Correction or crash?

The Herald reports:

New Zealand shares are tipped to be hit today after global sharemarkets were slammed in what’s been described as a “bloodbath”.

Hundreds of billions of dollars were wiped from the value of shares around the world yesterday. Australia’s stock market fell 3.2 per cent after Wall Street’s 4.6 per cent fall — where gains for the year have been erased in what was the steepest tumble in nearly seven years.

In Asia markets were also hammered with the Nikkei in Japan falling 4.73 per cent and Hong Kong’s Hang Seng index last night finishing down 5.11 per cent, pointing to another turbulent session on Wall Street. In early trading, Britain’s FTSE 100 dropped 2.05 per cent.

The global plunge — which will hit KiwiSaver balances — has been blamed on an overdue correction to booming sharemarkets over the past year, in particular, and the prospect of rising interest rates in the United States, which could slow economic growth by making it more expensive for people and businesses to borrow.

It’s probably is just a correction, but it could turn into a crash. Worth recalling the timing of global economic events.

  • 1973 – oil crisis
  • 1987 – sharemarket crash – 14 years later
  • 1998 – Asian crisis – 11 years later
  • 2008 – GFC – 10 years later

We’re now 10 years past the GFC. The chances of an adverse global economic event in the next three years is non-trivial.

Callaghan’s spend

Stuff reports:

Government agency Callaghan Innovation spent almost $3 million on travel and entertainment in one year.

Among the entertainment spending was a $50 tip from the public purse, following dinner at Wellington’s Dockside restaurant.

The figures, released to the Taxpayers’ Union under the Official Information Act, show in the 2015/16 financial year, the agency responsible for giving grants to support science and innovation, spent more than $300,000 on entertainment, more than $1m on domestic airfares, more than $850,000 on domestic accommodation and other travel expenses, more than $400,000 on international airfares, and more than $300,000 on international accommodation and other travel-related expenses.

$300,000 on entertainment is way too high, as is the overall spend on travel.

The entertainment spend of more than $300,000 was mostly justified as entertaining clients, and last month Callaghan said that type of spending was not unusual for a client-facing organisation.

I think this misses a key point.

Most client facing organisations are trying to get their clients to give them money. That is why you spend money on entertainment.

Callaghan’s job is to give (our) money to their clients!

Davidson confirms candidacy

The Herald reports:

Green MP Marama Davidson has confirmed she will stand for the party’s female co-leader role.

The strongest argument for Davidson is that she isn’t a Minister. It makes a lot of sense to have a co-leader who can focus on promoting the party’s brand and values, rather than administering a portfolio.

71% to 20% in support of euthanasia

Newshub reports:

The vast majority of New Zealanders support euthanasia, according to the latest Newshub Reid Research poll.

A Bill to legalise assisted dying is currently before Parliament and it has 71 percent of the country’s support, with 19.5 percent against it and 9.5 percent unsure.

That is a huge proportion in favour – much larger than on almost every other recent issue.

WHO Muddied the Waters?

NZ 4th in 2017 Democracy Index

The EIU Democracy Index is bad news overall (many countries got worse), but NZ should be happy with 4th top. The top 10 are:

  1. Norway 9.87
  2. Iceland 9.58
  3. Sweden 9.39
  4. NZ 9.26
  5. Denmark 9.22
  6. Ireland 9.15
  7. Canada 9.15
  8. Australia 9.09
  9. Finland 9.03
  10. Switzerland 9.03

Our sub-scores are:

  • Electoral process and pluralism 10.00
  • Civil liberties 10.00
  • Functioning of Government 9.29
  • Political participation 8.89
  • Political culture 8.13

The scores by region are:

  1. North America 8.56
  2. Western Europe 8.38
  3. Latin America 6.26
  4. Asia & Australasia 5.63
  5. Eastern Europe 5.40
  6. Africa 4.35
  7. Middle East 3.54

TOP candidate condemns waka jumping bill

Jenny Condie writes:

As someone nationally recognised as a “pain in the a…” for speaking out to an authoritarian party leader, it will be no surprise that I have thoughts about the latest waka jumping bill. In my view, the bill is a threat to our democracy, and should be opposed. We should be making it easier for new parties to enter Parliament, not harder.

TOP and Gareth Morgan is a good example of why this law would be so bad. One can well imagine if Gareth was a party leader in Parliament, he’s be using this law to kick out MPs from his caucus who dare to disagree with him. We know this, as this is what he did with his candidates!

The stated aim of the legislation is to preserve the integrity and proportionality of Parliament, by ensuring MPs who leave their party cannot continue in Parliament. However, over the years many MPs have left their party as a form of whistleblowing, because they believe the party is drifting away from its own stated goals and values. This, too, is a matter of integrity.

A good argument.

As someone who has spoken out about a party behaving in a way that is contrary to its stated values and been sacked for it, I naturally believe protecting the ability of individual MPs to act as whistleblowers is important.  

When the party leader can expel you from Parliament, you won’t dare to speak out.

She also quotes Sue Bradford:

How dishonourable of the Greens to support the waka-jumping bill; if Rod & Jeanette hadn’t been able to leave the Alliance, Greens would never have entered Parliament in 1999 & the whole journey may have been stillborn. It’s sad to see history forgotten.

The Green Party is voting for a law that would have prevented them from leaving the Alliance. Jim Anderton could have had them expelled from Parliament under this law once they announced they would contest the 1999 election as The Greens.

MOH report concludes sugar taxes don’t work

Eric Crampton has spent 50 days battling the Government to get a report the Ministry of Health commissioned from NZIER released. Thanks to the Ombudsman, it is now public.

Eric summarises their findings after reviewing 47 studies:

  • Taxes do generally appear to be passed through to prices and some reduced demand is likely
  • Estimates of reduced intake are often overstated due to methodological flaws and incomplete measurement
  • Price elasticities from early studies with fundamental methodological flaws have later been used in a number of other studies to assess the impact of sugar taxes, resulting in significantly overestimated reductions in demand
  • There is insufficient evidence to judge whether consumers are substituting other sources of sugar or calories in the face of taxes on sugar in drinks 
  • Studies using sound methods report reductions in intake that are likely too small to generate health benefits and could easily be cancelled out by substitution of other sources of sugar or calories
  • No study based on actual experience with sugar taxes has identified an impact on health outcomes
  • Studies that report health improvements are modelling studies that have assumed a meaningful change in sugar intake with no compensatory substitution, rather than being based on observations of real behaviour.

The last two are the killers. No study has found any improvement in health based on actual data. The ones that claim health benefits are based on models, not actual people.

Note this report was not commissioned by any industry participant, but by the Ministry of Health.

The achievements of the Government’s first 100 days

Tomorrow is 100 days since the new Government was annointed by Winston. They will no doubt be doing a release highlighting all the working groups they have set up. I’ve compiled my own list of some of their achievements in their first 100 days:

  1. Announced a target for reducing child poverty that would be less than National achieved since 2011
  2. Killed off the Kermadecs marine sanctuary
  3. Delayed fishing monitoring which protects Maui’s dolphins
  4. Jeopardised EU trade deal with move towards a deal with Russia
  5. Introduced a law to allow party leaders to expel MPs from Parliament
  6. Refused a law change to allow parents to share paid parental leave
  7. Appointed fewer women Ministers than under National
  8. Undermined Stats NZ neutrality
  9. Upset Australia on Manus Island
  10. Gossiped about Trump creating global headlines
  11. Lied over the Speaker’s election
  12. PM said capitalism was a blatant failure
  13. Appointed a Minister for Children who is pro smacking
  14. Appointed a Minister of Defence who wears unauthorised medals, even after being told not to
  15. A Deputy PM who is suing media for exposing his welfare overpayments
  16. Police Minister announced then backtracked on recruiting foreign police
  17. Revenue Minister announced then backtracked on GST on small imports
  18. Government claimed credit for ISDS exemption in TPP which actually were negotiated by National
  19. An Acting PM unable to answer questions in House, and who is now hidden from public view
  20. A Government that had to filibuster their own bills as they have no legislation ready

Just imagine how much more they can achieve in the next 100 days!

Winston doesn’t need to worry about budget bids

Barry Soper writes:

Peters isn’t terribly concerned and neither he should be. He’s the real power behind the throne as Labour celebrates its first hundred days in office. …

While the Prime Minister appears to be untouchable, so it would seem for her deputy who’s been presenting the cheques for the Finance Minister to sign it would seem.

Most ministers have to put up a convincing, grovelling case in the Budget round to get their cause across the line. Peters appears able to make announcements before the numbers are even crunched.

Yep Labour Ministers need to make budget bids. NZ First Ministers announce stuff publicly and then force Grant Robertson to fund it. Ron Mark did this with RSA funding and now Winston with his corporate welfare for the racing industry.

Green MP accuses her own Government of illegal spying

This is quite revealing. A Green MP is accusing the Government she votes for with confidence and supply of illegal spying – breaking the law.

Jacinda Ardern is the Minister for National Security and Intelligence. So are the Greens saying the PM is overseeing unlawful spying?

Andrew Little is Minister responsible for the GCSB and Waihopai. Are the Greens saying he is conducting unlawful spying?

The Greens have three Ministers in Government. Are the Greens saying they are part of a Government that conducts illegal spying?

How can Parliament have confidence in James Shaw (just appointed to the Intelligence and Security Committee), when one of his MPs is smearing the Government and the intelligence agencies by claiming they are breaking the law.

Ngapuhi’s challenge

David Rankin writes:

To provide some context for how significant the problem is, while Ngapuhi fights with itself over how to proceed with deciding who should represent it on Treaty negotiations, smaller iwi which have previously settled now calculate their monetary worth in the billions of dollars.

Ngapuhi’s combined worth might just reach $50 million in comparison. To make this comparison even more stark, on paper, every member of Ngai Tahu is worth around $25,000, while every member of Ngapuhi is worth just $385.

A huge difference.

Unlike just about every other iwi, we have failed ourselves and future generations because we have become too inward-looking.

At Ngapuhi meetings about Treaty settlements, you will not hear people talking about economic or social development. No one will mention tertiary education, scholarship, venture capital, job creation, commercial expansion, or social and cultural advancement Instead, the subject sooner or later always turns to who has a mandate to represent whom.

After 20 years of trying to decide who gets a mandate, the prospects aren’t looking good – which is a real shame. If they can agree on a mandate, then the capital from a settlement could do a lot of good.

Far from the Crown being responsible for what looks like a divide-and-rule approach to Ngapuhi, successive Treaty Negotiations ministers have been desperate to overcome its internal bickering.

To date, however, the internal struggles for political survival have trumped any outside efforts at reaching the long overdue settlement for the iwi.

One can only hope this changes.

A great example of what is wrong with some media

The 10 worst

I blogged in December on Marc Thiessen’s 10 best things Trump did in his first year.

He has also done a ten worst, which is here. Thiessen is a former staffer to George W Bush and Donald Rumsfeld.

  1. He has made no effort at bipartisanship
  2. He has spent more time attacking Republicans than Democrats
  3. He is empowering al-Qaeda in Syria
  4. He is giving Miranda rights to captured terrorists
  5. He has attacked the FBI and the intelligence community
  6. His noxious tweets undermine his presidency
  7. He fired James B. Comey
  8. He has dismissed Russian interference in the 2016 election
  9. He stood by Roy Moore
  10. He has failed to condemn the alt-right

I would have on the list that he has embraced protectionism over free trade.

Government MPs call anti-fluoridation activists “experts”

Stuff reports:

The Prime Minister has been forced to clarify Labour’s stance on fluoridation, after it was confirmed two Government MPs plan to host an anti-fluoride group at Parliament. 

Prominent US anti-fluoride campaigner Paul Connett is understood to be briefing MPs at Parliament in the coming weeks, hosted by Labour backbencher Duncan Webb and NZ First MP Jenny Marcroft.

It’s one thing to host such a group, but the invite describes him as an “expert”. Open Parachute has many posts debunking his hysteria. Basically he paints fluoride as a toxic poison (which it can be at very high levels) and ignores that the level at which water has fluoride in is well well below these levels.

But National Party health spokesman Jonathan Coleman has said the information being peddled by the group and Connett is “junk science” and dangerous. 

He questioned why those views would be treated as expert opinion in a briefing to MPs. 

That is the issue. The two Government MPs have described Connett as an expert which is an implicit endorsement.

“I’m very disappointed to see that that’s happening, and the question to the Labour Party has to be do they support fluoridation or not?

“At the time the Labour Party broadly said they supported that. Now you’ve got two Government MPs hosting anti-fluoride campaigners in Parliament… and the fact that we’ve got two Government MPs hosting that meeting would seem to indicate they don’t any more,” he said.

Fluoridation has been labelled one of the greatest health advances of the 20th century by the World Health Organisation. Coleman said the issue was “clear cut”. 

Labour says the science is settled on climate change, but at least one Labour MP seems to think it isn’t on fluoridation!

Swarbrick bill fails

Stuff reports:

Green MP Chloe Swarbrick’s medicinal cannabis bill has failed at its first reading.

The bill lost 47 votes to 73, with both every National and NZ First MP voting against it.

That is a shame. Her bill wasn’t perfect but it was a lot better than the Government’s bill which is mainly window dressing.

My hope now is that the Government bill will be significantly changed at select committee to make it easy for those suffering chronic pain or terminal illness to access cannabis for pain relief.

Of the 46 Labour MPs in Parliament 38 voted for the bill, along with every Green Party MP and ACT leader David Seymour.

“What’s been demonstrated in the House today is that it’s not a House of Representatives,” Swarbrick said.

“78 percent of New Zealanders agree with the premise of my bill, it was voted down today by quite a majority, so the National Party has really proved itself to be quite conservative on that.”

“I’m really gutted, because there are thousands of people out there who will now be criminals for at least the next two years.”

I agree this is a case where the MPs are well out of step with public opinion.

I’m disappointed that no National MP voted for it, but with there was never ever going to be 14 National MPs voting for it. It was all over once eight Labour MPs and all nine NZ First MPs voted against it.

This raises the interesting issue of how toothless and weak the Greens are. They could have got it through if their coalition partners had voted for it.

If I was James Shaw I would have gone to Ardern and Peters and said “We’re getting heaps of backlash from our members for voting for the waka jumping bill. As this is against our existing policy, it is putting huge pressure on us to not back it any further. However if our members see us get a win in exchange, and our medicinal cannabis bill gets through to select committee, then I think we can keep our members in line with the waka jumping bill”

Instead Winston gets the Greens to vote for his waka jumping bill, and the Greens get nothing in return.

Little baby bump

Some pundits would have had you thinking that the nation was so joyful at the PM’s pregnancy (which is joyful for the couple) that Labour would have shot ahead of National in the polls and be so dominant to be unbeatable.

But the Newshub poll out last night in fact shows National remains more popular than Labour. In fact National is at the same level as their election result. Labour is up – but at the expense of NZ First who face oblivion on this poll.

Now it is MMP, so the poll still favours the centre-left, but it shows a very competitive contest.

The seats on this poll would be:

  • CR – National 57+ ACT 1 = 58
  • CL – Labour 55 + Greens 8 = 63

If Greens drop 1% then they are out of Parliament also. And they always do worse than they poll.

Exports up 11% in 2017

Stats NZ reports:

Annual exports were valued at $53.7 billion for the year ended December 2017, up $5.2 billion (11 percent) from 2016. Dairy products led the rise, up $2.8 billion to $14.0 billion. Meat rose $706 million to $6.6 billion. Logs, wood, and wood articles rose $546 million to $4.7 billion.

11% growth in exports is huge. Again it will be very interesting to see how exports go in the next few years.

Worth noting that since we signed an FTA with China, exports to them have gone from $2 billion to $12 billion. This FTA was campaigned against by the then Foreign Minister Winston Peters and the Greens. They said it was bad for New Zealand and ran advertisements against it.