Tuesday, March 28, 2017

Labour/Green budget rules make sense

The more the Green Party talks about economic policy the more it is perceived by some on the left as becoming mainstream and accepting neoliberal philosophies. Sue Bradford and the CTU have protested that the agreed fiscal constraints announced by Labour and the Greens are a sellout and that the growing inequality in New Zealand won't be addressed under the proposed Budget Responsibility Rules. Many on the left are feeling uncomfortable that the business community and David Farrar are praising the announcement.

There is a widely held perception that National Governments constrain spending, and are therefore fiscally responsible, and Labour Governments spend large and accumulate debt. There is also another perception that to rectify the social inequalities in New Zealand, and address our environmental degradation, then fiscal restraints must be put to one side. Both perceptions display a good deal of economic ignorance.

There are also some Green supporters who want to see the Party pushing for monetary reform to reduce the power of the banking industry and promote the introduction of systems like Sovereign Money. While this may be philosophically sensible, it is politically impractical. Economic reform is not an election winner (as Social Credit has consistently discovered) as few voters understand economic theory to a level where they would comfortably embrace radical change.

The Green Party has a holistic approach to economic decisions and supports the view that environmental, economic and social policy should be strongly interconnected. The Greens economic policy is intended to deliver "...a resilient, flexible economy capable of adapting to new challenges, delivering meaningful work for our people and a healthier environment for us all". Working towards a fair and sustainable future is a key part of the vision.

In 2013 Russel Norman supported National's Public Finance (Fiscal Responsibility) Amendment Bill because many of the provisions within it made good economic sense. His supporting speech is worth listening to in its entirety. His idea of extending the bill to manage our social and environmental capital in the same way as our economic capital is sensible. To establish a sustainable economy, a government must live within its means and be future focused. The proposed budget management principles fits this approach.

Those who regard the Green/Labour determination to pay off debt, and work towards budget surpluses, as neo-liberal concepts don't appreciate that being fiscally responsible is not something owned by the Right. The current National Government has never been fiscally responsible as it has increased government debt considerably, invested in unsustainable industries and spent billions on motorways that don't pass basic cost benefit analysis. Its reputation is a product of effective spin rather than reality.

What is really important within any government budget is how revenue is generated and what the spending priorities are. Labour wants to review the current tax system and the Greens have been consistent in wanting policies and spending to be independently costed. Establishing a fairer tax system and sound processes for establishing new spending is essential. Increasing revenue can also be done within the existing system by diverting the energy used to hound beneficiaries to chase tax fraudsters instead (up to $10 billion of potential revenue), for example.

The Greens support of a carbon tax and a capital gains tax will be at the forefront of any coalition discussions. Both will be important in shifting to a more sustainable economy and being more environmentally responsible. The home insulation scheme that the Greens established through an early MOU with National was a huge success with a cost benefit ratio of almost 4:1. Good social and environmental policy actually makes economic sense too.

Reassurance that a Labour/Green Government won't launch into an irresponsible spending spree, as National will claim, is necessary to be elected in the current political environment. This is just a pragmatic consideration for becoming electable. Once in Government a shift in spending priorities away from corporate welfare, subsidising landlords and building unnecessary motorways will mean billions to reinvest into housing, health, welfare and education. The social, environmental and economic benefits will be enormous.

Wednesday, March 22, 2017

Running from "Hit & Run"

We are constantly fed positive stories regarding the professionalism, adaptability and resourcefulness of those employed in our military forces. While much of it is probably justified, an element of deliberate whitewashing has occurred when things have gone astray.

Our country has traditionally supported Britain and the US in numerous wars and since 1899 we have lost around 30,000 soldiers in different overseas' conflicts.  Obviously the most casualties occurred during the two world wars, however almost 130 have been killed since. Between 2010 and 2012 we lost 10 soldiers in Afghanistan.

Wars are terrible and losing comrades in armed conflicts must be extremely difficult to deal with. The professional credibility of our forces can be judged on they way we manage such situations. Sadly we have sometimes fallen short of those standards and a need for revenge has clouded thinking.

Few know of the shocking 1918 Surefend Massacre in Palestine. The New Zealand Mounted Rifles Brigade were so incensed at the killing of one of their own by a late night thief, caught in the act, that they attacked the local village in revenge. Between 40 to 100 civilian men were slaughtered in cold blood and houses burned. No one was punished for it but three years later the New Zealand Government paid 858 pounds to Palestine as compensation.

Jon Stephenson and Nicky Hager have exposed a modern version of Surefend. It is another story of revenge for a soldier's death and retribution involving the slaughter and injury of innocent people. In Surefend there was still a tiny element of morality shown when the women and children were removed from the village before slaughtering the men, but not so in Afghanistan in 2010.

The New Zealand SAS, together with Afghan soldiers and US helicopter gun ships attacked two villages in the Tirgiran valley filled with women, children and elderly. The brutal raid killed 6 (including a 3 year old girl) and injured 15. No assistance was provided to the dying and injured and the incident has been denied ever since. While the raid was mentioned in passing at the time, it is only now that there is significant evidence that the official story may not have been entirely truthful.

Nicky Hager is an internationally regarded investigative journalist who has already written a number of books that have lifted the lid on other dark periods of New Zealand's recent history. While dismissed as a "left wing conspiracy theorist" by those he has exposed, few have successfully discredited his intensively researched facts or his conclusions. Hager has endured some heavy handed responses because of his work, including illegal searches of his home and the confiscation of his and his daughter's computers.

Jon Stephenson is a journalist who has already experienced an attack on his credibility by both the army and the Government when he claimed that the New Zealand SAS in Afghanistan was knowingly ignoring its obligations within the Geneva Convention. His 2011 Metro article described how the SAS were handing over prisoners to other forces with the knowledge that they would likely be tortured. Lieutenant General Rhys Jones claimed that he lied about his sources of information and even Prime Minister Key questioned his journalistic reliability. Stephenson successfully sued for defamation.

The story of the botched raid has been around for a while and in 2014 Stephenson was able to get some initial verification that something had been covered up. His evidence was revealed on Maori TV and globally reported. Wayne Mapp, the Defence Minister at the time, denied any civilians had been killed.

The most moral way forward now would be to hold an independent inquiry to properly establish the truth. If it finds that the NZ SAS was complicit in a war crime then a global apology is necessary, those involved should be held accountable and compensation be paid.

Instead we have the Government trying to discredit the journalists, caged denials from the military and, rather than face the fire, all those concerned are running for cover.

Saturday, March 18, 2017

Nick Smith's Waterloo?

Nick Smith is desperately trying to dismiss the growing concerns from many New Zealanders that our water has been undervalued and over-exploited. While farming intensification has caused a major strain on our natural water systems he has firmly stood his ground against putting a value on water and expecting businesses to properly account for their operational impacts on water quality and supply.

The fact that overseas companies can extract water for free and profit from the exported resource became a tipping point for many. Smith is quite right when he claims that water bottling plants take a miniscule amount of our country's total supply, however he deliberately ignores the impacts on individual catchments and anger of communities whose own water supplies have been compromised.

Over twenty people gathered outside the Environment Southland building on Tuesday to join a nationwide protest. It was a damp, grey day but many of those who made the effort to come were not people already active in the local environmental communities. Fishermen, mothers and children and grandparents wanted to express their concern about the degradation of our rivers.

A Southland Times Editorial ignorantly accepted Smith's arguments and suggested that the national protests about water quality were misguided and should have been more concerned about the use of plastic bottles. This is my published letter in response:

Nick Smith’s desperate attempt to water down the growing concerns about the commercialisation and industrial use of our water at the expense of ordinary New Zealanders and our environment doesn’t wash with me.

Those who met with Environment Southland Councillors on Tuesday were a diverse group who wanted clean water for their children to swim in, healthy rivers for fishing and for our waterways to be treated with greater respect and care.

The mission of the New Zealand Water Forum that organised the action on Tuesday is: “To advocate for water quality, the preservation of our waterways and to lobby for change to ensure those who manage our water are held to the highest standard in doing so.”

New Zealand is blessed with a large overall supply of water but to talk in terms of total volumes is disingenuous. The management of our water should be considered at an individual catchment, stream or aquifer level. In our lowland, pastoral and urban areas we are experiencing major crises of supply and quality.

The rivers and streams near where the majority of New Zealanders live are mostly unswimmable. Many of our aquifers are being infected with E. coli and our estuaries are rapidly eutrophying from a continual inflow of polluted sediment.

When whole communities are struggling to have clean drinking water the fact that any quantity is being given away from the same catchments for commercial profit doesn’t make sense. It is also the principle, rather than the quantities, that anger us. We need to properly value our water if we want to restore and preserve it for all.

Tuesday, March 7, 2017

Bill English Embraces Homeopathy

Bill English has been the Finance Minister for three consecutive National led governments. After substantially cutting taxes for the wealthy in 2009 he discovered that the increase in GST did not make the policy fiscally neutral and a hefty level of borrowing was needed to make up the shortfall. Public debt under a Labour Government totalled around $10 billion when National took office and this quickly ballooned to $60 billion.
While Bill English continually used the Great Financial Crisis (GFC) and the Christchurch earthquake as excuses for increasing Government debt, this was only partially true. The impact of the GFC on New Zealand was not that great as all of our major banks were not affected and by 2011 our rich listers were seeing their wealth increase by around 20%. Major, government supported projects in Christchurch have continually suffered delays and recovery budgets have been under-spent.

Bill English and his Government have made little effort to increase revenue by chasing up the billions lost through tax fraud and closing existing loopholes. Instead they have attempted to squeeze the lowest income earners the hardest by tightening criteria for benefits and chasing up overpayments and benefit fraud.

Rather than the hard work of tightening tax law and deflating the property bubble, multiple quick rich schemes were explored instead. In the first term coal and oil were seen as the pathway to increased wealth. This dream crashed with the fortunes of Solid Energy and the opening up of our national parks and territorial waters for exploration and mining (offering subsidies and low royalties) failed to spark interest.

Selling off state assets was Bill's next ploy to balance the books and while this allowed for some financial relief, the income earned was less than expected and the government lost the longterm income from dividends.

The dairy boom was the next potential earner and the government paved the way for greater milk production through subsidising irrigation schemes and ensuring environmental restrictions were minimised. This involved sacking Environment Canterbury and turning a blind eye to increasing levels of water pollution. However, Fonterra paid the price of focussing on commodity markets rather than value added, branded products and its fortunes slumped as other milk producers increased supply.

Currently the tourist industry is holding up our economy and it has been difficult to benefit fully from this with minimal infrastructure to deal with the increasing numbers. This hasn't been helped by cuts to regional funding to deal with Auckland's growing pains.

While Bill English has been struggling to boost government income a number of serious crises are emerging that desperately need government investment. Child poverty has increased to 30%, our housing crises has deepened and our degraded rivers desperately need attention. The New Zealand health system is increasingly struggling to meet the needs of a growing and ageing population and climate change is the global crisis that our country has done little to address.

Bill English may not be the most effective economic manager (under his management New Zealand's productivity has stagnated), but his short term survival instincts are excellent. He has successfully created the impression of safe hands during 'difficult' times and even succeeded in achieving the holy grail of financial management, a budget surplus.

Few realise that our current Prime Minister's success is based on his adoption and practice of fiscal homeopathy, a little known economic tool that is very good at giving the impression of a recovery with very little input. It also relies on the 'placebo effect' by making people think that they have been given something substantial when the opposite is the case. Here are a number of examples to show how English has used the principles of homeopathy:
Homeopathy and the placebo effect has allowed Bill English and his government colleagues to be elected three times in a row. It clearly takes a while for snake oil salesmen to be exposed and the 2017 election should be the time that the ruse is identified and proper, evidence based treatment can be finally implemented. 

Monday, March 6, 2017

Bill English's Dictionary

New Zealand's Prime Minister, Bill English, has an honours degree in English Literature. He is described as a 'social conservative' in Wikipedia and worked in Treasury as a policy analyst before becoming an MP in 1990. Over his political career he has worked hard at changing the definitions of many words in common usage and, in his previous role as Finance Minister, has created a dictionary based on his political philosophy and neo-liberal economic perspectives. 


Auckland proper noun property investors paradise that needs more motorways.

beneficiary noun a lazy person of no economic value (probably on drugs) who should be working. Being on a benefit is equivalent to being hooked on drugs removing them is the best thing we can do.

compensation noun something to be avoided at all costs.

corporation noun the ultimate institution that deserves protection and subsidies.

development noun money making venture that deserves government support.

Dipton proper noun my childhood home that once provided a lucrative perk.

economy noun a financial system that serves and protects the wealthy.

education noun something that is dominated by socialists and unions that needs to be heavily controlled by standards and greater ministerial control.

environment noun contains useful resources to support development but environmental protection impedes development.

farm verb an essential economic activity that needs to be protected from environmental controls.

govern verb conduct the policy, actions and affairs of a country with the guidance of business and corporate lobbyists.

hospital noun an institution that provides health care with a minimum of funding.

humanitarian adjective the last criteria to be considered when constructing government policy.

Invercargill noun a city that is close to Dipton and isn't a property investors paradise and has no need of motorways, but has some value a service centre for farmers and as a shearing venue.

jeopardy noun the bottom line for government activity is avoiding legal jeopardy. One way of doing this is through legislative amendments done through urgency.

kingmaker noun bloody Winston...(I guess I can make him Foreign Minister, if need be, as he will probably get on well with Trump).

legislate adjective the process of changing laws to support development and protecting the government from jeopardy.

market noun the economic environment where commercial activity occurs and is the key determiner of social and environmental policy.

New Zealand noun the title used to identify and define us as sporting nation. The borders do not exist for trade and investment and anyone with money can obtain residency.

OECD noun (abbreviation: Organisation for Economic Cooperation and Development) a useful organisation for comparing New Zealand's GDP with others, but to be ignored for social comparisons.

politics verb the art of remaining in power through popular support. Crosby Textor have written the bible for this activity and managing public perceptions.

queer noun an unnatural state of being for some people that must be tolerated to remain in power (according to Crosby Textor).

revenue noun government income that is used to subsidise businesses and corporate entities.

Solid Energy proper noun a state owned enterprise that I had great hopes for but I don't like to talk about now.

tax verb the process of collecting revenue through minimising the demands on the wealthy and maximising the income from lower income earners.

trade noun this word should always be preceded by the word "free". For corporate and business interests around the world New Zealand should be the easiest place to do business. There is a necessary social and environmental cost to this that we just have to accept.

urgency noun process used to protect government interests and save developments but inappropriate for addressing issues related to housing, child poverty and climate change.

vague adjective describes the way social and environmental issues need to be managed to give the appearance of action when not actually doing anything of substance.

work verb something that workers do for their employers for as little as possible. Low wages give us an economic advantage.

worker noun a commodity or useful production input. The best of these come from overseas as the local ones are "pretty damn hopeless".

xenophobia noun a label used for those who oppose using cheap migrant workers and want to limit overseas purchasers of New Zealand property.

zealous adjective the way I approach limiting government spending on health education and welfare. This is to ensure I can claim budget surpluses and to give the appearance of responsible economic management. The next Government will have to bear the cost of rectifying my underspending.

Wednesday, March 1, 2017

Defending our young unemployed

Bill English has continued with the National Government driven meme that young unemployed New Zealanders are drug addicts, lazy and unemployable. Previously John Key had stated that unemployed New Zealanders failed drug tests and lacked a work ethic. Before becoming Prime Minister English had bluntly told a Federated Farmers meeting that "New Zealand workers are pretty damn hopeless". Both Key and English used conversations with their employer mates to justify their statements rather than data and research.

The reality is some distance from the myth that National is perpetrating to justify the large numbers of unskilled migrant workers coming into our country. Before the Christchurch earthquake the construction industry workforce was steadily shrinking and apprentice numbers had been cut. There is obvious justification for bringing in construction workers to make up a skill shortage (if we had continued building state houses at the same level as we did thirty years ago we would have retained a strong construction workforce). What is questionable is the large numbers of migrants filling jobs in the service and agriculture sectors.

Drugs are not actually a major problem for jobseekers and both Key and English would have known that less than 1% of those tested for drugs have been sanctioned. To give the impression that many unemployed were failing drug tests was clearly a deliberate lie to denigrate our young people to support the use of cheap migrant labour.

I described in an earlier post how workers have become viewed as mere commodities by many businesses and corporate interests. Commodifying workers to increase profits results in keeping labour costs down and being able to have a workforce on tap ('casually' turning them on and off as needed) is the ideal situation. Migrant workers often come from countries where wages and work conditions are minimal and few would be aware of New Zealand's employment law. While we have gone a little way to address zero hour contracts there are still large numbers of mainly migrant workers who have appalling working conditions and some are essentially working as slaves.

This Government has supported the dairy gold rush and is now fully behind the exploding tourist industry. It understands how high immigration pushes up businesses activity and GDP. However, low wage migrants have a negative impact on real productivity per person as each new migrant worker only adds a 0.5 growth equivalent. The demands on housing and infrastructure through this type of immigration cannot be met through their low incomes and productive value. It is false and unsustainable economics.

New Zealand currently treats its young appallingly, especially those who struggle to succeed in education and have few qualifications. Prior to 2008 the 15-24 year age group had twice the average unemployment, under National it has grown to three times. Between 15% and 18% of the younger age group have been unemployed since 2008 and for Maori/Pacifika it is around 25%. When you realise that our youth suicide rate is the highest in the OECD it becomes clear that too many of our young people are struggling and do not feel valued. On average in New Zealand, two young people will take their own lives every week and twenty will be hospitalised for self-harm.

New Zealand businesses want work ready labour units to enhance their businesses and do not want the hassle of employing young people with few skills who may need a high level of support and mentoring. It is far easier to import Indians, Filipinos or mature workers from the Pacific Islands than young 17-24 year olds with limited work experience and few skills.

We now have almost 30% of our young people growing up in poverty. Those who are failing at school are under-supported and funding will be slashed for those over 8 years. New Zealand has a long tail of underachievement in our education system and research shows that poverty is a major contributing factor. Hungry children from overcrowded, substandard homes struggle to learn.

Until recently those in state care were abandoned at age 17 (now 18) and there are few apprenticeships and training opportunities for those who are not academically inclined. There is even workforce discrimination in low skilled jobs when young people are expected to do the same work as an adult while being paid a "youth rate" for the first three months. It is hard enough for young people to survive independently but when accommodation and food still need to be paid on a reduced income, it is an added challenge. Our housing research in Invercargill revealed that independent young people struggle more than most to find and afford decent accommodation.

Rather than support and mentor our struggling young people into good work habits and develop higher skills, our Prime Minister dismisses them as hopeless drug addicts and his Government plans to spend $2.5 billion on prisons instead. No doubt we will need even more migrant workers to manage the prisons filled by the youth we have failed and to dig the graves of the many who lose hope altogether. We need to change the Government if we want a decent future for our young people, and ourselves, and build a fairer and more caring society.