The Herald reports:

Labour and the Green Party have conceded that a capital gains tax would not be a “panacea” for New Zealand’s unaffordable housing crisis.

The two parties seemed initially flummoxed when a questioner at an otherwise friendly election forum organised by the Public Health Association in Auckland this morning noted that having capital gains taxes had not stopped housing price booms in Australia, the US and Britain.

“I don’t know why they haven’t worked in those countries,” said Green health spokesman Kevin Hague.

I do. It is because the artificial restrictions on supply of land are the major factor in house price increases.

National North Shore MP Maggie Barry said Labour proposed so many exemptions in its capital gains tax that it would be ineffective.

“Perhaps that’s why it’s been ineffective in other countries,” she said.

I support NZ having a Capital Gains Tax, but it must be with no exemptions, and more importantly income and company tax rates should be lowered to compensate families and businesses – so the overall level of taxation remains the same.

David Cunliffe has said that their Capital Gains Tax will see NZ families and businesses paying $4 to $5 billion a year more in taxation. That is why they are doing it.

The Herald reports:

Prime Minister John Key made an assurance no more than 2 per cent of New Zealand’s farmland was foreign-owned as controversy continues over the sale of Lochinver Station near Taupo to Chinese company Shanghai Pengxin.

Labour and New Zealand First say they’ll block the sale of the 13,800ha property if they are in a position to do so after next month’s election, in response to strong public concerns over foreign ownership of farmland.

Mr Key and his Government have downplayed the scale of the issue and say they would act if there was evidence of a “run” on New Zealand farms by foreigners.

Yesterday, Mr Key said the Overseas Investment Office (OIO) told him in writing they believed “the amount of rural land that’s owned by foreigners is 1 to 2 per cent”.

An issue the media have not touched on much is that these proposed bans are illegal. We have the CER agreement with Australia, and under that can not ban Australians from owning property in New Zealand.

So Labour and NZ First’s policy would have us in breach of our oldest and most important trading agreement.

A good piece from the Herald on Putin’s problems:

The world faces a moment of maximum danger in Ukraine. Vladimir Putin has perhaps just a few days to decide whether to launch a full invasion of the Donbass, or accept defeat and let the Ukrainian military crush his proxy forces.

Nato officials say Russia has massed 20,000 troops in battle-readiness near the border, backed by Spetsnaz commandos, tanks and aircraft. Vehicles have been marked with peace-keeper labels already. Nato sees every sign that the Kremlin intends to disguise an attack as a “humanitarian mission”.

So it will be an overt invasion.

He has been clear from the outset that he will deploy any means necessary to bring Ukraine back into Russia’s orbit. Only war can now achieve this, since all else has failed, and since he has turned a friendly Ukraine into an enemy by his actions. The awful implications of this are at last starting to hit the markets.

“People thought that Russia was just playing a game of brinkmanship, and that pragmatism would prevail in the end. There is real fear now that this will spin out of control,” said Chris Weafer, from Macro Advisory in Moscow.

Yields on 10-year rouble bonds have jumped to 9.7 per cent, up 130 basis points since June. A liquidity crunch is rapidly taking hold across the financial system.

“The market is shut. Not a single Russian entity has been able to borrow anything in dollars, euro or yen since early July,” Weafer said.

The invasion will make this worse. Putin’s popularity will drop at home, as the economy slumps. He will face possible defeat in elections, which may force him to reveal whether he will allow this to happen, or will he remove the democratic facade.

Putin now faces draconian sanctions from the US, EU, Japan, Canada and Australia together. He can strike back by asymmetric means – perhaps a cyberattack – but tit-for-tat retaliation can achieve nothing. There is no equivalence. Russia’s economy is no bigger than California’s. This is an economic showdown between a US$40 trillion power structure, and a US$2 trillion producer of raw materials that has hollowed out its industrial core. The new arsenal of sanctions refined by a cell at the US Treasury – already used with crisp effect against nine countries – is nothing like the blunt toolkit of the 1980s or 1990s. Nor can Russia retreat into Soviet self-sufficiency. It is locked into global finance. The International Energy Agency says Russia needs to invest US$100 billion ($118 billion) a year for two decades just to stop its oil and gas output declining.

This is one of the benefits of having countries in the global economy – it means that when they do bad things, the economic pressure can be the best elver against them.

European officials calculate that Putin will not dare to cut off energy supplies, since to do so would bring the Russian state to its knees within months. But even if he tried – as a shock tactic – it would not achieve much. Oil can be obtained anywhere.

Cutting off the gas would hurt Europe, but hurt Russia more.

Finally had a chance to see the Dotcom video everyone's talking about. It's alarming. No place for that kind of thuggery in NZ politics

— Chris Hipkins (@chrishipkins) August 7, 2014

Getting a bunch of people drunk and getting them to chant abuse isn't political leadership. It's thuggery and megalomania intertwined.

— Chris Hipkins (@chrishipkins) August 7, 2014

I want more young NZers to vote to be heard, not because they're being wound up & manipulated by the worst kind of cynicism and thuggery

— Chris Hipkins (@chrishipkins) August 7, 2014

My respect levels for Chris Hipkins have just soared for having the balls to call it honestly, despite the fact Mana/Internet is a party of the left.

I wonder if Mr Cunliffe has a view on the video, or more importantly what it says about a party that not only encourages that behaviour, but is so proud of it, they turn it into an official party advertisement?

UPDATE:

@chrishipkins v dangerous when megalomania meets disaffected. Totally irresponsible behaviour & no place for it in NZ politics – or society

— Stuart Nash (@StuartANash) August 7, 2014

That’s a second Labour candidate to call a spade a spade and condemn the tactics of Dotcom as thuggish and megalomaniac. My hope is Dotcom will not get to hold the balance of power. The problem for Labour is the polls shows they can not govern without him.

The Herald reports:

Auckland University political marketing specialist Jennifer Lees-Marshment said the video’s rhetoric about revolution and changing the Government looked effective, but “reminds me of propaganda, chanting-type campaigning more reminiscent of Hitler and fascism [in Nazi Germany] than New Zealand in the 21st century”.

For the record I don’t think Dotcom is a Nazi, even though he collects their memorabilia. But I do think he is a bit of a German nationalist, as see by the tapes of him in the car boasting (incorrectly) to Mona about how the Germans built the Eiffel Tower and Statue of Liberty.

Massey University political marketing expert Claire Robinson said the video undercuts Ms Harre’s claim to integrity. “Laila Harre was expressing such indignation about John Key’s ‘sugar daddy’ comment and the need for respect in the political debate, and at the same time you have Kim Dotcom posting a video inciting hate speech, in effect.

“It is sinking to such a low, and completely at odds with what she’s trying to do, exposing yet again the enormous disconnect between Kim Dotcom’s hatred for John Key and the way that she wants to campaign.”

Laila gets offended when Dotcom tweets a silly joke about Batman killing a hooker because he used his real name, but thinks there is nothign wrong with the party she leads posting videos of people chanting “Fuck John Key”.

Imagine if a group of young activists were filmed a few years ago chanting “Fuck Helen Clark”. Laila would be demanding they be arrested for hate speech, or something.

Family First NZ yesterday laid a complaint about the video with the Advertising Standards Authority.

That could be interesting. It is worth recalling again this wasn’t a video shot by an audience member. This was an official video of the Internet Party.

NewstalkZb reports:

The Green Party wants a complete turnaround in transport funding.

The party has released its transport policy today and is proposing to axe over $11 billion in funding from State Highway Projects.

More than a billion more will be taken from local road improvements.

Instead the Greens want to increase public transport spending by almost $11 billion.

Transport funding should generally go on projects with the highest benefit to cost ratios. The Greens just hate cars and hence roads, so they want motorists to fund trains.

My preference is to have all transport decisions based on the benefit to cost ratio – have say everything with a BCR above 1.5 funded.

The Greens supported light rail for Wellington. That had a BCR of 0.05!!! That is equal to setting $100 notes on fire and burning them to ash.

They supported a rail package out to the Kapiti Coast that would have cost $100 million and only removed 80 cars a day at peak time. Buying 80 motorists a helicopter  would have been cheaper.

The Greens do not see congestion as a bad thing. They like congested roads. They think forcing motorists out of their cars will save the planet. That’s a valid worldview, but you should be aware of it.

A guest post by Mike Wilkinson:

If someone buys electricity, the seller needs to measure how much they’re using.  Smart meters do this electronically and they’re read automatically, making them a big step into the digital age.  How best should that step be taken?  By keeping it voluntary is what’s shown by comparing New Zealand’s smart meters with Australia’s.

The New Zealand Government more or less leaves companies to themselves to decide about smart meters.  Competition between electricity companies motivates installation.  There are now smart meters in over 50% of the country’s households and businesses, a figure growing by the day.  And since smart meters here are voluntary, they are installed only when companies want to use them.  They come at no additional cost to consumers.

The approach to smart meters in Australia has been very different.  In 2006, the Victorian State Government directed that over two million smart meters be installed in Victorian homes.  Since it was mandatory, this approach has been much more costly for consumers.  According to this Australian Productivity Commission report (see p. 383), it’s raised households’ electricity bills by over $100 annually.  Moreover, Victoria’s mandated rollout has contributed to uncertainty across Australia, delaying companies from installing smart meters.  In the rest of the country, only a few consumers actually have them installed.  This is in stark contrast to New Zealand, where the majority do.

The long term benefits of smart meters are indeed uncertain.  It isn’t clear which sort of technology is best for them and companies naturally disagree about how worthwhile they are.  New Zealand has been able to work through this – it has kept things voluntary while maintaining competition.  Meanwhile, Australia has shown how government intervention can make things worse by raising costs for consumers and creating uncertainty for companies.

Despite that uncertainty, one thing is clear: consumers in New Zealand are already benefiting from smart meters.  They allow many of us to see our electricity usage on a daily or even a half-hourly basis, almost in real time.  Worried you’re consuming way more electricity this winter?  Just look up your company’s website and see.  Gone are the days of waiting for an ‘estimated’ read at the end of each month.

Politicians occasionally show little respect for what’s occurring voluntarily when they suggest making certain things compulsory.  Labour MP David Shearer recently suggested that New Zealand’s smart meters were ‘plain dumb’.  He proposed introducing minimum standards for them, implying consumers should bear the cost of making those standards mandatory.  This comparison of New Zealand’s and Australia’s smart meters questions the wisdom of such an approach.

Smart meters could become very important in the future.  For example, if lots of people start plugging in electric vehicles for power at the end of each day, these meters could make all the difference for ensuring our electricity networks keep operating.  Whichever way they might be used, though, New Zealanders can be assured that they’ll benefit the most if our Government continues to keep things voluntary and competitive.

d

A reader e-mails:

Labour’s small business policy promises to significantly increase the proportion of government undertaken by small business.  This is good, but….

Labours Work and Wages policy will “ensure that government bodies only contract with businesses that are good employers including a history of adhering to employment legislation, and respecting the right of their employees to join a union and bargain collectively.”

Labour will also “seek to use the purchasing power of the state to create incentives for private sector employers who can become certified Living Wage employers.”

Small businesses will not be exempt from the good employer requirements, unless Labour proposes to backtrack on its Work and Wages Policy.  Most small businesses are not unionised.  Does this mean they will need to unionise to get a look in?  Will they have to pay $18.40 or more to their employees before they get a look in?

Labour’s policy does seem to be that the Government should discriminate against employers who do not unionised workplaces, which will mean almost all small businesses.

This is a very self serving policy. Almost all business policies of Labour’s are about forcing or incentivising more people to join unions. Unions in turn then use their extra money to help Labour get elected, in four ways:

1. Some unions join Labour and get to vote on their leader, candidates and policies
2. Some unions donate directly to Labour
3. Almost all unions allow their staff to spend as much time as they want campaigning for Labour on work time
4. Many unions run third party campaigns on issues, designed to help Labour get elected

So while one of Labour’s policies say they want more small businesses winning tenders, the small print is only if they have unionised workforces, to help fund the Labour Party.

Garth McVicar, the highly effective founder of the Sensible Sentencing Trust, will be a candidate for the Conservative Party. He is taking a leave of absence from the SST.

The Herald reports:

Greenpeace has won the right to register as a charity, the Supreme Court found today.

No. They have won the right to apply again.

Greenpeace has been involved in a lengthy court battle after a previous application to register as a charity was dismissed because it was found to be too political and its protests could land them on the wrong side of the law.

Today the Supreme Court found that political advocacy for a charitable undertaking is allowed.

It was a 3-2 decision which will now mean that almost anyone can be considered a charity. Family First certainly will be eligible now.

In light of this decision Greenpeace will now have to the right to apply to the Charities Board, formerly the Charities Commission, for reconsideration.

This decision made New Zealand democracy a little stronger, Greenpeace’s executive director Bunny McDiarmid said.

“It means that the Supreme Court has now recognised that trying to change our world for the better, and taking on government to do that, is a public good.

On that basis, the Labour Party is also a charity. So let’s make donations to all political parties tax deductible. I’d donate a lot more if I could claim it off tax!

3 News reports:

Prime Minister John Key doesn’t think there’s anything wrong with referring to Kim Dotcom as Internet Party leader Laila Harre’s “sugar daddy”.

Mr Key made the comments on RadioLive todya and Ms Harre told the same radio station she found them deeply offensive.

Asked later if he stood by them, Mr Key said he did.

Laila has openly said she abandoned the Greens for Dotcom, because of the resources he offered. The Greens were not paying her $150,000 a year, as Dotcom is.

But I love their thought patterns. It is outrageous for the PM to call Dotcom a Sugar Daddy, but it is fine for Dotcom to lead a crowd in chanting “Fuck John Key” and then be so proud of that, to stick it on You Tube as an official party ad.

If you want offensive, than the above qualifies I would say. Probably inspired by the person who leads the crowd chanting “Fuck John Key” and alleges he is a stooge for Hollywood.

Chester Borrows announced:

With the seven key initiatives in the package now all underway or in force, Mr Borrows today released figures showing the programme had already recouped or saved over $47 million and stopped thousands of illegitimate or fraudulent benefits.

The effect on the lifetime liability of current beneficiaries is estimated at a reduction of between $119 and $134 million as of March 2014.

“This Government has put in place a package of reforms to get smarter with the way we approach welfare fraud, and it’s very pleasing to see these reforms delivering such positive results,” says Mr Borrows.

“While we know it is only a tiny minority of beneficiaries who take money they’re not entitled to, those who do cost tens of millions of dollars each year, and we’re committed to stopping them.

“With the addition of these new measures, the Ministry of Social Development is stopping more fraud than ever before.  Investigators completed 4,614 investigations, established 2,270 overpayments and prosecuted 893 people during the 2013/14 year.  In total $88.4 million of fraud and illegitimate overpayments were established.”

That is not an insignificant amount of money.

“In its first year of operations this enhanced information sharing has prevented an estimated $44.8 million in illegitimate benefits from going out the door, and resulted in almost 6,900 benefits being cancelled.

The Greens will be outraged that someone had their benefit cancelled.

By Squeaky Lino (In the Halls of Power)

The ODT reports:

More than 50,000ha of high country between Lake Wanaka and Queenstown will be protected in the largest conservation undertaking on private land in New Zealand’s history. 

In an agreement between the Queen Elizabeth II National Trust and a company linked with millionaire record producer Robert ”Mutt” Lange, most of Motatapu, Mount Soho, Glencoe and Coronet Peak stations will be placed under protective covenants, effectively New Zealand’s first national park in private hands.

I expect Labour to condemn this as a privatisation or something equally stupid.

The four stations, which are leased in perpetuity by Soho Properties Ltd, cover 53,000ha of land – equal in size to the combined areas of Paparoa and Abel Tasman national parks.

Now that’s a reasonable size.

Soho Properties lawyer Willy Sussman said he had been ”at pains” to explain to Mr Lange the magnitude of what he was agreeing to.

”I was almost labouring the point – I asked him ‘do you understand what this means?”

”His reply was just one word – ‘absolutely’.”

As well as being a ”musical genius”, his Switzerland-based client was an unconventional and far-sighted thinker who wanted to ”make a positive difference to the world”.

If Labour and the Greens had their way, Mr Lange would never have been allowed to buy that land, and hence not able to place it in the public domain. This is a good example of how stupid their policies are.

Not all foreign investment in land is good or bad. That is why applications should be decided on a case by case basis, with the test being whether it delivers a net boost to New Zealand. Labour and Greens want to get rid of that test, and have a total ban. This story is a another good reason to stop them gaining power.

3 News reports:

This is beyond pathethic. Labour know nothing at all about the proposal, and how many jobs it may create, or extra export income for NZ. The only thing they know is that the buyer is a Chinese company, and that is enough for their xenophobic kneejerk reaction. It’s one thing to say no, after you consider a case on its merits. But Labour are pandering to blatant racism.

It’s one of the BIG election issues and this Friday night on Prime,  Sean will chair what is certain to be a key election debate. Social Development Minister Paula Bennett will confront Green Co-Leader Metiria Turei on inequality and poverty in NZ. They will be joined by two experts with very different perspectives, Alan Johnson from the Salvation Army, author of The Growing Divide. A State of the Nation Report from the Salvation Army 2012  . And from the faith based Venn Foundation we have its CEO, Greg Fleming, the former CEO of the Maxim Institute.
This will be the first of a series of weekly debates running right through the election — and after. We have some of the country’s top politicians lined up and with Sean’s extensive experience chairing election debate broadcasts, these are going to be must see shows.
And we’ll have a different way for you to win a book each week!

You can also catch up with us on Facebook.
And very shortly we’ll be going live with a  new political news website.

The future power behind the Government, if the left get into power with his $4 million utu campaign.

The latest from the NZ Initiative series:

The biographies of top economists indicate that they were often motivated to study economics in order to be better able to contribute to the common good.  

But what is meant by the common good and what policies contribute to it?  After all, in general elections, voters are commonly confronted with at least one party advocating higher taxes in order to make New Zealand a better place for New Zealanders – and at least one other party advocating lower taxes in the same cause.

Welfare economics is a branch of economics that explores what might be meant by the common good, and seeks to evaluate economic policies on the basis of their effects on the well-being of members of a community.

As explained previously in the economic ABCs, an insight that has endured since Adam Smith (1776) is that competition, in conjunction with security in person and property, induces even solely self-interested butchers, bakers and the candlestick makers to serve their customers’ interests. Otherwise we freely take our business elsewhere.

During the 20^th century, welfare economics formalised this insight into the proposition that stylised competitive processes will produce a zero waste welfare outcome.  It is optimal in the sense that no one person’s (self-perceived) welfare can be increased with reducing that of at least one other person (whether such a change is worth doing regardless remains a moot point).

Welfare economics has clarified the many situations in which the same competitive processes will potentially fail to maximise welfare in this sense. These include problems of monopoly, public goods (such as national security and communicable diseases), environmental pollution, income distribution, poverty, malleable preferences and distorting taxes. Economists have formally shown in many of these cases how a well-motivated government might ideally use taxes or regulations to improve general well-being.

Nevertheless, related branches of economics have also illuminated many difficulties that confront government action, including problems of voting behaviour, inadequate information and political and bureaucratic incentives.  The UK TV series, Yes, Minister, brilliantly depicts these difficulties. “Doing good” in government is subject to the Law of Unintended Consequences.

What about the welfare state? One of the earliest uses of this term was in the1942 Beveridge Report that ideologically proposed that the state was responsible for individual welfare “from the cradle to the grave”. What followed was a dramatic increase in taxes and social service spending in member countries of the OECD, albeit with significant national variations. Its effects on well-being will long be debated.

Judth Collins has announced three reductions in the levies we pay to ACC. They are:

1. Petrol levy drops 3 cents a litre
2. Employer levy drops 5 cents per $100 of earnings
3. Motor Vehicle registration fees drop an average of $136 (including impact of petrol levy drop)

The good news about these drops are that they are sustainable, with their respective accounts being at least 90% fully funded.

Duncan Garner writes:

Laila Harré – harden up.

And welcome back to politics. It hasn’t changed.

So, the Prime Minister said you’re backed by a sugar daddy – Kim Dotcom. So what? Many people will actually agree with him. It’s not really wrong. Is it?

To take offence is to be far too thin-skinned. Harden up, shake it off, but – best of all – just ignore it.

The truth is the Mana-Internet Party is backed by a German billionaire on the run from the authorities. It is what it is: he’s paying you and he’s paying for the party to exist. If he goes, the party goes.

Harre is playing the sexism card. Yawn.

Incidentially Your Dictionary says a definition of sugar daddy is:

A wealthy male benefactor to a charity or other cause

Sounds a very apt definition. Mirriam Webster also define it as:

a generous benefactor of a cause or undertaking

Laila is getting paid a full-time generous salary to campaign on behalf of Kim Dotcom. She shouldn’t complain when people point this out.

The Herald reports:

Labour’s Te Tai Tokerau candidate Kelvin Davis says he will donate money given to his campaign by National-aligned bloggers to Rape Crisis.

National’s pollster David Farrar and Whaleoil blogger Cam Slater both donated about $100 to Mr Davis’ campaign after a Facebook post Mr Davis wrote criticising Kim Dotcom and the deal with Internet Mana, and asking for donations.

Mr Davis said he had received the donations in his campaign account and would not return them, but nor would he use them on his electorate campaign.

“I’m going to donate it to Rape Crisis and thank them very much for their contribution to my anti-sexual violence campaign. I’m pleased people want to give so generously to the sexual and domestic violence campaign. It’s fantastic of them and it’s great that men are stepping up.”

I’m delighted I can assist a Labour MP to do something meaningful about domestic and sexual violence, as opposed to merely apologising for being a man!

Also give Kelvin credit that unlike Hone, Kelvin will be choosy over whom he takes money from 🙂

I understand Kelvin received well over $1,000 in donations from our blog readers, so we look forward to him actually putting some billboards up in Northland, from the other donations

The University Herald reports:

Low-income minority adolescents enrolled in California’s high-performing public charter high schools are less likely to engage in risky health behaviors, according to a new study by the University of California – Los Angeles.

Researchers said that these adolescents also scored better on Math and English tests as compared to their peers from other schools.

Previous studies have highlighted the link between health and K-12 education. But, the new study is the first to examine the impact of quality education on high school students’ risky health behaviors.

“These students’ higher cognitive skills may lead them to better health literacy and decision-making. They may be exposed to less negative peer pressure, and the school environment may promote the resilience that steers them away from these risky behaviors,” Dr. Mitchell Wong, the study’s lead investigator and a professor of medicine in the division of general internal medicine and health services research, said in a statement.

“In addition, in a better academic environment students spent more time studying, leaving them less time to engage in risky behaviors.”

For the study, researchers categorised “Risky behavior” as any use of tobacco, alcohol and marijuana within the past 30 days.

One can see that these charter schools are so evil that we can’t even afford to trial five of them in NZ. Labour has declared they must be wiped out if Labour win the election.

Stats NZ have reported that seasonally adjusted unemployment has dropped to 5.6%, which is excellent in continuing the trend. NZ now has the 9th lowest unemployment rate in the 34 country OECD. We were 11th lowest last quarter. We are now lower than Australia and Israel. In fact our OECD ranking is now lower than it was in 2008 (10th equal then). Our unemployment rate is 1.8% below the OECD average, and lower than Australia, Canada, UK and US.

Some stats:

• Unemployed of 137,000 is 17,000 fewer than a year ago
• Unemployment rate of 5.6% compared to 6.4% a year ago
• Employed of 2,328,000 – 82,000 more than a year ago
• FT employed up 71,000 and PT employed up 13,000
• 65,000 more in labour force than a year ago
• Labour force participation rate is 68.9% compared to 68.1% a year ago
• Maori unemployment rate is 11.0%, down from 12.8% a year ago
• Pasifika unemployment rate is 11.4% down from 16.3% a year ago
• Under 20 unemployment rate is 20.4%, down from 24.1% a year ago
• Manufacturing jobs are 246,500 – up from 242,600 a year ago (recall the crisis!)
• Number of hours worked is up 4.8% from a year ago (highest growth for many years)
• The proportion of under 20s not in employment, study or training has fallen from 8.0% a year ago to 7.4% today

Some additional data from the other employment surveys out today:

• Salary and wage rates up 1.7% from a year ago
• Manufacturing pay rates up 1.9% from a year ago (recall the crisis!)
• Total weekly gross earnings up 6.3% from a year ago
• Female average earnings as % of male up from 86.7% to 87.1% over a year