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Easter Trading – A “victimless crime”?

30 March 2013 25 comments

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happiness is just around the corner

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Some years ago, on ANZAC Day,  I was in a convenience store in downtown Wellington, chatting with a staffmember who also happened to be a friend.

It was before 1pm, and according to the law, whilst the convenience store was able to open, it was not able to sell alcohol.

A customer came in and wanted to buy a bottle of wine (who drinks booze in the morning?!). The staffmember advised him politely that, according to the law, they were not able to sell alcohol before 1pm.

The customer – a well-dressed pakeha male – threw what can only be called a tantrum and demanded his “rights” to buy whatever he wanted.

The shop assistant stood her ground. He continued ranting. And that’s when I said to him,

Do you realise that if she sells you that alcohol, she is breaking the law, and if caught, would lose her job?”

His reply? He spat back with a fair degree of venom, “I don’t care. I don’t give a shit about her job. I just want what I came in for.”

To which I replied,

Well, if you don’t care about her job, why should she care about your so-called rights? It cuts both ways, mate.”

His response was to swear and stormed out of the store.

Good riddance to an arsehole who, as a child, must have gotten everything he wanted by simply demanding it and stomping his feet.

I’ve never forgotten that incident. To me, it signified everything that is wrong with our society.

Since the mid/late 1980s, it seems to me that a “Me Culture” of  individualism, has achieved a degree of dominance that, in the past, would not have been countenanced.

This “Me Culture” is  one that demands consumer goods and services whenever we want it, without due regard for consequences or the rights and needs of others.  The issue of easy availability of cheap alcohol is one such example.

We all know that cheap booze is causing millions of dollars worth of damage to our society and economy. BERL put the figure at over $4.5 billion in 2005/06.  (See: Costs of harmful alcohol and other drug use) The demands placed on paramedic callouts, frontline hospital services, Police, Courts, Prisons, and loss to the economy due to ACC payouts, lost work days, family disruption and violence, etc, is costing our country hundreds of millions of dollars.

Yet, when community leaders and elected representatives want to control aspects of the booze industry, the shrill screams of outrage usually centre around one, selfish, argument,

“Why do you want to penalise me for the actions of others?”

Check out any messageboard, internet forum, letters to editor page, etc, on this issue – you’ll find that argument repeated ad nauseum. (And whinging like that it is nauseating.)

The perennial debate about retailers trading over the Easter weekend is another prime example of the “Me Culture”.

Companies such as Oderings flout the law every year; are fined a paltry $1,000, and are left to repeat the offence year after year,

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2011

Garden centre defies Easter trading ban

Acknowledgement: TVNZ – Garden centre defies Easter trading ban

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2012

Nursery enjoys a good Friday

Acknowledgement: Fairfax Media – Nursery enjoys a good Friday

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2013

Easter trading 'a victimless crime' - retailer

Acknowledgement: Fairfax Media – Easter trading ‘a victimless crime’ – retailer

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Meanwhile, in a quirky irony, larger corporate chain stores obeyed the law,

New Zealand Food and Grocery Council chief executive Katherine Rich said the corporate chains usually stuck to the rules, and would be closed today and Sunday.

Acknowledgement: IBID

The $1,000 fine paid by each store is outweighed by the big profits made by the law-breaking retailers.

So is it a “victimless crime”, as garden centre owner, Darryn Odering insists?

Or is this a a case of businesses manipulating ill-informed public opinion; selfish attitudes;  and exploiting their advantage as a minority of law-defying businesses, trading when their competitors are closed?

There are other laws in this country – specifically drug related – where it could be reasonably argued that smoking cannabis; ingesting LSD; snorting cocaine; or injecting heroin, is a “victimless crime”.

Yet, our prisons are filled with people who’ve used cannabis,  LSD,  cocaine, or heroin.

And how, specifically is “victimless” defined?

Are retail assistants who are forced to work on public holidays “victims” of  business owners whose only concerns are turning a profit?

There are a few numpties in this country who mistakenly  think that retail assistants (along with fast-food workers, etc) have a “choice” in working on public holidays.

Let me disabuse these naive individuals if that illusion. Retail, fast-food, etc, workers have zero choice in working whatever days/nights they are rostered on.  When employers interview staff one of their first questions will be,

“Can you work public holidays/evenings/nights/etc?” – despendent on what hours the business is operating.

If an employer needs staff  on a Monday, regardless of a public holiday; and s/he has two candidates; all other things being roughly equal; one can work a public holiday; the other can’t – who do you think the employer will choose?

And if a staff member doesn’t like working on  public holidays, and would rather spend time with a family; or has children to look after when schools are closed – do the Pro-Choice Muppets really believe that the employee has the power to change their rostered hours with repercussions?

I submit to the reader that with 170,000 unemployed in this country (and possibly higher according to some stats – see:  New Zealand Real Unemployment at 9.1%), that no retail or fast food worker will jeopardise their job by refusing to work public holidays.

They are a victim of their powerlessness and  high unemployment.

This is not a “victimless” crime. It is an exploitative crime, much like the pimp who forces his girlfriend/wife/relation out onto the streets at night, to have sex with strangers for money. It may be a legal activity, but it is not “victimless” (see: Girls pimped out by relatives – pastor )

Secondly; Louise Evans McDonald, of  the Retailers Association government and advisory group manager stated that,

“Many retailers similarly deserve the right to decide whether they open or not.”

Acknowledgement: Fairfax Media – Easter trading ‘a victimless crime’ – retailer

And that, folks, is the crux of the matter.

Oderings is open during Easter because it is hugely profitable.

Why is is hugely profitable?

Because it’s a public holiday.

Would it be hugely profitable if every single business was open on Easter Friday? Including schools, government departments, etc? In fact, if Easter Friday and Easter Monday was no different to any other day of the week – how profitable would it be for law-breakers like Oderings?

The answer, of course, is that it wouldn’t. It would simply be another business day. Let’s be clear here;

Oderings relies on it’s profits because it’s competitors obey the law.

Oderings would not have those huge  profits if it Easter Friday (and Monday) was another normal trading day.

So people like Rochelle Cook, with her children, at  Oderings Nursery in Upper Hutt on  Good Friday in 2012 (top image) would be at work and her children at day care.

So if the law is to be changed, let’s do it fairly and apply it across the board throughout the country: everything opens and everyone (with a job) works. Not just the captive retail assistants and fast food workers. Everyone.

And this is where the rubber hits the road. Do we, as a country, want to give up a holiday so we can all work like any other day?

And if we’re all working – how will that benefit us and retail outlets?

The answer is; it doesn’t benefit us. We get another day that shops are open and we’re all working. Oh  whoopty f****n doo.  What the hell did we just gain/lose?!?!

To all elected representatives, I offer this advice;

  1. If we’re serious about keeping our holidays, then it’s time that the $1,000 fine was increased to a more meaningful amount. $25,000 seems a nice figure. The current  penalty of $1,000 is meaningless. It’d be like sentencing a drug pusher to community service. Both are supposedly “victimless” crimes, after all.
  2. If we’re going to allow Oderings to open on Easter – then make it a blanket law, across the country. Everyone opens; everyone works.  That includes schools on Easter Friday and Easter Monday.  No one takes time off.

Now let’s see which way the public jumps.

As for Mr Odering, in future I think our household will be shopping at Mitre10 for our gardening supplies.

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References

TVNZ: Garden centre defies Easter trading ban (22 April 2011)

Fairfax Media: Nursery enjoys a good Friday (7 April 2012)

Fairfax Media: Easter trading ‘a victimless crime’ – retailer (29 March 2013)

Fairfax Media: Drought wilts Easter trade in plants (30 April 2013)

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Citizen A – Susan Devoy; Nick Smith; Len Brown; and DoC job losses – 28 March 2013

30 March 2013 1 comment

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– Citizen A –

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– 28 March 2013 –

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– Marama Davidson & Efeso Collins –

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Issue 1: Is Dame Susan Devoy’s appointment as Race Relations Commissioner a step forwards or backwards for Race Relations in NZ?

Issue 2: Do Nick Smith or Len Brown have any affordable housing options for the poor?

and Issue 3: Why must we be burning DoC to save DoC?

Citizen A screens on Face TV, 7.30pm Thursday nights on Sky 89


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Acknowledgement (republished with kind permission)

Martyn Bradbury

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Why a Four Year Parliamentary Term is not a Good Idea – Part Rua

29 March 2013 19 comments

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On 7 February, Key called for the Parliamentary term to be increased from three to four years.

This issue was canvassed in two previous referenda in 1968 and 1990. More than two-thirds of voters wisely voted to keep it at three years.

According to polling, the public response is narrower this time. Perhaps in part to the same polling method that seems to show National with 50%-plus support amongst the public.

This blogger thoroughly rejects any notion  to increase the Parliamentary term.

As I wrote previously in The Daily Blog, there are compelling reasons to deny politicians an additional year in office;

1. Attacks on Critics

Governments become arrogant over time, and National’s (mis)-treatment over it critics should give us great cause for concern.

The following is a  list of just  some of the people who have criticised this government and been abused or derided in return;

July, 2009

Natasha Fuller &  Jennifer Johnston, solo-mothers

Personal WINZ details released to the media by Social Welfare Minister, Paula Bennett, to discredit both women after they criticised National for canning the Training Incentive Allowance (which Bennett herself used to pay her way through University).

May, 2011

Jon Stephenson, journalist
John Key derides Stephenson’s research into NZ activities in Afghanistan: “I’ve got no reason for NZDF to be lying, and I’ve found [Stephenson] myself personally not to be credible.”

September, 2011

Nicky Hager, writer, researcher
John Key dismisses Hager’s book, on CIA involvement in NZ military activities in Afghanistan:  “I don’t have time to read fiction,” quipped the Prime Minister, adding that the book contained “no smoking gun”, just supposition, which, “makes it business as normal for Nicky Hager”. (Despite the book having 1300 footnotes to referencing documentation.)

October, 2011

Martyn “Bomber” Bradbury, broadcaster, blogger
Criticised John Key on Radio NZ. Subsequently banned/ “uninvited”  from returning to Radio NZ as a panellist for the Afternoons with Jim Mora segment.

November, 2011

Robyn Malcolm, actor
Criticises the John Key led National government for it’s failures at a Green Party campaign launch, and is, in turn, vilified by the ‘NZ Herald’, and by one-time National Party aspiring-candidate, Cameron Brewer.

November, 2011

Bradley Ambrose, journalist/photographer
Investigated by police after complaint laid by the Prime Minister, over the “Teapot Tape” affair. Ambrose investigated and interviewed by Police. Media office raided. Property seized. Eventually, no charges laid. Government considered seeking costs of $13,669.45 from Ambrose – but eventually decided not to.

March, 2013

Annette Sykes, lawyer, activist, President of Mana Party

When Annette Sykes criticised the appointment of sportswoman Susan Devoy to the role of Race Relations Commissioner, Minister Judith Collins responded with “Annette Sykes is a stupid person”. That’s how National views critics.

There is a degree of  vindictiveness to how National ministers deal with their criticism – and it ain’t pretty, Billy-Bob.

In addition, John Key’s response to  anti-asset sales opposition has revealed glimpses of his arrogance and dismissal of public concerns.

2. Public Opposition

As I wrote in The Daily Daily, on 4 May 2012,  over five thousand people took part in a peaceful,  anti-asset sales Hikoi to Parliament,

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Aotearoa is not for sale hikoi - anti asset sales march   - wellington - 4 May 2012

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Key’s response was instructive,

“How many people did they have? John Key asked reporters. “Where was it? Nope wasn’t aware of it.”

Key says the National Party has a clear mandate to proceed with privatising some state assets.

“Well over a million New Zealanders voted for National in the full knowledge we were going to undertake the mixed ownership model,” he said.

“So look, a few thousand people walking down the streets of Wellington isn’t going to change my mind.”

Source: Key unfazed as protesters descend on Parliament

Nearly a year later, on 12 March, a 392,000-plus signature petition was presented to Parliament. The petition  was  signed by ordinary New Zealanders who wanted nothing more or less than a say in their future.

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12-march-2013-presentation-of-anti-asset-sales-petition-parliament-referendum

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Key’s response?

Key said of the opposition petition you could be as “sure as little green apples [that] huge numbers of them are not bona fide names on the list” and would have to be struck off.

“They’ve probably taken over a year to get maybe 300,000 names, we’ve had 285,000 pre-registrations in a matter of days”.

Source: Government to ignore asset sales referendum

And according to Green Party co-leader, Russell Norman, Key further disparaged New Zealanders who signed  the petition by saying,

“…that the Prime Minister has said the people who signed this are children and tourists….”

Source: IBID

Charming.

We should be under no illusion that National ministers view any form of criticism or opposition with disdain. Key himself is contemptuous of  anyone who dares cross him.

Who in their right minds would want to give politicians an extra year to look down on us, as if we were grubby peasants, not worthy of their time and attention?

3. Unbridled Power?

Never forget that we are governed by an “elected dictatorship”,

  • There is no Upper House to scrutinise legislation from governments.
  • There is no written constitution to safeguard our interests.
  • Referenda have all the ‘bite’ of a toothless octagenarian (not that I support binding referenda – especially without Constitutional safeguards to protect the rights of minorities).
  • There are no mid-term elections; right-of-recall; Presidential Veto; or any other controls over elected representatives.

Once elected, unless a Member of Parliament is found guilty of a lewd act with a sheep, we have zero control over them.

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In conclusion

One of the main arguments in support of a Four Year Term is that three years is not sufficient time  for a government…

To which I respond with this;

That statement is never completed. It gives government more time to achieve – what? What incredibly complex, radical reforms are there that require an extra year (or more) for a government to have more time? What does Key have in mind that demands a four year term?

Remember that Select Committees work in unison, not one at a time, and Legislation can be passed in as little as 48 hours – as “The Hobbit Law” showed us (see: Helen Kelly – The Hobbit Dispute) – not that I’m advocating legislative changes conducted at warp speed.

Perhaps governments might have “more time to achieve things” if time wasn’t wasted with petty point-scoring in the Debating Chamber?  (see: Making Bold With The Speaker’s Chair)

As National-aligned blogger, David Farrar,  said in the NZ Herald on 25 March,

“People do feel three years is not long enough to judge. With a four-year term, more Governments might get chucked out after one term because people would say, ‘It’s been four years, we should have seen some impact.”‘

Really, Mr Farrar?

Funny thing…

National has now been in power for over four years.

What have they achieved in that time?

  • growing child poverty?
  • rising unemployment?
  • large numbers continuing to migrate to Australia?
  • wage cuts for 16-19 year olds?
  • taxpayer funded subsidies for Big Business?
  • taxcuts for the rich?
  • increased GST and other government charges for the poor?
  • lowing environbment standards and more pollution?
  • continuing attacks on the unemployed, solo-mums, etc?
  • no job creation policies?
  • continuing attacks on worker’s rights?
  • no comprehensive training for 85,000+ unemployed youth?
  • importing foreign workers instead of training our own unemployed?
  • state asset sales despite over-whelming opposition?
  • high dollar damanging our export sector?
  • more dodgy deals like pokie-machines for Skycity?
  • increasing foreign debt?
  • closing schools?
  • planned mining in Conservation lands?
  • etc, etc, etc…

As pro-National blogger David Farrar stated,

“It’s been four years, we should have seen some impact.”‘

Damn right, Mr  Farrar, damn right.

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When you stop voting

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Previous related blogpost

Why a Four Year Parliamentary Term is not a Good Idea  (15 March 2013)

References

Wikipedia: Election Day (United States)

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

NZ Herald: PM attacks journalist over SAS torture claims (3 May 2011)

NZ Herald: Charities’ food handouts at record after Govt cuts (18 Oct 2011)

TVNZ: Key unfazed as protesters descend on Parliament (4 May 2012)

Fairfax media: PM John Key Wants Four-Year Term For Parliament (7 Feb 2013)

Fairfax media: Government to ignore asset sales referendum (12 March 2013)

NZ Herald:  Voters divided on four-year term  (25 March 2013)

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Mighty River Power, Members of Parliament, and Conflicts of Interest

26 March 2013 16 comments

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On 27 June last year,  on the last episode of TVNZ7’s ‘Backbenches’, Minister for Courts, Associate Minister of Justice, and Associate Minister for Social Development, Chester Borrows, admitted his intention to  buy shares in partially-privatised state owned enterprises.

In an  exchange between ‘Backbenches’ Host Wallace Chapman and Chester Burrows,

CHAPMAN:  “Will you be buying shares in Mighty River Power?”

BORROWS:  “Yes, probably.”

CHAPMAN:  “Ok.”

BORROWS:  “I’m a mum and dad investor, well I’m half of a mum and investor partnership.”

CHAPMAN:  “So you will be.”

BORROWS:  “Yep.”

On 2 July, when I blogged this issue (see: Conflicts of Interest?), I asked three questions,

  • Is this a vested interest in partial-privatisation?
  • Is this a conflict of interest?
  • Is this verging on self-serving corruption?

It will be interesting to find (if at all possible to uncover), how many National/ACT/United Future members of Parliament will end up owning shares in Mighty River Power, and other part-privatised SOEs?

A recent Sunday Star Times story told readers that members of Parliament and government ministers would follow a self-imposed “moratorium” on not buying any shares in SOEs for 90 days,

Cabinet ministers have agreed to a voluntary “moratorium” preventing the purchase of shares by all ministers, and some of their staff, until 90 days after the initial sale.

Finance Minister Bill English’s office said: “Cabinet also agreed that ministers and the staff in those offices . . . should use their best endeavours to ensure that their partners and dependent children adhere to the same moratorium.”

Acknowledgment: Fairfax Media – Call to ban ministers from share float

That is simply not good enough. A politician could easily instruct a solicitor to buy shares on his/her behalf. Or purchase shares via a ‘shell-company‘. There are as many ways to dodge scrutiny as the human mind can imagine.

The implications of government MPs and Ministers owning shares in state assets which they themselves have decided to privatise is a serious matter.

The only three ways to avoid such a spectacular conflict of interest is,

  1. Pass legislation banning MPs or their spouses from ever owning shares in SOEs (not very practical)
  2. Make the Pecuniary Interests register a permanent feature for all politicians to fill out for the rest of their lives. (possible – though a real pain in the arse)
  3. Scrap the asset sales programme. (Much easier.)

If politicians such as Borrows purchase shares in SOEs, it will further lower their reputations in the eyes of the public. “They’re in it for themselves” will become a reality in the minds of people, rather than just a vague suspicion.

We’re treading on thin ice here and the prospect of real political corruption takes one step closer to reality.

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Additional References

Call to ban ministers from share float (24 March 2013)

Previous related blogposts

Conflicts of Interest?

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The road to Youth Rates – Wrong way, Prime Minister, Wrong way!

23 March 2013 15 comments

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closing the wage gap with Australia as promised by John Key

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1. Backgrounder

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It was during the 2008 general election that the issue of the growing wage disparity with our Aussie cuzzies became an issue. Curiously, it was the then-Opposition Leader, John Key, capitalist; multi-millionaire; and currency trader, who was making some very odd comments.

Indeed, he was sounding positively socialist – at the time;

We think Kiwis deserve higher wages and lower taxes during their working lives, as well as a good retirement.” – John Key, 27 May 2007

Acknowledgement: John Key’s website – “National Tough On Crime”

One of National’s key goals, should we lead the next Government, will be to stem the flow of New Zealanders choosing to live and work overseas.  We want to make New Zealand an attractive place for our children and grandchildren to live – including those who are currently living in Australia, the UK, or elsewhere. To stem that flow so we must ensure Kiwis can receive competitive after-tax wages in New Zealand.  We must cut taxes and grow our economy, and National will have policies to ensure both occur.” – John Key, 6 September 2008

Acknowledgement: National Party – “Environment Policy Launch

We will also continue our work to increase the incomes New Zealanders earn. That is a fundamental objective of our plan to build a stronger economy.” – John Key, 8 February 2011

Acknowledgement: Government statement

We want to increase the level of earnings and the level of incomes of the average New Zealander and we think we have a quality product with which we can do that.” –  John Key, 19 April 2012

Acknowledgement: Dominion Post – Key wants a high-wage NZ

Which sounded all well and good…

Until reality set in. And we remembered that John Key was leader of the National Party – not Labour, Greens, Mana, or the Alliance.

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2. Present Day

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As this blogger wrote last year;

On 9 October (2012), Labour Minister Kate Wilkinson announced that National intended to introduce a new Youth Rate, to take effect in April (2013). The rate would be set at $10.80 an hour – compared to the minimum rate of $13.50 [soon to be $13.75]  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.”

Acknowledgement:  Scoop – NZ teens face $10.80 an hour youth wage rate

It is doubtful if National’s Youth Rates 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.”

Acknowledgement:  Scoop – 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.

Note: the above figures relate to the adult Minimum wage at $13.75 an hour. At the time  the above statements were written, the adult minimum wage was $13.50 an hour. National very generously raised it by 25 cents an hour, and will take effect on 1 April this year.  (Low income earners would celebrate by popping the corks on a few bottles of Wairarapa ‘champagne’ – but 25 cents an hour doesn’t quite cover it. Perhaps a bottle of fizzy will suffice.)

So what was the rationale for National to implement what, effectively, is a wage cut for 16-19 year olds?

Minister for [Cheap] Labour, Simon Bridges said on 21 March this year – and I reprint his statement in full;

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Starting out wage - youth rates - simon bridges - national government - minister for labour - cutting wages

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Acknowledgement: Government statement – Starting-out wage available from 1 May

Nowhere in that statement does Bridges state –  or even hint –  that cutting the wages of 16 to 19 year olds will create one single new job.

Contrast that to Kate Wilkinson’s statement on 18 July 2010, when National introduced the 90 Day Trial Employment Period,

“The Government is focused on growing a stronger economy and creating more jobs for New Zealand families,” says Ms Wilkinson.

“There are a lot of people looking for work and the changes announced today will help boost employer confidence and encourage them to take on more staff.”

[…]

“The evaluation showed that 40 percent of employers who had hired someone on a trial period said it was unlikely they would have taken on new employees without it.

Acknowledgement: Government statement – 90-Day Trial Period extended to all employers

Wilkinson assured the country that, in return for employees losing job protection for 90 days, that the counter-benefit would result in  “stronger economy and creating more jobs for New Zealand families.

So how did that work out?

Let’s check the stats, shall we? From mid-2010 to the latest data for this year,

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Unemployment Rate - july 2010 - march 2013

Acknowledgement: Trading Economics/Statistics NZ

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From July 2010, unemployment rose to January 2011; dropped to July 2011; and then began an inexorable climb to 7.3%.

Even the drop to 6.9% [highlighted in the red box] in January 2013 is illusory, as Statistics NZ reported on Radio NZ,

The numbers officially out of work eased back from a 13-year high at the end of 2012.

But the fall in the unemployment rate was due to more leaving the workforce than new jobs being created.

The numbers of those deemed officially unable to find a job fell by 10,000 to 163,000 in the final three months, figures released by Statistics New Zealand on Thursday morning show.

As a result, the unemployment rate fell from 7.3% of the workforce to 6.9%.

The Household Labour Force Survey shows that employment fell by 23,000, led by there being more women out of work.

It was the third consecutive quarterly fall, taking those employed as a proportion of the workforce to a 10-year low.

The unemployment rate fell only because even more people gave up looking for work than lost jobs.

In all, 33,000 people dropped out of the workforce in the final three months of 2012 – the highest number to do so on record.

Acknowledgement: Radio NZ – Unemployment rate falls as more give up job hunt

If we add those missing 33,000 people to the number who are unemployed, the figures become  jaw-droppingly ghastly,

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Unemployment persons - july 2010 - march 2013

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Acknowledgement: Trading Economics/Statistics NZ

It’s fairly obvious; the 90 Day Trial Period not only did not create new jobs – but unemployment has skyrocketed.

Quite clearly, there are other factors that create new jobs, and silly, ill-considered, simplistic,  neo-liberal gimmicks do not contribute to the mix.

This blogger predicts that precisely the same will happen when youth rates are implemented on 1 April,

  • No new jobs will be created
  • Employment numbers will remain high
  • Older workers will be displaced in favour of cheaper, younger workers
  • New Zealanders will continue to migrate, en masse, to Australia, where jobs and wages have not  been undermined by an ideologically-blinded government

Is reducing the wages bill for  businesses really the best that Dear Leader can come up with? Because, really, the only thing that a new Youth Rates will do is transfer employment to cheaper workers and drag down wages with it.

This is not a plan for wage growth, it is a plan for a low-wage economy, with those New Zealanders who can, escaping to Australia.

Let’s not forget that on 10 April, 2011, Bill English actually welcomed lower wages, on TVNZ’s Q+A,

GUYON Can I talk about the real economy for people?  They see the cost of living keep going up.  They see wages really not- if not quite keeping pace with that, certainly not outstripping it much.  I mean, you said at the weekend to the Australia New Zealand Leadership Forum that one of our advantages over Australia was that our wages were 30% cheaper.  I mean, is that an advantage now?

BILL Well, it’s a way of competing, isn’t it?  I mean, if we want to grow this economy, we need the capital – more capital per worker – and we’re competing for people as well.

GUYON So it’s part of our strategy to have wages 30% below Australia?
BILL Well, they are, and we need to get on with competing for Australia.  So if you take an area like tourism, we are competing with Australia.  We’re trying to get Australians here instead of spending their tourist dollar in Australia.

GUYON But is it a good thing?

BILL Well, it is 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.

GUYON So let’s get this straight – it’s a good thing for New Zealand that our wages are 30% below Australia?

BILL No, it’s not a good thing, but it is a fact.  We want to close that gap up, and one way to close that gap up is to compete, just like our sports teams are doing.  This weekend we’ve had rugby league, netball, basketball teams, and rugby teams out there competing with Australia.  That’s lifting the standard.  They’re closing up the gap.

GUYON But you said it was an advantage, Minister.

BILL Well, at the moment, if I go to Australia and talk to Australians, I want to put to them a positive case for investment in New Zealand, because while we are saving more, we’re not saving more fast enough to get the capital that we need to close the gap with Australia.  So Australia already has 40 billion of investment in New Zealand.  If we could attract more Australian companies, activities here, that would help us create the jobs and lift incomes.

Acknowledgement:  TVNZ Q+A – Interview with Bill English

If the Nats think that the Australian government will sit idly by whilst Aussie businesses relocate to this country for cheaper wages, they are fooling themselves.  Australia will retaliate in some way – and it won’t be pleasant for us.

In last year’s May budget, the Nats decided to tax  the meagre wages of paper boys and girls (see: Budget 2012: ‘Paper boy tax’ on small earnings stuns Labour).  Now Key and English are cutting their pay again.

If this is truly the best that the Right can come up with, then they are bankrupt of ideas.

New Zealanders should ponder one, simple question; is this what we really  want for our country and our kids?

Meanwhile, we can add Key’s pledge to raise wages to his growing record of other broken promises. It’s turning into quite a list.

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Previous related blogposts

John Key’s track record on raising wages: 6. Youth Rates (11 Nov 2012)

Johnny’s Report Card – National Standards Assessment – Employment/unemployment (9 Jan 2013)

References

Government statement: 90-Day Trial Period extended to all employers (18 July 2010)

NZ Herald: Budget 2012: ‘Paper boy tax’ on small earnings stuns Labour (25 May 2012)

NZ Herald: Minimum wage to increase by 25c (26 Feb 2013)

Government statement: Starting-out wage available from 1 May (21 March 2013)

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Devoy as Race Relations Commissioner?! (revised)

22 March 2013 4 comments

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251637_367931503283864_96415761_n

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Susan Devoy, commenting on her appointment as our new Race Relations Commissioner,  said,

“There is no denying that this is a huge challenge in my life. I’m under no illusions how difficult it might be but maybe I didn’t realise how difficult it might be starting.”

Acknowledgement: Fairfax – Squashed in court of public opinion

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Dame Susan first woman in race post

Acknowledgement: NZ Herald – Dame Susan first woman in race post

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That has to be one of the  two worst Under-statements of the Year. (The other being John Key’s now infamous line that Hekia Parata was one of  National’s “smoothest communicators”. See:  Parata safe in her job – Key)

Ms Devoy’s appointment  has been heavily  criticised, mostly along the lines that she had zero experience in any field even remotely approaching race relations.  And some of her comments in the column she used to write for the  Bay of Plenty Times probably didn’t help much.

Comments like this,

“We deserve a day of true celebration and pride. We need a day that doesn’t necessarily replace Waitangi Day but complements it . . . This would leave Waitangi Day to be the day that recognises the importance of Maori, but the door open for a day that we don’t feel ashamed to be a New Zealander.”

Acknowledgement: Fairfax – Squashed in court of public opinion

Oh… so Maori can have Waitangi Day? That’s big of her.

No wonder that Annette Sykes condemned her appointment.

Judith Collins – famous for promising to crush all resistance (or was that Boy Racers’ cars?) – gave a measured, thoughtful, and insightful response to Ms Sykes. Collins called Sykes “stupid”. Wow, that rapier-sharp wit of Collins…

I must admit, when I first heard of Ms Devoy’s appointment, that I raised an eye-brow. I’m not totally familiar with her background, but from what I  knew, she seemed to have no social, practical,  or academic experiences that might give her insights into race relations.

Simply claiming to have “common sense” is not sufficient. What might be “common sense” for one individual might be offensive to someone else.

For example, referring to  “political shenanigans” on Waitangi Day, last year.

Ms Devoy and others of a like-mind might believe that was a straight forward, “common sense”,  assessment of events at Waitangi. It was not. It was inflammatory

On the other side of the coin, those who express themselves at Waitangi are doing so from a long history of broken promises; land theft; destruction of their culture; and a Treaty – signed between Maori and the Queen’s representatives here in New Zealand – that for well over a century had been observed more in the breach than reality – and then forgotten altogether.

If we’d been defeated in WW2 and colonised by a victorious Axis power, I think we would begin to understand how Maori felt.

Furthermore, when Ms Devoy said on 21 March,

“One of my strengths is that I’m pretty forthright and not afraid to have an opinion, but at the same time I have a very strong moral compass and I have a desire to do the right thing.”

Acknowledgement: NZ Herald – Dame Susan first woman in race post

– that really raised alarm bells with me. Her job is not to express “forthright… opinions” nor to “have a very strong moral compass”.   She is not there to tell people what to do nor to impress her “very strong moral compass” on others. If she doesn’t get to grips with that, the next few years will be a rough ride for Ms Devoy and others around her.

Judith Collins responded to criticisms of Ms Devoy’s comments by saying, that her opinions were hers alone, and she would be able to divorce them from her professional appointment,

Mrs Collins said the comments were made before Dame Susan became commissioner, and she would not be as free to express her personal views in her new role.

She added: “The Far Left does not have a monopoly on caring about race relations and Dame Susan Devoy is a very sensible and balanced person.

“We’re allowed in this country to have views that have not been politically sanitised and what’s wrong with that?”

Acknowledgement: NZ Herald – Minister defends Dame Susan Devoy’s new role

It’s not very reassuring when Minister Collins asserts that Ms Devoy, “would not be as free to express her personal views in her new role”. The underlying message is that Ms Devoy’s personal viewsare somehow  unpalatable and inimical to the role of  Race Relations Commissioner.

Worse still is when Collins says,

“We’re allowed in this country to have views that have not been politically sanitised and what’s wrong with that?”

Is the Minister suggesting that  Race Relations Commissioners in the past have had “ views that have … been politically sanitised”?

I would suggest that there is a vast gulf of difference between “ politically sanitised ”  and “ politically sensitive “. Unfortunately, National ministers seem not to know the difference.

And really, if Collins is serious about appointing people whose views have not been “ politically sanitised ” – perhaps she could hire the leader of a local White Supremicist group to the role? There’d be nothing sanitary about the political views of a white supremacist racist.

Whatever  inspired Collins to make this appointment, I believe, will come back and haunt National. Perhaps not this year. Maybe next year.

Does John Key really need another political fire to deal with? One would have thought that Hekia Parata and her Bigger Classroom Sizes foul-up would have been sufficient warning how events can rapidly spiral out of control?

Unless Ms Devoy has some hidden talent for this most-complex of jobs – her appointment will be like a quietly ticking political time-bomb.

Personally, I bear no animosity toward Ms Devoy and certainly harbour no desire to see her fail. With New Zealand being such a multi-cultural society, the office of the Race Relations Commissioner is important – this is where frictions can be quickly addressed and parties brought together to talk over differences.

I hope Ms Devoy succeeds.

But I can still hear a quiet ticking in the background.

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Two polls, two governments

21 March 2013 6 comments

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polls_ist2_141437_arrow_graph_down_rev_2249_704752_poll_xlarge

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Two  polls out recently give completely different outcomes if an election had been held over the last week or so.

One, the Roy Morgan poll would result in a change of government – whilst the Herald Digi Poll would (without overhangs) allow National to almost govern on it’s own. The results,

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Roy Morgan Poll

Herald Digi-poll

National

43.5% (-4%)

48.5% (+1%)

Labour

32.5% (+2%)

36.4% (+4.4%)

Greens

13.5% (+1%)

9% (-1.7%)

NZ First

5% (+2%)

2.5% (-3%)

ACT

0.5% (n/c)

0.1% (-0.1%)

Mana

0.0% (-0.5%)

0.5% (+0.2%)

Maori Party

2% (-0.5%)

1.1% (-0.4%)

United Future

0.5% (n/c)

0.0% (-0.3%)

Conservative Party

2% (n/c)

1.3% (-0.1%)

Undecideds/Wouldn’t Say

5%

11%

(n/c = No Change)

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Two polls, two outcomes, two governments. So which is more accurate?

In a previous blogpost (see:  Three recent polls), a comparison was made between Roy Morgan, Colmar Brunton, and Ipson Poll. Of the three, Roy Morgan was closest to actual election day results in 2011.

So let’s compare Roy Morgan; the DigiPoll, and Election Day results,

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Roy Morgan

24 Nov 2011

Digi Poll

25 Nov 2011

2011

Election results

Closest Polling result

Right bloc:

National

49.5%

50.9%

47.31%

Roy Morgan

Maori Party

1%

0.4%

1.43%

Roy Morgan

ACT NZ

1.5%

1.08%

1.07%

Digi Poll

United Future

0.5%

0.0%

0.6%

Roy Morgan

Left bloc:

Labour

23.5%

28%

27.48%

Digi Poll

Greens

14.5%

11.8%

11.06%

Digi Poll

Mana Party

0.5%

0.3%

1.08%

Roy Morgan
Other:

NZ First

6.5%

5.2%

6.59%

Roy Morgan

Conservative Party

n/r

1.3%

2.65%

Digi Poll

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Roy Morgan was slightly more accurate than the Heral Digi Poll.

Interestingly, Roy Morgan seems to be the most accurate pollster when it comes to National, beating Herald DigiPoll, Colmar Brunton, and Ipsos.

Equally important to  Roy Morgan’s polling for preferred Party, is  polling for Satisfaction/Dissatisfaction for the government of the day – in this case, National.

Roy Morgan asks respondants,

“Generally speaking, do you feel that things in New Zealand are heading in the right direction or would you say things are seriously heading in the wrong direction?”

The results seem to back up National’s fall in preferred Party stats,

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New Zealand Roy Morgan Government Confidence Rating (Government of John Key): Interviewing Dates
 

Jan 30-Feb 12,

2012

(post election)

Jan 2-13,

2013

Jan 14-27,

2013

Jan 28-Feb 10,

2013

Feb 11-24,

2013

Feb 25-Mar 10,
2013

Right direction

57%

53.5%

57%

55%

54%

51.5%

Wrong direction

30 %

33.5%

30.5%

30.5%

32.5%

37.5%

Roy Morgan GCR#

127

120

126.5

124.5

121.5

114

Can’t say

13%

13%

12.5%

14.5%

13.5%

11%

TOTAL

100%

100%

100%

100%

100%

100%

#Roy Morgan GCR = Roy Morgan Government Confidence Rating (The Roy Morgan GCR is 100 plus the difference between the percentage of New Zealanders who say the country is “heading in the right direction” and the percentage who say the country is “seriously heading in the wrong direction”).

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Acknowledgement: Roy Morgan Poll

Soon after the 2011 election, National rated highly with respondants, with 57% approval. Since then, except for a ‘blip’ at the beginning of the year, National’s approval rating has dropped from 57% to 51.5%.

Conversely, those expressing a view that National was headed in the wrong direction, rose from 30% soon after the 2011 election to 37.5%.

Those who Couldn’t/Wouldn’t say have dropped from 13% to 11% – meaning that people’s views on National are  firming up – and becoming more pissed off.

Once Mighty River Power is part-privatised, expect to see National’s support  plummet even further.

As this blogger has been predicting consistently; we will see a change of government in 2014 (if not earlier).

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Previous related blogpost

Census, Surveys, and Cellphones

Three recent polls

References

Final poll: Nats win looks certain, Winston over 5% (25 Nov 2011)

Roy Morgan Poll  (18 March 2013)

Labour rises at expense of allies  (21 March 2013)

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Two Tax Strikes against Dunne?

20 March 2013 5 comments

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cut taxes for the workers

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First, there was the Carpark Tax.

That didn’t go down well…

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Government ditches controversial car park tax plan

Acknowledgement: Government ditches controversial car park tax plan

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Strike one.

Then there was the “Talk Tax” on cellphone, ipads, smartphones, laptops, and  all manner of other gadgets. The business sector didn’t like that idea, either…

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Cellphone, laptop tax plan scrapped

Acknowledgement: TVNZ – Cellphone, laptop tax plan scrapped

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Strike two.

Next up, perhaps one of the meanest taxes ever…

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'Paper boy tax' on small earnings stuns Labour - stamped questionmark

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

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Made all the meaner because children cannot vote and therefore this is taxation without representation.

By contrast, the tax cuts of 2009 and 2010 gave the biggest cuts to the wealthiest in this country,

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tax-cuts-april-2009

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Tax rates October 2010

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The 2010 tax cuts alone gave Dear Leader an extra $291 extra per  week, on his old salary of $390,000 p.a. (see: $4b in tax cuts coming) – on the backs of school children doing paper-rounds and other part-time work, for pocket money, it could be said.

Key’s  salary has since increased to 411,510 – plus perks, allowances, superannuation, etc (see: Salaries payable under section 16 of Civil List Act 1979).

For Key, it’s apparently a “non-issue,

“A lot of people didn’t know they were entitled to them so they didn’t bother claiming. The amounts were fairly small and overall we have been trying to clean up the tax code.”

See:  Key rejects criticism of ‘paperboy tax’

I guess when you have $50 million stashed in bank accounts all over the place it’s fairly hard to identify with a kid earning $40 a week?

By what definition of fairness can we justify someone earning $390,000 a year getting an extra $291 a week – whilst paper boys and girls – who are paid a pittance anyway – are taxed for the few dollars they work for? Are we really that desperate as a nation? And then we wonder why our young people are buggering off to Australia and elsewhere?

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The Final Goodbye

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If there’s one single example of where our society has gone terribly wrong since 1984 – this, to me, is it.

It’s fairly apparent to everyone except the most sycophantic National supporter that the ’09 and ’10 taxcuts left a gaping hole in the government’s revenue. (see: Outlook slashes tax-take by $8b) Dunne’s pathetic attempts at raising additional taxes is simply a consequence of tax-cuts that were unaffordable three years ago – and remain unaffordable to this day.

On the issue of the “Paperboy/girl Tax”, I look forward to the business sector campaigning hard to scrap that, as they did with the “Carpark” and “Talk” taxes.

After all, the members of the Employers and Manufacturers Association have kids of their own.

Isn’t campaigning on behalf of your own children as important as a carpark?

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Additional

Key defends tax cuts in light of zero Budget (2 April 2012)

Key rejects criticism of ‘paperboy tax’ (25 May 2012)

Car park tax opposition cuts across cultural, class divide (19 March 2013)

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The unmitigated audacity of John Key and John Banks

19 March 2013 13 comments

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This is how a politician  owns up to a mistake,

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Shearer makes no excuse for forgetting bank account

Acknowledgement: Radio NZ

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Then there are politicians who continually blames others or claim to “forget”, when it’s obvious they are lying.

John Key’s talent for blaming others for his own stuff-ups is fast becoming becoming legendary,

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https://fmacskasy.files.wordpress.com/2013/02/national-and-john-key-blames.png

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Key’s habitual finger-pointing currently extends to blaming Solid Energy’s debt crisis on it’s  Board; management; coal prices; global financial crisis, and uncle Tom Cobbly. He takes  no responsibility for his own Ministers demanding higher debt gearing levels  and dividend payouts which helped plunge Solid Energy into a financial hole,

He’s [John Key]  blaming the previous Labour Government, including former state owned enterprises minister Trevor Mallard who encouraged the company to expand in 2007, and citing a Cabinet paper supporting that stance.

“They can’t wash their hands of the fact that from 2003 on, they were intimately involved with the plans that that company had,” Mr Key said.

Acknowledgement: TV3

It was put to the PM that Solid Energy seemed to have been working with a “pretty high-risk” strategy. He responded by saying that all of these things were operational matters — he added that “if National’s to blame, then so’s Labour”. He said that the management and the board are responsible for the balance-sheet.

Acknowledgement: Scoop.co.nz

Board at fault for Solid Energy debt, not Govt – Key

Mr Key denied the Government was responsible for the company’s woes, despite encouraging the board to take on debt in 2009 and expecting it to pay a dividend.

Acknowledgement: TV3

They made some investments in core assets and those didn’t work out either, and the coal price collapsed.

Acknowledgement: MSN News

So everyone was to blame for Solid Energy’s collapse – except National which has been in power for four years and bled the company dry with demands for high dividends.

Then there are times in politics that politicians make utterances that are breath-taking in unmitigated audacity,

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Shearer makes no excuse for forgetting bank account Banks comments

Acknowledgement: Radio NZ

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This is one such instance – John Banks,  whose memory was so “bad” that he forgot his close relationship with a rather large German multi-millionaire; a helicopter flight to one of the biggest mansions in New Zealand; and who forgot $50,000  cheques for  donations for his electoral campaign.

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John Banks says he never lied about internet billionaire Kim Dotcom’s $50,000 donation to his 2010 mayoral campaign but says he erred in not answering questions about the affair more openly.

But Mr Banks denied misleading the public about the donations and events around them, including a helicopter ride to Dotcom’s mansion which he has said he cannot remember.

“I didn’t lie. There’s no reason to believe that I lied. I simply couldn’t recall.”

Acknowledgement: NZ Herald

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For someone with “nothing to hide” ACT leader and former Auckland mayor John Banks is doing an awfully good job of creating the impression there are some things he would rather keep to himself.

He has refused to confirm he solicited a donation from internet billionaire Kim Dotcom for his 2010 mayoral campaign and refused to confirm he asked that the $50,000 donation be split into two $25,000 payments.

He has also said he does not remember who donated money to his mayoral campaign, does not remember discussing money with Dotcom and his staff and, till yesterday, could not remember flying to Dotcom’s Coatesville mansion in Dotcom’s helicopter.

Either Mr Banks is suffering from the early onset of Alzheimer’s or he thinks honest answers to the questions raised by the revelation that Dotcom was an undisclosed donor to his campaign will reflect poorly on him.

Acknowledgement: Dominion Post – Editorial: Bad memory or poor judgment?

John Key and John Banks are now attempting to compare David Shearer’s omission for declaring his New York-based bank account.

Key said,

“People make mistakes. I make mistakes and when I do, I try and tell people I’ve made them. It’s just that you don’t get cut any slack from the Labour Party when you say you’ve made a mistake, but when they make one they don’t want anyone to have a look at it.”

Acknowledgement: NZ Herald – Key weighs in on Shearer’s $50,000 ‘oversight’

And John “I-can’t-recall” Banks added his own 2 cents worth,

“Shearer is on record as saying those who suffer from a memory lapse aren’t fit to hold office.  Shearer’s hypocrisy is staggering.”

Acknowledgement: IBID

Except for one thing – and here’s the rub:

David Shearer himself disclosed and admitted his own mistake,

“Frankly I was horrified that I’d overlooked it and I moved straight away to correct it. When I myself found that (bank account) error I made the move to correct it, I didn’t wait for anybody else to find it.”

Acknowledgement: IBID

It is one thing to stuff up; come clean; apologise; and not try to blame others.

It is entirely another matter when one continually blames others for his mistakes or has such problems recalling events that they become a laughing stock.

Perhaps Mr Key and Mr Banks should take a lesson from David Shearer’s book;  own your mistakes; don’t blame others; and don’t make facile excuses.

It’s not politicians who make mistakes, that the public loathes. It’s when they try to avoid responsibility for their errors.

Especially when Key and Banks demand responsibility from the rest of us,

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Food parcel families made poor choices, says Key

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

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More dispatches from Planet Key

17 March 2013 4 comments

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planet key

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Planet Key’s #3 Moon “Brownlee”; Largest of the Moons, it tends to disturb other bodies through it’s presence. “Brownlee” has a rough surface and highly abrasive atmosphere that many find obnoxious. “Brownlee’s” gravitational influence has a negative, perturbing,  influence on nearby bodies such as Planet Christchurch.

Brownlee recently let rip at Christchurch City Council for not carrying out repairs to council-owned community housing fast enough,

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Brownlee says housing councillor should go

Acknowledgement: Radio NZ

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Consider for a moment that Brownlee, as the Canterbury Earthquake Recovery  Minister, is in constant contact with CERA, Christchurch’s mayor, and anyone else remotely connected with that city and it’s re-build.

Brownlee has channels of communications that are open to him that allows him to discuss issues and problems as they arise.

So what was the purpose of this display of public excoriation of the Christchurch Council and especially the vilification of one Councillor, Yani Johanson?!

Does Mr Johanson not have a telephone?

Email? Skype? A paper letter? Smoke signals? (The latter seems to work well for the Vatican.)

Could Brownlee not have sat down around a table and asked the most basic of questions,

How can we help?”

Or is the public display of testosterone-fuelled machismo Minister Brownlee’s new modus operandi when dealing with those who fall within his ministerial orbit?

This kind of authoritarianism may be the norm in Zimbabwe, Burma, or North Korea – but here in New Zealand it comes across as the cries and foot-stamping of a petulant child.

Meanwhile, National ministers should look in their own backyard when it comes to housing,

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Pomare housing demolition begins

Acknowledgement: Dominion Post

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Christchurch has been wracked by two massive earthquakes and thousands more quakes since. Every aspect of their basic infra-structure was damaged or ruined to varying degrees.

I think we can cut them some slack when it comes to re-building an entire city, from beneath ground-up.

Meanwhile, nearly eighteen months later, with no earthquakes or any other major disasters (unless one  calls a National Government a major disaster), one wonders why National ministers have not progressed any further to re-build Pomare’s state housing?

After nearly a year and a half, all we’re seeing is a vast vacant lot, where once peoples’  homes existed,

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Pomare state housing_vacant lot_farmers cres

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Pomare state housing_vacant lot_farmers cres

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Any ideas, Mr Brownlee?

(More on this issue in an up-coming blog-story)

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Planet Key’s #4 Moon “Dunne”; covered in a dense, white atmosphere; “Dunne” is known to move from Planet Key to Planet Labour depending on which mass is greatest. The largest surface object on “Dunne” is the ‘Make Me a Minister’ volcano, which erupts whenever there is a nearby power-source.

As Minister of Revenue and Flashy Hairstyles, Peter Dunne is charged with taxation issues in this country.

No doubt his job was made considerably harder with two tax cuts (2009 and 2010) which considerably reduced taxation revenue for the State. (see:  Govt’s 2010 tax cuts costing $2 billion and counting, see:  Outlook slashes tax-take by $8b) Indeed, English was forced to tax children and their paper-rounds. (see:  Key rejects criticism of ‘paperboy tax’)

Taxing kid’s meagre earnings. That’s how low and desperate National ministers have gone, to make up for the 2009/10 ‘lolly scrambles’ when the Nats  gave away billions in unaffordable tax cuts.

To try to fill the fiscal hole that Bill English, Peter Dunne, et al, have put themselves into, they’ve been scrambling to raise government charges  and tax everything and anything else that moves. (see: Prescription fees increase, see: Vulnerable children at risk from Family Court fees increase, see: Student fees rise faster than inflation, see: Petrol price rises to balance books)

The latest attempt to raise new taxes is Peter Dunne’s ‘carpark tax’,

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Business will evade car park tax

Acknowledgement: Fairfax media

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Well, well, well… a new tax?

A new fringe benefit tax?!

This is interesting.

Because John Key has always insisted that his Party cuts taxes and doesn’t increase them. Specifically, way back on 4 April 2005, when National was in Opposition,

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National Party Finance spokesman John Key has signalled an overhaul of the Fringe Benefit Tax, during a speech to the Auckland Rotary Club today.

“The next National Government will cut the red tape and compliance costs that are choking our businesses and preventing them from getting off first base,” he says.

“A practical example of what I am talking about is in the area of Fringe Benefit Tax.

“Today I want to announce that National will revamp Fringe Benefit Tax to remove a substantial amount of the paperwork that currently occupies too much administrative time for many of our businesses, especially the small ones.

[…]

We won’t entertain suggestions of applying FBT to on-premises car parks.” 

Acknowledgement: Scoop.co.nz

And again in 2010, when a video was uncovered where Dear Leader was quoted as saying,

National is not going to be raising GST. National wants to cut taxes, not raise taxes.

See: Key ‘no GST rise’ video emerges

When challenged on this in the House, just recently,  Minister for Everything, Steven Joyce, responded with this bit of bovine faecal material,

I would say that I think a fair amount has changed since that statement was made back in April 2005, which was when Don Brash was leader of the National Party. Since that time we have had three leaders of the Labour Party, and maybe a fourth leader of the Labour Party—”

Source: Parliament Hansards – 9. Tax System Changes—Employee Car-parks

Yeah. Lot’s of things have changed. Like, for example, the difference between being in Opposition and Promising the Moon – and being in Government and having to explain why the Moon is still out of reach.

And when the Nats have to make smart-arse comments about Labour’s leaders, then you know they’re really on the ropes. Defensive much, Mr Joyce?

Like Key’s broken promise on GST, the “carpark” tax is another instance of National breaking it’s election promises. Which indicates, mainly, that National’s tax-cuts were never as affordable as they made out in 2008.

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Special Edition Tax cuts today - John Key

Acknowledgement: National Party

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Planet Key’s #5 Moon “Bennett”; “Bennett” originated from the asteroid belt, where many poorer dwarf-planets with low mass; minimal mineral wealth; and mostly invisible, are locked in orbits that will take them nowhere. “Bennett” gravitated to the National Zone where her mass and mineral wealth increased by close association with  Planet Key and it’s many  moons.

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To repeat and quote Bennett, when she stated 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

To quote Minister Bennett’s latest utterances on this issue, on 12 March 2013, when hundreds of  people recently queued for just seven jobs at Carter Holt Harvey in Auckland,

“Well I am absolutely thrilled that 200 turned up quite frankly we’ve got more than 50,000 on the unemployment benefit but work expectations of them I think the fact that they are lining up that they want those jobs um speaks for itself and about peoples’ motivation to get work.”
 

“There’s always a lot of people going for certain types of jobs and if in particular if they are lower skilled they feel they can do them, they don’t have a lot of work experience, they have been out of work for some time.”

 
“No I don’t feel there is a job for everyone and I think it’s damn tough but I am incredibly proud of New Zealanders and their  motivation and the fact that they want them and I know that the economy is improving and we are going to see more happening.”

See: TV3  – Campbell Live:  Sign of the times: hundreds queue for 7 jobs

Acknowledgement for transcript:  Waitakere News – Don Elder, Paula Bennett and the rest of us

Ok, so the lightbulb has finally clicked in Bennett’s head. New Zealand has a problem. We do not have enough jobs for the number of unemployed and solo-parents who want to work.

It’s not often that a politician acknowledges the bleedin’ obvious – so kudos to her for having the  courage to do so. (John Key might learn a thing from Bennett in terms of not ducking  issues.)

However, if there are not sufficient jobs to go around – what is the point in wasting taxpayers’ money and Parliament’s time on this exercise in futility,

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Welfare reform bill passed into law

Acknowledgement: NZ Herald

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And why is language like this used by Bennett,

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Reforms to help beneficiaries out of 'trap'

Acknowledgement: NZ Herald

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If there are insufficient jobs – as Bennett herself has now acknowledged on at least two occassions, then ipso facto, the following must be true;

  1. The only ‘trap’ is a lack of work – not welfare
  2. Why “reform” the welfare system  when welfare itself is not broke – it’s the economy that is not working (as are 170,000 people)
  3. Why muddy the waters with  rhetoric like  “trap of benefit dependency“; “introduce expectations for partners of beneficiaries and make beneficiaries prepare for work“; or that welfare had “become a bit of a trap for quite a few people“?

What does “a bit of a trap for quite a few people” mean? That it’s a “little” trap as opposed to a “big” trap? Or is she attempting to minimise the impact of her beneficiary-bashing by trying to soften her rhetoric?

So the “dog whistle” rhetoric filters down to the right wing; the ill-informed; and other welfare-hating cliques in our society – but the message is watered-down for the Middle Classes who are uncomfortable with victimising the unemployed, or who may even know someone who recently lost their jobs.

That’s the trouble with beneficiary bashing during times of high unemployment. Most of us know someone who has lost their job through no fault of their own. Bennett is walking a tight-rope here.

Eventually, people will be asking; why are National ministers  wasting time on pointless welfare “reform” when it’s jobs we need?

Once that message percolates into the collective consciousness of the masses, National will be left standing naked – their corrupt, bene-bashing, dog-whistle politics exposed for all to see.

A few questions for Ms Bennett,

Why are you messing around with welform “reform”, when it’s jobs that we need?

Why aren’t you and your well-paid ministerial colleagues reforming the economy to create more jobs?

How much are these “reforms”  costing us, the tax-payer?

How many extra jobs will welfare “reforms” create?

I don’t expect answers to these questions because, really, they are unanswerable.

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Links

Facebook: Pomare save our community

Copyright (c)  Notice

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

  •     Use must be for non-commercial purposes.
  •     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 =

2013 – The Year of The Big Dry – Part Rua

15 March 2013 2 comments

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Continued from: 2013 – The Year of The Big Dry

Looking south from the Kennedy-Good Bridge (Fairway Drive),

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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The river, looking south. Don’t be fooled by the width of the water-flow, as subsequent photos will show,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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Looking down from the bridge, the shallowness of the river is clearly apparent. Note the six stones in the middle of the river,

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March 2013 - new zealand drought - the big dry - climate change

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A close-up of the the six stones. They are breaking the surface of the water,

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2013-the-big-dry-new-zealand-drought-hutt-valley-23.jpg

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Looking north again, toward the Tararua mountains. The sky is mostly clear, and what few clouds there are, show little promise of water,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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Away from the river, the nearby Avalon Park is parched. Again, it looks like something that our Aussie cuzzies might be more familiar with,

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March 2013 - new zealand drought - the big dry - climate change

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Another angle of the Park. Curiously, the park is devoid of it’s duck population. Normally, there are hundreds of the feathered critters all over the place. But this blogger couldn’t find one. Only a couple of dozen seagulls – eternal scavengers and survivors – were standing around, waiting for a free meal from a few people in the park,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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Moving north, at the Totara Park Bridge, this horse paddock was as parched as  Avalon Park,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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The river  flowing under the Torara Park bridge, with parched river banks to either side,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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The river, looking north, toward the  Tararuas. Again, don’t let the width of the river fool you – it’s actually quite shallow. Note the patch of rocks, left-of-center, and the one rock in the vcenter of the photo. They are breaking the water surface,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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A close-up of the photo above, showing  stones in the middle of the river breaking the surface,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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The river level is so low that even the river bank plant life is parched,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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Looking south, it’s easy to see how far the rive has dropped. In some places it’s more like a stream than the Hutt River we’re used to,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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By comparison, the Hutt River as it  normally is,

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Acknowledgement: Tourism Properties

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Acknowledgement: The Valley Club

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*** Newsflash***

The entire north island is now officially in drought. See: Drought status for entire North Island.

Our household is supporting local the call from the Greater Wellington Council to cut back on water usage. Specifically,

  • not washing the car (yay!)
  • stopped watering our vege garden or lawn
  • short showers – less than 5 minutes
  • cutting back on washing machine usage
  • only flushing the toilet when necessary; “if it’s yellow, let it mellow; if it’s brown, flush it down
  • giving dirty dishes and utensils a quick rinse in a bucket (containing water and detergent)  and putting aside to  wash in one big lot
  • not running water when brushing our teeth
  • preparing meals that require minimal water usage

When we’re faced with 20 days of water left – it focuses the mind not to waste the precious stuff. (See: Wellington has ’20 days of water left’ in drought)

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Copyright (c)  Notice

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

  •     Use must be for non-commercial purposes.
  •     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 =

2013 – The Year of The Big Dry

15 March 2013 1 comment

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NZ, Wellinton, 13 March 2013 –  In 2011, it was the Year of the Big Chill, as snow blanketed the entire country.

Two years later, as climate change impacts globally, New Zealand is no longer immune to extreme weather patters. In the Hutt Valley, just north of Wellington, the Hutt River’s levels are significantly lower than seen in a long time.

The following photos were taken on the Hutt River, from  Avalon to Totara Park …

Hutt River, adjacent to the Moonshine Bridge, looking north. The river level  normally swirls around  bridge pillars in the foreground. The pool in the foreground is usually part of the river flow,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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Stagnant pools, covered by green slime-algae, where only a few months ago the river flowed,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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Looking north, we see how far water levels have receded,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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Looking south, most of the Hutt River at this point is dry rockbed,

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2013-the-big-dry-new-zealand-drought-hutt-valley-6.jpg

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An overview from a higher vantage point. The river flow normally reaches all four concrete pillars of the rail-bridge,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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The width of  the river at this point is mis-leading; the water is extremely shallow. The water level reached to a swimmer’s  (not in image)  hip’s at the deepest point,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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Looking north, on the Moonshine Bridge. Half the river is dry,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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A view from beneath the Silverstream railbridge (parallel to the Moonshine bridge), with a view of a mainly dry part of the river,

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Looking north: at Avalon, part of the rivebank. Despite being close to the Hutt River, the grass is all dried and dying,

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2013-the-big-dry-new-zealand-drought-hutt-valley-9.jpg

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The grass was so brown and dry, it reminded me of Australia, where “The Sunburnt Country” is a literal description,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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Looking northward; the Hutt River at Avalon.  The water waters are at extreme low-levels. Just how low will become apparent in the next few photos,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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Looking north; the width of the river is illusory. Note the seagulls to the left-of-center in the photos,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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A close-up of the gulls. They’re standing in the water, indicating how shallow it is,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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The river curves around and under the Kennedy-Good Bridge (Fairway Drive). Note the tyre just off-centre, to the right, in the photo,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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A close-up of the above photo. Note the tyre? It’s not floating – it’s sitting on stones. That indicates the low level of the river,

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2013-the-big-dry-new-zealand-drought-hutt-valley-181.jpg

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Looking north; seagulls standing in the water; tyre sitting on stones (bottom of photo) and Avalon TV Centre, near top of pic,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  March 2013 - new zealand drought - the big dry - climate change

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To be continued: 2013 – The Year of The Big Dry – Part Rua

*** Newsflash***

The entire north island is now officially in drought. See: Drought status for entire North Island.

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Copyright (c)  Notice

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

  •     Use must be for non-commercial purposes.
  •     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 =

Pre-register your disinterest in buying Mighty River shares

14 March 2013 3 comments

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Pre-register your disinterest in buying Mighty River shares

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Not keen on buying shares in state assets you already own?

Are you wanting to pre-register your dis-interest?

Get in quick, now, and we’ll guarantee all pre-registrants 25% extra of NO shares at all!

This Facebook page is a great idea, and a simple, 5 second means by which you can indicate your disinterest in the sale of our state assets!

Get in Now! Get in quick!

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Pre-register your disinterest in buying Mighty River shares!

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Click the ‘Like’ Button to go to the Facebook Page!

Click the ‘Like’ Button to go to the Facebook Page!

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(And don’t forget to share this with your friends, family, workmates, etc! The more the merrier!)

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National caught out over Solid Energy – changes story on coal prices, debt, and other matters

13 March 2013 19 comments

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SOEs

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When Solid Energy’s financial crisis became public on 21 February 2013, Bill English, Tony Ryall, and John Key were quick to apportion blame. Their high-paid (by the taxpayer) media strategists had done their dirty work.

They blamed;

  1. Solid Energy mis-reading trends in coal prices
  2. The previous Labour government
  3. The Board and management of Solid Energy
  4. The Global Financial Crisis
  5. Mrs Teagle, the tea-lady
  6. Sunspots

Everyone was to blame. National’s hands were clean. The world is a bad place.

So, let’s go through the points above.

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1. Solid Energy mis-reading trends in coal prices

One of National’s constant lines –  in an attempt to smear  Solid Energy’s Board as incompetant – was the SOE’s  inability to “read trends in world prices for coal”.

As Dear Leader, John Key said on 25 February,

Asked at his post-cabinet press conference why Solid Energy was in such dire straits, he said its directors grossly over-estimated what they thought coal would be worth.

“They got it completely and utterly wrong, and up to the middle of 2012 they still rejected the international view of where coal was likely to go,” he said.

Source: Solid Energy got coal price wrong: Key

On 21 February, Little Leader, Bill English said,

“World coal prices have dropped significantly which has contributed to the deteriorating financial position that Solid Energy is in now.

“These discussions are required because the position of the state-owned enterprise has continued to deteriorate despite the restructuring that has already taken place,” Mr English says.

Source: Bill English & Tony Ryall – Statement on Solid Energy

And as Baby Leader, Tony Ryall also said on 21 February,

State-owned Enterprises Minister Tony Ryall said a number of factors had weighed against the company, in particular world coal prices dropping by 40 per cent.

“It is facing very serious financial challenges,” Ryall said.

Source: Debt-laden Solid Energy talking to banks

So the narrative  being spread by senior National ministers was that Solid Energy was incompetant and couldn’t understand world coal price trends.

Which, for a company that lives, breathes, and farts coal seemed… unlikely.

#1 – Rebutted

But then, on 13 March, Bill English was reported on Radio New Zealand with this statement,

But Finance Minister Bill English says it wasn’t clear that coal prices were declining, and the Government can’t be held responsible for how much debt Solid Energy eventually took on.

Source: Labour says Govt forced Solid Energy to borrow more

Okay… so despite Key, English, and Ryall insisting that Solid Energy had mis-read trends in global coal prices, he is now saying that “it wasn’t clear that coal prices were declining”?!

Well, I’m glad that’s been cleared up.

After all, it’s not like National was initially claiming that world coal prices [were] dropping by 40 per cent  to make Solid Energy’s board look bad – and then suggested  it wasn’t clear that coal prices were declining for National to save their own arses.

That would be… contradictory.

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2. The previous Labour government

National has blamed the previous Labour government for everything, from the decline of the British  Empire, to the sinking of the Titanic. (And trying to pin both World Wars on Labour – but that’s a work-in-progress.)

On 26 February, Key said,

“They can’t wash their hands of the fact that from 2003 on, they were intimately involved with the plans that that company had,” Mr Key said.

On 13 March, English said,

At the time, it was not clear that coal prices were declining. In fact, the best advice from the company—with which the Government ended up disagreeing—was that coal prices would continue to rise. But, as I said, that decision was made in the context of the mess that the previous Labour Government left with the State-owned enterprises.

Source: Parliament Questions and Answers – March 13

Ah, the inhumanity of it all… The dastardly tentacles of a previous government, from four years ago, reaches into the present day to thwart National’s good works. It’s amazing that with such power, that Labouir ever managed to lose two elections in succession, from 2008…

One has to wonder though… is National really so powerless? If so, why are they in government?

#2 – Rebutted

In a rather strange moment of open honesty, Tony Ryall had this to say about Labour’s administration of SOEs, on 27 February,

Hon TONY RYALL: No, I am not going to launch some sort of independent investigation into the governance of Solid Energy. The governance of Solid Energy, much of which was appointed under the previous Labour Government, was running that company and it was doing very well up until 2011. We had the scoping study. It identified a number of issues. And I agree with Trevor Mallard: the collapse of world coal prices is a most significant factor in this matter.

Source: Parliament Questions for oral answer: 5. Solid Energy—Former Chief Executive

And a few days later, on  2 March of this year, Key let slip,

”On the face of it, at least what it had was rising profits. It had a situation where its valuation was going up, it had bankers lending it money, and it had an investment stream that had been set in place by the previous Labour Government,” Mr Key told BusinessDay.

Source: Solid Energy bail-out cost likely to rise

Really?

A look at the profits and dividends paid during Labour’s administration bear out their prudent management of SOEs. And confirmed by Tony Ryall and John Key.

In Labour’s  entire eight years, not one single  SOE suffered a financial collapse of the magnitude of Solid Energy – and Cullen was still posting surpluses, year after year. And paying down government debt. And finding time to play with his grandkids.

The Nats are in office for four years – and they lose a SOE on their watch?

How does that work?

Especially when, as Adam Bennett reported in the Herald on 13 March,

Mr Shearer later said Solid Energy had responded to the Government’s call, “returning $130 million over four years, including $30 million in late 2011 by which time coal prices had further declined and the company was in financial distress“.

He also pointed to the company’s increase in borrowing over that period, rising from $13 million in 2009 to $191 million the following year and $313 million by 2012.

See: Govt accused of milking Solid Energy for dividends

By contrast, the previous Labour government, took only  $64.4 million as a dividend to the  to the Crown – over an eight year period. (See:  Government defends Solid Energy payouts)

Which still baffles me as to why New Zealanders still have this misconception that National are “prudent fiscal managers” of the economy.

Personally, I wouldn’t let the buggers run a sausage sizzle outside Pak’n’Save.

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3. The Board and management of Solid Energy

National’s culture of blaming others for their own mistakes is slowly but surely building in the public consciousness. (See previous blogposts: Taking responsibility, National-styleDear Leader Key blames everyone else for Solid Energy’s financial crisis) It has become de rigueur for National to immediately seek out, and blame others, for one of their cock-ups.

And when one minister – Kate Wilkinson – resigned immediatly upon the release of the report from the Royal Commission on the Pike River Coal Mine Tragedy, it was seen for what it was; tokenism. And a strategic attempt to close down (or minimise) media scrutiny of  National’s de-regulation in the 1990s, which led inevitably to  a culture of poor safety in our mining industry.

Practically every public comment by National has directly, indirectly, or in a covert fashion, attempted to sheet blame for Solid Energy’s financial crash on it’s Board and CEO, Don Elder.

Key even suggested – po-faced – that the SOE was practically out of control. On 25 February, Dear Leader stated,

While the New Zealand government was unwilling to back Solid Energy in that role, it appears to have been powerless to prevent the company from taking what Key described as “baby steps” towards such a future.

Source: Govt blocked grandiose Solid Energy plans in 2009

“The company did have the right to draw down debt and make investments without shareholder authority” up to a certain level, Mr Key says.

Source: Govt blocked grandiose Solid Energy plans in 2009

So, can someone remind me again – what, precisely, is the role of the Minister for State Owned Enterprises?

#3 – Rebutted

The above was nothing less than an attempt at total abdication of responsibility by Key and his Ministers. As an  incredibly insightful Dominion Post editorial of 2 March  stated,

There are always excuses when a company starts to fail. John Key’s explanation for the trouble at Solid Energy, however – he blamed the Labour government – was pitiful.

It was Trevor Mallard’s fault, apparently, for encouraging SOEs to spread their wings and fly. That was in 2007 or 2008.

This won’t do, and not just because Mr Key’s Government has been in power for more than four years. His argument also contradicts itself. A Labour government was seemingly omnipotent and could have its way with the state-owned coal company. But National had no such power.

The Government certainly said no when Solid Energy asked for a billion dollars to turn itself into a super-company along the lines of Petrobras, the Brazilian giant. Mr Key says it had grave doubts about the company’s expansion plans. His political opponents point out that he and Bill English had publicly backed Solid Energy’s big plans for lignite conversion and briquetting.

So what was really going on? Mr Key says the company didn’t require the Government’s approval for the investments. Nor did the Government have a good reason to sack the board, as it could have done under the SOE legislation. So: nothing to see here, apparently.

If all these excuses were valid, it would be hard to know how any government could be held to account for what its state-owned companies were doing. Mr Key’s Government cannot get off so lightly. Nor can his officials. It is unclear just what kind of “monitoring” Treasury was doing, but it obviously wasn’t effective.

Source: Editorial: Solid Energy excuses fuel anger

And then, on 13 March – the bombshell,

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Labour says Govt forced Solid Energy to borrow more

Source

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So now we’re getting at the answers.

Now we’re starting to build up a clearer picture as to not how Solid Energy got into debt – but why.

As with most things, the anwer is simple.

National needed cash to balance it’s books by 2014/15. Not content to flog off state assets to raise x-billion dollars, it used Solid Energy as as cash cow, to extract maximum dividends.

Just as Brierleys extracted maximum dividends from Air New Zealand in 2001, stripping the airline of it’s cash reserves in the process and bankrupting it.  (see previous blogpost: A Clear Warning to Investors in SOEs)

More importantly, it used Solid Energy as a front to borrow.

If a government borrows cash, it shows up on their balance books as a liability.

If a SOE borrows cash; then pays it to a government as a “dividend”, it shows up on the books as a profit.

That was why National was forcing Solid Energy to borrow hundreds of millions of dollars and then demanding it to be paid into government coffers as a “dividend”.

My immediate thoughts on this are,

  1. All three ministers – Key, English, and Ryall – should appear before the Commerce Select Committee to answer questions. To this blogger, there appears to be serious implications of  questionable behaviour by National Ministers and their dealings with Solid Energy.
  2. There is more to come out on this isssue, such as why Solid Energy’s Board allowed this cash-stripping by National Ministers to be carried out.
  3. And this is the most important: I think every New Zealander who is considering investing in Mighty River Power – and other SOE shares – should look very carefully at their books.  The question has to be asked; have National Ministers done the same thing to other SOES? Are they also heavily “geared” (borrowed against assets) and highly vulnerable to market downturns?
  4. The auditor-general, or some other forensic accounting firm, should immediatly be called in to to assess the books of all SOES.

At this point in time, I wouldn’t touch a single share of any SOE, with bio-hazard gloves.

They may be financially toxic.

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References

Fairfax media: Debt-laden Solid Energy talking to banks (21 Feb 2013)

Building a Brighter Future: Bill English & Tony Ryall – Statement on Solid Energy (21 Feb 2013)

Scoop: Govt blocked grandiose Solid Energy plans in 2009 (25 February 2013)

MSN News: Solid Energy got coal price wrong: Key (25 February 2013)

TV3: Govt, Labour squabble over Solid Energy (26 Feb 2013)

Otago Daily Times: Solid Energy bail-out cost likely to rise (2 March 2013)

Dominion Post: Editorial: Solid Energy excuses fuel anger (2 March 2013)

Southland Times: Government defends Solid Energy payouts (12 March 2013)

Radio NZ: Labour says Govt forced Solid Energy to borrow more (13 March 2013)

NZ Herald: Govt accused of milking Solid Energy for dividends (13 March 2013)

Parliament: Questions for oral answer: Ministers—Confidence (13 March 2013)

Parliament: Parliament Questions and Answers  (13 March 2013)

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392,000 New Zealanders send a clear message to John Key – Part Rua

12 March 2013 4 comments

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Continued from: 392,000 New Zealanders send a clear message to John Key – Part Tahi

NZ, Wellington, 12 March 2013 – Ms Maniapoto Jackson introduced the first speaker, Greypower’s President, Roy Reid,

“So please welcome up the man who initiated this historical moment for us – the biggest citizens initiated referendum in [New Zealand’s] history!”

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

Roy Reid

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“As President of Greypower, I wish to inform you  that Greypower has been opposed to the  sale of state owned assets  for a number of years. And this was reconfirmed at our annual general meeting two years ago. We advised all the political parties in this  House that we were opposed to them selling any of our assets.

Our generation worked hard. We paid the taxes, to build our existing assets. They’re not for sale. They belong to  all New Zealanders.

I sincerely thank all those who worked from one end of New Zealand to the other, to collect those 394,000 signatures just behind us.  It’s the biggest petition  ever presented to this House.
I pay tribute to our co-supporters, the New Zealand students association. For being involved with us, because it shows the country that we are united from the elderly to the younger generations…

…I’m sure that we’ve got enough valid signatures in those boxes to force the referendum. And [despite] no respect for what this government today says, the people of New Zealand will have their say.”

It as perhaps fitting that Mr Reid was given first opportunity to address the crowd.  It was indeed his generation, and others before him, who sacrificed so much to build what we have in New Zealand today. And which a few greedy, short-sighted number of our fellow New Zealanders seem unable to comprehend that these assets do, indeed, belong to us all.

Not just to those with the cash to buy shares.

Our elected representatives certainly did not hesitate to show their agreement with Mr Reid’s comments,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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Ms Maniapoto Jackson then invited the next speaker; ex-Vice President of the Auckland Students Association and  Ngai Tahu; Arena Williams,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

Arena Williams

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Ms Williams greeted the crowd in Te Reo and her following message was short, blunt, and to the point,

“There’s one message that the government needs to take home from such an over-whelming support of this petition, and that’s Stop the asset sales and give New Zealanders a chance to have a say on this really important issue!”

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The next invited guest-speaker was  economist, Peter Conway, from the Council of Trade Unions,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

Peter Conway

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Mr Conway said,

“The Union movement is really proud to be here today  at this amazing event and I just want to say, fantastic effort. Well done everybody! It’s awesome.

Now it might have been a little bit easier if for me to have the backing of a one million dollar advertising campaign, and maybe if we we’d been able to do it all on line. But I actually think that the fact that we went out there into communities where people work, live, and play and debated the issues; talked to people about it and got such a fantastic response, is really a testament to our democracy…

… So this is part of our democracy. And what we’re saying to the government; respect democracy… Let’s get this referendum up,  and the Council of Trade Unions, on behalf of the union movement, is calling on the government to halt all asset sales and listen to the people.

Kia kaha, and thanks very much.”

Ms Maniapoto Jackson then welcomed the Leader of the Labour Party and MP for Mt Albert, David Shearer,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

David Shearer

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 After expressing his welcome,  Mr Shearer gave a brief thanks to the people, followed by a similarly brief message,

Look, I just wanted to start by saying ‘thank you’, ‘thank you’ for all of those people who went out day after day, weekend after weekend, who stood on cold corners in the middle of winter and got people to sign this petition. Thank you to the hundreds of thousands of New Zealanders who care about this country so much that they put their signature to this petition.

This is about the transfer of an asset that we all own into the hands of a very few. That’s what it’s about, it’s about fairness. It [asset sales]  is not fair.

This referendum will make the government listen to New Zealanders.

The fight will go on. It’s not finishing today. It will go on and we in the Labour Party will continue to fight this until 2014.

I wanted to say, as the boxes were being put up there, I was thinking that “Another Brick in the Wall” tune came into my mind, and I was thinking “We Don’t Want your Asset Sales Programme John Key”…

… Once again thank you for your effort, thank you for being here today. Kia Kaha,  let’s take  it to the government.”

Before Ms Maniapoto Jackson introduced the next speaker, Green Party co-leader Russell Norman, she briefly pointed out  that the Parties behind her were unified, “with only the odd absence, which was duly noted“.

Mr Norman then addressed the people,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

Russell Norman

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Mr Norman then addressed the people,

“Today we stand here here on behalf  of the millions of New Zealanders who are opposed to the sale of their assets. Today we stand here on behalf of the hundreds of thousands von New Zealanders who have signed this petition, behind us. Today we stand here on behalf of future generations who are relying on us to stand up for our country.

And that is why we have done this massive piece of  work that you see behind us.

It has been incredibly hard work on behalf of thousands and thousands of people to go out and collect these signatures. It is despicable that the Prime Minister  then says that the people who signed this petition were children and tourists! Prime Minister you do not know New Zealanders!

If the Prime Minister of New Zealand thinks that the people who signed this petition, the 400,000 people who signed this petitition, are not real New Zealanders, then he is in the wrong country…

… Real New Zealanders are the ones who worked and laboured to build those assets up so that we could inherit them. Real New Zealanders are the ones who will look after them so that we can pass them on to those who come after us…

… We have a mandate to keep our assets. The Prime Minister has no mandate to sell them.”

Ms Maniapoto Jackson then introduced Mr Peters, saying  “if there’s anyone who can talk about justice and fairness, it’s Winston Peters“,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

Winston Peters

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“…Mr Key does does not have a mandate to make these sales. We all know the last election result and he relies upon the vote of Peter Dunne, who you know, with your money, at the last election had TV adverts saying that he would not do that.  So there is no mandate.

We come now to the referendum, which  is a chance for Mr Key to see whether he’s got the public backing and he doesn’t have even have the backing of one third of the National Party vote by every survey that you and I have seen.

Ladies and gentlemen, it’s going to be difficult over the next few months on this issue, but I want to make something very, very,  clear. Unless we make it clear to everyone who’s buying, that after the next election, whenever they fly the white flag, we intend to take back those shares at no greater price than they bought it for, then we will not be making the message very clear for Mr Key who governs for the few and very few.

Now your problem is,  you don’t own a casino. Otherwise he’d be listening to you.

And you’re you’re not a Hobbit or some wide-boy from Hollywood, otherwise, he’d be listening to you.

No wonder he fell upon the defence of tourists, because that’s what Mr Key is; a CV Prime Minister, who will soon go, on issues like that…

… this is just the beginning. It is not the end.”

Next up, Ms Maniapoto Jackson introduced “the wonderful leader of the Mana Party, and MP for  Te Tai Tokerau, Hone Harawira“,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

Hone Harawira

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Mr Harawira injected a note of humour into the afternoon, and the crowd enjoyed his off-beat way of giving a speech,

“Look I’m going to do most of my korero in Maori, so the best way for you to support it is, every time I stop to take a breath,  clap like crazy!”

The crowd obliged with enthusiasm, clapping and cheering each time he paused  during his korero.

Ending his speech in  Te Reo, he  added,

“Now just for a short chant, a short chant, eh? Because Moana get’s all the the recording rights for this little gig, so mine is going to be a short little chant. So just follow after me. You ready?

“Aotearoa is not for sale!”

The crowd responded, “Aotearoa is not for sale“.

“C’mon, c’mon, now you can do better than that,” he ‘admonished the crowd with a smile.He repeated, “Aotearoa is not for sale!”

The responded boomed back, AOTEAROA IS NOT FOR SALE!”

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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“Tell John Key to Go to hell!”

“TELL JOHN KEY TO GO TO HELL!”

And with that, Hone  Harawira finished with a cheerful “Kia ora tatou!”.

As far as political speeches went, it was one of the shortest and more entertaining that this blogger has heard for a while. He certainly injects a bit of fun into a political event.

As an intriguing aside, this blogger managed to capture this picture of two Davids and a Damian. Their body language seemed to belie any suggestion of tension or ‘struggle between Messrs Cunliffe and Shearer.

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

(L-R) David Shearer, David Cunliffe, Damien O’Connor

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Hmmmm… One has to wonder…

On a closing note, Ms Maniapoto Jackson ‘encouraged’ (dragged!)  Hone Harawira back to the microphone to sing a duet – an old song from their protest days together,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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And final posed-pics from Ms Maniapoto Jackson and  Hone Harawira, after their singing-duet finale,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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It’s interesting to compare the persona of Hone Harawira in the media, especially in his early days in Parliament – with the man who presents to the people, at public gatherings.  There is a warmth and sincerity to the man that is almost wholly lacking in his MSM appearances – but a warmth and humour that is obvious when seeing him in person.

And from the Green Party caucus, this lovely snapshot. They deserve thepride they were feeling in being part of a movement to collect nearly 400,000 signatures,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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In conclusion…

John Key’s casual dismissal of the petition, and the nearly 400,000 New Zealanders who signed it,  was not a “good look”. It spoke volumes of Key’s persona; his arrogance; and his pettiness.

He could just as easily have accepted the petition as part of the democratic process and congratulated New Zealanders for   participating. It would have made him look statesmanlike; stand above petty politics; and increased his mana.

Being derisive; suggesting that the signatures were from “children and tourists”;  was offensive.

It was unnecessary and uncalled for.

It was childish.

It publicly revealed John Key’s innermost insecurities – as he knows that the people are not with him on this issue. It must be a debilitating, depressing feeling, knowing that three million New Zealanders are angrily opposed to what Key and his cronies are up to.

“Where is the love”, he may well ask?

“Where is the respect”, we ask him.

An open message to John Key…

The Prime Minister insists he has a “mandate” to part-privatise our state assets.

I disagree. More people voted for Parties opposing state asset sales than voted for Parties endorsing said sales.

John Key has a one seat “majority”, due in part to manipulations during the 2011 election, and MMP rules that prevented some Parties from gaining representation in the House.  For example, the Conservative Party won twice as many votes as ACT – but gained no seats. (see: Mandates & Majorities)

That’s not a mandate, Mr Prime Minister – that’s an accident of circumstances.

Mr Key – if you truly insist that you have a mandate, then put it to the test. Hold off on the sharefloat for Mighty River Power. Let the people have their say in a referendum.

I, for one, will accept the verdict of a referendum, whatever the outcome. If the majority – even the slimmest margin over 50% – support your asset sale programme, you’ll not hear one more word from me on this issue ever again.

Are you willing to  put your “mandate” to the test, Mr Prime Minister?

Are you willing to listen to, and abide by, the will of the People?

I am.

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Additional

Radio NZ: Petitioners confident of asset sale referendum

Dominion Post: Government to ignore asset sales referendum

NZ Herald: Asset sales petition arrives at Parliament

TV3: PHOTOS: Asset sales petition presented

TVNZ: Petition against SOE sales delivered to Parliament

Newstalk ZB: Opposition MPs greet anti-asset sales petition

Copyright (c)  Notice

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

  • Use must be for non-commercial purposes.
  • 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 =

392,000 New Zealanders send a clear message to John Key – Part Tahi

12 March 2013 3 comments

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NZ, Wellington, 12 March 2013 – Another beautiful sunny day with blue skies  (apologies to farmers) was a perfect setting this afternoon in Wellington, when a couple of hundred marchers arrived on Parliament’s grounds, bearing 68 boxes, containing 392,000 signatures.

The referendum requires 304,000 valid signatures to precipitate a nationwide referendum. The 392,000 signatures gives a 22% ‘buffer’ against invalid signatures; people not on the electoral roll; duplicate signatures; and malicious attempts to undermine the petition.

There was a small number of people on Parliament’s grounds  awaiting the march, amongst them tino rangatiratanga activists, Brenda and Fran,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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At about 1pm, marchers arrived, bearing the boxes that contained a priceless treasure – signatures of 392,000 New Zealanders. Media flocked around them. This was an historical event,

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12-march-2013-presentation-of-anti-asset-sales-petition-parliament-referendum

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They walked onto Parliament’s grounds to cheers and applause of those waiting,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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On the steps to Parliament, more media and elected representatives from Opposition Parties were waiting. (Curiously, none from National, ACT, or United Future were in attendance. Their ‘invites’ must’ve been lost in the post?)

Politicians clapped as the marchers approached. Men, women, young, old, Maori, Pakeha, these were New Zealanders who believed that the People’s Assets were not to be stripped and flogged off by a handful of politicians,

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12-march-2013-presentation-of-anti-asset-sales-petition-parliament-referendum

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Sixty eight marchers proudly carried a prized box each,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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The boxes were carefully passed over a security barricade, to be stacked on the Parliamentary forecourt,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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Meanwwhile, the crowd watched, as the stacking of boxes progressed,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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The leadership of the Green and Labour Parties,  with Brendan Horan (far left, standing beside Metiria Turei); former AUSA President, Arena Williams (standing beside David Shearer); Grey Power National President, Mr Roy Reid; Annette King; and (far right – no slur intended, Mr Conway) CTU Economist and Director of Policy, Peter Conway .

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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Mana Party leader, Hone Harawira, joined the Party leaders shortly afterward (NZ First lreader, Winston Peters was standing off-camera, to the left),

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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NZ First leader, Winston Peters, being interviewed by a MSM journalist,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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A panoramic view of part of the assembled crowd,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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Green MP, Jan Logie; NZ First leader, Winston Peters, and NZ First MP, Andrew Williams, at the stacked petition boxes. At this point, the  invited guest-speakers were preparing themselves – and  their notes – to address the crowd and media,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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With a  unique style and flair she has become reknowned for, Moana Maniapoto Jackson welcomed people to today’s presentation of the petition,

“We are celebrating people power…”

Coaching the crowd, to chime in with “Ohhhh yeahhhh” as the chorus, Ms Maniapoto Jackson launched into a short protest-style song. Her powerful voice belted out the words, making her microphone and speakers practically redundant, as she filled Parliament with her lyrical sounds,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  12 March 2013 - presentation of anti-asset sales petition - parliament - referendum

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“Hey, hey Mr John Key,

You say you’ve the mandate
We’re here to help,
it’s not too late,
People here are standing strong
a hundred thousand – can’t be wrong
We’re here to help you get back on track,
Let’s stop the sales,
Let’s pull it back.

Crowd’s chorus, Ohhhhh Yeahhhhh!

All together now!

OHHHHH YEAHHHH!”

Ms Maniapoto Jackson then welcomed the first of “a long line of luminaries, that are positively glowing with energy and excitement as we deliver to the government a very strong call from New Zealanders.”

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To be continued at: 392,000 New Zealanders send a clear message to John Key – Part Rua

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Additional

Radio NZ: Petitioners confident of asset sale referendum

Dominion Post: Government to ignore asset sales referendum

NZ Herald: Asset sales petition arrives at Parliament

TV3: PHOTOS: Asset sales petition presented

TVNZ: Petition against SOE sales delivered to Parliament

Newstalk ZB: Opposition MPs greet anti-asset sales petition

Copyright (c)  Notice

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

  • Use must be for non-commercial purposes.
  • 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 =

Letter to the Editor: Regarding asset sales, mandates, and little green apples…

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Regarding asset sales, mandates, and little green apples…

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from:     Frank Macskasy  < fmacskasy@gmail.com >
to:     Dominion Post   < letters@dompost.co.nz >
date:     Tue, Mar 12, 2013 at 11:14 AM
subject:     Letter to the Editor

The Editor
DOMINION POST

Speaking from his latest hat-wearing excursion to Brazil, Dear Leader John Key dismissed the petition calling for a referendum on the question of asset sales, by saying,

“…sure as little green apples [that] huge numbers of them are not bona fide names on the list” and would subsequently have to be struck off from the total number. (“Government to ignore asset sales referendum”, 12 March 2013)

That seems a curious thing to say.

How does Mr Key know “[that] huge numbers of them are not bona fide names on the list”? Does he have some inside knowledge that the rest of us are not privy to? Let’s hope that fundamentalist National and ACT supporters have not been deliberately undermining the petition.

That would indicate a gross contempt for the democratic process and for the views of New Zealanders.

Politicians bend over backwards to earn our vote at election time, and promise to “listen” to our concerns. Instead of just promising to listen to us every three years, Mr Key might consider doing likewise in-between elections.

-Frank Macskasy
Blogger,
“Frankly Speaking”
[address and phone number supplied]

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from:     Frank Macskasy < fmacskasy@gmail.com >
to:     Sunday Star Times < letters@star-times.co.nz >
date:     Tue, Mar 12, 2013 at 11:19 AM
subject:     Letter to the editor

The Editor
Sunday Star Times

John Key keeps insisting that he has a “mandate” to partially-privatise our state assets. But a simple bit of arithmetic puts his assertion into serious doubt.

Votes from Parties endorsing asset sales:
National: 1,058,636
ACT: 23,889
United Future: 13,443
Total: 1,095,968

Parties opposing asset sales:
Labour: 614,937
Greens: 247,372
NZ First:  147,544
Maori Party:  31,982
Mana: 24,168
Conservative Party:* 59,237
Total: 1,125,240

Though the Conservative Party did not win seats because of MMP’s 5% and one-electorate seat  thresholds, it still won twice as many votes as did ACT –

which did win a seat – with the help of some none-too-subtle machinations between John Key and John Banks over a very public cuppa tea.

The up-shot? 29,272 more voted for Parties opposing asset sales than voted for.

Something that Mr Key might bear in mind next time he tries to claim a mythical mandate to hock off our state owned enterprises.

-Frank Macskasy
Blogger,
“Frankly Speaking”
[address and phone number supplied]

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from:     Frank M < fmacskasy@gmail.com >
to:     NZ Herald < letters@herald.co.nz >
date:     Tue, Mar 12, 2013 at 11:22 AM
subject:     Letters to the Editor

The Editor
NZ Herald

Dear Leader John Key is confident that he has a “mandate” to part-sell our state assets to private investors.

His dismissive response to 320,000 signatures on a petition, calling for a referendum on the issue, suggests otherwise.

Key  knows full well that his “mandate” is mythical and based solely on two seats in Parliament – Epsom and Ohariu – that were won through some very dodgy back-room deals. That’s not a “mandate” – that’s manipulation.

I challenge him to put the decision to the people.  If Key truly believes he has a real mandate, he won’t mind holding off on the sale of Mighty River Power, to test said “mandate”?

-Frank Macskasy
Blogger,
“Frankly Speaking”
[address and phone number supplied]

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If you’re keen to add your voice(s) by writing letters to editors, feel free to use the email addresses above. Mention John Key by name, and his clipping-service will most likely dump it on his desk.

Happy writing!

[Note: Letters-to-editor require full name, residential address, and contact phone number to allow verification of authenticity.]

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References

Government to ignore asset sales referendum (12 March 2013)

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= fs =

A Clear Warning to Investors in SOEs…

11 March 2013 12 comments

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soe powercos

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The recent financial crisis and near-collapse of Solid Energy – one of the five, state owned enterprises planned for partial-privatisation – should serve as a warning for those investor-vultures circling to buy shares in any of the SOEs.

In fact, recent history regarding Air New Zealand, Kiwiwail, and (non-privatised) BNZ in 1991,  are indicators that privatisation of state assets is not a guaranteed roadmap to wealth,

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The Air New Zealand crash

Source

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It is noteworthy that one of the cause of Air New Zealand’s collapse was it’s foolhardy buy-out of Australian airline, Ansett,

First, the decision by Air New Zealand to pay dividends and second, the decision to buy the second half of Ansett. Both moves turned out to be considerably more beneficial to the interests of Brierleys than those of Air New Zealand.

Take the Ansett purchase. In early 1999, Cushing announced that Air New Zealand was vetoing Singapore Airline’s bid to buy News Corp’s 50% of Ansett Holdings (Air New Zealand had held the other 50% of Ansett since September 1996). Instead, it decided to pay News Corp $A580 million and get 100% control.

It’s most likely true that Air New Zealand paid too much for the stake and that directors had too little information about Ansett’s financial and engineering state. These are well-aired opinions, but are secondary to the main question that should be asked: Why did Air New Zealand buy the second half of Ansett at all? It’s not just that it was hopelessly out of its depth buying an airline twice its size. It’s just hard to see any benefits – to Air New Zealand, that is.

Source: IBID

On top of that were big dividend demands from one of Air Zealand’s major shareholders, Brierley’s,

The at times cash-strapped investment company held between 30% and 47% of shares over the period so, based on the total dividend of $765 million, Brierley reaped an estimated $250 million to $380 million from the airline. And Air New Zealand’s decision to buy the second half of Ansett, cutting Singapore Airlines out of the deal, contributed to Brierleys being able to do its own deal with Singapore.

In April last year, two months after Air New Zealand bought Ansett, Brierleys sold Singapore Airlines all its Air New Zealand “B” shares for $285 million, or $3 a share. It was arguably the last exit option for Brierleys from these shares, and, apart from a spike at the end of last year, Air New Zealand shares have largely tracked downwards ever since – they were trading around 30 cents as Unlimited went to press.

Source: IBID

In other words, Air New Zealand had over-extended in unwise investments (as has Solid Energy), and was bled dry by rapacious demands for dividends (as did Faye Richwhite in NZ Rail in the early 1990s).

How does this relate to the upcoming partial-sale of Mighty River Power?

Recent revelations that Mighty River Power has shaky investments on Chile, should cause potential investors to pause for thought,

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Key struggles to push Chilean investments

Source

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According to the TV3 story above, “Mighty River Power has spent $250 million at the geothermal plant in southern Chile, but has just written off $89 million as the investments struggle“.

To which Key responded casually,

There is always risk.”

Dear Leader  seems somewhat blase about investors’ risks? Of course he is. It’s not his money.

The Crown Ownership Monitoring Unit (COMU) reported,

Impairments

During the period, the Company recognised $91.4 million of impairments principally reflecting its investment in the GeoGlobal Partners I Fund (GGE Fund), and its greenfield explorations for potential developments in Chile and Germany.

This impairment followed higher than expected costs at the Tolhuaca project in Chile due to the worst winter in 40 years adversely affecting drilling performance and only one of the two wells having proven production capacity. The value of GGE’s investment at Weiheim in Germany, has been impacted by increased costs due to required changes in the drilling location following the 3D seismic surveys and delays from environmental court challenges which have been resolved post balance date.

The GGE Fund had not raised capital from other investors by the end of the 2012 and Mighty River Power made the decision not to invest further capital into the existing structure. Overall, the impairment charge of $88.9 million for the German and Tolhuaca assets and the management company of GGE LLC leaves a residual book value of $91.8 million.

Source: Mighty River Power LtdResults for Announcement to the Market

On top of  Mighty River Power’s dodgy investment in Chile, New Zealand is now experiencing what is being called the worst drought in seven decades  (see:  North Island’s worst drought in 70 years). As Climate scientist Jim Salinger said about New Zealand’s current weather patterns continuing, and becoming  similar to the Mediterranean,

What it means is that if it just doesn’t rain for at least four months of the year, it means you have to bring in your water from elsewhere.”

Source: IBID

As all investors should bear in mind; most of our power generation is generated from  hydro stations. Mighty River Power, especially, derives most of its electricity from eight  hydro-electric stations on the Waikato River.

Mighty River Power CEO, Doug Heffernan has given a clear warning,

Following the lower than average inflows into the Waikato catchment during the last quarter [to December 31], Mighty River ended the half year at just 69 per cent of historical average [hydro storage].”

And Equity analyst Phillip Anderson of Devon Funds stated,

The same period last year they got really strong inflows, and this is the exact opposite . . .

In the second half of this reporting year they’re going to have to buy a lot more electricity to feed their customers, either on the spot market at a lot higher cost or use their [Southdown] gas plant.

We expect the second half of this year is going to be a lot tougher for them, they should get their margins squeezed if that all plays out.”

Source: Parched Waikato could hit Mighty River Power

The equation is blindingly simple,

Less rain = less water = less electricity generation

The question that begs to be asked is; where does the risk of investing in SOEs fall – private investors, or the State?

The answer I submit to the reader is, that like Air New Zealand, it will be private investors who bear the brunt of all risk. The State will simply pick up the pieces,  buying up shares at bargain basement prices, should anything go wrong.

Electricity generators like Mighty River Power will simply never be allowed to fail. Had the Labour government in 2001 allowed Air New Zealand to collapse, the fall-out to the rest of the reconomy would have been too horrendous to contemplate, and flow-on effects to other businesses (eg; exporters and tourism) and the economy would have been worse than any bail-out.

But any bailout will involve a massive loss for investors, as their share-value plummets. Again, Air New Zealand was an example to us all.

As the impact of climate change creates more uncertainly for our state power companies, investors need to think carefully before committing one single dollar toward buying shares,

Do I really want to bear all the risk?

Those who lost out on their investments in Air New Zealand in the 1990s will probably answer,

No.

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References

The Air New Zealand crash (1 November 2001)

A history of bailouts (7 April 2011)

Foreigners important for SOE sell-downs: Treasury (30 June 2011)

No law stopping foreign investors (16 Dec 2011)

Parched Waikato could hit Mighty River Power (22 Feb 2013)

Mighty River Power shares float mid-May (4 March 2013)

Taking the plunge in Mighty River (9 March 2013)

Key struggles to push Chilean investments (9 March 2013)

North Island’s worst drought in 70 years (10 March 2013)

Other blogs

Seemorerocks: An Appeal for a New Zealand Risk Assessment

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= fs =

National recycles waste product very well

11 March 2013 7 comments

From Bill Birch, in 1999,

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Bill Birch Speech On Taxation IRD

Source

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Note these two items,

 We aim to grow the economy by 10% in the next three years
 Create 100,000 new jobs

National’s track record in the three years leading up to the November 1999 election, and Labour’s track record from January 2000 onward,

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New Zealands Employed Person 1996 - 2003

Source

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Pretty self explanatory really.

Fast forward eleven years and four elections later,

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Budget 2011 Govt predicts 170,000 new jobs

Source

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 We aim to grow the economy by 4% by 2013
 Create up to 170,000 new jobs

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New Zealands Employed Person 2008 - 2013

Source

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Again, self-explanatory,

Key facts – In the December 2012 quarter compared with the September 2012 quarter:

 The unemployment rate fell 0.4 percentage points, to 6.9 percent.
 The number of people unemployed decreased by 10,000 people (down 6.0 percent).
 The employment rate fell 0.8 percentage points, to 62.6 percent.
 The number of people employed decreased by 23,000 (down 1.0 percent).
 The labour force participation rate fell 1.2 percentage points, to 67.2 percent.
 The number of people in the labour force decreased by 33,000.

Source: Dept of Labour (MoBIE) & Statistics NZ

There we have it: 23,000 jobs lost.

And 33,000 fewer people in the Labour Force (left the country, given up looking for work, etc)

Bill Birch – meet Bill English.  Different Ministers of Finance;  same bullshit; more empty promises.

Any predictions for National in 2023?

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= fs =

Labour, Greens, NZ First, & Mana – A Bright Idea with electricity!

10 March 2013 15 comments

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What?

A part of me is mightily pissed off at Labour.

Like, really ticked off.

From 2000 to 2008, they had ample opportunity to safeguard state assets and remove them from any prospect of privatisation by ideologically-driven,  rightwing elements in our political system.

But perhaps, I suspect that most folk – including the Left –  had believed that privatisation had been abandoned by National as an  ideological dead-end experiment, leading nowhere except eventual foreign ownership and profits remitted to offshore investors. Which, as a consequence, worsened our already shabby Balance of Payments deficit.

More importantly, we had every right to expect that National believed that asset sales would be a sure-fire way of losing an election.

However, someone – some bright, zealous, political strategist working in some back-room somewhere – must’ve come across a “cunning plan” to make asset sales palatable to at least half the voters.

That’s all the Nats needed; 50% of voters.

Why?

To pay for tax cuts in 2009 and 2010. Those tax cuts dug a $2 billion-plus hole in government revenue (see:  Govt’s 2010 tax cuts costing $2 billion and counting, see: Outlook slashes tax-take by $8b). The shortfall could only be made up by borrowing more – or selling something. National opted for the latter.

How?

Post 2011 Election,  has demonstrated that National has not changed it’s free-market stripes. Given an opportunity, they would hock off as much of the country as possible. For “the good of the nation”, you understand.

At the 2011 election, National were handed that opportunity, on a gold plate*,  by a voting public who seemed to be distracted by smoking magic mushrooms. Whilst voters expressed disdain at National’s privatisation – they voted National regardless.

(Call me old fashioned, but I tend not to vote for things I disagree with.)

Go figure.

Note that I said “they voted National” – they didn’t vote for National. It may seem as if I’m splitting hairs on a molecular level – but bear with me.

Consider the facts;

  • 1. In 2011, National won 1,058,638 votes – or 47.31% of votes cast. That gave them 59 seats.
  • 2. The 2011 election was the lowest voter turn-out (74.21%) since 1887.
  • 3. Whilst Labour’s vote dropped from 2008 to 2011, overall the anti-asset sale bloc gained more popular votes in 2011 than the pro-sale bloc,
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

* Whilst the Conservative gained no seats in Parliament (because of the 5% threshold), their numbers are included because they gained over double the electoral-support for ACT.

In effect, Key could claim an mythical “mandate” simply because the MMP rules in 2011 gave ACT a seat, but no representation for the Conservatives – even though support for the latter was double that of ACT.

  • 4. Voting patterns are reflected in polls which consistantly show public opinion opposed to asset sales. Generally, the figure is around two thirds opposed and less than a third supporting. (see: Most of us oppose selling NZ)

In fact, this blogger cannot find any reputable poll favouring National’s privatisation programme.

However, the harsh reality is that, for politicians, unless faced by a populist revolt and tens of thousands taking to the streets (see: Huge protest says no to mining on conservation land) , the only numbers that really count are bums-on-seats. Parliamentary seats.

Political machinations in Epsom and Ohariu gave Key the two seat Parliamentary majority he needed, and that’s what counts as a “mandate”. For the Nats, that’s the end-of-story.

Who?

As Dear Leader has oft been quoted,

 “On the mixed-ownership model debate, the Government has been very clear about its intentions since well before the 2011 election.” – John Key, 24 June 2012 (see: Most of us oppose selling NZ)

Thus far, 200,000 have pre-registered (see: Mighty River pre-registrations top 200,000) – which, whilst a sizeable number, is still only around five percent of those who voted for National in 2011. And I suspect many are pre-registering for a variety of reasons,

  • self interested naked greed
  • a desire to keep shares in local hands
  • and a few bogus pre-registrations to subvert the process (a surreptitiously organised covert resistance? You might say that, but  I couldn’t possibly comment)

The 200,000 pre-reguistrations is still dwarfed by signaturies to the petition, which is fast approaching 400,000 (see: Asset sales referendum likely)

So, did all 1,058,638 voters  who voted National in 2011 also endorse asset sales, either in whole or partial?

The answer is a clear no.  In a poll just over a year ago (see:  Poll shows asset sales unpopular), around 32% – about one third – of National supporters disapproved of asset sales.

That’s 338,764 voters who opposed asset sales who ticked the box for National in 2011, despite knowing full well that Key was promising partial floats on Meridian, Genesis, Mighty River Power, Solid Energy (now in doubt), and a further sell-down of Air New Zealand.

338,764 people who voted for something they didn’t want.

As Marcus Lush said on Radiolive on 28 February this year (2013),

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Why would anyone vote National and be opposed to asset sales -  28 February 2013 -  Radiolive - Marcus Lush

[click on image to access Radiolive link]

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Good question.

The answer, I think, can be distilled  down into two categories of voters.

  1. The first group simply either didn’t taken notice of  the asset sales campaign, or, more likely did not believe that Key would go ahead with the policy. They may even have thought that Key’s coalition ally(ies), United Future and/or the Maori Party, would stop the sales from proceeding. There was a kind of  “in denial” mentality going on here.
  2. The second group is perhaps more complex. Whilst they don’t support asset sales per se, they perhaps believed National Party rhetoric that shares would remain in New Zealand hands. Considering the consequences of Contact Energy’s privatisation – where the majority of shares are now in Australian hands – this would seem to be a forlorn hope.

Having spoken with National Party voters belonging to Group 1, I believe that asset sales will impact to varying degrees on National’s support at the next election. Having woken up to the fact that Key has no intention of backing away from  sales,  there are 300,000 National voters who may think twice before voting National again.

Expect National to drop in the next few polls following the sale of Mighty River Power.

However, unless something totally unanticipated happens between now and May, the partial sale of Mighty River Power will probably proceed. Followed by Genesis and Meridian. Followed by hefty power price increases if past history is anything to go by.

Where (to from here?)

NZ First’s Winston Peters has promised that any government he is part of will buy back state assets. (Which, by the way, if he’s not telling lies, means that any coalition deal with the Nats is off the table. I’m not holding my breath on this. The 1996 election is still fresh in my mind.)

On 4 March this year (2013), Peters announced,

“New Zealand First will use its influence on the next coalition Government to buy back our state-owned power companies which are being flogged off by National and we are committed to buying back the shares at no greater price than paid by the first purchaser.”

Source: One More Quisling Moment from Key

This is do-able. Especially if NZ Superannuation funds are used, which would not impact or have any bearing on a new Government’s books.

By announcing that the shares would be re-purchased  “at no greater price than paid by the first purchaser” – Peters is effectively putting all purchasers on notice: expect to incur a loss if you buy into National’s thieving (and let’s be clear – selling goods that don’t belong to you is theft) programme.

And a year earlier, in March 2012, Hone Harawira had promised the same in an open letter to investors,

“So today I think it only proper to send a warning to overseas investors – steer clear of any share offer in the above SOE’s. The purchase of these shares is likely to see you caught up in legal battles and direct action from citizens determined to protect their own interests, both of which will be lengthy and costly and have an adverse impact on the value of your investment.

As the leader of the MANA Movement and Member of the New Zealand House of Representatives, I wish to advise that MANA is opposed to the privatisation of state assets and will strongly argue for any shares sold to overseas investors to be returned to New Zealand hands.”

Source: Hone Harawira: Open letter to overseas investors

By contrast, in an attempt to appear “fiscally responsible” to Middle Class voters, Labour and the Greens were luke-warm, at best.

Green co-leader, Russel Norman said,

“We just can’t make the promise that Winston is making. We will do whatever we can, but it is two years away, the books are getting into a terrible mess because of National, and closer to the time we will make an announcement but at the moment we can’t.”

Source: Peters: Use super funds to buy back state assets

And Labour’s Clayton Cosgrove effectively went, ‘ditto’,

“… I can’t commit to an open-ended fiscal envelope. That would be fiscally irresponsible in my view.”

Source: IBID

Which is all pretty timid stuff.

This, my fellow New Zealanders, is why the Centre-Left lost the 2011 Election: no boldness in vision; no measurable difference to the Nats; and no unshakeable courage of  their/our convictions.

All that Labour and the Greens  said was “no” to asset sales.

And when Cunliffe suggested that a future Labour-led government would re-nationalise these SOEs – he was firmly slapped down by his Party.

On 4 December 2011,

I don’t stand for a paler shade of blue, and I want to look down the barrel and say this: if the Government is going to sell off precious state assets then we would not rule out re-nationalising some of them. And people need to be aware of that regulatory risk.”

When asked by host Guyon Espiner whether he would buy them back, Mr Cunliffe replied “we would look very hard [at buying them back].” Source

On 5 December 2011,

Labour leadership aspirant David Cunliffe has moved to clarify his position on the buyback of state assets.

He believed comments he made in a weekend interview, where he didn’t rule out buying back partially privatised SOE’s, had been misinterpreted.

Mr Cunliffe said it was not an explicit promise to buy back all shareholdings National may sell. Source

That’s not “manning the barricades” stuff – that’s an open retreat in the face of a remorseless enemy.

Which, in turn, emboldened National to openly mock and taunt the Labour Opposition, seven months later,

Hon BILL ENGLISH (Deputy Prime Minister) : I move, That the House take note of miscellaneous business. We are still waiting, this week, for the Labour Party to commit to buying back the shares of the 49 percent of the energy companies that the Government is planning to sell, mainly to New Zealanders. New Zealand First has made that undertaking. New Zealand First has shown that the Labour Party has persuaded New Zealand First that its arguments are so strong, New Zealand First should go and buy them back if it has a role in a future Government. But the Labour Party has not been able to persuade itself. Labour members have been in the Chamber arguing, hour after hour, day after day, week after week, that these proposed share offers are fiscally irresponsible, economic nonsense, and a sell-out to foreigners, but they are not so fiscally irresponsible that they are going to buy them back. They are not such a sell-out to foreigners that they are going to buy them back. They are not such an economic nonsense that they are going to buy them back.” – Source

At a time when Labour should be tearing strips of National and setting their own counter-agenda – we’re getting precious little of that. Instead, the agenda is being set by Key and his cronies with bugger-all opposition. The Greens and NZ First have scored more ‘hits’ against the Nats than Labour.

On top of that, the Greens have become the “go to” opposition Party, for criticism of National policies. If you doubt me, check out the next 6pm TV news bulletin. Which opposition party spokesperson is interviewed? Keep tabs over a few night. You’ll quickly see what I mean.

So, what options does Labour have?

It has two options;

  1. Carry on with a conservative course. There is a 50/50 chance it will lead the next government, with perhaps a one or two seat majority, consisting of Labour/Greens/Mana/NZ first.
  2. Strike out with a strategy of  aggressive and bold announcements of initiatives. Announce;
  • radical policies that are a departure from neo-liberalism and declare that the Great Neo-liberal Experiment is dead; “we come to bury the bastard, not praise him”.
  • focus on the message that the 30 year experiment in neo-liberalism has failed utterly, and is one reason we’re driving our young people to Australia
  • a policy that all state assets will be re-purchased at cost-price (as a coalition deal with NZ First)
  • a list of National policies that will be ruthlessly  reviewed and dumped (eg, the Hobbit Law)
  • a focus on job creation; attacking the root causes of child poverty; and a committment for decent housing for all New Zealanders
  • a full review of the tax system, with a plan to reduce (or eliminate gst) and replaced with a comprehensive Capital Gains Tax; Financial Transactions Tax; and other non-income related taxes
  • Comprehensive food-in-schools programmes
  • looking at how our Scandinavian and Nordic cuzzies are running their economies/societies
  • cheaper education for our kids
  • a conversation with New Zealanders as to what kind of society we want to live in – and are we willing to pay for it and set goals to achieve it?
  • etc, etc.

As part of Option 2, I have one further Bright Idea…

A Libertarian acquaintaince and I were chatting one evening at  ‘Backbenches’ (prior to it catching fire – and no, our conversation wasn’t that heated) . We were talking about the three state owned power companies.

He asked me; why should there be  three state owned companies; all producing the same service; at roughly the same costs and prices – have three sets of management; CEOs; offices; accounting systems; staff; etc? Wouldn’t  it make more sense to combine the three and pass the savings onto consumers?

Damn it, he was right. What is the point of having three state owned electricity companies?

One could do the same job – and cheaper.

Just as we had the old ECNZ, prior to Max Bradford’s so-called “reforms” in the late 1990s. At the time, Mr Bradford promised cheaper electricity through competition. Instead, power prices have doubled sinced the start of the century. (see: The 30-year power price hike , see: Power prices over decade)

“Ministry of Economic Development (MED) statistics show average power prices rose from 13.9 cents per kilowatt-hour on average in May 2001 to 26 cents in May 2011.” Source

The problem is not just to re-nationalise our electricity companies.

The next problem is what do we do with them?

How do we make them socially responsive to domestic consumers as well as  efficient?

Do we re-combine Mighty River Power, Genesis, and Meridian back into one single unit, a new ECNZ?

Do we ensure that there are Board members elected to a new ECNZ whose constituents are domestic users? Perhaps any such Board should have directly-elected  representation?

Do we entrench a new, state owned ECNZ in legislation so it’s future is protected from predatory governments seeking either maximum returns (ie, price gouging) or to privatise it?

Could a new ECNZ afford to offer each domestic household their first 300kwh per month, free,  as has been suggested by Victoria University researcher, Geoff Bertram? (see: Call for free power )

These are the issues which the Opposition should be focused on.

And thus far, we’ve not heard much from them.

If  Labour-Greens-NZ First are serious about being an alternative government, then by the gods, they should be serious about giving us that alternative.

Conclusion

When National started campaigning in the 2008 election, it began two years in advance with a series of  aggressive policies. It was acting like a Government-in-Waiting.

By contrast, Labour and the other parties are an Opposition-in-Waiting.   They are timidly watching and waiting for the public love affair with Key to wear off, and for National to f**k up.

Well, news flash guys.  That doesn’t seem to be working too well. The Nats have been excoriated with scandal after scandal last year and this year; unemployment rising; Mainzeal and Solid Energy collapsing – and the Nats are still high in the polls?!

My message to Labour, Greens, NZ first, and Mana;

If you want the voting public to take notice of you, you have to give them something that’ll make them notice you.

Be bold.

Be aggressive.

Offer alternatives.

Offer practical solutions.

Give the public a vision.

And at all times, work together.

If you don’t give the public an alternative, why should they look away from National?

Give the people of New Zealand an alternative, better way of living – and they will look at you.

But not until then.

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(* Plate will soon be auctioned on Trademe.)

Previous Blogposts

Politics through a crystal ball, palmistry, or chicken entrails?

History Lesson – Tahi – Electricity Sector “reforms”

Additional

Power prices over decade

The 30-year power price hike

Call for free power

Cunliffe: buy back any sold assets

Cunliffe not promising to buy back assets

Parliament: Hansards – Wednesday, 20 June 2012, Bill English on Asset Sales

More heat in power struggle as prices go up

Government in $112b barney over accounting

Electricity prices tipped to rise steeply

Heavy traffic hits Mighty River Power share site

One More Quisling Moment from Key

Other blogs

MANA threaten overseas investors not to buy assets – Bloomberg pick up on the story

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This is Must See: George Carlin’s Greatest Moment

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This may be American-focused, but I believe it applies pretty much to every other nation and society on this planet.

But don’t take my word for it. Look, listen, and make up your own mind…

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Dear Leader Key blames everyone else for Solid Energy’s financial crisis (Part Rua)

9 March 2013 8 comments

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national blighted hoarding 12 it's all labour's fault

Acknowledgement

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Continued from: Dear Leader Key blames everyone else for Solid Energy’s financial crisis

Opposition Party members of the Commerce Select Committee are demanding that  ex-CEO, Don Elder appear before the Select Committee to answer questions what went wrong at Solid Energy.

With unanswered questions about Solid Energy’s financial crisis; a murky history leading up to current events; big bonuses paid out as the company’s accounts were sinking into the red; and revelations that Don Elder is still recieving his  $1.3 million annual salary  – whilst working from home “serving out his notice” – pressure is mounting on National.

Solid Energy went from a multi-billion dollar company to being heavily indebited to $389 million.

How did this happen?

Did ministerial shareholders Bill English and Tony Ryall not notice?

Were they not receiving reports from Solid Energy’s Board of Directors?

Were no rumours or conversations floating around?

How does one keep a secret like that in a small country like New Zealand? (In which case  should Solid Energy take over our country’s security, from the GCSB and SIS?)

Why were we paying Don Elder for ($1.3 million p.a., plus bonuses no doubt) if not to be held to account?

On 8 March, Key was reported as saying,

“If he wants to go [to the Select Committee hearings] and they want him to go he is not going to get any opposition from my office.”

Source

And SOE Minister chipped in with this,

“It’s a matter for the Commerce Select Committee, Solid Energy and Dr Elder whether or not Dr Elder attends, but I don’t have a problem either way.”

IBID

Good. Because the public – who own Solid Energy – deserve answers. Thus far all we’ve had is the usual finger-pointing by National, with childishly pathetic  attempts to blame Labour for Solid Energy’s woes. As if Labour was still in government and the 2008 and 2011 general elections never happened.

This statement from Key, on 26 February 2013, simply doesn’t wash,

“They  [Labour] can’t wash their hands of the fact that from 2003 on, they were intimately involved with the plans that that company had.

The argument that somehow we would have gone in, in 2009 when the company was performing well, its results were good, the valuation of the company was going up, and just gone and sacked the board on day one is a bit fanciful.

Maybe we should have re-tested those [Labour-approved] initiatives but actually we gave [Labour] the benefit of the doubt that they might get one thing right.”

Source

“2003”?

That was ten years ago!  What has National been doing in the meantime?

As far back as September 2011, the Nats were abundantly aware that Solid Energy was embarking on expansion plans,

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Solid Energy starts work at Mataura Briquette Plant

Friday, 9 September 2011, 2:57 pm
Press Release: Solid Energy NZ

9 September 2011

Solid Energy marks the start of work at its Mataura Briquette Plant

The Hon Bill English, MP for Clutha-Southland and Minister of Finance, today marked the official start of work at Solid Energy’s Mataura Briquette Plant, by “turning the first sod” at a small event on site with neighbours, local authorities, and other guests.

The $25 million Mataura briquette plant is planned to start production by June 2012. It will produce up to 90,000 tonnes a year of low-moisture and higher-energy briquettes from about 150,000 tonnes of lignite mined from Solid Energy’s New Vale Opencast Mine and trucked to the Craig Road site. The plant will use technology developed in the USA by GTL Energy.

Source

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Here’s the photographic evidence, from National’s own ‘Flickr’ account, same date, 9 September 2011 – that’s Finance Minister Bill English, “turning the first sod of earth” for Solid Energy’s  Mataura Briquette Plant  in Southland. That plant was part of their expansion plans,

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solid-energy-chief-executive-don-elder-and-hon-bill-english-at-mataura-9-sept-2011

Source

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Only three months earlier, in June 2011, Key himself was supporting Solid Energy’s explansion plans,

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national business review - nbr - Key supports Solid Energy's lignite plans

Source

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Note Key’s comment in the above article in the National Business Review (hardly a leftist rag),

At the moment companies like Solid Energy are growth companies and we want them to expand in areas like lignite conversion.”

So for Dear Leader to blame Labour is not only disingenuous – it is cowardly.

It shows the entire country that the man who is supposedly or Prime Minister hasn’t got the balls to take it on the chin and admit that he and his Party f****d up. Big time.

Even the editorial from the Dominion Post said, with unconcealed exasperation on 2 March 2013,

There are always excuses when a company starts to fail. John Key’s explanation for the trouble at Solid Energy, however – he blamed the Labour government – was pitiful.

It was Trevor Mallard’s fault, apparently, for encouraging SOEs to spread their wings and fly. That was in 2007 or 2008.

This won’t do, and not just because Mr Key’s Government has been in power for more than four years. His argument also contradicts itself. A Labour government was seemingly omnipotent and could have its way with the state-owned coal company. But National had no such power.

The Government certainly said no when Solid Energy asked for a billion dollars to turn itself into a super-company along the lines of Petrobras, the Brazilian giant. Mr Key says it had grave doubts about the company’s expansion plans. His political opponents point out that he and Bill English had publicly backed Solid Energy’s big plans for lignite conversion and briquetting.

Source

This blogger welcomes Don Elder fronting up to the Commerce Select Committee.  However, that is simply not sufficient. In the interests of full justice, the following should occur,

  • John Key should front up and answer questions as well,
  • Bill English should front up and answer questions,
  • Tony Ryall should front up and answer questions,
  • All documentation should be made available to the Committee,
  • The Chairperson of the Select Committee – National MP Jonathan Young, should stand aside and  be replaced by a non-partisan senior judge or Queen’s Counsel,
  • If necessary, if the Committee is unable to answer questions, a full Royal Commission in Inquiry should be held.

National prides itself on being the party of ‘personal responsibility‘. It is no such thing. It is the party of personal advantage and not much more.

Thus far all we’ve had are evasiveness  and pathetic attempts to blame others. We’re also seeing more of the same from our Prime Minister;  bullshit.

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Previous related blogposts

National under attack – defaults to Deflection #2

Dear Leader Key blames everyone else for Solid Energy’s financial crisis

Taking responsibility, National-style

References

NZ National Party: Solid Energy chief executive, Don Elder and Hon Bill English at Mataura (9 Sept 2011)

Scoop.co.nz: Solid Energy starts work at Mataura Briquette Plant (9 Sept 2011)

NBR: Key supports Solid Energy’s lignite plans (3 June 2011)

TV3: Govt, Labour squabble over Solid Energy (26 Feb 2013)

Dominion Post: Editorial: Solid Energy excuses fuel anger (2 March 2013)

TVNZ: Pressure grows on Don Elder to front over Solid Energy (8 March 2013)

Fairfax media: Minister, PM fine for Elder to appear for grilling (8 March 2013)

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How to sabotage the asset sales…

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Something I blogged on 25 June 2012, and now more appropriate than ever…

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On last weekends’ (23/24 June 2012) “The Nation“,  the issue of asset sales was discussed with   NZ First leader, Winston Peters; Green Party MP, Gareth Hughes; and Labour MP, Clayton Cosgrove,

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Source

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Whilst all three parties are staunchly opposed to state asset sales, NZ First leader, Winston Peters went one step further,  promising that his Party would buy back the assets.

Gareth Hughes and Clayton Cosgrove were luke-warm on the idea, quite rightly stating that there were simply too many variables involved in committing to a buy-back two and a half years out from the next election. (And Peters never followed through on his election pledge in 1996 to buy back NZ Forestry – “to hand back the envelope”, as he put it –  after National had privatised it.) There was simply no way of knowing what state National would leave the economy.

Considering National’s tragically incompetant economic mismanagement thus far, the outlook for New Zealand is not good. We can look forward to more of the usual,

  • More migration to Australia
  • More low growth
  • More high unemployment
  • More deficits
  • More skewed taxation/investment policies
  • Still more deficits
  • More cuts to state services
  • And did I mention more deficits?

By 2014, National will have frittered away most (if not all) of the proceeds from the sale of Meridian, Genesis, Mighty River Power, Solid Energy, and Air New Zealand.

In such an environment, it is difficult to sound plausible when promising to buy back multi-billion dollar corporations.

Not to be thwarted, Peters replied to a question by Rachel Smalley, stating adamantly,

The market needs to know that Winston Peters and a future government is going to take back  those assets. By that I mean pay no greater price than their first offering price. This is, if they transfer to seven or eight people, it doesn’t matter, we’ll pay the first price or less.

Bold words.

It remains to be seen if Peters will carry out that threat – especially if a number of his shareholders are retired Kiwi superannuitants?

When further questioned by Rachel Smalley, Peters offered specific  ideas how a buy-back might be funded,

Why can’t we borrow from the super fund, for example? And pay that back over time?  And why can’t we borrow from Kiwisaver  for example, and pay that back over time…”

The answer is that governments are sovereign and can make whatever laws they deem fit. That includes buying back assets at market value; at original sale price; or simple expropriation without  compensation. (The latter would probably be unacceptable to 99% of New Zealanders and would play havoc with our economy.)

Peters is correct; funding per se is not an issue. In fact, money could be borrowed from any number of sources, including overseas lenders. The gains from all five SOEs – especially the power companies – would outweigh the cost of any borrowings.

Eg,

  1. Cost of borrowing from overseas: 2% interest
  2. Returns from SOEs: 17%
  3. Profit to NZ: 15%

We make on the deal.

The question is, can an incoming Labour-Green-NZ First-Mana government accomplish such a plan?

Should such a  radical policy be presented to the public at an election, the National Party would go into Warp Drive with a mass  panic-attack.

But it’s not National that would be panicked.

It would be National going hard-out to panic the public.

National’s scare-campaign would promise the voters economic collapse;  investors deserting the country; a crashed share-market; cows drying up; a plague of locusts; the Waikato River turning to blood; hordes of zombie-dead rising up…

And as we all know, most low-information voters are highly susceptible to such fear-campaigns. The result would be predictable:

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But let’s try that again…

A more plausible scenario would have the leadership of Labour, NZ First, the Greens, and Mana, meeting at a secluded retreat for a high-level,  cross-party strategy conference.

At the conclusion of said conference, the Leaders emerge, with an “understanding”, of recognising each others’ differing policies,

  1. Winston Peters presents a plan to the public, promoting NZF policy to buy-back  the five SOEs. As per his  original proposals, all shares will be repurchased at original offer-price.
  2. The  Mana Party  buy-in  to NZ First’s plan and pledge their support.
  3. Labour and the Greens release the joint-Party declaration stating that  whilst they do not pledge support to NZ First/Mana’s proposal – neither do they discount it. At this point, say Labour and the Greens, all options are on the table.

That scenario creates considerable  uncertainty and anxiety  in the minds of potential share-purchasers. Whilst they know that they will be recompensed in any buy-back scheme – they are effectively stymied in on-selling the shares for gain. Because no new investor  in their right mind would want to buy  shares that (a) probably no one else will want to buy and (b) once the buy-back begins, they would lose out.

Eg; Peter buys 1,000 shares at original offer price of $2 per share. Cost to Peter: $2,000.

Peter then on-sells shares to Paul at $2.50 per share.  Cost to Paul: $2,500. Profit to Peter: $500.

Paul then cannot on-sell his shares – no one else is buying. Once elected, a new centre-left government implements a buy back of shares at original offer-price @ $2 per share. Price paid to Paul: $2,000. Loss to Paul: $500.

Such a strategy is high-stakes politics at it’s riskiest.   Even if Labour and the Greens do not commit to a specific buy-back plan, and “left their options open” –  would the public wear it?

The certainty in any such grand strategy is that the asset sale would be effectively sabotaged. No individual or corporate buyer would want to become involved in this kind of uncertainty.

Of less certainty is how the public would perceive  a situation (even if Labour and the Greens remained staunchly adamant that they were not committed to any buy-back plan) of political Parties engaging in such a deliberate  scheme of de-stabilisation of a current government’s policies.

The asset sales programme would most likely fail, for sure.

But at what cost? Labour and the centre-left losing the next election?

We may well end up winning the war to save our SOEs – but end up a casualty of the battle.

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Related Blog posts

Peter Dunne says

Campaign: Flood the Beehive!

Additional

Asset sales remain unpopular for NZers

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Census, Surveys, and Cellphones…

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polls_ist2_141437_arrow_graph_down_rev_2249_704752_poll_xlarge

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Three polls in February (2013)  yielded two distinctly different results.

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Roy Morgan

13 Feb 2013

TVNZ/Colmar Brunton

17 Feb 2013

Fairfax/Ipsos Poll

20 Feb 2013

Right bloc:

National

44% (-2%)

49% (+5%)

44.9% (-1.3)

Maori Party

0.5% (-1%)

1% (n/c)

1.3% (-.01%)

ACT NZ

0.5% (n/c)

.01% (-0.5%)

.04% (+.04%)

United Future

0% (n/c)

.02% (-0.3%)

.01% (-.01%)

Left bloc:

Labour

34.5% (+3%)

33% (-2%)

36.3% (+1.9%)

Greens

13.5% (n/c)

11% (-2%)

10.7% (+.02%)

Mana Party

0.5% (n/c)

1% (n/c)

1.4% (+.08%)

Other:

NZ First

4% (-1.5%)

4% (n/c)

2.8% (-1%)

Conservative Party

2% (+1.5%)

1% (n/c)

1.6% (.02%)

n/c = no change

At the previous election, National was consistantly polling high – in the low-to-mid 50s. Their election result was actually 47.31%, several percentage points out from polling figures from Roy Morgan, Colmar Brunton, and Media Research,

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Roy Morgan

24 Nov 2011

TVNZ/Colmar Brunton

24 Nov 2011*

Fairfax/Media Research

23 Nov 2011

2011

Election results

Closest Polling result

Right bloc:

National

49.5%

50%

54%

47.31%

Roy Morgan

Maori Party

1%

2.0%

1.1%

1.43%

Media Research

ACT NZ

1.5%

1.7%

0.7%

1.07%

Media Research

United Future

0.5%

0.1%

0.1%

0.6%

Roy Morgan
Left bloc:

Labour

23.5%

28%

26%

27.48%

Colmar Brunton

Greens

14.5%

10%

12%

11.06%

Media Research

Mana Party

0.5%

1.0%

1.1%

1.08%

Media Research
Other:

NZ First

6.5%

4.2%

4%

6.59%

Roy Morgan

Conservative Party

n/r

2.4%

n/r

2.65%

Colmar Brunton

n/r = no result provided

As the chart above shows, polling figures were all over the place. Roy Morgan called it closest for the result for National – but under-reported for Labour.

Colmar Brunton called it closest for Labour.

Whilst at the same time, Media Research was way out for National – 6.69 percentage points off the mark – over twice the margin of error (3.1%) for that poll.  (see:  Gap closes as election looms – poll)

None of the polling companies were consistent in their results and all over-polled National. Only one pollster over-polled for Labour.

Part of the problem are anecdotal  stories that many low income families, students, transients, etc, no longer rely on landlines and use only cellphones. Polling companies do not call cellphones – only landlines. (A low-income family living not far from us fits this demographic group perfectly; no landline; cellphones only. The sole-parent head of the household votes Labour.)

This year’s census has an interesting question; Question 17,

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2013 survey - qu 17

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The question asks the respondent to “mark as many spaces as you need to show which of these are available here in this dwelling”.

What will prove interesting is not whether or not “a cellphone/mobile” is marked – but how many households will mark “a telephone”.

This will finally give us a clearer understanding what percentage of households do not have a landline.

If the numbers of households without a landline are significant (+/- 10%), then polling companies will either have to adjust their polling techniques – or be rendered useless. Without factoring in cellphone-only households, polling companies risk becoming an expensive ‘parlour game’ with little value.

One option is to return to the days of door-knocking pollsters. It’s an expensive option, but may be more reliable than phoning people on landlines.

This blogger keenly anticipates Statistics NZ releasing poll results on Question 17. It’s impact on politics in this country may be greater than we realise.

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Previous blogposts

Three recent polls

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“One should judge a society by how it looks after the sick and vulnerable” – part toru

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Frank Macskasy Frankly Speaking blog fmacskasy.wordpress.com 27-28 february 2013 - rare diseases disorders - New Zealand Organisation for Rare Disorders -NZORD

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Continued from: “One should judge a society by how it looks after the sick and vulnerable” – part rua

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Chris Higgins – Muscular Dystrophy Association

Chris introduced himself as Chief Executive of Muscular Dystrophy Association. He was present to give the MDA’s perpective on high-cost medicines. Chris told the seminar that the MDA covers over forty  neuro-muscular conditions, including Pompe Disease. All forty conditions are rare, he said.

Chris acknowledged Pompe Disease patients, Freda and Allyson, who were sitting in the audience. He thanked both women for supporting him, at the seminar.

Chris opened his talk by saying that Freda and Allyson “should be given a fair go”. They deserved the opportunity for a longer, and higher quality of life, so they can achieve their full potential. He said that going by what Freda and Allyson had been saying at the Forum, that family/whanau were really important to both women.

He added that family members of people suffering neuro-muscular diseases were important. Chris said that Freda’s grandchildren should not be deprived of growing up and getting to know their nana.

He said Allyson’s husband shouldn’t be deprived of the opportunity of having a long marriage with his wife. And Allyson’s children shouldn’t have to watch their mother slowly get worse, and then eventually be deprived of her altogether.

Chris said,

“And believe me, if you’ve ever been through the experience of having your mother die, it is a truly devastating experience. It just never leaves you.”

Chris then outlined his Association’s concerns. He spoke of being worried that the health system seemed unable to respond to the  needs of people living with rare conditions such as Pompe Disease. He asked if other people with neuro-muscular diseases have to go through the same processes as Freda and Allyson have had to face.

Chris said that as new advances are made with drugs to treat neuro-muscular conditions such as Pompe Disease, and other rare diseases,  that Freda and Allyson’s experiences will be repeated over and over again, as the relatively small  numbers of sufferers result in high-priced treatments.

Chris then questioned whether Pharmac’s NPPA Scheme   system was actually becoming a mechanism to justify their decisions to denying treatments, rather than providing access to much-needed medicines for rare diseases. He added,

“We’re concerned that Pharmac seems to have the ability to ration resources using cost-benefit criteria which do not seem to be applied anywhere else within the New Zealand health system. So it seems  to be one rule for some, and another rule for others…  because of that, MDA members, and I’m sure it applies to a lot of people in this room, as well, are starting to feel really discrimnated against by the New Zealand health system. Seems if you have a rare condition, you don’t get the same consideration from the health system as other people.”

Chris said that discrimination is inconsistent with medicines strategies as well as community values and ethics.

He said there seemed no political will to require Pharmac to relax its cost-benefit criteria, so access becomes a reality rather than a vain hope.

Chris then dropped a quiet ‘bombshell’,

“We’re coming to the point where [the] MDA has lost confidence that  Pharmac will ever grant it’s members access to high cost medicines.”

Chris told the seminar that his group, in conjunction with others, will continue to support their members who are suffering rare diseases.

But Chris expressed a view that he did not believe that it would be a long term solution for the future. Instead, he offered a solution to this problem, by advocating for a separate agency, outside of Pharmac, of an “orphan drugs access programme”,

“We see that  operating within the Ministry of Health but outside of Pharmac. And we see it as having access criteria which are a lot more relaxed than Pharmac’s, and [which] acknowledge  the particular requirements of people living with rare conditions… the thresholds need to be different… and people need to be given a fair go.”

He added that a different mechanism will better address the medicines requirements of rare disease sufferers,  and which are more equitable and reflective of community values.

Chris offered an ‘olive branch’ to the Health system and stated that the MDA is willing to collaborate with both the Ministry of Health and NZORD (New Zealand Organisation for Rare Diseases) in designing an affordable and mutually satisfactory alternative programme.

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  27-28 february 2013 - rare diseases disorders - New Zealand Organisation for Rare Disorders -NZORD

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Jenny

Jenny works for the support group, Lysosomal Diseases New Zealand. She gave a brief outline of events over the last few years – some of which has been covered by others at the seminar. She referred to one application, for treatment for Gaucher’s disease patients, that had “sat” on Pharmac’s desk for two years before being prompted to make a decision. Funding for that application was finally granted.

A subsequent application, for enzyme replacement therapy (ERT) for another rare disease was declined for a number of reasons, including, she said, that the applicants were “too sick” and “not sick enough“, etc..Some of those patients are now on clinical trials (Allyson) and some are untreated (Freda).

Jenny said that the 2008 election gave her group hope. The extension of Herceptin treatment from 9 weeks to 12 months was a campaign pledge from John Key in 2008 (see:  12-month Herceptin treatment now available)  –  and was enacted within a month of National being elected into office.

Jenny said,

“The Minister of Health funded [an extension to] herceptin, and we thought this is actually a really good step. And we might get some of our other Enzymes [Replacement Therapies – ERT] across the threshold.

The Minister pledged to improve access to specialised medicines…… we took families to Wellington so they could meet the politicians, and tell their stories.”

Jenny’s group thought they were making progress in 2009 when a little boy, with Hunter’s Syndrome, was quickly given Pharmac funding to  receive enzyme replacement therapy (ERT). Adult patients with similar conditions, though, were untreated and without funding for ERT.

Despite a Ministerial review to investigate how adults could gain access to treatment, there was no change, Jenny told the seminar.

Furthermore, in 2010, Allyson’s application for myozome (ERT) was declined by Pharmac, even though the Agency acknowledged there would be stabilisation and improvement to Allyson’s health through treatment.

An appeal to Pharmac’s decision was also rejected.

By 2011, Jenny said,

“We really ramped it up. We put a call out to the community and we asked our families to go and talk to their own local politicians; brief them about what we were doing;  what we needed; about the  issues around access to medicines. And John [Forman] and Chris Higgins got a meeting with Tony Ryall, who said to them that the ‘EC’ (exceptional circumstances) review would solve the problem.

It didn’t.”

Jenny’s group made submissions to Pharmac about the (revised EC scheme), the NPPA Scheme, stating that they believed that people with rare disorders would not make it past the threshold and “would be cut out”.

In September, three more applications were made to Pharmac for treatment for Pompe Disease. They were all declined said Jenny.

In desperation, the group brought a patient with Pompe Disease from the United States to New Zealand, so she could “tell her story” to Pharmac, politicians, and to the media,

“But still that didn’t make a change.”

Jenny then told the seminar about their experience in trying to seek a meeting with Prime Minister John Key,

“We went to Parliament to  request a meeting with the Prime Minister. We got turned out. They got the  security [guards] and we got bailed out of Parliament.”

Jenny read out a statement from Labour’s deputy leader, who called the decision to forcibly evict Jenny’s group, “cowardly and disrespecful”. (For more in-depth information how rare-disease sufferers have been treated by this government, see: Lysosomal Diseases New Zealand News & Issues  . See Party responses here:  Political party commitments on Myozyme and orphan drugs )

The National government had stated that the ‘new’ NPPA (Named Patient Pharmaceutical Assessment ) Scheme would solve the problem of funding for rare diseases,

“The High Costs Highly Specialised Medicines Review – a National promise – recommended PHARMAC review its Exceptional Circumstances process. PHARMAC did that and the result is a new scheme
to replace the old one called “Named Patient Pharmaceutical Assessment”. It starts next March and its budget is expected to go up from $4 million to $8 million in the first year.” – Jackie Blue

Source

Jenny said that in August last year, her group tested the new NPPA process by submitting an application for treatment for Freda (see previous blogpost). Like Allyson, Freda has Pompe Disease – but is receiving no treatment whatsover.

We thought we’ve got nothing to lose, let’s see if it works,” said Jenny.

Well guess what,” she asked, “It didn’t work. She got declined.”

Freda “was not eligible” because, amongst other reasons,

“Pharmac had not provided a pathway forward for their new scheme for rare diseases. So in October we went to the Health Select Committee to ask for help. They sent us to the Minister. Then to the Ministry. Back to the Minister. And he said go and talk to Pharmac.”

They had nowhere else to go, except on a bureacratic roundabout.

Health Minister, Tony Ryall, simply refused to address their problems in any meaningful way.

Jenny outlined the stress on families whose loved ones were either not receiving medication because Pharmac refuse to fund treatment, or, were forced to fly to Australia every two weeks to be part of clinical drug trials,

“That’s a huge stress on their families. We shouldn’t have to do this when there are treatments available in New Zealand. And our patients say ‘it’s like genocide – they pay their taxes, they’ve contributed to society, why can’t we have a fair go?’.

Jenny then asked, “Where to from here? I guess we’ll have to have a Plan B for what [comes] next.”

Blogger’s note: With each passing story that I write up for this blogpost, I am more and more impressed by the sheer heroism of these good people.

See previous related blogpost: Health Minister circumvents law to fulfill 2008 election bribe?

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  27-28 february 2013 - rare diseases disorders - New Zealand Organisation for Rare Disorders -NZORD

Jenny

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John Forman introduced the next speaker, saying  that the seminar had heard from patients and from support groups, but there were very few people who could contribute to this issue from an academic viewpoint. He said that  few people with an academic or professional background were willing to challenge or criticise Pharmac and that many tended to have a sympathy for the core role that Pharmac has.

John explained that Dr Greg Coyle had written his University Ph.D thesis on the role of Pharmac and how it manages exceptional circumstances.

“It is exactly the topic that we’re interested in, and it’s exactly the kind of academic rigour, independent of a direct patient interest or family interest in this issue.”

Dr Greg Coyle

– Health Researcher

– Principal Advisor to the Salvation Army

Dr Coyle voiced his appreciation for meeting the members of the Forum the previous night (27 February),

“I want to thank the people I met last night…It was important to me for me to meet some of the people that I thought about; researched; and wrote about. And I’m the better for that.”

Following Dr Coyle’s very personal remarks that were directed to those present at the seminar, he launched into his pre-prepared speech and power-point present.

This blogger will re-print some  of his main statements and the rest of the text of his speech can be found here: How does the operation of PHARMAC’s ‘Community Exceptional Circumstances’ policy align with the distributive justice principles of fairness and equity?

“Thank you for inviting me to talk about my research. The subject was fairness and how we might know if agencies are being fair when we ration health care, particularly pharmaceuticals, in New Zealand.”

“…Today I would like to spend a few minutes talking about my study into PHARMAC’s operation of the exceptional circumstances policy (now renamed the Named Patient Pharmaceutical Assessment scheme). This policy of PHARMAC’s was interesting to me because it is located at the very boundary where the needs of the whole society and the needs of an individual meet.

Examples of how we ration healthcare in New Zealand in an explicit manner are very rare. I do not wish to suggest that health rationing is rare –it most certainly is not –but it is mainly done in an implicit manner and patients and families often will not be aware that it is even happening. PHARMAC is one agency which is explicit about limiting care. Many of you know this well.”

“…So the questions I suspect that you want answered is how much cost for the treatment of a person with a rare diseases is too much? As a country do we have processes to decide this? Are the processes rational and fair? Would providing more money for public health mean that other sectors like education, police, welfare, public housing or recovering from natural disasters would be given less? ”

“…John Rawls, an American philosopher, developed a theory of ‘justice as fairness’the chief purpose of which was to ensure that utilitarian and consequentialist thinking, in meeting the greater good, would not sacrifice the position of individuals.   He presented the principle that each person is to have an equal right to the most extensive liberty compatible with a similar liberty of others. However when social and economic inequalities are to be arranged, they should be arranged so that they are both to the greatest benefit of the least advantaged and attached to positions and offices which are open to all under the conditions of fairness and equality.”

“…Amartya Sen, a contemporary welfare economist, philosopher and winner of a Nobel Prize for economic science in 1998, developed a contemporary widely held view of distributive justice…

…  He clarified perceptions of distributive justice in terms of a person’s capability to experience justice.  Sen’s notions of justice are ultimately linked with the capability of people and how their lives are lived in the world.”

“… Sen held that the reach of health equity is immense and health care must be of primary importance in any discussion on social equity and justice;

“…health equity cannot but be a central feature of social arrangements in general”.”

“… Consequently, using these two philosophers, I posed the question of PHARMAC:

How does the operation of PHARMAC’s Community Exceptional Circumstance’policy align with the distributive justice principles of fairness and equity as described by John Rawls and Amartya Sen?”

“…I decided to distill their theories into four questions which decision-makers could ask of themselves to discover (or simply begin to debate) whether their decisions are fair and just.

Here are my 4 questions. I use the term ‘distribution’to mean decision, policy, funding or delivery of a service:

1. Would the most advantaged in society accept this distribution if they, at an instant, found themselves to be the least advantaged in society and requiring such distribution for themselves?

2. Is this distribution arranged so that it is attached to positions and offices which are open and accountable to all?

3. Is this distribution based on the efficiency of substantive opportunities and on procedural fairness in defining efficiency?

4. Is this distribution based on information available to decision makers about the capability of this person to do things he/she has good reason to value?”

“… We see the two purposes for PHARMAC in the governing legislation. One is to approve subsidy on an adequate range of quality pharmaceuticals for the general community. The second purpose is to approve subsidy for citizens whose needs are not met by the general schedule and considered exceptional.”

“… The evidence showed that in PHARMAC’s first purpose, general allocative policies have been highly successful in procuring an adequate range of quality medicines at internationally low prices.

PHARMAC has saved the New Zealand health system approximately $1.17 billion in 14 years. This has been achieved by methods of utilitarian efficiency analyses relying heavily on the Quality Adjusted Life Years calculation. PHARMAC has also expertly utilised subsidising and purchasing decisions based on evidence of clinical effectiveness.”

“… However, in PHARMAC’s second purpose,  its success has been achieved, in part, by managing the claims of individuals in exceptional circumstances in a way that has not closely aligned the Rawls’and Sen’s principles of fairness, equity, openness and consistency.

The research shows that using the functions required of it by governing legislation, PHARMAC well achieves its statutory purpose. However, in doing so, PHARMAC must deal with the tension between justice as fairness to individuals whose needs are exceptional, and fairness to the needs of wider society.”

“… There are three structural problems here. The first is that PHARMAC has no stated philosophical principal on which to base its decision-making other than limiting expenditure to achieve its budget, which is not a principle but an outcome.

The Minister, parliament, the courts, the Ombudsman, DHBs, the pharmaceutical industry, doctors or patients have no way of knowing if the decisions being made by PHARMAC are fair to both the community and the individual. ”

“… The second problem is that PHARMAC and its committees claim to use the 9 decision making criteria to guide decision making. However, my research showed that the priority, or weighting, of the criteria are never explained. So one cannot know which criteria were met or not met when PHARMAC comes to a rationing decision. ”

“… The third problem is that under these conditions PHARMAC will always feel embattled and defensive because it cannot serve both purposes and adequately protect the Minister from criticism. My research showed that PHARMAC Community Exceptional Circumstances Committees don’t record the reasons for their decisions because they would most certainly be challenged. If I was a panelist I am not sure I would record the reasons for my decisions either because of the hazard of doing so.”

“… The pharmaceutical industry has worked out how to squeeze PHARMAC in the media over funding for pharmaceuticals for rare diseases particularly if these drugs are available overseas or the drug company has made a new drug available for a short period provided to individuals on compassionate grounds. Pressure groups, such as your own, highlight individual cases in the media appealing to the ‘Rule of Rescue’to raise public sympathy and put pressure on PHARMAC.”

“… PHARMAC’s claim that it simply does not have the budget for $500,000 a year for drugs for a single person is quite true. But the government does have budgets for other things for example $30 million for a sports stadium in Christchurch, $8m a year on ministerial limousines, assisting a private boarding school in Wanganui for $3.8m,  a greater than $350m tax subsidy for the Lord of the Rings and Hobbit  pictures or the government considering recapitalizing the state coal company for $400m… I could go on. ”

“… and one million for the penguin!” [Not in pre-prepared speech notes.]

“… In this first purpose they are world beaters and we should celebrate the relatively large savings PHARMAC has made…

… However in this system the needs of the individuals with rare diseases will always take second place. To achieve budgetary control over the community pharmaceutical schedule and provide for people in exceptional circumstances are contradictory purposes. The first purpose is explicit meso-level rationing and the second purpose is explicit micro-level rationing. They are not the same and cannot be treated the same way.”

“… Well what system for analysing pharmaceuticals for rare diseases would I propose?

Firstly I believe PHARMAC should continue to do what it does well which is carefully analysing clinical effectiveness and cost utility in the approval of subsidy for medicines for public hospitals and the general community.

(Slide 14) I believe the second purpose of PHARMAC, to approve subsidy for medicines for individuals with rare diseases should be handled by another agency administered by the Ministry of Health. Shall we call it the ‘Rare Diseases Funding Agency’ Its chair and members should be appointed by the Minister of Health.”

“… The Rare Diseases Funding Agency in New Zealand would be similar to PHARMAC in that it would have a fixed budget determined by parliament for the specific purpose of deciding on all claims not just for pharmaceuticals, but also for home support and other necessary assistance for people with rare diseases in the community.  The agency would need to implement the medicine strategy including the objectives of efficient use of resources and fairness and equity considerations. I have no idea what the level of funding should be, but a starting point would be transferring PHARMAC’s budget for ‘Named Patient Pharmaceutical Assessment’scheme, I believe is $8m, to the Agency.”

“… Or, here’s an idea, a reallocation of a proportion of the savings made by PHARMAC could also be made to the Rare Diseases Funding Agency.”

“… Finally, there should be consideration of the fairness of decisions to individuals. Fairness can be a consideration because the Rare Diseases Funding Agency is separated off from the funding of pharmaceuticals of the wider public.

The agency should demonstrate openness and transparency about it decisions. ”

“…A good model of openness and accountability to consider might be the investigation and reporting mechanisms of the Office of the Health and Disability Commissioner which I hold to be exemplary.

Clearly PHARMAC and the Rare Diseases Funding Agency would have boundary issues and it would be in both agencies’interest to have a cooperative relationship.”

“… I believe that there will never be a time when all the pharmaceutical or other health needs of people who suffer rare or common diseases will be able to be met. This day will never come. But such an agency which I am proposing, underpinned by distributive justice principles, will provide an accountable, cost effective and fair system for analysing and managing the limited resources which are available for this purpose.”

“…In summary, (Slide 15) I submit that the current PHARMAC system delivers incredible value on behalf of the general community but it does not deliver justice as fairness to individual claimants who suffer rare diseases. I believe a new Rare Diseases Funding Agency, such as I have described, would.”

(Blogger’s Note: It’s apparent that a general concensus throughout the seminar was that Pharmac’s role to fund treatment for patient’s with rare diseases was not working well, and that a new agency was needed to undertake this responsibility

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  27-28 february 2013 - rare diseases disorders - New Zealand Organisation for Rare Disorders -NZORD

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Lucy

Lucy has been advising NZORD of legal matters in relation to access to medicines for rare diseases. She has been undertaking this role for a couple of years. She said this has been of limited success, and likened it to trying to put a square peg in a round hole.

She said,

“But it doesn’t necessarily need to be this way. The legal framework feels like it should be capable of making these decisions.”

Lucy said that the Health Minister and Ministry “make all the right noises” when it comes to accessing treatments for rare conditions. She referred to various agencies, laws, and documents which all indicate a need to improve access to highly specialised medicines.

Lucy said that all the documents which refer to specialised medicines and principals of fairness, equity, and distributive justice (prompted with a whisper from Dr Coyle), and affordability,  should allow people to have a “fair go”.  She read from legislation and Statement of Intent relating to Pharmac,

“… including in exceptional circumstances providing for subsidies for pharmaceuticals not in the Schedule.”

She pointed out that rare disease should be the “exceptional circumstances” – “they’re the diseases that are so rare, hardly anyone has them.”

Lucy pointed out that these are the drugs that Pharmac will never fund because they don’t meet their narrow cost-benefit, health-economics basis – which Pharmac uses so well for mass-market medications.

“And why would we fund these things?” she asked. “We would fund them because,  we don’t want to abandon our citizens. We mount  hugely exprensive rescue operations  to rescue people stuck up on mountains even thought they’ve taken themselves up there. “

Lucy said that Pharmac considers that it doesn not need to take into account issues of morality, fairness, equity, and community values, because of the way legislation has been enacted. So they do not take those factors into account.

As a lawyer, Lucy said she would be assisting NZORD to ensure that Pharmac does take those factors into consideration, when making decisions.

She said,

“I don’t agree with their argument that fairness means the same processing criteria for everyone. Because it can’t be fair to say from the outset that this whole subset of patients will never be funded; ‘just rule them out’. There must be cases within that subset that deserve to be funded.”

Lucy added that in all cases the onus is on Pharmac’s decision makers to make their decisions with humility, empathy, and with respect,

“I think that Pharmac is exceptionally proud of the system that it’s developed and the $1.7 billion of savings that it’s  achieved for the Schedule. Such that, ‘they shall not be questioned’. And I think that;’s really  insulting for the people who don’t fit within that process.”

Lucy agreed with suggestions that a fundamental change to the system was required. She said that in the meantime  “legally we have what we  have”.

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  27-28 february 2013 - rare diseases disorders - New Zealand Organisation for Rare Disorders -NZORD

Lucy

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At the conclusion of the speakers’  addresses, there was ample time to mingle and ask questions. In a room full of people with serious medical conditions – many life-threatening – there was a strong feeling of cheerful optimism. Never underestimate the human  ability for hope…

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  27-28 february 2013 - rare diseases disorders - New Zealand Organisation for Rare Disorders -NZORD

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This blogger wishes to thank the fine people who invited me to attend the Forum; to hear their stories; and who trusted me to present those same stories in an appropriate, respectful, and honest way.

The thing that struck me the most was that these were ordinary New Zealanders who most likely have never thumbed their noses at authority; have never engaged in protest activity; and are your typical Middle Class fellow-Kiwis.

They are also people who’ve not been well treated by the system – including politicians who often promise The World – but when held to account – find shabby excuses not to help those who desperately need it.

This country – our government – could help sufferers of rare diseases. The money is there. Perhaps politicians could cut some of the subsidies they give to businesses; build one less motorway; take a bus instead of chauffered limousines (which Green MPs do very well); or any other number of savings.

The money is there.

It’s the will to spend it on medicines, which is lacking.

And to Allyson and Freda – you two are fabulous! My thoughts are with you both (and all the others who I met at the Forum, and those I didn’t).  May the politicians and others in high positions of decision-making hang their heads in shame for how they’ve let you down.

You’re simply the best.

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  27-28 february 2013 - rare diseases disorders - New Zealand Organisation for Rare Disorders -NZORD

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So who uttered the quote, “One should judge a society by how it looks after the sick and vulnerable”?

Look for yourself,

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Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  27-28 february 2013 - rare diseases disorders - New Zealand Organisation for Rare Disorders -NZORD

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Fine words, Mr Prime Minister. Perhaps these people would like to know how deeply you believe them…

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**Update** **Update** **Update** **Update** **Update** **Update**


NZORD has annnounced that it will be approaching the Office of the Ombudsman.

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Addendum

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Key defends 'small' Longstone payout

Source

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Previous related blogposts

Priorities? (19 Oct 2011)

Terminal disease sufferer appeals to John Key (12 Nov 2012)

Terminal disease sufferer appeals to John Key – Update & more questions (28 Nov 2012)

Health Minister circumvents law to fulfill 2008 election bribe? (18 Dec 2012)

Johnny’s Report Card – National Standards Assessment – Compassion (9 Jan 2013)

“There’s always an issue of money but we can find money for the right projects” – John Key (20 Jan 2013)

Media

Pharmac: The politics of playing god (16 June 2011)

$500,000 a year to keep toddler alive (5 Feb 2013)

Rare disease sufferers want pricey treatments (1 March 2013)

Rare disease takes awful toll on boy (1 March 2013)

Call for an Orphan drugs access policy to overcome Pharmac’s systems failure (28 Feb 2013)

Additional Information

Gregory John Coyle: How does the operation of PHARMAC’s ‘Community Exceptional Circumstances’ policy align with the distributive justice principles of fairness and equity?

The PNH Support Association of NZ

PNH Support: Petition to Government to Make Soliris available to New Zealanders!

Support for Jethro Morrow

Facebook: Support for Jethro Morrow Facebook Page

Facebook: NZ Rare Disease Day

Website: NZ Rare Disease Day

Facebook: Treat NZ Pompe Patients Now Facebook Page

Website: Pompe Network

Facebook: Lysosomal Diseases New Zealand

Website: Lysosomal Diseases New Zealand

Facebook: NZ Organisation for Rare Disorders

Website:  NZ Organisation for Rare Disorders   

Pompe Support: Petition to Government Fund Myozyme for Pompe Patients

Copyright (c)  Notice

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

  • Use must be for non-commercial purposes.
  • At all times, images must be used only in context, and not to denigrate individuals.
  • Acknowledgement of source is requested.

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