Last week, a Syrian blogger and citizen journalist, by the name of Rami al-Said paid the ultimate price; he was killed by the military forces of despotic dictator, war criminal, and disgusting excuse for a human being, Bashar Assad.
Rami al-Said was reporting from the Syrian city of Homs – which as most of us know by now – is being pounded to rubble by a mad dictator’s army. Rami al-Said refused to leave, and instead chose to report on the genocide that was taking place.
One of Rami al-Said’s last posts on his Facebook page stated,
“”Baba Amro [a suburb of Homs] is being wiped out now, complete genocide, I don’t want you to tell us our hearts are with you because I know that, I want projects everywhere inside and outside I want everyone to go out in front of the embassies in al…l countries everywhere because we are soon to be nothing, there will be no more Baba Amr – I expect this is a final letter to you and we will not forgive you.””
People have an instinctive fear of harm, injury, violence, and death. It’s part of our sense of self-preservation – that intrinsic, evolutionary urge to stay alive and stay out of harm’s way.
But every so often, human beings set aside that sense of self-preservation; their anger and indignation at an injustice overcomes their most basic fears (or at least pushes it to one side); and individuals and groups refuse to run away. They stand, and by the gods, they fight back.
History is full of such deeply heroic people. Whether they be poorly armed resistance fighters in various occupied countries during Europe’s darkest days under the tyranny of Nazism; or young Hungarian teenagers facing tanks from the Soviet Red Army in 1956; or unarmed citizens in China’s Tiananmen Square in 1989 – there is an indomitable spirit that refuses to bow down and surrender.
I don’t know what it must feel like to experience such a sense of self that confronts bombs, bullets, torture, and death. Living in a comfortable, peaceful, existence here in New Zealand, it is an utterly alien concept to me. I can’t even begin to guess at how and why such ordinary, heroic, people can set aside their fear of death to stand up to bullies who can bomb a city into dust.
But I can – and do – feel a deep abiding respect and admiration for people like Rami al-Said, who died when he could have escaped Homs; and whose only “fault” was being there, and reporting to the outside world what crimes were being committed against ordinary men, women, and children.
1986 – 2012
Blogger & Citizen Journalist
Husband & Father
– One of the good guys –
Rest assured, Rami – one day Syria will be free. Your death – and those of your fellow Syrians – will not have been in vain.
Five days ago, Finance Minister Bill English released a statement on the part-privatisation of several State Owned Enterprises. It is worthwhile re-printing his statement in full, and responding to it, point-by-point,
Running up $5-$7b more debt not the answer
by Hon Bill English, Finance
23 February 2012
Opponents of the Government’s mixed ownership programme need to explain to New Zealanders why it would be better to borrow an extra $5 billion to $7 billion from overseas lenders, Finance Minister Bill English says.
Speaking to an Auckland Chamber of Commerce and Massey University business lunch today, he said the challenge was how the Government pays for forecast growth in taxpayers’ assets over the next few years.
“Taxpayers own $245 billion of assets, and this is forecast to grow to $267 billion over the next four years. So we are not reducing our assets. Our challenge is how we pay for their growth, while getting on top of our debt.”
The rationale for offering New Zealanders minority stakes in four energy companies and Air New Zealand is quite simple, Mr English says.
“First, the Government gets to free up $5 billion to $7 billion – less than 3 per cent of its total assets – to invest in other public assets like modern schools and hospitals, without having to borrow in volatile overseas markets.
“Our political opponents need to honestly explain to New Zealanders why it would be better to borrow this $5 billion to $7 billion from overseas lenders at a time when the world is awash with debt and consequent risks.
“We would rather pay dividends to New Zealanders on shares they own in the energy companies than pay interest to overseas lenders on more borrowing.
“The fact is, the Government is spending and borrowing more than it can afford into the future. So it makes sense to reorganise the Government’s assets and redeploy capital to priority areas without having to borrow more.
“Most nights on television, we see the consequences of countries in Europe and elsewhere borrowing too much. We don’t want that for New Zealand.”
Secondly, under the mixed ownership programme New Zealanders will get an opportunity to invest in big Kiwi companies so they can diversify their growing savings away from property and finance companies.
“Counting the Government’s controlling shareholding, we’re confident 85-90 per cent of these companies will be owned by New Zealanders, who will be at the front of the queue for shares.”
Thirdly, mixed ownership will be good for the companies themselves, Mr English says.
“Greater transparency and oversight from being listed on the stock exchange will improve their performance and the companies won’t have to depend entirely on a cash-strapped government for new capital to grow.
“We already have a living, breathing and successful example of mixed ownership in Air New Zealand, which is 75 per cent owned by the Government and 25 per cent by private shareholders.”
In his speech, Mr English reiterated the Government’s economic programme this term would focus on rebuilding and strengthening the economy.
It’s main priorities are:
- Responsibly managing the Government’s finances.
- Building a more productive and competitive economy.
- Delivering better public services within tight financial constraints.
- Rebuilding Christchurch.
“So there will be no big surprises from this Government,” Mr English says. “We have laid out our economic plan and Budget 2012 will focus on implementing that plan.”
Firstly, let’s call a spade, a spade here. Whilst National ministers use the euphemistic term, “mixed ownership model”, the issue here is partial-privatisation of state owned enterprises. National’s spin-doctors may have advised all ministers and John Key to always use the phrase “mixed ownership model” – but the public are not fooled.
To begin, I take great exception to English’s opening statement,
“Opponents of the Government’s mixed ownership programme need to explain to New Zealanders why it would be better to borrow an extra $5 billion to $7 billion from overseas lenders…”
Opponants of National’s part-privatisation do not “need to explain” anything. It is up to National to explain why it feels the need to part-privatise tax-payer owned corporations that are efficient and give a good return to the State.
Demanding that the “opponents of the Government’s mixed ownership programme need to explain” their opposition is the height of arrogance. Governments in western-style democracies are accountable to the public – not the other way around.
English then goes on to say,
“Taxpayers own $245 billion of assets, and this is forecast to grow to $267 billion over the next four years. So we are not reducing our assets. Our challenge is how we pay for their growth, while getting on top of our debt.”
“…we are not reducing our assets” ?!?!
Selling 49% of Genesis, Meridian, Solid Energy, Might River Power, Air New Zealand (from 75% to 51%) down to a 51% holding is “not reducing our assets” ?!?!
“To know and not to know, to be conscious of complete truthfulness while telling carefully constructed lies, to hold simultaneously two opinions which cancelled out, knowing them to be contradictory and believing in both of them…”
English laments that “our challenge is how we pay for their growth, while getting on top of our debt”.
This involves two distinct issues;
Paying for the growth of state assets.
Genesis, Meridian, Solid Energy, Might River Power, and Air New Zealand are all profitable enterprises in their own right. In the 2010 financial year, these assets made a combined profit of $581 million dollars. None of these five SOEs are loss-makers.
They can each pay for whatever growth programme they require, using their profits.
Where National interfered in SOE operations, the results were highly distorted,
“Genesis paid out no dividend and had a zero yield on its operating profit of $293 million.
It had a 30.5% shareholder return on total assets.
Meridian had a dividend yield of 10.4%, achieved by paying out 428.8% of its profit. The increase came from the $300 million special dividend it received during the sale of Tekapo A and Tekapo B stations to Genesis, which was forced by the Government to borrow to pay for the purchase.” – Source
The reason that there is a “challenge [in] how we pay for their growth” is simple: National demands high dividends from these SOEs (often by forcing them to borrow) leaving little for the companies to reinvest in their own growth.
Under-funding is a problem only because National has created the problem.
Getting on top of debt.
Linking New Zealand’s $18-plus billion dollar debt to funding the growth of SOEs is deliberate sophistry (ie; a deliberate deception).
The reason we have out-of-control debt is because,
- the global banking crisis and recession hit New Zealand’s export-driven economy as it did nearly every other country (which is also why we have high unemployment – which makes National’s current beneficiary-bashing all that much more repugnant);
- the two earthquakes which damaged or destroyed much of Christchurch;
- and two tax-cuts in 2009 and 2010 which we could ill-afford; benefitted the top income earners/wealthy; and left a gaping $1.4 billion “hole” in the government’s revenue.
As a society and as an economy, we had no control over the first two crises to hit us.
But we sure had control over our taxation policy, and doling out generous tax cuts to millionaires and wealthy businesspeople was a luxury we could not afford. (Many maintain that National was “rewarding” certain affluent socio-economic groups for electoral support at the ballot box.)
Next. English states,
“First, the Government gets to free up $5 billion to $7 billion – less than 3 per cent of its total assets – to invest in other public assets like modern schools and hospitals, without having to borrow in volatile overseas markets.”
National appears confused (as with most of its ad hoc policies) as to the proceeds it may gain from the partial sales. Only a year ago, Key stated authoritatively,
“If we could do that with those five entities … if we can make some savings in terms of what were looking at in the budget and maybe a little on the upside you’re talking about somewhere in the order of $7 to $10 billion less borrowing that the Government could undertake.” – John Key, 26 January 2011
Then again, as recently as eleven days ago, English let slip that,
“I just want to emphasise that it is not our best guess; it’s just a guess. It’s just to put some numbers in that look like they might be roughly right for forecasting purposes. That’s an honest answer.” – Bill English, 17 February 2012
The best description of Key and English on asset part-sales: clueless.
It is also worrying that National is selling state assets to pay for “other public assets like modern schools and hospitals, without having to borrow in volatile overseas markets“.
Every householder will tell you that if you have to sell of your furniture; whiteware; tv, family car, to pay to maintain your home – then you are in deep financial trouble.
What National is doing is “selling the household furniture to pay for painting the house”. Selling off assets to pay for maintenance is not sustainable – eventually you run out of stuff to sell. It is a really dumb idea.
But more than that, it indicates that National is not “earning” enough, by way of taxation revenue to pay for it’s house-keeping. If we have to borrow or sell assets to do simple things like paint schools or properly resource hospitals – then it is a fairly clear indication that taxation revenue is insufficient for day-to-day operations of public services.
It also indicates that we are paying for the 2009 and 2010 tax cuts by selling state assets.
This is not “fiscal prudence” – this is foolish profligacy.
Bill English again demands, in his speech,
“Our political opponents need to honestly explain to New Zealanders why it would be better to borrow this $5 billion to $7 billion from overseas lenders at a time when the world is awash with debt and consequent risks.”
No, Mr English. Perhaps you should “honestly explain to New Zealanders” why you believe it makes greater commerciall sense to part-sell profitable assets that are returning a higher yield on investment, than what the government pays to borrow?
“The Government is estimating a $6 billion reduction in net debt after the sale of the state-owned enterprises – but concedes the savings on finance costs will be less than what it would have booked from dividends and retained earnings if it kept them.
Treasury forecasts released today in the Government’s budget policy statement outline the forecast fiscal impact of selling up to 49 per cent in each of the four State-owned power companies – Mighty River Power, Meridian, Genesis Energy and Solid Energy – and by reducing the Crown’s current shareholding in Air New Zealand.
They assume a price of $6 billion – the midpoint in previous estimates of a $5 billion to $7 billion sale price – and a corresponding drop in finance costs of about $266 million by 2016.
But the trade-off is the loss of an estimated $200 million in dividends by 2016 and the loss of $360 million in forecast foregone profits in the same year.
Documents supplied today state that the overall fiscal impact of selling a partial stake in the SOEs is a reduction in net debt, but the Government’s operating balance will also be smaller, because foregone profits would reduce the surplus.” – Source
Yet, only a year ago, Bill English was forced to concede that state owned power companies were indeed, highly profitable. In fact, he was complaining bitterly about State-owned generators “earning excessive returns”,
“Generally the SOE model has been quite successful in that respect. But if you look at those returns being generated particularly out of the electricity market, the Government has taken the view that that market is not as competitive as it should be.” – Source
The State will be losing money on the deal; earning less dividends from the SOEs than the cost of borrowing. The sums simply don’t add up.
There also seems to be some confusion (no longer a surprise) as to what National intends to do with sale proceeds.
On the one hand Bill English sez he wants to reduce debt,
“We are firmly focused on keeping the Government’s overall debt as low as possible and that is the most important consideration over the next few years.” – 16 February 2012
And a week later, English is spending it,
“First, the Government gets to free up $5 billion to $7 billion… to invest in other public assets like modern schools and hospitals…” – 23 February 2012
I guess Mr English is hoping that no one is paying attention?
Further in his speech, English makes this rather candid admission,
“The fact is, the Government is spending and borrowing more than it can afford into the future. So it makes sense to reorganise the Government’s assets and redeploy capital to priority areas without having to borrow more.”
And there we have it, folks: the clearest statement yet from our Minister of Finance that the partial-sale of our state assets has little to do with giving “mum and dad” investors a share in our power companies; or making them more efficient; or paying down any of our $18+ billion debt; or putting a new coat of paint on your local school – the government is desperate to raise cash because it “is spending and borrowing more than it can afford “.
The tax cuts of 2009 and 2010 were never “fiscally neutral” as National kept insisting.
The “tax switch” left a $1.4 billion “hole” in the government’s revenue and this is how they are attempting to “plug that hole”.
We have been conned.
The tax cuts will be funded by the sale of state assets that we, as citizens of this country, already own. And because the bulk of tax cuts benefitted the highest income earners/wealthy – who are also in a better position to acquire shares in Genesis, Meridian, Solid Energy, Might River Power, and Air New Zealand – the transfer of wealth from low and middle income earners will be two-fold.
The legacy of John Key’s government will be to make the rich richer, and for the rest of us, we can look forward to,
- more expensive power
- losing half ownership of our taxpayer-created state assets
- and the top 10% to increase their wealth even more
But, to be generous, I will leave the last word to the Hon. Bill English,
National’s hatchet-job on our state service continues – and appears to be getting worse.
Fresh from news that the Ministry of Foreign Affairs and Trade about to sack 305 people; and 295 uniformed personnel are to be fired from the Defence Force, we learn that Key’s government is about to fire at least 70 staff from Housing NZ,
This is on top of Housing NZ recently announcing that it will no longer assist low-income families with social needs,
Worse still, on top of the redundancies, is the planned closure of offices; and replacing front-line staff with an 0800 number Call Centre.
The sackings are a direct breach of Key’s promise to New Zealanders that the cutting of the state sector would not impact on front-line staff – and indeed he has stated that front-line numbers would be strengthened,
“It’s time to focus public spending on front-line services that make a real difference in people’s lives, rather than paper-shuffling and report-writing that does not…
We are not going to reduce the number of front-line staff. Let me make this absolutely clear – under National the numbers of doctors, nurses, teachers, social workers, police and other front-line staff will grow…
In addition, we are not going to radically reorganise the structure of the state sector. Our focus will be on delivering services. Just as Labour has done, we will take opportunities to make changes to some agencies as part of the usual business of government. However, there will be no wholesale reorganisation or restructuring across the state sector… ” – John Key, 12 March 2008
John Key has broken every aspect of his own committments that he made to the nation, nearly four years ago, and which he has been repeating ad nauseum ever since.
Not only is his government sacking front line staff – but they are radically reorganising the state sector. Key’s most bizarre recent proposal was contracting out government services to Google. I kid you not: Rise of the Terminator Keybot!
A proposal to replace 1,000 full time soldiers in the Defence Force with “reservists”, who are “on call”, is a depletion of front-line personnel. This leaves NZ ill-equipped and ill-prepared to meet our international committments for U.N. peacekeeping duties, or local disaster relief operations.
Soldiers are front-line personnel. In fact, the term “front line” is a military term.
For those of us with fairly decent memories, we may recall the 1990s; when a Bolger and Shipley-led National governments cut the state sector until health, housing, social services, etc, were failing to meet the needs of ordinary New Zealanders.
At one stage Prime Minister Jenny Shipley was mooting moving or demolishing the Beehive Building so that an extension to the main Parliamentary Building could be undertaken. The cost to taxpayers was estimated to be in the region of $94 million (1997 dollars).
All whilst rentals for State houses were set at market prices; ex-psychiatric patients were living in public toilets; and on 3 April 1998, Southland dairy farmer Colin Morrison (42) died on a waiting list, awaiting a triple heart bypass surgery. His condition was listed as “life threatening” – but was still on a waiting list when he died.
And all during the 1990s, the wealth/income gap between the top 10% and the rest of New Zealand widened further and further.
By 27 November, 1999, New Zealanders had had a gutsful and threw out the National government.
History is repeating. The question is, how bad will it get this time? Perhaps as bad as families living in caravans?
On Colin Morrison 1998)
From National’s website, I found this little “gem”,
Now, considering that the whole sorry saga of the Leaky/Rotting Homes fiasco began with the Building Act 1991 – when the then Bolger-led National government de-regulated the New Zealand building industry – it seems that National has not learnt a single, damned thing about that failed experiment in de-regulation.
“As Auckland Mayor John Banks says, “It was a previous Government that put in the legislation that allowed for untreated timber, cavity-less walls, chicken wire and plaster. So they should at the least accept an equal liability with local government.”
Mr Banks should know. He was a member of the Jim Bolger-led National Cabinet that passed the permissive 1991 Building Act which was naively based on the premise that National’s developer mates could be trusted not to cut corners.” – Source
Fast forward from 1991 to 2012,
” Fast-track building consents for standard, multiple-use building designs ” ???
” Make building law changes to allow more do-it-yourself building, and to make a broader range of minor and low-risk building work consent-free “???
It is appropriate that #55 – “Leaky Homes: Develop a $1 billion financial package to help owners of leaky homes get their homes fixed” – follows on from #53 and #54. Because de-regulating Building Consents and making DIY easier, without professional over-sight, will probably end up with yet more dodgy building; more rotting homes; and more New Zealanders having to pay thousands of dollars to repair shoddy workmanship.
Nice one, Mr Key, Mr English, Mr Brownlee, et al.
Never let it be said that you guys “waste any time” learning from your previous mistakes…
Despite John Key’s election-pledges in 2008 to see wages rise in New Zealand, the opposite seems to be happening; wages have either mostly stagnated, or, in some very public instances, are being actively driven down.
The maritime workers in Auckland and meat workers for meat-processing company, AFFCO, are facing an unprecendented attack on workers’ right and conditions which would see many (if not all) of them casualised and suffer a cut in wages.
This is hardly an “unrelenting… quest to lift… economic growth rate and raise wage rates“. It is, in fact, more akin to Bill English’s remarkable admission on TVNZ’s Q+A, on 10 April last year that having wages 30% lower than our Australian cuzzies was a “a good thing if we can attract the capital, and the fact is Australians- Australian companies should be looking at bringing activities to New Zealand because we are so much more competitive than most of the Australian economy.”
Unions representing various groups of workers have had a gutsful, and are asserting their right to strike,
The casualisation and reduction of real wages is not just a threat to the families of working men and women – but a threat to our economy as well.
National and ACT voters might care to reflect that just recently, BERL released a report outlining the value of blue-collar workers to the economy,
We simply cannot afford to lose skilled blue-collar workers heading of to Australia, or elsewhere in the world. Australia already has plenty of our doctors, nurses, engineers, scientists, etc.
As Berl chief economist Ganesh Nana said,
“If you reduce the amount of trained and skilled labour out there, not only are you reducing the quantity available to businesses, you are also increasing the cost of the labour … because it’s in short supply.”
Global finance and accounting firm Robert Half director, Andrew Brushfield, said recently,
“Where there is currently a need for skilled people in Australia, that need is just as prolific in New Zealand.” – Source
So let’s be clear about this;
- Reducing wages or casualisation of the workforce (which is the same thing thing as cutting wages) eventually ends up with this country losing yet more skilled workers to Australia.
- Reducing wages and casualisation increases the already widening wealth/income gap.
- More families will find themselves under financial pressure, as costs-of-living out-strips incomes. (In June 2007, 254,100 households rated themselves income-poor . By December last year, that number risen to 283,300. )
Instead of short-sighted, selfish, employer-driven vendettas against their workers – which achieves nothing except a form of reckless economic self-sabotage – this country should be looking at ways to increase wages, which then leads to increased business turn-over; generating greater economic growth; and ultimately, a more prosperous society.
I do not believe – not for one micro-second – Employers and Manufacturers Association chief executive Kim Campbell, when he said,
“Frankly, I think most employers would like to pay more if they can, I don’t know any employer who genuinely wants to pay less.” – Source
That is 100%, unadulterated crap.
It is crap because many employers can pay more,
They just choose not to.
Once again, from Mr Key,