The Energy Efficiency and Conservation Authority is proposing minimum energy performance standards and labelling for computers.

This has a certain deja vu, with the proposed maximum flow for shower nozzles in 2008, on the grounds of energy efficiency.

I’m all in favour of energy efficiency labelling. This allows consumers to make informed choices. When I buy a fridge or a washer/dryer, I always look at the labels and they form part of the decision on what model to purchase.

But it is another thing to have the Government regulate a minimum energy efficiency for a type of device.  Consumers pay for their electricity, and they are best placed to decide if the cost of having a less energy efficient device outweighs the benefits.

This proposal is a form of nanny state. If agreed to, it would be the Government dictating to consumers what computers they are allowed to buy within NZ. The alternative option of mandatory labelling should be chosen instead. If the Government should not dictate out shower flow speed, neither should they dictate what computers can be purchased.

Having said that, I would point out that the comparison with shower nozzles is only partial. It is quite possible that requiring computers to be more energy efficient will not affect the performance of the computer in any noticeable way. The main impact is probably an extra $20 on the price. While the proposal to limit the pressure in showers, would absolutely and noticeably have affected the performance of the shower.

The Herald each election does a Mood of the Nation survey when they get reporters onto the street and interview around 500 people. I think this generally is a good initiative. They report that it is unscientific, but it allows them to use actual quotes from people to use in their stories. So long as they stress the survey is unscientific, and the focus is more on what people said rather than the numerical results, I think that is fine.

But you can take these street surveys too far. Off memory, in 2008 a street survey of 100 people was reported by the Herald with great prominence as showing Judith Tizard retaining her seat. She lost of course.

This time we have a street survey of just 47 people in Epsom, that generates a story. It says:

John Banks has some support in the wealthy suburb of Remuera, but is less popular on the liberal fringes of the Epsom electorate, according to a Herald street survey.

A poll of 47 Epsom voters yesterday found the National candidate ahead of Act’s Mr Banks by 22 votes to 20.

It is ridiculous to do a story on a street poll of 47. First of all, you have the sampling problem – that in fact it is a poll of people who happened to be out on a street – in no way random.

But even if you overlook the fact it is a street poll, the sample size is ridiculously low.  The margin of error is 14.7%!

I generally regard 300 as the minimum acceptable for an electorate poll. That gives a 5.8% margin of error. A sample of 47 is close to useless.

Jim Anderton has been referred to the Police, for his letter to all voters in Wigram urging them to vote for Labour’s Megan Woods.

The Electoral Commission has ruled on a complaint from Cameron Slater that Jim Anderton is ineligible to be a promoter of a candidate advertisement, as he is a party leader. He did not register as a promoter, and someone involved in the administration of the affairs of a registered party is ineligible to be a unregistered promoter.

This could be quite a lot more serious that the normal referral for forgetting to put an authorisation statement on an advertisement. There are two reasons this is much more serious:

1. Jim Anderton has done something he was not allowed to do under the law.
2. This was not an obscure ad on Facebook or in a school newsletter, but a letter sent to every voter in the electorate

Sadly we will not know before the election the outcomes of any of the complaints to the Police. In what appears to be a fit of cowardice, it seems they have a policy that they will not decide on any prosecutions until after the election. This is massively wrong, and actually encourages law breaking.

The Southland Times proclaims:

Labour wants inquiry into fracking

Fans of Battlestar Galactica will share my amusement. Those who are not, can check the urban dictionary.

I’m wondering who will head up the inquiry?

The Dom Post reports:

Will Wellingtonians be blown away by the winning alternative to Wellywood?

The public vote has been counted and the sign dubbed Wellington – Blown Away is the clear winner of the first stage of voting with a whopping 46 per cent of the votes.

Designed by a team from advertising agency Saatchi & Saatchi, the sign dIt is aepicts the word “Wellington”, with the last few letters appearing to be whipped off the hill by the wind.

Second with 21 per cent of the votes was The Eye of the Taniwha, which shows the giant eye of the mythical beast gazing across the harbour.

These two designs will now go head-to-head with the Wellywood concept in a final vote that opens on Wednesday, and closes on November 17, with voting via dompost.co.nz.

As I blogged previously, putting two alternatives against Wellywood may be an attempt to skew the result. There is a risk that say 65% don’t want Wellywood, but if the vote is 35% Wellywood, 33% Wellington – Blown Away and 32% Eye of the Taniwha, then Wellywood wins. It is a shame they do not allow us to rank the three alternatives.

Because of the nature of the vote, I urge all those who do not want Wellywood to vote for “Wellington – Blown Away”, to avoid splitting the vote and letting Wellywood win. It got twice as many votes as Eye of the Taniwha in the first vote, so is the most likely to beat Wellywood.

Voting starts tomorrow and both Wellingtonians and non-Wellingtonians can vote. Please vote for “Wellington – Blown Away” to finally kill off the Wellywood sign once and for all.

Colin Craig’s Conservative Party has been claiming they will win Rodney, on the basis of this poll report, which is on their website. The key extract is:

47.2% of those who had decided who they were likely to vote for as an electorate candidate would vote for Craig.

This would position Craig in first place in the electorate, ahead of ‘The National Party Candidate/Mark Mitchell/Lockwood Smith (36.3%).

The polling was done by Research First. Whale recently revealed their director is a candidate for the Conservative Party. I commented at the time:

This does not mean that the poll results are or are not valid. As I said, validity is based on knowing the question asked and the methodology. You can poll for an organisation you are involved with. For example, Curia does an annual poll for the Republican Movement on whether people want NZ to become a republic when the Queen dies. Now I am on the Council of the Movement, but this doesn’t influence the results. The key thing is I have publicly disclosed my involvement.

Now in response to a request from Whale, Research First have released details of the questions they asked. It is good they have done so, because as I said the exact questions asked are often vital to interpreting a poll’s results. Their response says:

 Relevant questions included the following, in order of being asked:

1 For your party vote, have you decided who you will be voting for in the election?

2 Which party do you currently intend to vote for?

3 Have you heard of the Conservative Party?

4 Have you heard of Colin Craig?

Participants were read a brief preamble to provide context: ‘Colin Craig is the leader of the Conservative Party of New Zealand. In the Auckland mayoral election, Colin came third with over 40,000 votes’. Then asked…

5 If Colin were to stand in as a candidate in your electorate, what would be the likelihood that you would vote for Colin to be your member of parliament (on a scale of 1 = definitely; 2 = likely; 3 = neutral; 4 = unlikely and 5 = very unlikely)?

Those who identified they were neutral or unlikely to vote for Craig were asked:

6 Who do you intend to vote for?

Okay, let’s take this step by step. The first two questions are pretty standard. Then there are two specific question asking awareness of the Conservative Party and Colin Craig. Then a statement was read out which puts Craig in a positive light (mentioning his votes in the Auckland Mayoral election), and then they ask people how likely it is they will vote for Craig, and only if they say they are neutral or unlikely to they even ask you who else you will vote for.

The results are no surprise, once you realise this is the questions that were asked, and in what order. You have a number of factors here influencing the responses, namely:

• The mention of the Conservative Party and Colin Craig first
• The description of Colin Craig provided to respondents
• The question only asked about voting for Colin Craig, with no mention of anyone else
• Only if you say you are neutral or unlikely to vote Craig, do you even get asked whom else you might vote for
• The other candidates are unprompted, so you are comparing unprompted results vs a prompted result.

I am surprised that Research First did not insist on these questions being included in their report, as in my opinion they are quite vital to it. I also think it is unwise to compare answers to a prompted question to answers to an unprompted question.

If I was wanting to poll that seat, and get a result which was fairly trying to ascertain support, the questions I would use are either:

Which candidate, or party’s candidate are you likely to vote for with your electorate vote?

or

The candidates for Rodney are Colin Craig, Conservative; Beth Houlbrooke, ACT; tracey Martin, New Zealand First; Mark Mitchell, National; Terea Moore, Green and Christine Rose, Labour. Which candidate are you likely to vote for with your electorate vote?

One might also have a follow up lean question for those undecided. I very strongly suspect that the results to the questions above would be vastly different to the results of the poll commissioned by the Conservative Party.

There is never any 100% correct version of a question, and rarely 100% incorrect version. In terms of ascertaining potential support for Colin Craig, those questions may be legitimate if commissioned for internal use only. But what I think was wrong was to have them publicly reported as Craig being “in first place”. The questions should have been reported.

The lesson for media here, is to always ask for the questions. Those media who reported the poll, should be wary of doing so in future without checking.

Labour’s latest bold policy is to borrow $2.6b and spend most of it on paying people not to work.

Labour says it will effectively extend the in work tax credit to, well parents not in work. Ironically in Government they refused to do so, even in the face of legal challenges to the policy.

Labour had already pledged to give all beneficiaries an extra $10/week. This would give a DPB recepient an additional $60 a week on top of that. While National is working on incentives not to remain on the DPB, Labour is getting rid of one the few existing incentives to be in work.

In fact Labour’s policy is unfair to working low income parents. Because if you work, you have additional costs such as travel to work, work clothes etc.This policy makes it harder for someone to go from welfare into work.

Incientially this is not the first time Labour have pledged to end child poverty. They said in 2002 that if they got re-elected, “ending child poverty will be its top social policy“. Not as bad as their policy to have no one under 18 not in work, study or training – that particular policy they had announced five times previously.

So with this policy working families will have to pay the interest on Labour’s extra borrowing, while a sole parent on the DPB will get an extra $70/week in the hand.

At Curiablog I have full results from the Te Karere Digipoll of Tamaki Makaurau.

Sharples is 35% ahead of Shane Jones.  That will be a landslide, if an actual result. This was a seat Labour boasted of winning.

Four times as many voters cite Key over Goff as their Preferred PM. And this is amongst mainly poor urban Maori in South Auckland. The areas in the electorate which have more than 1,000 voters are:

• Clendon Park
• Mangerefour time
• Mangere East
• Manurewa
• Otahuhu
• Otara
• Papatoetoe
• Weymouth

So even in Mangere, Manurewa and Otara, four times as many Maori roll voters are saying they prefer the National Party leader to the Labour Party leader.

This is somewhat akin to a Republican candidate being four times more popular in Detroit as a Democrat. National only got 7% of the vote here in 2008, yet Key is four times the support of Goff to be PM.

Andrea Vance at Stuff blogs:

Camp David Cunliffe must be a pretty lonely place right now.

Labour’s lost the argument on the numbers. Phil Goff was allowed to front up to the public woefully unprepared on Labour’s economic policies.

That was one of two things: incompetent or a deliberate undermining of the leader.

Now we have the numbers, they are not so convincing.  Labour appeared to be hiding $6 billion of extra borrowing to restart contributions to the Super Fund. And it seems they have overstated the revenue stream from SOE dividends.

On top of all this Cunliffe looked nasty and sexist with his snide comments about police minister Judith Collins (who I’m pretty sure doesn’t want to breed with him either).

He’s been in parliament for more than a decade – but he’s a little short on allies within the caucus.

Saying all his, he was impressive – and confident – in a head to head debate with finance minister Bill English yesterday. He was also well-received on his last appearance on TVNZ’s Q+A a couple of weeks back.

David will never be accused of lacking in confidence!

I also rate his abilities. He was a good Minister, and if there is to be a Labour Government again at some stage (which is inevitable), I think he would be a better choice for  Finance Minister than any other alternatives. Whether he has the skills to be leader is not yet known.

iPredict has markets on who will be the next Labour Party Leader. The current probabilities are:

1. Cunliffe 35%
2. Parker 32%
3. Shearer 13%
4. Robertson 5%
5. Jones 5%
6. Little 4%
7. Mallard 2%
8. Street 0%

The only thing that looks certain is the next leader will be a bloke!

This is in some contrast to National. If Key retires around 2016, then I suspect we could have three women as realistic contenders for National’s leadership.

Paula Bennett announced:

Social Development Minister Paula Bennett is pleased to announce the successful applicants to the Fresh Start Innovation Fund.

“Nine providers have received funding to make a real difference with young offenders, particularly with young Maori,” says Ms Bennett.

“As part of the Fresh Start policy for young offenders, the Innovation Fund supports new ideas or programmes that offer a different approach to working with at risk young people,” Ms Bennett says.

Providers in this round will receive a combined total of almost $402,700 funding, out of more than $3.3 million awarded to 43 providers to date. …

“My thanks to independent selection panel chair Katherine Rich and to Sue Bradford who helped assessed the applications and recommended the successful programmes,” says Ms Bennett.

Good to see that Paula will involve someone who is a harsh critic of her policies, and is in fact standing against her. And also credit to Bradford for being constructively involved.

Labour’s law and order policy is to repeal the three strikes law so repeat violent and sexual offenders get out of jail far quicker. National has just announced five new proposed law changes, on top of the 18 passed to date:

1. Make it harder for those accused of serious offences to get bail where there is a pattern of offending while on bail.
2. Make assaults on police and corrections officers an aggravating factor for sentencing.
3. Random drug and alcohol testing of those on bail or home detention, where this is a condition of their sentence or bail.
4. Only hold annual parole hearings for those offenders who are addressing their offending and/or completed parts of their offender plan. In other words, no hearing if it is obvious they will not get parole.
5. Introduce civil detention orders for the very small (5 – 12 a year) number of high-risk offenders who are clinically assessed as being near certain to re-offend when released. Such orders can be sought by the Parole Board from the High Court.

I suspect the civil detention orders are intended for cases like the Beast of Blenheim.

A former girlfriend of the man known as the Beast of Blenheim said she is devastated he will be released next year, and he should never be allowed out of prison.

Stewart Wilson was convicted in 1996 on a raft of sex offences involving 16 females over a 23 year period and is due for release next September.

Asked if he would comply with a condition that he not have any contact with a child under the age of 16, Wilson was reported to have said “I don’t give a stuff about it”.

There are not many offenders, like Wilson. But when he makes it clear he will not comply with any release conditions, and it is almost inevitable he will rape again, there is nothing the current law can do, except wait for him to offend, and then after there is a new victim, do something.

At www.oweourfuture.co.nz you can try out Labour’s calculator, known as the wrongulator.

Whatever sums you put in, it will never give the same answer twice 🙂

The MP for Tamaki, Allan Peachey, died on Saturday. It was no secret he had cancer, but few knew it was this advanced.

Allan was a top class educationalist and if his health had been better, may have had the opportunity to be a top class Minister of Education. Education was his passion.

My thoughts go out to his family especially, but also his close friends and colleagues.

The last MP to die, while an MP, was Rod Donald in 2005 I think. I’m not sure who was the last one before that.

Incidentally if Allan had been contesting Tamaki again, his death would mean that voters in Tamaki would get a party vote only at the general election, and a by-election would be held, probably in December.

Whale provides video of “The moment”.

I wasn’t surprised that Roger’s funeral service packed out Old St Pauls. There were several hundred mourners from the young to the old. I did reflect during the service that an untimely earthquake would have wiped out the entire VRWC, leaving Whale Oil as the sole survivor to continue on.

Stuff has a write up of the service.I’ll do my own comments shortly, but first want to point people to the tributes page on Roger’s blog. There’s a wonderful collection from friends and colleagues. Some of the more well known are Michael Porter, Richard Epstein, Tyler Cowan, Ralph Norris, Gil Simpson, Tenby Powell, and Jenny Gibbs.

The service was an emotional mixture of celebration and grief. There were six speakers. Bryce Wilkinson spoke of Roger’s professional achievements. Regardless of whether or not one agreed with Roger’s policies, what everyone stressed was his incredible intellect and an incredible work ethic, combined with a total lack of ego.

His older brother Alan Kerr spoke, and then David Leonard, an old school/uni friend. David told many great stories of Roger. My favourite was the well kept secret that his friends nicknamed him Fido at university. On the basis of Kerr=Cur. They even went to the trouble of registering Roger with the Council and getting name tags. However they had to kill Fido Kerr off some time later when they got a letter telling them he needed a rabies shot.

Then two of Roger’s sons spoke, plus one of Catherine’s sons. Incredibly warm and moving tributes, and also huge sadness about the short period of time he had with his granddaughter and how they hoped he would last until December for grandchild no 2. Alas it was not to be.

One comment during the speeches had the entire church laughing out loud. Amongst a long list of people being thanked for helping Roger and Catherine cope during his final days, they thanked the ACT Party for their wonderfully distracting neediness.

So it was a great series of tributes to Roger’s life, and his personal qualities. But it was also very sad. Almost every speaker spoke of the huge love between Roger and Catherine. One quote was Roger helped make the world better, but for Catherine he was her world. Another said that Roger’s time together with Catherine was the happiest of his entire life, and the same for her. Roger worked up until the day he died. It is sad he never got to enjoy a quiet retirement with his loved one. Mind you, I suspect even in a quiet retirement, he would have taken his famous green pen along.

Afterwards a few of us went to Dockside to do some memorial toasts. That was nice. On Friday I had a call from another Roger. I went to call him back and as I typed his name in, it came up with Roger Kerr’s name and number also as an option. I deleted him from the phone, reflecting with sadness how that is when it really sinks in – realising no more calls or talks. There’s something final about deleting someone from your contacts.

I thought I would end with a story, which sums Roger up for me. It was when I worked for National in Parliament in 2003. Don Brash was the Finance Spokesman then, and we had a Caucus Economic Committee meeting on privatisation. Roger and a colleague from the BRT were the invited guests.

A document was circulated showing the companies that remained in state ownership. There had been a perception that all of them bar a few power companies had been sold in the 80s and 90s. But this paper listed around 50 companies still owned by the state. As discussion started on the economics and politics of privatisation, one MP asked Roger which of the 50 state owned companies were suitable for privatisation, and which were not. I have always remembered and treasured Roger’s reply, which of course was “All of them”.

I don’t tell the story to trigger a debate about asset sales. This is not the thread for that. There is a legitimate variety of opinions on its pros and cons. I tell the story to illustrate how Roger would never use weasel words, or say something he didn’t believe in. To the end, he would always advocate for what he believed was right. We need more men and women of conviction.

Radio NZ reports:

ACT Party leader Don Brash is dismayed that Labour wants to borrow a lot more than National, saying it’s imprudent.

“This makes no sense at all. Why would any householder with a large debt borrow more money to invest in shares? No prudent householder would do that – the Government shouldn’t be doing that either.

“Personally, I think the Government should be selling the assets in the Super Fund and using it to pay off debt. Why the Government should borrow money to invest in shares is simply beyond me.”

The Green Party is also critical of Labour’s plans to borrow to feed the Super Fund, also known as the Cullen Fund. Co-leader Russel Norman believes such a move is economically irrational.

“The Cullen Fund is a repository for surpluses, so when the Government’s running surpluses it makes sense to stash money away for the future and we really applauded Labour for that.

“Whereas, when you’re running a deficit, the logic of borrowing to put into your savings doesn’t make so much sense to us.”

I’m pleased to see some economic sanity from Russel Norman on the issue of Labour’s plans to borrow to save. Norman is correct to call it irrational.

Readers should be aware that Labour’s promise to borrow for the fund perverts its original intentions, as set up by Michael Cullen. I blogged what Cullen said when it was launched:

How will the government pre-fund future New Zealand Superannuation costs if there are insufficient surpluses?

The government will make contributions to the Fund from available surpluses. Where these are insufficient for making the required contribution a reduced contribution would be made.

So what Labour are proposing with their goofynomics is not what Cullen said would happen. He never proposed borrowing money to stick into the Cullen Fund. It was explicitly a fund whose contributions would come out of surpluses.

Now Labour are proposing to borrow an additional $6.1b off China over the next three or four years and to give it to the NZ Super Fund, who will promptly invest it mainly in international sharemarkets (that is where 58% of the Fund is).

Now Europe remains on the brink of a debt crisis. If Greece goes under, this will snowball. French banks especially will be massively hit and may go under. That in term will push some US banks under, and what happened in 2008 could look mild. If this happens, expect global sharemarkets to plummet.

And the economic geniuses in Labour say this is the perfect time to borrow $6.1b and invest it mainly in international equities!!!

As Russel Norman, said it is irrational.

Yes, in theory sharemarket investments will get you a higher return than sticking money in the bank. But do you know why that is? Because they are riskier. And as individuals we may choose to take those risks, but it is not the role of the Government to borrow money on our behalf and risk it on overseas (or domestic) investments. The world’s financial markets are fragile, and there is no guarantee that the returns of the past will ever be achieved again.

The fund has now been going for eight years. That is more than a quarter of the time set aside for it to gain so much money, that it can start to subsidise superannuation from 2031. It has lost a whopping $2.8b in just five months. Over the entire eight years, it’s return has been just 0.5% higher than the average Treasury bill rate (the cost of borrowing). It’s not quite as simple as this calculation, but this means that the actual extra money available for superannuation in 2031 onwards is $2b (annual cont approx) x 0.5% = $10m/year or $80/m over 8 years. Allow some compounding and let us round that up to $100m.

Yes $100m is what eight years of the Cullen Fund has achieved, compared to the alternative of just paying off debt. Not going to make a fuck of a lot of difference to the sustainability of superannuation in 2031, will it?

National, the Greens and ACT all agree. Say no to borrowing to save under Goofynomics. We need less debt, not more.

UPDATE: The NZ Super Fund has e-mailed me to comment:

It is correct that the return on the Fund is 0.50% above Treasury Bills since inception to 30 September 2011 (or as you say about eight years).

But you have confused two calculations to arrive at your $100 million figure. The 0.50% p.a relates to the Fund’s return relative to Treasury Bills (which you do say), not to the contributions made by the Government and so should not be used to calculate the return on the Government’s contributions (which ceased in July 2009 and so did not cover the whole eight-year period in any event).

Yes the Super Fund overall has increased its contributions by more than $100m. But the point I was making was a comparison to if the contributions had been used to pay off debt.

Total contributions since inception are 14.88 billion. Our return since inception is actually 3.92 billion. Both of those figures are on our website. The 3.92 billion includes just over $2 billion in NZ tax (again, as on our website), which the Governments that received it over the life of the Fund (the bulk of which was in the last two financial years) would not have gotten otherwise. Clearly, we don’t know what the return on that $2 billion might have been had we invested it instead. The point though is that it’s a bit more than $100 million.

There is a debate about whether you include the tax returns, as the argument is that if the money was (for example) used to subsidise KiwiSaver more, then those funds would also have generated more tax.

Additionally, we believe that in taking a strongly commercial approach to investing locally we produce social and economic returns for NZ over and above the financial returns on those investments (e.g. the 50% investment in Shell, the 40% investment in Kaingaroa Forest, the millions committed to locallthy-managed funds providing growth capital to small and medium size NZ businesses, the investments in high-quality dairy land etc etc.) Now of course that’s not directly relevant to meeting the future cost of NZ Superannuation – but hopefully you agree it’s more broadly positive for NZ.

I should point out that in no way am I critical of the job the Guardians have done. My own superannuation funds have taken a beating also – every month I stick $1,000 in and they lose more than that, so my fund is dropping. My argument is around whether it is sensible to borrow to invest in the Fund.

Finally, a big part of the value of the Fund is that it exists at all. It is a part of the Crown balance sheet that has one specified purpose and one only – assisting future Governments to meet the rising cost of New Zealand Superannuation. We believe that does make a difference to the sustainability of superannuation from 2031 onward.

It does, but so does paying off debt. As I said in my original post, it is a balancing of returns vs risk. The events of the last three years have reminded us that the risk is real.

Andrew Balemi (Auck Uni Stats Dept) at Stats Chat blogs on polls:

But let’s go back to the Horizon panel poll mentioned above. It claims that it’s to be trusted as it has sampled from a large population of potential panellists who have been recruited and can win prizes for participation. The Horizon poll adjusts for any biases by reweighting the sample so that it’s more like the underlying New Zealand adult population – which is good practice in general.

However, the trouble is this large sampling frame of potential panellists have been self-selected. So who do they represent?

To illustrate, it’s hard to imagine people from more affluent areas feeling the need to get rewards for being on a panel. Also, you enrol via the internet and clearly this is biased towards IT-savvy people. Here the sampling frame is biased, with little or no known way to adjust for any biases bought about from this self-selection problem. They may be weighted to look like the population but they may be fundamentally different in their political outlook.

Panel polls are being increasingly used by market researchers and polling companies. With online panel polls it’s easier to obtain samples, collect information and transfer it, without all the bother involved in traditional polling techniques like CATI.

I believe the industry has been seduced by these features at the expense of representativeness – the bedrock of all inference. Until such time as we can ensure representativeness, I remain sceptical about any claims from panel polls.

I believe the much-maligned telephone (CATI) interviewing, which is by no means perfect, still remains the best of a bad lot.

National has released an updated costing of Labour’s extra debt. They now have it at $15.6b over four years. Labour says it is $3.6b. This means there is no dispute that Labour will borrow more. It probably also means that the amount would be somewhere between $4b and $16b.

I’ve spent quite a few hours reading both Labour’s and National’s documents. Here’s how I see it:

• Borrowing for NZSF contributions of $6.1b. National is quite correct that this counts as an increase in net debt. If you look at crown accounts and budgets under Labour, the value of the NZSF is not included as part of the net debt calculation. However to be fair to Labour, their point is that this money is not being borrowed for spending, but to allow the NZSF to purchase investments.  The wisdom of that is another issue, which I’ll cover in another post. The bottom line is that the borrowing does increase bet debt but it does not increase the operating deficit, which is the more important thing to worry about. Borrowing for investments and capital purchase is still borrowing, but it is not as bad as borrowing for  operational spending. It can even be good.
• National’s figures on revenue look far more robust to me. Labour have taken no account of the extra avoidance by having an 11c difference between top personal and trust and corporate rates. They’ve also just invented $600m of revenue from unspecified anti-avoidance measures. Also not taken into account how a general R&D tax credit will see much expenditure reclassified as R&D to gain the credit.  Their ETS revenue figures have already been challenged by the Greenhouse Policy Coalition as out by 100% or so.
• Likewise on the expenditure side, there are policies that Labour had not funded, and polices previously announced not yet specified. National has credited back to them their $972 allowance for future policies and specified the costs of those previously announced but not yet costed.
• The dividends claimed as revenue as a hugely complex area. I had to talk to a boffin to get my head around it. First of all you have to understand that until an asset part-sale proceeds at a particular price, it is all theoretical. The price shares float at will determine the ultimate impact on the books. Having said that, in theory the share price should reflect the expected future earnings and the loss of dividends should be around equal to the saved interest on reduced debt. Now what is this you say about PREFU including the reduced debt but not the reduced dividends? Should it not include both? The explanation is that until a decision is made on a specific SOE part-sale in a specific year, you can’t forecast the impact on dividends. So has PREFU included the reduced debt? Sort of. The Govt has made a policy decision that the capital requirements for the next five years will be funded out of the asset part-sales. This is $900m/year or $4.5b total. This is expected to be the minimum the sales *less* foregone dividends will bring in. Remember the target range is $5b to $7b. So Treasury have done the correct thing for their purposes. But in terms of comparing National and Labour I agree it is unfair not to take some account of dividends. However rather than try and guess the impact on dividends (and get it wrong as Labour did) I think the fairer thing is to simply reverse the policy assumption that the capital spending will be funded from SOE part-sales. Over the four years this is $3.6b. Until we know details of SOE part-sales debating their impact on the deficit and hence debt is somewhat pointless. It all depends on the price the shares get.
• With the CBD rail loop, I go with National’s figures. The SH1 expansion they will can is scheduled for well into the future. To fund the CBD rail loop, they will need to borrow.

So putting aside SOE part-sales, overall I make it that Labour will increase net debt by around $12b over four years, of which half is for NZ Super Fund contributions.

True Increase in Labour’s Debt (2)

Winston Peters has said:

New Zealand First is not going with National.

New Zealand First is not going with Labour either. We are making that clear here today.

New Zealand First is not going with the Greens or the Maori Party. …

MMP is criticized by those who believe they have been born to rule but since this system was introduced, the party with the most votes has always formed the government.

We believe that the party that gets the most votes should try to form the next government.

But there’s one condition – the one safeguard that voters have – the one get out of jail card.

And that is do not let any political party in New Zealand govern alone under any circumstances. It is too dangerous!

Before we analyse what Winston actually means with this, it is first important to note one thing. Winston lies. Not just generally, but specifically on issues such as these. In 2005 he said NZ First would not take up the baubles of office. That was universally interpreted as meaning they would not take up a Ministerial role. Yet, as we all know Winston became Foreign Affairs and Racing Minister, allowing him to reward his secret backers.

Stuff have interpreted this as:

NZ First leader Winston Peters says the party will remain on the Opposition benches and refuse to support either of the two main parties if it is reelected to Parliament.

In a speech to be delivered to party faithful in Auckland today, Mr Peters all but killed any hope of Labour stitching up a minority government with his support if NZ First passed the 5 per cent threshold, saying he believed that the party that got the most votes should try to form the next government.

“New Zealand First is not going with National. New Zealand First is not going with Labour either. We are making that clear here today.

NZ First would not countenance a deal that involved the Greens or the Maori Party.

No Right Turn has blogged this this has killed off Labour’s dream:

Winston Peters has announced that he will not back either main party on confidence and supply, and will refuse to support any arrangement involving the Greens or Maori Party. So, that’s it then. Labour’s dream of cobbling together a coalition government if it does well enough (already a forlorn hope) is now dead. The issue now is not whether John Key or Phil Goff is Prime Minister, but whether Key gets to rule with an absolute majority.

But Winston has not in fact said definitely what he will do. At best he seems to be saying he will oppose both National and Labour. That could mean if NZ First did make 5% and hold the balance of power, he would force a new election by voting against supply and confidence.

A Government can only govern if it has supply and confidence. All Winston has said that the party with the most votes should try to form the next Government. Nowhere has he said he will allow them to.

Winston has left massive wriggle room, so he can do in 2011 what he did in 2005. The question that media should ask him is “Will he vote for confidence and supply for the largest party, against confidence and supply, or abstain?”. A related question is “What conditions will be attached to that”.

He has said NZ first is not going with the Greens or the Maori Party. That doesn’t answer the question of what if National needs (unlikely but possible) both NZ First and Maori Party to govern. Is he saying he will vote against if there are Maori Part Ministers but vote for if they are not Ministers?

Overall the only conclusion I can draw is that a Winston saying he will oppose whomever forms the Govt, and his apparent conditions on which other parties can be involved just makes new elections likely if they make 5%. Political instability is the last thing we need as Europe totters on the brink of economic disaster.

One interesting thing is that Winston and No Right Turn have both said National should not govern alone. NRT said:

This isn’t something we should allow to happen. As we saw back in the FPP-era, absolute majority government is constitutionally dangerous. It turns our country into an elected dictatorship, allowing a single party to run roughshod over everyone else and abuse the Parliamentary process to impose policies for which it has no mandate. MMP’s (thus far) enforcement of coalition and minority government prevents that from happening. It means the government has to negotiate for policies, convince other parties (and by extension the public) that its policies are acceptable. In other words, it keeps us safe. And that’s something we need to preserve.

Presumably this means Idiot/Savant is calling on voters to vote ACT. Because that is the best way to have a National-led minority Government. I/S has said that the Government will be National-led. That means that extra votes for Labour, Greens, NZ First or Mana will just be wasted as none of them would support a National-led Government.

A vote for the Maori Party will not work, as they are highly likely to have an overhang.

That leaves United Future and ACT. Now those parties need 1.2% to get an second MP and 0.45 to avoid overhang. United Future is looking like it will be an over-hang seat. So the best way for people to have a minority National-led Government is hence to give ACT the party vote.

Now personally I do not endorse ACT, as Idiot/Savant has done. If the voters vote to give John Key a majority, he has already said he will offer to share Government with the Maori Party, United Future and ACT – and at a minimum a policy co-operation agreement with the Greens.

UPDATE: Danyl at Dim-Post nails it:

Peters’ strategy is pretty simple. By ruling out the possibility of going into coalition with Labour, he attracts back right-wing voters who like his policies on immigration etc, but don’t want to cast a vote for his party if it means he’ll go into coalition with Labour. Then, after the election, Peters can go into coalition with Labour and throw a temper tantrum about media conspiracies every time someone suggests he promised not to go into coalition with Labour.

Stuff reports:

Law breaking tenants would be locked out of a state house for up to a year under National Party policy released today.

Excellent idea. The criminals in state houses often terrorise their neighbours.

As for where they will live, well there are thousands of other landlords around. They’ll have to convince a private sector landlord that they will be good tenants. That in turn may gave an incentive to stop the crime.

Key said National would insulate all state houses built before 1987 by the end of 2013.

An existing insulation programme would be expanded to cover a further 4600 state houses, he said.

The Greens will be pleased.

Who is the real winner from David Cunliffe’s brain fart, where he thought that in the middle of an election campaign, he would insult the highest ranked female Cabinet Minister by saying he thinks she is so unattractive, that no man would sleep with her, even to save the human race?

The answer is David Parker.

I’ve long advocated that Cunliffe is the most likely next Labour Party Leader. In recent months Parker has become a viable alternative.

Now assuming that there is a leadership ballot in December, the jibe which led the TV news last night will still be strong in their memories. Combine that with some internal anger over why it took so long to get fully costed fiscals, and I am worried I may lose my money.

Another possibility is Grant Robertson will become leader sooner than ideally he would want to. Grant is a smart guy who knows that in an ideal world he’d have another term of experience before becoming leader. But if Cunliffe has pushed himself out, and Parker is not sees as viable, then maybe Robertson will stick his hand up this time.