Patrick Smellie at Stuff reports:

Just about anyone who pays income tax earns more than $5000 a year, so every single taxpayer would have benefited from the move, largely offsetting Labour’s intention to raise the top income tax rate from 33 cents in the dollar to 39 cents anyway.

That is a good thing, not a bad thing, that all taxpayers would get a reduction in their tax. Every taxypayer would get $525. However with the top rate going up 6%, those who earn more than $8,750 over the top rate threshold would have ended up paying more.

But I always like to look at tax cuts as a percentage of actual tax paid. The $5,000 tax free threshold would mean tax on $20,000 would reduce by 20.8%, tax on $50,000 by 6.5% and tax on $100,000 by 2.2%.

However, by giving itself a $1.5b kitty to play with, Labour has opened up a significant flank for election year attack by National. In effect, Labour is saying that rather than give you your tax money back by exempting fresh produce and the first $5000 of income, we’ll decide how to spend it for you.

Whatever it proposes had better look attractive to the swinging, middle-of-the-road voters that Labour needs to bring its way this year if it’s to have a hope of governing after the election.

I hope Labour does offer a different form of tax cuts. My worry is they will only offer tax increases, and pledge to take more money off families that are working and give it to families not working.

The Herald reported:

Beneficiary advocates are angry that an Australian company has emerged as the big winner in an experiment that will pay contractors up to $12,000 to help a sole parent or a person with mental health issues into paid work.

How terrible. A company wins a contract to help people into work.

Perth-company Advanced Personnel Management (APM) has won pilot contracts for people with mental health conditions in Auckland, Waikato, Christchurch and Southland, and for sole parents in the Bay of Plenty, Wellington, Nelson and Canterbury – more than any local agency in the Work and Income tender.

So why is this?

APM’s website describes the company as “the largest private sector provider of Australian Government funded vocational rehabilitation services and disability employment services”. It says New Zealand operations started in 2012 with vocational rehabilitation contracts with the Accident Compensation Corporation (ACC).

Because they already have significant experience in this area.

Beneficiary Advocacy Federation co-ordinator Kay Brereton said the contracts should have gone to more local agencies such as the West Auckland Living Skills Homes (Walsh Trust), which won one of the mental health contracts, and the Kawerau Job Centre, which won a sole-parent contract.

So they also won contracts, but the whinge is that this Australian company won some also. I’m in favour of having lots of companies win contracts, and then judge them on results.

Strive Community Trust chief executive Sharon Wilson-Davis said she did not bid for the contracts and allowed an existing sole-parent contract to end late last year because she felt it would be impossible to achieve the work placements required to earn fees under the new pilots.

“A lot of these people certainly want to work but sometimes you are better off to get them into further training,” she said.

“Otherwise if you push them into these low-paying jobs, then when those jobs go they are back in the same place.”

Glad they are not one of the companies, with an attitude that it is better to remain out of work entirely, than take up a low paying job which might not last forever.

After the outward signs of success collapsed around her, Misty Leong was comforted by her teenage son.

When her husband left, she had to give up her successful real estate business to look after her daughter who was just 2, her son, and her own elderly mother.

It was 2009, in the early panic of the global financial crisis, and no one was buying houses anyway. Ms Leong went bankrupt. Her $1.8 million property was lost.

“I lost my health, money, property, everything,” she says. “But my son, he says: ‘Mum, you are still strong.”‘

Born in China 46 years ago and brought up in Macau, Ms Leong came to New Zealand in 1989. She worked as a waitress, then in a factory, but quickly opened her own takeaway bar in Forrest Hill on Auckland’s North Shore.

Later she and her husband and a partner started a gardening and home service business, and from there Ms Leong moved into real estate with Century 21 in 2002.

When it all collapsed, she was bereft. “I had no food, no income, no anything. My husband left me with all the business debts and didn’t help me with the children at all,” she says.

Sounds an awful situation. To go from being a business owner with significant assets to bankrupt would be a terrible blow.

She got the domestic purposes benefit. She never stopped looking for a job but had no luck.

But then …

Her break came when Work and Income referred her in February last year to In-Work NZ, the country’s biggest private contractor of welfare-to-work programmes. Within two months she landed a checkout job at Devonport’s New World supermarket. It was only 16 hours a week at first, but in July her hours increased to 22 and the in-work tax credit of an extra $60 a week, paid to single adults working at least 20 hours a week or couples working 30 hours between them, allowed her to move off the benefit.

Still a long way from where she was, but what a great work ethic to not turn your nose up at working in a supermarket.

Stuff reports:

Wellington’s popular waterfront diving platform was forced to close after faecal contamination spiked at nearly 500 times the safe level, documents reveal.

An email exchange issued under the Official Information Act showed that Wellington Waterfront and the city council decided to close the platform immediately on the Friday of the rugby sevens last year after getting advice from Regional Public Health.

The solution is simple. Do not dive into Wellington Harbour after you have been eating sugarless gummy bears!

Anything over 280cfu is considered an unacceptable risk to health but Greater Wellington Regional Council recorded 69,000cfu on January 26 last year.

More seriously, how does it get that high?

David Shearer writes in the Herald:

My research took me to a wonderful school, Owairaka District School, where 8-year-old students served me a lunch of vegetarian pizza from their own pizza oven, salad from their garden, and muffins made with eggs from their chickens and honey from their hives.

Owairaka is a decile 2 school but the children are kept nourished and learning through this innovative garden-to-table programme.

But more critically, they are picking up the lifetime skills of gardening and food preparation – and they are doing it alongside family and community volunteers who also benefit.

It’s win, win, win – so much better than a hand-out for the kids – and it raised a question I have grappled with since my bill was drawn.

Is it right to impose a one-size-fits-all solution on to every low-decile school in the form of a food hand-out?

No. It is excellent a Labour MP sees this. Better late than never.

My fear is that we will institutionalise dependence through relying solely on a feeding programme. We need to be far more forward-looking.

Yes.

There’s another critical need for a programme focused on nutrition. New Zealand has 275,000 overweight and obese children. Surely part of what we are teaching – in a practical way – should be around nutrition and good foods to eat.

There are two issues here – obesity and kids going to school without breakfast.

The latter is basically due to bad parenting. It costs just 39 cents  a day to give a child weetbix and milk for breakfast. If a kid is going to school without breakfast, it is not because of lack of money. Low income families get an extra $65 per week per child (plus up to $152 a week for the first child) to help cover the costs of a child.

Nutrition is an important issue, and educating kids on nutrition is worthwhile. Educating parents probably more so. But this can take many forms. I know scores of people who use smartphone apps to check nutritional content of food, and make decisions based on it.

Unfortunately, our current Government has done the opposite. In 2009, then Education Minister Anne Tolley removed the national guidelines to schools which stated that only healthy options should be available where food and beverages are sold at schools.

Sigh, now back to being the food police.  Almost no food in moderation is inherently unhealthy. Trying to categorise foods into always good and always bad is simplistic.

My bill originally aimed to legislate for food to be available in every decile 1, 2 and 3 school that wants it, so poorer communities can have confidence their children won’t be hungry at school.

That’s a start, but I’m going back to the drawing board so we can address the issues of nutrition and encourage self-reliance. We have lost the basic skills of how to garden and provide for ourselves.

So my aim is that my Food in Schools Bill will put resources into schools to help teach those simple skills, and enable kids to eat the food they grow themselves and understand a healthy diet.

Sounds an improvement. But to be honest the elephant in the room is the parents. If the parents do not understand nutrition and a healthy diet, then expecting teachers to change the eating habits of kids is a big ask.

Daljit Singh was found guilty of two counts of using forged documents on the 12th of December.

S16 of the Immigration Advisers Licensing Act 2007 states (paraphrased):

a person who has been convicted, whether in New Zealand or in another country, of a crime involving dishonesty must not be licensed unless the Registrar is satisfied that the nature of the relevant offence or matter is unlikely to adversely affect the person’s fitness to provide immigration advice

So why a month later, does the Immigration Advisers Authority still list Daljit Singh as a licensed immigration adviser?

Even worse, they state his licence renewal is in progress!

The Herald reports:

Finance Minister Bill English says he wants Google, Apple and Starbucks and other multinationals to pay more tax and hopes the issue will be raised at economic talks this week.

One can want them to do many things, but they’re not going to. Of course they will locate their tax base in a country with a lower company tax rate.

The minister said this morning that getting corporates to pay their fair share of tax required international collaboration.

“We’re very keen to see them pay more tax. The tricky bit is that it requires combined international action,” he told Radio New Zealand’s Morning Report.

“A whole range of countries are going to need to agree on tax rules for companies like Google and Apple and Starbucks and any number of corporates that you can think of.

Yep there is no unilateral solution. But even multinational co-operation has its limits. It takes just one country not to agree, and that is the country where those companies will be established for tax purposes. It will be good if they can get agreement.

Although Google and other companies had local offices in New Zealand, their tax bills were believed to be out of proportion with their reported sales in this country.

That’s because tax is paid on profits, not sales. ‘ll use a good example.

The latest APN financial statement has revenue of $461 million. Their tax was $652,000. Their tax as a percentage of sales was 0.14%. This is clearly out of proportion to their sales, and APN should immediately pay a fairer proportion.

How about a fair “living tax” of 5% on sales? This would mean APN pays tax of $23 million instead of $652,0000 and Fairfax would pay A$100 million instead of zero. Isn’t this the logical outcome of repeated reporting by APN and Fairfax of other companies’ tax bills in relation to their sales instead of their profits?

Late last year the Justice and Electoral Select Committee reported back the Electoral Amendment Bill, which was implementing recommendations from the 2011 election inquiry.

There’s a few changes made by the select committee. They are:

• Removing the proposed ban on displaying streamers, ribbons and rosettes on election day
• Allowing the High Court to order a recalculation of the allocation of list seats if there is a successful electorate electoral petition
• Requiring voters to verbally confirm their identity when being issued voting papers, so one can’t just use an Easy Vote card to get issued voting papers

All seem very sensible.

The Herald reports:

Len Brown has hinted at seeking a third Super City mayoral term in 2016, saying the factors that will guide him are the support of his wife, Shan Inglis, and maintaining his love and passion for the city. …

Asked whether he would seek a third term in 2016, Mr Brown said “There are two things that would determine my view in terms of the role that I have here. The first is that my family support me and the second is that so long as I maintain my love and my passion for our city and our people – and I do, I love this place and I love our people in the very best and the worst of times – then I would do the job.”

I hope he does stand again. That would guarantee a centre-right Mayor.

The Herald reports:

Labour has officially dropped its policies of having the first $5000 of earnings tax free and of removing GST from fresh fruit and vegetables Leader David Cunliffe said this morning.

The policies were adopted in the run up to the 2011 election under then-Leader Phil Goff but Mr Cunliffe’s immediate predecessor David Shearer in his first major speech as leader almost two years ago indicated that the policies would be dumped.

Labour estimated the policies would cost the Government about $1.5 billion a year in lost revenue.

The GST off fresh fruit and vegetables policy was a piece of populist nonsense and it is good to see it gone. It would have complicated a tax that is praised globally for its simplicity, and achieved little.

The $5,000 tax free earnings policy had some merit – it would have delivered tax reductions to every taxpayer. There is a case to be made that no one should pay tax until they are earning enough to live on, as otherwise you just give it back to them in welfare and have wasteful churn.

“While these were worthwhile policies , we believe there are better ways to help struggling Kiwi families”, Mr Cunliffe said.

Will this be a different form of tax cuts, or just spending increases? I hope Labour go into 2014 offering tax cuts. They offered $1.5 billion of tax cuts in 2011. They may not have been well targeted particularly, but they were tax cuts. Will they offer anything to taxpayers in 2014? Or just tax increases?

Josie Pagani blogs at Pundit:

If the FBI case is weak, that begs the question, why are the New Zealand Police continuing to pursue it?

Because it is not their role to decide if a case is weak. If a valid extradition request is received, the NZ Police are obliged to act on it, just as we expect the FBI to respond to extradition requests from NZ.

Whether a request results in extradition will be effectively decided by a New Zealand Judge (and rubber stamped by the Minister of Justice). It is a legal decision, not a political decision.

The NZ Judge does not decide if someone is guilty or not, just that the charges laid are ones that would also be crimes in NZ, and that there is a prima facie case to answer.

So the fate of Dotcom in a legal sense is a decision for Judges, not politicians. First a NZ Judge has to decide if he can be extradited, and then a US Judge (and possibly jury) will decide if he is guilty of the offences he has been charged with.

As I have said in the past, he may have run Megaupload in such a way that it stayed within the law. Again that is a decision for a judge (or jury to make). The US is not Albania. It has a robust court system, with guaranteed rights under the Bill of Rights.

If a NZ Judge finds that he should not be extradited, then good on him. And if he is extradited, and is found not guilty, then also good on him.

The New Zealand government better hope that Dotcom doesn’t get extradited and then win his case, because the damages owed will be in the millions. It was our police who shut down a multi-million global business. It’ll be New Zealand tax payers who pay the reparation.

This is not correct. NZ Police did not shut it down. The FBI did. NZ taxpayers are not responsible for reparation. What NZ taxpayers may be responsible for is mistakes made by the Police in his arrest, and that is (as it should be) being heard in court.

Now we turn to the politics, and that should be separate to the legal issues, but they get mixed up. National has the misfortune to be in Government when the charges were laid and extradition requested. Hence Dotcom blames them. If Labour had been in power, I suspect exactly the same would have occurred to him, and he would now be railing against the evil Labour Government and Helen Clark.

Dotcom is obviously not keen to face trial in the United States. He is trying to turn a legal issue into a political one. I don’t blame him for that. If I was in his shoes and with his money, I’d try to do exactly the same.  If you are a political party leader, then that make extradition a political issue, not a legal issue. You extradite alleged criminals, not politicians.

So whenever Dotcom does something in the political sphere, I ask a simple question. Would he be doing this, if he wasn’t facing extradition to the United States on these criminal charges?

My preference is for Dotcom to have his day in court (first NZ and then if extradited, the US). If he wins at either of these, then I’d welcome all his plans to invest in a new cable, promote more fibre, have encrypted file sharing etc. But again, would he be throwing parties for 25,000 people if he wasn’t facing extradition?

I am no fan of the way the Hollywood entertainment industry have tried to cripple the Internet and some of the laws they have tried to get countries to enact. In fact I have fought against them. But in terms of applying the law, that is a decision for courts, not politicians.

In terms of the political impact of the proposed party, Liam Hehir writes in the Manawatu Standard:

Is Kim Dotcom’s new “Internet Party”:

a) A new party geared towards internet- conversant millennials;

b) Another Left-wing party entering an already crowded field; or

c) Some new force poised to tap into massive disillusionment with politics-as-usual?

No matter what the party’s founders intend, the voters will come to their own conclusions. The answer will determine what impact (if any) the new party has on the electoral landscape.

The first possibility would be a potential threat to the National Government. More than a few libertarian-ish millennials vote National by default. The “ish” suffix is appropriate because these voters are not particularly ideological. They can abide neither Labour’s slavish political correctness nor the Marxian economics of the Greens. They do not have any particular love for National.

They do care about issues an internet-oriented party could capitalise on.

Take, for instance, the matter of geo-blocking. This occurs when media rights holders prevent access to pay-services by New Zealand addresses. The most obvious example is the popular service Netflix, which streams television and movies over the web for a pretty reasonable cost. Like many such services, it is closed to New Zealanders.

Geo-blocking is one of my pet hates. It is not something that NZ can do anything about, but eventually I believe it will die, and we will have one global market for content.

On the other hand, if the Internet Party is seen as just another anti- John Key party – along with Labour, the Greens, Mana and New Zealand First, then I think any threat to the Government will be negligible. Its existence could even help National in a tight election year.

The Greens are sounding rather hostile to the party, and Labour less than enthused. If even 2% of their supporters vote for it, and the vote is wasted, that may be enough to keep National in power. Intentions and impacts are not the same thing.

The final possibility is that the Internet Party could become a true protest party – absorbing the votes of the disenfranchised and generating new voters from among the increasing numbers of those who would otherwise not turn out.

This is the hope of at least some of Mr Dotcom’s Left-wing boosters. In a gushing write-up by socialist commentator Chris Trotter, for instance, the Internet Party was heralded as a potential parallel to Italy’s Five Star Movement, an ‘anti- politics’ party which rode a wave of voter disgust to a stunning electoral performance in that country’s elections last year.

But New Zealand is not Italy. Going into its last election, the latter country had been forced into austerity by a sovereign debt crisis. Things were so bad that, at the time, Italy was actually being governed by an unelected proconsul of the European Union. By contrast, our leaders have generally steered a good path through the recession and the economic forecast is now fairly sunny.

One can understand why the Government’s antagonists might be frustrated at the apparent immovability of the polls. If they are counting on some groundswell of disenchantment with New Zealand politics to wash John Key away, however, I think they do so at their peril.

It will be interesting to see the impact, if they ever get around to an actual launch, policies and candidates. I’ll probably like some of their policies. But there are policies I like (to varying degrees) in most political parties (except Mana probably).

Hamish Rutherford at Stuff reports:

Since entering Parliament in 2008, Peseta Sam Lotu-Iiga has risen quickly through the ranks as an MP.

Already the chair of the social services committee, the former financial analyst and Cambridge graduate has been tipped as a minister-in-waiting since the last election.

Lotu-Iiga was born in Apia in Samoa in 1970, moving to New Zealand with his family in 1973.

His upbringing was humble by his own account.

During his maiden speech to Parliament he said his father had walked from Ponsonby to Parnell to save the bus fare, while up to 16 people lived in his family’s three-bedroom house in Mangere.

However his education, which he described as “the key to unlocking so many of the opportunities that I have enjoyed in life” has been impressive.

After attending Auckland Grammar, Lotu-Iiga studied law and commerce at the University of Auckland, before being employed at top law firm Russell McVeagh.

Sam is a great example of the difference between income inequality and income mobility. Labour have explicitly abandoned equality of opportunity as being sufficient, and have committed to equality of outcome.

As well as being conferred the Samoan high chiefly title of Peseta, Lotu-Iiga has served in a variety of roles, from coach of the Auckland under-14 rugby team to being a board member of the Primary Health Organisations of New Zealand.

Sam is a former Auckland City Councillor and will be Associate Minister of Local Government, working with Paula Bennett.

The Dom Post editorial:

New Zealand’s organ donation rates are pitifully small. This means many people die every year because they fail to get a life-saving organ transplant. The Government has made some minor reforms, which seem to have helped the rate of tissue rather than organ donations – that is, of eyes, heart valves and skin. The situation remains lamentable. What must be done?

A start would be not allowing families to over-ride the decisions of donors.

I’m a donor. If one day parts of me may assist someone to have a better life, that is a good thing. My only request is that this doesn’t happen too soon!

It seems clear that New Zealand will not lift its rate unless it is prepared to spend a great deal more money. It will have to train many more specialists in an extremely delicate area. More than half of the country’s drivers have defined themselves as organ donors. But, faced with the trauma of dealing with a family member on the brink of death, many relatives refuse to give permission for donation. Changing this will be an expensive and difficult thing. And in the meantime, many people die.

Relatives should not be placed in the position of having to give permission, It is not their permission that matters. It is the permission of the person who agreed to be a donor.

The table above shows the state of play. Taking each in turn.

Greens – ruled out by National. Greens have not explicitly ruled National out. Preferred partner of Labour

NZ First – deemed unlikely by National but not ruled out. Ruled in by Labour. In past has said will negotiate first with largest party.

Maori Party – ruled in by National. Labour not ruled out but are trying to wipe them out of Parliament. Maori Party preference would be decided after election and consultation.

Mana – ruled out by National and vice-versa. Not ruled out by Labour.

ACT – ruled out by Labour.

United Future – has ruled out Labour. Not ruled out by Labour.

Conservatives – deemed possible by National. Labour has ruled them out. Conservatives not ruled either in or out and said preference is to support largest party.

So the effective groupings now are:

Right – National, ACT, United Future, Conservatives
Centre – NZ First, Maori
Left – Labour, Greens, Mana

Bloomberg reports:

China, the top emitter of greenhouse gases, is also the country that’s “doing it right” when it comes to addressing global warming, the United Nations’ chief climate official said.

Really?

In 2008 China emitted 7.03 billion tonnes of CO2 emissions, which was 23.5% of the global emissions.

In 2012 China emitted 9.86 billion tonnes of CO2 emissions, which was 28.6% of the global emissions.

To put it another way, global emissions increased by 5.6 billion tonnes in four years, and China contributed 61.3% of that increase. This is what the most senior UN climate change official calls “Doing it right”. She should be sacked.

China is also able to implement policies because its political system avoids some of the legislative hurdles seen in countries including the U.S., Figueres said.

By this, she means the legislature is a puppet of the ruling party. So what she is really saying is she thinks a one party state system of government is better than a democracy because it is easier to implement climate change policies, even ineffective ones.

The political divide in the U.S. Congress has slowed efforts to pass climate legislation and is “very detrimental” to the fight against global warming, she said.

So what has happened with US emissions?

2008 – 5.46 billion, 18.3% of world
2012 – 5.19 billion, 15.0% of world

So this UN official praises China for increasing it emissions, criticises the US for its reduction in emissions, and praises the Chinese political system for its effectiveness in fighting climate change.

The PM has announced:

Prime Minister John Key today announced changes to the National-led Government’s Ministerial line-up, to take effect from Tuesday, 28 January.

Internal Affairs and Local Government Minister Chris Tremain, who has announced his intention to retire from Parliament at the upcoming general election, will be resigning from the Ministry.

Peter Dunne will be appointed Minister of Internal Affairs, Associate Minister of Health and Associate Minister of Conservation. Mr Dunne will be a Minister outside Cabinet as he was prior to his resignation in June last year.

Michael Woodhouse will be promoted to the vacancy in Cabinet, and will retain all of his current responsibilities.

Paula Bennett picks up the role of Minister of Local Government, in addition to her current portfolio responsibilities.

The new Minister outside Cabinet will be Peseta Sam Lotu-liga, who will be appointed Minister of Pacific Island Affairs and Associate Minister of Local Government. Mr Lotu-liga is the MP for Maungakiekie and was first elected to Parliament 2008.

Congratulations to Sam and Michael for their promotions. Also kudos to Chris Tremain for stepping down early to allow a reshuffle. In terms of Peter Dunne’s return, I personally think a better timing would have been after the next election, if he had been re-elected by Ohariu voters. I don’t think seven months has been long enough.

The PM also announced:

Mr Key says that given the right electoral circumstances, his preference would be to continue working with the current three partners to the Government, which are ACT, the Māori Party and United Future.

“I believe there is also a scenario where it would be possible to add the Conservative Party to this group.

“While National has of course had differences with ACT, the Māori Party and United Future, together our four parties have formed a stable and successful Government since late 2008,” Mr Key says.

“We also have policy differences with the Conservative Party, however it is likely that there would be enough common ground to work with them in Government.”

In terms of other parliamentary parties, Mr Key ruled out working with Labour, the Greens and Mana on the basis that there is insufficient common ground to achieve a stable and successful working relationship.

“These parties represent a far left wing agenda that we do not believe is good for New Zealand,” says Mr Key.

With regard to New Zealand First, Mr Key said that he believed a post-election working relationship was very unlikely; however he would not rule the possibility out ahead of the election.

“In 2008 we ruled them out because we were unable to reconcile some of their statements on the Glenn donation matter. Six years has passed and, should New Zealand First be returned to Parliament, we would not rule out a discussion after the election.”

As I made clear, my preference was for National to rule NZ First out again. If they do end having to do a deal with Winston, it might give them a third term, but it could come at a considerable long-term cost. I am reserving the right to say “I told you so” if they do, and it all falls apart!

However the public will decide which parties make it to Parliament, and how many are needed to form a Government. So National’s options in order of appeal seem to be:

1. ACT/United Future
2. Maori Party
3. Conservatives
4. NZ First

ACT could get 1 – 2 MPs. United Future 1. So National needs 58 or 59 seats (if no overhang) to govern just with them.

Maori Party will get 1 – 3 MPs. That means National needs 55 to 58 seats to govern with them.

Conservatives could well get 5 MPs (3.6% if they get one electorate seat) and at least three if they win a seat. So National needs 50 to 55 seats to be able to govern with NZ First if the four minor parties all win an electorate seat.

Bob Jones writes:

But the election is still a race and thus interesting, more so as polls suggest it will be tight with National and a Labour-Greens combination currently polling 50/50. The expected thriving economy should consolidate the Government’s support although one suspects most folk will read about this promised new prosperity rather than actually feel it. National’s prime asset is John Key. He’s been an excellent Prime Minister, his genuine affability and popularity, plus his sharp intellect comprising a huge hurdle for David Cunliffe going toe to toe with him in debates. Additionally, my Press Gallery contacts report apathy in Labour’s caucus through distaste for their leader which doesn’t augur well for an impassioned campaign.

Labour have been almost missing in action over the break.

Much is made of the third parties deciding who’s government, specifically New Zealand First and the Maori Party. That’s presumptuous. Neither might be there after the election. Winston was just under 5 per cent then just over in the last two elections, while the Maori Party is in disarray and Harawira’s and their seats may revert to Labour.

I can’t see the Maori Party not being there. The issue will be how many seats they have.

Then there’s Christchurch, which unexpectedly backed the Government heavily last time in the all-important party vote, but polls suggest will not this year. So the election outcome is undoubtedly up in the air. Will Peter Dunne get up again? Probably – he’s an excellent electorate MP. Can Act find an attractive leader whom Epsom can vote for? Probably. This will dismay the Press Gallery who were hugely looking forward to Colin Craig’s arrival and soliciting his views on whether the earth is flat and if not, why don’t we Southern Hemisphere dwellers fall off, and other such pressing issues.

Colin Craig, Winston Peters and Dotcom all have a knack for headlines (positive and negative). But is there room for all three of them?

Still, with all these question-marks the Prime Minister could be forgiven for envying the recent Azerbaijan presidential election in which the results were accidentally released the day before anyone actually voted. After all, we all seek certainty in our lives.

Heh.

Stats NZ reports:

The consumers price index (CPI) rose 0.1 percent in the December 2013 quarter, Statistics New Zealand said today. Higher international air fares and rising housing and dairy prices were partly countered by lower vegetable prices and cheaper petrol.

International air fares rose 12 percent in the December 2013 quarter – the highest quarterly rise since the December 2009 quarter. “International air fares usually rise in December quarters. This quarter’s rise reflects seasonally higher air fares to Asia and Europe,” prices manager Chris Pike said. Package holiday prices (up 7.3 percent) also showed a seasonal rise.

Prices for housing and household utilities (up 0.5 percent) also rose, reflecting higher prices for property maintenance, purchase of newly built houses, and rentals for housing.

Annual inflation is 1.6%which is higher than I like it (I believe in aiming for 1%) but under the midpoint of the 1% to 3% range.

I prefer to look at the long-term series. Here are some comparisons of average annual price increases over the last five years (Dec 08 to Dec 13) compared to the previous five years (Dec 03 to Dec 08).

• Electricity 3.9% compared to 7.8%
• Household Energy 3.6% compared to 10.0%
• Food 1.7% compared to 3.4%
• Fruit & Vegetables 0.6% compared to 6.4%
• Rental Housing 1.9% compared to 3.6%
• Home Ownership 2.9% compared to 8.0%

Labour are very good at claiming they will lower food prices, electricity prices and housing costs – but their track record speaks for itself. Last election they campaigned to remove GST on fruit and vegetables. Well under the last five years of Labour they increased by 32%, and under five years of National just 3%.

The ODT reports:

A group of Dunedin businesses is moving to claim the high ground as debate intensifies over the arrival of oil companies in Otago waters.

However, with Anadarko’s drilling ship, the Noble Bob Douglas, due by the end of the month, protest group Oil Free Otago has also warned more protest action could be expected.

The warning came days after a group of four Dunedin businessmen created a new group, Pro Oil and Gas Otago, to spell out their support for gas exploration off Dunedin’s coast.

The group’s Facebook page has attracted more than 1300 ”likes” since Saturday, including from pro-drilling city councillors Andrew Whiley and Mike Lord, and support was continuing to climb.

Spokeswoman Robyn Broughton, of Dunedin, said the group wanted to counter ”scaremongering” by opponents of oil and gas exploration, and planned to meet representatives from the Dunedin City Council and oil companies.

A public event designed to demonstrate the city’s willingness to embrace the industry and its potential economic benefits was being discussed, although plans were yet to be confirmed, she said.

The city had an opportunity for ”astronomical” economic benefits from a natural gas find, but public debate to date suggested the city would not welcome the industry.

”I don’t want to see my grandchildren raised in London or Europe. I want something that will encourage our young people to come home … [gas drilling] has the ability to do that,” Mrs Broughton said.

It’s nice that some people are prepared to speak up for economic growth.

Their Facebook page now has almost 3,000 likes.

Rev Waldegrave defends his living wage calculations:

Second, she shamelessly selects luxury categories out of the Household Economic Survey (HES) database which is used for all New Zealanders, including the very wealthy, to imply the living wage includes international travel, Sky TV and the double counting of mortgage insurance simply because the questions are there. HES data is the record Statistics NZ gathers to show movements in income and expenditure for all New Zealanders. Everyone is asked all categories, but lower income households are hardly likely to be recording owning yachts or regular international travel. People who rent houses don’t record mortgage insurance, just as homeowners don’t fill in the rent columns.

Actually many low income households have Sky TV. The point is Waldegrave could have asked Stats NZ for data that excluded the costs of luxuries, but then that would not have produced such a high number. And he states why:

A living wage, on the other hand, refers to having those necessities, but also having the ability to participate modestly in society. Examples include being able to afford a computer, especially for children in a household, and a modest insurance policy. It could also include a trip to family in Australia or Samoa for an important occasion where savings have been put aside or extended family contribute.

So Waldegrave’s living wage is designed to include overseas travel. Clear.

Waldegrave misses the key issue around the living wage, and doesn’t mention it once, because it is so fatal to his cause. Only around 10% of those who earn the living wage are in the sort of household his calculation is based on.

We see this issue also in the minimum wage. Tyler Cown blogs a recent paper on the US minimum wage:

Only 11.3% of workers who will gain from an increase in the federal minimum wage to $9.50 per hour live in poor households…Of those who will gain, 63.2% are second or third earners living in households with incomes three times the poverty line, well above 50,233, the income of the median household in 2007.

A stunning figure.

I once was earning at (actually below) the minimum wage. That didn’t mean I was poor, or in a poor household. It meant I was young.

Stuff reports:

Access to costly but life-saving treatment for rare diseases comes down to looking cute on TV or knowing a politician, sufferers say.

Allyson Lock is one of only eight Kiwis diagnosed with Pompe disease, an incurable degenerative disorder. Untreated, it can be fatal, but Mrs Lock of Masterton and other sufferers have been refused treatment because of its cost.

A medication called Myozyme is available, but it is expensive and gets no funding from government drug-buying agency Pharmac. Costs vary according to a patient’s age, weight and severity of illness, but in Mrs Lock’s case have been estimated at $575,000 a year.

She said patients with similarly unusual illnesses had obtained funding for expensive treatment, which was unfair. “They say it’s too expensive, but there are other treatments that cost more. If your family can get you on TV, if you’re a little kid, if the public gets into an uproar, you get funded. That’s what it comes down to.”

It’s probably true that public sympathy plays a role in decisions. But regardless, these are difficult decisions. There is obviously a limit at which the Government can fund treatment, as every dollar spent on one treatment is a dollar not spent elsewhere. $575,000 a year is hugely expensive.  I’m not saying what the limit should be, as fortunately not my decision. And you can only have empathy for those with such conditions that need hugely expensive treatments.

New Zealand Organisation for Rare Disorders executive director John Forman raised the prospect of legal action against Pharmac’s funding refusal, and said it was unacceptable every other developed country was treating its Pompe patients, except New Zealand.

I’m not sure that is quite correct. In some countries I believe it is funded for juveniles only, which is a different variation of the disease.

It would be interesting to know what are the most expensive treatments that are funded by Pharmac. Is there a hard limit, or is it a combination of price and effectiveness?

Stuff reports:

Housing is unaffordable in all eight of New Zealand’s major markets, an international survey shows.

High median house prices have been upwardly skewed by recently imposed mortgage lending restrictions and low mortgage interest rates, an economist says.

The 10th annual Demographia International Housing Affordability Survey classified Auckland, Christchurch, Tauranga-Western Bay of Plenty, Wellington and Dunedin as “severely unaffordable”.

Palmerston North, Napier-Hastings and Hamilton-Waikato were “seriously unaffordable”, the survey said.

The survey uses a median multiple to determine the affordability rating of houses in 360 metropolitan markets in nine countries. The median multiple is calculated by dividing a region’s median house price by the median income.

Regions with house prices more than three times the median regional income are deemed unaffordable.

Overall, New Zealand had a median multiple of 5.5, up from 5.3 last year.

We need to free up more land. That is the component that has been increasing the most.

The Demographia survey is here.

I blogged last Friday my view that John Key and National should rule out a coalition or confidence and supply agreement in 2014 with Winston Peters, as they did in 2008 and 2011.

It goes without saying that I hope NZ First won’t make it back in 2014 (even though some of their MPs are good MPs, their leader is the problem), or if they do they will not hold the balance of power.

But what if they do make it back, and they do hold the balance of power. Does that automatically mean they must support a Labour/Green (and maybe Mana) Government if National has ruled out a deal with them?

No.

They can do so of course. In fact nothing at all can stop them from putting Labour and the Greens into Government, should they wish to. They have the constitutional right to do as they wish.

But there is an alternative. That is National as the largest party forms a minority government, and it continues to govern while it can pass confidence and supply votes in the House. This would mean NZ First abstaining (or possibly voting in favour).

You see one does not need to have a formal deal, where you swap policies or ministerial portfolios in exchange for confidence and supply. In countries such as Canada, minority governments form most of the time without a formal agreement on the basis the largest party should get a chance to govern.  You don’t need a formal agreement. You just need to be able to pass confidence votes in the House and get supply for the Government.

Now a minority government would need to of course negotiate with NZ First and/or other parties in Parliament in order to pass laws, but that happens already. For every law National at present only has 59 votes and has to get one or more parties to vote with them in order to pass a law. When they can’t, the law fails or is amended to be acceptable.

National would also need the House to vote for the Government’s Budget, or we would have an election. I would expect that a minority National Government would negotiate with parties on what they would like in the Budget, in order to get support. The Government may not agree to everything asked for, and that party would have to decide whether to force an early election or not. Doing so could risk an electoral backlash.

The advantage to National of minority government is that you would not need to have National and NZ First pretending they agree with each other on most issues, and that any criticisms between the parties would not be fighting within the Government, but just what you normally expect in Parliament.

And what are the advantages to NZ First? Also considerable. They get to be the deciding vote on most legislation, have a real chance of getting significant policy gains, but don’t run the risk of being in a third term government. They also retain the ability to differentiate from National. And as they have the ability to bring the Government down at any time, or put Labour into power, everyone would be very nice to them!

Now it is arguable that a minority government with no signed confidence and supply agreements could be unstable, and not last full term. That is true. But even having a formal agreement is no guarantee – as we found out in 1998 when the coalition split apart and dissolved between National and NZ First.

So as I said on Friday, I think Key should rule Peters out again. If we get an election result where say National again has 59 seats and Labour can’t govern without the Greens, then Key should offer to form a minority government. Peters may decide to go with Labour in return for some baubles but I am unsure he could stomach putting the Greens into power. Instead he may allow National to form a minority government, but he’ll be in a position to be the deciding vote on almost every law that comes before Parliament.

So what Key could announce (I have no idea what he will) is that National could work in Government with ACT, United Future, Maori Party and/or the Conservatives. After that, he would not entertain a formal confidence and supply agreement, but would be willing to to run a minority Government if any other party in Parliament were willing to abstain to allow that to happen.