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Posts Tagged ‘global financial crisis’

Radio NZ: Nine to Noon – Brian Easton – 7 February 2013

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- Nine To Noon -

 

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- Friday 7 February 2014  -

 

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- Kathryn Ryan & Brian Easton -

 

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Income inequality in New Zealand is set to become a central election issue, but is it really getting worse?

Brian Easton offers a solution how to address income inequality. Listen and find out what he suggests.

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Radio NZ logo -  nine to noon with Brian Easton

 

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Click to listen: Brian Easton, Economist ( 13′ 37″ )

 

 

 

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Acknowledgement: Radio NZ

(Hat tip: Murray Simmonds)

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Key & Joyce – competing with Paula Bennett for Hypocrites of the Year?

7 February 2014 1 comment

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Labour hasn't learned from the past - Joyce

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Reacting to Labour’s newly announced “Best Start” policy, National launched into a wholly predictable – and somewhat repetitive – reactionary condemnation of the plan.

According to “Economic Development” Minister, Steven Joyce,

Once again, the moment we get a lift in the economy, they want to start bribing people with massive extra spending. We haven’t even got to the end of January and Labour and the Greens are already promising to spend the thick end of an extra three quarters of a billion dollars a year. You can’t spend your way to prosperity. This Government understands that and is building a stronger economy to provide higher incomes for Kiwi families.”

Bribing people“?

Massive extra spending“?

You can’t spend your way to prosperity“?

Aside from being more meaningless right-wing cliches, the sheer hypocrisy of Joyce’s remarks beggar belief.

It was only five years ago that John Key was promising bribes – a-la tax cuts – even as the Global Financial crisis was beginning to impact on our economy.

Here in New Zealand, by 26 September 2008 (note the date) – we were officially in Recession – convincing evidence just how rapidly individual economies were being shaken as the Global Financial Crisis (GFC) spiralled out of control.  Three days later, as global share-markets lost value, the NZ Superannuation Fund posted a $880.75 million loss for the year to June 2008 , compared with a $1.09 billion profit the previous year.

By October, Republican President Bush signed into effect a US$700 billion bailout package for firms facing bankruptcy and the Bank of Scotland and HBOS – both facing collapse – were “effectively” nationalised by the UK government.

By November 2008, Lehmann Bros was bankrupt; over 200 US banks were in serious financial troubles; US mortgage finance companies Fannie Mae and Freddie Mac had collapsed; the Russian stock exchange closed after massive share-price falls; and other shocks reverberated throughout the global economy.

As the media was reporting the crisis day-by-day, with financial  headlines dominating every newspaper and television network in the country – what was National doing?

It was promising tax cuts. Big tax cuts “north of $50″ for each taxpayer. Tax cuts which Cullen said were unaffordable as then-Finance Minister, and warned,

Finance Minister Michael Cullen yesterday sent the country a further warning that the Government’s cupboard was bare, saying the pre-election fiscal update was expected to show “significantly worse” deficits than the $3.5 billion forecast in the Budget.

As Key’s promises mounted up, Cullen  challenged the Nats to say they would not borrow to pay for their tax cut programmes.

Despite the country being in recession, and the global situation deep in trouble, Key was still promising tax cuts. And he promisedthat the package announced today requires no additional borrowing, or cuts to frontline services to fund it“.

“No additional borrowing.”

In another speech at around the same time, Key said that “National has been mindful of recent global events“. So they were not oblivious to the financial storm swirling around the planet.

On 8 October 2008, Key was even more specific;

“Several months ago I made it clear that our tax plans would be hermetically sealed from other government spending tracks. That continues to be the case.

Paying for this package will not require additional borrowing. It will not require any cuts to public services.”

Unfortunately, like so many of Key’s promises, it was hollow rhetoric. Blatant lies, to be more accurate.

By March 2009, as the GFC and recession impacted on our economy, government revenue was already falling,

“The New Zealand government’s operating balance before gains and losses (OBEGAL) for the seven months ended January 31 was NZ$600 million, which was NZ$800 million below the pre-election update and NZ$300 million below December forecasts, Treasury said. Tax revenue and receipts during the period were NZ$500 million lower than the pre-election forecast.

Meanwhile, Treasury also disclosed a NZ$15.4 billion rise in Gross Sovereign Issued Debt to NZ$45.4 billion (25.3% of GDP) from the pre-election forecast.”

Despite worsening indicators and falling government tax revenue, in  April 2009, the newly-elected National Government enacted it’s first round of tax cuts. The second was scheduled for October 2010.

The result was wholly predictable. As the government lost hundreds of millions in foregone revenue, National  cut state sector services  – despite Key’s promise not to make such cuts,

“Government biosecurity cut backs leaves billion dollar industry vulnerable

The National Government’s decision to make more than 50 workers whose job it is to protect New Zealand from biosecurity risks leaves this country’s primary production industries vulnerable, Labour Biosecurity spokesperson Damien O’Connor says.”

As Andrea Vance wrote in October 2010,

“More than 2000 positions have been cut from the core public service since the Government capped numbers soon after it came to power.

State Services Minister Tony Ryall said yesterday more jobs were likely to go as many government departments would have little or no increase in funding in the next few years.”

And debt continued to rise,

(Year Ended 30 June 2010)

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As the second round of tax cuts was implemented on 1 October 2010, two thousand positions had been cut from the public State sector. And John Key’s government was borrowing $380 million a week – despite his earlier assurances that “paying for this package will not require additional borrowing”,

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Govt borrowing $380m a week

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A month later, all those borrowings were totalled up;

Treasury today published the Government’s financial statements for the 10 months ended April 30, which showed the debt mountain had grown to $71.6b. “

Meanwhile, despite assurance by Key,  cuts were also being made to public services such as  early childhood education, which was amongst the worst to suffer,

The Government is refusing to rule out further cuts to early childhood education as reductions affecting more than 2200 centres kick in today.

The Government announced at last year’s Budget it would eliminate the top rate of funding to early childhood centres.

Later in the year, Education Minister Anne Tolley announced an ECE taskforce would review the effectiveness of spending in the sector and propose new ideas.

Asked yesterday if she could rule out further cuts in this year’s Budget, she said: “Any budget decisions will be announced on Budget day.”

Tolley said the Government was “bringing spending under control”.

Labour says thousands of families will face average fee increases of $20 to $45 as a result of the funding cuts.

It has promised to restore funding and will today put its name to a petition against any more cuts.

Ministry of Education figures show 2249 of the country’s 5251 services will be affected by the cut.

Without much doubt (except to the most blinded-by-ideology National/ACT supporters), National won the 2008 election with big promises of “affordable” tax cuts; no cuts to public services; nor State sector redundancies.

None of those promises were kept.

On 29 January,adding to Joyce’s comments, Key said,

David Cunliffe’s developing a reputation around Parliament for being very tricky. He [Cunliffe] just needs to learn to be up front with the public so they can actually trust his word. I read his speeches and now after a number of examples of this, I really question whether the guy is telling me the truth …”

The same might be said of John Key’s reputation  for being very tricky, and perhaps Key  needs to learn to be up front with the public so they can actually trust his word.

Because really, when Key makes promises, I really question whether the guy is telling me the truth.

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References

TV3: Labour hasn’t learned from the past – Joyce

Labour Party: Best Start Package

Marketwatch: The fall of Lehman Brothers

CNN Money: New recession worry: Bank failures

Washington Post: Treasury to Rescue Fannie and Freddie

Huffington Post: Russia Halts Trading After 17% Share Price Fall

NZ Herald:  Recession confirmed – GDP falls

Fairfax media: NZ Super Fund drops $880.75m

The Telegraph: Financial crisis: HBOS and RBS ‘to be nationalised’ in £50 billion state intervention

NZ Herald: National sticking to $50-a-week tax cuts

Dominion Post: Cullen to Nats: will you borrow for tax cuts?

NZ Herald: Nats to borrow for other spending – but not tax cuts

John Key Website:  NEWS: Economic plan: A tax package for the times

John Key Website: SPEECH: National’s Economic Management Plan

NZ Herald: John Key on Tax Cuts: The National leader’s speech

Interest.co.nz:  Budget deficit worse than forecast; debt blows out by NZ$15.4 bln

Scoop Media:  Biosecurity cut backs leaves industry vulnerable

NZ Treasury: Financial Statements of the Government of New Zealand for the Year Ended 30 June 2010 – Debt

Fairfax media: ‘Unrealistic’ workloads on civil servants after cuts

NZ Herald: Govt borrowing $380m a week

Fairfax media: Government debt rises to $71.6 billion

Fairfax media: Further early childhood education cuts possible

Scoop Media: National Election Pledge Card

NZ Herald: Key launches scathing attack on Cunliffe’s credibility

Previous related blogposts

The National Party, common sense, and sausage sizzles

Another day in a lie of the National Party

From 2011 back to 1991?

Other blogs

The Standard: Gower plays a shocker

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Election 2014

Above image acknowledgment: Francis Owen

This blogpost was first published on The Daily Blog on 30 January 2014.

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Journalists encouraging irresponsible government policy?

6 January 2014 1 comment

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John Armstrong - Cutting tax tempting for National

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Sorry, John, but precisely WHO is talking about tax cuts?

Because so far, all I’m hearing is a couple of journos putting the question to Dear Leader and his faithful little side-kick, Lassie Bill English. No one else is seriously contemplating cutting taxes – not when New Zealand’s sovereign debt is now $60 billion as at 9 November this year – and  increasing by $27 million every day since Key’s hopelessly  incompetent government came to power in 2008.

According to Hamish Rutherford, writing for Fairfax Media, this equates to $13,000 for every man, woman, and child in New Zealand – and expected to increase by another $10 billion by 2017.

We need to address this problem – not fuel it by increasing consumption of imported goods, thereby worsening our balance of payments.

For god sakes, stop encouraging National to engage in any further irresponsible slashing of revenue.  National’s two previous tax cuts in 2009 and 2010 did nothing to  help stem the growth in our sovereign debt. Not when revenue fell by up to $4 billion after those tax cuts.

We have other priorities.

For example, why is the Wellington City Mission short of $2 million to carry out it’s valuable work to assist the poorest in our society? It is obscene that the Mission will have to consider reducing some services, as Chief executive Michelle Branney recently suggested.

Why are New Zealand’s poorest families unable to afford basic  medicines since this government-for-the-rich increased prescription charges in January 2013? When National cut taxes, it attempted to make up for the revenue shortfall by raising GST (despite promising in 2008 not to) and increasing government charges such as for prescriptions, Court fees, etc.

Why are New Zealanders needlessly suffering from rare diseases because PHARMAC cannot afford life-giving medication?

Why are poverty-related diseases making a come-back with such a vengeance?

Children’s Commissioner Dr Russell Wills…

… report is expected to reveal a 12 per cent rise from 2007 to 2011 in hospital admissions for poverty-related illnesses such as acute bronchiolitis, gastroenteritis, asthma, acute upper respiratory infections and skin infections.

“Most New Zealanders will find the numbers of children affected by disease shocking,” Wills told the Herald on Sunday, “but for those of us working clinically with families in poverty it is not surprising.”

Wills also works as a paediatrician in Hawke’s Bay. He said hospital wards were now full of poor, sick children every month of the year – not just in winter. There was no longer a “summer lull” in diseases.

English found himself so cash-strapped after their tax cut profligacy that, by 2012, he was even reaching into the meagre pay-packets of newspaper delivery boys and girls to grab extra tax revenue.

Instead of frittering away taxes, we need to be looking at the real problems confronting us;

  • Address child poverty problems

When children go to school hungry because families cannot afford sufficient food after paying high rents, electricity bills, etc. then there is something seriously wrong with our country.

Especially when we are now seeing children eating out of rubbish bins because there is no food at home for them. I refuse to believe that most New Zealanders want this kind of society for their children.

This is not the New Zealand I grew up in.

The next Prime Minister must make this a #1 priority, and begin with taking on the role of Minister for Children and implementing a comprehensive Food In Schools programme (not the shonkey half-measures undertaken by National earlier this year).

Next on the agenda; returning welfare payments to pre-1991-slash levels (inflation indexed); reduce prescription prices for medicine;  and implement a massive job creation programme.

  • Pay down debt

From 2000 to 2008, Clark’s administration not only paid down debt, but also posted Budget surpluses,

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Government Debt

New Zealand Government Debt To GDP

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Government Budgets

New Zealand Government Budget

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To be fair, Labour’s Finance Minister, Michael Cullen did not have the Global Financial Crisis to contend with. But by exercising fiscal prudence -  instead of  tax-cut lolly-scrambles demanded by the then-National opposition – he left the country in a fit state to weather the on-coming financial storm that was about to envelope the planet.

By the time National came to power in 2008, the global financial crisis was well and truly upon us, with the collapse of Lehman Bros on 15 September 2008. The GFC had started earlier, and signs were apparent to all but the most intransigent optimist that dark storm clouds were on the horizon.

As unemployment rose and economic activity slowed, National persevered stubbornly with it’s tax-cut programme – a move that would further indebt this country and put our government’s books back into the red again. At one stage, National was  borrowing $380 million  a week to make up for the shortfall.

This despite the fact that it was common knowledge that we were facing a dire crisis, as Tracy Watkin and Vernon Small reported on 23 April 2009,

The recession was expected to blow a $50b hole in the economy during the next three years, plunging the Government further into the red as costs climb and tax revenues fall.

“That’s $50 billion we will not recover as a nation, and $50 billion that cannot be taxed by the Government,” Mr English told a business audience in Auckland.

And yet, despite his own candid admission, English went ahead with tax cuts that we could ill afford, and had to make up with massive borrowings; cuts to government services; increased user-pays; mass sackings of state sector worker, and eventual partial asset sales. Even welfare was targetted for “reforms” (read; cost cutting) to claw back government spending.

Little wonder that by September 2011, credit rating agencies Fitch and Standard & Poors had downgraded us.

  • Invest in upskilling the unemployed

Why are we importing tradespeople from overseas when we have 7.1% (153,210) unemployment in this country?

National’s response to the skills shortage was this ideological fob-off from Bill English, in June 2011,

In the first place, it is the responsibility of the companies that expect to rebuild Christchurch to ensure that they have the skills.

And to ensure that everyone understood that National was maintaining it’s long-held tradition of shirking responsibility, he added,

Of course it will be tight, because they are competing with very, very large salaries, particularly those in Western Australia where something like $250 billion worth of capital projects are in the pipeline.”

IBID

That’s the problem with a government that places it’s faith in a free market solution to everything (except corporate welfare) – nothing happens.

Wouldn’t it have made more sense to offer free skills training to every unemployed person in New Zealand, along with subsidised accomodation in Christchurch for workers moving from other towns and cities to take up work offers?

There would have been a cost, to be certain. But that would have been off-set by (a) reduced welfare payments; (b) upskilled workers who would continue to use their new training for subsequent building projects; (c) more taxes paid by more employed workers;  and (d) a flow-on effect to other businesses as income-earning workers spent their wages.

The $4 billion frittered away in tax cuts would have made a considerable dent in our unemployment and given a much needed boost to our economy. And by providing work to the unemployed, the government would have saved millions in welfare.

But by sitting on it’s hands and doing nothing, National has maintained the status quo; 160,000 unemployed wasting their time, and requiring more of our taxes to be paid for the dole.

Is this crazy or what?

Hopefully an incoming Labour-Green-Mana(-NZ First?)  will have more sensible policies than what we’ve seen thus far from National. (Which won’t be hard to achieve.)

And other areas which desperately require State intervention,

  • A fairer taxation system, including reducing (or even eliminating) GST; introducing a comprehensive Capital Gains Tax;  looking at a Financial Transactions Tax (or “Robin Hood” tax, as Mana refers to it); making the first $20,000 tax free; and increasing tax for the top 1%.
  • A sensible pricing system for electricity especially for low/fixed-income earners.
  • Increase funding for early childhood education.
  • More state housing, so our fellow New Zealanders have a decent roof  over their heads.
  • Invest in public transport, especially in Auckland, before the city grinds to a stop.

Those are the things we need to look at. Not cutting taxes for the well off (which is usually what the Nats end up doing).

These should be the priorities of a sensible government. Anything, everything,  else is grossly irresponsible.

Otherwise, what the hell are we leaving our children?

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debt-mountain-cartoon.

May I have some food, a home, parents

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Postscript

Armstrong’s article on tax cuts features a large image of a smiling David Cunliffe. Note; Cunliffe. Not English, nor John Key.

Is there a subtle sub-text being conveyed here that I’m missing? Perhaps I’m getting the wrong ‘message’ from Armstrong’s piece, especially when he finishes with this intriguing comment,

Overall, English will not want to tie himself to future tax cuts without more solid evidence they can be sustained.”

My… that almost sounds like a veiled warning, doesn’t it?

This blogpost was first published on The Daily Blog on 30 December 2013.

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References

Bill English: Dr Cullen maintains tradition of tax-cut denial

Wikipedia: Bankruptcy of Lehman Brothers

NZ Herald: Govt borrowing $380m a week

Fairfax media: $50b hole in economy

TV3 News: Double credit downgrade a double blow for NZ economy

Fairfax media: Key ‘no GST rise’ video emerges

NZ Herald: Food parcel families made poor choices, says Key

The Press: Irish rush for quake jobs

NBR: Chch rebuild companies will have to find skilled workers – English

TV1 News: Rise in prescription charges ‘not fair’ – Labour

NZ Herald: Tax cuts: High earners set to benefit most

NZ Herald: Budget 2012: ‘Paper boy tax’ on small earnings stuns Labour

Fairfax media: $4b in tax cuts coming

Dominion Post: Bennett expects welfare reform to save $1.6b

Fairfax media: Public debt climbs by $27m a day

Radio NZ: Pharmacies ‘carry cost’ of increases

NZ Herald: Child poverty ills rising

Fairfax media: Hungry kids scavenge pig slops

Fairfax media: Mum Not Prepared To Wait And Die

Radio NZ: PM defends record of helping poor families

Radio NZ: 5th year in deficit at City Mission

Radio NZ: Funding declined for housing project

NZ Herald: John Armstrong: Cutting tax tempting for National

The Atlantic: Tax Cuts Don’t Lead to Economic Growth, a New 65-Year Study Finds

Sources

Trading Economics:  New Zealand Government Debt To GDP

Trading Economics: New Zealand Government Budget

Statistics NZ: Household Labour Force Survey: September 2013 quarter (6 Nov 2013)

Roy Morgan: New Zealand real unemployment down 0.3% to 8.5% and a further 8.6% (down 1%) of workforce are under-employed (5 Dec 2013)

Statistics NZ: 2006 Census

Statistics NZ: 2013 Census

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Bennett & Borrows – where are the jobs?!?!

1 August 2013 4 comments

From a recent Fairfax report,

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Hundreds apply for 90 Fonterra jobs

Source: Fairfax Media – Hundreds apply for 90 Fonterra jobs

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And there have been plenty of other similar situations, where job applicants have outnumbered available vacancies. See:

Employment-Unemployment Fact Sheet #1: Queues for Vacancies

So instead of welfare “reforms” which consist of re-naming various benefit categories and constant belittling of unemployed as drug-takers; alcohol abusers; prolific “breeders”; and mis-treating children – what is really needed are,

Jobs

But aside from a Convention centre deal with Skycity, which will most likely result in more problem gamblers, this National government has done precious little to generate more jobs for the unemployed.

Even the Christchurch rebuild, we are now told, will be done by foreign workers,

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Deal opens door for Chinese workers in Christchurch rebuild

Source: TV3 -Deal opens door for Chinese workers in Christchurch rebuild

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Why is there a “shortage of 17,000″ workers?!

The last big quake hit Christchurch in February 2011 – two and a half years ago! In that time, what have National ministers been doing?  Surely they must have received advice from governmental departments; industry organisations; and other expert advisers, that an army of trained workers would be required in the coming years?

Why was no plan set up to,

  1. Assess New Zealand’s current “stock” of skilled tradespeople,
  2. Begin a crash-programme to train people where perceived gaps were indicated,
  3. Organise infra-structure (accomodation, transport, meals, etc) to cater for the Rebuild Army

This is how previous governments built past massive projects such as the Manapouri power station, Clyde, etc: planning.

Indeed, I spoke to one person who worked at the Deep Cove end of the Manapouri Power Project in the 1960s. He  informed me that as part of his employment, his accomodation (aboard the Wanganella) and meals were all paid for.  (He also mentioned how his lunch box and tools kept regularly vanishing, and he thought his work-mates were playing pranks on him. Then, one day he saw a Kea make of with his shiny new lunchbox…)

This was the style of planning, support, and incentives offered to workers to travel to an isolated part of the country where the work was difficult, dirty, and often dangerous.

The building of our nation was certainly not left to the vaguaries of the “marketplace” to achieve.

Because really, when you hear comments like this,

“We frankly can’t run our industry without significant numbers of immigrant workers,” says Federated Farmers president Bruce Wills. “The industry is just too important to be hijacked by a lack of labour. If we can’t get Kiwis in these roles, then we’ve got to make it easy to attract and retain good immigrant labour.”

The problem is there aren’t enough New Zealand workers with the right skills.

“They need to be experienced,” says John Hughes of Rural Contractors New Zealand. “They need to have a work ethic. They need to have an ability to hit the ground running.”

Source: IBID

- this is nothing but a pathetic excuse that the “marketplace” has failed spectacularly to plan ahead and invest in up-skilling New Zealand workers.

“They need to be experienced,” says  John Hughes of Rural Contractors New Zealand, without explaining where that experience will come from if  workers are not hired and trained by people like Mr Hughes.

“They need to have a work ethic,” says John Hughes. Really? Is Hughes saying that since 2008, New Zealanders have misplaced their work ethic?? Yet, the situation of 900 people applying for jobs at Fonterra (see above) seems to indicate that workers not only have a work ethic – they want the work to go with it.

“They need to have an ability to hit the ground running,” says John Hughes. What does that mean? Because what I’m getting from Mr Hughes’ statements is nothing but self-serving excuses that his industry – Rural Contractors New Zealand – has done stuff all to train workers to meet their needs.

Who else is he expecting to meet the needs of the “marketplace”? The State?

But… isn’t the State supposed to stay out of the marketplace, according to neo-liberal business doctrine?

Anyway, this lazy, incompetant government is the last place we should be looking for active leadership on this growing problem (I refuse to call it an “issue”).  As Immigration Minister Michael Woodhouse said on TV3′s The Nation, on 21 July,

“Any employer will tell you when Work and Income sends some workers to them they will have some of those barriers. That is they’re not skilled or educated enough to do the jobs. They may have some issues with drug and alcohol or mobility, and I think those are barriers that we need to continue to move so Kiwis are first in line for the jobs.”

Source: IBID

So what Woodhouse is trying to tell us is that 95,000 New Zealanders suddenly developed a drug habit, alcohol dependency, lost their skills, forgot their education since 2007/08?

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New Zealand Unemployed Persons 2008 - 2012

Source: Trading Economics – Unemployed Persons in New Zealand

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So the Global Financial Crisis, which National regularly uses as an excuse for the poorly performing economy, had no part to play in the massive growth in unemployment from 3.50% in December of 2007 to the high of 7.3%  last year?

Which is strange, because even social welfare minister, Paula Bennett, was forced to concede on TV1′s Q+A, in on 29 April 2012,

There’s not a job for everyone that would want one right now, or else we wouldn’t have the unemployment figures that we do. “

See:  TVNZ  Q+A: Transcript of Paula Bennett interview

Let’s be quite clear here. When Borrows, Bennett, and other National Ministers refer to “drug dependency”, “alcohol abuse”, “lack of skills”, “lack of work ethic”, and other derogatory terms for unemployed and other welfare recipients – in reality they are shifting blame for on-going chronic unemployment from government inaction, to the victims of National’s “hands-off”, market-based policies.

This is a failure on the part of a government that is so wedded to hands-off, free market policies, that it’s hands are “tied” and cannot bring itself to be proactive on this growing problem.

National’s failure is so entrenched; so widespread; that it is, in effect, utterly paralysed to do anything.

The only recourse is to import cheap foreign labour to make up for this gross deficiency in government and industry  planning.

Once upon a time, our great little nation had the determination, resources,  vision, and sheer guts to build dams and roads  in isolated, rugged, wilderness areas.

By contrast, after two and a half years, we are scrambling to find workers trained to whack a nail into a piece of four-by-two.

With 146,000 jobless (HLFS) there is no reason in this wide world why government and industry groups, with union participation, could not have begun planning from Day One after the February 2011 earthquake.

What, exactly, do we pay the Minister for Earthquake Recovery (Gerry Brownlee) to do?

This mess is further proof (not that we needed it) that a hands-off, free-market approach, will not deliver on large scale development where only  the State has the necessary resources to plan and execute such projects.

Blaming the unemployed for lack of planning may fool some gullible members of the public. But the rest will eventually begin to question why we are importing foreign labour when 146,000 pair of hands are ready, willing, and able to do the work.

Once upon a time, we could do this. We rebuilt Napier after the 1931 earthquake, a more devastating seismic event than the 2011 Christchurch quake,

Few insurance policies covered earthquakes, and many insurers refused to pay for fire damage that resulted from the quake. In 1931 Parliament had passed the Hawke’s Bay Earthquake Act, which provided loans for local companies and individuals to rebuild their premises. Because of the economic depression, however, the funds granted were far from adequate, and repayment terms were harsh. Much of the money for recovery came from charity, which poured in during the weeks after the quake…

[...]

In November 1932, Hastings celebrated its reconstruction, and in January 1933, almost two years after the earthquake, during the New Napier Carnival, Napier was declared officially ‘reborn’.

Source: The Encyclopedia of New Zealand – Story: Historic earthquakes- Page 8 – Rebuilding Napier

Almost two years after the quake...”

With far more destruction; greater loss of life (256); less money available (no EQC funding or insurance cover back then!); and limited technology, our grandparents didn’t faff around waiting for the “market place” to deliver results. Nope, they pulled up their sleeves and got down to it.

Whilst it’s true that circumstances between Napier 1931 and Christchurch 2011 differ in many respects – we also have more resources than our grandparents did, eighty years ago.

More resources, perhaps.

Lacking in a bit of #8 fencing wire spirit…

But with a surplus of ideology.

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Show us the jobs!

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This blogpost was first published on The Daily Blog on 26 July 2013.

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Other blogs

Ideologically Impure: Oh look, Diane Vivian: Paula Bennett DID come for you

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David Shearer – New Solutions or Time-Honoured Answers?

29 January 2013 7 comments

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David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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Wainuiomata, Sunday, 27 January 2013 -  It was a scorcher of a day throughout most of the country – and the Wellington region was no exception.  The Met Office was predicting 23 degrees – this blogger scoffs at that and thought it nudged closer to 30.  Not for the first time, I thanked the Human Race for the invention of air-conditioning inside a car.

This was not the first time I had heard Party leaders speak. My very first occassion was Bill Rowling, in the 1975 election campaign.  According to my memory, he seemed a nice enough guy and had some good things to say.

Unfortunately forLabour – and for the nation – Muldoon made “mince meat” out of Rowling; won the ’75 election; trashed Labour’s compulsory super-savings scheme; and set the country on a course for future dependency on foreign bankers. Nice one, Rob.

My most recent encounter with a Party leader had been John Key, in Lower Hutt and then in Upper Hutt, in 2011 in the lead-up to the general election.

Impressions? I understood why many people likened politicians to used-car salesmen.  There was something about Key that instinctively made me feel uneasy and doubt every word he uttered. At any moment, I expected him to offer the audience shares in the Wellington harbour bridge. (Soon, he’ll be offering us shares in companies we already own. So I wasn’t far off.)

Back to the present…

At first, I thought the Wainuiomata Rugby Club – at a far-flung corner of this little village – was an odd place for a public meeting. But maybe not. In some ways, Wainui represents New Zealand  in the wider world; tiny, isolated, out-of-sight of the rest of the country and mostly forgotten. As a microcosm of New Zealand, surrounded by verdant green-covered hills, it was a perfect setting.

The Rugby Club car-park was jam-packed. Decided to park across the road. Smiled nicely at the Wainui Bowling Club folk who must’ve been wondering what was going on across the road, and legged it.  Bloody traffic had been slow all the way through the Hutt Valley and through Wainui and the ” star attraction” was due to start his speech within minutes.

The host’s introductory speech was just finishing, and David Shearer walked – strided confidently – from a rear annex where he had been waiting with one of his staff.

There was good applause from the audience, perhaps a third or half of whom were Labour party members or supporters.

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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Shearer was in good form as he opened his speech,

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Tena koutou katoa.

Greetings everyone and thank you for being here together on a Sunday.

It’s great to see so many friendly faces.

It’s wonderful to see so many of you prepared to give up some of your summer break to talk about the future of our country.

There is nothing more important. And nothing more urgent.

I can tell you that today I’m refreshed, I’m fired up, and I’m raring to go.

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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This year will be a big year for Labour – a year where we not only hold the government to account, but also show there’s a better way.

A way of hope, where there is a place for everyone and where we fight for a world class NZ that we can all be proud of.

Today I want to lay out the challenges before us, the need for change and our focus for the year.

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Shearer started off well – and for the most part, maintained a vigorous energy as he gave his twenty to thirty minute long speech.

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David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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NEW ZEALANDERS WHO INSPIRE US ALL

A book I was given for Christmas tells the stories of 50 inspiring New Zealanders – artists, scientists, musicians, business people, some well-known, some less so.

Reading about their lives, they share the same passion and pride in their work and in their country. The ambition to be world class.

As scientist Ray Avery says: ‘we have no respect for the status quo’.

These people never say it’s too hard – we’re not big enough, we’re too isolated, we don’t have enough money.

Instead they say, “To hell with it, I’m going to do it anyway”.

New Zealanders have always achieved what wasn’t supposed to be possible.

Sir Edmund Hillary’s idea of what was possible took him to the very top of the world.

Kate Sheppard’s idea of what was possible made New Zealand the first country to give women the vote.

Alan MacDiarmid’s idea of what was possible took him from Masterton to winning the Nobel Prize.

We’ve always dreamed big and succeeded.

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Interestingly, this is the same book that Alliance leader, Jim Anderton, referred to on numerous occassions during the 1996 general election campaign.  He often mentioned it in his speeches, highlighting how New Zealanders had struggled to overcome adversity during their lives.

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I see that same attitude in families and schools, businesses and sports teams as I travel up and down the country.

People overcoming adversity, dreaming of something better.

When I see a single mum put herself through polytech to build a better future for her kids, I’m inspired.

When I meet New Zealanders well into their retirement, who after a lifetime of service are the first to volunteer come Daffodil Day, I’m inspired.

When a kid, who the stats say should fail, becomes the first member of their family to graduate from university, I’m inspired.

It’s inspiring because Kiwis don’t lie down.

From the most famous to the most humble, courage and determination is the common bond.

They deserve a Government that backs their hopes and inspires them to succeed.

A Government that says: you do your bit, we’ll do ours.

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Shearer used the phrase “you do your bit, we’ll do ours” several times throughout his speech. It’s a phrase that can mean different things to different people.

In a centre-left context, it can suggest an interventionist hands-on government. Though it  harks back to the famous Marxist expression, “from each according to his ability, to each according to his needs“, I doubt if 21st Century Labour’s speech writer  had Karl Marx in mind.

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That’s what a Labour Government will do.

That’s what a government I lead will do.

 NATIONAL’S EXCUSES ARE HOLDING US BACK

 But this Government’s low expectations are holding us back.

For 4 years we’ve been fed skilfully spun excuses for why we can’t get ahead.

It’s the Global Financial Crisis, the Canterbury earthquakes, the global outlook that is the problem.

We are told we have to accept second best.

There is always an excuse for why we can’t get ahead. For why we can’t be a leader in this field or that.

For example, the National government aspires to being a fast follower when it comes to climate change.

Hold that thought. What is a fast follower exactly?

Does it mean that if we follow too fast we become … what…an accidental leader?

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Good point; “Does it mean that if we follow too fast we become … what…an accidental leader?

Writing his speech, I would have referred to New Zealand’s leadership during the French anti-nuclear tests at Muroroa, and our opposition to apartheid in South Africa. Whilst our Aussie cuzzies were lukewarm in their support of Norman Kirk’s decision to send a frigate to the test site, we went ahead and did it anyway.

We were The Mouse that Roared. And this would have tied in beautifully with his references above to “ 50 inspiring New Zealanders”.

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But a leader with no clue about where they’re going.

That’s not good enough with an issue that is so important to our planet, and our country.

We deserve better than that.

I refuse to accept that for New Zealand.

And so do the Kiwis I meet.

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Strangely, this seems reminiscent of Key’s January2008 speech, “A Fresh Start for New Zealand“,

We know this isn’t as good as it gets.  We know Kiwis deserve better than they are getting.  We are focused on the issues that matter and we have the ideas and the ability to bring this country forward. 

National is ambitious for New Zealand and we want New Zealanders to be ambitious for themselves.

The reason I point this out is that Shearer’s speech writer(s) should be wary of using too much generalised rhetoric. In many cases New Zealanders have heard it all before.

If rhetoric is used, make it original and make it something unique to social democratic precepts. There has to be a different language; different words – a different brand – to that of the Nats.

Otherwise Labour’s message will be diluted and lost within the political-media maelstrom.

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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 FORGOTTEN NEW ZEALANDERS

 But this Government has forgotten the hard-working and inspiring people I come across every day.

In a pub in Napier, a guy came up and said to me “I’m working harder than ever, I pay my taxes, we’re trying to bring up our kids the best we can, but we simply can’t seem to get ahead”.

He went on to say: “I just feel nobody is standing up for me”.

So many others I have met feel the same.

They’re busy helping organise school galas, donating their time to charities, running the sausage sizzle to fundraise for local sports clubs.

They are at the heart of our communities helping make our country the great one it is.

I’ve run into that spirit amongst many small business owners.

They’re the kind of people who pay themselves for 40 hours but work 80 just to keep the doors open.

They’re not asking for an easy ride or a hand-out.

But like thousands of others across this country, they’ve been taken for granted.

They feel the Government has forgotten them.

Kiwis across the country are working harder than ever.

They’re doing their fair share. Playing their part.

We all have that responsibility.

But they feel let down.

My promise to you as Prime Minister is that I will always stand up for the hardworking, forgotten New Zealanders.

You’re doing your bit, it’s time you had a Government that did its bit too.

 NEW ERA – HANDS ON GOVERNMENT

 We desperately need real leadership now more than ever.

The Global Financial Crisis has exposed the frailties of the old economic wisdom.

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Now we’re getting to the knitty-gritty. Recent history backs up Shearer’s statement 100%  that  the “Global Financial Crisis has exposed the frailties of the old economic wisdom“. This is reality and only the most hard-line rightwing National/ACT Party devotee  would attempt the futility of arguing to the contrary.

This is where National is vulnerable (amongst a truckload of other vulnerabilities).

In point of fact, whilst Key may not have been personally responsible for the 2007/08 Global Financial Crisis – his profession certainly had a hand in it’s making.  Key has admitted as such, two weeks after the 2008 general election (notice not before the election),

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Source

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In turn, despite the lies from National MPs (more on that in an upcoming blogpost), Labour left the New Zealand economy in a fairly positrive state,

  • unemployment was low at 4.6% (source)
  • sovereign net debt mostly paid down from 20% to 5.6% of GDP (source)
  • and Labour was posting surpluses, as even Key had to admit, with open derision (source)

These are all positives that Labour shouldn’t be afraid to remind New Zealanders – many of whom suffer from long-term memory-fade at the best of times.

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The National Party believes the financial crisis is just a blip to get over. Their solution is to apply their failed ideas of the past over and over.

They are wrong.

The hands-off, simply leave it to the market approach has failed all over the world.

We are on the cusp of a new era – when new thinking and leadership is needed to build wealth we can all share in.

The world has changed…

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Why not offer a few examples?

- Examples of hands-on State intervention.

- Examples of governments re-taking control of their currencies.

- Examples of people throwing out right wing governments and replacing them with centre-left administrations.

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…National hasn’t. It’s stuck in the past.

We need a government that recognises times have changed.

We need a Government that finds the courage to act, not better excuses for why we can’t.

We need a government prepared to stand up for hardworking forgotten Kiwis.

We need a smart, hands-on Government.

A government that is prepared to be a player, not a spectator.

That will be a Labour Government, and the Government I will lead.

It’s about getting our priorities right, being thrifty about our economy.

Bringing our debt under control.

But being smart about how we tackle the massive challenges ahead.

Above all, this country needs a government that chooses to act. Let me tell you what I mean.

When a young couple is putting off having kids until they buy a house, and yet despite saving hard, prices always slip beyond their reach, it’s time to act.

That’s why I’m committed to putting 100,000 families into new homes.

It’s ambitious, but New Zealanders can see right through the Government’s hands off approach that leaves it to the market.

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Ambitious? Of course – but also doable. This is not beyond our means and it’s laughable that those right wingers who poo-poo the idea as “too hard” or “too costly” are always – always – the same ones who defend against similar   criticisms levelled at  National’s “pet projects” for their business mates.

Evidently subsidising Warner Bros (a multi-billion dollar corporation) or a rugby tournament with our taxes is “not hard” and “not costly”. It’s called an ‘investment’.

So why is building homes for our own people “too hard” or “too costly”?!

Right wingers have a blinkered view of the world and a narrow idea of what is an ‘investment’.

Housing for our citizens is a human right and something we’ve always taken pride in. This is Labour’s core strength; ensuring a roof over peoples’ heads.

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They see through the tinkering with the RMA.

They see through the latest excuse – to blame the local Council.

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Well sussed.

Key has been blaming everyone and everything for the poor state of our economy; rising unemployment; growing poverty, etc.

  • In 2008 he blamed his money-trader mates
  • He’s blamed the Global Financial Crisis
  • He’s blamed people receiving welfare payments
  • He’s blamed “dodgy statistics”
  • He’s blamed the Labour Party
  • He’s blamed the Greens
  • He’s blamed Winston Peters

And now, recently, Key and his National cronies have taken to blaming local body councils,

We need more houses built in New Zealand, at a lower cost. That means we need more land available for building, more streamlined processes and less costly red tape…

… It’s ridiculous that we allow councils to demand almost anything as a condition for the consent.

And it’s ridiculous that we allow them to charge whatever fees they want.

See: John Key’s State of the Nation speech – post mortem

I’m waiting for him to next blame aliens, Illuminatii, et al.

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It’s just not credible.

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Damn right it’s not.

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It’s also why Labour will introduce a Capital Gains Tax to move investment into business and away from property speculation that is pushing house prices through the roof.

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Problem, solution.

Good.

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When a student graduating from university faces 7.3% unemployment and little chance of getting a job, it’s time to act.

They’ve done their bit, we need to do ours.

It’s heart-breaking watching parents waving goodbye to their kids at our airports.

People want to work – they just need the jobs.

Two days ago, John Key had an epiphany: We have a youth unemployment problem – we need apprentices.

Good on him. I thank the focus group that brought that to his attention.

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There was thunderous applause from the audience at this point.  The remark referring to “government by focus group” is a quip  that National constantly  tossed at the Clark government.

It applies equally well to National’s term. Let’s keep using it.

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There are now 20 per cent fewer apprentices today than when he took office. We are now importing foreign labour to meet skills shortages in the biggest rebuild in our history in Christchurch.

Is he just waking up to this now? Is this government asleep at the wheel, completely out of touch?

You don’t need to answer that. The answer is obvious.

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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There was a touch of humour as Shearer said, “you don’t need to answer that. The answer is obvious.” The audience loved the wry touch and laughed. The laughter was at National’s expense.

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I have been serious about youth unemployment from the day I was elected leader.

Labour’s plans are out there. I’d be delighted if this government picked them up and ran with them.

For example:

We’ll pay employers the equivalent of the dole to take on apprentices.

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More loud applause. Everyone welcomes the idea of apprentices – what’s not to like? Taking young folk from our 85,000 Unemployed or Not in Education or Training(NEET); training them into a trade; adding to the skills base of our country – this is real investment.

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We’ll back Kiwi businesses to get their slice of the $30 billion dollars the Government contracts out every year – but we will require them to take on apprentices and trainees in return.

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This is the kind of  social contract that only a centre-left government can enact. National’s neo-liberal dogma could not allow such a hands-on, visibly interventionist, policy. It flies in the face of everything they hold dear; that only the “Market” can create jobs.

Labour (or any other centre-left and left Party) has no such constraints. They can be utterly pragmatic and do whatever it takes to generate jobs.

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We’ll give tax breaks to companies doing world-leading research and development, so the innovations – and the jobs – they create stay right here in New Zealand.

Another thing.

When I see talented people forced to leave their home town because there’s nothing on offer for them, it’s time to act.

That’s why we’ll work with councils on projects that support their provinces. Projects like the Gisborne to Napier rail link to boost economic development and create jobs.

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This was well received by the audience, with good applause and rowdy cheering. The audience seemed to understand perfectly well the long-term value of rail.

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When I hear of high value manufacturers shedding jobs because our high dollar cuts them off at the knees, it’s time to act.

We’ll make changes to monetary policy so that our job-creating businesses aren’t undermined by our exchange rate.

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Problem, solution.

Excellent.

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When a 5 year old girl falls asleep in class because she had no breakfast before she left home, it’s time to act.

Labour will put food in schools, to make sure all our kids get the same chance to learn.

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Problem, solution.

On a roll…

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When a mum and dad work long hours but still can’t afford healthy food for their kids, it’s time to act.

We’ll lift the minimum wage and champion a living wage to make sure hard work can provide a decent living.

This is what I mean when I say we need a smart Government prepared to act.

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Problem, solution.

Good stuff!

Plenty of applause at these statements.  And plenty of material for the electronic media,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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And print media,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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This is where National will continue to be on the back-foot. Come 2014, (if the Nat-led Coalition lasts that long – by no means a foregone conclusion) Key and his administration will have been in office for six years. Aside from balancing the books (oh f****n hooray), what will be their legacy? What practical achievements can they present to the voting public after two terms in office.

Bugger all, I would suggest.

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A Government that says we will back you if you’re prepared to do your best.

Yes, we face huge challenges, but by being hands on we can turn our biggest challenges into opportunities for the future.

Since we announced KiwiBuild last year, excitement is growing. Architects, construction companies and designers around NZ have been in touch.

They see an opportunity to build affordable, energy-efficient – even energy generating – houses.

Houses that use home grown sustainable materials.

Houses that families will be proud to call home.

This is an idea the country is embracing.

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And it’s also 100% feasible. There is no reason why any of Shearer’s suggestions cannot be implemented. It is, after all, part of our innovative, “number 8 fencing wire” mentality that we love to espouse as a Kiwi characteristic.

Ok, well let’s put that into operation. Not just to make money for overseas corporates like Warner Bros – but for our own young people.

This is the kind of talk that cuts through the free market, neo-liberal BS. This is what will encourage New Zealanders to call  this country home – and not just a launching pad for overseas destinations.

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More than 70 per cent of Kiwis support our KiwiBuild programme to build 100,000 first homes.

New Zealanders are also behind our other new ideas and those numbers are growing.

Most people see the need for a Capital Gains Tax on investment properties.

Nearly six in every ten New Zealanders support our idea to make KiwiSaver universal.

And nearly two-thirds of you back our pledge to protect universal superannuation for future generations by gradually lifting the age of eligibility.

The forces of conservatism said that reforming Super wasn’t the right thing to do.

It wouldn’t be popular – so we shouldn’t do it. They were wrong.

New Zealanders are forward thinking and are prepared to do what it takes to create a better future.

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When New Zealanders understand the long-term implications of their decisions, and vote accordingly for sensible policies on Election Day, we can achieve great things.

But when we vote through sheer stupidity for selfish reasons – as many did on 29 November 1975 for Robert Muldoon – we inevitably achieve short term gain. But loose out Big Time on long term benefits (see related blogpost:   Regret at dumping compulsory super – only 37 years too late).

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National has a big idea of course – it’s to sell our best assets.

And, with them, goes another chunk of our future.

That is their plan.

Most Kiwis hate it. And we are behind them fighting that idea all the way.

 HANDS ON – A GLOBAL TREND

 Labour isn’t alone in knowing the time has come for active government.

A movement of leaders and people across the world have realised the old hands-off solutions take us nowhere.

It’s a new way of thinking and it’s evolving.

New Zealanders are looking to a government that will roll up its sleeves and back them.

You do your part, and we the government will do ours.

In 2014 that’s the Government I will lead.

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And that it pretty much what persuaded voters to support Labour and it’s coalition partners in 1999. The do-nothing, slash-and-burn mentality of Bolger and Shipley  was driving New Zealand to a yawning chasm. Neo-liberalism was creating a nightmarish society of high unemployment, degraded social services, missed opportunities, and widening gap between the rich and poor.

Sound familiar?

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 AGENDA FOR 2013

Kiwis won’t have to wait until the election to find out what I stand for and what I’ll do about the issues that matter to them.

I’ve already put clear stakes in the ground on housing affordability, quality education, growing jobs and the economy.

There’s more to come.

For Labour, this year is about preparing for Government.

We want New Zealanders to know that we’re ready to govern.

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It’s simple: appear confident and act like a government-in-waiting – and they will flock to you.

Note, this applies also to NZ First, Mana, and the Greens. The public want to see Opposition Parties working together for the good of the country as a whole. By all means offer your own policies for public debate – but take note that there’s a very fine demarcation between debate and squabbling.

Any hint of squabbling and the voters will turn of.

There have to be positive reasons for voters to take a punt on voting for the Opposition.

Work together, in a cool, calm, methodical, professional manner – and they will flock to you.

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That’s why today I’m setting out my agenda for the year.

Number one is jobs.

It is our most urgent priority and cuts across everything we do.

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Damn straight.

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Labour’s plan to build new affordable homes will create thousands of new jobs and apprenticeships.

A job is more than a weekly wage, it’s gives people a purpose and pride in themselves. That’s why I’m focussed on jobs.

Our housing proposals are at the cutting edge of urban design and energy efficiency.

This year we will bring together the best ideas of architects, designers, urban planners and others to a housing conference.

I want KiwiBuild ready to roll on Day 1 when we take office.

First-home buyers shouldn’t have to wait.

Jacinda Ardern, my Social Development spokesperson, will produce an alternative white paper this year, setting out our direction to help lift kids out of poverty.

There are 270,000 children in hardship in this country, and the government is failing them.

Kids deserve the best chance in life regardless of their parents’ wealth, and with Labour they will get that.

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And those of us on the Left will be supporting, encouraging, and where necessary, nudging, a Labour-led government to maintain the focus of these problems (I refuse to call them “issues”) .

It is simply unacceptable to have poverty in this country and tackling this cancer in our society must rank at the top, along with job creation and caring for our children.

On this note, I would suggest that David Shearer demonstrate his total commitment to addressing child poverty in this country by taking on the role of Minister for Children.

There is nothing more important to the future of our nation than our children. (Some rightwingers don’t get this simple fact – but then, they do suffer from a brain-deficit in comprehension of social problems.)

John Key made himself Minister of Tourism – and spent his holidays in Hawaii. I guess he’s Minister of Tourism for Hawaii, and we just didn’t hear that part of the announcement.

An incoming Labour Prime Minister’s portfolio must be Minister for Children.

No ifs, buts, or maybes – that will set the tone of an incoming Labour-led government.

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Their best opportunity is from a world-class education system.

We’ve already set out our plan to put food in schools and extend reading recovery so our kids aren’t destined to be drop outs from their first day at school.

This year I’m asking my education team to look at ways to improve transitions from school to further training and high-skill jobs.

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Suggestions;

1. Can Charter Schools. These are parasitic neo-liberal constructs which add nothing to our education system.

2. Look at Finland. They’re at the top of OECD PISA tables for achievement. I suggest they have a wealth of knowledge we can  gain from them. (Finland does not use the “Charter schools” model.)

3. Whether of not NZ First joins the Coalition on an official basis, I would strongly suggest that MP Tracey Martin be given an education or health or Associate Minister of Children’s portfolio. This woman has talent and should not be over-looked. (Disclaimer: I’m not a member, supporter, or even fan of NZ First. But I recognise talent when I see it.)

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85,000 young New Zealanders are not in work, education or training.

It’s a flaw in our system.

I want to see our schools seamlessly connect to further training opportunities.

I want every child to go through school with a purpose and plan of where they’ll end up.

Because every young Kiwi deserves a shot at a career that excites and motivates them.

Without this we’ll continue to see kids, without the right skills to get a job, falling through the cracks.

And our employers will continue to struggle to find the skills they need.

That’s not a future I want for my kids or yours.

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Pretty damned obvious, eh?

I mean, really, it’s so fricken insanely straight forward.

In fact, it’s so patently obvious that voters have a clear choice,

A. Vote National and more of the same – 85,000 not in work, education or training.

B. Vote for a centre-left Coalition and get these kids into apprenticeships.

Is there anyone out there who doesn’t get this?

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I’ve spoken of a clean, green, clever economy many times.

We need our environment to drive our economic success and our economy to keep our environment clean.

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Despite warnings from the likes of Dr Mike Joy that our environment was hardly the fiction of  being “100% Pure” or “Clean & Green”, right wing spin doctors (see:  When spin doctors go bad) and our Dear Leader don’t seem to understand the simple fact that much of our economy is predicated on our marketing brand (see:  John Key’s “pinch of salt” style of telling the truth).

Dr Joy was lambasted by Mark Unsworth – a rabid right-wing lobbyist for a professional “government relations consultancy” company, Saunders Unsworth – who condemned the scientist as an economic “saboteur” on 21 November, last year.

Now, as our environmental mishaps begin to compound, the chooks are coming home to roost – and crap all over everything,

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NZ works on agreement on residue in milk

Source

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The reality is we will not create more better paying jobs by simply exporting more milk powder.

We’ve been talking about it since Mike Moore invented lamb burgers.

Our future prosperity will be carved out by backing the talent of businesses working in high tech, or the innovations of those adding value to our natural resources.

It will be built by those that see the promise and opportunity of a clean, green future.

Great ideas are emerging from organisations like Pure Advantage, and from thousands of innovative can-do Kiwis.

A thriving manufacturing sector is at the heart of my vision. That’s why our manufacturing inquiry that starts tomorrow is an important first step.

But the commitment is lacking from government.

Well I am committed to this future.

There is simply no other option.

That is why I have asked my colleagues to develop a clear plan to diversify our economy.

A plan we can put in front of New Zealanders, not airy fairy concepts.

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There was more applause to this…

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All of these areas – jobs, education, housing and building a new economy – are critical to rebuilding our second largest city.

I am committed to rebuilding Christchurch from the grassroots up, not the Beehive down.

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A part of me thinks that “rebuilding Christchurch from the grassroots up, not the Beehive down” may be the toughest, most demanding of Labour’s promises.  300,000 Cantabrians may have 300,000 opinions as to what should be done.

At the very least, a Labour-led government must put an end to  school closures and the prospect of the Charter Schools experiment. Christchurch has enough stresses without central government adding to the woes of an already vulnerable community.

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That’s why I’ll be talking to Cantabrians about how they see their future.

To ensure their voices are heard.

That’s what we’ll work on in the coming months.

These ideas will make a difference.

These are ideas National simply can’t see.

CONCLUSION

The difference between the forces of conservatism and the need for change has never been wider.

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Indeed. On almost every level, there is a world of difference between the expectations of National Party supporters and those who support Labour, the Greens, Mana, and NZ First.

The differences are best epitomised by the issue of child poverty.

National/ACT supporters play the blame-game and deride parents for making “bad choices”. Key himself validated this belief in February 2011, when he said,

But it is also true that anyone on a benefit actually has a lifestyle choice. If one budgets properly, one can pay one’s bills.

“And that is true because the bulk of New Zealanders on a benefit do actually pay for food, their rent and other things. Now some make poor choices and they don’t have money left.”

See: Food parcel families made poor choices, says Key

This attitude of selfishness can become vicious and downright psychopathic in cruelty. Perhaps the nastiest I’ve seen was Damien Grant’s piece in the NZ Herald yesterday – see:  Damien Grant: I’d rather a better phone than feed a hungry child.

People like Grant – and those who posted vile messages in support of his comments – are the mean spirited, self-centered, dark side of humanity. Their vision of  society would not be too dis-similar to to Dickens’ Victorian-era world.

Though strangely enough, Rightwingers/National Party supporters are never quite able to explain  how a child can choose to be born into a family ridden by unemployment, poverty, dysfunction, addiction, abuse. Strange, eh?

Labour/Green/Mana and probably NZ first supporters see problems such as  child poverty as a societal problem that affects us all. They understand there are many reason why a family may be living in poverty.

With 175,000 New Zealanders now unemployed, it’s hardly surprising that poverty is increasing. Contrary to the bizarre fantasies of right wingers and low-information voters, the dole is not very generous. No one in their right mind would give up a job earning $600 a week, to go on the dole for $204.96 a week, net (see:   WINZ Unemployment Benefit – current).

A priority of an incoming Labour-led government should be  to un-do the benefit cuts of Ruth Richardson in 1991. It is an indictment on Labour that it never carried out this positive reform during it’s tenure in office.

Aside from being the right thing to do, Labour should ask itself; why should the poorest in our society vote for them if they don’t un-do the policies of previous right-wing  governments?

What’s in it for them?

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Come 2014, New Zealanders will face a choice more stark than any in a generation.

A choice in the direction of their country.

A choice between staying as we are and managing our decline, or being part of a hands-on

Government that’s backing hardworking New Zealanders.

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Government that’s backing hardworking New Zealanders“.

Code for the fickle middle classes?

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A government that chooses action over excuses.

A government that understands the world is entering a new era and we need to change with it.

One that shares the determination and passion of those Kiwis who inspire us most.

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There was more loud applause at this point. Despite not giving specifics, the audience seemed to like what they were hearing; the direction that Shearer was moving the Party.

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That’s the Labour Government I will lead.

But I can’t do it alone.

Today, I am asking for your help.

I want you to be part of my team and play a part in the next government.

I want to hear your hopes for this country and your ideas of how we get there.

I want each of you to take the Labour message out to your neighbours, your co-workers, your congregation, and your friends.

Tell them yes, we in the Labour Party are committed to making a real difference in people’s lives.

We will not accept the status quo.

A tide for change is building.

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Indeed. And that tide for change is not just the poor; the unemployed; or the low-paid. Even businesspeople seem to be getting mightily pissed of at National’s arrogant  hands-off, do-nothing, Leave-It-To-The-Marketplace attitude,

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The managing director of a company that makes and exports a device that protects crops from hail stones said comments from the Government that his sector needs to get smarter are “insulting and unnecessary”.

Mike Eggers said he is sick of hearing politicians telling him he has to up his game if he wants to survive – when the high dollar makes it more and more difficult to operate.

“We’re told to get smarter and I find that irritating and insulting. I’m about as smart as they get in my little field. How the hell do these people get smarter? For a politician to tell somebody else to get smarter – he’s risking his life.”

A scrap-copper manufacturer told the inquiry the Government can’t continue to do nothing about the exchange rate.

A W Fraser managing director Gordon Sutherland said the over-inflated dollar is crippling exporters and it was disappointing when the Government told them to keep making efficiencies to remain viable.

“We know that – we’ve known that for a very, very long time. Of course we get efficient, of course we try and work as hard as we can to be efficient – it’s the only way we can exist. It drives me insane when people say, ‘Get efficient’. What do you think we are – idiots? We’re not.”

Joyce’s immediate response?

“Nobody’s arguing that being a manufacturer isn’t challenging. In fact, in my history in business, every time you’re in business it’s challenging.

“But going around and trying to talk down the New Zealand economy and talk about a crisis in manufacturing, I don’t think is particularly helpful.”

Mr Joyce said there was no simple answer to the problems the sector are facing, except to keep working hard to further improve their businesses.

See: Radio NZ – Exporters tell inquiry of threat from high NZ dollar

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If Joyce and his little  National buddies think that kind of response will win them the next election – they must be more deluded than I thought imaginable.

Joyce might as well have saved time and simply told exporters and manufacturers, “Go vote Labour”. The effect will be the same.

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Change that guarantees everyone gets ahead, not just those at the top.

Change so we once again stand tall as a country.

A country where we strive to be a leader – not a follower.

A country where the Government is hands-on and backs its people.

A country we can be proud of.

Friends, join with me to build that future.

Because, together, that’s what we will do in 2014.

Thank you.

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With that, Shearer concluded his speech.  As the audience rose to their feet, cheering enthusiastically, he left the stage,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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So, what to make of  Shearer’s performance?

Shearer spoke from a pre-prepared speech (hard-copy provided to this blogger) which he more or less followed. He spoke convincingly and  passionately and though perhaps not as charismatic as a Jim Anderton or younger Winston Peters or late Rod Donald, it was sufficient to present his message to people in the  Hall.

Reading a pre-prepared speech, this Blogger scores Shearer  a 6/7  (where 10 is in the league of Lange/Kirk/Savage and 1 is one-dimensional to the point of being robotic.)

The speech scores a 5/6. It was adequate – but perhaps something was missing. Something that would make a listener sit up, with the proverbial lighbulb switching on.

After Shearer left the stage, Hutt South MP, Trevor Mallard, invited the gathering outside to enjoy the beautiful hot day in an adjacent park, as well as a free sausage sizzle for all,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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A traditional Kiwi sausage sizzle provided free snacks – though there were suggestions that NZ Herald journo, Audrey Young (not pictured) pay for hers in the spirit of Market User Pays,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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It also gave Shearer an opportrunity to meet the press outside, to answer questions. Most questions  seemed focused on  Labour’s recently released Housing policy,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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Patrick Gower (at left, with pink tie) was the main questioner,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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At times the questions were so intent on detailed house pricing; number of bedrooms; location; location; location, that they  seemed more suitable for a real estate agent than a Party leader. But they were fair questions and this blogger has no quibble with them,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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I stood with the group throughout the Q + A session, listening and recording the exchange between Shearer and msm journos.

My impression? He has improved significantly since his earlier days as Labour’s mumbling, incoherent,  leader. Occassionally there is still hesitation, and that requires further training to make his speech patterns more fluid, natural, and assertive.

In any case, except for an occassional moment or two, he answered journo’s questions reasonably  well.

The question is – is he ready to go head-to-head with The Great Car Salesmen, aka, our Prime Minister John Key? Currently, I’m not sure. By 2014, with more practice and experience, and as his confidence grows, he has a fair chance.

What the Labour Party needs to do is ensure that not only does Shearer get the training and experience, but that he is 100% well-versed in every aspect of Labour policy and funding mechanism.

National is vulnerable right now, and this blogger  believes things are about to get a whole lot messier for the Tories. 2012 was only the beginning of their eventual demise as government.

There’s still a lot of work ahead of us, and every critic and opponant of National must do their bit; Party activists; MPs (which means side-lining hopeless non-performers and elevating those who are taking it to the Nats); bloggers; and disaffected ordinary New Zealanders who’ve had a gutsful.

2014 is ours to seize.

Other moments and faces of the day

Rimutaka MP, Chris Hipkins, (“Kennedy for President” t-shirt) and friends,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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Hutt Mp, Trevor Mallard, chatting with two members of the public,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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Te Atatu MP, Phil Twyford, and supporters,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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And Labour leader, David Shearer, listening intently to a fellow New Zealander,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com David Shearer - 27 January 2013 - new era new solutions - wainuiomata rugby club

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Other blogs

The Jackal: Anti Shearer faction loses traction

The Standard: For a February leadership vote

Disclaimer

This blogger has no links or preference to either “Team Shearer” or “Team Cunliffe”, and is mostly neutral in the leadership stakes.

Copyright (c)  Notice

All images are freely available to be used, with following provisos,

* Use must be for non-commercial purposes.
* Where purpose of  use is  commercial, a donation to Child Poverty Action Group is requested.
* At all times, images must be used only in context, and not to denigrate individuals.
* Acknowledgement of source is requested.

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= fs =

John Key’s State of the Nation speech – post mortem

25 January 2013 28 comments

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John Key today delivered his State of the Nation speech. This is my appraisal of the contents of his address to the people of New Zealand…

Whether it’s welfare reform, law and order, education, the rebuild of Christchurch, or continuing our improvements in public services, it’s full steam ahead.

But no mention of jobs?

We’ve made a huge turnaround in the government’s books, we’ve brought in the biggest changes to the tax system in a generation, and we’re making significant changes to reform the welfare system and strengthen work obligations.”

Still no mention of jobs!

Among other things, we’ve introduced 90-day trials; set time limits for the consenting of large projects under the RMA; introduced a competitive new system for awarding oil and gas exploration permits; got ACC back into good financial shape; and kick-started a multi-billion dollar programme of infrastructure investment.”

Where are the jobs?

” …an economy that was left unbalanced, and in poor shape, by the previous government.

Bullshit. Aside from being National’s “Big Lie“, Labour posted several Budget Surpluses, and payed down debt.  How long can National keep blaming Labour for non-existant ‘mis-management’?

“…  the impact of the Global Financial Crisis

That was FOUR years ago – what has National been doing in the meantime – aside from banging on about welfare “reforms” and adding to unemployment by cutting back on the State sector and under-mining the export sector by not addressing the high Dollar?!

Since the bottom of the recession, in mid-2009, the economy has grown at an average of just under 2 per cent a year, and economists are expecting that to strengthen further.”

Yeah? Reallllly???

Which economists? These ones; Rodney Dickens finds economists consistently over-estimated growth?

And how can it be ‘strengthening’ when unemployment is rising; the export sector is being knackered by our high dollar; and government austerity is dampening growth?

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Govt austerity slows growth, keeps rates low - RBNZ

Source

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Key is practicing more of his “vacant optimism”, and bugger all else.

Our employment rate is very high in comparison to other countries, with over three-quarters of all New Zealanders aged 20 to 64 in work. There are still too many people looking for work who can’t find it.  But forecasts show employment continuing to increase and unemployment falling.

Bullshit. Unemployment has risen in the last four Quarters,

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New Zealand Unemployment Rate jan 2012 - dec 2012

Source: Trading Economics – Unemployment

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By what stretch of his money-addled brain is he expecting it to fall? Especially when the 170,000 new jobs predicted in 2011 by a vacantly optimistic Key, have yet to materialise.

Interest rates are at 50-year lows.

Oh, puh-leeese.

Interest rates are not determined by government. They are set by the Reserve Bank. And current interest rates are low only because the economy is weak.

Reserve Bank Governor Alan Bollard said: “New Zealand’s economic outlook has weakened a little since the March Monetary Policy Statement.

“Political and economic stresses in Europe, along with a run of weaker-than-expected data, have seen New Zealand’s trading partner outlook worsen. Furthermore, there is a small but growing risk that conditions in the euro area deteriorate more markedly than is projected in the June Statement.

The Bank is monitoring euro-area developments carefully given the potential for rapid change.“Increased agricultural production and the weakened global outlook have driven New Zealand’s export commodity prices lower.

The resulting moderation in export incomes, although partially offset by depreciation in the exchange rate, will weigh on economic activity in New Zealand. Fiscal consolidation is also likely to constrain demand growth going forward.

See: Reserve Bank Monetary Policy Statement June  2012

Is Key taking credit for a weak economy?! Go on, Dear Leader, I dare you to do it!

Prices for primary exports are holding up, and our terms of trade remain high.

Say whut? Has Key been caught out fibbing – again?  Terms of  trade are not “remaining high”. Quite the opposite,

New Zealand’s terms of trade fell to a three-year low in the September quarter as the country’s strong currency ate into returns from an increasing volume of dairy exports.

The terms of trade, which measures how much imports can be bought with a fixed quantity of exports, fell 3.2 per cent in the three months ended September 30, according to Statistics New Zealand. That’s more than the 1.8 per cent forecast in a Reuters survey of economists. Export prices sank 6.3 per cent, ahead of the 3.6 per cent expected, while import prices declined 3.3 per cent versus an anticipated 2 per cent fall.

See: New Zealand Herald – Terms of trade hit three-year low

Primary export prices are not “holding up”. They are falling,

Dairy, which accounts for about a quarter of New Zealand’s exports, was the biggest contributor to the falling export prices and rising volumes, with volumes surging 32 per cent in the quarter, even as prices sank 13 per cent.

See: IBID

This isn’t a “State of the Nation” report – it’s a work of goddamn  fiction.

That will be centred, of course, on Christchurch, where the spend is now estimated to be around $30 billion. But construction is also expected to pick up in other areas, and manufacturers across the country will be gearing up to supply materials.”

Again, more vacant optimism from Key.

If two major earthquakes had not trashed Christchurch, where would the “growth”  come from? What would be driving economic growth and employment? Faith in the Free Market?!

Volumes

Total manufacturing rose 2.6 percent.
Excluding meat and dairy product manufacturing, sales fell 1.4 percent.
Meat and dairy product manufacturing rose 13 percent.

Values

Total manufacturing rose 1.6 percent.
Excluding meat and dairy product manufacturing, sales fell 1.1 percent.
Meat and dairy product manufacturing rose 9.3 percent.

See: Statistics NZ Economic Survey of Manufacturing: September 2012 quarter

In any three-month period in New Zealand, between 100,000 and 200,000 jobs disappear, and between 100,000 and 200,000 new jobs are created, as businesses start up, expand, contract and close altogether.”

Is Key suggesting that there are “100,000 to 200,000 new jobs” created within a three month period?!

The man is in la-la land.

Statistics NZ revealed that for the Setember 2012 Quarter,

The number of people unemployed increased by 13,000 people.
The employment rate fell 0.4 percentage points, to 63.4 percent.
The number of people employed decreased by 8,000.
The labour force participation rate remained unchanged, at 68.4 percent.

See: Household Labour Force Survey: September 2012 quarter

I see no evidence of 100,000 or 200,000 new jobs anywhere. Unemployment, however, rose from 6.8% in the June 2012 Quarter  to 7.3% in the September 2012 Quarter.

Key’s speech mentions none of this, and is as vacantly optimistic as he was last year, or 2011, or 2010, or 2009…

Because the truth is, you only get jobs and growth in the economy when people invest money, at their own risk, in setting up a business or expanding an existing business.

[...]

But the only way net new jobs can be created is by private investors putting their money into businesses in New Zealand.”

Which brings us to the matter of Market failure. We simply are not seeing the number of new jobs required to soak up any of the 175,000 unemployed.

Since 2009, a net total of 114,200 Kiwis left for Australia and elsewhere (see: Johnny’s Report Card – National Standards Assessment y/e 2012: migration ). One could only imagine the staggering level  of  unemployment if Australia  wasn’t an economic “safety-valve” just across the ditch.

” Governments can encourage investment but they can also discourage investment.

A government can load up big costs and uncertainties onto business.

It can make people unwelcome because they are considered to be the wrong nationality to invest here, or in the wrong industry.

And it can lock up the resources of the country.

That would certainly discourage investment.

But as I said, we have to be a magnet for investment.

That’s why my Government is working hard to reduce costs and uncertainties for business.

That’s why we welcome investment that benefits New Zealand.

That’s why we are keeping our own costs down.

That’s why we are ensuring people have the right skills to contribute to the workforce.

That’s why we are ensuring the country has the infrastructure it needs to grow.

And that’s why we’re focused on opportunities to use our natural resources productively and sustainably.”

Ok. So again – where are the jobs?!

After four years of National’s “working hard to reduce costs and uncertainties for business”, “welcoming investment that benefits New Zealand”, “keeping our own costs down”, “ensuring people have the right skills to contribute to the workforce”, “ensuring the country has the infrastructure it needs to grow”, and “focused on opportunities to use our natural resources productively and sustainably” – why are we not seeing this translated into more jobs?

Instead we are seeing unemployment GROWING – not reducing.

Something is terribly wrong here.

” This year we are launching five new vocational pathways that clearly signpost the subjects young people should take to prepare for vocational careers in construction, manufacturing, the primary sector, the service sector and social services.

This year there will be over 4000 places available in trades and services academies, allowing young people to explore vocational career opportunities while still at school.

And there will be around 8700 Youth Guarantee places for young people to study fees-free outside the school environment.”

Two years after the earthquakes that levelled Christchurch?! National has belatedly realised that Market failure is not delivering the number of skilled tradespeople required, and government intervention is needed?

Oh well, better late than never. At least they didn’t wait till after the 2014 elections… Or the turn of the next century… Or the Second Coming…

“Under Labour’s wasteful management, up to 100,000 people a year listed as being in industry training were in fact “phantom trainees” who achieved no credits and in some cases were no longer alive.”

Oh, how original – more Labour-blaming!!

I suspect that figure of  “100,000″ is pure Key bullshit. But regardless, how long is National going to use Labour as a scapegoat?! Especially since, I suspect, that had National kept Labour’s apprenticeships scheme, we’d have the necessary numbers of tradespeople to help re-build Christchurch.

But I guess it’s easier for the Nats to do nothing; wait for the Market to deliver results – and then blame Labour when that nutty idea crashes and burns.

I hope Key realises that the finger-pointing of Labour-blaming is wearing rather thin? People are wondering when the Nats will start taking responsibility for their actions. Especially since National is the Party of personal responsibility,

We also need to remember the enduring principles on which the National Party is based – individual responsibility, support for families and communities, and a belief that the State can’t and shouldn’t do everything.” – John Key, 30 January 2007

Source: National Party

“That has freed up some very significant funding to re-invest in expanding apprenticeships.”

Oh? How much?

Is this “new” money?

Or money stolen from other budgets such as Vote  Health, eg;   for grommet operations for kids with glue ear? (see:   Grommet cuts fear )

One will excuse my cynicism, but with National’s current maniacal obsession with balancing their books, they are constantly robbing Peter to pay Pauline. The net result is that state services are being cut back and no  part of our community is safe from National’s cost-cutting slash-and-burn activities.

One thing is for sure – some other part of the community may find their services wound back to pay for National’s “expanding apprenticeships”.

” So today I am announcing a new initiative to expand and improve apprenticeship training.

This has a number of parts to it:

1. From 1 January next year, we are…”

“Next year”?!?!

Well, never let it be said that National moves with decisive speed when confronted with critical economic and social problems.

Initiating their “new” apprenticeships scheme will mean another year that Christchurch suffers a shortage of trained workers; another year we could have been training some of the 85,000 unemployed youth in this country. Another year – wasted.

This isn’t a government “on top of things”. This is procrastination by deliberate design. Perhaps Key is hoping that the Market will do the job in the next twelve months, giving National an excuse to quietly forget and drop this scheme?

“…we estimate that around 14,000 new apprentices will start training over the next five years, over and above the number previously forecast.”

This sounds remarkably familiar… Didn’t we get a similar promise in 2011,

Treasury say in the Budget, as a result of this platform on what we’ve delivered, 170,000 jobs created and 4% wage growth over the next three to four years.” – John Key, 19 May 2011

See: Budget 2011: Govt predicts 170,000 new jobs

Which was backed up on their 2011 election flyer,

“National’s Brighter Future Plan will help businesses create 170,000 new jobs over the next four years.”

Source: National Party

That one didn’t work out very well either.

Key went on to say,

“The whole idea is to kick-start new apprenticeship opportunities ahead of the curve, so that thousands of New Zealanders get to learn a new trade that will last them a lifetime.”

I have a simple question for our smile and wave Dear Leader; why didn’t they do this immediatly after the 2008 election? Why didn’t this come out of the Jobs Summit in 2009?

And why, as he’s said above, are they now leaving this critical problem to be addressed next year???

All in all – there is little here to create new jobs, now, when we need it the most. Even his comments regarding infrastructure are just so much ‘fluff’,

“Moving on to infrastructure, the Government will this year continue its significant programme of investment, which supports thousands of jobs across the country.”

Well that “support for thousands of jobs across the country” hasn’t worked out so well. Unemployment has risen four quarters in a row. Redundancies were happening across the board, up and down the country. 175,000 New Zealanders are now out of work. Three months prior, that number was 162,000.Before that, 160,000. (see previous blogpost: Johnny’s Report Card – National Standards Assessment y/e 2012: employment/unemployment ) The numbers are going the wrong way.

“In terms of housing, the Government is itself planning to build more than 2000 houses over the next two financial years…”

Two thousand?

That number is derisable and falls woefully short of the 20,000 new houses  required to be built each year to keep up with demand. As Warwick Quinn, from the Registered Master Builders Federation, said last October,

New Zealand had fallen way behind the required build rates of 20,000 homes a year, hit by the global financial downturn that began in 2008...”

See:  20,000 houses for Chch in next five years

Two thousand new houses over the next TWO years?

That doesn’t cut it, Mr Key. Not even close. In effect, what Dear Leader has done is acknowledge that a critical housing problem exists – but that National is unable/unwilling to address it in any meaningful way.  Their ideological attachment to free market dogma binds their actions at every turn.

Two thousand new houses over two years is a joke. Not a particularly funny one at that.

” We need more houses built in New Zealand, at a lower cost. That means we need more land available for building, more streamlined processes and less costly red tape.”

Now THAT comment worries me.

Didn’t we go through a de-regulation of the building industry in 1991? And didn’t we end up with billions of dollars of poorly built homes that leaked and rotted?

And wasn’t the end result of that disaster a situation where  liability ended up with local body councils paying 25% for repairs; central government 25%; and  home owners were lumped with 50%?! Oh indeed that IS the case!

Up to 89,000 home owners were affected by the “red tape” de-regulation of the early 1990s – and Key appears to be staggering drunkenly  down the same route. (see: Leaky home payouts start tomorrow )

Will this be a  repeat of the same errors of history all over again?!

Key went on,

” It’s ridiculous that we allow councils to demand almost anything as a condition for the consent.

And it’s ridiculous that we allow them to charge whatever fees they want.”

Why not? After all, National demands whatever taxes and government fees they want. Eg; rising petrol taxes; increased early childhood costs; increased ACC fees; raised GST, etc.

But when backed into a corner, default to Strategy #1 – blame Labour. As Key then said,

” Labour’s so-called ‘plan’ to build 100,000 houses doesn’t do anything to fix the actual cost of building – so will either fail miserably, deliver dwellings that people don’t want to live in, or require massive taxpayer subsidies. It’s dishonest and it doesn’t stack up.”

Well, Key would know about dishonesty: John Banks. Raising GST when promising not to. Mystery email regarding Standard & Poors. Clandestine meetings with Skycity executives. Pledging meals in schools, then recanting.

Key derides Labour’s plans to build 100,000 new houses, proclaiming it will “fail miserably”.

This from the smile and wave man who lives in a multi-million dollar mansion; has a holiday home in Hawaii; and god knows what other property – while young New Zealanders are desperate to buy their own homes. (See: Frustrated home buyers want investors to be discouraged)

This from the same smile and wave man who offers New Zealanders 2,000 new homes over TWO YEARS.

It beggars belief how anyone can take John Key seriously these days. The man is a joke.

Key then took the stick to local body councils,

“But if councils aren’t able to change their planning processes, then the Government would have to get a lot more proactive, because we are very serious about resolving this issue.”

Oh really? “Very serious”, eh? So serious that in four years National has done nothing about our housing shortage?

Moving from blaming Labour, Key now seems to be beating up on  local body councils.

Does National ever take responsibility for anything?!

On the environment…

” New Zealand is rich, for example, in minerals. The Greens and Labour oppose it, but we are going to continue to encourage development of our country’s oil, gas and mineral resources.

Looking across our resource base as a whole, what’s clear is that we need a much better system of planning and resource management – one that enables growth and provides strong environmental outcomes, and does so in a timely and cost-effective way.”

National’s ‘devotion’ to “strong environmental outcomes” is amply illustrated by their abandonment of the Kyoto Protocol; watering down the ETS,  and scrapping the five yearly State of the Environment Reports, despite John Key having endorsed it in September 2008 as one of National’s own policies. (See: National scraps crucial environmental report , Government shuns second Kyoto committment )

Anything Key, or one of his ministerial muppets, utters about environmental concerns can be safely dismissed as empty platitudes.

On the TPPA,

“The Greens and their fellow travellers say the TPP is anti-democratic. That is nonsense.”

Interestingly, Key does not say why claims that  the “TPP is anti-democratic” are “nonsense”.

Nor does he acknowledge that the TPPA negotiations are currently held in secret. The public and media are excluded from proceedings. Eventually, the TPPA presented to Parliament will  be a done deal, with no chance for media analysis and public oversight. If that’s not anti-democratic then I fear that Dear Leader has no concept of the principles of democractic participation.

Considering Key’s penchant for secretiveness when it comes to deals with corporates such as Mediaworks, Skycity, et al, It’s not clear to me why we should take him at his word.

On asset sales…

” Subject to the Supreme Court’s decision, this will start in the first half of the year with our offer of up to 49 per cent of the shares in Mighty River Power.

We also want to proceed with another IPO later this year.

The whole share offer programme will be a shot in the arm for New Zealand’s capital markets.”

Really? So National is flogging of half of Meridian, Genersis, Mighty River Power, Solid Energy, and further down-selling Air New Zealand… to satisfy “New Zealand’s capital markets”?!

Key’s background as a money-trader appears to have besotted him. The Big Sell-off has begun, and he’s positively salivating at the prospect.

Meanwhile, over 75% of New Zealanders don’t want a bar of state asset sales. But hey, so what? Anyone would think this was a democracy?

“At the same time, the Government will maintain majority ownership of the companies, and will use the proceeds to invest in other public assets, like schools and hospitals.”

Rubbish. National will use the proceeds to balance their books. Any other suggestion to the contrary is patent nonsense.

“That’s because overseas investment in New Zealand adds to what New Zealanders can invest on their own.”

?!?!

That makes no sense… Typo? Brain-fade? A drunk speech writer?

“It creates jobs, boosts incomes, and helps the economy grow.”

*sighs*

So much bullshit…

Let’s remind ourselves  for the zillionth time that,

  • unemployment is up
  • the income gaps between New Zealand and Australia continues to widen
  • the economy is “growing” at a snail’s pace and as it does, our Current Account deficit grows. Why? Because increasing economic activity boosts profits for foreign owned companies, which means more  profits remitted overseas, which results in a worsening Current Account deficit. That, in turn, impacts on the interest rate we pay for our own capital (borrowings for mortgages, etc),

John Key knows all this – but he ain’t sayin, Billy-Bob boy.

And businesses aren’t so happy either,

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The axe falls - Industry boss blames cuts on Govt

Source
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On Science & Innovation…

” Finally, despite tight times, the Government is continuing to put a real priority on science and innovation. Research funding will be greater this year than it ever has been, because new ideas are a key driver for a modern economy.”

Didn’t National remove the 15% R&D tax credit soon after winning the 2008 election? If that’s putting “a real priority on science and innovation” – I’d hate to see the Nats in full-flight when they positively hate something. (Oh yeah, kinda like beneficiary bashing.)

So back to default Strategy #1,

“But I can guarantee you one thing – Labour will oppose almost all of it.”

Yeah. Piss poor of Labour not to support National when Key demands absolute fealty. In fact, Labour, Greens, and NZ First should just bugger off and leave National to govern on it’s own… and we know what that’s called, don’t we?
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dancing cossacks
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Perhaps  New Zealand would be better served if – instead of constantly deriding and blaming Labour, the Greens, NZ First, local body councils, and Uncle Tom Cobbly – that National focused on the problems confronting our nation; our economy; and our society.  Fixating  on  Opposition Parties for eighteen  paragraphs is not a good look. Defensive, much, Mr Key?

John Key’s constant reference to Labour makes him look fearful – and perhaps so he should be.

By 2014, National will have been in office for six years, with very little to show for it. If Key goes to the election with nothing more except playing a bitter blame-game against Labour, voters will desert him in droves. Voters want results; something reassuring to make them feel better -  not excuses. Certainly not high unemployment, a stagnant economy, growing child poverty, lagging wages, more and more people taking flight to Australia, etc.

” As for the National-led Government, our plan will encourage investment, strengthen the economy and boost jobs.

People know what that plan is, we have stuck to it and we will continue to stick to it.”

Well, I’m happy-as-larry that National has a plan. Because most people haven’t got a clue what Dear Leader and his Nat mates are up to. Aside from cutting state and social services,  asset sales, and subsidising multi-billion dollar film companies, most New Zealanders are scratching their heads wondering precisely what this wonderful “Plan” is.

In 2011, business leaders were asking precisely the same thing,

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Business NZ sees no economic plan

See: Business NZ sees no economic plan

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Key’s speech can be summed up threefold;

1. Consisting mainly of wishful fantasy – with facts and the last four years disproving almost everything he claimed as a “success”,

2. Constantly blaming others for his own Party’s policy-failings. Grow a pair, Mr Key; man up and own your failings.

3. National’s faith in the ability of the Market to produce economic growth, jobs, and higher wages has been sadly misplaced. His announcement on 2,000 new homes over two years is an insult, and National’s new apprenticeship scheme is two years too late, and too little.

National’s neo-liberal policies are more faith-based dogma than anything rooted in Real Life – and the chooks are coming home to roost.

This wasn’t a State of the Nation speech – it was a Statement of  National failure. A Hekia Parata-style own-goal.

If this is National’s idea of a “bright new future”, they’ve just sent Labour and the Greens a very long concession speech for the next election.

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References

NZ Herald: Full text: John Key’s state of the nation speech

Other blogs

Pundit: Mom, apple pie, apprenticeships & not much else

Idle thoughts of an Idle Fellow: The Ruminations of Robert Winter: The Negative Mr Key

The Dim Post: All part of the service

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Did National knowingly commit economic sabotage post-2008?

24 January 2013 16 comments

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cheesecolour tax cuts

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By now, it has become fairly well known that National’s tax cuts in 2009 and 2010 were unaffordable and impacted disastrously on government revenue (and subsequent spending) in following years.

In 2008, National tempted voters with promises of “self funding” tax-cuts. (Though “self funding” was never very clearly explained.)

National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing.

[...]

This makes it absolutely clear that to fund National’s tax package there is no requirement for additional borrowing and there is no requirement to cut public services.

Source: Economy – Tax Policy 2008

The pledge of  “no requirement to cut public services  ” was also one that was made (and subsequently broken in dramatic fashion).

In May 2008, Key was making bold statements  of  “meaningful”  tax cuts,  “north of $50“,

John Key…  said National would be looking at economic figures and what other promises Dr Cullen made in the budget on Thursday… But he was very confident” National could deliver an ongoing programme of tax cuts, like that promised in 2005”.

See: National’s 2005 tax cut plans still credible – Key

Despite the growing black clouds of  a global downturn, Key was still optimistic. When questioned by Sue Eden of the NZ Herald whether National’s tax cuts programme of 2005 were still credible given uncertain economic circumstances, Dear Leader replied,

Well, I think it is.”

See: IBID

By early August 2008, as United States mortgage-institutions Fannie Mae and Freddie Mac  were  sinking into a credit crisis, Key remained defiant in the face of looming recessionary forces,

National will fast track a second round of tax cuts and is likely to increase borrowing to pay for some of its spending promises, the party’s leader John Key says.

But Mr Key said the borrowing would be for new infrastructure projects rather than National’s quicker and larger tax cuts which would be “hermetically sealed” from the debt programme.

The admission on borrowing comes as National faces growing calls to explain how it will pay for its promises, which include the larger faster tax cuts, a $1.5 billion broadband plan and a new prison in its first term.

It has also promised to keep many of Labour’s big spending policies including Working for Families and interest free student loans.

Mr Key today said there would be “modest changes” to KiwiSaver.

See: Nats to borrow for other spending – but not tax cuts

How does one ” “hermetically seal” tax cuts  from the debt programme ” ?!

The ‘crunch’ came on 6 October 2008, when Treasury released a document known as the “PREFU” (Pre-Election Economic and Fiscal Update). This Treasury report analyses and discloses the fiscal and economic state of the nation, with short and medium-term outlooks, based on international and local trends.

The 2008 PREFU started with this dire warning,

The economic and fiscal outlook has deteriorated since the Budget Update

In the five months since the Budget Update was finalised, we have witnessed a number of significant domestic and international developments: in particular, the deepening of the international financial crisis, the slowing housing market, and growing pressure on households and businesses. These developments are key factors in our updated view of the economy and the government’s finances set out in this Pre-election Update.

We are now expecting weaker economic growth over the next few years, resulting in slower growth in tax revenue and higher government expenditure. Combined with increases in the costs of some existing policies, these factors lead to sustained operating balance deficits and higher debt-to-GDP ratios.

The economic outlook is weaker …

Imbalances have built up during nearly a decade of sustained growth, including inflation pressures, an overvalued housing market, high household debt and a large current account deficit, with implications for interest rates and the exchange rate. With the economy slowing, these imbalances are starting to unwind – as are imbalances in the global economy – but there is a long way to go.

See: PREFU 2008 – Executive Summary

The opening statement went on to state with unequivocal frankness,

The international financial crisis has deepened and is having an adverse impact on global economic growth. New Zealand is expected to feel the effects of the financial crisis principally through the tighter availability and increased costs of credit, but also through a fall in business and consumer confidence, falling asset values and lower demand and prices for our exports.

[...]

The weaker economic growth that we are forecasting is reflected in reductions in our tax revenue forecasts. Compared with the Budget Update, we expect tax revenue to be on average around $900 million lower for each of the next three years.

  • The weak outlook for the household sector will have a direct impact through GST, which is forecast to grow by around 4% per annum over the next five years, compared with 7.5% over the six years to 2007.
  • With firms’ margins under pressure and profitability low, underlying corporate income tax is forecast to decline by 3% in the 2009 June year, and growth is expected to be negligible in 2010 as accumulated tax losses offset profits.
  • A relatively robust forecast for wages over the next few years helps to keep underlying growth in PAYE up at around 5% per annum.

The largest single change in government spending in the Pre-election Update is an increase in the expected costs of benefits. Compared with the Budget Update, benefit expenses are around $500 million per annum higher, reflecting both an increase in numbers of beneficiaries as a result of the slowing economy, and the impact of higher inflation on the costs of indexing benefits.

[...]

As a result of the various factors set out above, the government’s debt outlook deteriorates. This leads to higher debt servicing costs, which are forecast to be around $500 million per annum higher

See: IBID

Treasury continued – in considerable detail – to outline the gloomy prospects  for New Zealand’s fiscal and economic short-term and medium-term outlooks (see:  Fiscal Outlook),

In Risks and Scenarios, Treasury wrote,

Since the Budget Update, global developments have been more in line with the alternative scenario than the Budget forecast and global financial and economic conditions have worsened significantly. On the domestic front, finance companies have continued to face reduced debenture funding and more finance companies went into receivership or moratorium in the past three months. The speed and magnitude of the slowing in domestic demand has been more abrupt and greater than forecast in the Budget Update.

Reflecting these recent international and domestic developments, we have made significant downward revisions to our growth forecasts in this Update. However, the financial turmoil has intensified since the finalisation of our economic forecasts. As a result, we have seen the downside risks to our growth forecasts increase markedly, particularly in the years to March 2010 and 2011.

See: 2008 PREFU – Risks and Scenarios

Unlike his “lack of knowledge” over the GCSB monitoring of Kim Dotcom, or the Police report on John Banks, John Key cannot feign ignorance over the 2008 PREFU report,

John Key has defended his party’s planned program of tax cuts, after Treasury numbers released today showed the economic outlook has deteriorated badly since the May budget. The numbers have seen Treasury reducing its revenue forecasts and increasing its predictions of costs such as benefits. Cash deficits – the bottom line after all infrastructure funding and payments to the New Zealand Superannuation Fund are made – is predicted to blow out from around $3 billion a year to around $6 billion a year.”

See: Key – $30b deficit won’t stop Nats tax cuts

Especially when Bill English admitted his knowledge of the PREFU,

The figures outlined in the Prefu are a bit worse than we expected, and we are currently digesting them. However, National is not content to run a decade of deficits.”

See: IBID

In an example of black-humoured irony, English went on to say,

New Zealand can no longer afford Michael Cullen and Labour’s big-spending low-growth policies.”

See: IBID

But evidently New Zealand could afford National’s  “ big-tax-cutting low-growth policies“?

On 6 October 2008, Key reacted to the PREFU (proving he had full knowledge of it’s contents, and made this astounding comment when questioned about National’s planned tax cuts, at 0:40,

“REPORTER: What is your growth programme, does it include tax cuts?.”

“JOHN KEY: It certainly does include tax cuts. We have a programme of tax cuts.”

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Key reacts to 2008 PREFU figures

See: Key reacts to [2008] PREFU figures

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Key’s comments following 0:40 seem equally bizarre, and at 2:28 admits that “… we can’t deliver anything other than, ‘yknow,   a legacy of deficits for New Zealand…” – and still continues to warble on about cutting taxes, including trying to justify “debt for future growth“.

The consequences were a $2 billion hole in government tax revenue (see:  Outlook slashes tax-take by $8b;   Govt’s 2010 tax cuts ‘costing $2 billion and counting’); budget deficits (see:  Budget deficit $1.3b worse);   increased borrowings (see:  Govt borrowing $380m a week); cuts to the State sector in terms of services and jobs (see:  Early childhood education subsidies cut; 10 August: Unhealthy Health Cuts, 2500 jobs cut, but only $20m saved); and surreptitious increases in government charges and taxation elsewhere (see:  Petrol price rises to balance books; Student loan repayments hiked, allowances restrictedPrescription charges on the rise); and asset sales  (see: Govt says asset sales will cut debt).

The point of this blogpost is simple.

It’s not to look back, at the past…

… it is to look forward to the future.

When National makes Big Promises, be wary of the nature of said promises, and the underlying , invisible “hooks” contained within them.

Quite simply when the Nats offer you a “tax cut”, the first question that should pop into your head is not, “Oh goody, I wonder how much I’ll get!”

The first thought should instead be, “Uh oh, I wonder how much that’s going to cost me!”.

Because as sure as evolution made little green apples and the sun will rise tomorrow, the Nats care very little about your pay packet.

They care only about “rewarding hard work” [translation: more income for the rich] and “making the veconomy more competitive”  [translation:  implementing their neo-liberal agenda for their ideological crusade to turn this country into a Market-driven economy, away from an egalitarian society].

In the process, if they have to turn our country into a slow-rolling, economic train-wreck, then so be it.

They can always blame someone else,

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Key blames Labour for his Govt's wage gap failings

See video: Key blames Labour for his Govt’s wage gap failings

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Key even blames Labour for the  global recession !? (see @ 0:48)

In the meantime, did National recklessly  damage the New Zealand economy with unaffordable tax cuts, despite Key & Co being given ample warning by Treasury – simply to get elected in 2008?

Draw your own conclusions.

The evidence speaks for itself.

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I lied  get over it!

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Additional reading

The Atlantic: Tax Cuts Don’t Lead to Economic Growth, a New 65-Year Study Finds (16 Sept 2012)

References

National Party: Economy – Tax Policy 2008

NZ Herald: National’s 2005 tax cut plans still credible – Key (20 May 2008)

NZ Herald: Nats to borrow for other spending – but not tax cuts (2 Aug 2008)

The Treasury:  Pre-election Economic and Fiscal Update 2008 (6 Oct 2008)

NZ Herald: $30b deficit won’t stop Nats tax cuts (6 Oct 2008)

BBC News: Bank shares fall despite bail-out (13 Oct 2008)

Bay of Plenty Times: John Key: We cannot afford KiwiSaver (11 May 2011)

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Johnny’s Report Card – National Standards Assessment – the social welfare safety net

9 January 2013 3 comments

To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.

The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.

Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc)  in 2008 and four years in office to make good on it’s election promises..

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Social welfare safety net

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On the other hand this is still the best country imn the world to be raised as a child - yeah, right.

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The rhetoric:

It started well… National’s bad old image as a “bene-bashing Party, pandering to the ill-educated; the mis-informed; and the downright  ignorant, appeared to be a thing of the past.

John Key was a product of a civilised society where social welfare could give kids from the most disadvantaged households a chance to better themselves.

You can measure a society by how it looks after its most vunerable, once I was one of them. I will never turn my back on that.” – John Key, 28 November 2006

See: Speech to North Shore National Party luncheon

I have said before that I believe in the welfare state and that I will never turn my back on it. We should be proud to be a country that looks after its most vulnerable citizens. We should be proud to be a country that supports people when they can’t find work, are ill, or aren’t able to work.

[...]

My father died when I was young. My mother was, for a time, on the Widow’s Benefit, and also worked as a cleaner. But the State ensured that I had a roof over my head and money for my mother to put food on the table. It also gave me the opportunity to have a good education. My mother made sure I took that opportunity, and the rest was up to me. ” – John Key, 30 Jan 2007

See: The Kiwi Way: A Fair Go For All

Key even seemed to “steal” policies from the centre-left Labour Party,

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National launches its Food in Schools programme

Full story

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Perhaps National, under Key’s leadership, had learnt from it’s mistakes in the 1990s?

No such luck.

The Reality:

As the Global Financial Crisis plunged most of world’s nations (China and Australia being the two lucky exceptions) into recession, the ranks of the unemployted swelled.

As Brian Gaynor, executive director of Milford Asset Management,  wrote in the NZ Herald on 18 August 2012,

At the end of May, the 34-country Organisation for Economic Co-operation and Development (OECD) had an unemployment rate of 7.9 per cent.

Nearly 48 million were out of work, 15 million more than when the financial crisis began in 2007.

The unemployment rate continues to rise in the eurozone and is now 11.1 per cent.

See: Baby boomers clogging the job market

Here in New Zealand, unemployment skyrocketted from 78,000 in late 2007/early 2008, to the current 175,000 – over a doubling in only four years.

That’s 97,000 who had jobs prior to the Global Financial Crisis who are now out of work.

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new zealand unemployment numbers jan 2007 - jan 2012

See: tradingeconomics.com – Unemployment numbers

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If it weren’t for the 114,200 who have migrated to Australia in the same four year period, soaking up thousands of potential jobless New Zealanders, one shudders at the unemployment rate we would now have (see related blogpost:  Johnny’s Report Card – National Standards Assessment y/e 2012: migration ). Thank the mercies for our more affluent, and clever,  neighbour.

It’s fairly obvious to all but the most entrenched, bene-bashing, Talkback Radio moron that New Zealand has not escaped the effects of the Global Financial Crisis.

National’s devotion to market-forces has caught Key, English, and Joyce in a  trap of their own making.  Their dogma dictates that the State “cannot create jobs” – only the Market can do that, as Key stated on several occassions,

Nothing creates jobs and boosts incomes better than business growth. For New Zealand to build a more productive and competitive economy, we need more innovative companies out there selling their products on the world stage.” – John Key,  24 August 2012

See: Key Notes: Honouring our fallen soldiers

When the “Market” fails to behave as neo-liberal doctrine demands – then there is a problem. National cannot admit that it’s free market policies have failed. (It took the Russians seventy years to finally concede that their centralised market policy had failed them.)

For the National politburo, who cannot concede Market failure, there must be another reason why jobless numbers are increasing – not decreasing. It must be the fault of those on welfare. The unemployed must be to blame, as the Market is never, ever wrong.

Accordingly, from early-2011 onward, National began a concerted campaign against those receiving welfare assistance. It was a vicious, de-humanising, de-moralising campaign against those whose only “crime” was,

  • having lost their jobs,
  • had little access to training or apprenticeship,
  • raising children on their own,
  • were sick, injured, or disabled

From 2011, we started seeing headlines like these in our media,

Food parcel families made poor choices, says Key (17 Feb 2011)

Baby turns one, so get to work mum (6 June 2011)

Revealed: $100k-plus beneficiary homes (13 June 2011)

Single mum on DPB for decades (20 Sept 2011)

Minister spells out $43,000 ‘salary’ claim for solo mum (21.2.2012)

Beneficiary contraception plan ‘intrusive’ (8 May 2012)

Benefits may be linked to kids’ jabs (12 May 2012)

And if local bene-bashing stories weren’t sufficient to drive home the agenda of demonising this sector of society, National and it’s media corporate-whores could always rely on some excellent shock-value stories from overseas,

Man who fathered 30 kids says he needs a break – on child support (21 May 2012)

This next one was very popular at Federated Farmers – that well-known bastion of liberal sensibilities. The way that Bill English played his audience of cow-cockies and sheep-herders, with a barely-disguised smirk on his face, spoke volumes…

Drug tests for more beneficiaries mooted (28 June 2012)

Benefit cuts for drug users defended by PM (2 July 2012)

Said Paula Bennett,

There’s two words we don’t use often enough in this country and that’s self-responsibility. The size of someone’s family is their business, so long as they don’t expect someone else to pay for it.”

So saith the woman who was on the DPB; had free taxpayer funded tertiary education; gave up her part-time job at the time because it was “too hard”; and had WINZ assistance to buy her own home…

Big families mean big welfare dollars (15 July 2012)

Bennett increases pursuit of welfare ‘rorts’ (23 July 2012)

Beneficiaries on warrants face cash cut (6 Sept 2012)

Kidnappers among targets in benefit plan (7 Sept 2012)

And to really, really make sure we’ve been paying attention to this Nazi-style demonisation propaganda,

Beneficiaries cost $130,000 over lifetime (12 Sept 2012)

And in case we missed it first time, Fairfax gave the political dagger-in-beneficiaries-backs another good, hard, twist,

Beneficiaries’ bill $78 billion (12 Sept 2012)

Though Bill English promised, hand-on-heart, that this was not an exercise in “bene bashing,

Benefit tally ‘not an excuse for hard line’ (13 Sept 2012)

Then the Nats came up with the idea of a law change of  “one strike and you’re out”  for welfare beneficiaries who turned  down any “suitable” job offer from July 2013. Which would be laughable, because both Key and Bennett  have conceded that there simply aren’t enough jobs for everyone.

So what would be the point of a “one strike and you’re out” for the unemployed, except to paint them as “work shy” and “lazy”?

Propaganda. Nasty stuff.

‘One strike’ rule for beneficiaries (18 Sept 2012)

Funny thing… the media never compared welfare beneficiaries entitlements with that of politicians. How many beneficiaries get free air-travel for the rest of their lives for themselves and their spouses? Or a gold-plated superannuation scheme none of us are entitled to?

Those were just some of the media stories and headlines that assaulted our sensibilities and attempted to paint the unemployed  – the victims of the GFC – as “bene bludgers”.

All because National could not cope with the growing numbers of Kiwis losing their jobs, and had no plan to address growing unemployment.

So default to Setting ‘B’: Blame the Benes.

When Key stated that the most recent jobless stats – 7.3% unemployed -  had “come as a bit of a surprise” (see: Unemployment surges to 13-year high ), he obviously had not been paying attention to yearly figures from New Zealand Statistics.

Jobless numbers had ‘only’  been rising since the beginning of 2012,

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New Zealand Unemployment Rate jan 2012 - dec 2012

Source: Trading Economics – Unemployment

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The scary headlines above were only partially offset by other media stories of New Zealand’s increasingly visible ‘underbelly’. Poverty was no longer staying behind closed doors, away from “polite society”,

Hungry kids scavenge pig slops (11 May 2012)

Welfare rejig carries whiff of hypocrisy (12 May 2012)

Stuck for ideas, Govt preys on powerless (13 May 2012)

The same hate-campaign was being conducted overseas,

Hatred of those on benefits is dangerously out of control (18 May 2012)

No food, no shoes and kids kept home (23 May 2012)

Government Policy Impacting Child Poverty Levels (30 May 2012)

And then we came to the attention of the United Nations. Quasi-nazism – not exactly the “cool look” we want for New Zealand and it’s tourism industry,

Struggling families borrow to buy food (21 July 2012)

UN urges Govt reforms to not target beneficiaries (2 Aug 2012)

Principal wants taxpayers to fund breakfast scheme (12 Aug 2012)

Ministry memo critical of plan to drug test beneficiaries (17 Aug 2012)

Govt has caused ‘incredible shift of wealth’ – CTU  (24 Aug 2012)

Playing politics is not helping kids (26 Aug 2012)

Even multi-millionaire, Gareth Morgan, had to state the bloody obvious for those voters who were still less-than-fully-brain-functional,

Bennett accused of dehumanising beneficiaries (6 Sept 2012)

Precious little sense on Planet Paula (17 Sept 2012)

Belt tightening won’t reduce unemployment (23 Sept 2012)

Experts lament state of NZ child poverty (24 Sept 2012)

And when the Nats did try to address a social problem, the result would have been comical – had the issue of murdered children reminded us what was at stake,

Child-abuse funds ‘blown on hype’ (1 Dec 2012)

Social welfare – the stats:

From the Ministry of Social Development’s website;

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Numbers of working-age clients1 receiving main benefits at the end of September, 2002 – 2012

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End of quarter

Unemployment Benefits 2 Domestic Purposes Benefits 3

Sickness Benefits 4

Invalid’s Benefits Other main benefits 5 All main benefits
September 2002

112,147

109,078

37,275

64,596

21,613

344,709

September 2003

94,527

109,366

40,802

68,361

19,366

332,422

September 2004

65,764

109,021

44,110

4,067

17,624

308,158

September 2005

50,153

105,692

46,067

73,813

16,440

292,165

September 2006

41,027

100,579

47,527

75,988

17,026

282,147

September 2007

23,158

96,673

48,995

78,268

16,140

263,234

September 2008

23,273

98,473

48,208

83,618

16,036

269,608

September 2009

60,660

107,658

56,384

85,015

17,094

326,811

September 2010

65,281

112,765

58,661

85,305

16,200

338,212

September 2011

55,661

114,147

58,651

84,524

15,513

328,496

September 2012

50,390

110,738

59,595

83,570

16,649

320,942

Notes:

1 This report defines working-age clients as aged 18 – 64 years, to reflect the minimum age of entitlement of most benefits and the age of eligibility for New Zealand Superannuation.

2 Comprises Unemployment Benefits and Unemployment Benefits – Hardship.

3 Comprises Domestic Purposes Benefits – Sole Parent, Domestic Purposes Benefits – Care of Sick or Infirm, Domestic Purposes Benefits – Women Alone, and Emergency Maintenance Allowances.

4 Comprises Sickness Benefits and Sickness Benefits – Hardship.

5 Comprises Emergency Benefits, Independent Youth Benefits, Youth Payments, Young Parent Payments, Unemployment

Benefits – Training, Unemployment Benefits – Hardship – Training, Unemployment Benefits – Student Hardship, Widow’s Benefits, and (until April 2004) Transitional Retirement Benefits. Youth Payments and Young Parent Payments replaced Independent Youth Benefits from August 2012.

Source: MSD – September 2012

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Graph shows the rise in the total number of people receiving a main benefit through to 1994, the further rise through to 1999, the steady decline to June 2008, and the rise through to June 2009 reflecting the recession and the international financial crisis.  Numbers in receipt of the unemployment benefit follow a trend that is a rough mirror image of the employment rate.

Graph shows the rise in the total number of people receiving a main benefit through to 1994, the further rise through to 1999, the steady decline to June 2008, and the rise through to June 2009 reflecting the recession and the international financial crisis. Numbers in receipt of the unemployment benefit follow a trend that is a rough mirror image of the employment rate. The rising red line, signifying Sickness/Invalid beneficiaries is linked to ACC discharging it’s clients onto welfare, to make their own books “look good”.

Source: Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011

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Correlation between Global Financial Crisis, leading to NZ recession, leading to higher unemployment. (For the benefit of low-information National Party voters.)

Correlation between Global Financial Crisis, leading to NZ recession, leading to higher unemployment. (For the benefit of low-information National Party voters.)

Source: IBID

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The above data yields three interesting observations;

#1 Beneficiary numbers mirror Global Financial Crisis

Unsurprisingly, the numbers receiving social welfare benefits shot up just after the Global Financial Crisis hit New Zealand’s economy,  impacting on employment. The effects of the GFC continue to this day to create redundancies and unemployment throughout the country.

Low-information voters and the lunatic right-wing fringe element in our society maintain the fantasy that welfare is a “lifestyle choice”, where beneficiaries are attracted by “big money” paid out in benefits.

Not only are welfare payments usually abysmally low (just barely sufficient to survive on) – but the stats above clearly show the correlation between the GFC and rising beneficiary recipients.

There were 51,334 more people receiving welfare benefits in September 2012 than there were in September 2008. This increase can be sheeted home to,

  • the Global Financial Crisis destroying jobs,
  • National’s lack of proactive job creation policies helping to push up unemployed numbers,
  • ACC’s policies with regards to to injured and sick (see below).

Such is the folly of relying on the “Market” to deliver jobs.

Such is the hypocrisy of Bennett, Key, English, Joyce, et al, who blame welfare beneficiaries for being out of work – and threatening them with all manner of sanctions.

#2 Overall beneficiaries are down

Surprisingly, those receiving welfare benefits up to September 2012 still number 23,767 fewer than September 2002. Overall beneficiary numbers are not increasing anywhere as much as what Paula Bennett, John Key, and their right wing fellow-travellers are insisting.

There are two possible reasons for this.

Firstly, 114,200 (net) New Zealanders left our shores for Australia from 2009 to 2012 (see previous blogpost:  Johnny’s Report Card – National Standards Assessment y/e 2012: migration). Many left to find work overseas. These migrants might have added to unemployed and solo-parent  welfare recipient numbers, had they stuck around here in New Zealand.

Secondly, see #3 below.

#3 Unemployment Benefits vs Household Labourforce Survey Unemployed

It is a ‘quirk’ of New Zealand’s welfare system that married or de facto couples cannot receive welfare assistance if one should loose his/her job, but the other remains in paid work.

On the other hand, two people not in a relationship (eg; flatting in the same house), are eligible for welfare should one become unemployed and the other remains in-work.

There seems no logic to this contradictory situation and is even more unfair when one considers that the married/de facto couple both paid taxes, prior to one losing his/her job. That’s New Zealand’s bizarre welfare rules for you.

Which may explain why those receiving Unemployment Benefits from WINZ numbered  50,390 in September 2012 – whilst the Household Labour Force Survey (HLFS) recorded 175,000 unemployed people (see:  Household Labour Force Survey: September 2012 quarter).

WINZ records only those paid an Unemployment Benefit.

The HLFS records everyone, within a more inclusive criteria, irrespective of whether they receive a benefit or not.

Addendum 1:

Interestingly, the figures above  for Invalid and Sickness Beneficiaries rose significantly from 2009. This ties in with a NZ Herald report, dated 23 June 2012,

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The proportion of long-term ACC clients moving on to benefits has surged since the corporation adopted a tough new stance, which has fuelled allegations that they are being forced off compensation before they are rehabilitated.

Figures supplied by the corporation yesterday also show it has slashed the number of long-term claimants on its books by a quarter since mid-2009.

[...]

But yesterday’s figures show that the proportion of long-term claimants leaving ACC and going on to health-related, unemployment or domestic purposes benefits rose sharply from early 2009.

In the five years to 2008, the proportion going on to benefits was 12.1 per cent, but during 2009 that rose to 16.4. In the first five months of 2010, the most recent data held by ACC, the proportion rose to 19.4 per cent.

ACC figures also showed the corporation had reduced the number of long-term claimants on its books by 3644 or 25 per cent to 10773 in the three years since June 2009. That reduction is well ahead of ACC’s targets.

See: More ACC clients going on to welfare

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Throughout all these events which are beyond the influence and control of the unemployed, solo-parents, widows, invalids, sick, etc, National’s demonisation of those on welfare has been  a shocking indictment of  John Key’s leadership.

What is it in the mental make-up of politicians like Paula Bennett, John Key, Steven Joyce, and Bill English, that treating those who have lost their jobs, or looking after children,  as  “bludgers” is morally acceptable?

Especially when they must have access to precisely the same information that I, as a blogger, have.

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Benefit myth busting

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Addendum 2:

National’s response to unemployment is the introduction of “reforms” to social welfare legislation,

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Social Development Minister Paula Bennett yesterday introduced the second round of reform legislation.

The Social Security (Benefit Categories and Work Focus) Amendment Bill replaces the current benefits with three new categories: Jobseeker Support, Sole Parent Support and the Supported Living Payment.

It also includes provisions allowing payments to be cut if beneficiaries fail a drug test, have an outstanding arrest warrant, or if parents who do not meet “social obligations” for getting their children into health and education programmes.

See: Bennett expects welfare reform to save $1.6b

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As Bennett admitted on TVNZ’s Q+A, on 29 April 2012,

There’s not a job for everyone that would want one right now, or else we wouldn’t have the unemployment figures that we do. “

See:  TVNZ  Q+A: Transcript of Paula Bennett interview

The question that begs to be asked: how many new jobs will this create?

Addendum 3:

So what did happen to National Food In Schools programme, that it launched with such fanfare in February 2007?

Not surprisingly, Key’s attitude seems to have gone through a Reverse Road to Damascus Experience,

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Key in poverty 'la la land'

Full story

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Govt guarded on free school meals

Full story

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But then, going from Opposition to Government will do that to politicians.

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Social Welfare Safety Net

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Johnny’s Report Card – National Standards Assessment – Growth

9 January 2013 5 comments

To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.

The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.

Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc)  in 2008 and four years in office to make good on it’s election promises.

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Growth

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Recent history:

In the past, whenever National (or the right wing “Labour-ACT” government of the 1980s) came to power, the result was never very good,

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Decline in economic activity

Source: Dunedin Star

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Highest jobless rate in 2 years - 7 May 1998

Source: Otago Daily Times

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Redundancies hit Tranz Rail workers hard - 2 Oct 1998

Source: Otago Daily Times

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Current Account deficit blows out to 10-year high - 28 Jan 1997

Source: Otago Daily Times

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The rhetoric:

The National Party has an economic plan that will build the foundations for a better future.

* We will focus on lifting medium-term economic performance and managing taxpayers’ money effectively.

* We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.

* We will cut taxes, not just in election year, but in a regular programme of ongoing tax cuts.

* We will invest in the infrastructure this country needs for productivity growth.

* We will be more careful with how we spend the cash in the public purse, monitoring not just the quantity but also the quality of government spending.

* We will concentrate on equipping young New Zealanders with the education they need for a 21st century global economy.

* We will reduce the burden of compliance and bureaucracy, and we will say goodbye to the blind ideology that locks the private sector out of too many parts of our economy.

And we will do all of this while improving the public services that Kiwis have a right to expect.  ” – John Key, 29 July 2008

See: 2008: A Fresh Start for New Zealand

Growing the economy is the Government’s number one priority, and science and innovation have a key part to play in that growth.

Indeed, this Government has made science and innovation one of the six cornerstones of its economic growth agenda. We’ve done this because New Zealand needs an economic jolt. Our productivity and economic growth have been sluggish for decades and as a result we have slipped down the OECD’s ranking of national wealth per capita.

Our performance compared to other smaller advanced economies has been uninspiring at best. For example, in 1976 our per capita income was slightly ahead of Australia. It was nearly 20 percent greater than the OECD average.

We are now 20 percent behind the OECD average. Australia, by contrast, is still about 20 percent ahead.

Finland is another example of our relative decline. In 1979 our per capita income lines crossed – New Zealand going down and Finland going up. The Finns are now about 20 percent ahead of us.

So, how do we turn the situation around? ” – John Key, 1 July 2011

See: National Economic Development Forum

Present  reality:

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Declining traffic bad for the economy

Full story

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Unemployment up to 7.3pc - a 13 year high

Full story

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KiwiRail under fire over job cuts

Full story

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Current account gap narrows as trade balance shrinks

Full story

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Two things would be fair to say,

    1. National inherited an economy with low unemployment and net government debt at an all time low of 5.6% of New Zealand’s GDP, net. (Far from being fiscally profligate as National claims, Labour actually behaved more responsibly than National has done, as the information below clearly illustrates.)
    2. The Global Financial Crisis was not an event of National’s making. (Though the ideology of corporate greed, profiteering, and minimal government oversight which contributed to the Crisis is most certainly one that National shares.)

As Treasury data shows, New Zealand’s net government debt situation worsened from 2008 to June of 2012,

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NZ Government net debt 2008 - 2012

Source: Treasury – Financial Statemement of the Government of New Zealand

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NZ Government net debt 2008 - 2012 table 16

Source: IBID

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Table 16 above opened with a net government debt of 5.6% – left by the outgoing Labour government.

It closed with 25% net government debt – a fourfold increase – courtesy of National’s “prudent fiscal management”.

As the Treasury document explained,

Net debt increases as a result of cash deficits and
declines as a result of cash surpluses. It also
fluctuates in line with valuation movements in the
underlying financial assets and liabilities of the Crown
and movements in the amounts of currency issued to
New Zealand banks.

Net debt increased this year, continuing the steady
increase since the global financial crisis (figure 11).
Net debt increased from last year primarily due to
additional borrowings over the year to meet the
residual cash deficit (refer table 17).

Source: IBID

In other words, National took in lower revenue – taxes – which  inevitably resulted in increased borrowings; slashing of State services and funding; increasing user pays for other state services;  mass redundancies of state sector workers, and impending partial state asset sales.

The Treasury document goes on to show how much revenue was lost between 2008 and 2012,

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NZ Government tax revenue 2008 - 2012

Source: IBID

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A recent NZ Herald report has updated Treasury’s expections. The tax-take, GDP growth, and unemployment outlooks are not good,

A weaker economic outlook over the next four years has taken a bite of nearly $8 billion out of the Government’s forecast tax revenues for that period.

Nevertheless the Treasury is still forecasting a return to surplus, though only just, on schedule by 2015.

The forecasts in yesterday’s half-year economic and fiscal update are in line with the latest consensus forecasts, which means they are significantly weaker than in the Budget.

The growth track is lower by around 0.5 percentage points a year.

It reflects downwards revisions to expected growth among New Zealand’s trading partners, and a kiwi dollar expected to remain around present levels until the first half of 2014, so that net exports subtract from growth for the next couple of years.

Unemployment has been revised higher; it is 7.3 per cent now and still expected to be 5.6 per cent by March 2016.

See: Outlook slashes tax-take by $8b

The forecast rate of tepid growth is on top of low to negative growth in the last four years,

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NZ GDP growth rate 2000 - 2012

Source: tradingeconomics.com

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So what caused the drop in government tax revenue? And why did the lower tax revenue impact on higher unemployment and lower domestic growth?

The answer, in part, is not hard to uncover, and the following reports tell the story of how National undermined (sabotaged?) our nation’s government accounts.

First, we were offered The Bribe,

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National's 2005 tax cut plans still credible - Key

Full story

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Then we got the warning signs,

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Treasury to Rescue Fannie and Freddie

Full story

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Russia Halts Trading After 17% Share Price Fall

Full story

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Lehman folds with record $613 billion debt

Full story

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We were not exempt from the looming storm that was the coming Global Financial Crisis ,

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Recession confirmed - GDP fall

Full story

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National’s response?

The prudent step to take would have been to cancel the tax cuts as simply unaffordable.  (Labour’s Phil Goff generously promised to support National had it taken such a prudent measure. See: Labour would support deferral of tax cuts)

As a nation, we  would then maintain social services (education, housing, healthcare, justice system, early childhood education, superannuation, etc)  – or cut taxes. We could not have both. Not without even further massive borrowings from overseas.

National’s decision to persevere with their taxcuts beggered belief for those who understood the seriousness of the GFC and the recession we had fallen into,

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Key - $30b deficit won't stop Nats tax cuts

Full story

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The consequences of  National’s irresponsible cutting of taxation revenue was utterly predictable,

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Govt borrowing $380m a week

Full story

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Govt's 2010 tax cuts 'costing $2 billion and counting'

Full story

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Writing for the NZ Herald, Brian Fallow put the cost of taxcuts at $8 billion. (See:  Outlook slashes tax-take by $8b)

Only a fool (or devoted National supporter – the two are not mutually exclusive) could believe that we could give away billions in tax cuts without resorting to massive borrowings to cover the shortfall.

The result was a government deficit rising fourfold from 2008 to 2012, as the above Treasury stats clearly show.

National then desperately needed to balance the books. It scrimped and scrapped by cutting the state sector; raising taxes (gst, fuel tax, ACC levies, government charges, etc) elsewhere; closing tax exemptions for property investors; and cutting back on services (see: Student allowances a thing of the past for post-graduate students ).

Even paper delivery kids were not exempt from the grasp of this Scrooge-like ‘government’. See:  Budget 2012: ‘Paper boy tax’ on small earnings stuns Labour)

It also desperately needed to proceed with it’s state asset sales.

A cynic with a conspiratorial ‘bent’ might suspect that National deliberately manufactured it’s own debt crisis so that it could justify the partial privatisation of Meridian, Genesis, Might River Power, Solid Energy, and Air New Zealand, to it’s corporate/investor/aspirationist constituent-base.

In doing so, not only was the door left open for their privatisation agenda – but the side-effects of tax cuts left National with few options and manouvering room for job creation policies.

With net government debt quadrupling in four years from $10.2 billion (2008)  to $50.6 billion (2012), and taxation revenue falling from $56.7 billion (2008) to  $55 billion (2012), their hands were seemingly “tied”.

Compounding matters,    National cut back state services and  fired thousands of state sector workers, resulting in a further drop in  expenditure, all of which  impacted harshly on the economy.

Whether Free Marketeers like it or not, the state is the #1 business generator in our economy and society. When it cuts spending, the flow-on effects on  other, down-stream businesses, is inescapable.

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Govt austerity slows growth, keeps rates low - RBNZ

Full story

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With higher income earners either saving their tax cuts or paying down debt, tax cuts failed to “fire” the economy as Little Leader said in 2009 and Dear Leader adamantly predicted in  2010,

By taking firm, early and decisive action, the Government is managing the downturn to cushion the immediate impact on New Zealanders and to enhance future growth.” – Bill English, 28 May 2009

See: Budget 2009 – House goes into urgency

We’ve cut all personal income tax rates, GST has increased to 15%, and we’ve boosted NZ Super, Working For Families, and benefit payments by 2.02% to compensate for the rise in GST.

Today’s changes are just one part of our comprehensive plan to grow the economy, create jobs, boost incomes, and raise living standards for all New Zealanders. The tax package improves incentives to work, and tilts the economy towards savings, investment, and exports.” – John Key, 1 Oct 2010

See: Tax cuts today

In May 2010, Key had even used the migration issue as justification to cut taxes for higher income earners, professionals, and others in top brackets,

We can be envious about these things but without those people in our economy all the rest of us will either have less people paying tax or fundamentally less services that they provide.

They include doctors, entrepreneurs often, scientists, engineers, lawyers, accountants, school principals and nurses.

On Thursday you will see a deliberate attempt to make sure those people stay and put their skills to work here in our economy.” – John Key, 18 May 2010

See:  Key again defends tax cuts

BS. All of it is, BS.

None of it worked, of course. The economy not only failed to grow – it  stagnated or contracted (see:  Economic recovery stagnates – NZIER). And despite two tax  cuts, migration to Australia skyrocketed – ten thousand higher than under the previous Labour government’s last four years.  (see related blogpost:  Johnny’s Report Card – National Standards Assessment y/e 2012: migration)

Up until 2011, two of our most important  industries – manufacturing and construction – contracted, at a time when the Christchurch re-build should have been growing their turn-over and profitability. The downturn in manufacturing and construction had a flow-on effect on the  Wholesale Trade sector,

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New Zealand in Profile_2012_economy

Source: New Zealand in Profile: 2012 – Economy

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Other measures of the economy show no sign of improvement,

Bank profits back over $3 billion while economy stagnates (24 April 2012)

then “good news”,

Pickup in economic growth predicted (29 Aug 2012)

followed two months later by bad news,

Businesses gloomy about economic growth (9 Oct 2012)

Current Account Deficit Widens (19 Sept 2012)

 Trade deficit widens as dairy values fall (27 Nov 2012)

Terms of trade continue to drop (4 Dec 2012)

Govt deficit up as tax take dips (5 Dec 2012)

Deficit $169m wider than predictions (6 Dec 2012)

Growth forecast cut, debt seen higher (18 Dec 2012)

Current account gap narrows as trade balance shrinks (19 Dec 2012)

Outlook slashes tax-take by $8b (19 Dec2012)

Whichever way one looks at it, it’s a mess.

And it’s simply a bad joke for Key to reassure us,

While I think we have to acknowledge that the last three years have been pretty tough with the Global Financial Crisis, on a relative basisNew Zealand’s been doing a better than a lot of other countries.” – John Key, 17 Nov 2011

See: Key and Goff Q&A: Creating jobs

Trying to suggest that we  are nowhere as bad off as other nations such as the US, Spain,  Greece, etc – so our current stagnating economy is somehow  acceptable – is sheer rubbish.

One might as well justify National’s poor performance and reckless decision-making by stating we are better off than Zimbabwe, Haiti, or Bangladesh,

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catching-up-with-bangladesh

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We should not be “worse off” than those nations – we headed into the Global Financial Crisis with relatively good economic indicators!

There is Always An Alternative!

A responsible government would have abandoned any prospect of taxcuts and prepared policies to keep people in work; off the unemployment queues;  paying taxes; and contributing to the economy.

Policies such as,

With Option #3, National appears to have missed the obvious.

Injecting several billion into a crash-programme to build ten thousand homes for New Zealanders, who are currently struggling to buy their own houses, makes sense.

The Christchurch re-build has proven this to be the case, as the NZ Herald reported on 20 December 2012,

The economy grew at an annual pace of 2.5 per cent, and was 2 per cent higher than the same quarter a year earlier. Revisions to previous quarters showed New Zealand dipped back into recession in the second half of 2010, with two 0.3 per cent contractions in each quarter.

 The New Zealand dollar dropped to 83.33 US cents after the figures were released, from 83.60 cents immediately before.

Construction kept the economy ticking over with a 4.5 per cent expansion, contributing 0.2 of percentage point to overall GDP. Electricity, gas, water and waste services grew 4.4 per cent in the quarter, contributing 0.1 of a percentage point in growth to GDP, underpinned by an increase in hydroelectric generation.

“Residential and non-residential building activities were both up strongly this quarter, and both were boosted by Canterbury,” Statistics NZ said in its report. “The upper North Island also contributed to the growth in residential building activity.”

The Canterbury rebuild, which is expected to top $30 billion, is widely seen as the saving grace for an economy that has struggled to recover from its deepest recession in two decades, and has been getting some help from a resurgent property market in Auckland in recent months.

See: Economy grows 0.2pc – saved by construction

Statistics NZ national accounts manager Rachael Milicich didn’t split hairs. She bluntly stated,

 “The growth in the latest quarter was driven by construction.”

See: Economic activity up 0.2 percent

As for the tax cuts stimulating the economy with extra spending – you can forget that pipedream. According to Statistics NZ,

Household consumption expenditure, which measures the volume of spending by New Zealand households, was flat this quarter (0.0 percent).

See: IBID

National not only bought the 2008 election with promises of unsustainable, unaffordable tax cuts – Key, English, Joyce, et al, squandered an opportunity to keep 70,000 New Zealanders in paid employment (see: Employment graph, 2008-2012).

It was all so unnecessary.

Addendum

In March 2008, the then Finance Minister, Michael Cullen said,

Even before these challenges hit home John Key wants to increase our debt to at least 25 per cent of GDP. But he does not pretend he wants to borrow more to pay for more services and he does not really believe he needs to borrow more to pay for roads. He only wants to outspend Labour on tax cuts.”

See: [Labour]Government will not borrow for tax cuts

According to Treasury, the current net government debt as at 30 June 2012  stands at… 24.8% of GDP – just shy of 25%,

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NZ Government net debt 2008 - 2012 - Cullen's prediction

Source: Treasury – Financial Statemement of the Government of New Zealand

Cullen called it 100%.

It’s a shame that 1,053,398 voters couldn’t look past their own selfishness, and the lure of cash dangled before them, by a Party that was hell-bent on it’s own agenda to win power at any cost.

For New Zealand, that cost measured $50 billion and 175,000 unemployed.

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Report_Card_growth

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Johnny’s Report Card – National Standards Assessment y/e 2012: employment/unemployment

9 January 2013 4 comments

To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.

The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.

Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc)  in 2008 and four years in office to make good on it’s election promises.

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 Employment/Unemployment

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The rhetoric:

We agree with you, it’s the government’s responsibility to do everything within it’s powers to try to get people jobs.” – John Key,  17 November 2011

Source

The driving goal of my Government is to build a more competitive and internationally-focused economy with less debt, more jobs and higher incomes.” – John Key, 21 December 2011

Source

It’s true, ultimately if every one was to get off welfare we’d need to create even more jobs, but that’s the Government’s whole agenda is to have a vibrant economy that does produce jobs. I  certainly accept there’s not a job for every single person, but I don’t accept there aren’t some jobs out there.” -  John Key, 28 February 2012

Source

The reality:

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New Zealand Unemployment Rate

Source:  Tradingeconomics – Unemployment rate

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New Zealand Unemployed Persons

Source:  Tradingeconomics – Unemployed persons

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The response:

Unemployment has increased by 70,000 people since National took office in 2008.

The Global Financial Crisis, as a rationale, has worn thin and should be dismissed for what it is;  a shoddy excuse that should no longer be accepted.

The lowest unemployment, as any National politician will happily confirm is in Christchurch,

In Canterbury, in the year to September 2012, the unemployment rate decreased 0.3 percentage points to 5.2 percent. For women the decrease was 0.8 percentage points, down to 5.9 percent. There was a slight increase in the unemployment rate for men (0.1 percentage points), up to 4.6 percent.

The number of people employed rose 8,800 over the year in Canterbury, with 11,600 more people employed in part-time work (up 17.9 percent). There was a 2,800 decrease in the number of people working full time (down 1.2 percent).

The total increase in employment reflected a statistically significant 9,000 rise in the professional scientific, technical services, administrative, and support services industry group. Most of this rise was from the professional, scientific, and technical services industries.

The number of men and women employed in Canterbury both increased. For women the rise in employment was mostly in the professional, scientific, technical services, administrative, and support services industry group. For men the rise in employment was in that industry group, but also in the construction industry.

Source

Which poses the question: if the reconstruction of Christchurch is creating jobs – why has National not engaged in a similar house-building programme throughout the country?

If the reconstruction programme has resulted in increased employment in Christchurch – why not implement the very same solution nationwide, to generate jobs?

The answer, unfortunately, lies in ideological pig-headedness; National does not accept that the State has a role in job creation,

Nothing creates jobs and boosts incomes better than business growth. For New Zealand to build a more productive and competitive economy, we need more innovative companies out there selling their products on the world stage.” – John Key,  24 August 2012

Source

Unfortunately (for us, as a nation and society), this laissez faire, market-based  approach, has  failed to deliver the jobs we desperately need. In fact, the “free market” has simply opted for the cheaper, easy-option,

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Foreigners flood in for Chch rebuild

Full story

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Not exactly a stunning result for National’s promise last year to create 170,000 new jobs.

Addendum:

Will Statistics NZ  include the 719 foreign workers as part of any job growth stats for the next Quarter?

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Report_Card_employment

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John Key’s track record on raising wages – 6. Youth Rates

11 November 2012 6 comments

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Continued from: John Key’s track record on raising wages – 5. The Minimum Wage

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6. Youth Rates

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When Labour was elected into government in 1999, replacing the highly unpopular Shipley-led National administration, one of their first actions was to radically reform the  Youth Rate,

  1. From 2001 to 2008 the adult minimum wage applied to employees aged 18 years and over. Prior to that, the adult minimum wage only applied to those aged 20 years and over.
  2. From 1 April 2008, the adult minimum wage applies to employees aged 16 years and over, who are not new entrants or trainees.
  3. The youth minimum wage applied to employees aged 16 and 17 years. From 1 April 2008, the youth minimum wage was replaced with a minimum wage for new entrants, which applies to some employees aged 16 or 17 years.
  4. The training minimum wage was introduced in June 2003.

See: Dept of Labour – Previous minimum wage rates

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Source

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It did not appear to unduly impact on unemployment, which consistantly tracked downward in the 2000s, until the down-turn caused by the Global Financial Crisis began to impact on our economy, in 2007/08.

On 9 October, Labour Minister Kate Wilkinson announced that National intended to introduce a new Youth Rate, to take effect in April, next year. The rate would be set at $10.80 an hour – compared to the minimum rate of $13.50 an hour currently, and would include 16 to 19 year olds.

As Scoop.co.nz reported,

That equates to $10.80 an hour, or $432 before tax for a 40-hour week. From April next year, the ‘Starting Out Wage’ will apply to 16- and 17-year-olds in the first six months of a job, to 18- and 19-year-olds entering the workforce after spending more than six months on a benefit, or 16 to 19-year-olds in a recognised industry training course.”

See: NZ teens face $10.80 an hour youth wage rate

It is doubtful if National’s Youth Rate will actually create new jobs. More likely, a drop in youth wages will simply create more ‘churn’ in employment/unemployment numbers.

As David Lowe, Employment Services Manager for the Employers and Manufacturers Association, inadvertently revealed,

Without an incentive an employer with a choice between an experienced worker and an inexperienced worker will choose experience every time.”

See: Starting-out wage will help young people onto job ladder

So there’s no new job for the  younger worker – s/he is merely displacing an older worker. Which probably results in  older workers joining the migration to Australia.

End result; a loss of skill and experience for New Zealand, and a gain for our Aussie cuzzies.

Nice one, Mr Key. Remind us when you took on the role of staff recruiter for Australia?

On top of this, we have this bizarre rationale from Kim Campbell, CEO of the Employers and Manufacturers Association, who is arguing that young people should be paid less because they have less to pay for. I kid you not.

She said,

Remember these people are not raising a family or running a household on this money –nobody expects them to – but it does give them some money to get started on.”

Campbell’s remark are offensive on several levels.

Firstly, National’s intention to return to  Youth Rates for 18 and 19 year olds, as well as 16 and 17 year olds, is simply unreasonable. These people are  young adults, and those studying  at  polytech and  University Students will soon be earning less,  even while having to pay Student fees; course-costs; and living expenses like rent, food, power, and other financial committments.

Secondly, 18 and 19 year old are as able to have families as their older counterparts.

Thirdly, by what logic is it of  Ms Campbell’s business  that “these people are not raising a family or running a household on this money“?! It’s none of her damned business what 18 and 19 year olds spend their wages on.

Conversely, does that mean Ms Campbell will encourage companies to pay a higher,  living wage,to those workers who do happen to have families?!

Yeah, right.

If  National has a secret agenda to motivate more young people to head overseas, such a plan will succeed beyond their wildest dreams.

18 and 19 years olds – old enough to get married; old enough to get drunk; old enough to get killed in a warzone – but not old enough to be paid the same adult rate as a 20 year old?

National should take note;  it’s true that 16 and 17 year olds can’t vote.

But 18 and 19 year olds can – and do. I bet they just can’t wait to vote at the next election.

And precisely how does this raise wages, as per Dear Leader’s promises?

Next chapter: 7. Part 6A – stripped away

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Addendum

In June last year  Prime Minister John Key said the prospect of a new youth rate was unlikely,

“I don’t think there’s a high probability. Whether we’d actually bother embarking on that it’s far too early to say.”

Source: Govt reintroduces youth wage

Ten months and one election later, preparations are under way to legislate.

Is ten months “to early to say“?

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National in trouble? Time to dog-whistle the Middle Class!

6 September 2012 11 comments

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National is in deep trouble.

Very deep trouble.

A clusterf**k of bad stories; low growth; a growing flood of New Zealanders escaping to Australia; rising unemployment; an unpopular asset sales agenda that has  turned into an unholy  mess; and a recent slew of massive job redundancies has left National sinking in the polls.

See previous blogpost: John Key’s “Bright New Future”

The last Roy Morgan poll had the Nats at 44.5% -  now polling lower than it did last November, where it won  47.31% of the vote.

See recent blogpost: Latest Roy Morgan Poll shows change of government

At this current rate of dropping public support, National’s electoral defeat in 2014 (if not earlier), will be more like a rout than a close-result.  We may be looking at a repeat of the 2002 general election where National’s support collapsed, leaving a rump-vote of 20.93%.

See: New Zealand general election, 2002

A result  of that magnitude would mean 32 National MPs losing their seats.

If this blogger is aware of this simple fact, then you can bet your cotton socks that National’s party strategists are on over-drive.

National’s response, every time, is to employ deflection. The above image – “National:  Spin The Wheel Policy Development Process” – is not so much a funny picture as an actual strategy process.

During the last spate of bad headlines, National floated “kites” on sterilising beneficiaries and “encouraging”  solo-mums (but never solo-dads) and their daughters (but never their sons) on to contraception. (The unspoken inference being that all solo-mothers – but never solo-dads – are reckless “breeders”, and ignoring problems surrounding domestic violence, substance abuse, gambling addiction, marital affairs, etc.)

More recently  recently, the last dog-whistle was drug-testing the unemployed. (The inference being that all 164,000 unemployment are jobless by choice; on drugs; and unwilling to work.)

Never mind the ongoing Global Financial Crisis recession – that excuse is reserved solely for John Key and his ministerial cronies to use,

We did inherit a pretty bad situation with the global financial crisis..” – John Key

See:  View from the top

In the midst of a very deep global downturn we expect volatility and low growth, as we are seeing around the world economies.” – Steven Joyce

See: Parliamentary Questions and Answers – August 29

However, the government deferred the increase due to the challenging economic circumstances New Zealand was experiencing as it continued to recover from the global financial crisis and the Canterbury earthquakes.” – Gerry Brownlee

See: Petrol excise, road user charges increases

The global economic situation is like a dark cloud on the horizon and it’s not going to go away possibly for a generation – certainly for 15 or 20 years.” – Bill English

See: English warns of financial crisis lasting a generation

With low polling and redundancies dominating the headlines, National has cast about for another dog-whistle to distract the easily-led Middle class.

They’ve done the unemployed and solo-mums (but never solo dads) “to death”.

Next minority on the List; Maori.

Cue: John Key’s derisory response to the upcoming nationwide  hui on water rights,

The Government does not believe there should be a national hui; does not believe there should be a national settlement and it probably would not recognise all of the rights and interests that some Maori groups believe they have.

If the Crown was to be represented at the hui, and it wont be, because we’ve said were not having a national hui, we don’t support that…if you are an MP in the government you represent the Crown and any representation by my MPs at such an event would be interpreted as representation by the Crown.

I’ve made that position absolutely crystal clear..I do not accept the view that there needs to be a national hui, because I do not accept there will be a national settlement, because I do not accept it’s a national issue.”

See: Key – Government won’t go to water hui

Maori-bashing.

Almost as good as bene-bashing.

Or “get tough on crime/crush cars” rhetoric.

“Standing tough” with Maori “demands” for water rights will probably work a treat with racist rednecks and low-information voters.  With the former, their racism is deeply ingrained and such ignorance can be written of like the forty-plus financial companies that sucked billions out of mums and dads investors.

With the latter, it is a matter of education and dispelling myths and prejudice, before people’s  eyes eventually open and they connect-the-dots.

National will probably rebound in the polls on this strategy.

So unfortunately, Greens co-leader, Russell Norman is missing the point when he suggests that National has “blundered again” by deciding to boycott the Hui,

For the Government to say that it won’t even attend and will actually ban its MPs from attending is the exact antithesis of good faith negotiation and is yet another blunder from this Government.”

See: MP ban on attending water hui ‘another blunder’

There is no “blunder” involved here. This is naked, machiavellian politicking by National’s back-room boys.

Realistically, though,  they can only use this kind of demonisation and deflection  a few times before the public start to realise that they are being “played”. People wise up pretty quickly – especialy when Opposition Parties, political commentators, media, and bloggers patiently explain what the Nats are up to.

Too much Maori bashing  may even force the Maori Party to make some hard decisions. Do Sharples and Turia really want to be associated with a right wing party that vilifies Maori aspirations and exploits our society’s latent racist underbelly for their own ends?

Especially when a growing perception that Sharples and Turia seem  slavishly tied to National. Are they also  obedient to Dear Leader John Key’s diktat that all National MPs stay away from the upcoming nationwide Hui?

Maori Party Co-leader Tariana Turia stated categorically,

“Well at this point I don’t really see the point in going.”

And Pita Sharples followed,

We believe this is a thing that iwi/hapu have to work out themselves.”

See:  Maori Party likely to snub water rights hui

So whistle-away, Dear Leader.

But eventually,  as Abaham Lincoln pointed out,

You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.”

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Drug Testing the Unemployed – National’s Epic Fail at Job Creation

29 August 2012 31 comments

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This blogger has three questions for John Key and  the National Party,

1. Is is true that Paula Bennett made a correct statement when she  admitted on TVNZ’s Q+A, on   29 April 2012,

No. There’s not a job for everyone that would want one right now, or else we wouldn’t have the unemployment figures that we do. ” – Source

2. If National can claim the Global Financial Crisis as the reason for New Zealand’s low economic growth – why does the same rationale not apply to the unemployed, and if it does, why spend an estimated $14 million on drug testing when joblessness is a result of economic circumstances, and not drug-induced laziness?

3. How is National’s pledge to create 170,000 new jobs – made in November last year – working out? Especially when unemployment recently increased from 6.7% to 6.8%?

A day after National announced it’s intentions to drug-test the unemployed, Solid Energy broke the news that it was planning to make up to 263 of it’s miners, contractors, and other staff, redundandant.  Workers from Huntly East Mine and Spring Creek on the West Coast will lose their jobs.

See: Beneficiary drug testing plans unveiled

See: Spring Creek mine work suspended

This follows on from other redundancies announced just this year alone,

How many of the above redundant workers will Bennett insist be drug-tested?

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But more to the point – is this really a problem? Or, as is likely, is this a shameful attempt by National to deflect attention away from rising unemployment; their failure to manage an economy to generate new jobs; and to deflect blame onto the unemployed?

Because any sane, dispassionate analysis of this problem does not indicate that drug taking is the cause of 162,000 people currently out of work.

See: Unemployment rises: 6.8pc

Especially when in 2007, unemployment stood at 3.4%  – or 77,000 people!

See: Household Labour Force Survey December 2007 quarter

What has changed?

As National ministers  like John Key, Bill English, Gerry Brownlee, et al  like to consistently remind us – when their economic track record is held up for scrutiny – it’s called the “Global Financial Crisis”,

We did inherit a pretty bad situation with the global financial crisis. ” – John Key

See: View from the Top

In the midst of a very deep global downturn we expect volatility and low growth, as we are seeing around the world economies.” – Steven Joyce

See: Parliamentary Questions and Answers – August 29

However, the government deferred the increase due to the challenging economic circumstances New Zealand was experiencing as it continued to recover from the global financial crisis and the Canterbury earthquakes.” – Gerry Brownlee

See: Petrol excise, road user charges increases

The global economic situation is like a dark cloud on the horizon and it’s not going to go away possibly for a generation – certainly for 15 or 20 years.” – Bill English

See: English warns of financial crisis lasting a generation

It’s abundantly clear that National has no reservation in blaming the Global Financial Crisis for the sad state of our economy.  They refer to overseas influences time and time again.

So why does the same economic situation not apply to other economic indicators – like unemployment?

Why try to smear unemployed – who up until recently were in full-time, paid, employment – and brand them as drug-taking, lazy, “bludgers”?

Why did Bennett make this statement,

Recreational drug use is simply not an acceptable excuse for avoiding available work. Thousands of working New Zealanders are in jobs requiring they be clean of drugs; it’s reasonable to expect someone looking for work to do the same.”

See: Beneficiary drug testing plans unveiled

Bennett is implying that someone looking for work must be on drugs? Why?

The answer, I submit to the reader, is that National is playing to it’s audience of middle class, low-information voters; right wing extremists; and the plain crazy nutjobs. These are the target demographics for the Nats.

Because any sane person will look at the above list of redundancies from the likes of Brightwater Engineering, Telecom, Ministry of Foreign Affairs, etc,  – and wonder – WTF?! Why is National spending $14 million of my tax dollars on drug-testing redundant engineers, telecommunication workers, diplomats, etc?!

Because it plays to an audience of predominantly middle class (and quite a segment of the working class), who find it all to easy to believe the cliched  stereotypes  that depict  All Welfare Beneficiaries Are There By Choice. Internet fora are full of uninformed, prejudiced, and outright  crazy ‘trolls’ who revel in their distorted view of those on welfare, or low-paying jobs.

Never mind that four years ago we had half the unemployment we do now.

Do those ignorant fools believe that unemployed are out of work by choice, having given up their average wage/salary of $800 to $900 per week, so they could live in luxury on $204.96 (net, weekly unemployed benefit)?

See: WINZ Unemployment Benefit (current)

Drug testing the unemployed has nothing to do with any perceived problem with drug abuse.

This is a carefully constructed, skillfully diseminated, lie.

National is spending $14 million on a problem that does not exist.

National is desperate to turn public attention away from,

  1. Increasing unemployment
  2. Increasing poverty levels
  3. More and more New Zealanders heading overseas
  4. A stagnating economy
  5. National’s lack of traction in creating the 170,000 new jobs they pledged last year

Middle Class voters are being targetted by National’s tax-payer funded spin doctors and political strategists. Their agenda is clear and simple;

  • Brand  the unemployed as “lazy” and “on drugs”.
  • So it can’t be a failure on the part of National to create the 170,000 new jobs they promised us.

See: Budget 2011: Govt predicts 170,000 new jobs

Above all else, National’s nasty little strategy is an admission of failure on their part. They have failed utterly to,

  • grow the economy
  • create jobs
  • raise wages
  • stem the flow of skilled New Zealanders to Australia

Because clearly, if a government was building an economy that was generating more and more jobs, then what would be the need to create a bogeyman of lazy, drugged unemployed?

Especially when Labour presided over a growing economy with low unemployment,

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There was no talk of “lazy/drugged unemployed”  in 2007.

No Global Financial Crisis either.

Truly, National has hit rock bottom with this vile strategy. How long, one wonders, before the middle classes out in Voterland realise that they are being conned by some very cunning politicians and their back-room strategists?

A question for the Middle Classes;

We live in uncertain times. Any one of us are only one step away from being unemployed ourselves. How  would you feel being branded a possible drug-user by the likes of Paula Bennett and John Key?

Not too happy I’d suspect?

And one final question for the Prime Minister,

Where are the jobs?

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Previous related blogpost

Jobs, jobs, everywhere – but not a one for me? (Part Toru)

What’s up with the Nats? (Part rua)

Related Information

Employment-Unemployment Fact Sheet #1: Queues for Vacancies

Other blogs

Tumeke: What the real aim of drug testing beneficiaries is

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Asset Sales: two down, three to go!

22 August 2012 21 comments

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Oh dear, National seems to be in a spot of bother over it’s planned partial privatisation of  five SOEs…

Earth, Air…

One state owned enterprise, Solid Energy, appears now to be off the sales list. According to Finance Minister Bill English,

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Full story

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On top of that, there appears to be a real questionmark over the sale-value of Air New Zealand, as well, according to outgoing chief executive Rob Fyfe,

However, outgoing chief executive Rob Fyfe has said he would be “surprised if the Government would be wanting to sell” at the current low share price.

The company was in the midst of a “cyclical low” on its share price, Fyfe said in June.”

See: ibid

Fyfe is correct.

A look at Air New Zealand’s recent and longer term share price history shows that it has been badly affected by the Global Financial Crisis (GFC).

In 2007, Air New Zealand’s share price stood at $2.47 a share,

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Source: Google Finance – Air New Zealand Ltd

At the end of trading (22 Aug), today, that share price stood at 92.5 cents each. That’s a loss of  $1.545 per share,

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Source: Google Finance – Air New Zealand Ltd

In fact, the share price dropped from 94.5 cents a share yesterday (21 Aug) to it’s current level of 92 cents.

Looked at another way; it’s like having your home valued at $247,000 in 2007, prior to the onset of the GFC – and having it valued at only $92,500 today.

Not a good environment to be a seller.

NOTE: It is interesting that, of all the SOEs, Air New Zealand is the only one that has a small, privately-owned component. The state owns 73.13% of Air New Zealand, other investors own 26.87%.

See: Air New Zealand – Shares on Issue

This situation is a ‘quirk’ of Air New Zealand’s re-nationalisation in October 2001, when it faced collapse under a massive $NZ1.425 billion operating loss incurred by then-private owners.

See: Wikipedia – Air New Zealand, Re-nationalised era

So it’s current share value is a relatively true reflection of it’s present market-value.  There is no “guesswork” involved, as Bill English revealed in February this year, with the other four SOEs,

See: English admits his SOE figures just a guess

Helluva way to run an economy…

Most sane people wouldn’t sell at such a ridiculously low price and would wait for the market to recover.

However, despite misguided belief, National’s commercial nous is vastly over-rated. In fact, some of their commercial decisions have been absolutely apalling.

The most famous being that these assets – especially the power companies – actually return a higher dividend to government than would be the cost of borrowing that same money. As BERL reported in May,

Partial asset sales will do nothing to curb New Zealand’s growing debt problem, a new report by economic analysts Berl says.

The Berl report, commissioned by the Green Party and released today, says the Government’s partial asset sales programme to build new assets would leave the Crown accounts ”permanently worse off”.

Government debt, the ratio of debt to assets, net worth and total assets would all be worse off after the programme was carried out, Berl found.

”The interim loss of earnings resulting from reduced dividends and the period of time before the new assets reap benefits is never recouped,” the report said.

”Subsequently, the option of asset sales can only significantly improve the Government’s accounts if a set of assumptions are adopted that are at the extreme ends of plausibility“.”

See: Asset sales will leave Govt worse off – BERL

Madness.

The up-shot?  Unless the global economy stages a miraculous recovery in the next two years (about as likely as The Second Coming or Klingons camping out in my backyard),  and National ministers are dumber than I thought, Solid Energy and Air New Zealand can be scratched from the privatisation agenda.

Added to this, is a brewing toxic mess involving commercial interests and  Treaty claims over water rights…

Water…

At the beginning of August, Key realised that the partial-sale of SOEs was not going to go smoothly.  Until now,  state owned power companies were exploiting water resources for the benefit of the nation as a whole.

Maori were content with that status quo; for as long as no one owned the power companies – they were owned by us all – the same could be said of water.

But the moment that private ownership of  hydro-power generation was mooted – the situation changed. Water would be used to generate power, which would be sold, and would deliver profits to private owners.

Saying that “no one owns the water” that hydro-power stations use is akin to saying no one owns the coal or gas that are used in coal-powered and gas-powered stations.  Ridiculous.

The Waitangi Tribunal will shortly be delivering it’s response to Maori Council claims over water rights.

Most likely, the Tribunal will find in favour of Maori. This blogger can conceive of no reason why this should not happen, and just as land can be owned – so can water rights.

It’s a bit late-in-the-day for capitalist National voters and politicians to now be claiming socialist principles of  “collective ownership”. That just ain’t gonna wash, Jethro.

If National over-rules the Tribunal findings, then Maori will go to Court – the High Court to be precise. Of all Pakeha institutions, Maori have a great affinity for the legal system. They know how to use it for greatest advantage.

Going to Court will have one result; a lengthy delay in the asset sales programme.

On 22 August, National admitted what the rest of us already knew,

The Government says it is going to have to start making judgments about how much of its partial asset sales programme can be completed in this term of office…

[abridged]… Finance Minister Bill English says the Government also has to deal with other issues, such as the Waitangi Tribunal report on water rights relating to the partial sale of Mighty River Power, and possible legal action.

Mr English says he is not taking it for granted that the Government will be able to complete the full programme this term. “

See: Govt less bullish about partial asset sales

Fire…

And as if that was not enough to put a spoke in the wheels, two corporate interests have recently made announcements that could have a significant impact on share prices for the remaining three SOEs; Mighty  River Power, Meridian, and Genesis.

Norske Skog Tasman

Norske Skog Tasman’s plan to halve newsprint production at its Kawerau mill will have implications for the power generation industry if it goes through with it, says an industry analyst.

The company, which accounts for about 2.9 per cent of New Zealand’s power demand, is looking at cutting its annual production to 150,000 tonnes from 300,000 tonnes because of dwindling domestic and offshore sales.

The analyst, who requested anonymity, said the partial closure would further extend the “significant” generation over-capacity in the New Zealand electricity market.

A 50 per cent reduction in Norske Skog Tasman’s electricity demand would equate to about one year of demand growth estimated in Ministry of Economic Development forecasts. “

See: Paper mill cuts threat for power industry

By coincidence, Norske Skog buys most of its power from Mighty River Power, which is the first SOE that National  plans to partially privatise.

Any potential “mum and dad” investors may be warned off from investing in MRP shares. If  Norske Skog proceed with their plans, power consumption will decrease dramatically – and so will profits.  Which will mean a cut in dividends paid to shareholders.

Tiwai Aluminium Smelter

Perhaps the ‘nastiest’ surprise for National and it’s Dear Leader was this announcement on 11 August from multi-national conglomerate, Rio Tinto,

Meridian Energy’s announcement that it had been approached by New Zealand’s biggest power user, Rio Tinto, to discuss potential changes to its supply contract has created uncertainty for the Government’s plans to partly privatise the three power generators, analysts said.

State-owned South Island power generator Meridian said it had been approached by Pacific Aluminium, a business unit of Rio Tinto, the majority shareholder of New Zealand Aluminium Smelters (NZAS), to discuss potential changes to the electricity contract with the smelter.

The statement comes a time when Rio Tinto is assessing its options for the NZAS smelter at Tiwai Pt.

Tiwai takes about 15 per cent of New Zealand’s electricity, so the prospect of changes to the contract between Meridian and Rio was enough to send Contact Energy’s share price down 20c to $4.80 on Thursday.

Few in the financial markets expect Tiwai Pt to close, but if it did, much more power would be added to the national grid, depressing prices and affecting the profitability of all the power generators. “

Rio Tinto’s announcement immediatly  sliced 20 cents off  Contact Energy’s share price. What will it do to the three state owned power companies?

It’s hardly surprising, really. Everyone else appears to be putting their hand out, or up, to gain benefit from the asset sales – why not multi-national corporations who are already parked here in our country?

The Herald report goes on to say,

Morningstar analyst Nachi Moghe said there was ongoing concern about the feasibility of Tiwai Pt and the possibility that it might eventually shut down.

“Obviously, if that happens it will hurt everyone, but it will hurt Meridian the most,” he said.”That additional supply will throw the supply-demand balance out of kilter.”

One fund manager said the news was a “bolt from the blue”.

In the contract negotiations, he said, the pressure could go on Meridian to reduce its price, or to reduce the volume of power it supplies, which would have an impact on the wholesale electricity market.

“It’s poor timing but great timing on behalf of Rio Tinto as we go into the mixed ownership model process,” said the fund manager, who did not want to be identified.”

See: Smelter power review ‘bolt from blue’ for asset sales

Rio Tinto appears to be exploiting current uncertainties and confusion in  the current  environment.  As pressure mounts on National from every direction, this appears to be an opportune moment for corporations to start  flexing their own muscles.

Just what the Nats needed – their own corporate allies to shaft them at the worst possible moment.

Capitalism. Ya gotta laugh.

Weather

And the most critical factor to impact on the electricity generation industry: the weather.

This is something that even the “invisible hand” of the free market is utterly powerless to influence. Meridian’s profits have already been affected,

The worst inflows into its hydro lakes for 79 years took a toll on Meridian Energy’s earnings in the year to June 2012.

The state-owned generator and electricity retailer yesterday reported a net profit after tax of $74.6 million, down from $303.1 million the year before.”

See:  Dry year helps knock 28%  off Meridian profit

At this point, Dear Leader John Key might be starting to wonder. With all these ‘forces’ ranged against his Party’s plans to flog off our state assets – perhaps the Fates are trying to tell him something?

What next?

This blogger is surprised that China and Australia – both nations with which we have Free Trade Agreements – have not put their hands up to line up and buy shares.

After all, that is what FTAs are about. Legally, we might not be able to stop them.

Will we be hearing from our Chinese and Aussie cuzzies next?

Watch this space.

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Additional

Tiwai Pt threat could delay Mighty River sale

Energy float may turn into a s(t)inker

Other blogs

No where to go on Maori water rights

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What’s up with the Nats? (Part rua)

20 August 2012 12 comments

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Continued from: What’s up with the Nats? (Part tahi)

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If there’s somethin’ strange in your neighborhood

Who ya gonna call?

Natbusters!

If it’s somethin’ weird an it won’t look good

Who ya gonna call?

Natbusters!

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Intro

Ever since the National Party conference at the end of July, the National Party has been strutting the political stage like a bunch of patched gang-members, strutting about the main street of some small town in the back-blocks.

Key, Bennett, Joyce, Collins, Parata, Banks – even lowly backbenchers like Maggie Barry – have been obnoxiously aggressive in policy announcements and dealing with the media and critics.

The Nats have been unrelentingly in our faces ever since John Key uttered the threat,

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Full story

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This is not just about confidence.

This is something new. This is about a new, hyped-up, aggressive style of taking criticisms and failings, and turning it back on the critic.

Steven Joyce was on-style on TV3′s “The Nation” (19 August), when he belittled and badgered two journalists (John Hartevelt and Alex Tarrant)  who asked him pointedly about National’s short-comings. Joyce’s response was typical Muldoon-style pugnacity.

This interview with Joyce is charachteristic of how National Ministers have been belligerent in their responses.  It is singularly  instructive,

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Full story

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Interestingly, Joyce has a “go” at Labour; then the Greens; and even Hone Harawira throughout the course of the interview.  He even blames the global financial crisis and throws that in the face of Alex Tarrant, as he responds to a point.

Everyone gets a dose of blame – except the one party that is currently in power. So much for National’s creed that we should all take personal responsibility for our actions.

It appears that  National’s back-room Party strategists have been analysing the first few months of this year and have realised that when things go horribly wrong, or the latest string of economic indicators reveal more bad news, the relevant Minister(s) responds  with  aggression and with defiance.

If the old say “explaining-is-losing” is a truism, then any explanation offered automatically puts a Minister on the back-foot.

The best way out of such a sticky moment; take a page out of Rob Muldoon’s book, ‘How To Win Friends/Enemies and Influence the Media‘.

And National’s Ministers have been playing this ‘new’ game perfectly…

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Paula Bennett

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Of all National ministers, Bennett’s  behaviour has become  most  irrational,  offensive,  and just downright bizarre.

Not content with “offering” sterilisation to  solo-mums (but never solo-dads)  and their daughters, her views on poverty are so breathtakingly, woefully ignorant that this blogger has come to the conclusion that her tax-payer funded tertiary education was a complete waste of time and money.

See:  Hypocrisy – thy name be National

Bennett’s latest weird comments raised eyebrows and and a few hackles,

Get in the real world.

One week they can be in poverty, then their parent can get a job or increase their income and they are no longer in poverty … This is the real world, and actually children move in and out of poverty at times on a weekly basis.”

See:  Bennett slammed over child poverty claim

Bennet then lashed out, saying she “wasn’t interested in measuring child poverty“, and instead her government was more focused on addressing the problems,

Of course there is poverty in New Zealand. This has been acknowledged by the Government but it’s not a priority to have another measure on it.”

See: scoop.co.nz – Combating poverty more important than measuring it

How can National “combat poverty” if they are not aware of the scale of it? How can a government budget appropriately, without knowing the numbers involved?

Are they just going to guess?

Which then brings us to the issue of Bennett’s instance that the unemployed be drug-tested,

There is certainly a line between recreational use and addiction and that is challenging in itself and it’s something we’ll have to work through.

“At the end of the day you’ve potentially got thousands of New Zealanders who are unable to work because of recreational use and this paper also identifies that as a real problem, so we need to keep working our way through a solution“.”

See: Bennett ignored advice from Health Ministry – Logie

Again, the question needs to be asked – how many unemployed are on drugs?

Is it 99%?

Is it 50%?

Is it 10%?

Is it 2%?

Is it 0.00001%?

We need to know this, because National may be about to throw $14 million of our tax dollars at this “problem”,

The plan to cut benefits for job seekers who fail drug tests has been met with criticism by the Ministry of Health, saying it could cost up to $14 million a year.

[abridged]

Ms Bennett told Radio New Zealand she would not reconsider sanctioning only drug users based on the Ministry of Health’s concerns and said she was going ahead with the policy.”

See: Bennett ignored advice from Health Ministry – Logie

Bennett’s response?

I just don’t feel that we need to trawl through evidence and give that much kind of evidence to something that is just so obvious.

And added, that she was acting on information from,

“…the visits, from face to face meetings, I don’t know, from some of the international research I’ve seen.”

See: Paula Bennett so sure she’s right

Never let facts get in the way of some damned good prejudice, eh, Ms Bennett?

National’s intention to throw millions of our tax dollars at a problem that may or may not exist, and has not been quantified, beggars belief. It also makes a hollow mockery of John Key’s 2008 pledge to spend our money wisely,

We will be more careful with how we spend the cash in the public purse, monitoring not just the quantity but also the quality of government spending.”

See:  John Key – A Fresh Start for New Zealand

National was in opposition when Dear Leader made that pledge. Things change, I guess, when a Party becomes government and has access to our taxes.

The ‘bullishness’ of a cornered National Minister is clearly coming through on this issue.

So if Paula Bennett is ignoring Health Ministry advice,

  1. Where is she getting her advice and data from?
  2. Does she know the number of unemployed who are using recreational drugs?
  3. How much has National budgetted for this programme?
  4. If National has budgetted for drug testing – they must have an idea how many unemployed will be affected?
  5. In which case, we’re back to #1; Where is she getting her advice and data from?

Would Bennett know, for example, how  many of these recently-made redundant workers are on drugs;

See previous blogpost: Jobs, jobs, everywhere – but not a one for me? (Part Toru)

The answer, my friends, is not blown in the wind – it’s blown out her —- !

Let’s dispense with  the bovine excrement and stop the tip-toeing on this issue.

National was elected in 2008 on a pledge to raise our wages to parity with Australia.

See: John Key – A Fresh Start for New Zealand

Not only have they failed, but our wage-gap with our Aussie cuzzies is actually widening.

See: Wage gap grows $1 a month – Labour

National was elected in 2011 on a pledge to create 170,000 new jobs.

See: Budget 2011: Govt predicts 170,000 new jobs

Instead, our unemployment has risen to 6.8%.

See:  Unemployment rises: 6.8pc

In almost every respect, National’s policies – which are heavily reliant on the free market to deliver desired outcomes like growth and jobs – have failed.

John Key is presiding over,

  • a stagnant economy
  • rising unemployment
  • a low wage economy
  • wide gap with Australia
  • rising government debt
  • more New Zealanders escaping to Australia
  • and no plans to fix this mess except cuts to the state sector, asset sales, charter schools, crushing cars, and “reforming” the welfare system

That’s it. The “Grand Plan”. That’s as good as it get’s folks.

With more and more redundancies (see above) and  unemployment continuing to creep upward, Bennett’s plans to drug test the jobless is a deflection – an attempt to blame the victims of National’s (lack of) policies.

Drug testing the unemployed  is a ploy.

The unemployed are victims of the global financial crisis. Just  as National likes to make out that that it’s economic policies are also impacted by the recent GFC and resultant recession. It’s obscene that National uses the GFC as an excuse for their failings – and yet deny the unemployed the very same rationale for having lost their jobs.

By demanding drug testing, Bennett is sending a clear message to National’s redneck constituency, and to low information voters, that all unemployed are drug-addled, lazy,  ne’er-do-wells.

Because as we all know, being on the dole on $204.96 (nett, weekly) is a “lifestyle choice”, rather than working and earning the average wage; $800.

National has no idea how many unemployed are on drugs.

But they are still prepared to waste millions of dollars on pursuing a policy of drug testing.

All because they have failed to create the jobs they promised.

All because they need a scapegoat to show their dim-witted constituents that it’s the welfare beneficiaries at fault.

The Nazis used the scapegoating technique well well in the 1930s, when they blamed Jews, communists, gypsies, trade unionists, etc, for Germany’s economic problems.

National’s strategy here should be crystal-clear to us all; they are dangling the unemployed as scapegoats to the ill-informed; the prejudiced; and  low-information voters, for whom unemployment is a vague concept; the Global Financial Crisis happened “somewhere else“; and the dole is some unimaginably generous payment.

Very few low-information voters understand that the dole for a single person is only $204.96 (nett, weekly).

Very few National supporters understand that unemployment was 3.7% in 2007 and is now 6.8% because of an event that was sparked thousands of kilometres away in Wall St, USA.

And very few low-information and National voters want to understand this. Because to understand the realities of unemployment means that the next step is; what are they going to do about it?!

Like, this gentleman, posting on Facebook, who had no interest in anything except spouting his own narrow, ill-informed,  prejudice. I thought I’d share his “considered opinion” with the reader,

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These are the people that Paula Bennett, and National, are pandering to.

Prejudice is easier.

It means they can blame someone else.

It means not having to think about the issues involved.

Because it’s always someone elses’ fault.

Like Steven Joyce, who blamed Labour, the Greens, and Hone Harawira on TV3′s ‘The Nation‘, on 19 August. It’s always “someone elses’ fault”.

Unfortunately for Bennett, though, her  repugnant behaviour has become so entrenched that she is unable to behave appropriately even to her own colleagues,

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Source

Listen: Listen to more on Checkpoint

The more that National fails to deliver results, the more they will blame others.

Why should National take responsibility for a lack of jobs and rising unemployment? After all…

… they’re only the government.

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Continued at: What’s up with the Nats? (Part toru: John Banks)

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National – what else can possibly go wrong?!

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A contributor to The Standard blog, ‘Jenny’, made a very simple – but insightful post, detailing National’s track record in the last three and a half years,

This is a government determined to gift everything they could possibly wish to the rich and powerful, and on behalf of this greedy sector force onto the rest of New Zealanders.

More Pokies

More drilling

More fracking

More booze

More junk food

A fire sale of public assets

More pollution

More corruption

More scandal

Less sovereignity

Less civil liberty

More toadying to foreign powers

More toadying to foreign corporates

More spying snooping and videoing of New Zealand citizens

More bail-outs

More tax cuts

More job cuts

More benefit cuts

Have they actually done anything worthwhile or positive?

See:  Katherine Rich on the Health Promotion Board: The next outrageous piece of Nat cronyism

Jenny posits the question, “Have they actually done anything worthwhile or positive?

Try as one might, despite inane rhetoric and vague promises, no National Party MP, functionary, or groupie could possibly point to any success achieved by John Key and his colleagues.

Not . One.

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1.Economic Growth

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National’s “Master Plan” for economic growth and job creation seems to revolve around four events – none of which have been particularly successful,

  1. The rebuild of Christchurch. Despite being an opportunity to upskill 160,000 unemployed and a major boost to the economy – nothing much is happening. Instead, National is content to allow tradespeople from overseas to come into the country and carry out  the work. With few apprenticeships, we are woefully unprepared for the looming demand for tradespeople – a damning lack of planning by National and it’s naive reliance on the “free market” to provide skilled workers.
  2. The Rugby World Cup – far from being a major boost, seems to have contributed very little to our economy. In the last three months of 2011, GDP grew  just 0.3% – half  that  predicted by economists. It seems that Dr Sam Richardson’s prediction, that $700  million was a hopelessly unrealistic expectation proved to be unerringly correct.  Who is ultimately responsible for National throwing $200-plus million of our tax dollars at this exercise in outrageous extravagance? Murray McCully? Steven Joyce? John Key?
  3. The Sky City/Convention Centre deal. Our illustrious Dear Leader promised 1,800 jobs from this planned project, in return for re-writing gambling legislation and permitting Sky City to increase pokie machine and gaming tables by up to 500. Potential social fall-out surrounding increased problem gambling was casually dismissed by both John Key and Sky City’s CEO Nigel Morrison.    Unfortunately, as with most of John Key’s figures and promises, the expectation of 1,800 jobs was as fictitious as much of what he says.
  4. Asset sales. With weak growth; a stagnant economyhigh unemployment; and New Zealanders continuing to escape to Australia, National’s one (and only) trump card appears to be the partial-privatisation of five state owned corporations. As has been pointed out, ad infinitum, floating shares in these SOEs will not contribute to economic growth; nor create new jobs (in fact,  it is likely to result in redunancies, if past privatisations are any guide); nor create real wealth. It simply shuffles bits of paper (shares) around from investor-to-investor-to-investor. And if investors need to borrow to buy these shares, we are using overseas funds for speculative purposes. Which sounds suspiciously like our love-affair with speculative housing-”investments”.

As Business NZ has stated, our economic growth has been ‘unspectacular’. And that’s coming from one of National’s own business allies. (Just as Business NZ seemed somewhat unimpressed as National’s lack of planning and direction last year, just prior to the election.)

Otherwise, National’s Grand Plan can be summed up as a reliance on a “two pronged” approach to growing the economy; a hands-off “free market” approach, and tax cuts. Not only have neither worked terribly well, but these measures have been counter-productive.

Tax-cuts  gave massive increases in income to the richest 10% of New Zealanders – whilst the GST increase has made life harder for the poorest and lowest-paid in this country.

Right wing cheer-leaders who bleat on about their rich masters “working hard and deserving  increased wealth” may be aspirationists who one day hope to become one of the Master Class – but I hope they’re not holding their breath. That day will be a long time coming.

Tax cuts have also resulted in a government budget blow-out. Borrowing $380 million a week, whilst claiming that National is “not borrowing for tax cuts is credible only to National; their salivating sycophants; and low-information voters (for whom “The GC” is the height of documentary-making).

Tax cuts have also not delivered the promised boost to the economy by increasing spending and consumption. This is not surprising, as the tax cuts were given to the wrong sector of society.

High income, wealthy, asset-rich families tend to use their tax-cuts to reduce debt or spend on investments (shares, kiwisaver,  etc) that do not directly help small businesses.

Low income, poor, families spend everything. These are the the people who will buy more food to put on their tables; clothes; shoes; medication; and other consumables. These are the people that small businesses rely on on for their custom. And the retail supermarket sector is suffering a massive drop accordingly.

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Middle income families continue to stuggle not to fall behind. Any tax increase they may have gained has been swallowed up by increased gst, government charges, increased user-pays, etc.

I think most people have since ‘twigged’ that National has indeed borrowed for tax cuts. And we’re having to pay back those massive borrowings by  cutting services; slashing the state sector; and selling our state assets.

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2. Asset Sales

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National’s asset sales programme has been an unmitigated disaster from Day One.

Since National first announced their decision to partially privatise Meridian, Genesis, Mighty River Power, Solid Energy, and Air New Zealand, this issue has been opposed by the public.

National has used it’s so-called “mandate” from last year’s election to proceed with their policy, and passed enabling legislation only last Tuesday (26 June).

Any notion of a “mandate” is shaky and open to interpretation.

Whilst the National-ACT-Peter Dunne Coalition has 61 seats, and Labour, NZ First, Greens, Mana, and Maori Party have 60 seats – the number of Party votes cast tells a different story.

National , ACT, United Future Party Votes Labour, Greens, NZ First, Maori Party, Mana, and Conservative Party votes

National – 1,058,636

Labour – 614,937

ACT – 23,889

Greens – 247,372

United Future – 13,443

NZ First – 147,544

Maori Party – 31,982

Mana – 24,168

Conservative Party* – 59,237

TOTAL – 1,095,968

Total – 1,125,240

The irony of the Conservative Party gaining more Party Votes than ACT and United Future combined – yet winning no  seats in Parliament  – will not escape most fair-minded people. Adding the Conservative’s 59,237 party votes to the anti-asset sale bloc, yields a majority of voters opposed to National’s programme.

It is only the current rules of MMP (now under review) that allows this quirk to take place.

Add to that, opinion poll after opinion poll showing  60% to 80% of respondents  opposed to asset sales, and National’s mantra that “We have a Mandate” becomes patently untenable.

A recent  NZ Herald poll, where respondents were asked to leave a comment, as well as a “Yay” or “Nay” vote yielded results that were thoroughly predictable,

For: 151

Against: 552

The National Party understands this only too well. Hence their desperate, ad hoc  schemes to bribe the public with all manner of ‘sweeteners’,

  • giving first option to buy shares  to “mum and dad” investors
  • a bribe of “loyalty” shares
  • promise of “affordable” shares  for investors

There is a considerable degree of arrogance in National’s pursuing of their asset sales, despite considerable public anger.

On 26 October last year,  Dear Leader  said,

They don’t fully understand what we’re doing. My experience is when I take audiences through it, like I did just before, no-one actually put up their hand and asked a question. “

On 3 May, as a 5,000 person march wound it’s way through Wellington, John Key grinned to reporters and cheekily said,

How many people did they have?  Where was it? Nope wasn’t aware of it. So look, a few thousand people walking down the streets of Wellington isn’t going to change my mind. “

And on 26 June, Key tried to dismiss TV3 journalist John Campbell with this demeaning insult,

No, um, and with the greatest respect to your financial literacy, you’ve proven that you don’t actually have any. “

Key said pretty much the same about Greens co-leader, Russel Norman,

With the greatest respect to [Green Party co-leader Russel Norman], I’m sure he’s a great bloke, he doesn’t know much about economics. “

It is fairly obvious that Key has very little time for anyone who opposes his views. In fact, he gets downright belligerent and  derisive.

Who does he remind me of? Someone else who used to belittle and deride anyone who dared disagree with him – especially in economic matters. Who else was famous for his arrogance? Another Prime Minister,

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Despite public opposition and several valid commercial reasons made clear that these sales will be financially disadvantageous to our economy, National carries on, oblivious to all but it’s own ideological fanaticism.

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This is a Party totally out of touch with the rest of the country.

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3. Welfare

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In 2008, the GFC (Global Financial Crisis) hit the world with a social and economic recession not seen since the 1920s/30s. Coporations like Lehmann Bros collapsed. General Motors filed for bankruptcy protection. Others had to be bailed out with billions of taxpayers’ dollars. Millions lost their jobs and homes, and unemployment skyrocketed. Europe is tottering on the brink of a domino-like collapse of their currency.

Here in New Zealand, unemployment doubled from 3.4% by the end of 2007, to 7.3% by the end of 2009.

When criticism is levelled at National’s inability to address our stagnating economy, John Key and Bill English point to the GFC, stating it’s not their fault,

We did inherit a pretty bad situation with the global financial crisis.” – Source

This is a global debt crisis and you certainly wouldn’t want to add more debt at that time unnecessarily.” – Source

The economic downturn that may occur on a pronounced basis in Europe is factored into our books.” – Source

But when it comes to those who are the casualties of the economic downturn; the unemployed, National suddenly sings a different tune when it comes to Cause-and-Effect,

The Government is considering requiring beneficiaries to immunise their children.” – Source

Social Development Minister Paula Bennett yesterday said contraception would eventually be fully funded for female beneficiaries and their 16 to 19-year-old daughters. ” – Source

Prime Minister John Key says beneficiaries who resort to food banks do so out of their own “poor choices” rather than because they cannot afford food.” – Source

Under the Government’s new youth welfare policy, announced by Prime Minister John Key at the weekend, 16- and 17-year-old beneficiaries would receive a payment card for food and clothes from approved stores.” – Source

And perhaps – worst of all – was  this piece of vileness from Finance Minister, Bill English,

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[click on image to go to TV3 website]

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English’s smirking disdain, for all those New Zealanders who have lost their jobs due to the global financial crisis, was plain to see.  Shame on him; his revolting attitude; and shame on every person in his electorate who voted for this arrogant little man.

The National Creed

1. The  Global Financial Crisis – a handy excuse for poor economic policies and mismanagement.

2. The Unemployed – a handy scapegoat for National’s inability to grow the economy and create new jobs.

3. If in doubt, never take responsibilty; refer to #1 and #2.

Latest redundancies;

Will drug testing be used to  “sort this lot out smartly”, Mr English?

And more bizarre is Paula Bennet’s admission that National “has ruled out universal drug testing of all beneficiaries, with drug and alcohol addicts being exempted from sanctions for refusing or failing a drug test when applying for a job“.

See:  Addicts escape beneficiary drug testing

Which means that if addicts and alcoholics are not tested – that leaves only those  workers who’ve been unfortunate enough to lose their jobs through New Zealand’s ongoing stagnating economy.

Adding insult to injury doesn’t begin to cover the humiliation which National intends to thrust upon workers who’ve lost their jobs.

And all because National has no job creation policies.

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4. Sky City/Convention Centre

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This is perhaps one of John Key’s shonkiest deals. It is no wonder that the Auditor General is investigating the Sky City “arrangement” – so I have little faith that the investigation will yield much that is incriminating of Dear Leader.

As Key stated with utter confidence, on TV3′s ‘The Nation‘ on 17 June,

KEY: The involvement I had, as Minister of Tourism was to go and talk to a number of critical players, and as part of a general conversation say to them, “Hey, look, New Zealand’s interested in building a convention centre. Did that with Sky City. I did that with people out at ASB Centre The Edge. I did that with Ngati Whatua. That’s not unusual.  I mean, and to argue that that would be unusual would be to say, well, look I have discussions with people in Whangarei about building a museum there. And I have discussions  with people in Auckland about building  a cycleway.

So now what we’re  talking about about is, ok, was there undue influence or was the process correctly handled, that’s what the auditor general  will say.

So let me tell you this, for a start off, ok, in terms of the expression of interest process, my office had absolutely no involvement, no correspondence, [ interuption by Rachel Smalley] no phone calls, absolutely nothing. So when the auditor general  comes in there will be no correspondence, no phone calls, no discussions, zero. “ - Source (@ 6.37)

That statement does not instill confidence in me. Dear Leader has just stated, on record, that no evidence exists of his meeting(s) with Sky City management. Key admitted meeting with Sky City’s Board in late 2009,

I attended a dinner with the Sky City board 4 November 2009 where we discussed a possible national convention centre and they raised issues relating to the Gambling Act 2003“. – Source

But what was said or agreed on, we don’t know. As Key has stated, “when the auditor general  comes in there will be no correspondence, no phone calls, no discussions, zero”.

This is not a very good  example of transparency. It is certainly not the “transparency in government”  that Key has promised this country on several occassions.

In fact, it’s dodgy as hell.

See:  Doing ‘the business’ with John Key – Here’s How

In the same  blogpost ( Doing ‘the business’ with John Key – Here’s How )  dated 23 April, this blogger outlined John Key’s somewhat dubious tactics for pushing through dubious policies,

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Promise Big Numbers.  It doesn’t matter if the numbers never eventuate because they were fictitious to start with. By the time the media and public realise the true facts, the issue will be all but forgotten. A week may be a long time in politics – but a year positively guarantees  collective amnesia for 99% of the public.

From December, 2010,

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Cycleway jobs fall short

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6:00 AM Wednesday Dec 8, 2010

The national cycleway has so far generated just 215 jobs – well short of Prime Minister John Key’s expectation of 4000.

In May, Mr Key said he expected the $50 million project, which involves building 18 cycleways throughout the country, to generate 4000 jobs.”Source

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Who can remember the initial cycleway project and the promise of 4,000 new jobs?

Precisely.

From March, this year,

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Key defends casino pokie machine deal

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08:23 Mon Mar 5 2012 – AAP

Opposition parties are accusing the government of selling legislation through an agreement that will see Auckland’s Sky City build a $350 million convention centre in return for more pokie machines…

…  But Mr Key says it’s a good deal for New Zealand.

“It produces 1000 jobs to build a convention centre, about 900 jobs to run it… ” Source

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In a year’s time, who will recall the promise of 900 new Convention centre jobs?

Who will care that only a hundred-plus eventuate?

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Well, it didn’t take one year. It took only a matter of  months. On 5 March, John Key asserted,

 “It produces 1000 jobs to build a convention centre, about 900 jobs to run it, and overall the number of pokie machines will be falling although at a slightly lower rate.”

See:  Key defends casino pokie machine deal

But then, on 5 June,  the NZ Herald reported,

Job numbers touted by Prime Minister John Key for a proposed international convention centre at SkyCity are much higher than official estimates.

Mr Key has said a deal allowing SkyCity more gambling facilities in exchange for funding the convention centre would provide 900 construction jobs and work for 800 people at the centre.

But the figures are much higher than those in a feasibility study done for the Government by hospitality and travel specialist analyst Horwath Ltd.

Horwath director Stephen Hamilton said he was concerned over reports the convention centre would employ 800 staff – a fulltime-equivalent total of 500.

He said the feasibility study put the number of people who would be hired at between 318 and 479. “

See:  Puzzle of Key’s extra casino jobs

Sprung! Another of Dear Leader’s “little white lies” uncovered.

Next ‘cast iron guarantee’ from Dear Leader, who said on his website,

SkyCity has agreed to pay the full construction costs of the centre – estimated at $350 million. The company has asked the Government to consider some alterations to gambling regulations and legislation.”

See:  John Key -Convention centre development moves ahead

Yeah, I’ll bet that Sky City has “asked the Government to consider some alterations to gambling regulations and legislation“…

In business, it’s called a ‘contra-deal‘.

But it’s seems that even this deal is not as “free” for tax-payers as Key has made out. In fact, it has been uncovered that  taxpayers are definitely ‘stumping up’ some of their hard-earned cash,

Budget documents reveal that if the plan goes ahead, taxpayers will contribute up to $2.1 million to ensure its design and facilities meet Government expectations...  The Prime Minister, however, is defending the budget allocation of millions of dollars towards a potential Sky City convention centre.

John Key says he has always said his preferred position is that no taxpayer money would be spent – and that if it does go ahead, it will have economic spinoffs. “

See:  Govt misleading public over Sky City: Labour

So… Key has (once again) mis-led the public, and his stock-standard explanation is that “if it does go ahead, it will have economic spinoffs .”

John Key  claims that “a new convention centre would bring 144,000 additional nights of Auckland stays for business tourists, who generally spent twice as much as other tourists“.

See:  Casinos safer than pubs, Key says

But as Bob McCoskrie, National Director of Family First NZ, said somewhat more convincingly,

Tourists come to see the country and the culture – not the casinos. If tourists were really focused on gambling, they would be going to Las Vegas – not the Sky City casino venue in Auckland.

See:  Tourists Come to See Country & Culture – Not Casinos

What’s the bet that the forecast for “economic spinoffs” will be as accurate as National’s predictions for spin-offs from the Rugby World Cup or national cycleway?!

See:  Weather and World Cup fail to lift GDP

See:  Current account deficit widens to $2.7 billion

See:  Growth slows – GDP up just 0.3pc

How many times have we heard Prime Minister John Key make all sorts of promises that this or that will deliver jobs and economic growth – only to see the promise fail. Which is then  usually followed by an excuse relating to the global economic slowdown?

It’s getting rather predictable and tedious.

What Dear Leader has tried to gloss over and  dismiss is the inevitable consequence of increasing pokie machines: more problem gambling. Both John Key and Sky City CEO, Nigel Morrison,  have tried to trivialise this growing social problem,

The incidence of harm cited from Lotto is greater than that from pokie machines in casinos. Getting those facts across is difficult.  We’re not just on about growing our gaming machines.  We would like to grow our table games product and expand our operations to meet the growth of Auckland. “

See:  Casino boss: Lotto does more harm

Gambling addiction in many way is as pernicious – if not worse – than alcohol and drug additions. A compulsive gambler can damage not only his/her own life – but those around them. Houses have been lost; businesses crippled or closed down; families torn apart,  as problem gamblers suck others down into a whirlpool of uncontrollable gambling.

See:  Barred gambler coaxed back to casino

See:  Mum steals $330k from marae to feed pokies

From a Ministry of Health  report,

Overall, the prevalence of problem gambling in New Zealand adults was 0.4% (about 13,100 adults). Additionally, the prevalence of moderate-risk gambling was 1.3% (representing a further 40,900 people). In total, 1 in 58 adults (1.7%, or 54,000 adults) were experiencing either problem or moderate-risk gambling.

Other key findings of this study include:

  1. Maori and Pacific people experience more gambling-related harm than other people
  2. people living in more socioeconomically deprived areas are more affected by gambling-related harm.
  3. this study may help to inform the provision of problem gambling intervention services and public health activity, as the study showed that:
    • problem gamblers can be found in both urban and rural areas
    • Maori and Pacific people appear to be under-represented in intervention services
    • people experiencing gambling problems are more likely than other people to be current smokers, have hazardous drinking patterns, have worse self-rated health, and have a high or very high probability of a mood or anxiety disorder. “

See:  A Focus on Problem Gambling: Results of the 2006/07 New Zealand Health Survey

Interestingly, the above report, using 2006/07 data, and posted online in 2009, is the most recent Ministry of Health report available. Nothing more recent – and perhaps more damning of current gambling policies – is apparent on the Ministry of Health website.

Why is that?

On a more personal level, this blogger is aware of an elderly couple who were both addicted to pokie machines. Badly in debt, they were forced to down-size their family home and buy a smaller, more modest,  property. One of the couple died soon after, leaving the other who continued her gambling habit.

Not only has this elderly woman lost her surplus cash from the house-sale, but has gambled using equity in her current home.  She often ‘borrows’ money from her grown up children.

Her  modest house is deteriorating through lack of maintenance.

Not only has this woman lost all equity in her home, she is now more reliant on  both the State and her family.

Meanwhile, this article on Sky City’s most recent posted profits should be cause for concern,

”  Sky City Entertainment, one of the biggest gambling operators in the country, has seen a significant rise in profits over the course of the last year. The company attributes this growth to the earnings generated by the Sky City Casino in Auckland.

Over the course of 2011, profits for Sky City rose by over $10 million to $78 for the year. The company believes that the changes made to Sky City Auckland are to thank for this impressive profit increase over the course of the past year.

$50 million was spent on renovating the gambling facilities available the casino, but the company still managed to offset the costs with improved profits. In addition to building a new VIP lounge, Sky City also renovated other areas of the casino to make them more attractive to players.

Slots [pokies]  brought in the amount of increased revenue, seeing a rise by 17%. Non-gaming elements also helped to boost profits. Auckland’s recently-revamped hotels and restaurants garnered a great deal of attention from patrons.

It seems that the adage “you have to spend money to make money” is true for Sky City.  “

See:  Sky City Sees Huge Revenue Jump

If the convention centre is National’s only scheme to grow the economy and to create 170,000 new jobs – we are in deep trouble.

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5. TVNZ7

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Nothing best illustrates  National’s narrow vision of the role of government than the demise of TVNZ7. Nothing.

Whether the previous Broadcasting Minister, Jonathan Coleman, or the current Minister, Craig Foss – their attitude has been the same; market forces shall prevail – and public-interest programming shall be the responsibity of NZ On Air, who shall contract such programmes to current commercial broadcasters.

Except that this is a cop-out.

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The beauty of TVNZ7 is that public broadcasting was, in the main, focused on a single broadcasting platform. The public knew where to go to watch certain types of programming.

Just as the public now go to supermarkets to buy their meat, fish, veg & fruit, and bread – instead of going to a butchers; a fish shop; a  fruit & veg produce store; and a bakery. Imagine the uproar if John Key told us we must go to five different food retailers to buy five different sorts of foodstuffs?! Dear Leader would have a size 9 boot imprinted on his backside.

TVNZ7 fulfilled the same public demand; niche programming on a niche broadcaster.

Just as, currently we have racing on the TAB channel; Chinese programming on CTV; parliament on Parliament TV, etc.

Ironic that politicians have no problem broadcasting their “debates” (inverted commas used deliberately), deeming their squabbles and shrill screams a must have - but not public, non-commercial TV.

Or, that we can have non-stop horse racing on a free-to-air TV channel.

But we are not entitled to have access to non-commercial public TV.

Whatever concept National has of public television, it is clear that Broadcasting Minister, Craig Foss’s vision is different to the rest of New Zealand,

“…  the government was ‘committed’ to supporting local content through NZ on Air, instead of directly funding single broadcasters. “

See:  No help for titanically pointless bill

Having public TV through NZ On Air is akin to selling vegetarian/vegan food products in butcher shops. You have to go looking for it. It’s not easy to find. And it’s buried amongst ‘crap’ you’d rather not have to put up with.

And what makes NZ On Air funding of  ‘Media7/Media3‘  “public television” – when it will have advertisements peppered throughout?

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Take out the advertising of underarm deodorants; cat/dog food; toilet ducks; panty shields;  the latest 4WD monstrosity from Korea; promos for the latest US crime/cop shows; reality TV shows; home improvement shows; US sitcoms; and voyeuristic, soft-core porn like “The GC”,  and a 30 minute current affairs programme from TVNZ7 becomes a 20 minute show on TV3.

There goes our chance to focus on critical social issues, as commercial advertisers compete for our attention.

What next? Advertising in Tolstoy’s  “War and Peace”? Shakepeare’s “Macbeth”? Anne Frank’s Diary?

We are being ripped off in more ways than one. We deserve better than this.

But not, it seems, according to National; there is more than an element of vindictiveness in their decision to can TVNZ7. As if it was their opportunity to “stick it to us” after their embarrassing backdowns on mining in conservation schedule four estates; their attempt to cut teacher numbers and increase classroom sizes; and ongoing resistance to state asset sales.

The closure of TVNZ7 is a clue what National thinks of us. And it ain’t very pleasant.

See: Pundit – TVNZ kills ad-free channels to grow profits

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6. Education

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Current cutbacks to state and social services is a re-run of the 1990s. National’s cuts now, mirror those of last century.

Bolger, Richardson, Shipley, and Bill English  ran amok – slashing health, education, police, military, and anything else they could lay their cold, clammy, neo-liberal hands on.

At one stage, in the late 1990s, the health system was so badly run down that   patients requiring critical surgery were not receiving it – and were dying on waiting lists.

See: Died waiting for by pass

See:  Funding cut puts centre in jeopardy

See:  Myers warns few jobs, more poor, ahead for NZ

This year, as part of National’s on-going agenda to cut government services; reduce the size of the State; and to pass on savings  as tax cuts to the rich, National has cut staffing levels; departmental budgets; and services.

The New Zealand middle class tolerates this – until it affects them, personally.

Enter: 24 June – Minister Parata and her plans to slash teacher numbers and increase class sizes.  That was a step too far, and a teacher-parent-principal-Boards alliance fought back. Hard.

Bill English – a bloodied veteran of the Bolger-cum-Shipley administration of the late 1990s -  recognised the signs that a revolt of the middle classes was in the offing.   National’s merciless cuts to social and government services in the ’90s had resulted in an electoral thrashing in the November 1999 elections.

Upshot: 7 July – Government u-turn on cost-cutting policy.

This is now the second major policy u-turn by National. Their previous bloodied-nose, in July 2010, when Gerry Brownlee was forced to announce a back-down on National’s proposals to mine schedule 4 conservation land, was a stunning exercise in people-power.

In my previous blogpost (Why Hekia Parata should not be sacked), I argued that Educational Minister, Hekia Parata should not be forced to step down from her ministerial role. As I pointed out, “sacking Parata for policies that every other Minister has been implementing seems pointless. Especially when National’s essential policy of cutting expenditure and services would remain unchanged”.

However, recent revelations from OIA-released  document have revealed,

The papers for the education budget reveal class size funding ratio changes went even further than what was announced.

Education Minister Hekia Parata originally urged changes that would seen 1300 fewer teachers hired over the next four years than would have happened under the existing funding formula.

That plan to curb growth in teacher numbers would have seen a “a minimal net reduction” in staffing of about 260 after four years.

The Government eventually decided on a less aggressive plan to cap teacher numbers, with almost the same number proposed to be employed in 2016 as now.

That plan to save $174m over four years was agreed and written in to the Budget but Parata was forced in to an embarrassing backdown earlier this month, which cancelled the plan and returned to the status quo.

However Parata’s original plan was to cut $217m. “

See:  Deeper teacher funding cuts ditched

It appears that Ms Parata’s inclination was for even deeper cuts to Education services  than, (a) the public was initially aware of and (b) that her National ministerial colleagues could stomach.

This explains, in part, why Key torpedoed  Parata’s plans to cut education services; he was thoroughly exasperated with an an incompetant  Minister who badly overestimated her abilities and could not “sell” even a watered down version of her plans. He must have been spitting tacks that, had Parata’s initial plans to cut $217 million (instead of $174 million) gone ahead,  she would have found herself in a much deeper hole, and the fallout to National would have been much worse.

This blogger has come to the conclusion that Hekia Parata is way over her head, and should step down as Education Minister forthwith.

At any rate, she will be gone at the next cabinet re-shuffle.

Tea-lady might be a good, safe role for her?

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7. ETS – Another of Key’s broken promises

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John Key is adamant that National will not consider slowly raising the retirement age from 65 to 67, because it is a committment he has promised to keep,

I’ve made it quite clear it would be my intention to resign from parliament if I broke that promise to New Zealanders.”

See:  Govt against raising retirement age

This blogger finds it hard to understand Key’s reticence to “breaking” an election promise. After all, he’s broken promises not to raise GST; to retrieve the bodies of the Pike River miners;  to address growing youth unemployment; stem the flow of migration to Australia; grow the economy; and now, to implement an ETS.

In May 2008, Key stated,

Key outlined a series of principles an ETS should have, including…

… It should be closely aligned with Australia’s ETS.

It should not discriminate against small and medium businesses in allocating emissions credits and purposes. “

See: Nats call for a delay to emission trading scheme law

At the time, Key also stated,

This not about National walking away from an ETS, we support that. . . we just simply want to get it right and we now have the time to get it right.  “

That was four years ago.

Since then Australia has implemented it’s own carbon tax that will lead in to a full ETS by 2015,

The A$23-a-tonne price on carbon emissions started yesterday [1 July 2012] , directly affecting 294 electricity generators and other companies.

The federal Government is aiming to cut carbon emissions by 5 per cent by 2020, with the carbon tax shifting to an emissions trading scheme in 2015. “

See: Protests greet day one of Aussie carbon tax

By contrast, National has been delaying implementing New Zealand’s own version of an ETS, and has now “postponed” it until 2015.

And yet, four years ago, Key stated that New Zealand’s emissions trading scheme should ” be closely aligned with Australia’s ETS  “.

Our Aussie cuzzies have already started their carbon tax/ETS.

With National postponing the ETS for farmers, industrial and commercial polluters, until 2015 – that means that Dear Leader’s “postponement” will have lasted seven years – over two Parliamentary terms.  How long does Key need to ‘get it right’ ?

Ten years?

Two decades?

Perhaps the turn of the 22nd century?

Let’s cut through the BS here. John Key is not “postponing” the ETS – he is postponing it indefinitely. National has no intention of ever implementing it. So much for Key’s statement,

Ours is not a political agenda here, we want a good ETS that works.”

That deserves to be immortalised,

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See also: Tumeke – Blue ignores Red to pretend to be Green while turning to Brown to subsidize big polluters

See also: Tumeke – The Emissions Trading Scam and the audacity of Farmers

The sooner the Nats admit this deception, the better for the entire country. Until then, the only sector paying the ETS is… us, the public.

Which leads on to…

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8. Tax Cuts & Government charges

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In 2009 and 2010, National cut taxes.  The rationale, as National explained in their 2008 document,

In the short term, National’s tax package will give households confidence and some cash in their back pockets to keep the economy going and to pay down debt.

In the longer term, our tax package encourages people to invest in their own skills and make best use of their abilities, because they get to keep more of any higher wages they earn. It encourages them to look for and to take up better and higher-paying jobs that make more use of their skills.

See: National Party  Tax policy

However, what National giveth with one hand; National taketh with the other.

Any benefits from the ’09 and ’10 taxcuts have been more than swallowed up (for low and middle income earners) by increases in a myriad of government and SOE charges.

The most recent have been Family Courts fees, which have risen astronomically.

From July 1 2012, services which used to be free to couples in dispute, now incur considerable court fees,

  • Child custody disputes: $220
  • Property disputes: $700
  • Hearing of any application for each half-day, or part half-day: $906

Of all National’s user-pays regimes, charging couples who are separating; highly stressed; and where violence may be involved, is mind-boggling. We thought it was miserly when National decided to tax children in the last budget – but these user-pays Family Court fees hit people who are vulnerable in the extreme,

But Family Law Specialists director Catriona Doyle says most families try to avoid handing custody and property decisions to a judge and only use the Family Court as a last resort in irresolvable conflicts.

The few people who waste the court’s time by filing repeatedly or unnecessarily won’t be put off by the fees because they’ll either be wealthy enough to afford it or earning little enough to have the fees waived, she says.

“It’s going to hit the middle class and lower income families where $220 is a lot of money.”

Women especially will be hit hard, as they are often financially disadvantaged when a relationship breaks up, Ms Doyle says.

Rather than trying to keep children out of court, the ministry should be aiming to resolve conflicts before children are affected by them, she says.

“Leaving children in a conflict situation where the parents are at war is neglect and abuse. The kids who live in that situation are damaged.”

A judge should be the person to decide if a case is genuine or flippant, especially when children are involved, she says.

“It’s not something that should be addressed by Parliament or a court registrar”.

See:  Family court fees will hurt women – lawyer

Minister of Courts, Chester Borrows, stated plainly,

What we are trying to do here is have a disincentive for people to be able to bring these matters before the court. “

See:   Family Court fees tipped to hit low earners, children

(Note: As a matter of interest, Chester Borrows is the very same Minister who stated he would be buying shares in SOEs, when they were partially-privatised. See:  Conflicts of Interest? )

National complains that  court costs have risen  from $84 million in 2004/2005 to $142m in 2010/2011 – hence Family Court fees must be imposed.

This is faulty logic, and is penalising people who are attempting to sort out damaging relationship breakdowns.  Using Family Courts is preferable to taking the law into one’s own hands. Disincentiving people from using the law – which Parliament put in place to protect us all – is like disincentivising people from calling the Police if you’ve been burgled.

Instead, if we are being “encouraged to resolve issues ourselves”, find the burglar; beat the crap out of him; and retrieve our stolen property ourselves.  That is what Borrows is advocating.

Further using Borrows’ “logic”, National should implement high user-pays charges in public hospitals, as  ” a disincentive for people ” to use hospitals.

It sounds ridiculous? It is ridiculous.

It is also dangerous. Borrows and his idiotic fellow ministers are playing with peoples’ lives. Putting expensive, punitive barriers up at a time when families most need society’s help defies logic, common sense, and most of all, compassion.

But then – when did anyone ever accuse the National Party of being compassionate?

And will the Dear Leader, John Key,  take responsibility if something goes horribly wrong, and an emotionally-stressed family explodes into violence because they had no way out through the Family Court? Like hell he will.

This is a death waiting to happen.

On your miserable head be it, Mr Borrows.

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9. More on those tax cuts

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As an aside, National’s 2008 Tax document makes this derisable claim,

” This makes it absolutely clear that to fund National’s tax package there is no requirement for additional borrowing and there is no requirement to cut public services.

Jeez. No wonder people don’t trust politicians.

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10. Alcohol law reforms

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The latest offerings of irrationality from John Key’s Universe; evidently Dear Leader does not believe that minimum pricing for alcohol would work. He suggests (with a straight face, no doubt) that minimum pricing for booze would not work because it could drive people to drink lower quality liquor instead of reducing consumption,

What typically happens is people move down the quality curve and still get access to alcohol.”

See:   PM sceptical dearer booze will cut consumption

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Mr Key, how do I mock thee? Let me count the ways… (with apologies to Elizabeth Browning)

 How do I mock thee? Let me count the ways.
I ridicule thee to the depth and breadth and height
My soul can reach, when laughing at you hard
For the ends of Banality and Idiotic Government.
I mock thee to the level of every day’s
Most quiet need, by sun and ecobulb-light.
I deride thee freely, as men strive for human rights.
I caricature thee purely, as they turn from praise.
I jeer at thee with the passion put to use
In my old griefs, and with my voter’s faith.
I scorn thee with a scorn I seemed to lose
With my lost saints. I sneer at thee with the breath,
Smiles, tears, of all my life; and, if  The People choose,
I shall but take the piss better after you are voted out.

Why so contemptuous, you ask?

Because raising the price of  tobacco has been the number one tool of both Labour and National governments.

As recently as 12 June, John Key stated on a Fairfax online interview,

The Government is unashamedly trying to deter people from smoking through price, particularly young people who are very sensitive to rising tobacco prices. I know this is difficult for those that have smoked for quite some time, but for your long term health I can only encourage you to try and give up. “

See: Blogpost -  Fairfax; An hour with Dear Leader (@ 12.57)

So high-pricing for tobacco is useful for ” the Government is unashamedly trying to deter people from smoking ” – but not for alcohol?

Raising prices to deter smoking works. But raising prices to deter binge-drinking doesn’t?

It boggles the mind how Dear Leader can hold two conflicting viewpoints, simultaneously, without suffering a brain explosion.

Or is it simply that the liquor industry is a generous donor of funds for National’s election campaigns?

In the meantime, life goes on,

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See:   Ambulance base for Wellington party central

See:   ‘Pressure valve’ medics patch up night’s drunks

See:   BERL Report – Costs of harmful alcohol and other drug use

See:   Drunk kids flooding our hospitals

See previous blogpost: A kronically inept government

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11. Government Cost cutting = Economic suicide

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On 12 May, this blogger posted a piece on National’s slashing of our MAF biosecurity.

In part, I posted this dire warning,

Now, we have the prospect of  having entire suburbs in Auckland being contained in some kind of loose “quarantine”, after a Queensland fruit fly was caught in a pest surveillance trap,

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Considering that the Queensland fruit fly costs the Australian economy approximately  $160 million a year, this is a very real threat  to New Zealand’s own $5 billion annual horticultural industry.

Five billion dollars, per year, every year. All under threat because this government wanted to save a few million bucks by employing fewer biosecurity staff.

As if the discovery of a  painted apple moth in 1999; the varroa mite infestation of our honey hives in 2000; and other isolated instances of pests found in this country did not serve as a warning to us – National  proceeded to cut back on biosecurity staffing.

This blogger wonders sometimes (actually, all the time) what goes through the minds of our esteemed Honourable Ministers of Her Majesty’s Government. These are supposedly well-educated men and women, with support from thousands of University-educated advisors – and yet they still manage to accomplish the most incredibly moronic decisions conceivable.

National has put at risk this country’s  $5 billion industry – simply to save a few million dollars.

They have risked horticulturalist’s businesses; workers their jobs; and all the down-stream economic activity – to save a small percentage of billions.

This blogger has three pieces of advice for all concerned,

  1. John Key must  accept the resignation of  David Carter, Minister for Bio-security immediatly.
  2. National must reinstate biosecurity services to pre-2009 levels.
  3. Horticulturalists (and others who own farms and other agricultural businesses) should carefully consider whether National is working on their behalf – or for the sake of implementing false economies. What is the point of an orchardist voting for National – if National is going to screw his/her business by cutting back on essential government services such as biosecurity?!?!

Hopefully, this  fruit fly is a lone bug; perhaps a stowaway in someone’s bag or in a container offloaded at Ports of Auckland.

If so, once again we’ve been lucky.

But how long will our  luck hold out?

See previous blogpost: Bugs and balls-ups!

It seems our luck ran out some years ago,

The kiwifruit growers’ association is considering legal action over the outbreak of the vine disease PSA and says it can’t rule out seeking compensation.

An independent review released on Wednesday into how the bacterium came into New Zealand has found there were shortcomings with biosecurity systems, but it does not say that caused the entry.

The disease was first confirmed near Te Puke in 2010 and has infected 40% of the country’s kiwifruit orchards. It is expected to cost the industry $410 million dollars in the next five years.

Ministry for Primary Industries director general Wayne McNee asid the review did not determine how PSA came into the country but does show where improvements can be made.

NZ Kiwifruit Growers president Neil Trebilco says he can’t rule out that compensation will be sought by growers.

See:   Kiwifruit growers take legal advice over PSA

A damning report into the outbreak of kiwifruit virus PSA is another in a series of warnings over the biosecurity system that the Government has failed to act on, Labour’s biosecurity spokesman Damien O’Connor says.

The independent report was commissioned by the Ministry for Primary Industries (MPI) following the devastation caused by the virus in the Bay of Plenty orchards with an estimated cost of $400 million.

The report, released yesterday, found “shortcomings” in New Zealand’s biosecurity system although it could not say how the incursion had occurred.

It said MPI could improve protections and must work more closely with industry groups.

The report also suggested resources be moved from low-risk industries to high-risk ones such as the kiwifruit sector.

O’Connor said there needed to be a complete overhaul of the biosecurity system.

The National Government cut biosecurity funding in 2009 and had accepted the growing risk caused by faults in the system, he said.   “

See:  Labour: Govt ignored biosecurity warning

Anyone with two inter-connecting neurons would’ve figured out very quickly that if a government cuts biosecurity then we put ourselves at dire risk of pests entering our country. Like the varroa mite. Or PSA bacterium.

With approximately  550,000 shipping containers and 4.5 million people entering New Zealand each year, it stands to reason that we are at extreme risk of unwanted organisms being brought into the country.

National was warned as far back as 2009, when 60 Biosecurity jobs were “dis-established”.  It therefore defies understanding as to why National believed that cuts could be made to frontline MAF Biosecurity without serious consequences.

Spelling out those consequences,

  1. Millions – even hundreds of millions of dollars of valuable export dollars lost,
  2. Jobs lost,
  3. Businesses ruined,
  4. And not one single government minister taking responsibility.

The only question now remaining to be asked: how many farmers and horticulturalists will vote for National at the next election?

Remember:  you get the government you deserve.

This time, it is farmers and horticulturalists who have been warned.

See:   Risks involved in cutting MAF Biosecurity jobs

See:   Farming at risk if biosecurity jobs cut, PSA warns

See:  Minister warned about biosecurity concerns

See:  Fruit restrictions in place

See:  Biosecurity savings ‘false economy’

See:  Biosecurity NZ webpage

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12. The Terminally Ill

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During the 2008 general election, Prime Minister  John Key adopted the Herceptin campaign.

Pharmac was funding herceptin treatment for women suffering from breast cancer only up to a nine week period.  Breast cancer patients wanted treatment extended to twelve months. Pharmac refused, stating there was no evidence that an extended treatment period would prove beneficial,

Pharmac CEO,  Matthew Brougham, said,

A fresh review of the science and other information has failed to convince us that 12-month treatments offer any additional benefits over the concurrent nine week treatment.”

See:  Nats pledge funding for 12-month Herceptin course

Enter,  John Key. As the 2008 election campaign swung into full force, Key leapt upon the issue,

National recognises that many Kiwis have limited access to modern medicines. We will improve that access.

“We will boost overall funding for medicines and speed up the registration of new medicines, with final approval remaining in New Zealand.

“These initiatives will be funded within the indicative health spending allocations in the Prefu [Pre-election Fiscal and economic Update].

“They are also further examples of our determination to shift spending into frontline services for patients, rather than backroom costs.”

See:  Key says Nats would fund 12-month Herceptin treatment

The election promise was one of many that Key made (along with tax cuts and the perennial “getting tough on crime), and on 10 December 2008, the Prime Minister-elect announced,

I am proud to lead a government that has honoured such a commitment to the women of New Zealand.

“The commitment was part of National’s first 100-days action plan.  I am pleased that the Herceptin funding policy effectively applies from the swearing in of the Government on 19 November.”

See:  Government honours Herceptin promise

Unfortunately, John Key’s belief that ” National recognises that many Kiwis have limited access to modern medicines. We will improve that access. We will boost overall funding for medicines and speed up the registration of new medicines, with final approval remaining in New Zealand -  seems only to apply during election campaigns.

At other times, Key  does not seem to want to know.

Allyson Lock is one of five New Zealanders who suffers from Pompe Disease. It is a terminal condition.

There is medication available (called Myozyme ), but it currently receives no funding from Pharmac agency Pharmac.  It is an expensive drug, but without that medication, Allyson and her fellow sufferers will not survive.

See: Mum not prepared to wait and die

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Frank Macskasy Frankly Speaking Blog Pompe

IN SEARCH OF CURE: Allyson Lock will travel to Brisbane every fortnight for five years to receive treatment for the rare incurable disease Pompe.

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Allyson and her group have appealed to John Key for funding for their medication – without success. In fact, Key wants nothing to do with Allyson and other Pompe sufferers.

At a recent “on-line  chat” with John Key, hosted by Fairfax Media, several people including this blogger attempted to put a question to the Prime Minister; why was National not prepared to fund medicine for Pompe as they had for breast cancer sufferers?

See previous blogpost:   Fairfax; An hour with Dear Leader

After all, Pharmac had expressed the same reservations regarding the efficacy of  Myozyme as they did with long-term  herceptin treatment. Yet, that did not stop Key from ensuring breast cancer sufferers had full access to a year-long course of herceptin.

John Key and Health Minister Tony Ryall have wiped their hands of Allyson.

It is not election year.

So there are no political points to be scored in saving the lives of five fellow New Zealanders.

I look forward to John Key proving me wrong; a link to this blogpost will be sent to media as will as the Prime Minister’s office. The rest is in his hands.

To Prime Minister, John Key;

Fund treatment for Allyson and others, Mr Key. They deserve no less than breast cancer sufferers. You can either oversee funding for their treatment – or attend their funerals.

Your call, Mr Prime Minister.

See previous blogpost:   Priorities?

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Related blogpost

The wheels are coming off, and there’s a funny ‘plink-plink’ sound

A John, a Tony, and a Winston

Additional

David Cunliffe:  Speech – The Dolphin and the Dole Queue

Gordon Campbell:  Efficiency Is Not Your Friend

Acknowledgement

Thanks to ‘S’  for proof-reading.

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= fs =

Excuses, Excuses….Key is full of them!

19 June 2012 3 comments

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John Key has finally admitted what the rest of us already suspected;  National will not be returning to surplus in 2014-15.

See:  Key not sure of surplus goals

The economy is simply not generating enough taxable activity; incomes are low; and not enough jobs are being created.

It’s as simple as that.

In part, this is due to ongoing overseas economic problems in Europe, and the USA’s mind-numbing US$14 trillion dollar debt.

But most of our poor performance can be sheeted home to National’s own policies; cutting expenditure; not implementing job creation programmes; and unaffordable tax cuts in 2009 and 2010. Taken together, these are a toxic mix of free market “medicine” that is making the “patient” very sick, before we see any signs of improvement.

Last night (18 June), with one simple statement, Key admitted the blindingly obvious,

I’m now a little less confident of reaching a surplus.”

Well, der!!

It’s not like National’s past performance has given us reason for confidence in their economic planning and predictions!

See: Jobs, jobs, everywhere – but not a one for me? (Part Rua)

But perhaps the most derisable aspect of Key’s admission was when he added this comment,

In terms of what that means for New Zealand it doesn’t really change anything. The European debt crisis remains the biggest threat to the New Zealand economy by some margin. I’m a little less confident because of Europe in general but let’s see how things play out over the next three to six months

See:  PM: Euro crisis may delay surplus target date

Is John Key claiming that the crisis in Europe and the collapse of the Greek economy wasn’t evident only three and a half weeks ago, when Bill English released the 2012 Budget? And when all manner of predictions were made?

See:  Budget 2012: The main points

The Greek melt-down has been happening since 2008, when the global financial crisis began the collapse of that house of cards. It did not start yesterday.

So why is Key only now referring to Greece? And why is he using Greece as an excuse for National’s 2014/15 objective, to return to surplus, falling apart?

Because that objective was never tenable in the first place.

Like John Key’s constant  big job promises (170,000 new jobs; Sky City’s convention centre 1,800 new jobs, etc),  Budget 2012 was predicated on high economic growth (3%) which simply was never credible. It was a propaganda exercise.

National is simply using the Greek Crisis as an excuse for National’s own poor fiscal management.

Just as National has used the global financial crisis to excuse  New Zealand’s ongoing high unemployment; then welfare beneficiaries for their predicament;  and before that, blamed the previous Labour government for our stagnant economy.

See:  John Key, Statement to Parliament 2011,  8 February, 2011

See: Bill English, Parliamentary Questions And Answers – 30 July 2009

Now it’s the Greek’s turn to be National’s latest excuse for their economic mis-management.

Conservatives and right wingers made a big deal out of those at the bottom of the socio-economic ladder taking responsibility for their actions and choices.

See:  Food parcel families made poor choices, says Key

Unfortunately, those same conservatives and right wingers rarely seem to take responsibility for their own actions and choices.

How many more years will need to pass before Key and National run out of excuses; others to blame; and begin to take responsibility?

This blogger doubts that voters will wait that long.

For National, the clock is ticking.

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= fs =

That was Then, This is Now #13

Does this man never learn?!

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Frank Macskasy Blog Frankly Speaking

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On 22 November 2008, Prime Minister-elect, John Key, presented a speech to an APEC meeting where he told a gathering of some 500 business leaders from 21 countries,  that financial regulation was urgently needed to pull the world out of the global financial crisis.

Key said, in part,

“... It is no news to anyone that the global economic outlook for 2009 is weak.

Not since the Great Depression has the world experienced such a significant financial crisis as we have seen in recent months. We have seen an expansion of credit and leverage at levels that were so unprecedented and arguably so uncontrolled that they now threaten the very stability of the world’s banking system…

… To understand the potential scope of the changes that may be required is to understand the changes in the global economy over the past 10 to 15 years.

Over the past decade or so the global economy was fuelled by a private sector credit boom made possible by a combination of large macroeconomic imbalances with and between economies, relatively low global inflation, new waves of financial innovation, and huge amounts of leveraging by hedge-funds and other financial institutions.

These forces were, in turn, fuelled by excessive optimism in asset markets, and a more relaxed, and in many cases, recklessly complacent attitude to risk…

… Our banks have, in large part, escaped significant exposure to the destructive products such as the sub-prime market that has wreaked havoc in other jurisdictions…

… Beyond our ability to trade and interact with each other, the second and most obvious effect of the financial changes of the past 10 to 15 years has been a large increase in asset prices, greatly increased demand and, most crucially, a huge expansion in credit.

This in itself isn’t new. The difference is in the magnitude and scale relative to the real economy and the inability to quantify the risk due to a lack of transparency.

This has led to two new challenges. First, relating to the effectiveness of monetary policy in dealing with asset cycles and price bubbles in particular, and second, relating to the adequacy of regulation of financial institutions... “

It is abundantly obvious that Key was well aware of the part played by hedge funds and other financial institutions in the mess that was the Global Financial Crisis (GFC). That crisis led to massive taxpayer-funded bailouts of corporations deemed TBTF – To Big To Fail.

The ‘side effects’ were millions losing their jobs; their homes; and governments cutting back on expenditure and state services.  Many likened the 2008 Great Recession to the Depression of the 1920s/30s.  Only because 21st century Western nations have a well-developed social welfare system did we not have a repeat of the soup-kitchen lines; entire homeless families living in the streets; and shanty towns springing up to offer some semblance of shelter.

In Europe, the effects of the Crisis continues to worsen, and we are seeing another dangerous sign that social stresses are beginning to impact; the rise of neo-nazi political organisations.

The greed of Wall Street, and the unfettered power of  neo-liberal Globalist-Corporatism  is dragging the world to the precipice. It is a precipice that even  distance will not protect us, here in New Zealand.

Just as we were not exempt from the Great Depression in the 1920s/1930s; the rise of fascism; and it’s awful consequence; World War Two.

Key continued,

In recent months the world has focused on the spectacular collapses of companies like Lehman Brothers and my old firm, Merrill Lynch.

What is now apparent is that as the pressure to boost profits grew, Wall Street assumed more and more risk. The quantity, and also the complexity, of this risk saw investment banks evolve into pseudo hedge funds with balance-sheets and risk exposures well beyond what anyone would have previously deemed acceptable.

But leverage wasn’t, and hasn’t been, the sole preserve of the banks.

The hedge-fund community has mushroomed in size and significance. Gone for the most part is the traditional macro hedge fund, where risk was based on the views of an individual trader who undertook conviction trades that bore some sense of balance when compared to the overall size and structure of the market.

Today, hedge-fund leverage is for the most part unregulated, opaque and, arguably, globally unmanageable. The regulation that does occur is for the most part focused on the fitness of the manager to report to their investor.

All of these factors have helped contribute to the explosion in credit, completely out of proportion to the real economy, with cheap equity leveraged to the hilt.

So now the party is over and the taxpayers of the world are left to underwrite – in one form or another – the liabilities and obligations of banks and, by extension, their hedge-fund clientele.

We can no longer afford to ignore the fact that the amount of risk that hedge funds are able to take through the leverage of their funds is arguably completely disproportionate to the real economy.

These realities and the associated bailout of financial institutions are expected to prompt a widespread review of financial regulation. This is entirely appropriate.

I emphasise, however, that this will require a change of mindset and a global approach – especially as the home of many financial institutions, including hedge funds, is no longer the traditional economies.

We must proceed with caution.”

Indeed: “We must proceed with caution.

Which is why it totally beggars belief that Key was planning to invite those very same Global Corporatists to New Zealand  to set up some kind of  “zero tax rated financial services hub”. The proposal was led by banker, Craig Stobo, who  told National’s 2009 Jobs Summit that “an economic boost would result if the Government created a zero tax rating for foreign investors who invested in international funds” in New Zealand.

The then-Economic Development Minister Gerry Brownlee, appointed Stobo as chairman of an advisory group the following year to determine what incentives would draw  financial corporates  to New Zealand to participate in the proposed “financial hub” proposal.    Brownlee paid  Stobo’s group  fees ranging up to $655 a day, on top of an up-front allocation of $500,000.

(Maybe that’s why prescription charges are going up from $3 to $5 each?  Advisors don’t come cheap.)

As this media report further outlined,

Stobo’s appointment came after the Government’s Capital Markets Taskforce expanded the initial zero-tax idea into an ambitious plan to compete directly with tax havens Luxembourg, the Cayman Islands and Ireland to host international funds investing in the Asia-Pacific region.

However, Treasury comment on a draft version of Stobo’s report in July 2010 said it did “not present a convincing case that the funds domicile industry could be effectively developed in New Zealand and that it would provide net economic benefits to New Zealand”.

Confidential research by Oliver Wynam, conducted for the Capital Markets Taskforce which was charged with reviving New Zealand’s capital markets after the finance company crash and recession, were withheld from the Sunday Star-Times.

However, summaries of the research seen by this paper estimate New Zealand could secure 17 per cent of the Asia-Pacific market for fund domiciles, generating annual revenues of $1 billion by 2015 and providing up to 5000 high-quality jobs.

Official advice later poured cold water on these numbers. A February 2010 Treasury report noted: “The benefits appear overstated, including the estimate of the number of sustainable jobs.”

But the Wyman report went global, and plans were drawn up for Key to discuss the proposal with senior international bankers when he visited New York in September 2009.

That was the trip when the prime minister made headlines with a turn on The Late Show with David Letterman, but Treasury documents show during this visit he was briefed for proposed meetings with the chief executives of Goldman Sachs and Citibank where the hub was to be discussed.

In December 2010 Key said that a major international bank offered to shift business to New Zealand if tax policy changes were forthcoming. ” -  Key backs off ‘hub’, 13 May 2012

Note the last paragraph; “…Key said that a major international bank offered to shift business to New Zealand if tax policy changes were forthcoming“.

Oh indeed?! And where have we heard that before? Changing legislation to encourage a business to invest here?  Warner Bros? Sky City?

It apprears that Dear Leader has been making rather a habit of selling our  legislation for deals!

Key’s meeting with Goldman Sachs is also disturbing.

Goldman Sachs has been implicated in dubious dealings on Wall St, and benefitted from selling many of the dodgy “products” that led to the GlobalFinancial Crisis in 2008,

As  Allan Sloan, a senior editor for ‘Fortune’  magazine, said on 15 October 2007,

So let’s reduce this macro story to human scale. Meet GSAMP Trust 2006-S3, a $494 million drop in the junk-mortgage bucket, part of the more than half-a-trillion dollars of mortgage-backed securities issued last year. We found this issue by asking mortgage mavens to pick the worst deal they knew of that had been floated by a top-tier firm – and this one’s pretty bad.

It was sold by Goldman Sachs – GSAMP originally stood for Goldman Sachs Alternative Mortgage Products but now has become a name itself, like AT&T and 3M.

This issue, which is backed by ultra-risky second-mortgage loans, contains all the elements that facilitated the housing bubble and bust. It’s got speculators searching for quick gains in hot housing markets; it’s got loans that seem to have been made with little or no serious analysis by lenders; and finally, it’s got Wall Street, which churned out mortgage “product” because buyers wanted it. As they say on the Street, “When the ducks quack, feed them”. ” -  Source

In 2010,  Goldman Sachs faced legal action from the US Federal financial watchdog,

On April 16, 2010, the Securities and Exchange Commission (SEC) announced that it was suing Goldman Sachs and one of its employees, Fabrice Tourre. The SEC alleged that Goldman materially misstated and omitted facts in disclosure documents for a synthetic CDO product it originated called Abacus 2007-AC1. Goldman was paid a fee of approximately $15 million for its work in the deal.

The allegation is that Goldman misrepresented to investors that an independent selection agent, ACA, had reviewed the mortgage package underlying the credit default obligations, and that Goldman failed to disclose to ACA that a hedge fund, Paulson & Co., that sought to short the package, had helped select underlying mortgages for the package against which it planned to bet.

The SEC further alleged that “Tourre also misled ACA into believing that Paulson invested approximately $200 million in the equity of ABACUS 2007-ACI (a long position) and, accordingly, that Paulson’s interests in the collateral section [sic] process were aligned with ACA’s when in reality Paulson’s interests were sharply conflicting.”  Goldman Sachs stated that the firm never represented to ACA that Paulson was to be a long investor, and that as normal business practice, market makers do not disclose the identities of a buyer to a seller and vice versa.

The complaint states that Paulson made a $1 billion profit from the short investments, while purchasers of the materials lost the same amount. The two main investors who lost money were ABN Amro and IKB Deutsche Industriebank.IKB lost $150,000,000 within months on the purchase.ABN Amro lost $840,909,090. ” – Source

Barely three months later, Gioldman Sachs settled out of Court. Three months!?!?

For the American judicial system, where cases like this can take years, or even decades – this is the legal system’s version of travelling in a spaceship at the speed of light,

”  Goldman Sachs has agreed to pay $550 million to the Securities and Exchange Commission, one of the largest penalties ever paid by a Wall Street firm, to settle charges of securities fraud linked to mortgage investments.

The S.E.C. filed a lawsuit against Goldman in April, accusing the bank of securities fraud. The settlement came just days before Goldman is scheduled to report its second-quarter earnings.

Under the terms of the deal, Goldman will pay $300 million in fines to the Treasury Department, with the rest serving as restitution to investors in the mortgage-linked security. Goldman will not admit wrongdoing, though it will admit that its marketing materials for the investment “contained incomplete information”. ” – Source

John Key was to meet this man, Goldman Sachs CEO Lloyd Blankfein, in New York,

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Frank Macskasy Blog Frankly Speaking

CANCELLED: John Key was to meet Goldman Sachs CEO Lloyd Blankfein in New York.

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The proposed meeting with Blankfein was to take place during the same visit to New York when Key appeared  on ‘Letterman’, in September 2009, for that cringeworthy appearance, “Top Ten Reasons to visit New Zealand“.

Treasury analysis of  Stobo’s report in July 2010 stated,

[It did] not present a convincing case that the funds domicile industry could be effectively developed in New Zealand and that it would provide net economic benefits to New Zealand” . – Source

Treasury warned that the proposal could risk,

“… a wealth transfer from New Zealand taxpayers to overseas financial institutions.

Treasury also noted that the OECD was “cracking down” on tax havens in Europe (Luxembourg, Ireland, etc) so it remains to be seen why New Zealand would put itself in a similar position.

This blogger considers Key’s plans for a “tax haven” and his plans to draw Goldman Sachs into the equation as apalling bad judgement on his part.

Considering that Goldman Sachs was one of the financial corporations that Key had railed against in November 2008,

“We must proceed with caution.

What is even more mind-boggling and incredible is that Key himself advocated for reforms at that same APEC meeting, when he stated,

”  What we all know, however, is that transparency is possible and must be demanded…

… My Government is firmly committed to working with other governments and businesses like yours to not only grapple with the immediate pressures on our economy but to, in turn, address the underlying issues that led to today’s financial crisis. ” – Source

Turning New Zealand into a tax haven for companies to hide their fortunes, and shield them from legitamate taxes, and dealing with one of the prime movers in the Global Financial Crisis, which had been sued by a US Government financial watchdog – is not “addressing  the underlying issues that led to the global financial crisis”.

Thankfully, this harebrained scheme went nowhere. When the  ‘Sunday Star-Times‘  approached Key on this issue, evidently he “distanced the government from the controversial aspects of the plan“. (In plain english: he ducked for cover.)

But it should serve as ample warning that the man who is our Prime Minister deserves the hard scrutiny that the media have been according him.

Thankfully, we still have a reasonably critical and independent media in this country.

And thankfully, they can keep an eye on John Key.

God knows someone needs to.

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Postscript:

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Frank Macskasy Blog Frankly Speaking

Full Story

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*

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Acknowledgement

Dominion Post/Sunday Star Times

Additional

Junk mortgages under the microscope

Goldman Sachs  SEC  Fraud Civil Lawsuit

Goldman Settles With S.E.C. for $550 Million

Key blames ‘reckless’ money men for crisis

Address to the CEO Summit, APEC Business Advisory Council (ABAC)

Key backs off ‘hub’

JPMorgan CEO offers blunt apology

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