John Milford writes:

Which was why, when a government minister recently said one of the biggest business confidence surveys going around was “junk”, I was puzzled.

I assume he didn’t like its findings, which showed confidence continuing a subdued trend since the election. That means he also won’t like the Wellington Chamber’s quarterly survey or the others that do the rounds, because they’re all telling the same story.

Business confidence surveys ask businesses about how they’re feeling and what they expect to happen to themselves and the national economy. They reflect what I’m being told face-to-face, and I doubt the minister would be willing to tell too many of these businesspeople to their face that what they’re saying is junk. …

The problem for the Government is that confidence is not going to improve as long as they insist on pushing ahead with their proposed changes to industrial legislation.

Two weeks ago in this column, I expressed serious concerns about the effects the removal of 90-day trial periods from companies with more than 20 employees would have on employment, workers and the economy.

But there are three other parts of the Employment Relations Amendment Bill as it’s drafted that will further reduce flexibility and harm the growth prospects of businesses.

They are provisions that allow union reps to enter a workplace without permission, force businesses to settle collective agreements even if they don’t or can’t agree, and force them to join a multi-employer collective agreement (MECA).

Every single change proposed by Labour greatly benefits unions and harms businesses.

Similarly, rather than improving industrial relations, removing the right of employers to opt out of bargaining is likely to make it worse. Both parties can now opt out but removing only the employers’ right to do so is asking for trouble and bad agreements created under duress.

Not even pretending it will be an equal playing field.

If that doesn’t cause its own friction, forcing businesses to join a MECA will. This provision forces every company in an industry that has workers in the same union to agree to the negotiated multi-employer collective, irrespective of how well the company treats and pays its employees, or wants to. What’s more, employees not in the union won’t be able to negotiate better conditions than those who are.

Again this is designed to get more money into unions, so unions can spend more money and resources helping Labour get elected.

Employers agree with the goal of developing a modern, high-performing economy, but they would like to understand how dredging up failed and divisive labour laws will help that happen.

No matter what the question, Labour’s answer seems to be the 1970s.

Matt Nippert reported:

The New Zealand taxpayer has forked out nearly $600 million to Hollywood producers since 2010 to support the Wellington-dominated film industry, and despite commissioning numerous studies the Government is unclear whether this represents money well spent.

I’ve got mixed feelings on film subsidies.

Films are unlike most other economic activity because they are truly globally mobile, and are for limited duration. So decisions on where to film do get impacted by local subsidies.

It’s not like deciding where to build a factory that will be there for 30 years. And there are no issues such as goods being produced and freighted etc.

So there is a significant economic benefit to a local economy by having films and TV shows produced here. Locals gain work, there is increased tax revenue, there are tourism benefits.

However film studios are very ruthless and can and will play countries and even cities off against each other, trying to get bigger and bigger subsidies. And if no-one played the game, it would be good. Eventually the marginal return on any subsidy is small, if they keep growing.

Parker said, given the escalating costs of the scheme, he was now considering advice from Treasury about limiting the amount the Government would spend each year.

“We certainly haven’t made a decision to axe the subsidies. One of the questions that has been raised with officials with Treasury is whether you can somehow cap it,” he said.

Parker said he was open to such a move, but mindful of competing advice from the Ministry of Business, Innovation and Employment it could create uncertainty making New Zealand a less attractive filming destination

The Sapere review said while the industry was growing strongly – faster than the rest of the economy – it had lost the competitive advantage enjoyed a decade ago with innovations forged during filming Lord of the Rings and was now effectively part of a commodity industry competing on price.

As I said, this is a tough issue. If we no longer have a competitive advantage, then merely competing on a subsidised price might not be beneficial.

Newshub reports:

Corrections Minister Kelvin Davis has issued an embarrassing clarification after saying he didn’t see the latest prison population projections before deciding to build a smaller prison at Waikeria.

The newly released Ministry of Justice report, from 2017, has the prison population increasing by an additional 2000 people compared to the previous forecast.

It’s now forecast to increase by more than 4000 by 2027 – that would take the prison population from 10,300 in June 2017 to 14,400 in June 2027.

The projections were completed in October, the report says, with the figures not released publicly until last week.

On Monday morning Mr Davis said he hadn’t read the report until Sunday night.

The admission that he hadn’t read a months-old report before making a crucial decision on the size of Waikeria Prison was met with surprise, leading the news at the next hour.

Who knows now if he had or hadn’t read the report. Several of his colleagues boast how they don’t read their papers, so quite possible he didn’t.

But either way another own goal which adds to the impression of a Government that is struggling to actually govern.

The Independent reports William Hague:

William Hague has urged Theresa May to consider legalising cannabis as he claims the war on the drug has been “comprehensively and irreversibly lost”.

The remarks from the former foreign secretary heap political pressure on the prime minister amid an escalating row in the cabinet over the government’s approach to medical cannabis and growing outrage over a 12-year-old epileptic boy’s use of the drug. …

Ms Caldwell had purchased the drug in Canada to treat her son, Billy, who was rushed to Chelsea and Westminster hospital on Friday evening in a critical condition having suffered multiple seizures. It led to Sajid Javid, the home secretary, granting a 20-day emergency licence of the oil.

You shouldn’t need to get permission from the Home Secretary to help your 12 year old boy.

“It must now be asked whether Britain should join the many other countries that permit medical-grade marijuana, or indeed, join Canada in preparing for a lawful, regulated market in cannabis for recreational use as well,” he added.

As do many US states.

Writing in The Daily Telegraph, he joined those who have called for a change in approach over cannabis, claiming the idea the narcotic can be “driven off the streets and out of people’s lives by the state is nothing short of deluded”.

The war on cannabis has failed for over 30 years. So why do we persist?

“Everyone sitting in a Whitehall conference room needs to recognise that, out there, cannabis is ubiquitous, and issuing orders to the police to defeat its use is about as up-to-date and relevant as asking the Army to recover the Empire.

“This battle is effectively over.”

I love Hague’s pith.

Stuff reports:

A review into the appointment of Deputy Commissioner of Police Wally Haumaha will look at whether the State Services Commission received or sought all relevant background information. 

Acting Prime Minister Winston Peters also confirmed on Monday the inquiry would look into the information the commission had, and whether that information was made available to the relevant ministers. …

Peters said the inquiry would be delivered to Internal Affairs Minister Tracey Martin, as it was not appropriate to have either the State Services Minister or the Police Minister oversee it. Martin would be appointing an independent person to undertake the inquiry, in the coming week. 

That’s nonsense. It has nothing to do with Internal Affairs. The appropriate Minister is the State Services Minister, as they ran the appointment process.

Peters batted away suggestions her role as a NZ First MP might compromise her. Haumaha had sought selection to be a MP for the party in 2005, but withdrew from the process. …

National Party police spokesman Chris Bishop however, called into question the “close ties” Haumaha had with NZ First. 

“Mr Peters must explain whether he disclosed this conflict at Cabinet given Mr Haumaha was once a candidate of his party, and how this conflict was managed during the appointment process.

“He must also explain his completely inappropriate appointment of NZ First MP, and former party official, Tracey Martin as the minister in charge of the inquiry,” Bishop said.

It is a bad look having a NZ First Minister in charge of the inquiry of the appointment of someone who sought to be a NZ First candidate.

The first photo is 27 year old NZ MP, Simeon Brown.

The second photo is the 31 year old Chancellor of Austria.

Shane Te Pou writes:

The welfare state is about those of us who are doing OK to help those who are not – manaakitanga. The goal is to give our neighbours, our sisters and brothers a hand to help them back to dignity and self-sufficiency when life deals them a tough hand. This is why the father of the welfare state, Michael Joseph Savage, called it “applied Christianity”. Today’s smart young left-wing thinkers might call it “the politics of love”.

Given our experience of colonisation, we Māori should be especially alert to the dangers of welfare becoming much more than that. There is no shame in needing a helping hand from time to time but there is no personal tino rangatiratanga or mana in being permanently reliant on the state if you don’t need to be.

This is not how Grant Robertson see things. It is now very clear that his goal is to have everyone – Māori and Pākehā – permanently dependent on the state.

Yep. If they can get over 50% of the population reliant on the state, then they will get over 50% voting for parties that promise to give them more money from other people.

Other examples include the Government’s Winter Electricity Payment, which will cost taxpayers about $1.8 billion over the next four years. This goes to everyone over the age of 65, from struggling working-class widow to billionaire. It will be paid even to wealthy superannuitants who escape this cold New Zealand winter with a Grand Tour around Europe. To his credit, Simon Bridges has said a National government would cancel that con and look at ways to help those elderly people and beneficiaries who really do need help with their winter power bills.

Winston gets around $400,000 a year and he’ll get the winter electricity payment.

But the worst example is Phil Twyford’s KiwiBuild. This was meant to help young Kiwi couples struggling to save enough for a house deposit take their big first step towards self-sufficiency by buying a modest government-built home. Now Twyford says KiwiBuild is for everyone: young Max Key will qualify for a KiwiBuild house, as will English’s kids and Ardern’s new baby when it comes of age. Each one of the 100,000 houses Twyford is promising to build that is bought by one of these well-to-do kids is one fewer for a young couple from West Auckland.

It’s ridiculous.

The old conservative Labour left wants us all on the welfare hook and unable to get off because that’s the way to make us docile Labour voters for life. Those of us on the progressive Labour right need to stand up for Savage’s original vision and for tino rangatiratanga in our own lives. I don’t want to be the last socialist left standing as I say welfare should be about helping poor.

Shane is entirely correct. Sadly he is a small small minority in Labour.

A reader writes in:

Winston owes the taxpayer $158,000 from 2005.

If you apply IRD interest rates to the debt over 13 years you get $983,000.

The late payment penalties are here (IR240):

http://www.ird.govt.nz/resources/0/f/0f49a4e9-7fe0-4165-b397-987d67b6e8e8/ir240.pdf

We charge late payment penalties on all overdue payments. We charge the penalties in stages. This means that the longer a payment remains overdue, the more penalties we’ll add. The stages are: 

• 1% the day after the due date 
• 4% seven days later 
• 1% each month the tax to pay remains overdue.

This is what the taxpayer should now counter sue Winston to recover.

Sadly for the reader the debt can’t be collected as they retrospectively changed the law to prevent it.

Infometrics assesses the Government’s free tertiary fees policy. Their summary:

• Accessibility: B- (most benefits high spending households)
• Student numbers: C+ (no significant increase in enrolments)
• Skills gaps: F (is discouraging people from trades training)
• Improving quality: F (tertiary funding per student is frozen)
• Wasting taxpayer money: A+ ($2.5b down the drain)

A very astute analysis.

Stuff reports:

Acting Prime Minister Winston Peters says an inquiry will be held into how Deputy Commissioner of Police Wally Haumaha was appointed following concerns raised by victims’ right advocate Louise Nicholas.

On Friday evening Peters said: “Cabinet will consider the matter on Monday to determine the specific details of the inquiry and its terms of reference,” said Mr Peters.

Nicholas says she went to police top brass with concerns about Haumaha, over his relationship with the former officers she accused of raping her, back when he was being considered for an assistant police commissioner role.

This will be very interesting. You see the Deputy Commissioner is not appointed by the Commissioner, but by the Prime Minister.

The process is run by the SSC, and they provide advice. However it is a Prime Ministerial decision.

UPDATE: And complicating the issue is the fact that the Deputy Commission was a candidate for NZ First in 2005. This shouldn’t disqualify him to be Deputy Commissioner, but it does make you wonder if this was a factor in his appointment.

Neil Irwin at the NYT writes:

The real question in analyzing the May jobs numbers released Friday is whether there are enough synonyms for “good” in an online thesaurus to describe them adequately.

So, for example, “splendid” and “excellent” fit the bill. Those are the kinds of terms that are appropriate when the United States economy adds 223,000 jobs in a month, despite being nine years into an expansion, and when the unemployment rate falls to 3.8 percent, a new 18-year low.

“Salubrious,” “salutary” and “healthy” work as words to describe the 0.3 percent rise in average hourly earnings, which are up 2.7 percent over the last year — a nice improvement but also not the kind of sharp increase that might lead the Federal Reserve to rethink its cautious path of interest rate increases.

Nat Torkington writes:

How do our startups fit into the R&D tax credit scheme? Short answer is: they don’t. Tax is a concern if you’re profitable. If you’re not profitable, tax is the least of your worries.

So the R&D tax credit does nothing for startups and high-growth firms.

Nothing.

Even worse, the proposal is half-baked. It’s clearly aimed at the kind of old-school physical product companies that dominated the 20th century in New Zealand: Gallagher, Fonterra, etc. It talks about R&D as following the scientific method, and there are lots of examples with dies and machine blanks.

Even weirder, the definition of R&D specifically excludes market research, design, and social sciences work. The iPhone is a UX innovation, and indeed Apple’s whole market distinguishing feature is R&D around Design. Facebook are doing R&D right now via social sciences, trying to understand the networks of conspiring bots and political actors (I know this as I went to Social Science Foo Camp at Facebook in January). Lean and agile software development starts with iterating with a customer, trying to design the feature or product that they want and will use. This is literally called The Design Process and it’s critical to building a new product.

The key point Nat makes is that tax credits are of no value to most startup companies – only to well established companies that are already profitable.

Nat concludes:

Early-stage startups are not profitable, are almost exclusively doing R&D, and are utterly unsupported by this policy.

Hopefully the final policy will be different.

A guest post by a reader:

It might make the cyclists feel warm but we know it is useless in terms of impact.

After a spend over 10 years of $640 million on cycling specifically, and presumably a good share of another $1140 Million from local transport and road safety budgets, and “in addition to the dedicated bikeway funding, ATAP is jammed full of benefits for cycling in many other areas”, Bike Auckland claims  https://goo.gl/cy3mcR :

“The aim: to raise biking from the Auckland-wide average mode share of 1% to 5% by the end of the ten-year programme. (Note: the central suburbs were already knocking on 4% at the last census; so if the average citywide mode share including even the far-flung rural areas hits 5%, you can be sure the core areas will have much higher rates of everyday biking).”

5% ? Pfffft.

Its simply a statement of hope based on self-delusion. And they have 10 years to make up more excuses and change the goal post when the aim is not met.

Let us look at the claim in a bit more detail.

The first and important thing is to look at real actual numbers from the last Census 2013 for Mode of Travel to Work statistics https://goo.gl/8A9MNp :

Total stated for Auckland local board areas (3)

Car                  364,257

Bus and train   36,978

Active mode    28,491 (cycling hidden here)

Other                6,486

That is 436,000 commuters across the whole of Greater Auckland area, and cycling at 1.5% of total is only about 6,500 cyclists. Even if the cyclists wildest pipe dream of 5% is reached in 10 years it will mean only 22,000 cyclists. So to increase cyclist numbers by about 15,300 taxpayers and rate payers are going to spend $640M + say 114M (10% of other transport and safety spending). That is $754M / 15,300 cyclists and works out to about $50,000 per extra cyclist. Excessive spend on a maybe 5% minority don’t you think?

Worse is no one, ever has or seem to want to, calculate the external costs the Auckland cycling plan imposes on the 95% of the people caused by the reduction in road lanes, various speed reduction measures, and huge loss of parking. The cost for the 95% due to increased use of fuel and loss of productive time due to longer commutes, the consequent cost of the environmental cost of increase in emissions, and the unavoidable cost of finding alternate private parking.

Bike Auckland claim of “Central suburbs knocking on 4% at last census” is a stretching of the truth (or a bombastic lie). Another Bike Auckland post states https://goo.gl/HjDxfV :

“A nice and very responsive staffer at Auckland Council provided some extra breakdowns of the cycling numbers when we asked about averages:

Auckland Region: Bicycle 2006: 1.01% Bicycle 2013: 1.22%

Legacy (circa 2009) Auckland City Council Area: Bicycle 2006: 1.55% Bicycle 2013: 2.00%”

This same post says “The greatest cycling percentage however is in Whenuapai West (over 10%) – but the more typical “high mode share” suburb in Auckland would be a place like Pt Chevalier South (official census name, actually the area is better described as “Mt Albert North”) or Narrow Neck on the Shore, both with 4.5% cycle mode share.

So one suburb in the city proper makes it to 4%. That does not make it “central suburbs” does it? What follows in the article is excuses and whinging about why uptake is generally low in central suburbs. By all means go and follow the interactive graphics link provided in the post if you know the Auckland suburbs in detail.

Cycling is huge a con job being perpetrated on the majority of tax payers and ratepayers by a small number of vocal cycling zealots. Unthinking, virtue signaling politicians at both the national and local level politics are falling for it.

Politicians would be better off spending most of this money on the 95% by making it efficient for the majority to get from point A to B. The benefits of providing expensive infrastructure for the few, that cycling delivers, is far outweighed by the economic benefits to the 95% majority in terms of time, money, efficiency for businesses and improvements to the environment.

Barry Soper writes:

The wheels might not be coming off the coalition Government but they’re certainly in need of a good oiling and the tyres need to be inflated.

We’re told to give them the benefit of the doubt that they’ve got a plan, even if the doubts continue to grow.

If they have a plan, it is very well hidden.

The Minister now in charge of the grand housing plan, Phil Twyford, was on Tuesday being confronted by his opposite number in Parliament’s bear pit, the sneering Judith Collins, who wanted to know what part of Kiwibuild is Kiwi.

Twyford assured her they weren’t planning on bringing in workers from overseas to complete the ambitious project but then the very next day that’s exactly what they announced, making it easier for building firms to bring in skilled foreign hired hands to make up the shortfall of thirty thousand construction workers.

So Twyford contradicted himself just a day later.

Here’s the interesting thing. If they need to import 30,000 construction workers to build the 100,000 houses, won’t those 30,000 workers also need houses to live in?

Kate Hawkesby writes:

One of the ministers nailing his new job, in my humble opinion, is Commerce Minister Kris Faafoi.

He got onto the Takata airbag recall, he’s talking butt kicking for wheel clampers, and now we hear the news he’s on to Visa and Mastercard over their fees. …

What I like about Kris Faafoi is that he manages to fire these broadsides at businesses without personal attacks or bully boy tactics. He’s grabbed his portfolio and is running with it, making a lot of noise, by being a voice for the little guys: the consumers, the small business operators.

He’s doing it without the loose lines and the throwaway insults that Shane Jones employs.

So although he may not always make the front page, he is quietly reassuring us mere mortal consumers, that he has our back. And that’s a good thing.

I agree. Faafoi is doing a good job.

The Herald reports:

New measures to stamp out loan sharks could include caps on interest rates and fees, and increased penalties for irresponsible lending.

They are part of a raft of measures recommended to Commerce Minister Kris Faafoi, in an MBIE discussion paper reviewing the Credit Contracts and Consumer Finance Act.

The recommendations include increased licensing for lenders, and introducing “more prescriptive” requirements for affordability assessments.

Faafoi said it was becoming clear the 2015 amendments to consumer finance laws didn’t go far enough, and it was now time to “finish the job” to protect the most vulnerable.

He said the recommendation to cap interest at 100 per cent of the amount they originally borrowed, seemed common sense.

I am no fan of these predatory companies. In fact I stopped patronising a cafe that had one of them based in the cafe.

But good intentions can backfire. A 100% cap on interest may end up increasing interest rates for some borrowers.

At present interest rates will vary from say 30% to 300%. Now if you bring in a cap of 100%, what may happen is all these payday type lenders will charge 100%. Some people may be better off, but a lot may be worse off.

News.com.au reports:

A BILL enacting Britain’s decision to leave the European Union has become law after months of debate, the House of Commons speaker announced today, to cheers from Eurosceptic politicians.

Stats NZ for the last year has been consistently reporting around 3% of house sales appear to be to non residents.

The Herald ran a story quoting ASB saying they have calculated that actually up to 20% of sales are to non residents.

But the story was misleading, as Stats Chat highlights.

The ASB research was that between 11% and 21% of sales were to non citizens. That is very different to non residents.

You can have lived here for 30 years and not be a citizen. In fact we are one of the few countries that provides almost no incentives for residents to become citizens. Residents can vote etc. They just can’t stand for Parliament.

Newshub reports:

A Ministerial Advisory group met once, noted its meeting minutes were subject to the Official Information Act (OIA), then stopped taking minutes in further meetings.

Broadcasting, Communications and Digital Media Minister Clare Curran set up the Ministerial Advisory Group in February to investigate establishing a Public Media Funding Commission.

Documents released to Opposition MP Melissa Lee under the OIA show the group decided to “not keep minutes for its further meetings” after meeting for the first time on 27 February.

The minutes for that February meeting show early on in the meeting, “The MAG (Ministerial Advisory Group) noted it is subject to the Official Information Act.”

This is pretty amazing. They have a first meeting and note they are subject to the OIA. They then resolve to not keep any minutes of further meetings, to avoid anyone asking for them under the OIA!

And this is all happening in the portfolio of the Minister for Open Government!

A competent Minister would instruct them to follow the OIA and keep minutes of their meeting. Especially as they are working in such a sensitive area as broadcasting funding.

15

I’m no fan of Labour’s desire to remove some or all sanctions against benefit fraud. But some of the changes announced by Sepuloni seem reasonable and welcome. Let’s take them in turn:

1. Security guards at MSD offices are no longer required to check people’s names off a list or to ask for ID and they are no longer dressed in security uniforms. What they will do now is welcome people warmly and ensure people feel safe coming in for support

Sounds good. Uniformed guards sounds very off putting.

2. All MSD offices now have the new MSD client commitment up in their offices – in English, Maori and sign language (other languages are also provided).

I presume some service level obligations. Fine.

3. Water is now available

Amazed this was not the case in the past,

4. Where possible accessible toilets are being made available (with baby changing tables)

Baby changing tables are a great idea. Especially many clients will be parents.

5. The new layout (being piloted at 4 new sites initially) has more private spaces, a kids play area, more clearly marked areas

Also a good idea. Kids get bored.

6. An eligibility guide has been launched and is now available online nation wide and

Understanding eligibility is good. All too often media report families saying they can’t make ends meet, and it transpires they could be getting more support.

7. Today we were able to report that as a consequence of changes I asked for a month ago that led to manual benefit sanctions and cancellations requiring an authorised 2nd person to approve the decision, we have seen a daily reduction of 23% in actual manual benefit sanctions and cancellations.

A 2nd staffer to approve seems sensible. But important to remember that there are responsibilities with welfare, and sanctions are the only way you can enforce those responsibilities such as actually trying to get a job.

But overall these changes actually look quite positive.