Treasury have released:

The operating balance before gains and losses (OBEGAL) was a surplus of $1,410 million, compared to a forecast surplus of $498 million.  This favourable variance of $912 million was largely due to higher than forecast core Crown tax revenue and lower than forecast core Crown expenses.

Both good news.

Core Crown tax revenue was $462 million (1.0%) higher than forecast for the eight months ended 28 February 2017.  Corporate tax was the largest driver of this favourable result with revenue being $551 million ahead of forecast.  This increase was across both provisional and terminal tax, indicating that profits in the 2016 tax year were higher than forecast and that this has continued into the 2017 tax year. 

A good sign of economic strength.

The Herald reports:

Little said he had wanted to settle the case prior to the trial – but concluded the Hagamans had no interest in settling after what he described as the “most bizarre negotiation” he had ever been involved in.

The Hagamans had rejected two offers of $26,000 and $100,000 and said the wording of the apology was inadequate, but Little said they had never provided him with the wording they wanted.

However, in cross-examination the Hagamans’ lawyer, Richard Fowler, presented a letter from last December in which the wording the Hagamans wanted for an apology was included.

Little conceded that, but said there was no further attempt to amend it to something acceptable to both. “This was the opening gambit and I would expect negotiations to continue.”

Not a good look when you say something under oath which turns out to be false.

His top offer of $100,000 was the most he could afford and he would have to borrow that using his family house as security.

The Leader of the Opposition gets a salary of $288,900 a year, plus a superannuation subsidy of $32,005, and an allowance of $16,697.

A quote from Australian HRC Chair Gillian Triggs:

Sadly you can say what you like around the kitchen table at home.

The AHRC are determined enemies of free speech. The irony is free speech is one of the essential human rights, but the zealots often ignore that.

Been sent a paper authored by former finance minister Roger Douglas and Economics Professor Robert MacCulloch. The abstract is:

Many nations are forecast to struggle to publicly fund their welfare states over the coming decades by taxing the young. As a potential way to pre-empt these looming problems, there has been a surge of interest in the Singaporean model which features compulsory savings accounts and transparent pricing of health services. It has achieved some of the best health-care outcomes in the world at a cost that is the lowest amongst high income countries. In this paper we show how tax cuts can be designed to help establish compulsory savings accounts so that a publicly funded welfare system can be changed into one that relies more heavily on private funding in a politically feasible way. To our knowledge, showing how both a tax and welfare reform can be jointly designed to enable this transition to occur has not been done before.

The background includes:

One of the few countries that has successfully controlled health-care costs, whilst also maintaining one of the highest quality services in the world, is Singapore. The cornerstone of its system is the compulsory ‘Medisave’ account. Workers pay a percentage of their wages into their individual accounts. Employers also make contributions. The size of the contributions is set by the government. The funds are used to help pay for services, in addition to funding health insurance plans. Medisave has kept national costs low by helping allow for health services to
become more transparently priced to the users and by shifting a portion of expenses to individuals and their employers.

On the delivery side, services are provided by a mix of both publicly and privately owned hospitals, competing with one another. Government assistance is provided for those who are unable to pay. In terms of performance, Singapore’s universal healthcare system was rated 6th out of 191 nations by the World Health Organization, ahead of most high-income economies.

The tax side:

First, we show how tax cuts weighted towards low and middle income earners can enable the funding of individual compulsory savings accounts. These accounts can be used to pay direct for most medical expenses, cover events related to job-loss and accidents, purchase mandatory catastrophic insurance plans, as well as
build up retirement savings. Tax rates are reduced to zero on earnings up to $NZ 50,000 for single tax-payers (and up to $NZ 65,000 for one income families with dependent children). The funding of the accounts is supplemented by contributions from employers, whose corporate taxes are reduced in lieu.

And cut some costs:

Second, provided that subsidies to two groups, namely businesses in receipt of ‘corporate welfare’ and university students from wealthy families, are stopped then the above tax cuts can be made sufficiently deep to allow most people to establish significant savings balances (on top ofpaying a share of their own welfare costs and retaining their pre-reform disposable incomes).

Combined with a gradual increase in the current NZ retirement age equal to three months per year over the next 20 years (so that it is rises from 65 to 70 years old) the fiscal strains on the public purse coming from funding the welfare state can largely be resolved.

But help out those who need it:

Third, even in the presence of our sizeable tax reductions, the government can still retain sufficient revenues to fulfil the role of ‘insurer of last resort’, helping to pay for those individuals who cannot meet their own welfare expenses out of their savings accounts.

The more detailed tax proposal is:

the corporate tax rate is cut to 17.5 cents in the dollar of profit and the GST rate is increased to 17.5%. The PIT rate falls to zero for single tax-payers (i.e., a single person or a couple with two incomes) earning less than $50,000. It becomes 17.5% for incomes between $50,000 and $70,000, and 23% on income beyond $70,000. For one-income families with dependent children, PIT rates fall to zero for incomes less than $65,000.

And what happens to the extra income?

The funds from the above tax cuts on incomes up to $50,000 for single tax-payers (and up to $65,000 for one-income families with dependent children) go directly into compulsory savings accounts for all employed workers. They are supplemented by an individual’s own, and their employer’s, contributions. Single tax-payers contribute 5% of earned income up to $50,000 (or up to $65,000 for one-income families with children). Their employer pays another 12½% of income up to $50,000. These contributions add up to total compulsory savings of $17,500 per year for those earning $50,000 or more (and $22,750 for a one-income family with children on
$65,000 or more). The savings are used to pay for one’s health and other welfare expenditures.

They propose 45% of the compulsory savings for an individual be reserved for healthcare expenses.

It’s a bold reform proposal which I’d love to see implemented in New Zealand. I look forward to seeing the final version of their paper published,

The Herald reports:

Labour leader Andrew Little wants a “tourist tax” charged at the border to help pay for tourism infrastructure, rejecting Tourism Minister Paula Bennett’s concerns it risked making New Zealand look like a “rip-off.”

Little said a “modest” levy would be ring-fenced to pass on to local councils to use on tourism-related infrastructure.

“We rapidly and urgently need new infrastructure and infrastructure upgrades targeted at tourists and the easiest and most efficient way to pay for it is just a border levy collected when you buy your ticket, and a mechanism to distribute it to local councils.”

In my experience modest levies become immodest levies over time.

Foreign tourists do pay tax – around $1.1 billion a year. It is called GST. It is also proportional – the higher spending tourists pay more than the backpackers. Those who spend more time in NZ pay less than those here for a brief conference.

A new levy charged on airfares would hit the low budget travellers, who are the ones most price sensitive.

So I don’t see a need for a new tax. What we simply need to do is have say a quarter of the $1.1 billion currently collected, allocated to local councils for tourism infrastructure.

Liam Hehir writes:

Has Labour’s anti-capitalist fever finally broken?

Several weeks ago, Andrew Little made an unambiguous commitment to not increase taxes. This is a significant shift for Labour. Less than a year ago, finance spokesman Grant Robertson was saying tax increases were on the agenda.

Then, last week, Labour and the Greens announced a set of “budget responsibility rules”. These promised to maintain current levels of government debt. It also committed any new government to maintain overall spending rates at their present levels.

These developments have two very positive implications.

First, it shows the opposition sees itself as a serious alternative government. When parties think they have a sniff, they become conspicuously moderate. They run what are sometimes denigrated as “me too” platforms that stress continuity.

It also illustrates that Labour is still a party to the post-Muldoon consensus. It would never use the word, but it remains committed to the basic precepts of neoliberalism. And, through the need to present a united front, they’ve dragged the Greens along with them for good measure.

The Greens have signed up to keeping spending to under 30% of GDP. This is lower than Ruth Richardson or Bill Birch managed. It’s superb that Labour got the Greens to agree to this.

The principles behind the Labour-Green declarations are sound and praiseworthy. They communicate a sense of responsibility. Yet they are not without risk either.

Expensive new and better funded programmes, no tax increases, a budget surplus.

Governments may, as a rule, choose any two of these. Unless they are working from a massive existing surplus, they cannot have all three.

To become prime minister, Andrew Little must master this “impossible trinity”. If he fails to do so, the promises of March could be his undoing.

Over the years, Labour and the Greens have promised many things to many people. There is nothing surprising about that, of course. Promises of more money is what oppositions do.

But meeting these promises will cost billions and billions of dollars. The Government surplus, meanwhile, will be “only” a few billion dollars. Accordingly, there is no way to meet all those pledges without more taxes or borrowing.

I really look forward to costing the Labour and Green policies, so we can see if their policies match their pledge.

Green co-leader Metiria Turei faced criticism for this on Twitter. She responded by claiming that “a shift in current wasteful spending” would enable better funding of social programmes.

Great – the Greens now want to fund new spending by cutting existing wasteful spending. Exactly what National has been doing. Welcome to the club Metiria.

Governments rotate in and out of power. Another Labour government is all but inevitable. It may not happen in 2017, but as the years go on, we will only get closer to the day it recaptures the Treasury benches.

I am nobody’s idea of a Labour supporter, but our democracy would suffer if it didn’t win elections from time to time.

Labour governments are an essential part of our political ecosystem. And if they’re relatively conservative when in power, so much the better.

A Labour/Green Government that pledges to keep spending to under 30% of GDP worries me a lot lot less than a Labour/Green Government with no such pledge.

I’d prefer National to win this election but so long as Labour and Greens kept their word to keep spending below 30% of GDP, them winning would not be a disaster as it would have been in say 2014.

Stuff reports:

A group of 27 high-profile New Zealanders, including unlikely allies such as Don Brash and Dame Tariana Turia, have penned an open letter warning freedom of speech is under threat in the country’s universities.

It was the brainchild of Auckland University of Technology’s History Professor Paul Moon, and rejects “the forceful silencing of dissenting or unpopular views” on university campuses.

It also insists debate must not be suppressed because the ideas put forth “are thought by some or even by most people to be offensive, unwise, immoral, or wrong-headed”. …

The open letter has been signed by academics, business leaders, community representatives and controversial commentators including Sir Bob Jones, former prime minister Sir Geoffrey Palmer, Maori educationalist Sir Toby Curtis, poet Albert Wendt and former MP Luamanuvao Winnie Laban.

Moon said freedom of speech was the foundation of a modern, diverse and democratic society and it protected religious freedom and individual expression.

“Kneejerk calls from Police and the Human Right Commission to introduce hate-speech laws after recent attacks on ethnic communities will have the unintended consequence of suppressing free speech. Education, open debate and understanding will change racist and intolerant views – not censorship,” he said.

Great to see this response to the call by those two authorities for a law to restrict free speech further. The full list of signatories are:

Assoc Professor Len Bell, Dr Don Brash, Dr David Cumin, Sir Toby Curtis, Dr Brian Edwards, Graeme Edwards, Dr Gavin Ellis, Sir Michael Friedlander, Alan Gibbs, Dame Jenny Gibbs, Bryan Gould, Wally Hirsh, Professor Manying Ip, Sir Bob Jones, Professor Pare Keiha, Assoc Professor Luamanuvao Winnie Laban, Dame Lesley Max, Gordon McLauchlan, Professor Paul Moon, Sir Douglas Myers, Assoc Professor Camille Nakhid, Sir Geoffrey Palmer, Professor Edwina Pio, David Rankin, Philip Temple, Dame Tariana Turia, and Professor Albert Wendt.

Here’s what the Gpovernment should do. Appoint a new member of the Human Rights Commission. A Free Speech Commissioner in the mould of Tim Wilson who would be a fearless and staunch advocate of free speech, even speech that offends.

In related news, Ayaan Hirsi Ali is not coming to NZ or Australia due to security concerns.

MBIE has a list of Councils that have decided to allow trading on Easter Sunday (which is not a public holiday). So if you want to go shopping on Easter Sunday, here is where to go:

• Far North
• Kaipara
• Hauraki
• Rotorua
• Napier
• New Plymouth
• Stratford
• Rangitikei
• Carterton
• Masterton
• South Wairarapa
• Central Otago
• Clutha
• Southland

The Herald reports:

New Zealand-bound Lions fans are facing huge surges in accommodation prices, including one motel seeking a nightly rate of seven times its normal charge.

A Weekend Herald investigation has revealed Wellington motel, Fernhill Motor Lodge, is charging $1000 a night at the time the city hosts the second test, compared with a regular rate of $135. The Quadrant in Auckland CBD is seeking $1125 on the night of the first test, more than three times its room rate the following week.

According to online booking sites, only 5 per cent of hotel rooms in Auckland’s CBD are still available for the first and third All Blacks-Lions tests on June 24 and July 8.

This is where competition is a good thing.

If you go to Airbnb, you can get a room near Eden Park for under $60 a night and an entire apartments or houses for under $200 a night.

An interesting poll of 1,000 Londoners. They found:

• Labour lead over Conservatives has shrunk from 16% a year ago to 3%
• Corbyn net disapproval at -44%
  • Current Labour voters -7%
  • 2015 Labour voters -35%
  • Under 25s -22%
  • Over 65s -60%
  • C2DE social grades -33%

Corbyn is a London MP. Even his own London voters think he is failing.

A guest post by Keeping Stock:

I had the privilege of attending a National Party candidate selection in Whanganui yesterday, and it was a most interesting experience. Four candidates had made it through pre-selection, the first contested National Party selection in the Whanganui electorate since Chester Borrows won the nomination in 1999.

Each of the nominees spoke for 10 minutes, then answered questions from the party president and PM which were handed to them in a sealed envelope. In the end, it may well be that the responses to the questions were the final determinant.

There was no clear winner on either of the first two ballots, and the lowest-polling candidate dropped out each round. On the third ballot, Whanganui lawyer Harete Hipango won the nomination ahead of Whanganui District Councillor Hadleigh Reid. She will be an outstanding candidate, and if elected, a terrific replacement for Hon. Chester Borrows. She is also the first Maori woman ever to win selection for a seat already held by the National Party.

But the best bit of the whole day was this; there were 60 voting delegates, all members of the National Party’s Whanganui branch. There was a presence from National Party HQ, but that was only to ensure that the rules were observed; the decision on a local candidate was made solely and entirely by local party members. Contrast that with Labour, where all too often Head Office has a major say, often trumping the wishes of the local membership.

I certainly prefer National’s method of selecting candidates to Labour’s; it is local democracy at work. Perhaps that’s why National pretty much has a mortgage on provincial New Zealand, with Palmerston North and Napier being the only provincial seats Labour holds. And as long as the local party members continue to have the ability to select a candidate they want, not to have to accept someone forced on them by Head Office, that’s unlikely to change.

As KS says, it is good when you have a decision made by local members, not head office.

The Herald reports:

Labour leader Andrew Little upped his offer from $26,000 to $100,000 in a last-minute bid to settle the defamation claim against him by hoteliers Earl and Lani Hagaman but Mrs Hagaman rejected it as too little and too late.

Little’s offer was revealed in Mrs Hagaman’s evidence at the High Court in Wellington, during which she read out letters between lawyers for the two.

The Hagamans are now seeking more than $2 million in damages from Little over comments he made last year about a $100,000 donation from the Hagamans to the National Party in 2014 and a contract later awarded to their hotel chain – Scenic Hotel – to manage the Matavai resort in Niue.

At the time, the Hagamans gave Little a deadline to apologise and retract his comments, but he refused. Mrs Hagaman said at that point, all the Hagamans wanted was an apology and “minimal” costs: “just a couple of legal letters.”

Why on Earth didn’t he just apologise at the time? Who was advising him?

Mrs Hagaman said in February this year, Little offered the wording of an apology and $26,000.

In response the Hagamans said although they “have no wish to destroy Mr Little by rendering him insolvent,” a more realistic offer was needed.

His return offer of $100,000 was also rejected – Mrs Hagaman said her costs by then were already $215,000 and the wording of the apology was inadequate because it did not state there was no link between the donation and the hotel’s business interest in Niue.

If your offer a year later doesn’t even come close to the costs of the other party, it is possibly not a big surprise they say no.

Mr Hagaman was now very ill and had been given only weeks to live and Mrs Hagaman said she decided to go ahead with the defamation suit to clear his name before he died.

“We are very proud of what we do. We are very proud people. His name is very important to him and it’s incredibly important that he does die with dignity – and for our children.”

She said it was offensive and “distasteful” to suggest the Hagamans would expect something in return for the donation – they were regular donors to various charities and community groups, including $1 million for the Christchurch Cathedral from Mr Hagaman: “a true atheist”.

Very generous.

The Hagamans are suing over six separate statements Little made, one in a press release and the rest in media interviews after that. In those, Little had questioned whether there was a link between the donation and the Matavai contract which was awarded to Scenic Hotel soon afterwards, as well as a $7.5 million Government aid fund to upgrade the resort at a later date.

The comments the Hagamans claim amount to defamation include phrases such as: “it looks murky from the outside, it looks shady,” “stink to high heaven,” “there’s just something about this whole deal that really stinks” and reference to National Party’s “dodgy deals” such as SkyCity and the agrihub in Saudi Arabia.

Mrs Hagaman said the overall insinuation was that the Hagamans had done something corrupt and she felt they were being targeted.

The court will decide if the statements were defamatory or fair game. But as I have said before, Little would have been fine if he had merely called for an investigation. It is his angry language of stinking to high heaven etc which has made him vulnerable.

Bill English has said that after reviewing the video footage of the raid, that he sees no reason to have an inquiry into Operation Burnham.

This is a pity, because I thought an inquiry would be useful reassurance. Of course those alleging war crimes can and should go to the New Zealand Police whose job it is to investigate any crimes, including war crimes.

Does this mean we will never know what happened? Well based on both the book summaries and the NZDF responses, here’s what I think did happen.

Civilian Casualties

I think it is very very likely that Hager and Stephenson are correct in that there was at least one civilian casualty on the raid – the three year old girl. There is no way she was an insurgent, and no reason to think her death wasn’t due to the raid.

This is highly regrettable, and NZDF earlier descriptions of civilian deaths as unfounded was almost misleading. They should have said “unknown but possible” as they were aware of the building hit by mistake.

Insurgent Casualties

H and S say no insurgents were killed while NZDF says they have video of those killed being armed.

It seems that the main insurgents they were after were not killed in the raid. They had left the village. But that doesn’t mean those killed were not also insurgents, just different ones. If you come out firing with a gun, you’re treated as an insurgent.

The families may claim those adults killed were not insurgents, but there are many reasons they would say that, including compensation. I suspect H and S have taken everything claimed by the families at face value as it fits their world view.

War Crimes

Did the SAS commit war crimes? Well not even the book claims they do, just they may have. Civilian casualties does not equate to war crimes – otherwise Churchill and FDR are war criminals.

NZDF say only two shots were fired by SAS snipers and the person killed was an insurgent.

More telling is the fact that there was a lawyer involved in the operations of the raid, personally saying who is and is not a legitimate target. This is a level of caution and respect for the laws or war which is hard to beat. It is not compatible with the H and S version of a blood thirsty revenge raid.

Independent Review

While I don’t think there anything untoward happened except a gear accident on a US helicopter that probably killed a civilian child (and maybe some adults), it isn’t great to have everything based on NZDF internal investigations.

The US military have Inspector-Generals, the NZ Police have the iPCA, the SIS and GCSB have the IGIS. It would not be a bad idea to consider an independent watchdog for NZDF.

Liam Donovan writes at Politico:

The problem for Schumer and his caucus is this: Republicans are not bluffing when they say Gorsuch will be on the court one way or another. The squishes, the institutionalists, even the erstwhile “Gang” members are unwavering in their support. Gorsuch is well-qualified for the job, acquitted himself admirably by any measure, and if an unprecedented partisan filibuster is the only thing standing between him and the bench, the Reid Rule will be invoked for the second time.

The Democrats are on the verge of making a huge mistake – for the second time.

The first mistake was when Harry Reid used the nuclear option to get rid of the 60 vote threshold for cloture on Cabinet and judicial (except Supreme Court) appointments. It has come back to bite them in a major way as Trump has managed to get all his Cabinet confirmed, despite many getting less than 60 votes.

It also means there is almost no political pain for McConnell to get rid of the 60 vote threshold for Supreme Court appointments. If Reid has not done what he did a few years ago, there would have been huge resistance to changing the rules for Trump nominees. I doubt the Republicans would have got the votes for it.

But saying Republicans have the political will to put Gorsuch on the court is different than saying there are 50 GOP senators who are otherwise prepared to end the filibuster. Their appetite is entirely a function of circumstance. Were Democrats to lay off Gorsuch, keeping their powder dry for the future and maintaining the moral high ground, it would be rather easy to imagine the Susan Collinses, John McCains and Lindsey Grahams of the world getting cold feet with a lesser Trump pick, particularly one who shifts the balance of the court rather than maintaining it.

This is key. Some Republican Senators do not want to use the nuclear option but if the Dems are going to block a vote on someone as suitably qualified as Gorsuch, then they will get rid of it as the only remaining option.

Now if a liberal Justice dies in the next three years, the next Trump nominee will dramatically shift the balance on the Supreme Court. And if the 60 vote threshold has been abolished this time around, he is almost certain of getting his pick confirmed no matter who they are.

However if they let a vote occur on Gorsuch, and kept the 60 vote threshold, it would be far harder to have the Republicans invoke the nuclear option for the next nominee.

So the end result of this is not just going to be that Gorsuch gets confirmed, but also that Trump will have a much easier time with his next nominee. A huge own goal.

Another aspect to all of this, is that the Senate has become so partisan, that I believe no future Supreme Court nominee will be appointed unless the President’s party has a majority in the Senate. There will be years of vacancies.

Stuff reports:

Wellington’s oldest cinema – The Paramount on Courtenay Place – will celebrate its centenary before it closes its doors.

Cinema Paramount (CPL) director Janet Carson said the theatre would close in September.

“After 100 years we’re gutted to be the ones closing the door … it’s hard,” Carson said. 

It is a pity, but it is partly a victim of newer niche cinemas. On top of the Reading complex, Wellington has the Lighthouse, Embassy, Roxy, Empire, and Penthouse also.

Daniel Hannan MEP writes:

In 1917, Lenin’s Red Guards stormed the Winter Palace in Petrograd. …

The revolution, in other words, began as it was to continue: with looting. It wasn’t long, though, before the looting turned to bloodshed – bloodshed on an unimaginable, oceanic scale.

Nothing had prepared humanity for so much slaughter. Perhaps ten million indigenous Americans were killed by European pathogens after Columbus. A similar number of people died in the Atlantic slave trade. The Nazis killed 17 million. The Communists killed 100 million – some shot after show trials, some tortured to death, some starved to enforce collectivisation.

Never have so many died for an ideology.

The Communists took over or banned every voluntary association, emptying the civil space that used to exist between state and citizen. When the Hungarian Socialist Workers’ Party seized power in 1948, for example, Janos Kádar, as Minister of Home Affairs, abolished over 5,000 independent associations: churches, charities, chess clubs, Boy Scout troops, village bands.

If you think the state must be all powerful, then you want to eliminate all other institutions.

How often we see some moral idiot wearing a Che Guevara tee-shirt. We should react as we would to someone wearing an Adolf Hitler or Osama bin Laden tee-shirt; but, in general, we don’t.

I recall the Labour and Green MPs mourning the death of Fidel Castro, despite the murders, executions and torture he oversaw.

There are always ideologues who say they’d be happy to break a few eggs in order to make an omelette. These ideologues need to be refuted with the observable data of the last hundred years. Setting aside the vast fact that human beings are not eggs, there has not been a single case of an omelette actually emerging. Communism leaves us with empty eggshells and empty bellies. Every time. This story shall the good man teach his son.

Communism has failed in literally every country that has tried it.

Stuff reports:

One of the frontrunners to potentially take over from Paul Eagle as Wellington’s deputy mayor has only been a city councillor for just over five months.

Northern ward councillor Jill Day is understood to be one of Wellington Mayor Justin Lester’s two preferred candidates to take over as his sidekick should Paul Eagle become the MP for Rongotai after September’s general election.

The other potential candidate is long-time Lambton ward councillor Iona Pannett. …

Lester would not comment on potential deputy mayor replacements on Tuesday. But sources close to the mayor’s office confirmed he was only considering Day and Pannett.

This is probably code for “The Mayor speaking off the record”

When asked for comment and opinion on the frontrunners, all other city councillors said the ultimate decision was up to Lester and they would support whoever he chose.

Although Day has been tipped as Lester’s favourite, it was clear that Pannett’s decade of civic experience made her the clear favourite among her colleagues.

Many were surprised a first-term councillor would be considered for such a big job.

None of the other councillors expressed an interest in the deputy position and most were surprised that experienced councillor Simon Marsh was not in the mix.

Simon is one of the more moderate Councillors and would be a more reassuring pick than a Green Party councillor who has opposed almost every roading project the city has seen.