The Dom Post editorial:

Wellington City Council chief executive Kevin Lavery said he felt “deflated” when councillors blew his carefully crafted annual plan out of the water. He was being diplomatic, no doubt. In fact, the politicians had behaved irresponsibly.

Mr Lavery had presented them with a plan that held rate increases within the council’s self-imposed limit of 2.5 per cent. But then councillors voted to fund extra projects – and by the end of the meeting the rates increase had jumped to 2.75 per cent. Mr Lavery was entitled to feel miffed. Officials “actually gave you $300,000 to spare”, he noted. Instead, they had overshot.

This was bad enough, but Councillor Bryan Pepperell rubbed salt in the wound. He said council staff should work to reduce the rates increase to 2.5 per cent when the full council meets in two weeks to adopt the yearly budget. This was an outrageous suggestion, and Mr Pepperell rightly got a caning for it.

Cr Simon Marsh said it was like saying, “we made the mess, now someone else clean it up”. Exactly.

The buck has to stop with the politicians themselves. They have to make the tough calls on cuts and they have to resist the urge to fund their pet projects. In this case they failed to do either.

We need Councillors who can make tough decisions, rather than keep increasing our rates beyond the ability of households to pay.

Labour, Greens and NZ First release their “report” from their manufactured inquiry into the manufacturing crisis. They specialise in putting out cherry picked data to try and convince people there is a crisis in manufacturing.

To counter that I’m blogging these graphs which are all directly from the Stats NZ Infoshare database and show some key metrics over time, so people can see the actual changes and trends. They are a mixture of positive and negative, but not an indicator of a crisis I would say. In fact all have been improving recently.

This is the manufacturing component of NZ’s GDP. There certainly has been a decline in real prices, but note it started in 2006 and since 2010 it has started growing again.

This is the total gross earnings from people working the the manufacturing sector. A significant fall from Q1 2008 to Q3 2009, but some growth since then.

The number of jobs in the manufacturing sector has been falling since 2004. This is partly because of growing automation.  The large falls began in Q1 2007 until Q4 2009. Since 2009, there has been some modest growth.

The manufacturing sales show a similar pattern. A big decline started Q1 2008. Since Q4 2010, it has been growing – quite strongly in recent months.

This graph I blogged last week and is not from Stats NZ, but the BNZ/Business NZ Performance of Manufacturing Index. It is basically a specialised business confidence index for the sector. It is at a nine year high.

So what do these graphs all show? Several things:

1. NZ suffered from the global financial crisis in late 2008 through to 2010
2. NZ manufacturing started declining prior to the GFC, in Labour’s last term. This is no surprise as we went into recession at the beginning of 2008, and the tradeables sector was in recession from 2005.
3. Jobs in manufacturing have been declining for a longer period, due to automation
4. Every manufacturing indicator is now positive and growing, with confidence for the sector at a nine year high

It’s good for parties to promote alternative economic policies for sectors such as manufacturing. That is what politics is about. It is not good however to try and manufacture a crisis, when there clearly is not a crisis.

As for the exchange rate, have a look at the TWI in the last year.

And before anyone lies, this post was my idea, all my own work, and unknown to everyone else in the entire universe  until it appeared on the blog.

David Fisher at NZ Herald reports:

Opposition leaders say New Zealand’s involvement in the international “Five Eyes” spying network should be included in an inquiry into intelligence agencies.

Labour leader David Shearer and Green co-leader Russel Norman said too little was known about what benefit New Zealand got out of the relationship.

It also brought from Dr Norman comparisons to New Zealand’s rejection of nuclear weapons in the 1980s – a step which saw the country frozen out of friendly relations with the United States for 25 years.

The call comes after a week of international suspicion over spying by the United States’ National Security Agency, a sister agency to New Zealand’s GCSB in the Five Eyes network. NSA whistleblower Edward Snowden claimed the agency used data from Apple, Facebook, Google, Yahoo and other tech giants to spy on billions of people.

Mr Shearer pledged to hold an inquiry into the intelligence services if the party won power next year. He said it was an important step towards improving oversight and would include the Five Eyes network.

I expect the Green Party to say things like NZ should consider withdrawing from our intelligence sharing operations with Australia, Canada, UK and US.

But I’m actually shocked that Labour is now agreeing with the Greens, and saying we should look at withdrawing.

I don’t think I can imagine an act more likely to permanently alienate our traditional friends.

Labour’s lurch to the left continues. Look at this list of Green party policies that Labour has now adopted after initially resisting:

• Capital Gains Tax
• Universal Child Payment
• Extending Paid Parental Leave
• Exchange Rate Interventions
• NZ Power nationalisation
• Abolishing youth rates
• Reviewing involvement in Five Eyes

Labour seem determined to battle the Greens for the left vote, and abandon the centre to National.  This is an unusual approach for an opposition.

One of these men is NZ Labour MP David Clark and one is German CDU MP Jens Spahn.

Spahn was elected an MP at the age of 22, and is now 33.

Just been to The Penthouse Theatre to see National Theatre: This House. It’s filmed version of the play, and if you are into politics, I’d call it a must see.

It is based in the House of Commons from 1974 to 1979 and shows the machinations of both Government and Opposition Whips during that five year period of minority government or very unstable majority Government.

Almost all the events shown are based on real life incidents such as the MP who faked his own death and the Liberal Party leader charged with murdering his gay lover.

The play ends with the 1979 vote of no confidence in the Callaghan government which the Opposition won by 311 to 310.

It is on Monday night at 7 pm and Wednesday morning at 10 am. A three hour show, with an interval. Superbly done and a must see for politicos.

The NZ Herald reviews the Fork & Brewer in Wellington:

Tucked away in a former pizza joint just off Wellington’s Willis St, this pub presented me with something of a problem when I first found it. Having been to an event where the troughing and grazing were top-notch, the stairs were a struggle for me.

However, that was the only struggle I had as I found an absolute gem of a bar at the top; a haven for those who love not just great beer but exceptional food as well.

The place is large enough to accommodate both a generous bar area and a quieter dining area, despite having a brewery slap in the middle of it. With 40 beers on tap, you need to give yourself a bit of time when you visit.

The beer selection is nicely democratic, offering mainstream as well as craft versions, which allows the customer to decide what to drink. Among the craft beers are some stand-out drops, like Renaissance Stonecutter Scotch Ale, Yeastie Boys’ Pot Kettle Black and Fuller’s London Pride among many others. The bottled selection is strong, with a nice choice of beers from around the world.

The wine list is well thought-out and handily priced, while the spirits selection is great.

The service is great, too, with attentive, knowledgeable and, best of all, chatty and genuinely funny people behind the stick, making it the sort of place where even a solo drinker can linger.

The food is simply divine. Chef Anton Legg loves beer and it shows in how he uses spent grain from the brewery as an ingredient in his cuisine. He also makes his own vinegars, which are sensational. If you order the glorious hand-cut, spent-grain-slated chips, make sure you request some of the pale ale vinegar to dip them in. Try the spicy chicken wings, too.

I can thoroughly recommend the chicken wings also!

Wellington is packed with great beer bars (something Auckland should be taking note of) and this is a one of the better ones, taking a simple concept – good beer and good food – and turning it into a real art form. Go there, and enjoy, but make sure you don’t have anything on afterwards because you won’t want to leave.

Scores

Service: 5
Menu: 5
Drinks: 5
Atmosphere: 5
Overall: 5

You can’t complain about a review like that.

Fork & Brewer is my favourite bar in that area of town. Not only does it have great beer, food and service – it also has power plugs at every table for laptops!

BNZ Chief Economist Tony Alexander has eight proposals for helping with housing problems. They are:

1. Initiate a large builder training programme targeting not just youth but low skilled migrants. Yes, the migrant gates would need to be opened. Just the signalling of strong intention to boost builder numbers would make investors think twice about their capital gain assumptions. 
2. Ban councils from imposing any development fees and allow developers to install their own infrastructure. 
3. Create an SOE whose sole purpose is to undercut existing building materials suppliers through bulk purchases from offshore, nodal warehousing and distribution from just three or four locations in the country, with a separate agency responsible for monitoring the quality of materials sourced. 
4. Initiate a new large state house building programme relying largely on the to be created new carpenters etc. Constrain new state houses to more efficient building systems including containerised modular housing (this doesn’t involve shipping containers), central and screwed in foundations, etc. 
5. Ban house sales to non-residents (even new houses given the ease with which special developments could arise targeting solely folk offshore and soaking up construction sector resources). 
6. Impose a tax on all houses owned by Kiwis offshore with the aim of encouraging them to sell them. 
7. Put in place a capital gains tax on second properties and farmland and immediately payable stamp duty for all second house purchases. 
8. Rezone all land within 10-20 kilometres of existing city boundaries as residential

Nice to have some radical thinking in this area. Tony predicts the chances of hos policies being implemented:

Low, zero, zero, mild, mild, zero, low, zero. 

Which ones do you agree with?

I like 1, 2, 6 and 8. I support a CGT but on all properties, not just some.

Stuff reports:

Moderate cleric Hassan Rohani won Iran’s presidential election today, the interior ministry said, scoring a surprising landslide victory over conservative hardliners without the need of a second round run-off.

Interior Minister Mostafa Mohammad-Najjar announced on state television that Rohani secured just over 50 percent of the ballot based on a 72 percent turnout of 50 million eligible voters. “Mr Hassan Rohani … got the absolute majority of votes and was elected as president,” Najjar said.

The outcome will not soon transform Iran’s long tense relations with the West, call into question its disputed pursuit of nuclear power or lessen its support of Syria’s president in the civil war there – matters of national security that remain the domain of Supreme Leader Ayatollah Ali Khamenei.

This doesn’t mean a radical change of policy. The Supreme Leader remains in charge. But it does mean a President who is not as offensive as his predecessor.

Though an establishment figure, Rohani is a former chief nuclear negotiator known for his nuanced, conciliatory approach. He has pledged to promote a policy of “constructive interaction with the world” and to enact a domestic “civil rights charter”.

Rohani’s wide margin revealed a broad reservoir of pro-reform sentiment with many voters, undaunted by restrictions on candidate choice and campaign rallies, seizing the chance to repudiate the dominant hardline elite over Iran’s economic woes, international isolation and crackdowns on social freedoms.

The fact he won on the first ballot is a good sign of strength for the reform movement. Over 36 million Iranians voted and he got 50.7% of the vote, with the next two candidates getting 16.6% and 11.4% respectively.

Rodney Hide writes in the HoS:

It was Dunne’s basic goodness that did for him. Politicians leak all the time. Helen Clark was masterful. But they don’t get caught. That’s because they know what they’re doing.

You certainly don’t use your Parliamentary email. You don’t discuss with a journalist the possibility of leaking. That gives them the power, either through error or design, to get you sacked.

If you’re going to leak, leak; don’t leave your fingerprints all over it.

The leaking, too, has to have a point: it advances your cause, knocks an enemy off course, distracts the media from your own problems, or helps set the agenda. The leak was of no political benefit to Dunne whatsoever.

Most leaks are to disadvantage the other side. This leak disadvantaged the Government he is part of, and didn’t help Dunne at all. A few people think that maybe Dunne wasn’t the leaker – that he just helped Vance confirm the story and she had a second source. But personally I go with Occam’s razor.

The HoS reports:

Teachers at a state school have called in the union to protest about being asked to lead pupils in daily karakia.

The NZEI union has been asked to address concerns held by some staff at Auckland’s Kelston Intermediate School over reciting a Maori prayer before lessons start each day.

The school recites a karakia at the start of its weekly assembly and in classrooms before lessons begin.

Staff deliver the prayer, which asks for the day to be blessed, help with work and to have a good week.

An NZEI spokeswoman confirmed the union was intervening at the school.

“NZEI is helping facilitate further discussion at the school on the issue and the school is welcoming of this.” Kelston Intermediate principal Phil Gordon said he had no idea some staff were unhappy with karakia in the classroom until contacted by the union representative.

A Ministry of Education official said state primary schools were required to be secular – but this didn’t preclude teaching about religion.

There is a difference between teaching about religion, and compulsory prayer sessions led by a teacher.

NZEI is right to intervene and stand up for the rights of their members not to have to partake in a religious ceremony.

Gordon said he reassured the union representative the karakia was a cultural component of school life and an expression of beliefs that reflected the Kelston community.

“I guess what they might have been inquiring about is the presence of karakia, etc, within school so we talked about what we’re doing is not a religious thing but a cultural thing.”

It is both religious and cultural. They can do cultural stuff that is not religious, but prayers by their nature are religious.

Fran O’Sullivan writes at NZ Herald:

David Shearer, Russel Norman and Winston Peters will have an opportunity to present themselves as the “government-in-waiting” when they turn up to HamiltonJet’s premises on Monday to release the results of their parliamentary inquiry into the future of manufacturing.

What awful timing for them. On Friday the Performance of Manufacturing Index hit a ten year high, and on Monday the three parties will have to proclaim how manufacturing is in crisis and dying.

Mechanisms to deal with an “overvalued and volatile dollar” – which include making the dollar and jobs additional priorities for the Reserve Bank,

Again, what bad timing for them as the dollar has dropped by around 10% in the last few weeks.

Over a four-year period manufacturing jobs have fallen by nearly 40,000 (16.7 per cent); the number of manufacturing businesses has dropped by more than 1300 (6.1 per cent); the annual value of manufactured exports was down by 12.4 per cent; and manufacturing profits fell by 17.4 per cent.

Fran doesn’t say which four year period though. In the last four years the Household Labour Force Survey shows 255,600 manufacturing jobs in March 2009 and 246,200 jobs in March 2013 which is a decline of 9,400 – not 40,000.

Now any decline is not good, but 9,400 is one quarter the size of the 40,000 the Greens stick around.

NZ Herald quiz is here.

John Armstrong writes in the NZ Herald:

What were they thinking? Why did four of Labour’s most politically astute MPs – Phil Goff, Annette King, Clayton Cosgrove and Kris Faafoi – not foresee how awful it would look for senior party figures to be seen hobnobbing with SkyCity executives in the company’s corporate box at Ed

Almost a quorum for a caucus meeting!

The consequent perception is that Labour says one thing and does another. And, as oft-stated, perception is everything in politics.

To add further insult to injury, the MPs were fooling no one in lambasting the $400 million-plus project.

At some point, Labour is going to have to shift its position on the convention centre deal away from outright opposition to something more accommodating of the aspirations of the thousands without work in Labour strongholds such as South Auckland who view SkyCity’s latest venture as offering the possibility of a secure job.

It will be fascinating to see their election policy. Will they vow to legislate the deal away without compensation, which would see the convention centre construction stop overnight.

The gains that the party made in the polls earlier this year have largely evaporated. That has been replaced by a discernible sense of drift. David Shearer is once again struggling to gain profile. Sources describe working relationships in the leader’s parliamentary office as “dysfunctional”.

Despite the denials, I have now heard from three independent sources that the decision has been made for staff changes there, and they are actively trying to recruit a replacement.

Some MPs are at cross-purposes over policy. Others – notably Trevor Mallard – are consumed with making mountains out of parliamentary mole-hills. How many times can you stage a walkout from the parliamentary chamber without losing dramatic effect?

As I said, it is now more note-worthy when Mallard doesn’t walk out! And recall this is Labour’s nominee to be Speaker!

The blunt truth is that in terms of activity, innovative ideas, outright attack and all-round impact, the Greens are making Opposition look easy. They are running rings around Labour. They also wisely maintained a degree of perspective regarding Dunne, with Russel Norman this week questioning the value of a privileges committee hearing which is being sought by Labour.

Yep, the Greens did go too far also with talk of Police complaints, but soon wised up and backtracked.

David Shearer’s February reshuffle of his shadow Cabinet has, however, so far failed to create any sense of urgency that might suggest the party actually wants to govern. …

Meanwhile, the clock is ticking ever faster on Shearer.

I think Shearer will survive, because the caucus can no longer just roll him. If they no confidence him, then the leadership goes to a full ballot with the unions and members having the majority of the votes. The outcome of Cunliffe v Robertson is by no means certain.

Michael Forbes at Stuff reports:

Wellington Mayor Celia Wade-Brown has been accused of “blatant electioneering” by her mayoral opponent, John Morrison, after she left him out of last-minute efforts to secure a football World Cup qualifying match for the capital.

Ms Wade-Brown was in Auckland yesterday, wooing New Zealand Football officials who will decide where the All Whites will play their final home qualification game in November ahead of next year’s World Cup in Brazil.

The choice is between Wellington’s Westpac Stadium or Auckland’s Eden Park.

Mr Morrison, who is the city council’s sports portfolio leader, said he had been working with Wellington’s bid team for months.

But he found out late on Thursday night that the mayor had “pulled rank” and would be leading the delegation instead of him, he said.

“She’s attempted to basically sneak around me and slip up there [to Auckland] in the hopes that she can come away with some glory, presumably,” Mr Morrison said.

“It’s totally out of order in terms of etiquette,” Mr Morrison said.

“I just hope she doesn’t unstitch the deal since she hasn’t really been involved at all.

“I hope she doesn’t stuff it up for Wellington.”

Ms Wade-Brown, who was yesterday quoted in The Dominion Post as favouring a “consultative and inclusive leadership style”, defended her decision to go.

I think the Mayor is worried that if Morrison pulled off another successful venture, it would make her re-election even tougher. So putting her ambitions ahead of the city. Sad.

The New Yorker looks at PRISM:

Snowden’s actions revealed a few distinct, though interrelated, N.S.A. programs. The first, of which we have the clearest picture—largely because government officials have acknowledged and defended the program—collects the records of nearly every call placed within the United States. Snowden leaked to the Guardian a secret court order demanding that Verizon Business turn over the records—“telephony metadata”—of calls within, to, and from the United States that cross its network. It then emerged that the N.S.A. has been collecting such records for seven years, from every major carrier in the country. The President and others in the Administration emphasized, in response, that the N.S.A. wasn’t listening to actual conversations. But the vast database of records the N.S.A. collects can say far more than a phone conversation. Metadata, which can include caller and location information, is fairly talkative. (Senator Dianne Feinstein has stated that the N.S.A. does not require a court order to search its database of call logs; it needs only “reasonable, articulable cause to believe that that individual is connected to a terrorist group.”)

So basically they have this huge database of all calls involving US telcos, and then when they want to check someone out they look at whom that person has been calling or receiving calls from.

Meanwhile, the program called Prism, which aims to collect digital intelligence about foreign targets, remains frustratingly opaque. The leaked slides of the PowerPoint presentation that formed the basis for the news—its intended audience within the N.S.A. remains unclear—claim that nine leading tech companies participate in Prism, permitting the N.S.A. to gather data like e-mails, chat records, photos, videos, file transfers, and more. An additional slide published by theGuardian states that Prism features “collection directly from the servers” of those tech companies. The Post wrote that the N.S.A. and F.B.I. “are tapping directly into the central servers of nine leading U.S. Internet companies.”

But it increasingly appears that the technical descriptions in the Post and the Guardian may have been imprecise. This would be unfortunate, whether it resulted from the limited knowledge of the reporters and their editors, or simply from flawed claims in the internal documents. The technical details of Prism matter; they carry implications in terms of the nature of the program itself and the extent of tech companies’ coöperation. While the Times, citing “people briefed on the negotiations” between the government and the companies, has described Prism as functioning like a “locked mailbox” to which the government has the key, the Post has reported that, according to anonymous “intelligence community” sources, “government employees cleared for PRISM access may ‘task’ the system and receive results from an Internet company without further interaction with the company’s staff.” It added that “companies cannot see the queries that are sent from the NSA to the systems installed on their premises.”

They key aspect seems to be the ability for NSA staff to pull data directly from the Internet companies, without those companies having the ability to check they are only taking data they have a legal right to access. But it is unclear if they can do this.

Google’s response to the allegations has also been aggressive. The company’s chief legal officer, David Drummond, wrote in a post, “We cannot say this more clearly—the government does not have access to Google servers—not directly, or via a back door, or a so-called drop box. Nor have we received blanket orders of the kind being discussed in the media.” The company has publicly requested that the government allow it to disclose the number of Foreign Intelligence Surveillance Act national-security requests it receives—which must currently be kept secret—because its “numbers would clearly show that our compliance with these requests falls far short of the claims being made.” (Microsoft and Facebook have followed suit.) What Google says is very different from what the N.S.A. documents that the Post and the Guardian have published allege. But it seems unlikely that Google would intentionally engage in even minor misdirection, given its high price: if Google were caught lying, it would lose users’ trust forever, which could actually destroy the company.

I doubt Google is lying.

We also lack details about Blarney, a program mentioned in a slide as part of the N.S.A.’s “upstream” data-collection efforts, which a leaked slide describes as the “collection of communications on fiber cables and infrastructure as data flows past.” The Post characterizes Blarney as collecting metadata about Internet communications—similar to the call-records program—possibly allowing the N.S.A. to build an index of Internet traffic and how devices and people connect. Blarney may be far more invasive than Prism, but it remains unclear. Two other presumably ongoing “upstream” data-collection programs remain unnamed, their titles redacted from the slide.

A very useful summary of the situation.

Hat Tip: Dim Post

Oh dear. The oppositions manufactured crisis in manufacturing has been dealt another blow. Today saw the release of the latest BNZ/Business NZ Performance of Manufacturing Index. And what does it say:

The manufacturing sector recorded its highest level of activity for almost nine years, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for May was 59.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This is the highest level of overall expansion since June 2004. Compared with previous May results, the 2013 value was the highest since the survey began in 2002.

That’s a strange definition of crisis.

BNZ Economist Doug Steel said that PMI results do not get much bigger than this, even globally. 

“The pick-up is material. It puts upside risk to our manufacturing and overall economic growth forecasts over coming quarters. The strong result essentially gives us more confidence that the recent and forecast upswing in construction activity will flow through to manufacturing activity, with the usual lag.”

Russel Norman will be very upset.

That’s a pretty impressive crisis.

Oh dear. David Shearer is just making it worse for him and Labour.

First we have this interview in Stuff:

Today Shearer admitted that the MPs accepting the hospitality looked bad.

“I would have said, this is pretty unwise guys, given what we know,” Shearer said, adding that he believed the MPs had learned their lesson.

So Shearer is saying his office didn’t even know the MPs were attending?

But Shearer denied the situation undermined Labour’s arguments against the terms of the convention centre deal.

The invitation was “obviously a gift, on one level it is a perk of the job”, he said, adding that his MPs went to a large number of events which they would probably prefer not to.

Oh my God. Now he is arguing that the poor Labour MPs didn’t event want to attend. It was just their duty to go. How awful – getting to see an All Black test from a corporate box with free food and alcohol.

Shearer had gone into the box to speak to someone he knew was there, whom he declined to name. He would not explain how he knew the person was in the box.

He said he did not know his colleagues were being hosted by SkyCity until he got there. 

So Shearer was popping into the box to see some one else? And no one had told him Labour MPs were there. I think Shearer is fundamentally an honest person so is telling the truth. But it says volumes about their internal communications.

Also Whale has audio from Radio Live where David Shearer says, well listen to it yourself and try and work it out.

Words fail me, Hopefully not you, so make your comments below. As always captions should be funny, not nasty.

The Telegraph has a nifty tool where you put in your income and it tells you how much tax you pay over a 43 year career, and where it goes.

If you earn 50,000 pounds you pay over 43 years:

• 219,000 pounds for welfare
• 110,000 pounds for health
• 83,000 pounds for education
• 43,000 pounds for interest
• 36,000 pounds for defence

Would be good to see some lifetime figures for NZ.

Have heard from two separate sources that two very senior staff in David Shearer’s office are departing.

Have been wrong once before on this issue so not naming staff, but as I said have heard from two different people. No doubt will be confirmed one way or another this afternoon.

Nicole Mathewson at The Press reports:

Phillipstown School is seeking legal advice about whether it can challenge the Government’s decision to have it merge with Woolston School.

In a statement, the school’s Board of Trustees said it was “disappointed and concerned” by Education Minister Hekia Parata’s confirmation last month that she intended to combine the schools.

The pair are set to merge at Woolston in January 2014.

“We are concerned that the minister’s decision does not comply with the requirements of the Education Act, and have instructed public law experts Chen Palmer to urgently advise us on whether the minister’s decision is lawful,” board chairman Wayne West said.

Well there goes 80% of their operations grant for the year! 🙂