Eric Crampton writes:

It is very, very easy to break a beautiful tax system. Here is the recipe for doing it.

Start by finding some product that seems a little frivolous – a bit of a luxury – and preferably one that’s mostly used by people that the typical voter does not really like anyway. Say, for example, the fancy beard oil used by hipsters to maintain their elegant facial appendages.

Then, find some cause that nobody could object to. Something really motherhood and feijoa pie. Tieke recovery. Who doesn’t love the New Zealand saddleback and support its recovery? Nobody.

Add the two together and propose a tax on hipster beard oil to help fund Tieke recovery programmes. Who could object? Hipsters are at best a mild nuisance, and at worst a looming threat to national identity; beard oil seems the height of frivolous consumption; and Tieke are a perennial entry in Bird of the Year competitions.

The bundle is an economic abomination. If Tieke recovery is the best use of the next public dollar, it is best regardless of whether we tax hipsters’ beard oil. And if a tax on hipsters’ beard oil is the most efficient next tax to impose, then the government should tax it regardless of whether the money raised is used to cut other taxes, fund Tieke recovery, or fund something else entirely.

Many countries have a tax system where hundreds or thousands of different products have different tax rates applied to them. I’m glad we don’t in NZ, and hope we don’t change.

My starting point for anyone advocating a new tax, is that they should identify an existing tax to eliminate or reduce so that overall tax levels on families and businesses doesn’t increase.

Scoop reports:

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they’d be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up.

The Auckland-based power company has signed a ‘swaption’ contract with Meridian Energy “and other market participants”, according to a statement from Meridian chief executive Mark Binns. Meridian, but no detail of the trigger price for firing up Huntly has been given and there is no indication of how much of up to 150 Megawatts of additional capacity is committed to Meridian versus other generators.

Meridian only owns wind and hydro power stations and appears to have led the charge to pay to have the two 250 megawatt Huntly ‘Rankine’ units on standby for any periods of low inflows to hydro lakes that could compromise security of electricity supply. The contract will make up to 100MW available year-round and an additional 50MW in the winter months, from April to the end of October.

The move will disappoint environmental campaigners seeking less fossil fuel use in the New Zealand electricity system, which is roughly 80 percent renewable at present, with a target of 90 percent renewable by 2025.

By 2025 it is likely Huntly will have closed anyway. The decisions on individual power stations are for the company directors. It is not a decision for Government. The Government has correctly placed a charge on greenhouse gas emissions, so that coal costs more than previously. But if Genesis has decided it is more profitable to keep it open for now, that is fine. The price they pay for emissions through the ETS will help pay for offsets such as forestry. That is why an ETS is a good market response, rather than central Government decision making.

Energy Minister Simon Bridges said the move was a “pragmatic” and “transitional” measure, while the national grid operator Transpower also welcomed the decision.

“There were times in 2019 that we forecast a shortfall of energy, which could have been difficult to manage,” said chief executive Alison Andrew in a statement. “In extreme cases (for example a dry year when the hydro lakes are very low), we could have experienced a situation where consumers would have been asked to conserve their power usage.”

Basically without Huntly there would have been risks of power shortages. As more generation comes online, Huntly won’t be needed eventually.

The quarterly disclosure is out. The highest expenses for non-Ministers is:

1. Andrew Little $36,009
2. Kelvin Davis $24,016
3. Nuk Korako $23,984
4. Metiria Turei $23,011
5. Kanwaljit Snigh Bakshi $21,350
6. David Carter $21,027
7. Jacqui Dean $20,749
8. David Cunliffe $20,613
9. Stuart Smith $20,406
10. Meka Whaitiri $20,357
11. Clayton Cosgrove $20,296
12. Nanaia Mahuta $20,157

For Ministers (domestic travel) the top are:

1. John Key $41,886
2. Te Ururoa Flavell $38,941
3. Steven Joyce $35,807

The Telegraph reports:

Open borders across Europe have allowed Isil to plant sleeper cells across the continent and in the UK, poised to launch Paris or Brussels-style massacres, America’s intelligence chief has warned.

James Clapper, the US Director of National Intelligence, warned the free movement of citizens around the EU was “in conflict” with the need to protect security.

He said there is evidence of fanatics from Islamic State in Iraq and Levant (Isil) in Britain, Germany and Italy secretly plotting outrages like those witnessed in France and Belgium.

Being an island nation has its drawbacks. It makes it harder to trade, and harder to travel.

But there is a real plus, in that it makes us easier to have relatively secure borders.

Stuff reports:

Sergeant Cameron Browne told the authority that, when he entered the bar with police last month, Andrews was at the DJ booth.

“He used the PA system to tell patrons that the police officers were not real, they were in fact strippers,” Browne said.

“He encouraged patrons to pay police $20 to strip, and continued to encourage patrons to taunt police until the compliance was complete.”

Heh, I find that pretty funny actually.

The officers also testified to often finding intoxicated people in the bar. Some reported seeing drunk people leaving through an upstairs window. 

Thom said he assessed two drunk women, barely able to stand, in the bar who “were among the worse I have seen in some time”. 

Based on serving drunken patrons, it is possible the bar should lose their licence – but not for joking the Police are strippers.

The challenge is determining if they were served at this bar while drunk, or whether they drank elsewhere and then came to Ruby Rabbit.

The Herald reports:

The number of permanent name suppression orders issued by the courts has halved in the past five years. In 2011, 640 people received permanent suppression for criminal matters in the district and high courts. The next year, the number dropped to 407 and has slid even further to 317 in 2015. Over the same five-year period, the number of people appearing in court has fallen by about 25 per cent, according to information from the Ministry of Justice.

Good to see the law change working, and fewer people getting name suppression. That is a significant drop.

The Herald reports:

A top New Zealand property expert opposes a land tax and says a stamp duty is a far better option.

Dean Humphries, a national hotel broker and a former Auckland University lecturer, was responding to PM John Key talking of a land tax and said that would not resolve the issues around foreign buyers purchasing houses here.

“Stamp duty is a no-brainer and could bring in tens of millions of dollars annually. Land tax is the most draconian thing I’ve ever heard of. Where does the Government get their advice from? Stamp duty is so easy because you pay up front at the time of purchase and just a percentage of what you’re paying. It’s just the easiest thing to do and the tax can be used for a multitude of things,” Humphries said.

Key is threatening to apply a land tax to foreign-based house buyers if there is evidence they are pushing up New Zealand house prices – and it could also apply to Kiwis abroad.

Actually a land tax is better, in my opinion (and that of Tax Working Group).

A stamp duty can be avoided by having a trust purchase the land, and then just changing the trustees. Also stamp duty would encourage people to never sell their properties, while a land tax encourages people to use their properties (not land bank them).

However this is all premature. The Government has said that IF the data shows there is a high proportion of foreign buyers, then a land tax is the best option.   The data may show that relatively few buyers are non-residents.

Stuff reports:

Tourism bodies are calling for a single Australia-New Zealand visa to boost international visitor numbers on both sides of the Tasman.

The trans-Tasman visa would make long-haul flights ot Australia and New Zealand more enticing and allow the two countries to be marketed as a single destination, say the Tourism and Transport Forum Australia and Tourism Industry Association New Zealand.

The two bodies have written to the Australian Minister for Immigration and Tourism in support of their call.

They want a regional visa that would allow international tourists to travel between both countries.

Sounds a great idea. Many tourists coming to one place do want to visit the other.

“A temporary Trans-Tasman Visa arrangement was implemented during the ICC Cricket World Cup 2015 in which visitors travelling between 26 January and 5 April 2015 only required an Australian visa to travel over to New Zealand.

“A three-month visa was granted upon arrival in New Zealand to those holding an eligible Australian visa through the period,” the two industry groups said in a statement.

“Australia and New Zealand are long-haul destinations – it makes a lot of sense for us to package the two countries together in a joint regional visa to prospective international tourists who are weighing up the long flight to our countries,” said TTF chief executive Margy Osmond.

“The reality is that if you are coming halfway around the world to Australia or New Zealand you want to make it worth your while, just as travelling to Europe we visit a multitude of countries on that continent not just one.

“Seamless travel between Australia and New Zealand for our own citizens and international visitors is a goal we should be strongly pursuing to make our two nations a more attractive destination in what is a cut-throat, competitive tourism market.”

A 2014 TTF investigation suggested a joint visa scheme could increase the number of international visitors to the region by 141,300 people by 2020.

Not sure how robust that number is, but am sure it would help boost tourists numbers.

The key would be to make sure that there is policy alignment on who can get a visa.

After easily winning five further states Trump now has 927 delegates, needing just 310 of the remaining 651.

He’s won 50.9% of pledged delegates and needs just 47.6% of the remaining delegates.

It is now mathematically impossible for Cruz to win prior to the convention. It is Trump or a contested convention and the odds are looking good for Trump.

On the Democratic side Clinton has 62% of the delegates to date and needs just 286 more of the 1,397 left. That’s only 20.5%.

If you ignore superdelegates, Clinton has 56% to 44% for Sanders. To beat her on pledged delegates Sanders would need to win 59% of remaining delegates.

Stuff reports:

Hospital bosses were warned about a childbirth educator’s controversial and dangerous teachings 10 years ago, but it appears nothing was done.

Antenatal teacher Adith Stoneman is being investigated after it was revealed she was teaching “old wives tales” to expectant mums, including advising women to use castor oil for induction, at publicly-funded classes at Waitakere Hospital in west Auckland.

It has now emerged other parents were alarmed by her non-scientific approach, which has strengthened calls for greater regulation of the childbirth education industry.

Auckland mother Jenni Hunter said she complained to Waitemata DHB in 2006 after Stoneman told her class that immunisations were linked to autism and Vitamin K caused cancer in children.

So for 10 years this midwife has been funded by taxpayers to give false information to pregnant mothers. That’s outrageous.

Hunter has joined calls for an overhaul of the way childbirth lessons are run.

“I want to know that all antenatal classes are checked so they provide balanced, evidence-based, practical information.”

Last week, a maternity health campaigner called for a national evidence-based curriculum, auditing of childbirth lessons and a single advice source for expectant parents.

The auditing is the key thing.

Parents have shared their own bizarre lessons from childbirth classes across the country on social media.

* “We should only have our baby in an environment we felt comfortable having sex in.”

* “We were told medical intervention pretty much meant that you had done something wrong.”

* “A c-section was the worst that could happen to our baby.”

* “Pain relief blocked the ‘love hormone’ from mother to child. Lucky I disregarded that when I went into hospital as I ended up having an emergency c-section.”

* “Talking about [caesareans] would be bringing on the negative side of birth.”

* “Rather than doing an internal exam of a woman’s cervix, a midwife should tell how far along she is by the look on her face.”

* “[Give] your baby untested remedies … ‘the [baby’s] body would take what it needs and excrete the rest’.”

* “You fail as a mother if you can’t breastfeed … [and] that natural birth is the only way.”

* “Don’t get induced, don’t have an epidural, don’t have a c-section … unfortunately [I] had to have all the above and felt like I had failed.”

Most midwives are highly professional and excellent at their jobs. But there is a small minority who have a near religious view that childbirth should never involve any medical intervention, and they give misinformation to parents. As it is a taxpayer funded service, the Government and DHBs need to ensure that the advice being given is based on knowledge, not prejudice and opinion.

From Tim Blair:

1. Harvard biologist George Wald estimated that “civilization will end within 15 or 30 years unless immediate action is taken against problems facing mankind.”

2. “We are in an environmental crisis which threatens the survival of this nation, and of the world as a suitable place of human habitation,” wrote Washington University biologist Barry Commoner in the Earth Day issue of the scholarly journal Environment.

3. The day after the first Earth Day, the New York Times editorial page warned, “Man must stop pollution and conserve his resources, not merely to enhance existence but to save the race from intolerable deterioration and possible extinction.”

4. “Population will inevitably and completely outstrip whatever small increases in food supplies we make,” Paul Ehrlich confidently declared in the April 1970 Mademoiselle. “The death rate will increase until at least 100-200 million people per year will be starving to death during the next ten years.”

5. “Most of the people who are going to die in the greatest cataclysm in the history of man have already been born,” wrote Paul Ehrlich in a 1969 essay titled “Eco-Catastrophe! “By…[1975] some experts feel that food shortages will have escalated the present level of world hunger and starvation into famines of unbelievable proportions. Other experts, more optimistic, think the ultimate food-population collision will not occur until the decade of the 1980s.”

6. Ehrlich sketched out his most alarmist scenario for the 1970 Earth Day issue of The Progressive, assuring readers that between 1980 and 1989, some 4 billion people, including 65 million Americans, would perish in the “Great Die-Off.”

7. “It is already too late to avoid mass starvation,” declared Denis Hayes, the chief organizer for Earth Day, in the Spring 1970 issue of The Living Wilderness.

8. Peter Gunter, a North Texas State University professor, wrote in 1970, “Demographers agree almost unanimously on the following grim timetable: by 1975 widespread famines will begin in India; these will spread by 1990 to include all of India, Pakistan, China and the Near East, Africa. By the year 2000, or conceivably sooner, South and Central America will exist under famine conditions….By the year 2000, thirty years from now, the entire world, with the exception of Western Europe, North America, and Australia, will be in famine.”

9. In January 1970, Life reported, “Scientists have solid experimental and theoretical evidence to support…the following predictions: In a decade, urban dwellers will have to wear gas masks to survive air pollution…by 1985 air pollution will have reduced the amount of sunlight reaching earth by one half….”

10. Ecologist Kenneth Watt told Time that, “At the present rate of nitrogen buildup, it’s only a matter of time before light will be filtered out of the atmosphere and none of our land will be usable.”

The sad thing is that many of those who made the predictions are still around pushing their hysteria.

Buried in a rugby piece was this nugget:

From the Hurricanes’ perspective, Fatialofa began exceeding expectations the moment he arrived.

The 23-year-old lock was preparing to play for Auckland in last year’s provincial premiership final when the Hurricanes called. He’d figured a chance in Super Rugby had passed him by again, until that offer of a wider training group berth in Wellington came through.

It was in February’s pre-season match against the Blues in Eketahuna that Fatialofa first began to indicate he would be more than just a body to hold hit shields at practice.

“That was actually a funny story, old Eketahuna, because I wasn’t meant to play that game,” Fatialofa said.

“Then I found out on the morning of the game that I was in the 23 and then much closer to kickoff I found out I was starting. Two other locks were meant to play but James Blackwell went down and Blade [Thomson] went down and I ended up playing 80 [minutes].

“But that was probably the chance I needed to show what I’m about.”

This time last year the 2010 New Zealand Secondary Schools’ representative was working as a teacher aide in west Auckland. He was grateful for it too, given how hard it can to find gainful employment when you your provincial side requires you fulltime for four or five months of the year. 

“It was a pretty cool school, a charter school,” said Fatialofa.

“The kids there were on their second or third-chance school but I enjoyed them. They were mostly Pacific Island and Maori.

“It was testing times for the first couple of weeks, while they were sussing me out. But I ended up really enjoying that job and was pretty gutted when I had to leave when the ITM Cup started.

Remember that Labour, Greens and NZ First want to close down every charter school in NZ.

Audrey Young reports:

There are some differences between National and Labour’s policy responses to the housing shortage but the fact is that much of it is by degree. There is more commonality between their policies than difference on addressing supply.

Government partnering private developers on Crown surplus land is equivalent to KiwiBuild policy.

It requires state intervention in the private market in a bid to rapidly boost supply. It is the Government’s most important current policy in terms of potential for growing supply.

Within five years, the Government expects to be delivering 15 to 20 per cent of the new houses into the Auckland market.

National has also embraced Labour’s urban renewal programme in Tamaki and encouraged large-scale development programmes such as in Weymouth and Hobsonville. They have few differences there.

The crossover goes both ways. Labour has now accepted National’s long-held view that restrictive planning laws in Auckland have been a key driver in limiting urban boundaries and driving up land prices. It was a major concession and Twyford announced new funding schemes to spread the cost of development infrastructure across generations, rather than piling it into the cost of a new home.

Labour hasn’t yet decided how it will vote on the current RMA reforms before a select committee, aimed at relaxing consenting rules but there’s a good chance it will support it.

A few years ago the parties were in quite different positions. National was focusing mainly on increasing supply and Labour on decreasing demand.Now both parties are promoting policies to both increase supply and decrease demand.

The Herald reports:

The Green Party has lost its third senior staff member in as many months after chief of staff Andrew Campbell announced his resignation, saying it was time for “fresh legs” to take over his role after two elections.

Mr Campbell has held critical back-room roles in the party for the past five and a half years, first as chief press secretary and then as chief of staff after James Shaw took over the leadership from Russel Norman after the 2014 election.

It follows the resignations of chief press secretary Leah Haines for family reasons, and former communications director David Cormack who left after just six months in the role to set up a public relations company.

This will be a loss to the Greens. Andrew is very respected can capable. His move into Chief of Staff was seen as a good one.

Mr Campbell denied the string of resignations was due to discontent in the Green camp. “It’s the best job I’ve ever had. I love politics, I love elections but you get to a point where you need to take a break from it. That’s it in a nutshell.”

He did not yet have another job lined up but had made it clear to the Green Party after the 2014 election that he intended to leave, partly because he felt it was time for ‘fresh legs’ to take on the role after seeing the party through two elections.

Regardless of how you spin it, it’s not a good look to have your Chief of Staff resign less than a year after he takes up the role.

I don’t think it is due to internal discontent, more a realisation that the chance of the Greens getting into Government is pretty bleak. Even if there is a Labour-led Government, they’ll need Peters and he’d veto the Greens being Ministers.

The Justice and Electoral Committee has made some recommendations arising from their inquiry into the 2014 general election. Overall it is barely tepid with no significant changes recommended despite massive problems in the area of enforcement (The Police simply don’t enforce electoral laws, and no one else is able to).

Here’s their major recommendations:

• Having more advance voting places available over 12 days
• Enabling voters of Maori descent to change between general and maori rolls every three years instead of every five as present. This is a bad recommendation as boundaries are done every five years and running the Maori option out of sync with the boundaries review means you may get some gerrymandered seats with very low or very high electoral populations. If however they also review boundaries every three years, then it is okay.
• Considering providing clarification or exemptions to the restrictions on broadcasting election programmes to address satirical, humorous, and creative programmes. (this is good)
• Prohibiting campaigning and the display of campaign material within, and in the immediate vicinity of, advance voting places. (this is good)

Overall it is more about what they didn’t recommend, such as finally sacking the Police as the electoral law enforcement agency after their incompetence or unwillingness to enforce electoral law in the 2005, 2008, 2011 and 2014 elections.

Roy Morgan’s monthly poll is out and blogged here.

Quite different to Colmar Brunton. CB has National up while RM has National down.

Both CM and RM have Labour down, and well under 30%.

CM has NZ First down 1% while RM has NZ First up 3.5%.

The Guardian reports:

Austria is braced for political turmoil with fears that the landslide victory for a rightwing populist and gun-carrying candidate in Sunday’s first-round presidential vote could trigger snap elections.

Norbert Hofer, of the rightwing Freedom party (FPÖ), defied pollsters’ predictions to beat the Green party’s Alexander Van der Bellen into second place, gaining 36% of the vote. The two candidates will go head to head in a run-off ballot on 22 May.

The Green candidate got 20% and an independent 19%. The candidates of the two main parties got just 11% each, reflecting huge discontent in Austria.

But many commentators say the crisis of the political establishment in Austria has much to do with the fact that the two centrist parties have governed the country in a “grand coalition” for the past 10 years.

This almost always happens when there is a grand coalition.

Victoria Crone has announced:

Auckland Mayoral Candidate Vic Crone has announced her first set of policies, fiscally responsible commitments she says are fundamental basics of building a world class city.

The policies were jointly developed with Auckland Future and the announcement includes lifting council performance in four key areas: keeping residential rates low, cutting waste, reducing staff costs and controlling debt – essentials that council needs to get right.

“Last year ratepayers faced a 9.9 per cent average rates increase, for some it was a shocking 15 per cent. As Mayor I will cap average residential rates increases at 2 per cent per annum for the next three years,” says Ms Crone.

So Victoria Crone and Auckland Future are pledging a maximum rates increase of 2% annually for the next three years.

Having rates go up massively end endlessly is a political choice. Len Brown and the current Council chose to increase rates by 9.9%.

This year Aucklanders should check out all candidates for Council and the Mayor, and ask if they have made a pledge on rates increases. If they won’t make a pledge, then don’t vote for them unless you want more further massive rates increases.

Vic Crone’s leadership will deliver at least $500 million in savings with a focus on reducing back-office waste, efficient procurement, cutting duplication and imposing a Mayor-led Line-Item Review programme.

As a start, Crone will reduce staff costs by 5-10 per cent over the next three years and cap staff numbers at current levels, saving up to $80 million.

“It’s concerning that every year for the last three years council has exceeded its staff cost budget line by over $50 million. I will put a stop to this trend while protecting frontline staff, core services and key capital investments.”

This can be done. If anything, one could be even more ambitious with reducing staff costs.

The Press reports:

Christchurch Mayor Lianne Dalziel says she will “not walk away from the city”.

Dalziel confirmed on Monday afternoon that she would seek a second term as Christchurch’s mayor in October’s local body election.  

She had been overwhelmed by positive feedback from the public in recent weeks, which helped make her decision, she said.

“The challenge of bringing about the change that we have managed to achieve in the last two-and-a-half years hasn’t come without its cost, but I am prepared to continue to serve the city for another three years if that’s what the city chooses.”

This is no real surprise. Very few people stand for Mayor and only do one term.

What will be interesting is if there is any challenger. It is quite possible there won’t be.

NBR reports:

As someone in the pro-Uber, pro-disruptive technology, I was hoping the government would side with Uber but I’m surprised at just how emphatically Mr Bridges has backed the newcomer.

Last night, the transport minister said he would take the “lightest touch” possible as the new rules were finalised.

“I’ve always thought that in politics you’re on the side of the angels if what you’re doing is good for consumers, and ultimately this will be,” he said.

“What I want to see is a regime that allows for new technological innovations but is safe. Some change is required but we’re open to where that goes.”

A very welcome focus on what is best for consumers, not what is best for industry.

More broadly, some fear quality will drop under his laissez-faire proposals. But at least Uber drivers have the incentive that they are constantly being rated by passengers. And, in contrast, we’ve all had rubbish taxi drivers at times who have poorly maintained cars and/or an inability to work a simple GPS. Often the difference is nothing, given the number of taxi drivers who do double duty, whipping off their magnetic taxi badging when they get an Uber hail.

The New Zealand government’s approach is a happy contrast to some countries, like France, which are trying to ban or crack down on Uber; or Australia, were insanely complicated and expensive arrangements are being established (in South Australia, the state government is paying 1137 taxi drivers $A30,000 each as compensation for a law making ride-sharing apps like Uber legal. The $34 million move is being funded by a $A1 tariff on taxi fares that will, of course, make Uber seem even more attractive. Western Australia is introducing annual fees for Uber drivers. New South Wales is introducing a stonking $A250 million taxi industry compensation package, with a $A1 a ride special tariff for five years).

So well done, Mr Bridges.

A very good outcome from Bridges and Foss.

Stuff reports:

The future of New Zealand’s oldest purpose-built police station is in the hands of Wellingtonians.

A local couple are the proud new owners of the heritage Mt Cook police barracks in Buckle St. …

The Buckle St, category A heritage listed commercial premises, was built in 1894 by prisoners. It was home to The Dominion Museum and National Art Gallery until the completion of Te Papa in the late 1990s.

The building, at the base of the Pukeahu National War Memorial Park, is currently tenanted to several small companies on short-term leases.

Bayleys Wellington salesman James Higgie, who is marketing the building for sale by tender, said the new owners, from Wellington, had no immediate plans for the building.

As I blogged previously, this building would be ideal for the Police Museum – the oldest police station in NZ, and right in the middle of the Pukeahu heritage area. A memorial to fallen police officers would fit the nature of the area perfectly.

The current Police Museum (at the Police College) gets around 7,500 visitors a year (from last published stats). Move it to Buckle Street as a tenant, and I reckon you’d get at least ten times as many visitors.