The Herald reported:

The National Party has won its appeal over how much it must pay for breaching the copyright of Eminem’s Lose Yourself in a 2014 election ad.
In a decision released today, the Court of Appeal allowed the National Party’s appeal – and reduced the damages payment down from $600,000 to $225,000.
“On the evidence, the proposition the National Party turned a blind eye to the risk of copyright infringement or saw a risk and embarked on a reckless course of conduct with respect to that risk was not sustainable,” today’s decision says.

$225,000 damages is a lot better than $600,000. Of course not as good as zero damages.

Business Insider reports some insights from Mark Textor on why voters there are sick of politics. Has some resonance:

You work hard and do the right thing, and get no wage growth while the big end of town and politicians get tax cuts, wage increases and bonuses.
You pay your rego and taxes to build roads but still have to pay tolls to use them to get your kids to school and yourself to work while others profit.
You save up all your life and put into your super then they change the goalposts just when you’re getting near to benefiting from those savings.

You set up a little family trust to protect your small business or family farm but the politicians want to raid it with taxes.
If you make a financial mistake at work you get the sack, but the CEOs of banks keep their jobs and all their normal pay when criminals use their bank to launder money.
You invest your bit of inheritance in a blue chip Aussie company and expect a decent dividend but you get low returns while management get bonuses for poor performance.
You fill in a million forms to get any help from government but the politicians can’t even get their citizenship paperwork right.

You tighten your belt for hard times whilst governments spend billions on the big end of town consulting firms to write reports that are never implemented.
The buildings at your local school are in disrepair and your local club hasn’t enough money for your kid’s equipment whilst stadiums get built for big corporate sports that end up empty.
You have to manage kids’ schools, and homework and sports, your household budget, relatives and help out the local charity – all while holding down a job – no excuses. But Canberra is full of excuses for not doing their job.
And more than ever you have to tackle the harsh realities of life whilst the media, business of politicians prefer to indulge in pure ideology.

Worst, you can’t occasionally swear, tell a politically incorrect joke, have a fag, eat some fast food or enjoy a beer or two without someone important telling you are bad, when most of the time you do the right thing.

Politicians should take note.

Stuff reports:

If everyone in the world could move to whatever country they wanted to, New Zealand’s population would swell by 231 per cent.

United States-based research firm Gallup’s most recent Potential Net Migration Index (PNMI), a 2015-2017 survey of more than 450,000 adults from 152 countries, has revealed that New Zealand would see a substantial influx of people if migration were free.

In fact our increase would be the biggest in the world, percentage wise. We’d go from under 5 million population to over fifteen million.

Controlled migration is very beneficial to New Zealand. Our points and skills systems means that most immigrants boost the economy and help generate tax revenue which funds social services.

But uncontrolled immigration would be very different.

The countries that would have the biggest percentage population increase with open borders would be:

1. New Zealand 231%
2. Singapore 225%
3. Iceland 208%
4. UAE 204%
5. Switzerland 187%
6. Australia 179%
7. Kuwait 169%
8. Bhutan 162%
9. Canada 147%
10. Luxembourg 131%

The countries that would lose the most population are:

1. Sierra Leone -70%
2. Haiti -63%
3. Liberia -60%
4. Congo Kinshasa -50%
5. Nigeria -46%
6. Syria -44%
7. Kosovo -42%
8. El Salvador -40%
9. Guinea -36%
10. Senegal -34%

Stuff reports:

North Korea says it will never unilaterally give up its nuclear weapons unless the United States removes its nuclear threat first.
The statement carried by the official Korean Central News Agency on Thursday (local time) comes amid a deadlock in nuclear negotiations between the United States and North Korea.
It raises further doubts on whether leader Kim Jong-un will ever relinquish an arsenal he may see as his greatest guarantee of survival.

This stance is the exact opposite of what they agreed to do.

The United States will of course never get rid of its nuclear weapons. So by now demanding they do so before he gives his up, Kim is now saying North Korea will never give up their nukes.

So the summit was a chance for peace, but like all others it has failed.

The Herald reports:

The Government is potentially spending up to $53 million a year on its flagship fees-free policy for students who have either withdrawn from or failed tertiary courses. …

Answers to written parliamentary questions reveal that there were 2619 students through to September who had enrolled in a fees-free course and later withdrew – though these students may have enrolled in other courses.
With an average of about $7000 spent on each student under fees-free, National MP Simeon Brown said that would amount to about $18m that the Government paid to tertiary providers for students that had later withdrawn.
National MP Nikki Kaye then asked about the students who failed courses paid for by the Crown.
“What are the people of New Zealand paying for? How many students have failed and effectively had their fees paid for by the Crown?”
Commission chief executive Tim Fowler said the average fail-rate was about 12 per cent – or about 5000 of the 41,700 students in fees-free tertiary education.
That would cost about $35m, assuming $7000 per student.

If people pay nothing towards something, they don’t tend to value it so much. It used to be us taxpayers pay 75% and students pay 25% which was about right. Now we pay 100% and of course the money gets wasted.

Rodney Hide writes:

Sir Michael Cullen may well achieve his career highlight having left Parliament with his appointment as Chair of the Tax Working Group, a position for which he has no qualification or expertise.  It’s given him his best opportunity to whack “rich pricks” good and hard.
 
“Rich pricks”
 
Sir Michael has always had a thing with “rich pricks”.
 
In his maiden speech in 1982 he took the opportunity on interjection to thank the farmers of Canterbury and the Hawkes Bay who had provided him with a scholarship to attend Christ’s College: “I ripped them off for five years then, and I shall get stuck into them again in the next few years”.
 
He was gleeful powering up unions at the expense of employers in 2000: “Eat that! You lost, we won, it [the ECA] goes!”
 
His “Eat That! You lost” mentality also saw him increase the top rate of tax from 33 cents to 39.
 
His descriptions of Sir John Key were classic Sir Michael: “working class scab” and “rich prick”.
 
Capital Gains Tax
 
Sir Michael Cullen is again after “rich pricks” through his Tax Working Group.
 
The Working Group’s Interim Report recommends taxing all capital gains on (p.37):
 
the sale of land and all property other than the residential home;
intangible property including goodwill;
plant and equipment; and,
shares and other equity interests.
 
The gain is to be calculated in nominal terms and taxed at the taxpayer’s full rate.  Taxpayers are to be taxed on inflationary gains.
 
The Working Group’s concern throughout is that it’s the wealthy (“rich pricks”) who make capital gains.
 
Definition of Income
 
The Group’s advocacy for capital gains is not a reasoned argument but flows entirely from the Group’s definition of income: it defines income to include capital gains and then declares not taxing capital gains a distortion, inefficient, and unfair (pp. 5, 18, 26, 28, 32, 34).  Further, it’s wealthy men who own capital and so not taxing capital gains favours rich men over women and poor people (pp. 18, 28, 32). That’s it.
 
The Group explains their definition of income as follows: “realised capital gains provide a basis for consumption in the same way as labour or interest income (p. 24)”.
 
It’s this definition of income that provides the Group’s entire rationale to tax Capital Gains.
 
What should be taxed
 
The Group’s problem is that their definition of income implies much bigger “holes” in the tax base than not taxing capital gains and about which the Group is silent.
 
The income definition employed is what is known as Haig-Simons: “consumption plus changes in net worth”.
 
The definition means the “tax holes” include the imputed rentals of owner occupied homes, DIY (such as mowing the lawns, renovating the kitchen), looking after your own children and doing your own housework.  All of these activities and services are untaxed yet provide “a basis for consumption in the same way as labour or interest income”.
 
Indeed, they are taxed when you pay someone to do them for you.
 
Applying the Working Group’s argument, all these activities and services should be taxed and should be taxed ahead of capital gains because their value is larger and therefore the distortion, the inefficiency, the loss of government revenue, and the unfairness are greater.
 
Of course, no one is advocating such taxes (apart from Gareth Morgan’s TOP Party which at the last election advocated taxing imputed rentals).  The Group uses Haig-Simons simply to justify taxing capital gains. The definition itself is not an argument and is wholly inadequate as an arbiter of what should be taxed and what should not be taxed.
 
That the Group don’t consistently apply their definition shows their ideological bias to taxing capital gains and hence, they believe, in taxing “rich pricks”.
 
Apples and the tree
 
The problem of the capital gains tax is that it taxes income twice (three times actually because income tax double taxes capital income: once when you earn it and again on any return from saving and investments).
 
An asset like an apple tree has value because it produces a future income stream in the form of apples.  A barren tree has no economic value. The value of the tree is entirely a product of the future income stream.
 
Selling an asset, like the apple tree, is simply selling a future income stream.   Double the income stream and the value of the asset doubles. Tax the income stream by 50 percent and the value halves.
 
Any capital gain on selling the tree is already taxed because the tree’s value is discounted by the tax that has to be paid.  There is no tax dodged in not paying tax on capital gains because the future income of the asset is taxed and the asset’s value discounted accordingly.
 
Taxing capital gains is a double tax. There is no distortion, inefficiency, unfairness, in not taxing capital gains.  The distortion, inefficiency and unfairness arises in taxing capital gains.
 
The effect of taxing capital gains
 
Taxing capital gains is the most damaging of taxes.  It locks-in assets because it’s only on their sale that tax is liable.  Holding on to assets avoids the tax. Don’t sell the tree, don’t pay the tax.  That makes for a sclerotic economy where assets aren’t so-readily bought and sold and so don’t achieve achieve their best and most economic use.
 
That makes for a poorer economy.
 
Taxing capital gains double taxes entrepreneurship, the very engine of a successful economy.  Entrepreneurs typically take their reward by way of capital gains: they build businesses that employ people and generate wealth.  Taxing capital gains means less entrepreneurship.
 
Taxing capital gains doesn’t cost “rich pricks” but poor workers.  Investment funds are highly mobile around the world. Their supply curve in the jargon is highly elastic.  That means the cost of taxes on capital is shifted to workers. It’s workers who carry the cost through lower wages than they would otherwise enjoy.
 
What drives investment is risk and after-tax rate of return.  A country like New Zealand increasing their tax on capital lowers the after-tax rate of return.  The flow of investment funds falls until the after-tax rate of return adjusts back to what it was before the tax.  The return on capital remains the same: it’s just that New Zealand workers have less capital to work with and as a result are less productive than they otherwise would be with lower wages as a consequence.

Capital Gains Tax entirely counterproductive
 
A Capital Gains Tax in New Zealand would prove entirely counterproductive: it would be damaging to the economy with its cost borne by workers, not “rich pricks”.
 
That tax burdens are shifted has been understood by economists since 1838 (Cournot, Researches on the Mathematical Principles of the Theory of Wealth) and in all text books since 1890 (Marshall, Principles of Economics).
 
Taxing capital gains won’t even achieve what Sir Michael intends despite its cost.
 
There should be no surprise by this.  Sir Michael invariably dismisses economic analysis of his policies as “ideological burping”.  

The Washington Post reports:

President Trump announced Thursday that Defense Secretary Jim Mattis would leave his position in February, marking the departure of an influential figure who has steered the Trump administration toward foreign policy continuity and restraint.

Trump has almost no-one left who will say what they actually think is best. He only wants people who will agree with him.

His resignation letter makes it clear he thinks Trump is ill suited as Commander in Chief. Specifically he cites:

• The need for alliances such as NATO and Defeat-ISIS
• The need to be unambiguous with countries such as Russia who want to shape the world on authoritarian values
• The need to treat allies with respect
• The need to be clear-eyed over malign actors and strategic competitors

This also comes at a time when documents have shown that Trump was actively trying to negotiate a Trump Tower deal in Moscow, while campaigning to be President. So his fondness for Russia may have nothing to do with blackmail or foreign policy – just simple business.

Almost 2,000 people have voted in the 2018 Kiwiblog Awards. The winners are:

• National MP of the year – Simon Bridges wins with 51% followed by Melissa Lee on 32% and Paul Goldsmith on 17%
• Labour MP of the Year – Kris Faafoi wins with 52% followed by Jami-Lee Ross on 28%, Grant Robertson 11% and Jacinda Ardern 9%
• Minor Party MP of the Year – David Seymour gets a majority of 68% followed by 19% for Shane Jones and 13% for Julie-Anne Genter
• MP of the Year is picked up by Judith Collins on 39%, then Simon Bridges 34%, Melissa Lee 14% and Jacinda Ardern 13%.

The MP of the Year results of course reflects the readership of Kiwiblog (but I note Russel Norman won in 2012).

Stuff reported:

New Zealand will be voting for the controversial UN Migration Compact.
The Government sought legal advice before making the decision to become part of the first-ever UN global agreement on a common approach to international migration.
Foreign Affairs Minister Winston Peters said the advice said the compact did not compromise sovereignty.

Neither did the TPP but that didn’t stop Winston railing against it in opposition.

The comments on the NZ First Facebook page are interesting. Here’s a few:

• Go to hell NZ First. You’re never getting my vote again.
  
• Change your name to New Zealand Second. 
• Bullshit Winston. You turncoat!. That’s it for me. Never again NZ First & many will agree
• Winston , no more of my vote !!
• Bad call I been voting nzf since I was 18 and I don’t like this call.
• I don’t like us signing this,,most likely I will not vote NZ First next election. That will be first time in 20+ years.
• This is a MASSIVE BETRAYAL by Winston Peters. Make no mistake NZ First. There will be consequences!!! Every NZ First supporter I know is in shock and this is spreading amongst supporters like wild fire.
• BS!!! You led everyone that voted for you up the garden path….Never again!
• You are a complete joke! Many of us wish to take back our votes for New Zealand First. What a bunch of fools those who voted for you are. 

Definitely not happy campers.

Voting is now open for the 2018 Kiwiblog Awards.

The contest for National MP of the Year is between

• Simon Bridges for toughness under pressure and keeping National in the 40s
  
• Paul Goldsmith for exposing the fraud and waste from Shane Jones’ corporate welfare
• Melissa Lee for forensic pursuit of Clare Curran
  

The contest for Labour MP of the Year is between

• Jacinda Ardern for keeping Labour popular
• Kris Faafoi for all round competence and composure
• Grant Robertson for strong economic stewardship (ie didn’t let his colleagues spend all the loot)
• Jami-Lee Ross for services to the Labour Party

The contest for Minor Party MP of the Year is between:

• Julie-Anne Genter for public transport advocacy including biking to hospital to give birth
• Shane Jones for delivering the money to the seats that vote for them
• David Seymour for services to dancing and euthanasia

Finally for overall 2018 MP of the Year, it is between:

• Jacinda Ardern for keeping Labour popular and showing you can be Prime Minister and a mother to a new born
• Simon Bridges for toughness under pressure, keeping National in the 40s and ruling out new taxes
• Judith Collins for exposing the failings of Kiwibuild
• Melissa Lee for forensic pursuit of Clare Curran

A professor of philosophy writes in the NYT:

Unless we believe there is such a profound moral gap between the status of human and nonhuman animals, whatever reasonable answer we come up with will be well surpassed by the harm and suffering we inflict upon animals. There is just too much torment wreaked upon too many animals and too certain a prospect that this is going to continue and probably increase; it would overwhelm anything we might place on the other side of the ledger. Moreover, those among us who believe that there is such a gap should perhaps become more familiar with the richness of lives of many of our conscious fellow creatures. Our own science is revealing that richness to us, ironically giving us a reason to eliminate it along with our own continued existence.
One might ask here whether, given this view, it would also be a good thing for those of us who are currently here to end our lives in order to prevent further animal suffering. Although I do not have a final answer to this question, we should recognize that the case of future humans is very different from the case of currently existing humans. To demand of currently existing humans that they should end their lives would introduce significant suffering among those who have much to lose by dying. In contrast, preventing future humans from existing does not introduce such suffering, since those human beings will not exist and therefore not have lives to sacrifice.

So he doesn’t advocate the killing of all currently alive human beings but he does think there is a case for killing off future humanity.

Only in academia!

A former MP sent this lovely message out of the blue to Chris Finlayson after his valedictory:

Date: Tuesday, 18 Dec 2018, 19:40

To: Hon Christopher Finlayson 

Subject: farewell

And (to resort to the vernacular of your basic origins):

Fucking good riddance – rat..

The reply from Mr Finlayson was:

From: HonChristopher Finlayson

Date: Tuesday, 18 Dec 2018, 20:32
Subject: RE: farewell
 
Dear Mr xxxxxxx
 
I am very worried that a lunatic has broken into your system and is sending demented e mails in your name. I suggest you contact the Police.
 
Yours sincerely
 
Chris Finlayson

Stuff reports:

The Government has scrapped its plan to appoint a powerful individual to shape the country’s digital future in the wake of the debacle over the appointment of a chief technology officer for the country earlier this year.
Government Digital Services Minister Megan Woods has instead recommended to the Cabinet that a small group of people should be appointed to fulfil the functions that would have been performed by a CTO.

That’s a terrible idea. Basically instead of having a CTO who can actually achieve things, they are going to have another advisory group.

It understood the new group of expert advisers will operate within the same $500,000 budget that had been earmarked for Handley’s salary and travel expenses, and that the group may only report to Woods, rather than also reporting directly to the Prime Minister.

So $500,000 on a group that will, umm, do what? There’s a huge difference between what one full-time person can do, and what a group of people who meet for four hours a month can do.

The year is almost over, so it is time for nominations for the annual Kiwiblog Awards. The nomination categories are:

• 2018 Minor Party MP of the Year
• 2018 National MP of the Year
• 2018 Labour MP of the Year
• 2018 MP of the Year

Make your nominations in the comments (free free to say why) and then I’ll start a vote based on the most popular nominations.

The winners in 2017 were:

• National MP of the year – Bill English
• Labour MP of the Year – Jacinda Ardern
• Minor Party MP of the Year – Winston Peters 
• MP of the Year – Bill English 

Stuff reports:

It’s the week before Christmas but good cheer is yet to visit Parliament, with even Prime Minister Jacinda Ardern getting a telling off after an apparent attempt to call her opponent names.
Ardern was made to withdraw and apologise by Speaker Trevor Mallard after she responded to a question from Opposition leader Simon Bridges with the words “simple, Simon”.
Simple Simon is a childhood nursery rhyme.

As sledges go in Parliament, this is about as mild as it gets. What is interesting though is that it goes against the brand she is trying to promote for herself of “kindness”.

It also gives me the great opportunity to contrast her academic record with the guy she is calling simple.

Jacinda went to Waikato University and graduated with a Bachelor of Communication Studies. Presumably this is where you learn to say clever quips such as “Simple Simon”.

Simon Bridges first two degrees were from the University of Auckland where he gained a BA and an LLB with honours. Then he went to to do a postgraduate Bachelor of Civil Law (equivalent to an LLM) from that obscure university in Oxford. Oxford say that “only those with outstanding first law degrees are admitted” to the BCL.

The Government has announced the minimum wage will go from $16.50 to $17.70 per hour in April. The median hourly wage is $25 an hour so this will make our minimum wage 70% of the median wage. It is highly likely at this level there will be a significant impact on jobs (not all increases in minimum wages impact jobs – the key is the ratio to the median wage).

How does this compare to other countries? Well much much higher. Other OECD countries are:

1. New Zealand 70%
2. France 62%
3. Australia 55%
4. UK 54%
5. Luxembourg 53%
6. Germany 48%
7. Belgium 47%
8. Ireland, Canada 46%
9. Estonia 41%
10. US 34%

I don’t normally listen to debates on bills, but I was in the House waiting for Chris Finlayson’s valedictory speech and heard some speeches on a Reserve Bank amendment bill.

Labour MP Kiri Allan finished her speech by saying:

I’ve been struck by the words of the founder of Ford Motors. It was Henry Ford who said, “It is well enough that people of the nation do not understand our banking and our monetary system … I believe,” he said, “there would be a revolution before tomorrow morning [if they did].” As we have covered off aspects of what is required to be considered by the bank in developing our monetary policy, I think I’ve come to share Henry Ford’s view.

Henry Ford is a very good person to quote on automobiles but a very bad person to quote on monetary policy.

The reason for this is Ford was a massive anti-Semite who hated Jews. His criticisms of monetary policy were rooted in his beliefs that Jews controlled the world’s money etc.

Some of the things Ford did include:

• sponsored a weekly newspaper that published strongly antisemitic views against “the Jewish menace”
• published “The International Jew” in 1920 with chapters such as “
  The High and Low of Jewish Money Power”, “
  Jewish Idea in American Monetary Affairs” and “
  Jewish Power and America’s Money Famine”
• wrote “If fans wish to know the trouble with American baseball they have it in three words—too much Jew.”
• was quoted favourably by Hitler in Mein Kampf and Hitler called him an inspiration
• blamed the Jews for provoking violence against them
• was granted the Grand Cross of the German Eagle by Nazi Germany in 1938
  

I’m sure Kiri (who is a very nice person) had no idea of Ford’s background when she quoted him. It is a popular quote you often see on the Internet. But the lesson is to be careful of whom you approvingly quote.

The galleries were packed for the valedictory of Chris Finlayson. People were no doubt hoping for his normal mix of charm, eloquence and verbal assault and they were not disappointed.  I recommend people read the whole transcript or view the video.

Some extracts:

 I want first to acknowledge my opponents. The Labour opponents that I had in Mana and Rongotai, Winnie Laban, Annette King, and Paul Eagle and their spouses, are very, very nice people. I really enjoyed their company. The campaigns were pleasant and issues-focused.

I especially acknowledge Annette’s husband Ray, who would sit through campaign meetings in Island Bay with a beatific smile on his face as Paul Tolich, Ken Findlay, and the rest of the Island Bay Labour gang yelled at me. I once told Ken Findlay in 2014 to sit down and shut up—I always had a special rapport with constituents.

Heh. 

I know my colleagues very well. By now, my colleagues will be whispering to one another that I’ve gone troppo. Well, fear not, because I now turn to talk about New Zealand First. The most I can say to them is: thank you very much for not choosing the National Party in 2017. As is well-known, I think we dodged a bullet.

So true.

I had a ministerial suite in Bowen House for about eight years. I did not want to move to the Beehive, but Mr Brownlee offered me Murray McCully’s seat if I agreed to speak to my colleagues from time to time. It was my staff who made me move. I tried to organise an exorcism of the suite, given that McCully had been there for eight years, but was told the incense would set off smoke alarms.

I think Murray would have enjoyed the exorcism.

I’ve almost forgiven Guyon Espiner, who taught me a very good lesson: do not appear on Morning Report just after you’ve woken up. I remember very well the morning he interviewed me and put a proposition to me from Metiria Turei, and I said, “Oh, well that’s what happens when one is dealing with a left-wing loon.” And he put another proposition to me, and I said, “Well, that’s what happens when one is dealing with a right-wing loon.”, and he said, “Well that commentator was John Key.” The message came down from the ninth floor that if I wanted to be Minister for Consumer Affairs I was on the right track.

Ouch.

 People have said some nice things about me in recent days but these people are the ones who made the settlements happen. I also acknowledge John Key and Bill English, without whose active support nothing would have been achieved. I say to Andrew Little that this is the best job in Government. Don’t worry about setbacks. Just when it seems a negotiation has gone all wrong something very good can and invariably does happen. I mean who knows, Sonny Tau could decide to go and live in Iceland!

Now that was biting. So very harsh, but funny.

But I do want to say something about two MPs I greatly admire. First, Gerry Brownlee: when the history of the Key Government is written, his work rebuilding a shattered city will be regarded as that Government’s greatest achievement. I witnessed in Cabinet his absolute commitment to and compassion for his fellow Cantabrians. Sometimes I felt that his contribution has been taken for granted—well, not by me, because I think he’s a great New Zealander.
And secondly I want to acknowledge Nikki Kaye, who won Auckland Central in 2008 and has held it since then. Auckland Central is very like Rongotai, except Nikki wins Auckland Central. She was a Minister with a brilliant future and, as we know, was very unwell last year, but she fought that cancer and is doing a tremendous job in Opposition. I strongly support her bill on teaching foreign languages. She’s an example to all of us of grit, of courage, and of determination.

Very nice and moving tributes to Gerry and Nikki.

Members probably know the old wisecrack, “Some people please wherever they go; other people please whenever they go.”, and I’m sure many will be thinking the second part applies to me—although, I understand, not Mr Robertson. I have it on excellent authority that he’s distraught and is currently undergoing counselling.

Heh.

In 2005, Michael Cullen said in the Address in Reply debate that he wasn’t convinced of “this sort of Latinate habit of everyone kissing each other after every maiden speech”, and I agree. It’s a dreadful habit. I think the same principle applies to valedictories, so Mr Speaker, fellow members of the House, that’s all from me. If anyone needs a lawyer in the future, don’t bother me. All the best. Goodbye.

And on that note Chris walked out of the door behind him, avoiding the usual several minutes of hugs and handshakes and the sustained standing ovation.  Parliament has lost a very fine MP, but the legal profession has regained an even finer lawyer.