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Election ’17 Countdown: Joyce – let the lolly scramble begin!

25 February 2017 1 comment

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(Or, “Under-funded health, education, and other social services? Let them eat tax-cut cake!”)

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2017 Election – Opening Gambits and Giveaways

You can tell it’s election year; the lolly-scramble (aka, hint of tax cuts) has begun;

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Historical Context

Cutting taxes (and social services on-the-sly) is one of National’s mainstays when it comes to election promises. Bribes work best when a government has nothing left to offer.

Who can forget the infamous  2008 election campaign, where – despite the Global Financial Crisis firmly taking hold of the New Zealand economy – then-National Party leader, John Key promised tax cuts.

In January 2008;

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

[…]

And we will do all of this while improving the public services that Kiwis have a right to expect. ”

In March 2008, then Finance Minister, Michael Cullen warned against borrowing for tax cuts;

“ Those who would actively choose to drive New Zealand into further debt to pay for tax cuts lack real ambition for our economy…

[…]

Even before these challenges hit home John Key wants to increase our debt to at least 25 per cent of GDP. But he does not pretend he wants to borrow more to pay for more services and he does not really believe he needs to borrow more to pay for roads. He only wants to outspend Labour on tax cuts.

His plan would cost an extra $700 million a year in financing costs alone, around what the government has invested in new health services for each of the last two years.

But the real worry is that Mr Key’s pro-debt policy shows he does not take long-term challenges seriously. His risky deal for tax cuts today would leave the bill to our children and grandchildren tomorrow.”

Undeterred, Key pursued his irresponsible promises and in August 2008 announced to a gullible public;

National will fast track a second round of tax cuts and is likely to increase borrowing to pay for some of its spending promises.

Key made the incredible assertion that tax-cuts would not impact on government debt;

So that will be extremely clear cut and rather hermetically sealed.

Key’s claim of “hermetically sealing” tax cuts from the rest of government fiscal activity was never fully explained, and nor did the MSM ever challenge that unbelievable promise.

In October 2008, Key repeated his fantasy of affordable tax cuts;

Our tax policy is therefore one of responsible reform…  We have ensured that our package  is appropriate for the current economic and fiscal conditions… This makes it absolutely clear that to fund National’s tax package there is no requirement for additional borrowing and there is no requirement to cut public services… National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing’ .

The rest is history. National was elected to power on 8 November and tax cuts implemented in 2009 and 2010. Government borrowing and  debt rocketed;

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A third round scheduled for 2011 was cancelled as the budget blow-out  caused – in-part – by  unaffordable tax-cuts began to hit home even on a profligate National-led administration.

By May 2011, National was borrowing $380 million per week to fund it’s debt. Bill English and John Key seemed startled by the government’s deteriorating financial position;

Finance Minister Bill English said the Government’s financial position had deteriorated “significantly” since late 2008.

“The pre-election update in 2008 forecast that the deficit for this year would be $2.4 billion,” he said.

“It’s much more likely to be around $15b or $16b.”

That level of deficit, as NZPA has previously reported, will be the highest in New Zealand’s history and Mr English confirmed that today.

Prime Minister John Key confirmed the average weekly borrowing figure, which he said was unaffordable.

Michael Cullen’s warnings over unaffordable tax cuts seem to have been long-forgotten as collective amnesia over-took the National Party leadership.

Worse still, it was the rising army of unemployed who were to pay the fiscal bill for National’s profligacy;

More than three quarters of all beneficiaries will be forced to seek work or face cuts to their payments under sweeping recommendations from the Government’s Welfare Working Group… Working group chairwoman, economist Paula Rebstock, said the present high levels of welfare dependency meant major changes were needed. “ There are currently few incentives and little active support for many people reliant on welfare to move into paid work. Long term benefit dependency can be avoided if investments are well targeted and timely…”  Social Development Minister Paula Bennett said the report was an opportunity to change the welfare system and would feed into Government work in the area.

Key indulged in National’s favourite activity when things went horribly wrong after his administration’s apalling policty-decisions. He blamed those at the bottom of the economic heap;

Prime Minister John Key says beneficiaries who resort to food banks do so out of their own “poor choices” rather than because they cannot afford food. “But it is also true that anyone on a benefit actually has a lifestyle choice. If one budgets properly, one can pay one’s bills. “And that is true because the bulk of New Zealanders on a benefit do actually pay for food, their rent and other things. Now some make poor choices and they don’t have money left.”

By 2016/17, National’s net debt had reached $66.3 billion. (Damn those beneficiaries’ “poor choices”.)

The Joy of Joyce’s Tax Bribe

On 8 February this year, Joyce announced aspects of this year’s coming Budget. Joyce  dangled the tax-cut carrot  in  front of voters;

It is also very important to remain mindful that the money the Government spends comes from hard working Kiwi families. We remain committed to reducing the tax burden on lower and middle income earners when we have the room to do so.

On the same day, Joyce voiced concerns about New Zealand’s massive mountain of private debt;

I have discussed DTIs with the Reserve Bank Governor, who remains concerned about the levels of debt in some households in the context of recent increases in house prices.

Joyce has good reason to be nervous. As of this year, New Zealand’s household debt has reached stellar proportions;

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Any further tax-cuts will not only be based on cuts to social services (health, education, housing, NGOs, etc), but may further fuel the housing bubble.  This would raise the prospect of a monstrous  three-headed creature of National’s making where;

  • it would likely have to have to borrow to fund the tax-cuts,
  • fuel an increase in private debt as tax-cuts are spent on a property-buying binge,
  • as well as driving first-home buyers out of the market as housing-prices take off again.

Joyce voiced this concern on 8 February;

The use of macro-prudential tools can be complex and affect different borrowers in different ways. I am particularly interested in what the impacts could be on first home buyers.”

So further tax cuts may have negative impacts that a fourth National administration would have to deal with if it wins the 23 Sept election.

On top of which, New Zealanders would be faced with further cuts to social services and increasing user-pays in health and education. From our on-going housing crisis;

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… to more user-pays in education;

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…in healthcare;

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… and the gutting of NGO services through budget-cuts;

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When Kiwis take up National’s tax-cut bribes, they end up paying more, elsewhere.

But even slashing the budgets for the state sector and NGOs is insufficient to meet the multi-billion dollar price-tag for tax-cuts.  National is desperately having to scramble to find money where-ever it can. So-called student loan “defaulters” are firmly in National’s eyesights;

Almost 57,000 student loan borrowers found in Australia

The agreement came into force in October and the details of around 10,000 New Zealanders were found in the first data match. The process has since been refined and a total of 56,897 people have now been located.

“These borrowers have a combined loan balance of $1.2 billion and $430 million of that is in default. Inland Revenue will now start chasing up these borrowers and taking action to get their student loan repayments back on track,” says Mr Joyce says.

Mr Woodhouse says “The data shows that more than half of these borrowers left New Zealand over five years ago, with nearly a quarter having been away for more than 10 years. A third of them have not returned to New Zealand in the past four years. One third of the group has had no contact with Inland Revenue, and 43% have not made a payment since they left New Zealand.

“It’s time these people did the right thing and met the obligations they signed up to when they took out their student loan,” Mr Woodhouse says.

Who else will National target to squeeze money out of?

What social services will National slash to fund tax-cuts?

What further user-pays will be implemented?

One further question; if National does not pay down our sovereign debt – how will the country cope with another global financial crisis and shock to our economy? As Joyce himself pointed out;

 

“ We need to keep paying down debt as a percentage of GDP. We’ve set a target of reducing net debt to around 20 per cent of GDP by 2020. That’s to make sure that we can manage any shocks that may come along in the future.”

 

When National took office from Labour, the previous Clark-Cullen government has prudently resisted National’s tantrum-like demands for tax cuts and instead paid down our sovereign debt. As former Dear Leader Key himself was forced to admit;

In 2005, as Leader of the Opposition;

“ Firstly let me start by saying that New Zealand does not face the balance sheet crisis of 1984, or even of the early 1990s. Far from having dangerously high debt levels, gross debt to GDP is around a modest 25 percent and net debt may well be zero by 2008. In other words, there is no longer any balance sheet reason to justify an aggressive privatisation programme of the kind associated with the 1980s Labour Government.

In 2012*, as Prime Minister Key  justified the partial sale of state-owned assets;

The level of public debt in New Zealand was $8 billion when National came into office in 2008.  It’s now $53 billion, and it’s forecast to rise to $72 billion in 2016.  Without selling minority shares in five companies, it would rise to $78 billion.  Our total investment liabilities, which cover both public and private liabilities, are $150 billion – one of the worst in the world because of the high levels of private debt in New Zealand.”

(* No link available. Page removed from National Party website)

With our current debt of $66.3 billion, we no longer have a safety-buffer. That is the current dire state of our government books.

It is astonishing that Joyce has the nick-name of “Mr Fixit”, as he makes irresponsible hints of tax cuts to come.

Little wonder that Joyce’s unearned reputation as “Mr Fix It” was deconstructed by journalist and political analyst, Gordon Campbell;

The myth of competence that’s been woven around Steven Joyce – the Key government’s “Minister of Everything” and “Mr Fixit” – has been disseminated from high-rises to hamlets, across the country. For five years or more, news outlets have willingly (and non-ironically) promoted the legend of Mr Fixit…

[…]

Of late however, the legend has lost some of its lustre. More than anything, it has been his handling of the SkyCity convention deal that has confirmed a lingering Beltway suspicion that Joyce’s reputation for business nous has been something of a selfie, with his competence appearing to be inversely proportional to his sense of self-esteem. Matthew Hooton’s recent critique of Joyce in NBR – which was inspired by how the SkyCity convention deal had cruelly exposed Joyce’s lack of business acumen – got a good deal of traction for that reason. On similar grounds, Joyce’s penchant for (a) micro-managing and (b) the prioritising of issues in terms of their headline potential has resulted in his ministerial office becoming somewhat notorious around Parliament for (c) its congested inefficiency and for (d) a not-unrelated extent of staff burnout.

[…]

Not only is Joyce’s ministerial office renowned as an administrative bottleneck – where issues tend to be ranked in terms of their p.r. potential for the Minister – none of this seems to be in service of any wider goal or vision. As Mr Fixit, Joyce tends to be engaged in the equivalents of blown fuses and leaking taps – rather in the re-design of the political architecture. Joyce has simply never been – and has never pretended to be – a big picture kind of politician. He has been never someone with an abiding interest in – or the intellectual stamina for – systemic change.

The re-election of National this year – by any means necessary, whether beneficial to New Zealand or not, no matter what the social or financial costs – appears to be ‘Mr Fixit’s’  latest ‘DIY’ project.

And like most DIY budgets, wait for the blow out.

Just like 2009.

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References

Interest.co.nz: Finance Minister says Government remains ‘committed to reducing the tax burden

Scoop media: Tax cuts still in the mix for Joyce’s first budget

Sharechat: Tax cuts still in the mix for Finance Minister Steven Joyce’s first budget

Radio NZ: Budget date set, tax cuts likely

NBR: Government hints at tax cuts in Budget 2017

Fairfax media: Joyce signals low and middle earners’ top rates target for tax cuts

NZ Herald:  The Economy Hub – About those tax cuts… Steven Joyce, the big interview

NZ Herald: John Key – State of the Nation speech

Scoop media: Government will not borrow for tax cuts

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

Guide2: National Party – Tax Policy

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

NBR: Tax cuts scrapped in budget

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

NZ Herald: Govt borrowing $380m a week

Fairfax media: Extensive welfare shake-up needed – report

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

NZ Treasury: Budget Economic and Fiscal Update 2016

Beehive: 2017 Budget to be presented on 25 May

Beehive: Finance Minister requests cost-benefit analysis on DTIs

NZ Herald: New Zealand residential property hits $1 trillion mark

Beehive: Almost 57,000 student loan borrowers found in Australia

Scoop media: John Key Speech – State Sector Under National

Werewolf: The Myth of Steven Joyce

Other Blogs

The Hand Mirror: A crack in the wall

Previous related blogposts

Tax cuts & school children

Letter to the editor: Setting it straight on user-pays in tertiary education

Letter to the Editor: tax cuts bribes? Are we smarter than that?

The Mendacities of Mr Key #3: tax cuts

The Mendacities of Mr Key # 19: Tax Cuts Galore! Money Scramble!

The Mendacities of Mr English – Social Services under National’s tender mercies

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This blogpost was first published on The Daily Blog on 20 February 2017.

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Election ’17 Countdown: The Strategy of Ohariu

22 February 2017 2 comments

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(Or, “It’s only ‘hypocrisy’ when the Left do it!“)

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The Labour-Green New Deal

On 14 February, the Left finally woke up to the realities of MMP. A deal was brokered and the only possible, logical  outcome arrived at;

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The Radio NZ story is correct; Dunne retained the Ōhāriu electorate by only 710 votes.

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Had Green voters given their electorate vote to the Labour candidate, Virginia  Andersen would have won Ōhāriu by 2,054 votes and National would  have lost one of their coalition partners.

With the subsequent loss of Northland to Winston Peters in March 2015, National would have lost their majority in Parliament and would have had to either rely on NZ First for Confidence and Supply – or call an early election.

A major victory for the Left (and all low-income people in our community) would have been the abandonment of National’s state house sell-of. (Current state housing stock has dropped from 69,000 rental properties in 2008 to 61,600 (plus a further 2,700 leased) by  2016.)

National has sold off  7,400 properties. Meanwhile, as of December last year, there were 4,771 people on the state house waiting list;

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Had Dunne been ousted from Ōhāriu in 2014 our recent history would have been completely altered.  Anyone who believes that the Labour-Green accomodation was a “dirty” deal might ponder the ‘rights’ and ‘wrongs’ whilst spending the night in a car or under a tarpaulin. Preferably in winter.

Green Party co-leader, James Shaw, rightly pointed out the obvious;

“I think New Zealanders will understand that, in an MMP environment, it makes perfect sense for us to not stand a candidate in Ōhāriu. Ōhāriu has a significant impact on the makeup of Parliament.

Not standing in Ōhāriu increases the chances that we will be in a position to change the government in September – it’s as simple as that.

I would actually argue that we’re being more transparent here by actually simply saying we’re not going to and it’s within the structure of the memorandum of understanding with the Labour Party that we signed last year, where we actually held a press conference saying that we were going to work together to change the government.”

Shaw has rejected any suggestion that this is a “dirty deal”. Again, he is correct. the Greens and Labour are simply working by the rules of MMP as National determined in 2012/13, when then-Dear Leader Key refused to eliminate the “coat-tailing” provision.

Shaw should have thrown the description of a “deal” right back at critics such as right-wing blogger and National Party apparatchik, David Farrar, and TV3’s faux-moralistic Patrick Gower. Shaw’s response should have been hard-hitting and ‘in-your-face’,

“Damn right it’s a deal. Those are the rules set by  National and we  play by them. If people don’t like it, take it up with the Tories.”

Some context

In 2012, National followed through on an earlier government committment to conduct a review into the MMP electoral process. The Commission called for submissions from the public, and over 4,600 submissions were duly made on the issue. (This blogger made a submission as well.)

As a result, the Commission made these findings;

The Commission presented its final report to the Minister of Justice on 29 October 2012 with the following recommendations:

  • The one electorate seat threshold  [aka “coat-tailing”] should be abolished (and if it is, the provision for overhang seats should also be abolished);

  • The party vote threshold should be lowered from 5% to 4% (with the Commission required by law to review how the 4% threshold is working);

  • Consideration be given to fixing the ratio of electorate seats to list seats at 60:40 to address concerns about declining proportionality and diversity of representation;

  • Political parties should continue to  have responsibility for selecting and ranking candidates on their party lists but they must make a statutory declaration that they have done so in accordance with their party rules;

  • MPs should continue to be allowed to be dual candidates and list MPs to stand in by-elections.

 

The first two recommendations were a direct threat to National’s dominance in Parliament, and then-Minister of Justice, Judith Collins rejected them outright;

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Key offered a mealy-mouthed excuse for not accepting the Electoral Commission’s report;

“If you’re really, really going to have major change to MMP you’d want to have either consensus or to put it to the people.  It’s not a matter of blame – it’s just a range of views out there.”

Yet, submitters had been fairly clear in their views and failure to obtain “concensus” from the smaller parties in Parliament said more about their own self-interests than public-interest.

A NZ Herald editorial pointed out;

All of National’s present allies, Act, United Future and the Maori Party, take the same view of the single electorate entitlement and all but the Maori Party have benefited from it at some time. Self-interest may be their underlying motive…

[…]

National seems not to want to disturb the status quo because it discounts its chances of finding stable coalition partners under the simplified system proposed.

So the hundreds of thousands of taxpayers’ dollars spent on the MMP Review; seeking submissions; listening to submitters; and providing the Report to Parliament was all an utter waste of money.

The “coat-tailing” provision would be set to remain because without it National would find it harder to find potential coalition allies, and therefore govern.

It also meant that all political parties now have to play by the same rules, or else be disadvantaged.

(Hypo)Crit(ic)s

— Gower

Patrick Gower (with Jenna Lynch sharing the byline) writing for  TV3 News was obviously having a bad coffee-day with this vitriolic comment, condemning the Labour-Green accomodation;

Labour and the Greens have just done the dirtiest electorate deal in New Zealand political history – and it is all about destroying Peter Dunne.

The tree-hugging Greens will not stand in Ōhāriu to help the gun-toting former cop Greg O’Connor win the seat for Labour.

This is dirtier than most electorate deals because for the first time in recent history a party is totally giving up on a seat and not running rather than standing but giving a ‘cup of tea’ signal for its voters to go for a minor party candidate.

The degree of hypocrisy to Gower’s comment is breath-taking.

Note that he suggests that it is preferable to “giving a ‘cup of tea’ signal for its voters to go for a minor party candidate” rather than withdrawing a candidate and openly declaring an accomodation.

In effect, a journalist has advocated for “open deception” rather than transparency. Think about that for a moment.

Gower antipathy to left-wing parties using current MMP rules is not new. Three years ago, Gower  made a scathing attack on Hone Harawira and Laila Harré over the alliance between the Internet Party and Mana Movement;

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By attacking parties on the Left who choose to work together (but not parties on the Right), Gower is either displaying crass ignorance over how MMP works – or undisguised political bias.

I will not be surprised if Gower eventually ends up as Press Secretary for a National minister.

Postscript: Re Gower’s comment that “for the first time in recent history a party is totally giving up on a seat and not running“.

This is yet more ignorance from a man who is supposedly TV3’s “political editor”. Political parties often do not yield a full slate of candidates in every electorate.

In the 2014 General election there were 71 electorates; 64 general and seven Māori electorates;

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The Green party had only 57 candidates out of 71 electorates. Notice that even National did not offer candidates in every electorate.

Only Labour fielded a candidate in all 71 electorates.

So as usual, Gower’s political knowledge is disturbingly lacking. Or partisan. Take your pick.

— Farrar

Soon after the Greens announced their accomodation deal, National Party apparatchik, pollster, and right-wing blogger – David Farrar – was predictable in his criticism. Cheering for Patrick Gower, Farrar  wrote;

…Labour and Greens have spent years condemning deals where National stands but tells supporters they only want the party vote, and now they’ve done a deal where they don’t even stand. I don’t have a huge issue with them doing that – the issue is their blatant hypocrisy.

They’re so desperate to be in Government they’ll put up with that, but the irony is that if Winston does hold the balance of power and pick Labour, he’ll insist the Greens are shut out of Government.

Yet, in 2011 and 2014, Farrar had different thoughts on deal-making when it came to electoral accomodations;

This is sensible and not unusual. Off memory most elections there have been some seats where ACT doesn’t stand a candidate to avoid splitting the centre-right electorate vote. One of the nice things about MMP is that you can still contest the party vote, without needing to stand in an electorate.

And,

I think Epsom voters will vote tactically, as they did previously. But the choice is up to them. National may say we are only seeking the party vote in an electorate – but they still stand a candidate, giving voters the choice. Epsom voters are not controlled by National. If they don’t want to tactically vote, then they won’t. All National will be doing is saying we’re happy for people to vote for the ACT candidate, as having ACT in Parliament means you get a National-led Government.

So, according to Farrar, it’s ok  that “ ACT doesn’t stand a candidate to avoid splitting the centre-right electorate vote“. He describes it as “one of the nice things about MMP“.

So as long as a deal is presented dishonestly – “All National will be doing is saying we’re happy for people to vote for the ACT candidate, as having ACT in Parliament means you get a National-led Government” –  then that’s ok?

Both Labour/Greens and National/ACT have presented electoral accomodations – but in different ways.

One was transparent.

The other was doing it with a “wink, wink, nudge, nudge”.

It is unreasonable and hypocritical to support one side to exploit current MMP provisions to their benefit – whilst expecting others to work to a different set of rules. Perhaps Mr Farrar should look at how National/ACT presents their accomodations to the public – or else do away with the coat-tailing provision altogether.

Ōhāriu Green Voters

Following the 2011 General Election, I noted that Green voters had failed to make full use of strategic voting under MMP;

Dunne’s election gave National an extra coalition partner  and his win  therefore assumes a greater relevance than a “mere” electorate MP.  In effect, 1,775 Green voters sent John Key a second Coalition partner, after John Banks.

And again, post-2014;

Some Green supporters are either woefully ignorant of MMP – or have been smoking to much of a certain herb. Or, gods forbid, they are so desperate to remain ideologically pure in their principles, that they are willing to allow a right wing candidate to be elected, rather than supporting a candidate from another party on the Left.

In  Ōhāriu (as well as other electorates) Peter Dunne was returned to office because Green Party supporters cast their electorate votes for Green candidate Tane Woodley, instead of the Labour candidate. Preliminary election results for Ohariu yield the following;

ANDERSEN, Virginia: (Labour)11,349*

DUNNE, Peter: (United Future) 12,279*

WOODLEY, Tane: (Greens) 2,266*

Had supporters of the Green Party given their electorate votes to Viriginia Andersen, Peter Dunne would have been defeated by 1,336* votes.

The Greens need to get it through to their supporter’s  heads that giving their electorate votes to their own candidates is a waste of effort and an indulgence we cannot afford.

When elections are close-fought and majorities slim, such indulgences cannot be tolerated, and the Greens need to educate their supporters quick-smart, if we are to win in 2017.

(*Note: figures above were preliminary and not final results.)

If there was an element of frustration and anger in my comments above, it was a ‘face-palm’ moment.  The  poorest families and individuals in New Zealand have paid the price by enduring two terms of National because Green voters chose to indulge themselves by casting both votes for the Green candidate, rather than strategic vote-splitting.

I can understand affluent, propertied Middle Class voting for self-interest.

I find it less palatable that Green voters cast their ballots for some bizarre feeling of political purity. That is selfishness in another form.

Beneficiaries being attacked by a souless government; people living in cars, garages,  rough, or crammed three families into one home; people suffering as social services are slashed, will find it hard to understand such selfishness.

In the United States, blue-collar workers voted for a populist demagogue. The workers who voted for Trump believed that the Left had abandoned them.

We dare not allow the same despair to flourish in our own country.

If politics is a contest of ideas; a battle of ideology; then strategy counts.

The Greens have woken up to this simple reality.

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References

Radio NZ: Green Party will not stand in Ōhāriu

Electoral Commission: Official Count Results – Ōhāriu

Radio NZ: Winston Peters takes Northland

Radio NZ: Thousands of state houses up for sale

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2015/16

Fairfax media: Samoan family stuck in makeshift, mosquito-ridden tent – ‘through no fault of their own’

Ministry of Social Development: The housing register

Radio NZ: Labour-Greens deny deal over Ohariu seat

NZ Herald: Political Roundup – Embarrassing but strategic deal for the Greens

Electoral Commission: 2012 MMP Review

Electoral Commission: What people said on the MMP Review

Electoral Commission: The Results of the MMP Review

NZ Herald: Govt rejects recommendations to change MMP system

NZ Herald: Editorial – National too timid on MMP review

Electoral Commission: Financial Review

NZ Herald:  Govt rejects recommendations to change MMP system

Radio NZ:  Collins defends not trying for changes to MMP

Fairfax media:  Government’s MMP review response slammed

Scoop media:  Minister’s response to MMP review a travesty –  Lianne  Dalziel

NZ Herald:  Editorial – National too timid on MMP review

TV3 News: Patrick Gower – Labour-Greens do double dirty deal in Ōhāriu

Electoral Commission: Electoral Commission releases party and candidate lists for 2014 election

Kiwiblog: The double dirty deal in Ohariu

Kiwiblog: Marginal Seat deals

Kiwiblog: National’s potential electoral deals

Additional

Electoral Commission:   2017 General Election

Other Blogs

The Standard:  The coat-tail rule and democracy (2014)

Public Address:  Government votes not to improve MMP (2015)

The Standard:  Greens stand aside in Ōhāriu

Previous related blogposts

Patrick Gower – losing his rag and the plot

Judith Collins issues decision on MMP Review!

Judith Collins – Minister of Talking Crap

Letter to the Editor: Mana, Internet Party, Judith Collins, and “coat-tailing”

Letter to the Editor – Dom Post editorial off into LaLaLand

John Banks: condition deteriorating

The secret of National’s success – revealed

Election 2014 – A Post-mortem; a Wake; and one helluva hang-over

2014 Election – Post-mortem Up-date

Post mortem #1: Green Voters in Electorates

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Above image acknowledgment: Francis Owen/Lurch Left Memes

Above image acknowledgment: Francis Owen/Lurch Left Memes

 

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This blogpost was first published on The Daily Blog on 17 February 2017.

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The Mendacities of Mr English – Social Services under National’s tender mercies

12 February 2017 2 comments

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Context

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On 25 January, as Radio NZ returned to it’s normal broadcasting schedule (and putting away it’s dumbed-down “summer programming” until next December/January), John Campbell had his first interview with John Key’s replacement, Bill English.

Campbell raised several issues with English; the US withdrawal from the TPPA; the Pike River mine disaster; and the housing crisis. At this point, English made this staggering claim;

@ 5.58

“We’ve got a government actually with a good record on addressing, in fact, some of the toughest social issues. There may be disagreement over means by which we’re doing it, ah, but our direction is pretty clear. And you know over, certainly heading into election year we think that the approach the government’s developed around social investment, around increasing incomes is the right kind of mix – “

English’s bland assertion that “government actually with a good record on addressing, in fact, some of the toughest social issues” is at variance with actual, real, mounting socio-economic problems in this country.

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Key indicator #1: Unemployment

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The latest HLFS unemployment stats show an increase from 4.9% to 5.2% in the December 2016 Quarter. However, in all likelihood, the unemployment numbers are actually much, much, higher since Statistics NZ arbitrarily altered the way it  calculated what constituted  unemployment.

On 29 June 2016, Statistics NZ announced that it would be changing the manner in which it defined a jobseeker;

Change: Looking at job advertisements on the internet is correctly classified as not actively seeking work. This change brings the classification in line with international standards and will make international comparability possible.

Improvement: Fewer people will be classified as actively seeking work, therefore the counts of people unemployed will be more accurate.

The statement went on to explain;

Change in key labour market estimates:

  • Decreases in the number of people unemployed and the unemployment rate

  • Changes to the seasonally adjusted unemployment rate range from 0.1 to 0.6 percentage points. In the most recent published quarter (March 2016), the unemployment rate is revised down from 5.7 percent to 5.2 percent 

  • Increases in the number of people not in the labour force 

  • Decreases in the size of the labour force and the labour force participation rate

The result of this change? At the stroke of a pen, unemployment fell from 5.7% to 5.2% for the March 2016 Quarter (and subsequent Quarters).

If the “current unemployment figures” from Stats NZ are reported as “5.2%’, they may well be back to the original March 2016 figure of 5.7%, before the government statistician re-jigged definitions.

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Key indicator #2: Housing

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– Home Ownership

According to the 1984 NZ  Yearbook, in 1981 the number of rental dwellings numbered 25.4% of housing. 71.2% were owner-occupied. Nearly three quarters of New Zealanders  owned their homes.

Home ownership reached it’s maximum height in 1991, when it stood at 73.8%. Since then, it has steadily declined.

By 2013 (the most recent census survey), the numbers of rental dwellings had increased to 35.2% (up 33.1% in 2006). Home ownership had decreased to  49.9%  (down from  from 54.5% in 2006). If you include housing held in Family Trusts, the figure rises to 64.8% of households owning their home in 2013, down from 66.9% in 2006.

Whether you include housing held in Family Trusts (which may or may not be owner-occupied or rented out), home ownership has fallen steady since the early 1980s.

Renting has increased from 25.4% to 35.2%.

More and more New Zealanders are losing out on the dream of home ownership. Conversely, more and more of us are becoming tenants in our own country.

As Bernard Hickey from Interest.co.nz said in December last year;

Nearly two thirds of the 430,000 households formed since 1991 are tenants.

Think about that for a moment. It is a stunning revelation of how the young and the poor have been hit the hardest by the changes in New Zealand since the mid-1980s, and on an enormous scale.

It means two thirds of the kids born in those families grew up in rental accommodation, and more than 80% of those are private rentals (although the Housing NZ homes are often no better). That means they often grew up in mouldy, damp, cold and insecure housing. It’s true that some homes occupied by their owners are also below par, but it’s a much lower proportion and owners have the option to improve their homes through insulation and ventilation.

The NZ$696 billion increase in the value of New Zealand’s houses to NZ$821 billion between 1991 and 2015 means the 64% of owners in live-in houses have also had plenty of financial flexibility to improve those houses. Renters have had no access to that wealth creation and are not allowed to put a pin in the wall, let alone put in a ventilation system or some batts in the ceiling. The take-up for the Government’s home insulation and heating subsidies were vastly higher among home-owners than they were for landlords.

Those 284,000 renting households formed since 1991 have also often been forced to move schools and communities and all the roots that build families because New Zealand’s rental market is so transient.

[…]

It illustrates the scale of the fallout from that collapse in home ownership from 1991. Not only has it handicapped the education, health and productivity of a entire generation of New Zealanders, but it is set to magnify the likely growth in pension and healthcare costs of our ageing population. And that’s before the wealth and income inequality effects.

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– Affordability

In 2016, the 13th Annual International Demographia International Housing Affordability survey rated New Zealand as one of the most unaffordable housing markets in the world;

The most affordable major housing markets in 2015 are in the United States, with a moderately unaffordable Median Multiple of 3.9, followed by Japan (4.1), the United Kingdom (4.5), Canada (4.7), Ireland (4.7) and Singapore (4.8). Overall, the major housing markets of Australia (6.6), New Zealand (10.0) and China (18.1) are severely unaffordable. (p2)

[…]

In New Zealand, as in Australia, housing had been rated as affordable until approximately a quarter century ago. (p24)

A 2014 report by the NZ Institute for Economic Research stated  the “the average house price rose from the long-run benchmark of three times the average annual household income to six times“;

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house-price-to-income-ratio-new-zealand-housing-affordability

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The NZIER report refers to several reasons for increasing housing prices; slow supply of land; demographic demand (from ‘Baby Boomers’); and investor demand caused by lack of a capital gains tax. Interestingly, the Report also refers to an “over-supply of finance”;

The loosening of financial standards and rising household debt relative to income has happened over a long period of time. The increase in indebtedness has coincided with rising house prices relative to incomes. This suggests that increased household indebtedness has at least partly contributed to the increasing price of homes. (p14)

Prior to Roger Douglas de-regulating the banking/finance sector, New Zealand banks could only lend depositor’s funds as mortgages.

As a result, mortgage money was “tight”, and scarcity helped keep house prices down. Vendor’s expectations were kept “in check” by scarcity of bank funds. Prior to the mid 1980s, Vendor’s Finance (by way of a Second Mortgage) were commonly-used financial tools to assist house-owners to sell and buyers to complete a purchase.

Once the banking sector was opened up, and monetary policy relaxed, cheap money flooded in from overseas for banks to on-lend to house-purchasers. As property investor, Ollie Newland vividly explained in the 1996 TV documentary, Revolution;

“I got a phone  call from my bank manager to say some bigwigs were coming up from Wellington to have a chat with me. I thought it was just one public relations things they do. I had a very small office, it wasn’t much bigger than a toilet cubicle, and those five big fellows  crowded in with their briefcases and books and they sat on the floor and the arms of the chairs – I only had one chair in the place – and stood against the walls. Their first words to me were, we’re here to lend you money. As much as you want. For somebody like me, and I’m sure it’s the same for everybody else, to suddenly be told by the bank manager that you could have as much money as you want, help yourself, that was a revelation. We thought we had died and gone to heaven.”

Unfortunately, the side affect of this was to increase vendor’s expectations to gain higher and higher prices for their properties. Combined with recent high immigration, and a lack of a comprehensive capital gains tax, and the results have been troubling for this country;

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As well as increasingly unaffordable housing, we – as a nation – are sitting on a trillion-dollar fiscal bomb.

Think about that for a moment.

Little wonder that in September last year, the Reserve Bank issued the sternest warning yet that we were headed for impending economic mayhem;

A sharp correction in house prices represents a key risk to the financial system, and one that is increasing the longer the current boom in house prices persists. A severe downturn in house prices could have major implications for the banking system, with over 55 percent of bank loans secured against residential property. Moreover, elevated household debt levels and a growing exposure of the banking system to investor loans could reinforce a housing downturn and extend reductions in economic activity, as highly indebted households are forced to reduce consumption and sell property.

As with many other individuals, institutions, organisations, business leaders, left-wing commentators, media, political pundits, political parties, the NZIER was (and still is) calling for a comprehensive capital gains tax to be implemented.

Even then, this blogger suspects we may be too late. National (and it’s predecessor, to be fair) have left it far to late and the economic horse has well and truly bolted.

Even a Capital Gains Tax at 28% – New Zealand’s current corporate tax rate – may be insufficient to dampen speculative demand for properties.

Meanwhile, the dream of Kiwis owning their own homes continues to slip away.

Depressingly, New Zealanders themselves have permitted this to happen.

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– State Housing

If the Middle Classes and their Millenial Offspring are finding it hard to buy their first home, think of the poorest  families and individuals in our communities. For them, social housing consists of packing multiple families into a single house; living in an uninsulated, drafty,  garage; or in cars.

Last year, the story of mass homelessness exploded onto our media and our “radar” as New Zealanders woke up to the reality of persistent poverty in our cities;

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Although on occassion, the mainstream media found them themselves  in embarrassingly ‘schizophrenic’ situations as they attempted to reconcile reporting on our growing housing crisis – whilst raising advertising revenue by  promoting “reality” TV programmes that were far, far removed from many people’s own disturbing reality;

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According to UNICEF;

295,000 New Zealand kids are living beneath the poverty line, which means they are living in households where income is less than 60% of the median household income after housing costs are taken into consideration.

One way to alleviate poverty is to provide state housing, at minimal rental, to families suffering deprivation. Not only does this make housing affordable, but also strengthens a sense of community and reduces transience.

Transience can have deletarious effects on families – especially on children – who then struggle with the stresses of losing friends; adjusting to new neighbourhoods, and new schools.

A government report states that transience for children can have extreme, negative impact on  their learning;

Nearly 3,700 students were recognised as transient during the 2014 year. Māori students were more likely to be transient than students in other ethnic groups.

[…]

Students need stability in their schooling in order to experience continuity, belonging and support so that they stay interested and engaged in learning.

All schools face the constant challenge of ensuring that students feel they belong and are encouraged to participate at school. When students arrive at a school part-way through a term or school year, having been at another school with different routines, this challenge may become greater.

Students have better outcomes if they do not move school regularly. There is good evidence that student transience has a negative impact on student outcomes, both in New Zealand and overseas. Research suggests that students who move home or school frequently are more likely to underachieve in formal education when compared with students that have a more stable school life. A recent study found that school movement had an even stronger effect on educational success than residential movement.

There is also evidence that transience can have negative effects on student behaviour, and on short term social and health experience

Writing for The Dominion Post, in April 2014, Elinor Chisholm and  Philippa Howden-Chapman pointed out the blindingly obvious;

Continuity of education and supportive relationships with teachers are critical for children’s educational performance.

“Churn” is not good for educational performance or enrolment in primary health care, where staff can ensure children are properly immunised and chronic health problems can be followed up.

It was for this reason that, in our submission on the Social Housing Reform Bill late last year, we strongly recommended that families with school- age children should be excluded from tenancy review.

Secure tenure and stability at one school would allow children the best chance of flourishing. In high- performing countries such as the Netherlands, children are explicitly discouraged from changing schools in the middle of the school year.

The bill had announced the extension of reviewable tenancies to all state tenants (new state tenants had been subject to tenancy review since mid- 2011). However, the housing minister, as well as the Ministry of Business, Innovation and Employment, had made clear that the disabled and the elderly were to be excluded from tenancy reviews.

In our submission, we acknowledged the Government for recognising the importance of secure tenure.

People who are compelled to move house involuntarily can experience stress, loss, grief and poorer mental health. Housing insecurity is also associated with poorer physical health.

National’s policy of ending a state “house for life”;  increased tenancy reviews for state house tenants, coupled with the sale of state houses, is inimical to the stabilisation of vulnerable families; the well-being of children in those families; and to communities.

In 2008, Housing NZ owned 69,000 rental properties.

By 2016, that number had dropped significantly to 61,600 (plus a further 2,700 leased).  National had disposed of some 7,400 properties.

Between 2014 and 2016, at least 600 state house tenants lost their homes after “reviews”.

This, despite our growing population.

This, despite John Key’s own family having been provided with the security of a state house, and Key enjoying a near-free University education.

This, despite John Key, ex-currency trader,  and multi-millionaire, admitting in 2011 that New Zealand’s under-class was growing.

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Key indicator #3: Incomes & Inequality

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In June 2014, Oxfam reported on New Zealand’s growing dire child poverty crisis;

The richest ten per cent of New Zealanders are wealthier than the rest of the population combined as the gap between rich and poor continues to widen.

Oxfam New Zealand’s Executive Director Rachael Le Mesurier said the numbers are a staggering illustration that the wealth gap in New Zealand is stark and mirrors a global trend that needs to be addressed by governments in New Zealand, and around the world, in order to win the fight against poverty.

“Extreme wealth inequality is deeply worrying. Our nation is becoming more divided, with an elite who are seeing their bank balances go up, whilst hundreds of thousands of New Zealanders struggle to make ends meet,” said Le Mesurier.

Figures for the top one per cent are even more striking. According to the most recent data, taken from the 2013 Credit Suisse Global Wealth Databook, 44,000 Kiwis – who could comfortably fit into Eden Park with thousands of empty seats to spare – hold more wealth than three million New Zealanders. Put differently, this lists the share of wealth owned by the top one per cent of Kiwis as 25.1 per cent, meaning they control more than the bottom 70 per cent of the population.

Oxfam New Zealand’s Executive Director, Rachael Le Mesurier, was blunt in her condemnation;

“Extreme inequality is a sign of economic failure. New Zealand can and must do better. It’s time for our leaders to move past the rhetoric. By concentrating wealth and power in the hands of the few, inequality robs the poorest people of the support they need to improve their lives, and means that their voices go unheard. If the global community fails to curb widening inequality, we can expect more economic and social problems.”

A 2014 OECD report placed New Zealand as one of the worst for growing inequality;

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Not only was inequality a social blight, but according to the report it impacted negatively on economic growth;

Rising inequality is estimated to have knocked more than 4 percentage points off growth in half of the countries over two decades. On the other hand, greater equality prior to the crisis helped increase GDP per capita in a few countries, notably Spain.

According to the OECD assessment,  income inequality had impacted the most on New Zealand, with only Mexico a close second;

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oecd-2014-estimated-consequences-inequality-cumulative-growth

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The OECD Report went further, making this “radical” observation;

The most direct policy tool to reduce inequality is redistribution through taxes and benefits. The analysis shows that redistribution per se does not lower economic growth.

The statement went on to “qualify”  any suggestion of socialism with a caveat. But the declaration that “analysis shows that redistribution per se does not lower economic growth” remained, constituting a direct contradiction and challenge to current neo-liberal othodoxy.

In August 2015, former City Voice editor, and now NZ Herald social issues reporter, Simon Collins revealed the growing level of child poverty in this country;

The Ministry of Social Development’s annual household incomes report shows that the numbers below a European standard measure of absolute hardship, based on measures such as not having a warm home or two pairs of shoes, fell from 165,000 in 2013 to 145,000 (14 per cent of all children) last year, the lowest number since 2007.

Children in benefit-dependent families also dwindled from a recent peak of 235,000 (22 per cent) in 2011, and 202,000 (19 per cent) in 2013, to just 180,000 (17 per cent) last year – the lowest proportion of children living on benefits since the late 1980s.

But inequality worsened because average incomes for working families increased much faster at high and middle-income levels than for lower-paid workers.

The net result was that the number of children living in households earning below 60 per cent of the median income after housing costs jumped from a five-year low of 260,000 in 2013 to 305,000 last year, the highest since a peak of 315,000 at the worst point of the global financial crisis in 2010.

In percentage terms, 29 per cent of Kiwi children are now in relative poverty, up from 24 per cent in 2013 and only a fraction below the 2010 peak of 30 per cent.

In September 2016, Statistics NZ confirmed the widening of  income inequality from 1988 to 2015,  between households with high  and  low incomes;

  • In 2015, the disposable income of a high-income household was over two-and-a-half times larger than that of a low-income household.
  • Between 1988 and 2015, the income inequality ratio increased from 2.24 to 2.61.  

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The neo-liberal “revolution” took place from the mid-to-late 1980s. Hardly surprisingly, the rise in income inequality takes place at the same time.

Income inequality dipped from 2004 when Labour’s “Working for Families” was introduced.

However, income inequality worsened after 2009 and 2010, when National cut taxes for the rich; increased GST (which impacts most harshly on low-income families and individuals); and increased user-charges on essential services such as prescription fees, ACC levies, court fees, etc. Increasingly complicated WINZ requirements for annual re-applications for benefits and complex paperwork may also have worsened the plight of the country’s poorest.

Despite all the promises made by the Lange government; the Bolger government; and every government since, our neo-liberal “reforms” have not been kind to those on low and middle incomes.

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Key indicator #4: Child poverty

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According to Otago University’s Child Poverty Monitor in 2014;

Child poverty has not always been this bad – the child poverty rate in the New Zealand many of us grew up in 30 years ago was 14%, compared to current levels of 24%.

Thirty years prior to 2014 was the year 1984. David Lange’s Labour Party had been elected to power.

Roger Douglas was appointed Minister of Finance. The Member for Selwyn, Ruth Richardson, was also in Parliament, taking notes.

The term “trickle down” entered our consciousness and vocabulary. It promised that, with tax cuts; privatisation; winding back state services; and economic de-regulation, wealth would trickle down to those at the bottom of the socio-economic ladder.

How is that working out for us so far?

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So much for  the “aspirational dream” offered to us by “trickle down” economics.

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Key indicator #5: The Real Beneficiaries

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In June last year, Radio NZ reported  the  latest survey of household wealth by Statistics NZ. It found;

“…the country’s richest individuals – those in the top 10 percent – held 60 percent of all wealth by the end of July 2015. Between 2003 and 2010, those individuals had held 55 percent. The richest 10 percent of households held half of New Zealand’s wealth, while the poorest 40 percent held just 3 percent of total wealth.”

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Following hard on the heels of the Stats NZ report,  Oxfam NZ made a disturbing revelation;

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Three years after her previous public warning,  Oxfam New Zealand’s, Rachael Le Mesurier, was no less scathing. Her exasperation was clear;

“The gap between the extremely wealthy and the rest of us is greater than we thought, both in New Zealand and around the world. It is trapping huge numbers of people in poverty and fracturing our societies, as seen in New Zealand in the changing profile of home ownership.”

National minister, Steven Joyce responded. He was his usual mealy-mouthed self when interviewed on Radio NZ about the Oxfam report;

“There’s always inequality but again you have got to look at those reports carefully because in that report a young medical graduate who has just come out of university would be listed as somebody who is in the poorest 20 per cent because they have a student loan.They’ll pay that student loan off in about four years and they’ll be earning incomes of over $100,000 very quickly.

So although they’re in those figures today, they won’t be in those figures in five years’ time.”

Which appears to sum up the National government’s head-in-sand attitude on child poverty and income inequality.

Economist, Shamubeel Eaqub, though, had a different “take” on the issue and warned;

“Every time we see a new statistic on inequality, whether it’s in terms of income, opportunities or wealth, it shows very clearly that New Zealand is being ripped apart by our class system.”

When economists begin to issue dire social warnings, you know that matters have taken a turn for the worse.

So where does that leave our New Dear Leader Bill English  with his insistence  that “we’ve got a government actually with a good record on addressing, in fact, some of the toughest social issues”?

English’s assertion to John Campbell on Radio NZ, on 25 January, (outlined at the beginning of this story) makes sense only if it it is re-phrased;

“We’ve got a government actually with a good record on addressing, in fact, some of the toughest wealth-accumulation issues. There may be disagreement over means by which we’re doing it, ah, but our direction is pretty clear. And you know over, certainly heading into election year we think that the approach the government’s developed around private investment, around increasing incomes for the wealthiest ten percent is the right kind of mix – “

Not a very palatable message – but vastly more truthful as income inequality continues to wreak appalling consequences throughout our communities and economy.

Otherwise, English appears to reside not so much in the Land of the Long White Cloud, but in the Realm of Wishful Thinking.

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References

Radio NZ: Checkpoint – Bill English on the challenges of his first month as PM

Scoop media: Unemployment rate rises to 5.2 percent as labour force grows

Statistics NZ: Household Labour Force Survey – Revisions to labour market estimates

NZ 1984 Yearbook: 3A – General SummaryCensus of population and dwellings 1981 (see “Tenure of Dwelling”)

Statistics NZ: Owner-Occupied Households

Statistics NZ: 2013 Census QuickStats about national highlights – Home Ownership

Interest.co.nz: Bernard Hickey says the collapse in home-ownership rates among families formed since 1991 is an unfolding disaster for NZ’s economy, our society and the Government’s finances

International Demographia: 13th Annual  International Housing Affordability

NZ Institute for Economic Research: The home affordability challenge

Monetary Meg: What is vendor finance?

Radio NZ: NZ immigration returns to record level

NZ On Screen: Revolution

NZ Herald: New Zealand residential property hits $1 trillion mark

Reserve Bank: Regulatory Impact Assessment of revised LVR restriction proposals September 2016 – Adequacy Statement

The Guardian: New Zealand housing crisis forces hundreds to live in tents and garages

Fairfax media: One in 100 Kiwis homeless, new study shows numbers quickly rising

Al Jazeera: New Zealand’s homeless: Living in cars and garages

NZ Herald: Homelessness rising in New Zealand

Radio NZ: Homeless family faces $100k WINZ debt

TV3 News: The hidden homeless – Families forced to live in cars

TV1 News: Housing crisis hits Tauranga, forcing families into garages and cars

UNICEF: Let’s Talk about child poverty

Education Counts: Transient students

Dominion Post: Housing policy will destabilise life for children

NZ Herald: State housing shake-up – Lease up on idea of ‘house for life’

Radio NZ: Thousands of state houses up for sale

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2015/16

Fairfax media: Nearly 600 state house tenants removed after end of ‘house for life’ policy

NZ Herald: Key admits underclass still growing

Oxfam: Richest 10% of Kiwis control more wealth than remaining 90%

NZ Herald: 300,000+ Kiwi kids now in relative poverty

Statistics NZ: Income inequality

Law Society: Civil court fee changes commence

Fairfax media: Prescription price rise hits vulnerable

Salaries.co.nz: ACC levies to increase in April 2010

Radio NZ: Thousands losing benefits due to paperwork

Scoop media: Health Issues Highlighted in Child Poverty Monitor

NZ Herald: Hungry kids foraging in pig scraps ‘like the slums of Brazil’

Fairfax media: Damp state house played part in toddler’s death

NZ Herald: More living in cars as rents go through roof

NZ Doctor: Tackle poverty to fight rheumatic fever

Radio NZ: 10% richest Kiwis own 60% of NZ’s wealth

Fairfax media: Wealth inequality in NZ worse than Australia

Radio NZ: Steven Joyce responds to Oxfam wealth inequality report

Additional

Dominion Post: Kids dragged from school to school

Other Blogs

The Standard: John Key used to be ambitious about dealing with poverty in New Zealand

Previous related blogposts

Lies, Damned lies and Statistical Lies

Lies, Damned lies and Statistical Lies – ** UPDATE **

National exploits fudged Statistics NZ unemployment figures

2016 – Ongoing jobless tally and why unemployment statistics will no longer be used

CYF – The Hollowing Out of a State Agency

The Mendacities of Mr Key # 18: “No question – NZ is better off!”

Foot in mouth award – Bill English, for his recent “Flat Earth” comment in Parliament

The Mendacities of Mr English – Fibbing from Finance Minister confirmed

Rebuilding the Country we grew up in – Little’s Big Task ahead

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This blogpost was first published on The Daily Blog on 7 February 2017.

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= fs =

Cutting taxes toward more user-pays – the Great Kiwi Con

31 January 2017 1 comment

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Introduction

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The following is the amount spent by Labour, on Vote Education in the 2008 Budget;

Total 2008 Vote Education: $10,775,482,000 (in 2008 dollars)

Total students in 2009: 751,330* 

spend per student: $14,341.88

The following is the amount spent by National, on Vote Education in the 2016 Budget;

Total 2016 Vote Education: $11,044,598,000 (in 2016 dollars)

Total students in 2016: 776,948**

spend per student in 2016 dollars: $14,215.36

Total 2016 Vote Education: $9,608,800,000 (re-calculated in 2008 dollars)

spend per student in 2008 dollars: $12,367.37

Calculated in real terms (2008 dollars), National’s spending on Vote Education was $1,166,682,000 less last year than Labour budgetted in 2008.

In dollar terms, in 2016, National spent less per student ($14,215.36) than Labour did in 2008 ($14,341.88). Converting National’s $14,215.36 from 2016 dollars to 2008 dollars, and the sum spent  per student is even less: 12,367.37.

In real terms, National has cut the total*** education budget by $1,974.51 per student.

*  Not including 9,529 international fee-paying students

**  Not including 11,012 international fee-paying students

*** Total spent on Vote Education, not just schools and tertiary education.

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Tax-cuts and Service-cuts

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Writing in the Daily Blog recently, political commentator Chris Trotter had this to say on the matter of taxation and social services;

Speaking on behalf of the NewLabour Party, I felt obliged to spell out the realities of tertiary education funding. I told them that they could have free education or low taxes – but they could not have both. If the wealthy refused to pay higher taxes, then students would have to pay higher fees. If the middle class (i.e. their family) was serious about keeping young people (i.e. themselves) out of debt, then they would have to vote for a party that was willing to restore a genuinely progressive taxation system.”

Since 1986, there have been no less than seven tax-cuts;

1 October 1986 – Labour

1 October 1988 – Labour

1 July 1996 – National

1 July 1998 – National

1 October 2008 – Labour

1 April 2009 – National

1 October 2010 – National

 

The 2010 tax-cuts alone were estimated to cost the State  $2 billion in lost revenue.

Taxes were raised in 2000 by the incoming Labour government, to inject  much needed funding for a cash-strapped health sector. The previous National government, led by Bolger and later Shipley, had gutted the public health service. Hospital waiting lists grew. People waited for months, if not years, for life-saving operations. Some died – still waiting.

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During that time, National cut taxes twice (see above). Funding for public healthcare suffered and predictably, private health insurance capitalised on peoples’ fears;

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A decade late, National’s ongoing cuts, or under-funding, of state services such as the Health budget have resulted in wholly predictable – and preventable – negative outcomes;

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A critic of National’s under-funding of the health system, Phil Bagshaw, pointed out the covert agenda behind the cuts;

New Zealand’s health budget has been declining for almost a decade and could signal health reforms akin to the sweeping changes of the 1990s, new research claims.

[…]

The accumulated “very conservative” shortfall over the five years to 2014-15 was estimated at $800 million, but could be double that, Canterbury Charity Hospital founder and editorial co-author Phil Bagshaw said.

Bagshaw believed the Government was moving away from publicly-funded healthcare, and beginning to favour a model that meant everyone had to pay for their own.

“It’s very dangerous. If this continues we will slide into an American-style healthcare system.”

Funding cuts to the Health sector have been matched with increases to charges;

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cuts to NGOs offering support services;

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… and  leaving district health boards in dire financial straits;

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The critical correlation between  tax cuts and consequential reduction of state services was nowhere better highlighted then by US satirist and commentator,  Seth Meyer. He was unyielding with his  scathing, mocking, examination of  the travesty of the Kansas Example of “minimalist government”;

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Here in New Zealand, National’s funding cuts have not been restricted to the Health sector and NGOs. Government agencies from  the Police , Radio NZ, to the Department of Conservation have had their funding slashed (or frozen –  a cut after inflation is factored in).

The exception has been the Prime Minister’s department which, since 2008, has enjoyed a massive  increase of $24,476,000 since 2008 and  a near-doubling of John Key’s department and Cabinet expenditure since Michael Cullen’s last budget, seven years previously.

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Tax cuts, slashed services, and increasing user-pays

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By contrast,  parents are finding more and more that the notion of a free state education is quietly and gradually slipping away. User-pays has crept into the schools and universities – with harsh penalties for those who fail to pay.

In May 2013, National’s Tertiary Education Minister, Steven Joyce, announced;

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True to his word, in January 2016, the first person was arrested for allegedly “defaulting on his student loan”. By November the same year, a third person had been arrested. Joyce was unrepentant;

“There probably will be more, we don’t know of course how many are in Australia but that’s a very good start, and I think it’s probably a reasonable proportion of those who are in Australia.”

Joyce, of course, has nothing to fear from being arrested for defaulting on a student loan. His tertiary education was near-free, paid for by the tax-payer.

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National had no choice, of course. The entire premise of user-pays was predicated on citizens paying services that until the late ’80s/early ’90s, had been either free or near-free. With student debt now at an astronomical $14.84 billion, National cannot afford to let ‘debtors’ get off scott-free. That would send the entire unjust system crashing to the ground.   According to Inland Revenue;

… nearly 80,000 of the 111,000 New Zealanders living overseas were behind on their student loan repayments.

IRD collections manager Stuart Duff said about 22 percent of borrowers living overseas were in Australia.

He said the $840m owed to New Zealand was a substantial amount of debt.

Figures show that student debt has been increasing every year since it’s inception in 1992. At this rate, student debt will achieve Greece-like proportions;

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Graphic: acknowledgement - NZ Herald

Graphic acknowledgement:  NZ Herald

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Unsurprisingly, loan ‘defaulters’ have surpassed $1 billion, including $16 million  written off through bankruptcy. Some never pay off their “debt” with $19 million  lost after death of the borrower.

But it is not only tertiary education that has attracted a user-pay factor. School funding has also been frozen, with operational grants the most recent to suffer National’s budgetary cuts;

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Education, Inc.

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Schools are so starved of funds that they are having to rely on outside sources of income  to make up shortfalls;

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Reliance on foreign students to make up shortfalls in government spending is essentially turning our schools into commercial ventures; touting for “business” and ensuring “clients” achieve good results so as to ensure repeat custom.

When did we vote for a policy which effectively commercialised our education system?

Schools are also funded more and more by parents – to the tune of hundreds of millions of dollars. Fund-raising and ever-increasing school fees are required, lest our schools become financially too cash-strapped to function.

In 2014, school “donations” (actually fees by another name) and necessary fundraising reached  $357 million and is estimated to reach a staggering $1 billion by this year;

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It is estimated that a child born this year will cost his/her parents $38,362 for thirteen years of  a “free” state education. In 2007, that cost was 33,274. Our supposedly “free” state education is being gradually whittled away, and replaced with surreptitious user-pays. According to Radio NZ;

Some school principals say many schools are considering a hike in parent donations next year and cutting teacher aide hours, as they respond to a freeze on core school funding.

More than 300 school principals responded to a survey by teacher unions.

About 40 percent of school principals said they were considering cutting back on the hours of teacher aides and other support staff next year.

Thirteen percent said they were looking to increase parent donations.

The president of the teacher union NZEI, Louise Green, said the survey showed it was students who miss out when school funding was frozen.

The neo-liberal princiciple of user-pays is being covertly implemented throughout the public sector and nowhere is this more apparent than in education. Parents and guardians are expected to pay more for education and this is “off-set” by cuts to taxes. This is core to the concept of user-pays.

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User-pays is hard to pay

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The problem is that this is not an overt policy by National. The public have not been given a clear choice in the matter and instead increasing user-pays has crept in, barely noticed by the voting public. Even when challenged, a National Minister will use mis-information to attempt to use Trump-like “alternative facts” to hide what is happening;

But Education Minister Hekia Parata said parents contributed just $1.80 for every $100 spent by the taxpayer on education.

The Government was set to invest $10.8 billion in early childhood, primary and secondary education, more than the combined budget for police, defence, roads and foreign affairs.

New Zealanders have been lulled into a false sense of security that, even after seven tax cuts, we still have “free” education.  But as Chris Trotter pointed out with cool logic;

I told them that they could have free education or low taxes – but they could not have both.

The question is, what kind of society do New Zealanders want: a free education system or  tax cuts and more user-pays?

Because we can’t have both.

At the moment, politicians are making this choice for us.

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Postscript

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From a Dominion Post article on 24 January;

Student loans are getting bigger and graduates are taking longer to pay back the money they owe.

Figures from last year’s Student Loan Scheme Annual Report show the median loan balance in this country grew from $10,833 in 2008 to $14,904 in 2016.

The median repayment time for someone with a bachelor’s degree also lifted from just over six years, to eight and a half.

Since a peak in 2005, the numbers of people taking up tertiary education have declined.

[…]

Labour education spokesman Chris Hipkins said there was a variety of factors that lead to higher student loans and longer repayment times. Tuition fees continued to rise, as did living costs.

“The long term impact for people is quite significant, basically they have a large debt for longer,” Hipkins said.

“If they’re weighed down with student loan debt it will be difficult to get on the property ladder, it’s already a burden, and this is making it even harder for the next generation.”

Universities New Zealand executive director Chris Whelan said that when it came to universities fees increasing, one need only look at published annual accounts of the country’s eight universities to see they were not “raking in” a lot of money.

Currently two-thirds of the cost of tuition was covered by subsidies, and one-third was covered by the student.

LOANS ON THE RISE

Median loan balances

2010 – $11,399

2012 – $12,849

2014 – $13,882

2016 – $14,904

Median repayment times for a bachelors/graduate certificates or diplomas

2010 – 6.9 years

2012 – 7.8 years

2014 – 8.5 years

 

 

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References

Reserve Bank NZ: Inflation calculator

Treasury: Vote Education 2008

Treasury: Vote Education 2016

Educationcounts: School RollsStudent Rolls by School 2005-2009

Educationcounts: School RollsStudent Rolls by School 2010-2016

The Daily Blog:  Don’t Riot For A Better Society: Vote For One!

Infonews: Government’s 2010 tax cuts costing $2 billion and counting

The Press: Four forced off waiting list die

Otago Daily Times:  Heartwatch Insurance Cover

Radio NZ: Patients have ‘severe loss of vision’ in long wait for treatment

Fairfax media: Researchers claim NZ health budget declining, publicly-funded surgery on way out

Radio NZ: Patients suffering because of surgery waits – surgeon

Fairfax media:  Prescription price rise hits vulnerable

TVNZ News: Kiwi charities and NGOs face closure with impending funding cuts

NBR: Leaked document shows 10 District Health Boards face budget cuts – King

Fairfax media: Police shut 30 stations in effort to combat budget cuts

Youtube: Kansas Tax Cuts –  A Closer Look

Scoop media: Budget cuts continue National’s miserly underfunding of DOC

Fairfax media: Student loan defaulters to face border arrest

NBR: Arrested student loan defaulter claims to be Cook Island PM’s relative

Fairfax media: Third arrest of student loan defaulter made following government crackdown

Radio NZ: Govt tightens education purse strings

NZ Herald: ‘At risk’ school funding revealed – with 1300 to lose out under new model

Fairfax media: Student loan borrowers seeking bankruptcy as millions in debts wiped due to insolvency

NZ Herald:   Schools using foreigners’ fees to staff classrooms

NZ Herald: Parents fundraise $357m for ‘free’ schooling

NZ Herald: Parents paid $161m for children’s ‘free education

NZ Herald:   School costs: $40,000 for ‘free’ state education

Motherjones: Trickle-Down Economics Has Ruined the Kansas Economy

The New Yorker: Covert Operations

CBS News: Kansas loses patience with Gov. Brownback’s tax cuts

Kansas City Star: Gov. Sam Brownback cuts higher education as Kansas tax receipts fall $53 million short

Bloomberg: Kansas Tried Tax Cuts. Its Neighbor Didn’t. Guess Which Worked

Fairfax media: Tourism industry claims DOC will be severely handicapped by funding cuts

Previous related blogposts

The slow starvation of Radio NZ – the final nail in the coffin of the Fourth Estate?

12 June – Issues of Interest – User pays healthcare?

The Mendacities of Mr Key # 16: No one deserves a free tertiary education (except my mates and me)

The Mendacities of Mr Key # 19: Tax Cuts Galore! Money Scramble!

The seductiveness of Trumpism

Steven Joyce – Hypocrite of the Week

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This blogpost was first published on The Daily Blog on 26 January 2017.

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St John management applies tourniquet to workers’ throats

20 January 2017 1 comment

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Charitable organisation, St John, which operates ambulance services nationwide, as well as other medical services, has been engaging in  anti-worker actions during recent industrial negotiations to conclude a collective agreement.

On 5 January, St John announced that workers wearing apparel bearing a pro-union message “Healthy Ambos Save Lives” would be docked 10% of their wages;

St John Ambulance officers who ditch their uniforms as part of ongoing strike action will have their pay docked by 10 per cent.

The First Union, which represents 1000 ambulance officers across the country, has condemned the move as “astounding”.

But St John says it didn’t take the step lightly, and it was done out of concern for the health and safety of staff and patients.

The wage deductions come as ambulance officers enter their third month of industrial action, following stalled collective agreement negotiations with St John.

Striking workers are continuing to respond to emergencies and call-outs as normal, but are breaching St John policy by refusing to wear uniforms.

Instead, unionised St John workers have been wearing T-shirts reading “Healthy Ambos Save Lives”.

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St John clinical operations director, Norma Lane,  ‘spinned’ the wage-docking as a “safety” issue;

“It is important ambulance officers are identifiable in an emergency environment where circumstances can change rapidly. Not complying is a health and safety risk not only to the employee but to fellow officers and other emergency workers. While there is only a very small number of ambulance professionals refusing to wear hi-vis vests, we have advised First Union and our staff that those employees not complying with this requirement will receive a 10 per cent deduction of wages.”

How cutting wages improves safety for workers is not made clear by Ms Lane.

St John’s threats echo that made by AFFCO employers, almost exactly a year ago;

An AFFCO worker has been suspended without pay, and will probably be sacked after filming workers in union t-shirts being refused entry to work, the Meat Workers’ Union says.

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[…]

AFFCO said it was company policy that union t-shirts were not worn on site, and that they were associated with inappropriate and threatening behaviour.

One Union member made his/her feelings perfectly clear with this image posted on First Union’s Facebook page;

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st-john-ambulance-worker-shirt-first-union-facebook-page

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What is clear, though, is that St John is engaging in all-out repugnant industrial warfare against the First Union.

St John Station managers have used emotional blackmail, legal threats from law firms,  and deliberate mis-information in a calculated strategy to undermine First Union and its  members’ resolve. As  Ambulance Professionals First spokesperson, Lynette Blacklaws, revealed on 7 November last year;

“When a crew arrived in mufti at a station in Auckland this morning their manager snapped that ‘if someone dies because they didn’t let you in be it on your heads’. This comes on the same day station managers in the Bay of Plenty told several ambulance officers over the phone that industrial action was cancelled, even though this isn’t true.”

More aggressive  anti-union activity was to come.

On 24 November last year,  St Johns announced on it’s media page that it had  concluded a successful collective agreement with the  Amalgamated Workers Union NZ Southern  (AWUNZ), Central Amalgamated Workers Union  (CAWU), NZ Ambulance Association (NZAA), and the Ambulance Officers Workplace Union  (AOWU).

First Union was not a party to the new collective agreement. St John stated on it’s webpage,

It is our preference to have nationally consistent terms and conditions for all St John employees, accordingly, St John and the four union parties have made provision for the First Union members to become party to the new Collective Agreement should they wish

The statement continued with this ominous ‘rider’;

If First Union decides not to become party to the new Collective Agreement, St John will continue to work through the various options available.

On 7 January this year, First Union learned what “various options” St John had in mind. As reported in The Daily Blog, St John was flexing it’s industrial muscle using new anti-union laws passed by National in 2015.

The union representing over 1000 St John Ambulance staff has today received confirmation from the Employment Relations Authority that St John has lodged an application to withdraw from bargaining without concluding a collective agreement.

If St John were to be successful they would be the first company to withdraw from bargaining without concluding a collective agreement under the 2015 amendments to the Employment Relations Act.

Simply put, National’s so-called “reforms” allowed employers to cease negotiations to conclude a collective agreement with a union, by applying to the Employment Relations Authority;

Before the law change, parties bargaining for a collective agreement were required to conclude that agreement unless there was genuine reason not to. The change means that a collective agreement does not have to be concluded, however parties must still deal with each other in good faith.

[…]

The Act provides some protections against parties that end bargaining by deadlocking on one issue. Specifically, either party can seek a declaration from the Employment Relations Authority (the Authority) about whether bargaining has concluded. The process is discussed in more detail below.

First Union officials were not impressed. They understood the agenda that St John was playing out;

Jared Abbott, spokesperson for Ambulance Professionals First, the network within FIRST Union representing ambulance officers, said the application confirms what the union suspected: that St John had no intention of reaching an agreement.

“St John have spent less than two hours with us at the table since we started our protest actions. Applying to conclude bargaining now is outrageous. This is no way to treat your staff.”

Mr Abbott said that despite writing to the company on several occasions and requesting a proposed collective agreement, St John repeatedly refused to make a formal offer.

Ambulance Professionals First has also written to St John highlighting how no collective agreement was presented to the ratification meetings for the smaller unions who agreed to settle, a requirement under the law for a collective agreement to become operative.

“We’re astounded with how unprofessional St John has been. Ambulance staff just want fair recognition for the hard work they do. This is only going to get more staff off-side,” said Abbott.

“We don’t believe St John’s application will be successful.”

St John is using ‘the stick’. Other employers opt for ‘the carrot’ to break legal strikes;

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Whether by ‘carrot’ or ‘stick’, the bosses’ agenda remains the same: to smash unions and undermine workers’ rights. The end result – dampen wage growth and wind-back hard-won worker’s conditions.

St John management’s unscrupulous behaviour makes a mockery of that organisation’s so-called “five values”;

We do the Right Thing – Whakaaro Tika
We take responsibility. Make the tough calls. Think of others.

We stand Side by Side – Whakakoha
We respect, value and support what others contribute.

We Make it Better – Whakawerohia
We find solutions- step up, own it, do it.

We have Open Minds – Whakahangahanga
We listen openly. Encourage ideas. Welcome feedback.

We are Straight Up – Whakapono
We act with honesty, courage and kindness.

They even have ‘badges’ proudly displayed on their webpage;

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Obviously St John’s “five values” do not extend to their own workers.

Curiously, whilst St John proudly announced it’s collective agreement with four other unions on its “News Articles” page, it made no mention of it’s application to the Employment Relations Authority to abandon negotiation with First Union;

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Neither has it disclosed to the public on it’s website that it is taking draconian steps to dock ambulance drivers’ pay packets by 10% for  wearing shirts bearing union messages.

Is St John ashamed to present this information on their website, where public eyes can see what the organisation is doing to it’s ambulance drivers? It is evidently not a “good look” that an organisation nearly a thousand years old, and  dedicated to helping people, is screwing its own staff.

According to Norma Lane, the wearing of the First Union shirts constitutes   “participation in a partial strike” and thereby justifies docking ambulance drivers’ pay.

Which is about as mean-spirited as a charitable, non-profit organisation can get. As  Jared Abbott correctly pointed out;

“The wage deductions are pretty astounding. The actions ambulance officers are taking cost St John nothing.”

At first look, St John’s actions appear to contravene the Wages Protection Act 1983 which prevents employers from arbitarily docking workers’ pay;

Deductions may only be made from an employee’s pay if they are required by law, agreed to by the employee or are overpayments in some circumstances.

However, it appears that St John is stretching an exemption to what is known as a “partial strike“;

Employees strike when a number of employees totally or partially:

  • break their employment agreement
  • stop work or don’t accept some or all the work they usually do
  • reduce their normal output, performance, or rate of work.

Employees don’t have to stop work completely for them to be on strike.

However, one suspects that more reasonable-minded people would find it difficult to define a “partial strike” as wearing a shirt. If that is St John’s justification for docking ambulance drivers’ pay, then it may be on very shaky ground, both legally and morally.

Whether by luck, or clever design,   this has all transpired over the Year’s End/New Year period when current affairs programmes such as The Nation and Q+A are on hiatus, and even Radio NZ is operating on a “summer holiday programme”. The later  is closer to listening to The Breeze rather than serious news and current affairs.

Once the public begin to understand the machinations of St John’s management, that organisation’s reputation may risk a real hit. “A good reputation” as Colin Beveridge once reflected on,  “is hard-won and easily lost. But the lost reputation has invariably been given away by the actions of the holder, rather than been taken away by somebody else.”

Words that St John’s management would do well to consider.

St John – heal thyself.

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Postscript

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It will be interesting to find out what salary increase St John’s CEO will have this year or next.

 

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References

St John: Ambulance Services

St John: A quick snapshot of what we do

NZ Herald: St John ambulance officers to have pay deducted over industrial action

Radio NZ: Worker suspended over union t-shirts

Facebook: First Union – Healthy Ambos Save Lives

First Union: St John threatens jobs… over wearing a badge

First Union: St John employ “emotional blackmail” in badge dispute

St John:  AWUNZ, CAWU, NZAA & AOWU Unions and St John reach agreement

The Daily Blog: St John apply to end bargaining with FIRST Union

Ministry of Business, Innovation, and Employment (MoBIE): Amendments to the Employment Relations Act 2000 (March 2015)

Ministry of Business, Innovation, and Employment (MoBIE): Law changes to collective bargaining

Radio NZ: Junior doctors offered up to $200/h to break strike – union

St John:  Vision & Values

St John: News Articles

St John: The Order of St John

Radio NZ: Ambulance staff to have wages cut over strikes

Employment NZ: Deductions

Employment NZ: Strikes and lockouts

Fairfax media: Big pay rises for district health board heads

Additional

Facebook: First Union

Facebook: Ambulance Professionals First

Previous related blogposts

If anyone wants to see the Working Class

Help Talley’s Affco Workers!

Immovable and Irresistable forces – combined!!

The Talleys Strikes Back

John Key’s track record on raising wages – 7. Part 6A – stripped away

John Key’s track record on raising wages – 8. An End to Collective Agreements

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This blogpost was first published on The Daily Blog on 15 January 2017.

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Letter to the editor – Juliet Moses does NOT speak on my behalf!

17 January 2017 4 comments

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Frank Macskasy - letters to the editor - Frankly Speaking

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This recent NZ Herald story was brought to my attention by Martyn Bradbury writing on The Daily Blog;

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Which prompted me to send this response to the Herald’s editor;

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from: Frank Macskasy <fmacskasy@gmail.com>
to: NZ Herald <letters@herald.co.nz>
date: Sun, Jan 15, 2017
subject: Letter to the editor

Letter to the editor
NZ Herald

Regarding Juliet Moses’ comment in the New Zealand Herald article, that UN Resolution 2334 “was an affront to all New Zealanders” (6 Jan) – I will thank her and her fellow travellers not to assume they speak for me and others.

Last I looked, Israel has not added Aotearoa to it’s list of illegally annexed territory.

As for Moses’ assertion;

“…Israel’s Arab neighbours mounted a second unsuccessful attempt to exterminate her in 1967”

– is either woeful ignorance or wilful misrepresentation of historical fact.

Israel launched the so-called Six Day War on 5 June 1967 against it’s neighbours;

“In response to the *apparent* mobilization of its Arab neighbours, early on the morning of June 5, Israel staged a sudden preemptive air assault that destroyed more than 90 percent Egypt’s air force on the tarmac. A similar air assault incapacitated the Syrian air force.” – Encyclopedia Britannica

Arrogant and mis-informed. She most certainly does not speak on my behalf.

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-Frank Macskasy

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References

NZ Herald: Juliet Moses – Israel vote was an affront to all New Zealanders

Encyclopedia Britannica: Six-Day War – Middle East – 1967

Additional

Causes: Petition – Aerosmith boycott apartheid Israel!

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The Legacy of a Dismantled Prime Minister

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Prime Minister elect John Key with Picton the kitten on arrival at parliament, Wellington, New Zealand, Monday, November 10, 2008. Credit:NZPA / Ross Setford.

Prime Minister elect John Key with Picton the kitten on arrival at parliament, Wellington, New Zealand, Monday, November 10, 2008. Credit:NZPA / Ross Setford.

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Following his unexpected announcement to resign as New Zealand’s Prime Minister on 5 December last year, much  has been said of Key’s “legacy”. Pundits have been scratching their heads, trying to figure out what  “legacy” can be attributed to eight years of a Key-led administration.

Despite screeds being devoted on the subject, it appears that little can actually be attributed to any form of Key “legacy”.

On 29 December, Radio NZ’sDirector of News Gathering“, Brent Edwards, wrote;

“At the time of his departure, his own personal rating remained high…”

Whilst Key’s Preferred Prime Ministership rating remained higher than his rivals, Key’s public support had plummeted since 2009. In October 2009, Key rated a phenomenal  55.8% in a TV3/Reid Research poll.

By May last year, TV3/Reid Research reported Key’s support to have fallen by 19.1 percentage points  to 36.7%. The same poll reported;

National though is steady on 47 percent on the poll — a rise of 0.3 percent — and similar to the Election night result.

So something was clearly happening with the public’s perception of Key. Whilst National’s overall support remained unchanged from election night on 2014, Key’s favourability was in slow-mo free-fall.

Edwards’ analysis of Key’s “legacy” appeared mostly to consist of this observation;

Within the political commentariat Mr Key has been highly regarded, mainly on the basis of his political style.

He added,

He was quick to dump any political unpopular policies before they did terminal damage to his government and he had an uncanny knack of skating through the most embarrassing political gaffes with little damage, if any, to his political reputation

What other Prime Minister, for example, would have escaped with their political credibility intact after revelations they had repeatedly pulled the ponytail of a waitress at their local cafe?

In effect, Key’s ‘qualities’ appeared to consist of constant damage-control and “an uncanny knack” to avoid being charged with assault.

Edwards contrasted Key’s administration with that of Jim Bolger and pointed out the latter’s legacies, which have had a lasting impact of New Zealand’s social and political landscape. The first was the advent of MMP which forever changed politics as it is done in this country. The second was Bolger’s courage to stand up to his party’s redneck conservatism and engage with Maori to address Treaty of Waitangi grievances.

Key’s “legacies”, according to Edwards, was a failed flag referendum costing the taxpayer $29 million and this;

He did help manage the country through the Global Financial Crisis and the Christchurch earthquake. But National was left a legacy by the previous Labour Government – a healthy set of government books – which gave it the financial buffer it needed to deal with both crises.

Irony of ironies – Key’s one claim to a “legacy” was the product of a prudent Labour finance minister whose own legacy was a cash-gift to Key. Yet, even that cash-gift to Key could have been squandered had then-Finance Minister, Michael Cullen listened to Key’s wheedling demands for tax-cuts;

“Mr Key can’t have it both ways. One moment he says there is a recession looming then he thinks there are still surpluses to spend on tax cuts.”

… he is almost the kinder, gentler Kiwi Donald Trump. He is a populist who has been able to read and respond to a national mood in ways that few other politicians have, although that has more to do with a reliance on opinion polling than some kind of semi-supernatural intuition. 

Matthews’ reference to Key’s ability “to read and respond to a national mood in ways that few other politicians have, although that has more to do with a reliance on opinion polling” was pointed out by Radio NZ’s John Campbell, in his own assessment of the former Prime Minister’s tenure;

Key entered Parliament in 2002. His maiden speech was a pre-Textor, pre-dorky, pre-casual, pre-everyman piece of rhetoric, ripe to the point of jam with admonishments and exhortation.

[…]

And the key passage, in this respect, was: “We mustn’t be scared to do things because they might offend small groups, or seem unconventional. Good government is more than doing what’s popular. Good government is more than blindly following the latest opinion poll.”

On election night 12 years later, having just been made prime minister for a third term, Key triumphantly thanked his pollster, David Farrar, by name: the country’s “best”, he declared, admitting, as the New Zealand Herald reported, that he had rung Farrar “night after night, even though he wasn’t supposed to”.

The man who’d entered Parliament declaring a belief in something better than poll-driven politics had subverted himself. Gamekeeper turned pollster.

Matthews summed up with this conclusion;

He was somehow politically untouchable, even when New Zealand was laughing at or with him, or just cringing. Future historians will provide a clearer picture of his failures: A flag change that was supposed to be a personal legacy became an expensive embarrassment; the Trans-Pacific Partnership deal is dead in the water; he could have used his political capital to do something meaningful about inequality and poverty.

[…]

But over on the West Coast, the government’s failures to satisfy the grieving Pike River families remain entirely embodied in Key.  

Again, Key’s abilities appear to lie with being “politically untouchable”. His “legacies” amounted to a list of dismal failures.

The unknown author of an editorial for the Otago Daily Times was kinder, as if it had been written by one of National’s small army of taxpayer-funded Beehive spin-doctors;

The legacy Mr Key will leave is one of financial stability, a unified government, a record of strong economic management and a commitment to lift as many New Zealanders out of poverty as possible. A shortage of suitable housing has been laid at the door of Mr Key but his efforts in trying to sort out that particularly difficult area have been assiduous.

One of the issues he received the most criticism for is failing to bring home the bodies of the Pike River miners who died in the explosion. While Mr Key would have meant what he said at the time, the pragmatism which ruled his career meant he made a tough call to allow the mine to be sealed. Then there was the failed flag referendum.

But, his leadership during the Christchurch, and latterly Kaikoura, earthquakes was seen as outstanding by most New Zealanders. New Zealand secured a seat on the United Nations Security Council in no small part due to the work carried out by Mr Key.

Curiously, the un-named author glosses over the “commitment to lift as many New Zealanders out of poverty as possible”, “a shortage of suitable housing … laid at the door of Mr Key”, “criticism for … failing to bring home the bodies of the Pike River miners who died in the explosion”, and “the failed flag referendum”. Because at least –  the author crows – we “secured a seat on the United Nations Security Council”.

The ODT’s mystery cheerleader for our former Dear Leader may be one of the few attempts to put a positive ‘spin’ to Key’s administration. It was, however, glaringly light on specifics.

In direct  stark contrast to the ODT’s lame attempt to canonise Key, Audrey Young was more caustic in her piece, Key – No vision, no legacy, no problem. Her conclusions were;

… two other areas I consider to be legacies for the Key Government although he has not claimed them as such: the Ross Sea sanctuary and the modernization of New Zealand’s spy agencies.

Unfortunately for Young, the original proposals for a MPA (Marine Protected Area) for the Ross Sea began as far back as 2005, and was first mooted by the US delegation to the Commission for the Conservation of Antarctic Living Marine Resources (CCAMLR).

If Key’s sole legacy was to increase the spying powers of the SIS, GCSB, and uncle Tom Cobbly – that may not be something his descendants bring up at polite dinner parties;

“Yeah, it was grand-dad Key who helped turn New Zealand in the virtual police state we have now. Sure we have spy cameras in every home, workplace, and cafe, but crime is almost non-existent!”

– is not something Max or Steph’s own kids will be heard crowing about.

Young suggested that Key’s “legacy” was more akin to a ‘state of mind’;

When I’ve asked people this week what they thought Key’s legacy was, many have said he gave New Zealanders a greater sense of confidence, especially about New Zealand’s place in the world.

That is true but it is a state of mind. It could just as easily disappear through circumstances well beyond our control.

Giving “New Zealanders a greater sense of confidence, especially about New Zealand’s place in the world” were the legacies of former Labour Prime Ministers – notably Norman Kirk and David Lange. Their leadership against the war in Vietnam; atomic bomb testing in the South Pacific; opposing apartheid in South Africa; advancing gay rights,  and turning the entire country into a nuclear-free zone are legacies that are with us today.

Going back even further, and the legacies of Labour’s Michael Savage are still discussed today.

Cringing whilst Key recited his “Top Ten Reasons for Visiting New Zealand” on the David Letterman Show would hardly have given Kiwis “a greater sense of confidence, especially about New Zealand’s place in the world“;

[Warning: Cringe Level: Extreme]

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Most who saw that episode would have  hidden their heads beneath a pillow or blanket. Hardly the stuff of legacies, except of the Silvio Berlusconi variety.

She then concluded;

The fact that Key doesn’t really have a legacy is of no matter.

Well, that’s alright then. According to Young, Key’s “legacy” would be in the same vein as the manner in which he handled his own and ministers’ scandals and stuff-ups; nothing to see here, folks, no legacy, move along please.

Comedian, Jeremy Elwood, offered;

We may never have another Prime Minister who provides as much fodder for as many late night comedy shows around the world, as well as right here, again, but that’s all been part of his “popular appeal”.

Another ‘comedian’ – albeit unintentional – was Roger Partridge, writing on behalf of the so-called NZ Initiative (formerly the now largely discredited Business Roundtable). Partridge offered a lengthy list of neo-liberal “reforms” from Key’s tenure as PM;

Key’s was also a reforming government. After the Fourth Labour government, it was perhaps New Zealand’s most radical in the post-war era. The GST for income tax swap, welfare reforms (the likes of which might have brought down another government), the investment approach to social services; labour market reform, partial-privatisation, reforms in education, including national standards and charter schools: these may have occurred incrementally, but together they comprise a prodigious package of reform.

None of Partridge’s listed “reforms” will stand. In an era marking the rise of nationalistic political movements (Brexit, Trump, et al),  Key’s “package of reforms” will be rolled back and many, like Charter Schools, swept away entirely.

These legacies of a failed economic ideology – neo-liberalism – may rate a mention in the footnotes of future history books, but not much more. In fifty years time, no one will point to Key’s supposed “reforms”  as people still do to Michael Savage’s achievements.

The Herald’s “business editor at large”, Liam Dann pointed to;

…ongoing GDP growth at about 3 per cent, unemployment at around 5 per cent and the crown accounts are solid with the Government booking surpluses that are forecast to top $8 billion within five years.

– but had to concede that much of this “growth” was illusory, based mostly on high immigration and unsustainable ballooning house prices in Auckland;

The housing boom has been a global phenomenon driven by the unusually low interest rate environment in the wake of the GFC. Investors have been looking for somewhere to put their money outside of the bank and assets prices have soared – both sharemarkets and property.

And far from National’s books being in surplus, Key has  managed to rack up a debt of  $95 billion according to a recent Treasury document.  Dann must have missed that salient bit in his rush-to-gush. He did, however, acknowledge the nature of the “ongoing GDP growth” further into his piece;

Overall population growth and record net migration is widely cited as a factor taking the gloss off New Zealand’s strong growth story.

Per capita GDP isn’t nearly so strong and the extra population is adding to the housing bubble and highlighting some deficiencies in infrastructure spending.

Almost reluctantly, Dann concludes;

He has not been a reformer but he has created a stable platform, in unstable times, for growth.

He exuded confidence and it rubbed off on the economy. Whether he has done enough to set the nation up for long-term prosperity, as outlined in those rosy Treasury forecasts, remains to be seen.

He also repeats Brent Edwards’ observation;

…Key made the most of the market conditions he had to work with.  He has benefited from some ground work done by the previous Labour Government, particularly in booking the gains from the China free trade agreement.

Writing for Radio NZ, John Campbell asks;

So, in the end, how will history judge John Key?

In his earnest, boy-scout, way, Campbell is charitable about one possible legacy left by Key;

In the age of Trump and Brexit and Manus Island, and having succeeded Don Brash and his divisive Orewa rhetoric, part of what may endure is a sense that, under him, New Zealand did not embrace xenophobia and paranoia and the vilification of Māori, Muslims, Mexicans, blue-collar immigrants and almost anyone who wasn’t Tribe White.

To this point, writer and trade unionist, Morgan Godfery, not a natural ally of Key, tweeted on the day the prime minister announced his resignation: “I’ll go into bat for Key on this: he rejected the politics of Orewa, avoiding what might have been an ugly decade of tension and conflict.”

Which might be true… except that Key and his Ministers were not above vilifying those who dared criticise National, or when it suited party-politics;

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nationals-targets-of-vilification

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See also: National Minister refers to PM as “Wild Eyed” Right-Winger!

In his usual manner of gentle admonishment, John Campbell chides Key and his Administration for their failing in housing;

“When I was six”, [Key] said in his maiden speech, “my father died; leaving my mother penniless with three children to raise. From a humble start in a state house, she worked as a cleaner and night porter until she earned the deposit for a modest home. She was living testimony that you get out of life what you put into it. There is no substitute for hard work and determination. These are the attitudes she instilled in me.”

Campbell responded;

Key was six in 1967. Among the many things that have changed since then is housing affordability. The IMF’s latest Global Housing Watch lists New Zealand’s housing market, in relation to household income, as the most expensive in the OECD. Could a penniless solo mother, working as a “cleaner and night porter”, paying market rents, now earn the deposit for a modest home?

Then Campbell issued what may well be Key’s one and only true legacy – if one could call a broken promise to the grieving families and friends of 29 men entombed deep within a mine on the West Coast, a “legacy”;

This is what John Key said, behind closed doors, when he met with Pike families on September 22, 2011.

“The first thing is I’m here to give you an absolute reassurance we’re committed to get the boys out.”

An absolute reassurance. The boys out. When the families heard that, there was spontaneous applause. The human details. The empathy, sincerity and trust. When the clapping stopped, the prime minister continued:

“When people try and tell you we’re not, they’re playing, I hate to say it, but they’re playing with your emotions.”

And then John Key made it personal:

“So, you are the number one group that want to get those men out. And, quite frankly, I’m number two. Because I want to get them out.”

Five years on, the men are still in. It may be that the risk of getting them out is too great. But, when he was alone with them, Key didn’t say that, or qualify his words with that possibility. His was an “absolute reassurance”, and the families believed him and have clung to that belief in the years since.

Of all the many broken promises from Key, that will be the one most remembered. Because as Campbell so astutely pointed out, “John Key made it personal”.

‘Mickey Savage’ writing for The Standard was more brutal and unforgiving in his/her appraisal of Key’s administration;

Key has perfected the aw shucks blokey persona that some clearly like.  Although this was only skin deep.  His management of dirty politics and the Cameron Slater Jason Ede axis of evil won him the last election but at the cost of his soul.

As to the substance he did not really achieve or create anything.  He saw off the Global Financial Crisis and the Christchurch Earthquake rebuilds basically by borrowing money which New Zealand could because Michael Cullen had so assiduously paid off debt.

His economic development policies were crap.  Expanding dairying only polluted our rivers and increased our output of greenhouse gasses. The growth of tertiary education for foreign students only caused the mushrooming of marginal providers.

The primary economic growth policy now appears to be ballooning immigration.  Auckland’s population grew almost 3% last year.  The symptoms are clear, rampant house price increases, homeless caused by ordinary people no longer being able to afford inflated rental amounts and a whole generation shut out of the property market.  And services are stretched as budgets are held but demand increases.

And child poverty has ballooned.  Key was great with the visuals and the talk of an under class and the trip to Waitangi with Aroha Ireland before he became Prime Minister was a major PR event for him to show that at least superficially he cared about the underclass.  But the reality?  Over a quarter of a million of children now live in poverty and kids are living in cars even though their parents have jobs.  There is something deeply wrong in New Zealand.

S/he concluded;

Overall Key was great at the spin and the PR but appallingly bad at dealing with the reality.  Despite his hopes the country is now in a far worse situation under his stewardship than it was when he took over.

‘Mickey Savage’ has summed up Key’s legacy perfectly and I leave this brief assessment for future historians;

John Key – Master at spin, photo-ops, and PR, but nothing else.  When the teflon was stripped away, there was nothing underneath.

And that will be his legacy: nothing. We simply couldn’t think of a single damned one.

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References

Radio NZ: PM to resign – ‘It feels like the right time to go’

Radio NZ: How does John Key’s legacy compare to the Bolger years?

Scoop media: 3 News Poll – 2-10 October 2012

TV3 News: Newshub poll – Key’s popularity plummets to lowest level

Beehive: Cullen on Key’s tired old tax cut mantra

Fairfax media: The boy from Bryndwr – John Key’s Christchurch legacy

Radio NZ: Brand John – The Key to National’s success

ODT: The John Key legacy

NZ Herald: Key – No vision, no legacy, no problem

US State Department: A proposal for the establishment of the Ross Sea Region Marine Protected Area

Youtube: John Key’s Top 10 Reasons to visit New Zealand

The Telegraph: Best of Bunga Bunga: 7 most outrageous lines from Silvio Berlusconi’s new biography

Fairfax media: John Key’s most enduring legacy is make the right like Madonna

Interest.co.nz: Roger Partridge assesses the legacy of John Key as Prime Minister and finds an impressive record given the constraints of MMP

NZ Herald: Liam Dann – John Key’s economic hits and misses

NZ Herald: NZ’s half-trillion-dollar debt bomb

Treasury NZ: Financial Statements of the Government of New Zealand for the Year Ended 30 June 2016

Additional

NZ Herald: Bennett gets tough with outspoken solo mums

Scoop media: Justice Minister Judith Collins resigns from Cabinet – PM’s announcement

Dominion Post: Forced sterilisation ‘a step too far’

Newstalk ZB: Key – Nicky Hager a conspiracy theorist ‘because I think he is’

NZ Herald: PM attacks journalist over SAS torture claims

NBR: Collins on her last chance, PM says

NZ Herald: He’s Dotcom’s little henchman – PM attacks journalist’s spy claims

NZ Herald: Eleanor Catton has ‘no particular great insights into politics’, says John Key

Other Bloggers

Against the current: John Key’s Dismal Record on Climate Change

Bowalley Road: What A Way To Go! Some Initial Thoughts On John Key’s Resignation

Local Bodies: John Key’s Real Legacy

Sciblogs: Key’s legacy – an economist’s view

The Daily Blog: The true legacy of John Key

The Standard:  John Key’s legacy

Your NZ: Key’s legacy

Previous related blogposts

National Minister refers to PM as “Wild Eyed” Right-Winger!

Lies, Damned lies and Statistical Lies – ** UPDATE **

The Mendacities of Mr Key # 18: “No question – NZ is better off!”

National and the Reserve Bank – at War!

National exploits fudged Statistics NZ unemployment figures

The Dismantling of a Prime Minister – Completed

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audrey young political column cartoon john key's legacy

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This blogpost was first published on The Daily Blog on 4 January 2017.

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