The Herald reports:

A scheme funded by New Zealand taxpayers netted billionaire Peter Thiel tens of millions of dollars while his publicly funded investment partner barely broke even.

The partnering of Thiel’s Valar Ventures and the Government-owned New Zealand Venture Investment Fund (NZVIF) was launched by minister Steven Joyce in March 2012, nine months after Thiel took his oath of citizenship at the New Zealand consulate in Santa Monica.

Joyce said at the time the venture was “part of the Government’s comprehensive business growth agenda”, but a Herald investigation has discovered the arrangement was quietly ended in October when Thiel activated a generous buyback option allowing him and his private partners to claim all profits from the venture by cheaply buying out his public co-investor.

A Wall St analyst told the Weekend Herald the clause left the Government facing a “horrendous risk-return proposition” that had no place in agreements between commercial parties.

“If a professional investor signed this deal, they would be the butt of their colleagues’ jokes all the way out the door,” the analyst said.

“This is a clear ‘heads I double win, tails I lose’, ‘heads the taxpayer loses, and tails the taxpayer loses’ proposition, and a very savvy deal for Thiel.”

This assessment is echoed by Auckland-based Castlepoint Funds partner Stephen Bennie, who said he would leap at the chance to sign up to a deal if a partner offered such a clause.

“You’d take it. And obviously a fairly smart guy did. Thiel didn’t need to be asked twice,” Bennie said.

The play appears to have left Thiel with an investment worth least $30 million after contributing just under $7m. The NZVIF, by contrast, confirmed in a statement to the Weekend Herald that it received just $10.2m following the October move after having earlier contributed $9m.

So a crappy deal for taxpayers which shows why the Government shouldn’t be doing something which is better suited to the private sector – venture capital. As the article says no professional investor would have signed such a deal.

Finance Minister Joyce, who was Minister for Economic Development at the time the Valar partnership was signed and operated, was asked if the buyout option represented a good deal for taxpayers.

“On the face of it, no,” the minister said.

Joyce said he had inherited the settings for the NZVIF, including the buyout clause, and suggested Lees-Galloway direct his criticism elsewhere.

“If he’s got a problem with it — and I don’t argue with him that he should — then he needs to go back and talk to the Labour ministers at the time [2002] who set this up,” Joyce said.

The point of changing governments is to change policies and settings also. A policy where taxpayers take all the risk, but can get left out of the reward is one that should never have been left in place.

The existence of the buyback option, described by a Wall St source as having exposed the Government to a “horrendous risk-return proposition”, meant Thiel was able to cheaply acquire the NZVIF’s share if the investment performed well, but share losses equally if it failed.

The NZVIF said the buyback option had been a standard part of its investment partnership since 2002 and was intended to encourage private-sector involvement.

“Rather than making an investment return, NZVIF’s primary role has been to develop market activity, participation, awareness and capability,” a spokesman said.

If an investor is concerned with a return on investment then they will take greater care with their investment.

The Express reports:

A NEW poll has revealed that Ukip leader Paul Nuttall is on track to easily win the Stoke Central by-election and cause a political earthquake.

According to the poll commissioned by Labour Leave, Ukip has a strong lead in the Labour stronghold with 35 per cent 10 points ahead of Labour.

The by-election is set to take place on 23 February after leading moderate Tristram Hunt quit to become director of the V&A museum.

Despite being a very close third in the general election in 2017 the Tories are lagging behind on 10 per cent.

Stoke had one of the strongest Leave votes in the referendum with almost 70 per cent of voters backing Brexit.

Labour may regret selecting a candidate who was pro-remain in an area so heavily in favour of Brexit.

Stephen Jacobi writes:

In Asia, there is the Regional Comprehensive Economic Partnership (RCEP), a complex trade negotiation involving 16 economies, including Australia and New Zealand. RCEP also includes China but is not led by China, (as some commentators insist on believing) but by ASEAN (Association of South East Asian Nations). RCEP has been underway for a number of years and is grinding on at a slow place. Whether that quickens as a result of TPP’s demise remains to be seen. India is a reluctant participant and the current level ambition in the negotiations is not high. RCEP at present is not an alternative to TPP, but is a useful initiative nonetheless – and could be particularly so for New Zealand if it delivers better access to Japan and India which we currently lack.

RCEP is useful but the benefits will be less than TPP.

Then there is the TPP(11) option. As of today Japan, a key player, has said TPP is “meaningless” without the United States, while other players including Australia, New Zealand and Singapore have expressed interest in exploring the options. Japanese reticence needs to be seen in the context of their critical security relationship with the United States. On the other hand, Japan, like New Zealand, has already ratified TPP. We need to let some quiet diplomacy proceed to see if the remaining 11 parties, or a sub-set of them, see merit in amending TPP to take account of US withdrawal. This should include deciding whether or not to strip out of the agreement those things that were essentially US demands. It’s too early to jump to conclusions; the TPP ratification process has in any case another year to run.

A lot of what is in there is due to the US so stripping out their demands would not be a quick process. And will Japan and Canada concede much on tariffs without incraesed access to the US to match? I see little chance or value in TPP less the US – but again better than nothing.

New Zealand has been seeking to obtain a bilateral FTA with the United States since the turn of the century. Two problems have bedevilled that effort: first, a poor political and security relationship, which has now been fixed, thanks to efforts over years by certain politicians and diplomats on both sides, supported by leaders from business and the wider community. And second, on the economic front, the small size of the New Zealand economy and the perceived – if highly exaggerated – risk which our agricultural sector poses to American farmers.

This will make it difficult for New Zealand to get ahead in the queue and may make a purely bilateral agreement ultimately no easier to negotiate than TPP. While we simply do not know the detail of the new President’s trade policy, he is not likely to do us favours on agriculture and may seek to go beyond the TPP outcomes on issues like investment and intellectual property. Nor is likely to be any more flexible on allowing professionals to work temporarily in the US as many services exporters especially in the tech sector would wish.

There is much irony here – TPP’s lengthy negotiation was in part because the other 11 partners were seeking to counter the full extent of American ambition across a range of issues as well as a wider framework of trade rules for the region. This was largely achieved: the final TPP text was a carefully structured consensus, which represented a balance of interests of all parties. For New Zealand TPP delivered substantial benefits with little change to existing policies, even if we did not achieve all we hoped.

This is key. TPP allowed us to resist most of the US demands and the final agreement meant relatively minor changes to our existing laws and policies. In a bilateral we would have very little ability to do this, and I doubt a bilateral would be of net benefit to NZ.

One News reports:

He was expected to run for the Maori Party, but at Waitangi on Sunday it’s anticipated he’ll announce he is taking up Labour’s offer.

That hasn’t impressed Dover Samuels.

“I thought the only waka jumper in the parliament was going to be Tau Henare but looks like Willie has superseded that,” he said.

While the list won’t be released for several months, feathers are already ruffled, as a high list place would mean he leap-frogs existing Labour Party members, and perhaps even current MPs.

Newshub reports:

Waitangi’s lower Te Tii Marae is seeking to charge media outlets up to $10,000 to film dignitaries and politicians arriving on Saturday and Sunday. 

The marae’s communications liaison, known simply as ‘Tana’, says the tradition of media companies gifting a koha to the Marae has been scrapped, and replaced with a ‘coverage fee’. 

The cheapest ‘coverage fee’ is $1200, which gives entry to journalists, photographers, and camera operators – but restricts them to two areas of the marae grounds. 

The only other option is an ‘exclusive package’ costing $10,000 which gives access to all parts of the marae, including inside during speeches. 

And people wonder why the PM is not attending. I suspect at the other marae around NZ, there will be no such charges.

Stuff reports:

Shane Jones’ rumoured political comeback with NZ First has faced a setback, with party members setting up a “Never Shane” group to protest his potential candidacy. …

However, a Facebook page described as “a network of NZ First members and supporters opposed to Shane Jones” has been set up ahead of a potential announcement.

NZ First member Curwen Rolinson, the group’s founder, said many party members were concerned about the possibility of Jones standing at the September 23 election and ruining what could be “a watershed year”.

“His personal background as a politician is so diametrically opposed to our values in NZ First, we just don’t see how he could conceivably fit in.”

Jones is pro TPP and pro asset sales according to the group so shouldn’t be a member.

Curwen blogs in detail why he is opposed to him.

There is no doubt Winston wants him in caucus, and for Shane to become Deputy Leader and eventually Leader. But there is significant opposition to this in NZ First, not least from the current caucus and Deputy Leader!

Stuff reports:

Kiritapu Allan is sitting with a cup of black coffee, a crown of tight dark brown curls, a bone-white linen blazer on top of a crisp white shirt. …

She already has a hash tag for her social media campaign – #tolleygetonyourtrolley.

Allan says Tolley, at 63, has had her run, and her time representing the region should be up.

Yes I am sure that hashtag will win her the seat.

Tolley has a 7,934 majority.

Johan Norberg looks at the progress humanity has made in recent years:

• Where 150 years ago it took 25 men a whole day to harvest and thresh a ton of grain, one person with a modern combine harvester can do it in six minutes
• In 1947, 50 per cent of the world’s population was chronically malnourished. Today that’s down to 13 per cent.
• Chlorination of water led to a massive drop in infant mortality. Such benefits have now been extended to the Third World, with the result that 91 per cent of the world’s population (2.6 billion people) have clean water, as opposed to 52 per cent in 1980.
• In the 1830s, in western Europe life expectancy was still only 33. Today, average life expectancy in the world is an amazing 71.
• Homo sapiens evolved on this planet 200,000 years ago, since when there have been 8,000 generations of humans. But most of this reduction in mortality has been only in the past four generations.
• Deaths from mosquito-borne malaria have halved since 2000, and in Africa more than half the population now sleep under mosquito nets. Modern science has also turned HIV/Aids, which has killed 40 million people, into a chronic condition that can be handled.
• Major inroads have also been made with cancer treatment, and rates of cancer deaths have fallen 22 per cent in the past two decades.
• In 1981, 54 per cent of the developing world’s population lived in extreme poverty — defined as living on less than $2 a day. Last year, it was just 12 per cent.
• On May 15, 1984, the world’s major powers had managed to remain at peace with one another for the longest stretch of time since the days of the Roman Empire.
• The average war between states killed 86,000 people in the Fifties. Today, it kills slightly more than 3,000 people.
• An analysis of 457 terrorist groups active since 1968 shows not a single one of them succeeded in conquering a state, and 94 per cent of them failed to secure even one of their goals.

• Two hundred years ago, only one in eight of the world’s population could read and write, and many in the European elite preferred it that way. They feared that if the poor got an education, they might stop accepting their lot in life. All that has changed. Today, only a seventh of the global adult population can’t read and write, and going to school has become the norm.

Don’t turn the clock back.

Stuff reports:

It’s illegal for Prime Minister Bill English to live in Premier House, the official prime ministerial residence.

In a quirk of the law, English isn’t allowed access to taxpayer-funded accommodation in the capital – because he’s based there.

Somewhat bizarre that the rules won’t allow the Prime Minister of New Zealand to reside at the official residence of the Prime Minister of New Zealand.

As it happens, he doesn’t want to. He has a family home in Karori and while Premier House is grand, it is somewhat sterile. I’d rather be in my own home also.

If Andrew Little becomes Prime Minister, he’ll also have the same issue – as a Wellington based MP he will be ineligible to live in Premier House.

The House of Commons has voted 498 to 114 on the first reading of the Brexit Bill. Good to see most MPs recognise that their job is to implement the will of the peoplein the referendum that was held.

The vote by party was:

• Conservatives 319 to 1 (Ken Clarke against)
• Labour 167 to 47
• SNP 0 – 50
• DUP 8 – 0
• Lib Dems 0 – 7
• Independents – 3
• Greens 0 – 1
• SDLP 0 – 3
• Plaid Cymru 0 – 2

Rob Hosking writes:

The latest run of economic data has only served to reinforce the picture of continued expansion over the coming year.

Even the latest government accounts – particularly the monthly tax revenue data – point to strong underlying economic activity. …

Overall tax revenue is up 9.4% on the equivalent time period. Revenue from direct individual tax, in its various forms, is up 7.9%. Corporate tax – which is, admittedly, always volatile – is up a whopping 16.3%. GST is up 14% – much of which appears to reflect the tourism boom.

So surely time for tax cuts!

The latest year on year GDP growth was 3.6%. The long-term trend is in the region of 2.7-2.8%. The consensus forecast is for 3.5% for the year to March 2017,  3.3% for the following 12 months, and 2.9% for the next 12 months – all above the long-term trend.

Even the most pessimistic forecast for the next three years, UBS New Zealand’s Robin Clements, foresees growth averaging 3.4% for the year to March, 2.9% the following 12 months and 2.5% for the next 12 months.

Manufacturing and services data released in the last week points to continued strength in those sectors: the performance of manufacturing index (PMI) – an internationally comparable measurement – showed the sector averaging, over the past year,  a height only seen once since the survey began in New Zealand in 2002.

The manufactured manufacturing crisis lives on in our memories!

Stuff reports:

Destiny Church leader Brian Tamaki has revealed himself as a passionate Trump supporter and hopes New Zealand will have a leader “like him” one day. …

“President Donald Trump is the closest thing of seen to a “True Politician” and “Leader” for a very long time..can only pray to God NZ would get one like him one day.”

Brian no doubt sees himself in that role.

Stuff reports:

The revelation that Donald Trump berated Malcolm Turnbull, the leader of one of America’s closest allies, during a recent official phone call has been met with shock, disbelief and some embarrassed humour in the United States, fuelling concerns about the US president badly damaging important international relationships.

The Washington Post scoop revealing the tense conversation broke late in the day in the US and went on to dominate late night news television shows and social media, with many expressing disbelief that of all the countries the US could have offended in the first weeks of a new administration, it would be America’s genial allies across the Pacific.

This is how Trump treats arguably the US’s 2nd most loyal ally after the UK.

“I made a Top 100 Possible Trump Administration Foreign Crises list & I gotta admit ‘Rupturing US-Australia Relations’ was NOT on there,” senator Chris Murphy, a Democrat from Connecticut who sits on the same committee, also wrote.

If this is how he negotiates with Australia, imagine how bad relations with China are going to be!

Feeling rather sorry for the new Secretary of State.

“Who’d have thought it was possible to blow the US-Australia relationship?” wrote The New York Times writer Nick Kristof. “It’s childproof. But not Trump-proof.”

Is anything?

Audrey Young writes:

The pressure is on Little to improve his own performance and the party’s image to lift its support.

Making Jacinda Ardern deputy leader after she wins the Mt Albert byelection is an obvious way to help change the party’s image and to complement his own.

It is not a question of whether or not Ardern deserves it.

It is a matter of recognising that she could make a difference to the party’s results.

She has a big national profile and an even bigger one in Auckland and is the face of Labour to many younger voters.

I agree. I think Ardern replacing Annette King would be a boost for Labour.

Duncan Garner writes:

So Prime Minister Bill English has put the hotheads of Te Tii Marae in their rightful place and is giving Waitangi the swerve entirely on our national day.

He’s made the right call: someone had to deal to these self-appointed meatheads who harbour delusional thoughts of a better country under their misguided views of the world and the place of the Treaty of Waitangi. 

Their at-times violent approach is repugnant and has no place in our modern, increasingly confident country.

So I totally back him abandoning Waitangi in favour of attending a series of events, including a reggae concert, in Auckland.  His absence removes these activists’ platform to promote their petulance.

English will instead head to Orakei and Hoani Waititi Marae. It’s a much better choice anyway – a fusion of Maori, Pakeha, Asian and other cultures all enjoying food, performances and celebrating our children, families and country. That’s the way it should be in a mature nation. 

A true celebration.

I’m not sure these people will ever be happy or satisfied. It’s been a problem since 1974. Rob Muldoon always attended Waitangi. David Lange never did. Jim Bolger went until the insults flew. Helen Clark walked away after she was reduced to tears. John Key promised to always go until they banned him from speaking about the Trans-Pacific Partnership.

I’m not even sure if the Waitangi mob can articulate what their issues are. Protest in a democracy is good. I support it. But not violence and thuggery.

Yes the treaty was breached – and we’ve spent decades setting up processes, writing cheques and apologising. Have these “activists” not noticed that the Maori Party has been part of the Government for the past eight years?

They have a seat at the most powerful table in the country. They are included, not excluded.

It’s not this Government that should be vilified by Maori. If anything, the worst anti-Maori decisions came from the previous Labour administration. They blocked Maori from going to court to fight for legal rights to the foreshore and seabed and then there were those poorly judged and executed Tuhoe raids.

If the “activists” bothered to look, Bill English has privately worked to engage genuinely with Maori for more than a decade. But that won’t suit their narrative.

English has done more to understand Maori and their issues than any other finance minister or prime minister I can recall. He deserved better from Te Tii Marae. Ask any Maori at the coalface of change and policy and they know English cares deeply about how policy affects their families.

My children are Maori. Two of them speak the language fluently. I am proud of who they are and what they stand for. 

They stand as both proud and independent young Maori women and proud New Zealanders. That’s not the face of the future – that’s what’s happening now.

Well said Duncan.

Rasmussen reports:

Most voters approve of President Trump’s temporary halt to refugees and visitors from several Middle Eastern and African countries until the government can do a better job of keeping out individuals who are terrorist threats.

A new Rasmussen Reports national telephone and online survey finds that 57% of Likely U.S. Voters favor a temporary ban on refugees from Syria, Iraq, Iran, Libya, Somalia, Sudan and Yemen until the federal government approves its ability to screen out potential terrorists from coming here. Thirty-three percent (33%) are opposed, while 10% are undecided. (To see survey question wording, click here.) 

Similarly, 56% favor a temporary block on visas prohibiting residents of Syria, Iraq, Iran, Libya, Somalia, Sudan and Yemen from entering the United States until the government approves its ability to screen for likely terrorists. Thirty-two percent (32%) oppose this temporary ban, and 11% are undecided.

Even 34% of Democrats support the ban.

I still think it is grossly mistargeted. Read this article for example:

Kaveh Ranjbar, one of ICANN’s board members, had to miss his flight to Los Angeles on Monday because of the ban.

Ranjbar—who was born in Iran—lives in the Netherlands, where he is the Chief Information Officer of RIPE NCC, a nonprofit regional internet registry. (The company has offices in Amsterdam and Dubai.)

He’s the Chief Executive of the IP address registry for Europe (critical infrastructure for the Internet) yet he can’t enter the US because of where he was born.

It’s fine to have higher standards of admission for some countries, such as visas. But a total ban is silly, even temporarily. It’s basically a PR stunt that will just inconvenience thousands for no security value.

But as the poll shows, most Americans back the ban and I suspect the protests against it may lead to more support for Trump, not less.

The Dom Post reports:

Wellington Mayor Justin Lester is looking to trim his council’s spending by $8 million so his expensive election campaign promises can go ahead without a massive rates hike.

Lester announced on Wednesday that Wellington City Council would be undertaking a thorough review of council spending in order to find a minimum of $8m in ratepayer savings during the 2017-18 financial year.

He has tasked council chief executive Kevin Lavery with leading the review, and said part of that would be identifying spending that was now a lower priority in the short-term.

The $8m saving is needed if the council is to fund Lester’s key projects while also keeping Wellington’s annual rates rises below the 3.9 per cent average forecast over the next 10 years.

Very pleased to see the new Mayor wanting to cut lower priority spending and recognising that ratepayers can’t afford rates increases of the level we have had.

Justin Lester said in response to a Kiwiblog survey he would not vote for an average annual rates increase of more than 3%. It looks like he means to stick to that, which is good.

Bill English has announced a safer communities package:

• 1,125 more Police staff, a 10% increase to over 13,000
• 880 more sworn officers
• $503 million safer communities package
• A new 24/7 phone number for non-urgent Police calls
• New target for 98% of home burglaries to be attended within 48 hours
• 95% of NZers to be within 25 kms of a Police presence
• $115 million more for Corrections and Courts

I especially like the target for burglary attendance.

The Herald reports:

Willie Jackson has dumped the Maori Party and is set to announce he is standing for Labour instead.

The Maori broadcaster and former Alliance MP was considering standing for the Maori Party in the Tamaki Makaurau electorate, but sources said he had since been approached by Labour and now planned to stand on the list for them instead.

Harre, McCarten and now Jackson all back in the fold. The new future focused Labour Party of 2017 is the Alliance of the 1990s!

It is understood Jackson had met with Labour leader Andrew Little and believes he will secure a high list ranking to secure his return to Parliament.

Oh dear. I hope Willie has done his due diligence. Labour are required to rank the list so half of the likely caucus is female. That means it is unlikely there will be any men in the top 10 effective list positions.

The CTU have said:

“What is needed is a change in the calculation of the minimum wage. The minimum wage needs to be two-thirds of the average wage, this would make it much fairer (two-thirds of the average wage would be $19.88 per hour).

The idea of linking the minimum wage to the mean or median wage is not bad in itself. I’d welcome it, as would save the arbitrary decision making process every year. It would also shift the focus to increasing the median wage so everyone benefits.

But a level of two thirds of the average wage would be by far the highest in the world. The current minimum to mean ratios are:

1. New Zealand 0.52
2. France 0.50
3. Slovenia 0.49
4. Chile 0.46
5. Australia 0.44
6. Germany 0.43
7. Israel 0.43
8. UK 0.41
9. Canada 0.40
10. Ireland 0.37
11. US 0.25

The media never ever report our minimum wage is already the highest in the developed world.

At certain levels increases have only a small impact on employment. But the larger the ratio to the average wage is, the more jobs that would disappear. If this was not the case the minimum wage would be $50 an hour.

If you compare minimum wages to median wages, the CTU proposal would have the minimum wage at 85% of the median wage. This again would be the highest in the developed world. Other minimum to median ratios are:

• France 62%
• Israel 58%
• Australia 53%
• UK 49%
• Canada 44%
• Ireland 44%
• US 36%

What I would do is fix the minimum wage at its current level of 67% of the median wage. It would still be the highest in the developed world, but would mean that the focus would go on lifting wages across the board – and you do that via productivity gains not decrees.

Pete George blogs on how Central Otago businesses have been allowed to open on Easter Sunday and now also Wanaka businesses (Queenstown already could).

This shows the law working well – local Councils deciding what works for their area. It was nuts that Queestown could open but not Wanaka. It was also nuts that a tourist region such as Central Otago had to close down on Easter Sunday.

The Herald reports:

Five National Party backbenchers have been given promotions by Prime Minister Bill English.

Melissa Lee, Jian Yang, Kanwaljit Singh Bakshi, Jonathan Young and Scott Simpson have been given Parliamentary Private Secretary roles.

That means they will assist ministers, but are not part of the executive and do not get a pay rise.

Lee has been reappointed as Parliamentary Private Secretary to Ethnic Communities Minister Judith Collins and Yang will also take on this role.

Bakshi will assist the Police Minister Paula Bennett and Young will work with Economic Development Minister Simon Bridges.

Simpson will work with both Environment Minister Nick Smith and Conservation Minister Maggie Barry.

English said the private secretary positions were important roles which helped ensure strong links between ministers and the caucus.

As the story says there is no extra pay or even resources involved with being a PPS, but it does mean a Minister will work with them on appropriate issues.