Tuesday, July 30, 2013

Foreign Ownership Arguments Flawed

Crafar Farms

The Green and Labour policies that will restrict foreign ownership of New Zealand property has been attacked using many flawed arguments. The fact that much of these criticisms are being reported as if they have some substance is appalling.

I will try and expose the nonsense behind each:

1) Restricting foreign buyers of New Zealand properties won't solve the problem.

This policy is part of a package of solutions, including a capital gains tax and was never considered as the sole solution. It is still an important, however.

2) It's a mad idea that no one would consider doing.

Australia has the very same policy and so do many other countries.

3) Restricting foreign ownership is just a xenophobic reaction to asian buyers.

This is a total straw man. The Green Party has questioned the sale of land to any foreign interest, whether it be American, German or Asian. "Keeping it Kiwi" is about sovereignty and control, not race or culture.

4) The number of sales to foreign interests is so small that it could never be regarded as an issue.

3-4% of sales to foreign buyers at any one time is a misleading representation of the true effect.

Most foreign buyers will be buying much of our most expensive property. For instance the Crafar farms would be regarded as one sale and yet involved 16 farms, 8,000 ha and $200 million dollars. Solid Energy will be selling 8 farms and over 3,000 ha as one lot.

In the case of the Crafar farms, no New Zealand buyer could have afforded them. If the farms had to go to a NZ resident the price would have had to drop and perhaps sold as separate units. This would have made the properties accessible to local farmers and the land values would begin to reflect more realistic levels.

Also while percentages of sales to foreign owners in any given month or year may appear small but over ten years or more it becomes more substantial. Where will we be in twenty years time if we don't change our approach to ownership?

5) We need investment and this policy will stop the flow of investment capital into the country.

This policy will restrict foreign control of our land, however overseas investment is to be encouraged. This is already being done well around the country without ceding control to offshore interests. What we especially don't want is speculative investment that only exists to make quick profits for the offshore investor and lacks any long term commitment to our economic development.

6) Our Free trade agreements won't allow us to restrict foreign investment in residential property.

This would be anti-demographic if it were true and demonstrates why free trade agreements (TPP) should be negotiated with greater transparency. We shouldn't be bullied into selling up our own land and properties to foreign investors. Our national sovereignty should not be negotiable.

Sunday, July 28, 2013

Spontaneous GCSB Rally In Invercargill


Someone had asked me a week or so ago if I was interested in organising a rally against the GCSB Bill in Invercargill in the support of the nationwide protest. I declined, not because I thought it wasn't important, but because I didn't think there was enough time to organise something that would have the same impact as our anti-mining and asset sale marches (attracting hundreds of people). However, I got a txt message from a local union organiser asking if I was attending a protest in Invercargill's Wachner Place at 2pm.

I do not generally support such gatherings when there is likely to be only a handful of people as it may inadvertently ridicule the cause by giving the impression that few care. In this case I made an exception and turned up to give moral support to whoever had initiated it.

A little before 2 pm I arrived in Wachner Place to find one or two people looking as though they were waiting for something to happen. Surprisingly within 10 or so minutes we had over fifty people milling around looking for a leader (to put this in perspective, as a percentage of our population, it would be  the equivalent of 1,400 in Auckland). Whoever had created the Facebook event, and had it listed on the national site, had not turned up themselves. Those who were there had been contacted by random txt messages or had picked it up on Facebook. We even had a cameraman from CUE TV arrive with the expectation that something was going to happen.

Ex MP and past Invercargill Labour candidate, Lesley Soper, turned up with the same intention as myself and together we decided to use the opportunity to present the Green/Labour perspectives on the law change and lead a question session and general discussion.

Many of those present were under thirty and had no party affiliation. They were concerned and angry and felt let down by the political system. From memory, here are some of the things they asked:

"How can John Key do this when most polls say we don't want it?"

"Will this bill give the right for the GCSB to spy on me anytime?"

"We should be allowed binding referenda, we should be able to say if we want this or not!"

"How can the Government push this through and ignore the Human Rights Commission, the Law Society and a Supreme Court Judge?"

"Why doesn't the media report this stuff properly?"

"I can't believe this is happening in New Zealand, what can we do?"

Later in the afternoon I saw the extent of the protests around the rest of the country, we are heading down a slippery slope and people are rightly worried.




Wednesday, July 24, 2013

The Housing Crisis and Crocodile Tears


John Key claims that first home buyers are "a priority" and "all tools have to be considered". His displays of concern and compassion for those desperate for a house of their own are only crocodile tears. Like Hekia Parata's claim that Maori and Pasifika achievement are her priority, there is a huge gap between the stated priority and what is expressed through actions.

It is obvious that Key has considered all the tools that will address the housing crisis and has rejected them all, not because they will probably make a difference, but because of the pain it will inflict on markets and investors. Most of our wealthiest New Zealanders derive a good amount of their income from property and bursting the current bubble will cause much distress amongst those with whom he has the closest relationship.


The 2008 incoming Minister of Housing and the Government were provided with useful information and advice from the Ministry of Business, Innovation and Employment that has largely been ignored for three years:
  • A fall in employment in the construction sector (loss of 16,000 jobs over two previous years).
  • 10-20% of people completing apprenticeships leaving for overseas almost immediately.
  • The loss of skills and capacity will reduce the ability of the construction sector to respond when demand grows. This will delay economic recovery, inhibit housing supply and increase the cost of new building and housing.
  • Without intervention, housing shortages (especially affordable housing) could be expected, which would further exacerbate housing affordability problems.
  • Income related rental subsidies are an increasing cost to the Government (70% increase in six years). 
  • House prices have increased by 101% over previous six years.
  • The building and housing system and its outcomes shape the wellbeing of our society as a whole.
  • 50% of the current social housing stock is 50 -70 years old.
  • Mismatches exist between the type and size of social housing being provided and that which is demanded. 
  • $2.4 billion required to bring current social housing stock to a 'decent' standard over the next 10 years.
  • The Government could play a more direct role in supporting/stimulating activity in the construction sector through increased Housing Corporation works.
  • There is a need to ensure a supply of modest, affordable homes
  • There is a need to achieve community renewal by creating more socio-economically mixed communities (Hobsonville and Tamaki developments).
Despite good advice, the lack of action from this Government in such a crucial area of social wellbeing has been extraordinary and the Christchurch earthquake only added to the growing and predictable housing crisis.

If the Government had started immediately on building affordable homes and lifted the standards expected from rented properties we would have increased the capacity of the local construction industry and would not be relying on importing a workforce of 30,000 to meet current demands. Apprentices would have remained in the country and greater numbers could have been trained (18% drop in apprenticeships 2008-9). The Government's New Zealand Apprenticeships Scheme (due too start in 2014) is simply too late when in 2012 we had already advertised overseas for 23,000 construction workers. We also need to revise how we train our apprentices as we are excluding many by focusing on literacy rather than practical skills.  

A capital gains tax would have reduced the over-investment in property, as would limiting such investment to New Zealand residents only. We now have amongst the most expensive housing in the world. The Government has continually protected the interests of property investors over the needs of struggling families and the wider economy.

Housing New Zealand has not been supported to a level necessary to either maintain building industry capacity or meet urgent housing demands. There was a drop of 25% in the number of families supported into housing in 2012 (7,000) from those supported in 2008 (9,400). Even with the added demand in Christchurch, Housing New Zealand only increased their managed stocks by 856 houses over the three years (from 68,644 to 69,500), a relatively minimal increase. While there is some effort to lift the standards of their current housing stocks with the "warrant of fitness", the same standards will not be expected from private landlords, whose incomes are supported by housing subsidies. The 70% cut in the budget for the home insulation scheme will also limit the rate that these rentals will be improved.


The plan to use the Hobsonville development to build more entry level housing and create more diverse socio-economic communities has been given minimal support as Key has bowed to the interests of elite home buyers and developers. The initial plan to provide 100 of the 3,000 houses at a price less than $400,000 (under the Gateway Scheme) was wiped after only 17 houses were sold. Key's explanation, "...we think the capacity for lower income New Zealanders to own their own home is greatly enhanced by the fact interest rates are lower", lacked credibility at the time. The Reserve Bank's plans to toughen lending criteria has further mocked  Key's statement when a 20% deposit will be expected from first home buyers (up from the current 5%).

As with Glenn Innes, Hobsonville will not be wasted on the poor.

An earlier National Government was responsible for the  $13 billion leaky building debacle that seriously damaged the quality of New Zealand's housing construction for 15 years. They also dropped the apprentice training system that has led to our current shortage of skilled workers. It is obvious that this National led Government continues to have little regard for the importance of housing to New Zealand's social and economic wellbeing and its shocking record in this area will only continue.

Monday, July 22, 2013

Eric Roy Replies, As Do I



Eric Roy felt compelled to respond to my letter despite reservations:

"I always hesitate to respond to Green Party candidate Dave Kennedy's letters, as it usually provokes another ill-informed response, but I have to tidy up his mistakes (July 18)."

After much spin, blaming the previous government for Novopay and listing the sums spent in different areas (with little contextual explanation), Eric ends with:

"Mr Kennedy's bias to being anti-Government blinds him to the fact that we are getting on and doing the job."

Here is my "informed" and factually based response:

I was amused by Eric Roy's determination to resort to spin in his reply (July 22) to my earlier letter.

It was his Government that cut funding to the Education Ministry by $25 million and appointed someone to lead it with no understanding of our public education system (Lesley Longstone had a background in Charter Schools). A review by the Prime Minister's Office had revealed that the Education Ministry was the worst performing in the state sector and yet Government Ministers agreed to implement Novopay on its advice, with no trial and 147 identified software defects. The resulting mess was predictable and cannot be blamed on an under-resourced Ministry nor the previous Government.

The Green’s home insulation scheme has been one of the most successful initiatives supported by this Government and it got a glowing report from Treasury. The initial outlay of $330 million created $1.3 billion worth of benefits (five times the resource costs) and created employment as well as 200,000 healthier homes. If the initial four year agreement was so incredibly successful, and is still necessary, why cut it?

The demand for early childhood education has grown, partly through this Government’s determination to encourage mothers of young children into employment. Despite the recent increase in funding we actually have fewer qualified teachers in each centre and invest far less in the sector than most OECD countries.

Mr Roy needs to talk to the Southland District Council and local truck drivers to understand how his Government has caused a deterioration in our local roads. The NZTA has reduced funding and has limited the Council’s ability to target spending to areas of greatest need.

We desperately need a Government that properly consults and plans for the future rather than looking for quick fixes that benefit few.

Friday, July 19, 2013

Diversions Hide Incompetent Governance.


Obviously the best way to appear competent is just to do the job well and with this National Government there is only the occasional flicker of good sense coming through any decision. The most recent example of this was Nick Smith's determination to reject the Fiordland Tunnel proposal. Sadly this logical response to evidence and public concern from our Conservation Minister is a rare occurrence when blinkered ideology and backroom deals tend to dominate. This National led Government usually just creates an imaginary sense of proactive competence to hide their glaring inadequacies.

Hekia Parata has surprisingly withstood numerous revelations that she is out of step with the education sector she is responsible for and she has already had to reverse decisions to increase class sizes; close Salisbury School; and mandate the PaCT tool. The Chief Ombudsman's review of the Ministry's handling of the mergers and closures of Christchurch schools will probably expose more examples of poor process identified by an earlier report and Parata is desperate to create a diversion.

The release of the latest National Standards data provides the Minister with some figures she can use to hold over educators and create an illusion that she knows what she is talking about. Publishing levels of achievement in black and white and allowing comparisons like sports league tables make them very attractive to an ill-informed media. The fact that they do not represent anything like the easily quantified sports scores and are highly dubious in their accuracy is not generally acknowledged. It is likely that Parata will use this flawed data at every opportunity to question teacher performance and to justify more ideological change. A recent example of this is the Southland Times headlining article South's kids below target, figures show.

The documentation just released on the Sky City deal has created more doubts regarding the Government's decision making processes. John Key was forced to make the documents available to provide some transparency in a process that had previously lacked any. The ongoing pressure and scrutiny from the opposition had reached a point where revealing the truth behind the deal was going to be less damaging that the scenarios being created through supposition. It has been revealed that even Treasury expressed concern at both the viability of the convention centre and the wisdom of supporting the gambling industry.  To manage the damage and create another diversion the Government dealt the old "beneficiary bashing" card again.

Paula Bennett is far more effective than Parata at avoiding charges of incompetency and to do this she avoids measuring anything that could reveal the ineffectiveness of her policies. She and her departments can always be relied on to produce a useful diversion for herself or the Government with some new beneficiary bashing initiative or shocking revelation.  Benefit fraud always generates a stronger emotional response than tax fraud, even though the latter is a much bigger issue.


As with National Standards, few question the validity of benefit fraud statistics and the fact that what is often labelled as fraud is not at all. The Auditor General states in a report on benefit fraud:

"For the purposes of this report, we use the term ‘benefit fraud’ more widely, to include cases of substantiated overpayments, regardless of whether criminal prosecution resulted from investigation. Our focus was not on the outcome of investigations, but rather on the systems, policies, and procedures used in looking at matters that may or may not be ultimately proven to be fraud."

A genuine beneficiary was appalled to discover that an overpayment she had received was designated fraud even though she was innocent and had refunded the money immediately. She was told that she shouldn't worry about what was recorded because the staff knew the truth.

The media have again been sucked in by another smokescreen and diligently quoted the revelation that 3139 people paid more in tax than what their income as a beneficiary should have generated. We have no idea whether there is a reasonable explanation for many that have been prematurely labelled "welfare cheats". The ironic fact that they had actually paid their tax (unlike the wealthy tax avoiders) was also ignored.

Sadly the angst created by the idea that some people may be earning more in benefits than they deserve is much greater than the concern that the dodgy Sky City deal may cost the country millions in future compensation and cause hardship for thousands of people affected by problem gambling.

Another successful diversion.


Wednesday, July 17, 2013

Southland Suffers Under National


Invercargill MP Eric Roy congratulated our victorious Southland Sharks basketball team and tried to claim that his National led Government is also celebrating some "wins" in today's Southland Times. I felt compelled to point out how little Southlanders have to celebrate:

MP Eric Roy attempted to list the wins achieved by his Government over the last 4 years (From the Beehive, July 17) and I was pleased to see the inclusion of the home insulation scheme that was initiated through an agreement with the Green Party. Sadly it has been a one step forward, three steps back situation under his National led Government.

Despite being highly successful the home insulation initiative was almost wiped altogether and has now had its budget cut by two thirds.

Our Early Childhood sector is still reeling from the $400 million cut from their funding in 2009 and is experiencing dropping numbers of qualified teachers in centres and kindegartens. Hundreds of Southland teachers and support staff are still suffering from the poorly implemented Novopay system.

Our roads are degrading from cuts in funding to support the crazy $12 billion motorway schemes. These motorways have largely failed cost benefit analysis and have been based on demographics rather than their economic value (Southland produces over 11% of our export income while having only 2% of the population). The delay in building the bridge south of Frankton is nonsensical.

Electricity charges continue to rise well above the rate of inflation and the Government would rather sell off power companies and receive their dividends than ensure that prices were fair and reasonable.

The Government’s support of Solid Energy’s mad lignite schemes has ended in a $400 million collapse and a $30 million briquetting plant that no one really wants. The sale of the Solid Energy farms as one lot will also shut out local buyers.

We may also lose Fiordland’sWorld heritage status if the Government continues to favour private company profits over protecting our natural resources.

Southland does not really have a lot to celebrate, Mr Roy.


(Eric's tie is actually symbolic of a lot that has gone wrong under National)

Friday, July 12, 2013

SkyCity and a Social Cancer


This John Key led Government have shown time and again that their bottom line will always be what they can legally get away with, not what can be morally justified. They also regard their relationships with certain captains of industry as more important to them than the welfare and rights of ordinary New Zealanders.

Evidence of the harm that alcohol does to our society is abundant and alarming and yet when there was an opportunity to make a difference and adopt some excellent recommendations from our Law Commission, this Government backed off. Many of our wealthiest New Zealanders are booze barons and maintaining company profits was deemed more important than the huge costs incurred by our health, welfare and judicial systems (estimated as over $5.3 billion a year or $14.5 million a day). If the alcohol problem was viewed on a purely economic basis, there would be no justification for supporting the industry to the current extent.

There is great inconsistency with this Government, they have been relatively tough on tobacco and are clamping down on synthetic cannabis, but when it comes to the industries that actually cause the most harm to our society they are surprisingly tolerant. Te Ururoa Flavell's Gambling Harm Reduction Amendment Bill would have enabled a significant reduction in problem gambling and would have also shifted the profits back into the communities that generated them. Predictably the bill has been significantly watered down and the transfer of wealth from the poor to the already affluent will continue. There was also no way the Government could support this bill and also progress the SkyCity deal.

Up to 60,000 New Zealanders are problem gamblers (1.8% of the population) and 78% use pokie machines as their primary mode of gambling. A 2012 New Zealand health survey found that almost 90,000 people were negatively affected by other people's gambling. Around 25% of gambling expenditure comes from problem gamblers and if these people were identified early and managed appropriately then it would mean a substantial reduction of gambling profits. Between 2004 and 2005 there were 593 self exclusions from casinos and only 188 were instigated by the casinos themselves.

The SkyCity convention centre deal has been an appalling one from the very beginning, but despite strong opposition and genuine concerns it appears that the Government has again misplaced its moral compass and is determined to push it through. While the Government claims that the extra pokies included in the deal will be offset by a reduction elsewhere this is nonsensical when they will lock us into supporting a 35 year exclusive licence that will block any reduction within SkyCity itself. While the Government claims that the benefits will outweigh the level of harm created, the evidence provided is not convincing. The project itself is a huge gamble.

Metiria Turei has spoken strongly about potential social consequences of the deal and while the numbers she refers to may well be worst case scenarios it is obvious that the Government has given little attention to these concerns. Whatever the extent, gambling related theft from businesses and community groups is actually a real issue as is the harm caused to children and families. SkyCity's new initiatives to mitigate problem gambling are promoted as addressing the concerns, however, based on past efforts, their actual impact is likely to be minimal.

SkyCity are complaining that they are being victimised by outrageous claims, but I struggle to feel sympathy for a company where at least 25% of their profits are generated by causing social and economic harm. That their business should also be protected for 35 years is a form of bizarre industry protectionism that is unlikely to be offered to any other.

The Speaker has determined that the SkyCity bill will be decided on a conscience vote and it is already clear that John Key expects all his MPs to ignore their conscience and support a corrupt process and outcome. I guess for a country that is now ranked below Spain for corruption this is just business as usual.





Wednesday, July 10, 2013

Political Corruption and an Independent Teachers' Council


The recent survey carried out by Colmar Brunton revealed that New Zealand may no longer regard itself as the least corrupt country in the world. In 2012 we were ranked first equal as the least corrupt country, along with Denmark and Finland, based on public perceptions. According to the latest survey we would now be ranked much further down, below Spain and similar to Portugal (which were 30th and 33rd in 2012).

The five institutions within New Zealand society that are listed as the most affected by corruption are political parties, the media, Parliament, business, the private sector and religious bodies. Those perceived as less corrupt include the judiciary, the education system and medical and health services.

It is ironic that we currently have the situation where decisions regarding our education system are being made by the institution regarded as our most corrupt. The Government, the Minister of Educaton Hekia Parata and John Banks have struggled with ongoing challenges to their honesty and ability to follow good and transparent process. Despite this, they have continually refused to meaningfully collaborate with the education sector, who include (according to the Readers Digest) some of our most trusted professionals (politicians were ranked between insurance sales people and sex workers). Treasury and economists are now regarded as providing the most valuable education advice even though I struggle to see what understanding they would have for the developmental needs of 6 year old children.

One of the most drastic changes to our internationally regarded public education system is the introduction of Charter Schools, or Partnership Schools (as the Minister insists they should be called). This system had no political mandate and will allow business interests and religious groups to have a greater involvement in education. Again there is great irony in the fact that both of these groups are in the top five for perceived corruption and the Government has blocked any scrutiny of their operations by having them exempt from the Official Information ActThe Civilian, a satirical blog, was able to cleverly highlight the flaws in a politically determined and business led education system by putting into a medical context.

There is ample evidence outside the corruption survey to demonstrate that politicians may not be the best informed and most reliable people to determine what is best for education and our children. There would be merit in having an independent professional authority that could stand outside politics and the industrial concerns of unions and provide informed educational leadership. Our current Teachers Council has the potential to fulfill this leadership role.

Our doctors have a Medical Council that is a respected authority, dedicated to maintaining the professional credibility of our medical practitioners. It is in both the profession's and the public's interest that they are beyond political interference and ensures that a doctor's prime responsibility is serving the needs of his/her patients. Politically determined protocols and treatments are not likely to improve patient care and the same would be true of education.

At present the Teachers Council is an underfunded crown entity that is responsible for teacher registration, professional standards and discipline. It has already done some good work in developing induction and mentoring programmes and supporting educational leadership. Even this Government accepts that increasing the capability of the teaching profession would make the biggest difference in raising achievement and the most effective way of doing this would be to lift the professional status of teachers. In Finland teachers are regarded as equal or above doctors as a profession and they have around 6,000 applicants for 600 training positions each year. A well resourced and professionally supported Teachers Council would be the best way to advance teacher capability and credibility.

The Government has recently completed a review of the Teachers Council, driven in part by disciplinary concerns, and has come up with some politically slanted recommendations that will actually diminish professional credibility and the status of well qualified registered teachers. One of the most concerning elements will be licensing untrained instructors and giving them the "Authority to Educate". Despite the explanations given, this would be a dangerous precedent and it is unlikely that the medical profession (using the Civilian's context) would allow untrained people to have the "Authority to Medicate".

While the Government has created this opportunity to look at how a future Teachers Council may operate it is important that any developments will actually have a positive effect on the profession and improves what is delivered in classrooms and what is provided for our children. Four important things need to be emphasized:

  1. That the professional capability of a teacher is recognised as something that overarches all sectors and levels. With the medical profession, the initial qualification gives doctors the broad skills to practice in any field. It follows therefore, that "a teacher is a teacher" and it is experience and further professional development that allows them to specialize. The ability of teachers to be able to work across sectors is a strength (this currently happens). A qualified teacher with a background in any one sector should be regarded for any sector above untrained laypeople.  
  2. The Teachers Council must have a high level of professional representation on the governing body. It would be unthinkable to have laypeople dictating to the medical profession (although the presence of some on the governing board would be useful) and it is important that decisions are based on professional knowledge and ethics. 
  3. The status and integrity of a profession is established by the professional knowledge and capability that is built over time. Comprehensive initial teacher education, mentoring and proven capability are required to allow someone to be a registered professional. To give untrained lay people the "Authority to Educate" will only compromise the standing of the profession as a whole.
  4. The main focus of the Council would be to increase the individual capability of teachers and strengthen educational leadership within schools and centres. Every school and every teacher should be trusted to operate in a professional manner when teaching children and prioritising their needs. A high trust culture would provide much better outcomes than one of centralised, data driven accountability that is well removed from the realities of different communities and varied needs. A one size fits all model of teaching and learning does not work in a society that is increasingly multicultural and with growing income inequities.
Submissions on the Teachers Council Review proposals can be made up to the 14th of July. Our children deserve an education system that is driven by professional considerations not constantly changing political ideologies and expediency.