Hide on Greens/Labour nationalisation

May 12th, 2013 at 8:12 am by David Farrar

Rodney Hide gives 10 reasons there policy is full of holes:

  1. Electricity prices are working. As they should
  2.  Electricity prices are fair and reasonable
  3. Quick! Turn up the swimming pool
  4.  The lights will go out
  5. We all lose as taxpayers
  6.  Businesses shut, jobs gone
  7. What about the planet?
  8. We have choice and competition
  9. Shearer-Norman power
  10.  It’s cheaper to hand out money

No 9 I wish to focus on:

The power market is one of the easiest to enter. Labour and the Greens claim companies are making “super-profits”. If that were the case, they could set up their own power company and fund their election campaign – and lower power prices for everyone. They won’t, of course, because they can’t. There’s no easy money to be made supplying power. The super-profits line is political rhetoric: it’s not true.

This is a very good point. There are no huge barriers to becoming an electricity generator. We have 14 companies that are generators.     If they think the profits are so excessive, why don’t they do what they did with Kiwibank and just set up one new competitor – rather than take over the entire industry?

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Hide on Auckland Transport

April 28th, 2013 at 6:31 am by David Farrar

Rodney Hide writes in the HoS:

My research led me to Wellingtonian Tony Randle, who spent months trying to get the analysis underpinning the 2010 Rail Business Case, succeeding only after a complaint to the Ombudsman.

Once Tony got hold of the analysis he found:

1. Basic spreadsheet errors. The spreadsheet fails to calculate the running costs of the second purchase of 26 trains. That ignores $689 million on the train option.

2. Incorrect exclusion of costs from the rail option. The study excludes the necessary funding to extend the Northern Busway into the city centre. Building this access is a necessary part of the rail option.

3. Addition of a second bus tunnel without explanation, adding hundreds of millions to the bus option.

4. Unreasonable assumptions, including a prediction that under the rail option, present bus capacity into the city centre will carry another 20,000 passengers a day without any new bus lanes or busways.

And people wonder why the Government won’t just hand over billions of dollars. I’m not sure what is worse – the massive errors in the analysis, but the fact they wouldn’t release them without the Ombudsman.

The overall impression is that the analysis was slanted to conclude trains over buses, despite the fact that buses may provide a better cheaper service.

The errors and poor assumptions total $1.5 billion. The bias is systematic; each and every mistake favours rail over buses. Correcting for the errors reverses the study’s conclusions and shows the CBD bus tunnel more cost-effective than the City Rail Link.

Tony Randle’s review is damning of Auckland Transport’s report. And it’s damning of the rail option. Auckland Transport’s response? Stony silence.

I’ve blogged on Tony’s work before. I am surprised no Councillor has followed it up. He makes available his detailed spreadsheets freely.

Last December, Auckland Transport released a second report. City Centre Future Access Study also concludes that the city rail link beats the two bus options considered, but now for different reasons to the first report. And, once again, Auckland Transport published the study without the underpinning analysis.

I followed Randle’s lead and requested the spreadsheets and the relevant model output reports. Auckland Transport has refused to supply them to me.

Its latest is a lawyer’s letter explaining that Auckland Transport will provide what I want but only if I pay them $3850.

Oh, and they won’t send me the spreadsheets.

Instead, they will send a printed output. That’s useless to me. It won’t allow me to check the very calculations that Randle showed were so devastatingly wrong in their first report.

I am left to conclude that Auckland Transport doesn’t trust its own analysis. So how can I trust it? And, more especially, how can you?

Very good questions. The spreadsheets should be provided free of charge to anyone asking. They already exist. There is no cost involved in e-mailing them out. The cost of $3,850 demanded is a rort.

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Hide complains National too soft on Shearer

March 24th, 2013 at 1:00 pm by David Farrar

Rodney Hide writes in the HoS:

The frightening part for Labour leader David Shearer forgetting to declare his $50,000-plus offshore bank account is National’s response: next to nothing. The Prime Minister said simply that Shearer’s memory lapse was “unfortunate”.

Unfortunate? That’s scary.

The usual political playbook is straightforward: 1. Make the account suspicious; 2. Keep the story alive; 3. Ensure a public inquiry; 4. Bust Shearer.

The political play is best run by an up-and-coming backbencher. Ministers must be seen as too busy running the country to be bothered.

The backbencher doesn’t allege any wrongdoing. That requires evidence. The only concern is perception.

The backbencher kicks off by asking why an MP and party leader would ever need an offshore bank account. “The political leaders who have secret offshore accounts aren’t the sort we usually have in New Zealand.”

The story is kept alive by pressing hard through the media with new questions every day. Day Two: “Mr Shearer must come clean with just how much he has in his secret account.” Of course, Shearer will refuse. Good.

Day Three: Allege it’s over a million dollars.

Journalists do the rest. They put the million-dollar figure to Shearer. If he doesn’t deny it, then a million dollars it is. If he denies it’s a million, the journalists won’t let go until he declares how much it’s below a million. The account’s dollar value is secured easily enough.

A new day, a new question. When did he last use the account? Who put the money in? When and why? Why hasn’t he closed the account? On and on it goes.

The public inquiry is achieved by making a Breach of Privilege complaint. It’s impossible for Parliament’s Speaker to refuse. If failing to declare $50,000-plus in a foreign bank account is not a breach then MPs are free to declare Mickey Mouse or whatever on their register of interests.

The resulting Privileges Committee is media gold. Shearer must front to a committee of senior MPs, most of whom are on the Government’s side. The questioning is in public, on camera. Week after week he must explain to incredulous MPs how he forgot about having tens of thousands of dollars in an offshore bank account but somehow remembered every year when he completed his tax return.

The whys and wherefores of his overseas banking would be dragged out of him. The committee would want his banking records. He would have little choice but to supply them.

I have absolutely no doubt that what Rodney describes is what would have happened if it was a National Party Leader who failed to disclose for four years in a row a foreign bank account.

Rodney has a theory about why:

But National has done none of this. That means only one thing. National want Shearer right where he is: leading the Labour Party into the next election.

Heh. I think that is reading too much into it. I think it is rather not wanting to appear to be too sanctimonious.

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Rodney says auction the unemployed on trade Me!

March 24th, 2013 at 9:00 am by David Farrar

Rodney Hide in NBR writes:

We have 50,000 people on the unemployment benefit and plenty of work that needs doing. The 50,000 represent 1000 years of work that doesn’t get done each and every week. The waste is horrific.

The waste follows from the failure to match the unemployed to the jobs that need doing at a price potential employers are willing to pay.

The matching part of the problem is a perfect job for the internet. And, sure enough, US techno whizz Morgan Warstler has the fix: match the jobs and the unemployed on eBay and pay them through Paypal.

In New Zealand our equivalent, Trade Me, is the perfect set-up linking Kiwis wanting to sell with those wanting to buy. It’s similarly perfect for matching those looking for work with those with jobs that need doing. Trade Me should be used to match jobseekers to jobs.

Under the Warstler scheme the unemployed would register on Trade Me to receive their benefit payment each Friday night.  At present, an unemployed 20-year-old receives a benefit payment of $190.84 gross a week.  Let’s make that $200.

Once an unemployed person is registered on Trade Me anyone wanting work done can bid for them to do it.  It’s the perfect way to match the jobs that need doing to those who can do them. 

So how would it work?

The unit of work on offer is a 40-hour week. And the bids start at $40 a week. That appears impossibly low but the government still pays the $200, so the least anyone gets paid for a week’s work is $240. 

The low starting bid ensures the market clears every week. Local retirement villages and community groups would be actively bidding to help the unemployed into work and to get work done.  Specialist contractors would move in to bid for the unemployed and to offer their work to the marketplace.

It’s hard to see the price staying at $40 a week. Especially for good workers.

The bids increase in $20 increments, with the government getting back $10 of each $20 hike. The worker gets to keep the other $10. For example, if the bid goes to $200 the worker keeps $320 and the government contributes $120 of his or her pay.

So basically the benefit abates.

Trade Me enables feedback possible both ways. Anyone familiar with the site knows how that works.

The good workers and the good employers would soon be identified. There would be no better CV than a string of positive comments on Trade Me. Those workers would get their wages bid up and would soon have a permanent job.

The impossibly lazy would also be identified. They could be followed up by government agents.

Likewise, the bad employers would be weeded out. They would be dealt to just as bad dealers are dealt to on Trade Me. The Warstler scheme provides total transparency.

You could trial this with the long-term unemployed – those who have been on the unemployment benefit for over six months.

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Hide on how Governments hurt the poor

March 17th, 2013 at 1:00 pm by David Farrar

Rodney Hide in the HoS describes 10 ways Government policies hurt poor people:

  1. The Government funds the very best schools for rich kids’ education. The price of entry is the cost of a house that’s “in-zone”. Poor families can’t afford it. They are locked out of decent schools and their kids are consigned to third-rate institutions.
  2. Rich girls are subsidised to attend university and become teachers, accountants and lawyers. Poor girls are subsidised to drop out of school and have babies.
  3. The rich teach their kids to work hard and be smart to succeed. The Government teaches poor kids their land was stolen and that to prosper they must work on Treaty claims in hope of winning it back.
  4. Rich boys start work on graduate wages. Poor boys are shut out of the job market by the minimum wage.
  5. Solo mums face the highest effective marginal tax rates in the country. The rich have tax planners and offshore accounts.
  6. Metropolitan Urban Limits restrict the supply of land and inflate the value of existing homes. That’s great for families who already own a house or two. It’s bad for the poor. The Urban Limits shut them out of ever owning a house. The poor are never able to accumulate capital and establish the sense of pride and belonging that home ownership brings. They are tenants for life.
  7. The Government subsidises the winnings of rich horse owners. The gambling of poor people is taxed through the TAB and pokie machines.
  8. The ballet and the orchestra are subsidised. Smoking and drinking are taxed.
  9. Poor neighbourhoods are crime-ridden. The rich live behind locked gates and security patrols and say tougher sentencing and increased policing don’t work. The poor struggle to protect their meagre possessions and to keep their children from the clutches of gangs and drug dealers.
  10. The Resource Management Act, occupational safety and health, and our labour laws protect established business from upstarts who can’t afford lawyers, human resources consultants and three tiers of management devoted to compliance.

A fair bit of truth there.


Hide on housing

December 3rd, 2012 at 4:00 pm by David Farrar

Rodney Hide writes in NBR:

You gotta love politics.

Think of the care, the anguish, the endless calculations, the budgeting, the fear, the heartache that the average household endures before determining to build a house.

Politics dodges that.

You just announce it. No care. No anguish. No calculations. No budgeting.

And not one house. One hundred thousand houses.

It’s think bigger!

In business you would be dismissed as a quack and jailed for fraud. That’s why politics is so wonderful. It turns the world upside down.

Newspaper editorials have enthused over the policy.

These same editorials condemned finance companies for their recklessness.

The 100,000 house policy makes the finance companies appear paragons of transparency, analysis and proper budgeting.

I am amazed that no media outlet has tried to seriously analyse the numbers behind the policy.

The backers of the 100,000 houses policy don’t have to trouble themselves with a carefully worded prospectus that could land them in jail should the plan go pear-shaped. Nope.

They just have to announce it.

Politics has no need to attract investors. Inland Revenue works day in and day out fleecing citizens of their hard-earned cash precisely to fuel such grand projects, the very stuff and substance of politics.

Yep, the taxpayers are the ones who will for out $30 billion or so in the belief that the Government will be able to sell houses in Auckland for under $300,000 and only lose $15,000 on them.

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Hide on Peter Jackson

December 2nd, 2012 at 10:00 am by David Farrar

Rodney Hide writes in the HoS:

Three cheers for Sir Peter Jackson. He’s done it again. Another blockbuster movie. Made right here in New Zealand.

Sir Peter proves anything is possible. I would never have believed that a Kiwi down in New Zealand could make blockbuster movies. Not just blockbuster movies but movies that bust the Hollywood block.

Sir Peter’s Lord of the Rings trilogy was the biggest movie project ever undertaken. The trilogy grossed $3 billion at the box office. It won 17 Academy awards. The final in the series, Return of the King, won 11 Oscars, tying it withBen Hur and Titanic for the most Academy Awards ever.

The Hobbit is even bigger. And, again, Sir Peter has delivered.

I was lucky enough to attend the premiere of The Unexpected Journey. The crowd and the enthusiasm for the movie was incredible. It wasn’t just hype. The stars were genuinely overcome by their reception. And their warmth for New Zealand, and for working with Sir Peter, was real. It was a tremendous feeling to be there.

I doubt there is any other city, where a significant proportion of the population would turn up for a movie premiere!

James Cameron, director of Avatar and Titanic, attended. He said the The Hobbit sets a new movie-making standard.

He also had this to say about Sir Peter, elevating the movie industry in New Zealand to a global level: “It’s really only happened a couple of times before, in Los Angeles and maybe London. It’s the first time it’s been done by a single film-maker.”

Jackson’s contribution to New Zealand, and especially Wellington, is almost unprecedented for an individual. I believe his legacy will outlive him and Wellington (and NZ) is well placed to continue as a moviemaking city, even when Jackson is not making films himself.

It’s easy for us to have an inferiority complex. Ours is a small country a long way from the rest of the world. We can easily believe we can’t do as well as the rest of the world. The rest of the world seems richer, bigger and closer to the action.

But Sir Peter proves that wrong. He entered one of the biggest, toughest industries in the world and did it bigger and better than anyone else.

We no longer suffer the tyranny of distance. And, yes, ours is a small population, but that no longer hampers us because now the entire world is only a nanosecond away.

Jackson can be finalising a film on the Sunday, and have it transmitted to Hollywood within a couple of hours.

Oh, The Hobbit has had its share of knockers – political activists, unionists, Peta, the disgruntled and the envious. Our biggest impediment may be the tall-poppy syndrome. But we shouldn’t let nagging ninnies blind us to achievement and opportunity.

Indeed, the Hobbit haters have had their share of publicity. For me, I can’t wait to see the film – especially at the faster frame rate.

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Labour’s housing plans – houses for everyone

November 18th, 2012 at 2:18 pm by David Farrar

As bribes go, this is one of the bigger ones. Labour are promising 100,000 new cheap houses and all you have to do is vote for them. Let’s look at the speech:

The start-up cost of the building programme will be financed through issuing government stock called Home Ownership Bonds.

The money we make from selling the houses will go back into the pot for building more.

The houses will be compact in size. Some will be stand-alone dwellings and others apartments. All of them will be good quality and energy efficient.

The homes will be sold to first home buyers who’ve saved their own deposit, like with KiwiSaver.

We estimate that the maximum needed to be raised for a kick-start will be $1.5 billion.

It will quickly become self-funding though. And because it’s a capital investment, it won’t affect our commitment to balance the books and return to surplus.

Labour don’t seem to understand about this concept called interest. When you borrow money (unless you print it as Russel wants) then you have to pay interest on it.

Now let’s think about this 100,000 house bribe. The average sale price of a property is $410,000. with 100,000 houses that means around $40 billion of capital to be outlayed in advance. The NZ Super Fund say the risk free rate of return is 5.16% on average. Let’s say the Government can borrow at 5%. That is already $2 billion in interest if there is only a year between borrowing the money and selling the house. I am not a property developer but I suspect it takes much longer than that.

But now consider that the Government just selling then at the median price will not help families much. So presumably the Government will sell them at a discount. How much? We don’t know. Say it is a 10% discount or $40,000 per house. That is another $4 billion.

But here’s the sad thing. Unless we do something about the supply of land in Auckland, the increase in house prices will be greater than any discount from the Government selling homes cheaply. Rodney Hide sums this up in the HoS:

There are many reasons why Auckland house prices are high. A lack of tax isn’t one of them.

One reason is that Auckland councils have for years run a deliberate policy to hike house prices. The council doesn’t put it that bluntly, calling it “smart growth” or a “compact Auckland”. But the policy works by hiking house prices.

The policy’s purpose is to get us to live in apartments over train stations. That way we will be more likely to take a train and the mountains of cash that councils have sunk into trains, stations and rail lines over the years won’t look such a waste. …

The policy works by the council running a planning fence around the city, a fence called the Metropolitan Urban Limit. Inside the fence houses can be built; over the fence, not so much. It’s the fence that has us piling on top of each other.

It’s said that the housing market isn’t working. Actually, it’s working perfectly. The council is artificially holding down the quantity of land supplied and people are bidding up the price of the precious little that is available. That’s how a market works when there is a shortage.

The result is easily seen. Average section prices in New Zealand account for 40 per cent of the cost of a new house. In Auckland it’s 60 per cent. There’s a 20 per cent council planning tax on Auckland houses.

It’s not hard to make houses more affordable in Auckland. Just loosen the fence. Land over the planning fence costs only 12 per cent of land inside the fence.

Unlock the planning fence and house prices would tumble. At the very least, the heat would be taken out of the market. Auckland families and couples would once again be able to afford a house

And best of all you won’t need to borrow $40 billion to do it!

UPDATE: Labour say they will sell the houses for under $300,000. I’d say the cost to the taxpayer has just exploded. This is the biggest bribe since Think Big. When the costs of construction exceed what they think it should be, the taxpayer will be left footing the bill.

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Unions accounts

November 4th, 2012 at 11:23 am by David Farrar

Rodney Hide writes in NBR:

The Maritime Union of New Zealand is in the same pickle as the New Zealand Meatworkers’ Union. It, too, has hidden millions of dollars of spending from the legally required public scrutiny.

Following my complaint, the Registrar of Incorporated Societies, Neville Harris, has ordered the Meatworkers’ Union to re-file six years’ of accounts (Hidesight, Aug 24).

His clear expectation is that the full accounts be presented for approval at the annual meeting on November 7 and be filed promptly thereafter.

It will be fascinating to see if the union complies. It has fought long and hard to keep its accounts hidden. But I’m backing the Registrar to prevail. He has the necessary statutory power to ensure the union complies with the law.

This is good. Unions get numerous rights and privileges under the law. One of the few obligations to to be an incorporated society, which means their annual accounts must be public documents. Hiding the majority of funds away from public scrutiny is not acceptable.

Rodney writes how the Maritime Union has also been hiding money in branch accounts, which have not formed part of their public accounts they file with the Registrar. He notes in the comments on his post:

The Registrar of Incorporated Societies replied to my complaint as follows:

“In light of the issues raised by the NZ Meat Workers and Related Trades Union matter, my office is currently reviewing financial statement compliance by those incorporated societies who are registered unions.

This suggests that the Registrar will be investigating all unions to ascertain how many are following the law and disclosing their full accounts, and forcing those which are hiding accounts to publish in full. It will be fascinating to see how many other unions have been doing this.

Hat Tip: Whale Oil

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Hide says Repeal 6A

October 8th, 2012 at 12:00 pm by David Farrar

Rodney Hide writes in NBR:

You win the contract to clean the local hospital. You succeed because you are good at your job and have a good crew.

The previous contractor was slack and expensive. The hospital gives him one month’s notice. It’s a good result for you. And a good result for the hospital.

But then Part 6A of the Employment Relations Act kicks in. Part 6A enables the existing cleaners to transfer your business. The purpose of this provision is to protect “vulnerable workers”.

Part 6A defines the vulnerable workers by the work they do and where they do it. Essentially, it covers industries such as cleaning and food and laundry services. The real protection is to existing contractors.

Indeed, the previous contractor told the hospital it was no use dropping him in your favour because Part 6A means nothing much would change. It would be the same crew on the same wages and conditions doing the same job. 

Part 6A locks in existing workers and sloppy work practice. It doesn’t protect “vulnerable workers”.

It protects slack businesses and poorly trained and managed workers. It’s anti-competitive. It drives up the cost of cleaning and laundry services including for government, which is the major country’s buyer. 

I regard it as horrific that a winning contractor has to keep on the staff of the losing contractor, and the same terms and conditions. It destroys their ability to be more innovative and flexible.

National rightly slammed the Labour government for introducing Part 6A in 2006. But National in government has done nothing.

There has been a required statutory review of Part 6A in 2009. But then nothing. The minister is still sitting on the result.

The evidence is clear. Part 6A can’t be amended. It should be repealed.

I agree. No employer should be forced to employ staff from a competitor. It also destorys any incentive for staff to perform well for their employer, if they know that even if their employer loses the contract they are guaranteed jobs with the next employer.

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Hide on “child poverty”

September 23rd, 2012 at 12:00 pm by David Farrar

This is Rodney Hide at his best as he destroys the myths around “child poverty” which brings up images of kids starving in New Zealand. Rodney says in the HoS:

“Child poverty’s terrible! Kids hungry! It’s getting worse!

“270,000 poor kids. And government? Doing nothing!”

But hang on. All kids are poor. Children typically don’t own much beyond a few toys. That’s true in poor families. And it’s true of rich families.

Children must rely totally on parents and caregivers. On their own, they’re destitute.

And yet we have a report boldly titled Child Poverty. That tugs at the heartstrings and makes great newspaper copy but it’s wrong. The report should properly be titled family or household poverty.

So the “child” part of the term “child poverty” is misleading.

But even that’s misleading. The 270,000 “child poverty” figure refers to relative poverty. Your children suffer in “poverty” if your household’s net income is less than 60 per cent of your equivalent household’s median income. The cut-off income for a couple with four children is just over $1000 a week. Net.

It’s no wonder that one child in four lives in “poverty” – $1000 a week in the hand is well above any lack of comfort let alone starvation. But for the experts, that’s “poverty”.

Raising for kids on $52,000 (net) a year would be tough and challenging. But probably not what most people think of poverty. It is also reflecting that on top of that $52,000 net a year, the family will be getting tens of thousands of dollars in “free” education and healthcare for their kids.

A windfall that doubled all incomes wouldn’t budge the child “poverty” figure. There would still be 270,000 poverty-stricken children. That’s because experts define “poverty” in reference to the middle income.

Making people richer doesn’t fix relative poverty. The only fix is to narrow the spread of income, even if that makes everyone poorer. That’s why experts recommend taking even more income from families above the median income to give to those below it. The fix follows directly from defining “child poverty” as household inequality.

This is key. By the way the poverty industry has defined poverty, the only “solution” is to tax people more and hand out more welfare. It is a front for the classic socialist agenda.

If we had a great depression which saw the top 50% of families suffer a 20% drop in income, and the bottom 50% suffer a 10% drop in income – the poverty industry would claim that fewer families are now in poverty! Seriously.

In these times of huge global economic uncertainty, the focus needs to be on economic growth, not increasing tax and welfare.

News reports now link the poverty report to children turning up to school hungry. But even the gloomiest estimates don’t have 270,000 hungry kids.

Labour leader David Shearer quoted a 2002 Ministry of Health survey to say 83,000 children aged 5 to 14 “sometimes or often went to school without breakfast”. That’s well short of the 270,000 “living in poverty”.

But even the 83,000 figure is exaggerated. The survey found the equivalent of 83,000 kids in the previous week “not” or “sometimes not” eating or drinking at home before school but 76,000 “usually” or “sometimes” eating or drinking on the way to school. Presumably, they are many of the kids who didn’t eat at home.

Data we have not seen in other media reports.

The survey found that the older the child the more likely they were not to eat at home and the more likely they were to eat on the way to school. Also, girls were more than twice as likely as boys not to eat at home. The sex and age differences suggest forces other than poverty at work.

Further, although children from poorer households were more likely not to eat at home before school, they were also more likely to drink Coke and eat chips and be fatter.

Poverty can’t be the cause. A bowl of porridge costs 10 cents. The most nutritious food on the planet is liver. It costs 70c a serve. The second most nutritious is an egg: 50c.

I have nourishing bone broth for lunch. The marrow bones for a good brew cost $10. That’s 50c a meal. Good nutritious food doesn’t cost much. It certainly doesn’t cost much compared to a Coke, a bag of chips or a burger.

The lack of breakfast is not caused by a lack of money. It’s caused by a lack of care. That lack of care can’t be fixed by giving parents more money. Handing parents more money doesn’t make them care more.

Porridge is meant to be one of the best breakfasts you can give your kid.

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Hide on POAL and unions

September 16th, 2012 at 12:00 pm by David Farrar

Rodney Hide writes in HoS:

I later worked as a fitter’s mate in British construction. My workmates would lie, cheat, steal and engage in industrial sabotage. The crew I was part of stole an entire Landrover. That was no mean feat: we were on an island in the North Sea.

We were building a gas stripping plant at Sullom Voe in the Shetland Islands.

I regularly saw metal scraps tossed into one-metre gas pipes as they were welded up. That was to ensure maintenance work once construction was finished.

Both Lyttelton Port and Sullom Voe were union-controlled. The control was maintained through bullying and violence. I was threatened that a spanner could fall on my head; an English welder had both legs and both arms broken for not following union dictates.

The way I saw it, the bosses got us to do what they wanted by paying us. That suited me. But union bosses got us to do what they wanted through thuggery and violence. I didn’t like it. And I didn’t like them.

This is referred to as the “good old days” amongst the union leaders.

Auckland has a beating heart. It’s the port. And it’s in trouble.

It lost Maersk’s Southern Star services to the Port of Tauranga last December. Fonterra followed in January. That’s $25 million in revenue gone. That’s 15 per cent of the port’s total revenue.

Ten years ago, Auckland handled double the containers that Tauranga did. Now they’re on par. Tauranga is set to pass Auckland.

Tauranga has the flexibility and efficiency that Auckland lacks.

Auckland Port’s dividend to Auckland Council is $20 million. A proper roster would double it. That’s equivalent to a 1.5 per cent rate cut. But the real gain would be to Auckland businesses, jobs and wages. …

The Maritime Union have proved the port bosses’ point through the negotiations several times over. They have gone on strike 12 times. And the port says productivity went up. Every time.

Tauranga is a shining example of a mixed ownership model. The staff are shareholders and are happy. They take pride in completing jobs efficiently.


Another Rodney column

August 28th, 2012 at 7:14 am by David Farrar

Rodney is on fire at the moment. His NBR column on the Meatworker Union accounts is excellent:

 I was recently told about some serious spending by the New Zealand Meat Workers Union that surprised me. It was so surprising that I thought I should check it out. No problem. I would just look up their audited accounts that the Registrar of Incorporated Societies would hold. That way I could determine if the story I was told was true. I was shocked to learn the accounts aren’t there. The meatworkers have four branches and for the past seven years have only been disclosing the capitation fees paid by the four branches to the national body. For the year ended September 2010 the disclosed income was $712,370. The total income to the union is several million dollars a year. That’s a failure over the years to disclose tens of millions of dollars

Whale has blogged extensively on this in the past. The union thinks it can hide the income and expenditure of its branches by pretending they are not part of the incorporated society. But this is clearly wrong. The law states a union must be an incorporated society.

The law is clear. To be a union, an organisation must be incorporated. And incorporated societies must file annual financial statements that members of the public can inspect. The advantage of incorporation is that it gives a legal personality separate from the society’s members. In return, members of the public can inspect the society’s accounts. But I can’t for the Meat Workers Union. Neither can you. And that’s been the case for seven years.

Sadly, the authorities are not exactly holding the union to account

Parliament has provided the registrar with the power to require records. So I wrote to the registrar pointing out the meatworkers’ failure. I suggested he use his power to get the branch records for the last seven years and make them publicly available. That was back in May. The registrar is Neville Harris, deputy secretary of the Ministry of Economic Development, which is part of a new super ministry. He advised me that he had been aware of the meatworkers’ failure to disclose their accounts since November 2011.  My information was not news to him. He explained he had been in contact with the union and was following up with the objective of having it file a “revised financial statement” that includes information relating to the activities of its branches. I have had no explanation why he doesn’t just demand the branch records and why he is speaking of just one financial statement singular when there are several years missing. It’s a complete mystery to me why the registrar just doesn’t demand the branch records and made them publicly available. After all, that’s the law’s requirement of unions and incorporated societies. Mr Harris and I now have had quite a correspondence. I can report that I am no further ahead than when I started. This month he advised me that he has decided the way forward is to obtain an opinion from an external accounting expert and to endeavour to resolve this matter on the basis of that advice. I have no idea why the registrar is seeking that advice. The problem is not an accounting one. It’s a legal one. The simple requirement is that the Meat Workers Union and its branches are required to disclose to the public their income and their expenditure and they aren’t. The person in charge of making sure they do is Mr Harris. Parliament has granted him the power to ensure they do. He is refusing to use that power. Instead, he’s working with the union to get them to file and is seeking accounting advice. Heaven only knows why.

I agree it is simple. The Registrar states you have until x date to file corrected accounts and a failure to do so will result in deregistration. Companies get automatically degregistered for late annual returns, so why does a union get away with seven years of inadequate returns?

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Rodney on Euthanasia – his full column

August 27th, 2012 at 4:00 pm by David Farrar

Rodney Hide has written in the Herald on Sunday on why he supports euthanasia, and the so sad case of Martin Hames who had to kill himself because we did not allow euthanasia. Rodney has told the story before, but not to quite the same detail. I can’t abridge it, so quote it in full:

I doubt my friend Martin Hames ever needed a decent pair of pyjamas. But 10 years ago, he went and bought himself a brand new pair.

Martin lived alone. He didn’t own a TV. He didn’t have a car. He was the shyest man I have ever met. I never knew him to have a girlfriend.

Martin worked with me in Parliament. He used to call me Boss even though I wasn’t. It was his way of getting me to do things. He would say, “Focus on the big picture, Boss. Get stuck into government expenditure/apartheid/the-failing-school system.” I almost always followed Martin’s advice.

He had worked for the Reserve Bank then with Ruth Richardson when she was Minister of Finance. He wrote the brilliant book Winston First. That was about you-know-who. He wrote numerous policy papers and penned many speeches. He wrote a marvellous book titled The Crisis In New Zealand Schools.

Martin was wickedly funny and socially awkward. He didn’t so much walk as jerk along. His arms often waved about uncontrollably.

I still laugh when I remember him throwing a cup of coffee over his shoulder.

That was when our gorgeous press secretary told him he could slip sugar into her hot drink anytime he liked.

Martin’s mother had died of Huntington’s disease. Her truly dreadful death took years. In the final stages of Huntington’s the mind loses its ability to control even the simplest movements – even swallowing is difficult and many sufferers die choking.

So, at 19 years old, Martin learned he had a 50 per cent chance of suffering the disease. He decided not to marry. Or have children. The risk was too great. And in his 40th year he got the fateful diagnosis.

We knew what he was planning. But the law forbade us helping or even knowing.

He put his affairs in order. On his own, one night at home, alone, he pinned a note to his new pyjama top: “Huntington’s disease: Please Do Not Resuscitate”. He attempted a massive overdose. But poor Martin. He didn’t get all the pills down.

His neighbour found him. Martin regained consciousness in Wellington Hospital. The circulation had stopped to his legs and the doctors wanted to amputate.

Martin asked what would happen if they didn’t cut his legs off. “You will die”.

“Good,” replied Martin, “I have Huntington’s disease.”

The doctors and nurses understood, wheeled him into intensive care. They gave him pain relief, looked after him. They were truly marvellous.

I dreaded going to see him. I needn’t have. “I am having a great death, Boss. I am getting to say goodbye to my friends.”

His characteristic shyness was gone. Why bother? It was his last day on this Earth.

Ruth Richardson shed a tear. “See,” said Martin, “I always knew you were a big softie.”

The young press sec kissed Martin and said, “See you round.” Martin replied: “Maybe – it’s taking me longer to die than they thought.”

Martin Hames died peacefully in his sleep in the early hours of the next morning. His dad was there. He died happy and he died content.

Martin had every right to take his own life. He also had every right to ask for help. But to give that help is against the law.

Martin feared he would slip into madness or lose control before he killed himself and be sentenced to years of suffering that would be hateful to him.

Maryan Street’s End of Life Choice Bill, now before Parliament, would have enabled Martin to plan his death better. He would not have needed to rush to it.

He and I joked one last time. Then he was serious. He said if I wanted to do something in his memory it would be to change our law so no one else had to go through what he had had to go through. He said, “Boss, change it, change it for all the others.”

I told him I would do my very best.

This column’s not as good as you could write, Martin. But it’s my best. And it’s for you.

Up until reading this account some years ago, I had been slightly anti-euthanasia. Coming from a medical family I did not like the idea of doctors ever having a role in ending life rather than preserving it. But I realised how selfish that preference was, when I read the awful choice the current law forced on people like Martin. No one should ever have been forced into having to make the choice he did.

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Rodney on same sex marriage

August 5th, 2012 at 10:00 am by David Farrar

Rodney Hide writes in the HoS:

The Marriage Act 1955 doesn’t say I can’t marry a man or that a woman can’t marry a woman.

But the courts have ruled that it wasn’t Parliament’s intent to enable same-sex marriage and that it’s up to Parliament, not the courts, to declare whether same-sex marriages are lawful, not the courts. It’s a fair call.

Back when the Marriage Act was enacted, homosexual activity was a crime carrying a maximum of life imprisonment. It’s a safe bet that parliamentarians then weren’t envisaging they were passing a law that would enable two men to apply for a marriage licence.

A very safe bet.

But even then the law had softened towards homosexuality.

Parliamentarians in the early days were hard core and set the penalty for homosexual activity as death. The death penalty for buggery was removed in 1867.

The 1893 New Zealand Criminal Code was still discouraging: “Everyone is liable to imprisonment with hard labour for life, and, according to his age, to be flogged or whipped, once, twice or thrice, who commits buggery either with a human being or with any other living creature”.

The flogging for buggery was removed in 1941 and hard labour removed in 1954.

The 1961 Crimes Act reduced the maximum sentence for sodomy between consenting adult males to seven years’ prison.

The big change was in 1986, when Parliament voted by a narrow margin to decriminalise homosexual activity. Consensual sex between men was no longer a crime.

A very interesting history lesson. And I’m willing to bet that at every stage, there were probably opponents who warned that this law change would be awful for New Zealand. They were wrong every time. Hell, as an 18 year old student I was against, due to the fact my views were based on fear and ignorance, rather than principle.

Is there a single MP alive today who voted against decriminalising homosexual activity in 1986, and doesn’t regret it? I doubt it. People may be surprised at some of those who voted against.

Stan Rodger, Peter Tapsell, John Terris, Whetu Tirakatene-Sullivan, John Banks, Bill Birch, Jim Bolger, Philip Burdon, Michael Cox, Warren Cooper, Paul East, Tony Friedlander, Jim Gerard, Doug Graham, Doug Kidd, Denis Marshall, Roger McClay, Don McKinnon, Jim McLay, Winston Peters, Ruth Richardson, Lockwood Smith, Simon Upton, Venn Young were some of the 44 votes against. It only passed 49 votes to 44.

Only three National MPs voted for it – George Gair, Katherine O’Regan and Ian McLean.

I know a lot of those who voted against it, and they are good people. But I bet you the vast majority of them 25 years on regret their vote. It must be tough to have on your record that you voted for consensual sex between two adults to remain a criminal offence.

While I respect legitimate and sincere views against same sex marriage, I do think there will be quite a few MPs who vote against who will end up with regrets in the future. Same sex marriage is absolutely inevitable in my view, as support for it is massively high amongst under 35s. And in 15 years time, nothing will have changed except some gay couples will be married, rather than just in a civil union.

But the MPs who voted against will find that in 15 years time, many New Zealanders will find it incomprehensible that they voted against allowing same sex couples to marry – just as in 2010 we find it incomprehensible that such good MPs such as  Jim Bolger, Philip Burdon, Michael Cox, Paul East, Doug Graham, Doug Kidd, Don McKinnon, Jim McLay, Ruth Richardson, Simon Upton and Venn Young voted to retain a law which made consensual adult sex punishable by up to seven years in jail.

Can anyone find an MP who voted No in 1986, and would vote the same way today on the same law?

Consensual sex between women was never illegal in New Zealand. Early legislators thought such a thing impossible and didn’t like to think about it and so never criminalised it.

Good old Queen Victoria!

Rodney concludes:

I have enormous respect for conservative values and traditional ways of doing things. But here’s the question for those pushing traditional values against same-sex marriage: what tradition do you want our Parliament to push back to? The death penalty? Flogging? Hard labour? Life imprisonment? Seven years’ jail?

Our Parliament has a sad and sorry history in its treatment of two adults who just want to love and be with one another.

Let’s hope with Louisa Wall’s bill that history is finally made just that: history.


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Hide on MOM

July 8th, 2012 at 8:39 am by David Farrar

Rodney Hide writes in the HoS:

The state-owned enterprise Mixed Ownership Model that’s causing such a fuss was pioneered by Helen Clark and Michael Cullen over a decade ago.

John Key and Bill English are simply extending it. The fuss over privatisation is a fuss about nothing much.

In 2001, the Labour Government spent $885 million bailing out Air New Zealand. Instead of taking over the company lock, stock and barrel, the Government took an 82 per cent stake and left the remaining share in private hands trading on the share market.

Hence was born the Mixed Ownership Model.

Mixed Ownership proved itself with Air New Zealand. The trading of the company’s shares on the share market means its performance is continually and publicly assessed. That continual public feedback on performance is lacking with state-owned enterprises. Mixed Ownership provides a desperately needed market discipline on SOE directors and executives. That’s a good thing.

Labour pioneered the model and fully expected to be selling down shares as National is doing.

Why did Labour never buy 100% of Air NZ, if it thinks a mixed ownership model is so bad?

Sir Michael Cullen told Cabinet, in setting up the model, that, “It may, however, be desirable to divest some or all of our shares at a future date.” The Labour Government readily accepted that a future sell-down may well prove desirable. And not just some shares, but all of them.

Sir Michael also knew that the Super Fund was set up to be funded out of surpluses, not to be funded from borrowing.

The greater discipline that the trading of shares applies to these businesses will enhance their performance. There’s no way Air NZ would have done as well if it were an SOE.

For Kiwis, it’s the companies’ better performance that will enhance the country’s economy, not whether the Government makes a profit or loss on sale.

Yep. In my view the Government should not own a company, just because it wants the dividends from it. It should only own companies that are strategically necessary – such as arguably Transpower and Kordia – national infrastructure operators.

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Rodney working hard

June 24th, 2012 at 12:00 pm by David Farrar

Rodney Hide writes in the HoS:

After getting the toss from Parliament last year, I spent six months renovating our house, top to bottom. It was the best therapy after years of politics.

I know now what to do if there is ever a gap to fill in my life: Get an old house and fix it up. It’s a huge challenge and very satisfying. Living in a freshly minted house is the best and it’s even better when it’s your own work you can look at every day with pride. And seeing the delight in former owner Mary’s face, she is now 89, was rather neat.

My plan then had been to put my feet up a bit to enjoy the new house and figure out what to do next. Then Ian the Builder needed a hand at his next job. We put up a new ceiling together.

It was like old times.

And through that job I met Roger the Digger Driver. He needed an extra pair of hands on his next job.

So I have spent the week with Roger and the boys taking down a 3m concrete retaining wall. The wall ran the length of a section and had fallen against the house it was supposed to protect. It was a tricky demolition.

My job involved getting down in the mud with a sledgehammer, a crowbar and a wheelbarrow. After the first day I ached all over. But by the second day I was into the routine.

Roger says that 20 per cent of those who work for him don’t come back after the first morning tea, another 20 per cent disappear after lunch, and another 20 per cent get their mums to ring the following morning to say Johnny won’t be coming to work.

The remaining 40 per cent work with him for the rest of their lives.

It’s good money, too. It’s half what I was getting as an MP but it’s only half the hours. Plus smashing up concrete is pure stress relief and a good workout.

During the week I was taught how to take down a concrete wall. It now looks like I will be learning to put one up. Bill, the Retaining Wall Man, came to have a look at the job, and to tell me he’s a man short.

When I was a politician I was supposed to pretend sympathy for people without a job. The truth is I never had much. I always figured there’s work to be done for anyone prepared to get stuck in. I now know that’s true. I got a job pushing a wheelbarrow and swinging a hammer. Why can’t the so-called unemployed? We all know why. They’re too picky. The jobs don’t suit. It’s a bit cold. It’s a bit wet. It’s a bit hard.

But that’s why they are called jobs. They are not meant to be fun. They’re meant to be a bit tough and a bit of a challenge. That’s where the satisfaction of a good day’s work comes from. There’s no satisfaction if it’s easy.

There would be no unemployed people if everyone took the first job offered and got stuck in. If they got stuck in, they would love the work. They would then be offered a multitude of jobs and could pick and choose what they wanted to do.

So here’s my challenge for anyone wanting a job. Get off the dole. That shows you are serious. Take the first job offered. That shows you are keen. Get stuck in. That proves you’re useful.

Work is satisfying. I got restructured to part-time in one job. I immediately went along to an organisation I was involved in and asked if I could work unpaid for them for two days a week, just so I was doing something five days a week.


Well done Rodney

June 18th, 2012 at 3:00 pm by David Farrar

Rodney Hide’s column at the HoS is on racial preferences or quotas at medical school. His conclusion was:

But race, colour, creed shouldn’t worry us. We shouldn’t care if doctors are yellow, white or brown. All we should care about is that they are good at the job. And that should be the university’s sole concern. It is wrong that the university discriminates on skin colour. It is wrong that it is attempting a correct colour mix. The university should treat all applicants equally: that means being blind to race.

That wasn’t what got my attention though. It was this comment on the Herald website:

Debate on this article is now closed due to an increasing number of unpublishable comments.

I’ve never seen that on the Herald before. Well done Rodney, you’ve managed to turn the Herald into a blog :-)


Hide’s column

May 20th, 2012 at 10:15 am by David Farrar

Rodney Hide in the HoS:

I suspect Captain Cook bringing pigs to New Zealand did more to end cannibalism among Maori than the preaching of missionaries. Pigs are easier to catch and kill than your neighbours.

Heh, so true. I understand they taste nicer also.


Hide on the Brash coup

March 30th, 2012 at 4:25 pm by David Farrar

A must read interview with Rodney Hide in the Listener. An extract:

The moment Don Brash went public with his ambitions over the Easter break last year, Hide realised the game was up no matter what the result. “Once he’d announced the attack on me, I was toast,” he exclaims, relishing the chance to finally tell the story. “Even if I won I was toast, and so I thought, ‘Oh well, I’m toast, and I need to work this through in the best way,’” he says, edging closer to the table as the late sun falls across the street.

“I had to line up the board, line up supporters, line up the Prime Minister, walk them all through it, work out how to handle it. And of course, Don was such a klutz that I ended up organising his coup!” Hide’s final task was a phone call to Brash, whose absent-minded-professor voice he mimics as he relays the story.

“I said: ‘Don, you and I are having a press conference at 11am.’
“‘Oh really?’
“I said: ‘Yes and at this press conference I will be announcing that I am standing down.’
“‘Oh really? Oh, that’s very good of you.’ 
“‘The board will support you and I’ll bow out gracefully.’
“‘Oh that’s very good. Where’s the press conference?’
“‘I said: ‘It’s blah, blah, blah in Newmarket …’ and all the rest.
“‘Where will I park my car?’
“I said: ‘Don. I have organised your f—ing coup for you. You can figure out where to park your f—ing car.’”


It is a lengthy and interesting interview.

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An interview with Rodney

October 8th, 2011 at 12:00 pm by David Farrar

Nick Venter has an interesting interview with Rodney Hide.


No valedictory for Hide

August 1st, 2011 at 11:00 am by David Farrar

John Armstrong at NZ Herald reports:

Former Act leader Rodney Hide will not be delivering a farewell speech to Parliament because as far as he is concerned he is not retiring from politics.

He is instead being pushed out of the House by his successor.

Retiring MPs traditionally deliver a valedictory speech before the House rises for an election in which they review the highs and lows of their parliamentary career.

“I am not retiring,” Mr Hide said last night. “I did not choose to be pushed out.”

True, but many MPs leaving Parliament were pushed out.

For my part, I think it is a pity, as I’d like to hear what Rodney would have said in a valedictory.

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The case against a CGT

July 16th, 2011 at 9:00 am by David Farrar

I’ve said that in principle I support a CGT, if it is part of making NZ a broad base low rate tax system. Former ACT Leader Rodney Hide makes the argument against a CGT, as an effective double tax on business. He writes at interest.co.nz:

A business generates $100 a year. The going discount rate is 10 percent. The value of the business is $1,000. That’s if there’s no tax.

Introduce a tax of, say, 30 percent, and the business now yields only $70 a year. The business is worth only $700. The tax liability is capitalised into the value of the business.

Now let’s say I buy the business and fix it up. I double its income to $200. In the absence of any tax the business is now worth $2,000 and I can sell the business and pocket a $1,000 capital gain. However, if there’s an income tax of 30 percent the increase in the business’s value is from $700 to $1,400. My capital gain is now only $700.

My gain is not tax free even though I appear to pay no tax on my gain.

That’s because the capital value reflects the extra tax the extra income the business generates.

A capital gains tax of 30 percent reduces my gain from $700 to $490. I am doubly taxed.

Capital gains aren’t tax free and a capital gains tax doubly tax savings and investment.

Put like that, it does appear to be a double tax. Any arguments against the logic?

Capital gains tax is brutally unfair

There are plenty of ways a capital gains tax is unfair. Imagine a young widow with children whose husband poured his heart and soul into his business. Following his death the young widow has no choice but to sell the business. She has no income and no other assets.

The business was a start up. It generates $200 a year. After tax, that’s $140. The business sells for $1,400 upon which capital gains tax has to be paid at say 30 percent.

She nets $980. In the absence of any tax she would net $2,000.

The widow is taxed at 51 percent. That’s brutal.

A good case against by Rodney

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Hide resigns

April 28th, 2011 at 1:19 pm by David Farrar

Rodney Hide resigned as Leader of ACT at midday. Don Brash will be elected Leader at the next Caucus meeting.

I’d like to pay tribute to Rodney at this point in time. It is primarily due to Rodney that ACT survived in 2005 and 2008. Over his 15 years in Parliament Rodney has had a greater and more benficial impact on Parliament than most MPs.

I’m glad he is so happily married to Louise, and has become a Dad again. That will remind him of what is truly important in life – far more so than politics.

It looks like Rodney will remain an ACT MP and Minister until the election.

The immediate issues for ACT are:

  1. Does John Boscawen remain Deputy Leader, or does that revert back to Heather Roy.
  2. Does John Banks stand in Epsom for ACT.
  3. List Ranking

While I have said previously that I’m not sure how good a fit John Banks is to ACT, there is considerable logic to having a candidate in the seat who will clearly win it for ACT. If they look guaranteed to win the seat, then they can campaign that voting for ACT is not a wasted vote, and that the more people who vote for them the more influence they will have on policy.

It is possible a Brash led ACT will also make it harder for Winston Peters to get traction (which is of course a good thing). Winston planned to campaign hard on the foreshore & seabed issue, but a Brash led ACT may be more effective in appealing to the coastal coaltion supporters.

Where NZ First, and Labour and Greens, will attack is on economic policy – especially wages, asset sales and superannuation. Goff is already suggesting that it was a cunning National plot to have Don roll Rodney (which is hysterically untrue).

The reality is that Don and Rodney are near identical minds on economic policy. What will determine their influence on Government is not so much who the leader is, but how many seats they win. At 10 seats you roughly expect twice the influence of 5 seats.

So as I said earlier, the next few polls will be interesting.

UPDATE: An excellent blog post from Cactus Kate on ACT.

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Has Calvert switched?

April 28th, 2011 at 9:05 am by David Farrar

Stuff reports:

Don Brash believes he has the numbers to roll Rodney Hide and become the new ACT leader as soon as today after furiously lobbying MPs.

The fates of Brash and Hide rest with the party’s newest MP, Hilary Calvert, who pledged her support for Hide at the weekend – but spent yesterday afternoon in a meeting at Brash’s Auckland apartment with Hide opponent Sir Roger Douglas.

Calvert did not return calls and refused to comment as she left. But after the meeting, Brash said he was “cautiously optimistic” of securing the ACT leadership, suggesting he believes he has her support.

He told National Radio that if she switched votes it would be “logical” for Hide to resign as early as today.

Brash also made it clear he saw no place for Hide in any party he led, suggesting it would be his advice to Hide “to go, quite frankly”

Most of the speculation has been on whether Boscawen would back Brash, not Calvert.The Herald reports:

On Sunday, she said that she backed Mr Hide and would vote for him over Dr Brash, and on Tuesday she repeated that position.

But yesterday, when the Herald asked if her position was still the same after her meeting with Dr Brash, she said: “I’m not prepared to make any comment.”

There’s been a fair amount of disinformation flying around, so we’ll see how things play out today.

However if the media are correct, then Don has won and will become Leader. I still stand by my comments about the nature of the coup. It is about winning the war, not the battle. And my concern is that Don has damaged his brand which was almost being above politics.

If Don does become leader, all eyes will be on teh next set of public polls. I have no doubt ACT will go up in the polls. The two key questions are how much, and from whom will they pull their extra support. I’d also caution not to take the first set of polls as gospel – there is a honeymoon effect. The second set of polls are likely to be more indicative.

Anyway let’s wait to see if the media have it right, and if Don has won. If he has, I’ll blog some ideas for key policies he can campaign on – apart from closing the gap with Australia.

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