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Posts Tagged ‘Amy Adams’

The Mendacities of Ms Amy Adams – 2,000 more state houses?!

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Soon after criticising the Coalition for “hiding debt in SOEs” – a capital offense that National was guilty of in 2009, and which contributed to  bankrupting Solid Energy by 2015 – National Party’s finance spokesperson, Amy Adams, was at it again.

This time, Ms Adams was making claims on housing that official figures could not sustain. Her talking-up of National’s so-called “achievements” in social housing collapsed when exposed to scrutiny.

Appearing on TVNZ’s Q+A on 20 May, Ms Adams’ criticisms of the Coalition government were rigorously  challenged by a bemused Corin Dann. At every opportunity she took to attacking the Coalition, Corin Dann was able to turn the criticism back on National.

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National Party’s Finance Spokesperson, Amy Adams – A bad case of Foot-in-Mouth affliction.

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When Ms Adams asserted that;

“Even Treasury is saying that the GDP growth that they’re forecasting is only held up because of strong and, in fact, growing immigration numbers…”

– Corin Dann responded with undisguised disbelief;

“Are you seriously criticising this government for relying on immigration to grow its economy when your government relied on immigration and housing?”

Ms Adams became increasingly defensive. Instead of holding the current Coalition government to account, it rapidly became a cross-examination of National’s own track record whilst in government.

At one point, Ms Adams asserted;

” Just take state housing for example — we promised 2000 new houses a year, so 6000 over three years. This government is now committing to deliver less than they promised and only 1600 a year. “

If National had been re-elected last year; and if those six thousand new State houses had been built – it would have made little appreciable difference to homelessness in New Zealand.

In 2008, according to it’s 2008/09 Annual Report, Housing NZ stated that it’s housing stock stood at 69,173 (p25).

Housing NZ’s 2016/17 Annual Report revealed “we own or manage approximately 63,000 homes”. (p7)

After eight years in government, National had managed to “lose” six thousand state houses.

Meanwhile, waiting lists for state homes have rapidly ballooned as the scourge of homelessness worsened under National.

In March 2008, there were 206 applicants for a State house in the “A” Category: deemed “at risk”. There were 3,605 in “B” Category: deemed “in serious housing need”. Total: 4,017.

(NOTE: There were additional categories – “C” and “D” – considered less urgent by Housing NZ. These two categories were removed from Housing NZ’s books after July 2011.)

Since March 2016, the waiting list for a state house went from 4,017 in 2008, dropping to  3,352 in June 2015, and skyrocketing to 7,890 in March this year;

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Indeed, had National not disposed/sold/transferred 6,000 state houses and had they proceeded to build an additional 6,000 as Ms Adams asserted on Q+A, they could well have put a serious dent into homelessness, over-crowding, and living in sub-standard hovels in this country.

Instead, homelessness has worsened to an extent where National was forced – reluctantly – to even concede that there was a crisis. National went from this last year;

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– to this, this year;

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It took a long time.  Ocean-going behemoth oil tankers have made course corrections faster than National Party policy changes.

Unfortunately, National’s election policy on Housing offered scant information how they intended to resolve this crisis. Tellingly, their policy document referred to “social housing” once – and then only very briefly;

Freeing up Crown Land to see 34,000 more affordable, market and social houses built over the next ten years.

There is no reference to state housing.

Despite a NZ Herald report in July 2016;

In the past financial year, HNZ built or bought 871 state houses.

Its rate of construction will now be ramped up to around 1300 state houses this financial year, 1500 the following year, and around 2000 the year after.

– there appears to have been very little movement in increasing Housing NZ’s stock.

The same Herald story reported that;

Over the next two years, Housing New Zealand will also build another 800 affordable houses to be sold on the open market.

– effectively turning Housing NZ into a profit-driven property developer.

Ms Adams may have based her claim of  “2000 new houses a year, so 6000 over three years” on that Herald story. But Housing NZ’s own Annual Reports do not back up her numbers.

Once again, National’s spokespeople have been caught out embellishing the truth at best – or – telling deliberate fibs at worst. (A third option is that Ms Adams was simply making-up-policy-on-the-hoof.)

One thing is clear. Under a re-elected National government, this;

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– would have become this;

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References

Mediaworks/Newshub: Govt not honest about debt in new Budget – Amy Adams

Fairfax media: Solid Energy announces voluntary administration ahead of sale

Scoop media:  Q+A – Amy Adams interviewed by Corin Dann (transcript)

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2016/17

Housing NZ: Quarterly Housing Sector and Housing Assistance Report – March 2008

Housing NZ: Briefing for the Minister of Housing – December 2011

Ministry of Social Development: Housing Register

Mediaworks/Newshub: Flat house prices prove there’s no crisis – National housing spokesman Michael Woodhouse

Radio NZ: New National leader says there is a housing crisis in NZ

National Party: National’s comprehensive housing plan

NZ Herald: Housing New Zealand to spend $2 billion on new state houses

Other Blogs

The Standard:  There is no housing crisis in New Zealand

Previous related blogposts

Solid Energy – A solid drama of facts, fibs, and fall-guys

Solid Energy and LandCorp – debt and doom, courtesy of a “fiscally responsible” National Govt

National recycles Housing Policy and produces good manure!

Our growing housing problem

National Housing propaganda – McGehan Close Revisited

Housing; broken promises, families in cars, and ideological idiocy (Part Tahi)

Another ‘Claytons’ Solution to our Housing Problem? When will NZers ever learn?

Government Minister sees history repeat – responsible for death

Housing Minister Paula Bennett continues National’s spin on rundown State Houses

National’s blatant lies on Housing NZ dividends – The truth uncovered!

National continues to panic on housing crisis as election day looms

National’s housing spokesperson Michael Woodhouse – delusional or outright fibber?

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This blogpost was first published on The Daily Blog on 23 May 2018.

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The Mendacities of Ms Amy Adams – “hidden borrowing”?!

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National is at it again;  indulging in rank hypocrisy by criticising the Labour-NZ First- Green Coalition Government of policies that they themselves carried out.

This time, the National Party’s finance spokesperson, Amy Adams, has accused the Coalition Government of “hiding away debt” in SOEs. Speaking to Mediawork’s Newshub, she protested;

“…If you actually look at where Grant Robertson has hidden another six billion dollars of borrowing in Crown entities, total borrowing has actually gone up almost $17 billion. And if you look at it in that way, it’s going to take up our debt-to-GDP ratio to above the 20% target in 2022. So I think he’s being very tricky in fudging the numbers and hiding $6 billion more debt in that Crown entity space.”

Ms Adams has apparently “forgotten” that the previous National government did precisely what she is now alleging that the Coalition is doing.

By  2009, the Global Financial Crisis began to heavily impact on the National Government’s tax revenue. Except for GST, company, individual, duties, and other revenue were down;

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Despite the fall in taxation and other revenue, National proceeded  with it’s first tranche of tax cuts in April 2009. According to then-Finance Minister, Bill English, the 2009 tax cut represented a $1 billion loss of revenue to the National government;

“About 1.5 million workers will receive a personal tax cut, injecting an extra $1 billion into the economy in the coming year.”

This presented a serious problem for National, as it was borrowing $450 million per week, by December 2009, according to BNZ Capital economist, Craig Ebert.

This left National in dire straits. Government revenue was collapsing; borrowing was ballooning – and worse was to come. National had tax cuts planned for the following year. They would be estimated to cost government at least $2 billion in lost revenue.

National’s Cabinet came up with a novel ‘solution’: State-owned enterprises would be treated as ‘cash cows’. Each SOE would be instructed to borrow to their maximum limit and “… release all surplus capital to the shareholder as special dividends“.

In May 2009, then-SOE Minister, Simon Power, issued this letter to all relevant state owned enterprises. Note the red-highlighted portions;

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(Please note that the above version differs slights from the text provided in the NZ Herald version. Some of the redactions above re-appear in the NZ Herald version.)

By November 2011, a Treasuring scoping-study revealed that Solid Energy was experiencing severe financial problems. National’s Ministers were officially advised of Solid Energy’s precarious financial state, but this would not become public knowledge until two years later, in February 2013.

By August 2015, Solid Energy was placed into voluntary administration. By March this year, the liquidation process was near to completion.

Interestingly, the Herald story announcing the final stages stages of liquidation stated only;

Solid Energy first started its downward spiral in 2013 when global coal costs plummeted, exposing its commercial error in carrying substantial debt on its balance sheet.

There was no mentioned of the tens of millions of dollars expropriated by the National government after it’s letter-of-demand from Simon Power in 2009.

Neither was there a mention of the debt levels forced upon Solid Energy;

Solid Energy’s gearing ratio [borrowings] was 13.8 per cent in 2009, but that rose to 34.4 per cent in 2010 and 41.7 per cent last year [2012].

In fact, Solid Energy was bankrupted not only because of it’s high debt levels (four times higher than in 2008/09), but because National demanded 65% of cash reserves to be paid to the government as “special dividends”, as the CCMAU document below shows;

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Solid Energy had meagre cash reserves remaining when the international price of coal fell, reducing it’s income.

Neither did it help when  National abruptly reneged on it’s subsidy to Solid Energy to  generate bio-fuels. National implemented it’s subsidy in 2008 – and scrapped it in 2012.

That decision left Solid Energy with a bio-fuels subsidiary (Biodiesel New Zealand) that was suddenly uneconomical to produce.

Adding insult to injury, and perhaps one of former Dear Leader  John Key’s worst case of misdirected blame-gaming, he lamented the collapse of Solid Energy;

“The causes of the financial crisis at Solid Energy are the usual suspects in failing businesses – too much debt, unsuccessful investments and no reserves to weather a slump in coal prices.

Prime Minister John Key’s comments yesterday indicated these problems and pointed the finger at an imprudent amount of debt and investments that have not returned any cash yet.

Key said the debt had climbed to $389 million when “typically coal companies do not have a lot of debt on their balance sheets”.

Through incompetence;  election year tax bribes that sent sovereign debt soaring and government deficits ballooning; SOE management that failed to assert independence from Ministerial interference; a willingness to strip SOEs of their cash; and demanding that they ramp up their “gearing” (borrowing/indebtedness) – like a fiscal vampire, National sucked Solid Energy dry.

So that combined with the removal of biofuels subsidies and a collapse in international coal prices, the final ‘leg’ of the three-legged stool – unsustainable debt and depleted cash reserves – was enough to send Solid Energy spiralling down into bankruptcy.

It is against this backdrop of “hidden borrowing” by National, that undermined and destroyed one SOE, that Ms Adams is now accusing the Coalition government of the same thing.

National has a distinctly predictable habit of blaming it’s political opponents for behaviour that it itself is guilty off.

Accordingly, Ms Adams wins this dubious “merit award”…

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Postscript: Amy Adams was elected into Parliament on 8 November 2008. She therefore shares collective responsibility for the  demise of Solid Energy, along with her colleagues, Bill English, John Key, Tony Ryall, and Simon Power.

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References

Mediaworks/Newshub: Govt not honest about debt in new Budget – Amy Adams

IRD: Revenue collected 2008 to 2017

Scoop media: Rankin -Tax Cuts 2009-2011

Scoop media: Government delivers April 1 tax cuts, SME changes

Otago Daily Times: Government now borrowing $450 million a week – claim

NBR: Key again defends tax cuts

Scoop media: Govt’s 2010 tax cuts costing $2 billion and counting

NZ Herald: Simon Power letter to SOEs, May 2009

Treasury NZ:  Treasury Report T2011/2373: Solid Energy New Zealand Scoping Study Report

Fairfax media: Solid Energy in debt crisis talks

Fairfax media: Solid Energy announces voluntary administration ahead of sale

NZ Herald: Solid Energy enters final stages of liquidation process

Fairfax media: Ministers pressured Solid Energy, Parliament told

Treasury: Solid Energy Information Release March 2013 (Document 1875419)

Fairfax media: Biodiesel loses subsidy, prices to rise

NZ Herald: Solid Energy half year profit down as coal export price falls

Fairfax media: State miner to return to coalface

Additional

Other Blogs

The Standard: The real reason Solid Energy is failing

The Standard: Has John Key jumped the shark?

Previous related blogposts

Solid Energy – A solid drama of facts, fibs, and fall-guys

Solid Energy and LandCorp – debt and doom, courtesy of a “fiscally responsible” National Govt

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This blogpost was first published on The Daily Blog on 21 May 2018.

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National continues to panic on housing crisis as election day looms

15 June 2017 6 comments

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The Grand Announcement!

On 3 June, National announced with great fanfare that additional state housing would be made available in Tauranga  and  Papamoa;

Almost 220 new social and transitional places are on the way for Tauranga and Papamoa, the Government has today confirmed.

“We’re on track to have 68 short term transitional housing places available in Tauranga and Papamoa by the end of the year. This will mean we can support up to 272 families in Tauranga and Papamoa every year while long term solutions are found,” says Ms Adams.

“Of those 68 places, 21 places are already open.

“Across the wider Bay of Plenty region, we will be providing a total of 146 transitional housing places meaning we’ll be able to help 584 families every year,” says Ms Adams.

“These houses are in addition to the 290 social houses we’re planning to secure in the Bay of Plenty. These new properties will be a welcome addition to the region, which is an area of growing need.”

Minister Amy Adams emphasised,

“We are working hard alongside providers to address the demand on social housing and help those most in need of warm, safe housing.”

Except…

Which would be fine – except that in December last year, National signed an agreement to sell off 1,138 state houses to IHC subsidiary, Accessible Properties;

Accessible Properties has signed a contract with the Government confirming it will acquire and manage 1,140  [actually 1,138] state homes in Tauranga, and plans to add 150 more houses to its portfolio.

The 1140 homes are currently with Housing New Zealand and will transfer on April 1, 2017. The contract was signed today and Housing New Zealand tenants are receiving letters this week explaining the change of ownership.

It was a similar deal to the one  the Salvation Army walked away from in March 2015;

The Government’s plan to sell off unwanted state houses to community housing providers has been dealt a massive blow with the Salvation Army walking away from the negotiation table.

The Salvation Army announced today it lacked the expertise, infrastructure and resources to deal with the number of houses and tenants that the Government wanted to offload.

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Salvation Army social housing spokesman Major Campbell Roberts said the Government had underestimated the complexity of the task.

“I don’t think there has been enough thinking gone into it.”

Roberts said the current “Housing New Zealand monopoly” wasn’t working, but handing social housing over to single community organisations, like the Salvation Army, would fail.

Community Housing Aotearoa director Scott Figenshow rightly pointed out;

“ Last month the Government confirmed $1.2 billion of deferred maintenance on the state housing stock. Why would a provider want to purchase a liability? ”

IHC/Accessible Properties showed no such hesitation and on 1 April this year the sale was completed. Accessible Properties’ CEO,  Greg Orchard, appeared very pleased with the deal;

“The properties have been assessed as being at a very good standard – we will maintain this and seek to make improvements.”

The sale of the properties took place at the same time that Tauranga was experiencing a housing crisis similar to Auckland’s;

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Which means…

National’s “grand plans” for 220 new social and transitional places remains woefully short of the 1,138 houses that National sold off to IHC’s Accessible Properties at the end of March.

It is also unclear what is meant by “ transitional places“. Are these actual houses? Or motel units, à la Auckland-style;

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Only National would have the brazenness to sell off 1,138 state houses and then announce one-fifth of that number of “new houses” as some sort of “stunning achievement”.

Worse still is National’s over-all record when it comes to State housing;

In 2008, Housing NZ’s state housing stock comprised of  69,000 rental properties.

By 2016, that number had fallen to 61,600 (plus a further 2,700 leased) – a dramatic shortfall of 7,400 properties.

No  wonder we have families living in cars in the second decade of the 21st Century.

Where did those state houses end up?

Promises made…

In September 2009, then-Housing Minister, Phil Heatley, announced that state house tenants would be allowed to purchase the state houses they were living in;

From today those state house tenants in a position to buy the house they live in can do so, says Housing Minister Phil Heatley.

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Over the next week, Housing New Zealand will be approaching about 3,800 state tenants who pay market rent and live in a home that is available for purchase, to make them aware of the opportunity.

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To ensure a property is not on-sold to developers, a tenant who purchases their state house will be unable to reapply for a state house for three years from the date of purchase.

Heatley specifically made clear his opposition to state houses ending up in the hands of anyone but occupying tenants.

In January 2015, our then-Dear Leader, Key, repeated National’s plans to sell state houses – but only to social service providers;

We’ll then look to sell between 1,000 and 2,000 Housing New Zealand properties over the following year for use as social housing run by approved community housing providers.

In doing so, we’ll use open and competitive processes.

Community housing providers may want to buy properties on their own, or they may go into partnership with other organisations who lend them money, contribute equity, or provide other services.

Properties will have to stay in social housing unless the government agrees otherwise, and existing tenants will continue to be housed for the duration of their need.

Selling properties in this way doesn’t reduce the number of social housing places. It just means more of the tenancies will be managed by a non-government housing provider rather than Housing New Zealand.

We’re very conscious that the sale of properties has to work for taxpayers.

We’re looking to get a fair and reasonable price for these properties, bearing in mind they’re being sold as ongoing social houses with high-need tenants.

We’re not selling them as private homes or rentals.

Note his unequivocal guarantee; “We’re not selling them as private homes or rentals”.

As with many of Key’s statements, he was somewhat ‘loose’ with truthfulness.

Promises broken.

By May this year, it became very apparent where many of the 7,400 state houses sold off by National had ended up;

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The article by Virginia Fallon makes this extraordinary revelation;

While the Devon St sale gives buyers the chance to choose their neighbours, it marks a bittersweet ending for Kay Hood, who once owned 80 per cent of the street.

“I would have liked to have bought the sixth one, that’s the only eyesore,” she said.

Over 20 years, Hood and husband Peter bought five houses on the street, and she wishes the last one never got away.

“We bought them off Housing Corp and I did approach them for the last one, but we never got it.”

We bought them off Housing Corp…”?!

So while entire families are camping out in cars, garages, or  –  if they are lucky – motel rooms, private investors have ‘snapped up’ State House properties.

In this case, the Hoods on-sold their investments (ie, former state houses), and were candid in their plans;

“ We’re going to go skiing and spend the children’s inheritance. ”

Personally, I hold no antipathy toward the Hoods. In our current social climate of  hyper-individualism  combined with a degree of moral ambiguity, many of our fellow New Zealanders have exploited opportunities for speculation such as this.

But I do hold 100% responsible John Key and his fellow Ministers-of-the-Crown who allowed this travesty to occur.

More so John Key, who benefitted from a state house in his youth;

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The over-powering stench I can smell is either a dead, rotting whale on my front lawn – or Key’s appalling hypocrisy.

The sound of a train-wreck hurtling toward you

It is abundantly clear that National is panicking over the issue of housing.

Whether it is homelessness or over-crowding by poor families, or home unaffordability for middle-class Millenials, National has managed to spectacularly cock this up.

New Zealanders may be able to tolerate poverty. This country has had varying degrees of poverty since the Year Dot.

But the notion of homelessness is more than they can stomach. Homelessness strikes at the very core of the “Kiwi Dream”, where a roof over your head and a place to raise a family is one of our strongest values. (The other being the now-mythical notion of egalitarianism. That social ideal had the life throttled out of  it after 1984.)

Housing-related problems (I refuse to call them “issues”) for National keep mounting in a Trump-like way.

On 8 June, on Radio NZ, Major Campbell Roberts (the same Maj. Roberts who, in 2015, had thoroughly rejected National’s invitation to buy properties from Housing NZ)  from the Salvation Army’s social policy unit, had been invited by then Finance Minister English to become part of National’s Housing Shareholders Advisory Group.

Maj. Roberts revealed that now-Dear Leader, Bill English, had described a looming housing crisis as far back as 2010;

“ He [Mr English] said a couple of things; one, the use of of the $15 billion asset of Housing New Zealand, and the second was that he was seeing a major crisis in Auckland in housing in five or six years.  It was a passing comment – but it was one of the reasons for setting up the shareholders group.

English’s prediction has eerily come to fruition;

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Unsurprisingly, English rejected Maj. Robert’s revelations using a highly effective technique from his predecessor. One of English’s tax-payer funded spin-doctors said,

The Prime Minister was having a number of such conversations on housing reform at the time, including with a housing advisory group which included the Salvation Army, and he doesn’t recall exactly what he said.

Who else had memory problems when it came to potentially embarrassing gaffs and scandals?

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Meanwhile, in a latest move to dampen the ballooning housing market, the Reserve Bank is contemplating adding a new “tool” to it’s regulatory powers. The RBNZ wants to cap  debt-to-value ratios at five times a borrower’s income;

The Reserve Bank wants to be able to stop people taking out mortgages that are too big compared to their incomes.

It wants debt-to-income restrictions (DTIs), which limit the amount that people can borrow to a multiple of their income, added to its macroprudential toolkit, alongside loan-to-value (LVR) restrictions.

The restrictions are used in other markets around the world, such as Britain, where borrowers must have a loan no bigger than 4.5 times their income. The Reserve Bank is suggesting a limit of five times.

The size of New Zealand mortgages compared to incomes has increased sharply over the past 30 years. The Reserve Bank said increases since 2014 partly reflected the drop in interest rates over that time, but it was possible that rates could rise again in future.

The RBNZ estimates debt-to-income restrictions could prevent 8,800 investors from buying a property. But 1,600 First Home buyers  would also be caught up in stringent DTI restrictions and locked out of  owning their home.

The Bank’s chief agenda is to prevent a massive housing crash that would impact on the economy; cause mass unemployment; and result in thousands losing their homes through mortgage defaulting;

The housing market could collapse if mortgage rates rise to 7 percent, given the increasing numbers of households heavily in debt, the Reserve Bank says.

The Reserve Bank stress-tested the ability of borrowers to cope with mortgage rates at 7 percent, which is close to the average two-year mortgage rate over the past decade.

It found 4 percent of all borrowers, and 5 percent of recent ones, would be put under severe stress where they could not meet day-to-day bills for food and power.

Auckland borrowers appear particularly vulnerable to higher rates, with 5 percent estimated to face severe stress.

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“So that if a downturn comes, you don’t get a whole lot of forced sales coming onto the market that depresses house prices even further, and create a risk for the banking system and also the broader economy.”

All because National ignored a crisis that Bill English predicted seven years ago, and could have dampened with a capital gains tax equivalent to company tax, and stopping investors from claiming tax deductions on mortgage interest payments.

It is bizarre and inequitable that tax-payers are in effect subsidising investor/speculators on their investments. Especially when, after two years, those properties can be on-sold with little or no capital gains tax paid.

If the RBNZ introduces a debt-to-income ratio of five times a person’s income, it may well succeed in dampening down the property bubble.

But as usual, it will be those at the bottom (or near the bottom) who pay the price. They will be the ones who continue to be locked out of the property market and denied a chance to enjoy the Kiwi Dream of home ownership.

The resentment and anger this will cause cannot be over-stated.

The sound in Bill English’s ear is the roar of a train wreck bearing down on him and his hopeless, self-serving ‘government’. ETA for the crash: 23 September.

All because National stubbornly refused to act to curb property speculation.

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References

Scoop media:  More social housing coming on board in Tauranga & Papamoa

NZ Herald:   Government sells off Tauranga’s state housing portfolio to Accessible Properties

Accessible Properties:  What is happening?

Fairfax media:  Salvation Army says no to state houses

Bay of Plenty Times:  Accessible Properties takes over state homes

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

Bay of Plenty Times:  Tauranga’s homeless problem at ‘crisis point’

Sunlive: Housing crisis under the spotlight

Radio NZ:  Housing situation critical – Tauranga principal

Tauranga Budget Advisory:  City’s Rental Housing In Crisis

NZ Herald:   Govt to buy more motels to house homeless as its role in emergency housing grows

Housing NZ: Annual Report 2008/09

Housing NZ: Annual Report 2015/16

Beehive:  State houses available to buy from today

Fairfax media:  John Key Speech – Next steps in social housing

Fairfax media:  Can’t afford your own island? How about buying your very own street?

NZ Herald:  Prime Minister John Key’s childhood state house up for sale as Government offers 2500 properties to NGOs

Radio NZ:  PM spoke of housing crisis in 2010 – Sallies

Otago Daily Times:  Auckland housing crisis expected to drag on

Fairfax media:  PM talked of major housing crisis – Salvation Army

Dominion Post:  Editorial – Prime Minister’s bad memory embarrassing

Fairfax media:  Debt-to-income ratio would stop thousands from buying houses – RBNZ

RBNZ: Consultation Paper – Serviceability Restrictions as a Potential Macroprudential Tool in New Zealand  (p26)

Radio NZ:  Housing market could collapse on 7 percent mortgage rates

IRD: Residential property

IRD: Taxation (Bright-Line Test for Residential Land) Act 2015

Additional

NZ Herald: Key admits underclass still growing

NewstalkZB: Demand for food banks, emergency housing much higher than before recession

Previous related blogposts

Budget 2013: State Housing and the War on Poor

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This blogpost was first published on The Daily Blog on 10 June 2017.

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

26 November 2015 4 comments
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The chilling of the mainstream media

Whether by machiavellian, subtle and covert political pressuring from on-high; bad management decision-making,  or an inevitable process of  dumbing-down brought on by the never-ending need for advertising revenue and rapacious returns to share-holders, news media in this country continues to suffer at the on-going impacts of “market forces”.

The demise of Campbell Live and the loss of Mihingarangi Forbes from Maori TV’s Native Affairs and Dita De Boni from the NZ Herald should give all thinking New Zealanders cause for concern. Those three were amongst the most talented and critical voices from the mainstream media, and their dumping no doubt had a chilling effect throughout the media in this country.

With few exceptions, journos have mortgages and  bills to pay; mouths to feed; and careers they are passionate about. The constant possibility  of sudden termination of their contract is a sword of damocles that probably weighs on their minds when considering how critical of the Establishment they really want to be.

The may be risking their jobs if they stick their heads too far above the parapets.

The only people whose jobs are apparently safe are Mike Hosking and Paul Henry (who seems to bounce from company to company without any deleterious effects to his credibility).

Interestingly,  each has been ’embedded’ with  the two major television networks, TVNZ and Mediaworks’ TV3. Neither are journalists and  both Hosking and Henry  are unashamedly  linked to National.

This is “independepent media freedom” in New Zealand, circa 2015AD.

Who watches the Watchmen?

The last bastion of an independent  freedom, free from commercial imperatives and political interference (hopefully) is, Radio NZ. Despite an incident three years ago, where blogger Martyn Bradbury was banned from Radio NZ for making comments highly critical of our esteemed Dear Leader, the broadcaster maintains a strong ability to project itself as a serious, credible news and current affairs medium.

It continues to carry out strong investigative reporting; interviewing government ministers; State sector leaders;  and other public figures; and offering political analysis from both the Left and the Right.

One of Radio NZ’s most insightful (and often under-valued) programmes is  Mediawatch, which scrutinises, analysis, and holds to account, New Zealand’s mainstream media in a way that is not matched anywhere else by any other MSM outlet. As the Radio NZ promo-blurb states;

“Mediawatch looks critically at the New Zealand media – television, radio, newspapers and magazines as well as the ‘new’ electronic media. It also examines the performance of the agencies, corporations and institutions that regulate them. It looks into the impact the media has on the nation, highlighting good practice as well as bad along the way – and it also enquires into overseas trends and technological developments which New Zealanders need to know about.

It aims to enlighten everyone with an interest in the media about how it all works, how quickly things are changing – and how certain significant stories and issues are being covered. It’s also intended to be essential listening for those who work in the industry itself – as well as those who simply enjoy well-produced and lively radio.”

A recent prime example was on 9 August, when TV3 reporter, Tova O’Brien was taken to task for attributing a quote to someone who never actually said what she claimed;

@ 2:50 –

Colin Peacock: In New York, Tova O’Brien also got a second opinion on Murray McCully’s lofty dream of reforming the veto powers of the so-called Big Five at the UN. And 3 News introduced that story like this;

TV3 News: Former Prime Minister Helen Clark thinks Murray Clark is dreaming if he thinks New Zealand can rid the UN Security Council veto. Russia used the veto yesterday during… [fade-out]

Colin Peacock: Though Helen Clark had actually applauded Murray McCully for his ambition. It was Tova O’Brien who used the word ‘dreaming’ in a question to Helen Clark.

Helen Clark: It [New Zealand] should go for it. It [New Zealand] should follow it’s [New Zealand’s] dream.

Tova O’Brien: But in this case he’s dreaming.

Helen Clark: It’s not a short-term objective.

That was downright dishonest reporting.  Only Radio NZ’s Mediawatch picked up on it.

Last year, on 7 July, Mediawatch was the only  mainstream media team that questioned and criticised the NZ Herald’s dubious stories surrounding unsubstantiated claims of large donations made by migrant businessman, Donghua Liu, to the Labour Party. (Those claims were later “clarified”  with a half-hearted  retraction by the Herald.)

No other mainstream media questioned any of the astounding and unsupported claims made by Donghua Liu, and reported uncritically by the Herald.

It is a sobering thought that aside from the toothless “watch dog” of the Press Council, and only marginally more effective Broadcasting Standards Authority,  there is no real scrutiny of  mistakes, omissions, and mis-reporting made by our media.

Self-criticism does not come easily to the Fourth Estate.

Gutting by slow starvation?

Funding for Radio NZ is channelled through New Zealand on Air – a body described on Wikipedia, as “…an independent New Zealand broadcast funding agency” and  “autonomous crown entity separate from central Government and governed by a Board of six appointed by the Minister of Broadcasting. NZ on Air is responsible for the funding of public-good broadcasting content across television, radio and new media platforms“.

The funding figure of $31.816 million is an easy one to remember – it has remained unchanged since 2009-10, when National assumed the reins of government. The figure has been maintained until next year.Using the Reserve Bank inflation calculator, Radio NZ’s funding should have risen to $35.26 million. In effect, by not keeping pace with inflation, Radio NZ’s funding has been cut by around 10%.

By contrast, Budget data showing increases to the Prime Minister’s Department makes for sobering reading.

  • Michael Cullen’s last budget,  2008/09, allocated $25,470,000 to Vote Prime Minister and Cabinet.
  • In the same 2008/2009 Budget, Radio NZ was allocated $31,718,000 through NZ on Air, an increase of $2,644,000 (approx 8%) from the previous year.
  • In National’s first Budget, 2009/10, Vote Prime Minister and Cabinet was allocated $33,021,000 – an increase of $7,551,000 – or just under 25%!
  • In the same 2009/2010 Budget, Radio NZ’s allocation went up by $98,000 to $31,816,000 – not even a 1% increase.

For the first time, the Prime Minister’s Departmental budget exceeded that of Radio NZ. Furthermore;

  • Since 2009/10, Radio NZ’s allocation has stayed the same; $31,816,000.
  • By contrast, the amounts allocated to the Prime Minister’s Department has increased, and in the 2015/16 Budget was allocated  $49,298,000 – an 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 ago.
  • In the 2015/16 Budget, Radio NZ was allocated  $31,816,000 – a nil increase.

Framed another way, a news media organisation – dedicated to informing the public about government activities – has had no increase in resourcing since John Key’s administration came to power in late 2008.

By contrast, the Prime Minister’s Department – dedicated to promoting the power of the Government and more specifically, pursuing National’s political agenda – has had a doubling of taxpayer funding.

Where to for funding Radio NZ?

On 17 August, I wrote to NZ on Air’s Chief Executive, Jane Wrightson and asked;

“In your Annual reports, NZ on Air’s income from  Crown revenue went from $109,813,000 (for the year ended 30 June 2008 ) to  $128,726,000 (for the year ended 30 June 2015) – an increase of nearly $19 million.

Can you explain why none of that increase, according to your Annual Reports,  was directed at Radio NZ?”

On 21 August, Ms Wrightson responded;

“NZ On Air does not set Radio New Zealand’s Crown funding. This is done by Ministers. I am not aware of any government-funded entity that has an automatic inflation provision to increase funding.”

When questioned whether “Radio NZ’s funding has been frozen (effectively reduced, after inflation is factored in) because it is considered to be politically “inconvenient” or “embarrassing”  to the government”, Ms Wrightson replied;

“NZ On Air is a funding agency independent of Government in terms of our content funding strategy and decisions. Radio New Zealand’s funding has been static in the same way that all publicly funded agencies in the cultural sector have been static, during a time of fiscal constraint.”

Fiscal constraint” does not appear to be a limiting factor when the Prime Minister’s Department is funded from the tax-payer’s purse/wallet.

Questions for the Broadcasting Minister

On 6 September, I asked the Minister of Broadcasting, Amy Adams;

It is my understanding that Radio New Zealand’s funding has not increased since 2009, when it’s budget was set at $31,816,000.

With it’s funding frozen, and no means of other revenue, it has effectively had a funding cut after inflation and salary increases are taken into account.

Can you explain why Radio NZ’s budget has not, at the very least,  been inflation-indexed?

Can you explain why Radio NZ’s budget has been frozen whilst at the same time, the Prime Ministers Department has had a budget increase since 2008 from $25,470,000 to $49,298,000 in 2015/16 – a near doubling in just seven years?

Are you committed to increasing Radio NZ’s budget next year? If not, why not?

How do you expect Radio NZ to deliver excellent service  when it has effectively had a cut in funding?

On 20 May this year, you were enthusiastic about Radio NZ’s growth in market-share;

“While there has been a decline in listenership across traditional platforms, over the last twelve months RNZ’s online audience has grown significantly as their multi-media strategy is implemented.”

For example:

  • In 2013/14, 3.5 million podcasts were downloaded.
  • In 2013/14, radionz.co.nz page views reached 21 million and over 2014 unique users of the website grew by over 50 per cent.
  • In 2013/14, regular user of the RNZ mobile app grew by almost 62 per cent.

Ref: https://www.beehive.govt.nz/release/bill-update-radio-nz-charter-passes-second-reading

Whilst this is evidence that Radio NZ is a prudent manager of it’s funding, it is unreasonable to expect that this situation is  sustainable for the foreseeable future.

If the Prime Minister’s Department required a 100% increase from 2008, then why has Radio NZ not been accorded the same benefit?

There have been suggestions that Radio NZ’s frozen funding is a covert attack on the broadcaster and an attempt to reduce it’s effectiveness. What is your response to this assertion?

On 17 September 〈¹〉,Minister Adams replied to my questions;

“I have been pleased to see the steps RNZ is taking to ensure its success in the
changing media environment and the ways it has expanded to reach new audiences,
such as The Wireless, an online service for young people. Although operating
within a static funding environment, RNZ continues to meet it’s objectives and
has become an established multi-platform broadcaster with the annual funding of
$35 million it receives.

While I share your concern about the funding constraints RNZ has faced over
recent years, this is common across all public services. In a time of fiscal
constraint, it is especially important that the Government manages the public
finances in a prudent and responsible manner and makes sustainable choices about
the prioritisation of public funds. I welcome the approach RNZ has taken to
ensure the business is run as efficiently as possible and that public funds
are utilised as effectively as they can be to maximise the public value of content.”

Adams went on to state;

“While I recognise your concern about the funding constraints RNZ has faced over
recent years, this is common across all public services. In a time of fiscal
constraint, it is especially important that the Government manages the public
finances in a prudent and responsible manner and makes sustainable choices about
the prioritisation of public funds. I welcome the approach RNZ has taken to ensure
the businrss is run as efficiently as possible and that public funds are utilised
as effectively as they can be to maximise the public value of content.”

To put it mildly, her response was utterly unsatisfactory, and in no way offered any sensible answers. Her comments also did not appear to reflect realities surrounding Radio NZ and required clarification.

Awkward Questions and Questionable Answers

On the same day, I wrote back to the Minister, seeking new answers;

As I pointed out to you in my 6 September email,

It is my understanding that Radio New Zealand’s funding has not increased since 2009, when it’s budget was set at $31,816,000.

With it’s funding frozen, and no means of other revenue, it has effectively had a funding cut after inflation and salary increases are taken into account.

Can you explain why Radio NZ’s budget has not, at the very least,  been inflation-indexed?

Can you explain why Radio NZ’s budget has been frozen whilst at the same time, the Prime Ministers Department has had a budget increase since 2008 from $25,470,000 to $49,298,000 in 2015/16 – a near doubling in just seven years?

In your response to me, dated 17 September, you stated in-part;

“While I share your concern about the funding constraints RNZ has faced over
recent years, this is common across all public services. In a time of fiscal constraint, it is
especially important that the Government manages the public finances in a prudent and
responsible manner and makes sustainable choices about the prioritisation of public
funds. I welcome the approach RNZ has taken to ensure the business is run as
efficiently as possible and that public funds are utilised as effectively as they can be to
maximise the public value of content.”

This response does not address the questions and issues I raised in my email.

Namely; why has Radio NZ’s funding been frozen since 2009 – whilst funding for the Prime Minister’s Department has doubled  since 2008 from $25,470,000 to $49,298,000 in 2015/16.

 The next point I raised was;

Why has Radio NZ’s funding been frozen since 2009 – whilst funding for the Prime Minister’s Department has doubled  since 2008 from $25,470,000 to $49,298,000 in 2015/16.

You state that “In a time of fiscal constraint, it is especially important that the Government manages the public finances in a prudent and responsible manner and makes sustainable choices about the prioritisation of public funds” – yet this constraint does not seem to have been applied to the Prime Minister’s Department, with funding increases every year since 2008.

Can you shed light on  why Radio NZ’s funding has been frozen, but the Prime Minister’s Department has not?

And the last point I raised;

Secondly,  you write that “ it is especially important that the Government manages the public finances in a prudent and responsible manner and makes sustainable choices about the prioritisation of public funds“.

Can you explain the meaning of term, “sustainable choices” in the context of your letter? What, precisely, do you mean by “sustainable choices“?

Lastly, you refer to Radio NZ as a “business”. Considering that RNZ is non-commercial; has very little revenue; does not return a dividend; and has no profit-making capability – can you explain in what sense the broadcaster is a “business”?
This time, the Minister’s response was not so promptly forthcoming, and after sending a reminder on 1 October to her office, I was advised on 15 October;

The section of your email relating to the budget of the Department of Prime Minister and Cabinet has been transferred to the Department, as it is better able to respond to your query.

Minister Adams will respond to your questions regarding the funding of RNZ.

It was now apparent that I was asking awkward questions that could not be fobbed off with a three-paragraph letter written in bland political jargon-speak.

Having transferred part of my OIA to the Prime Minister’s Department, I suspected it would be a long wait for a response.

On 13 November, Minister Adams responded to my request for clarification to her statement on 17 September. She first said;

“With regards to the first matter you raise, no government agency’s budget is inflation
linked. Ministers make decisions on an annual basis about potential funding increases
based on the requirements of the agencies. As you will be aware, these decisions involve
prioritisation across the entire public sector to ensure that any additional funding is
focused on the areas of most need.”

The Minister’s claim that “no government agency’s budget is inflation linked”appears to be at variance with the fact that the Prime Minister’s Department’s budget has doubled since 2008. This is an area which she obviously has no answer to, hence “transferring” my query to the PM’s Department.

However, Adams’ assertion that “ministers make decisions on an annual basis about potential funding increases” is actually at the nub of this problem. It is precisely the fact that Radio NZ’s budget has been frozen by a decision at a  ministerial level, that Minister Adams herself admits.

In effect, by deciding that Radio NZ’s budget is not to be increased, it is a form of political interference in an otherwise independent agency’s affairs.

National has long since abandoned Muldoonist-style direct interference in state sector departments and agencies. The more subtle – but just as destructive technique – is to quietly starve a recalcitrant independent body of funding.

When Minister Adams insists that “Ministers make decisions on an annual basis about potential funding increases based on the requirements of the agencies“, she is being duplicitous.

No one could sensibly suggest that a nationwide broadcaster could operate on a long-term basis without an increase to it’s funding.

Executives warn Parliamentary Select Committee of dire financial situation for RadioNZ

Radio NZ’s growing financial problems was raised during the 2012/13 financial review of Radio New Zealand,  by the Parliamentary Commerce Committee. The Committee referred to the issue at the beginning of their Report;

“Crown funding for Radio New Zealand has not increased in six years; we asked how this had affected staff and services.”

Labour’s Kris Faafoi was direct when he asked RadioNZ’s, Deputy Chief Executive, Ken Law;

“…you’ve been under a pretty difficult financial situation for 5 or 6 years now. I notice in the questions that you gave back to us that you’ve managed to make some savings of around $2 million in the last year, but how much longer can you cut your cloth until there is no more cloth to cut?”

Law, responded;

“I would suggest that that funding will have to be externally generated. But we have been very successful. We’ve made a number of
savings, particularly in production systems. We have some excellent expert staff in audio production. They’ve made some major savings in audio production systems and procedures. We’ve taken out some of the resilience or some of the duplication in transmission networks. That’s been a very calculated risk, but one that we think we’ve been able to manage and we can manage into the future. But really your question—how much longer? Not much longer.”

That was review was held around 8 May 2014. Despite putting on a brave face to the Parliamentary Committee and voicing up-beat comments, Radio NZ’s executives are clearly concerned that they are fast running out of cost-saving options.

Also noteworthy is that, in an attempt to cut costs, managerial decisions have been implemented to cut “some of the resilience or some of the duplication in transmission networks“.

Law described  cut-backs to “resilience” as “a very calculated risk”. This can be taken as to mean that Radio NZ’s technical infrastructure has been undermined and compromised for cost-saving purposes.

“Sustainability” and job losses looming

Minister Adams’ also explained what she meant by the term, “sustainable choices” and  in what sense was the broadcaster  a “business”, considering it is non-commercial, and has no revenue-income to speak of;

“With regards to the term ‘sustainable choices’ as used in my previous
correspondence, I meant choices about fiscal policy that keep government debt at
prudent levels and manage fiscal risks. As mentioned above, when Ministers make
decisions about agency funding they have to prioritise initiatives from across the
state sector to achieve this.

[…]

Although RNZ is not a commercial business, the Crown expects commercial disciplines
to be applied to the use of public funds and for RNZ to act in a professional and
business-like manner.”

Minister Adams’ candour was startling. She was admitting that her use of the phrase “sustainable choices” referred not to Radio NZ – but to National’s own attempts to balance it’s Budget and post a surplus.

Like other areas of the State sector – health, education, housing, police, etc – National has been cutting budgets to meet Budgetary demands. Those demands were exacerbated by National’s tax cuts of 2009 and 2010. Using the Minister’s phraseology, those tax cuts were ultimately “unsustainable choices“.

A year and a half  after  Ken Law’s fateful words to the Commerce Committee, Radio NZ’s chief executive, Paul Thompson, announced that the broadcaster would be shedding jobs;

RNZ chief executive Paul Thompson confirmed staff had been sent memo outlining the proposed changes at the state-owned broadcaster on Tuesday.

Newsreaders and producers at Radio New Zealand are in the gun, with the national broadcaster planning to shed jobs in their push into digital.

RNZ chief executive Paul Thompson confirmed staff had been sent memo outlining the proposed changes at the state-owned broadcaster on Tuesday.

This included cutting the overall headcount at RNZ from 283 to 270 by July next year, with 20 jobs disestablished and seven new digital roles created.

“We are having to find some savings which is no surprise.”

National’s on-going refusal to adequately  fund Radio NZ  has  predictably been  “un-sustainable“.

The Prime Minister’s Office confirms doubling of their Budget

Having heard nothing since 15 October, when the Broadcasting Minister’s office transferred part of my OIA request to the Prime Minister’s Department, follow-up enquiries were made on 23 October as to what progress they were making;

“It is my understanding that Radio New Zealand’s funding has not increased since 2009,
when it’s budget was set at $31,816,000.

With it’s funding frozen, and no means of other revenue, it has effectively had a funding
cut after inflation and salary increases are taken into account.

Can you explain why Radio NZ’s budget has not, at the very least, been inflation-indexed?

Can you explain why Radio NZ’s budget has been frozen whilst at the same time, the Prime
Ministers Department has had a budget increase since 2008 from $25,470,000 to $49,298,000
in 2015/16 – a near doubling in just seven years?”

By 12 November, a month after Minister Adams’ office had transferred part of my OIA request to the Prime Minister, no reply had been forthcoming and I asked again whether I could expect a reply.

A little over twentyfour hours later, I received a two-page response from the Department of the Prime Minister and Cabinet. (The full text of the document is available for viewing here.)

In response to my questions;

“Why has Radio NZ’s funding been frozen since 2009 – whilst funding for the Prime Minister’s Department has doubled  since 2008 from $25,470,000 to $49,298,000 in 2015/16?”

“This [funding] constraint does not seem to have been applied to the Prime Minister’s Department, with funding increases every year since 2008. Can you shed light on  why Radio NZ’s funding has been frozen, but the Prime Minister’s Department has not?”

– the answers were “interesting” to say the least.

Anne Shaw, Director of the Office of the Chief Executive, confirmed that the budget for the DPMC had doubled  since 2008 from $25,470,000 to $49,298,000 in 2015/16.

She described the doubling of the Prime Minister’s Department as taking on “new responsibilities“;

“The Department of the Prime Minister and Cabinet (DPMC) serves the Executive (the
Governor-General, the Prime Minister and the Cabinet) through the provision of high
quality impartial advice and support services. DPMC is comprised of five business
units: Cabinet Office, Government House, Policy Advisory Group, Security & Intelligence
Group, and Ministry of Civil Defence & Emergency Management. The functions of DPMC
have changed significantly over the period of time covered by your request with taking
on new responsibilities. The changes in funding largely reflect this.”

Interestingly, Shaw refered to political management  and the Civil Defence  bureacracy as “business units”. Are those “business units” run with the  expectation of  commercial disciplines  to be applied to the use of public funds and to act in a professional and business-like manner” – as Minister Adams demanded of Radio NZ?

Shaw then provided alleged examples which appeared to justify the doubling of funding for the Prime Minister’s office.

However, Budget documents are not always clear as to what “additional fundings” were made from the Prime Ministers Department (DPMC), as purported by Shaw. In several instances, there was no apparent reference to any increase for a given purpose;

(1) “Additional funding” for the  “conservation of Government House in Wellington” between 2009/10 and 2010/11:

Vote Prime Minister and Cabinet 2009/10 Budget: $20.1 million

Vote Prime Minister and Cabinet 2010/11 Budget: $17.4 million

Vote Prime Minister and Cabinet 2011/12 Budget: $1.1 million

Vote Prime Minister and Cabinet 2012/13 Budget: $1 million

(2) “Payments made as a result of the September 2010 and February 2011 Canterbury Earthquakes, including support for response and recovery as a result  of the 22 February 2011 Canterbury Earthquake“. There were no payments found  for “support for response and recovery activities”  relating to the earthquakes within the 2010/11, 2011/12, or 2012/13 Budgets.

(3)  “Relocating the intelligence and security functions to a new purpose-built facility for the New Zealand intelligence community” 2010/11.  There were no payments found  for any such “relocation” within the DPMC Budget.

However, the Budget for Vote Communications Security and Intelligence increased massively during the 2010/11 period which Shaw claimed as justification for the DPMC’s budget increase:

Vote Communications Security and Intelligence 2008/09:  $49.368 million

Vote Communications Security and Intelligence 2009/10:  $59.142 million

Vote Communications Security and Intelligence 2010/11:  $73.926 million

Any increase for “relocating the intelligence and security functions to a new purpose-built facility for the New Zealand intelligence community” appears to have come from Vote Communications Security and Intelligence, not Vote Prime Minister’s Department.

(4) There is no reference to expenditure for “Cabnet”  or establishment of the National Cyber Policy Office within the 2012/13 Budget for Vote Prime Minister’s Department. If it exists, it was “buried” under one or another classication.

(5)  Shaw also referred to costs incurred for “depreciation funding for the refurbished Government House“. These entries do exist in each DPMC Budget.

“Funded depreciation” is described as “… a fixed asset management method that helps a company set aside funds to renew machinery and equipment that it uses in operating activities“.

It is highly unlikely that any government will be building a new Government House any time soon.

(6) Shaw gave another explanation to the ballooning Prime Minister’s Department’s budget; “In April 2014, the Ministry of Civil Defence & Emergency Management (MCDEM) became part of the DPMC. This meant an additional funding increase in 2013/14 with the transfer of civil defence and emergency management functions from Vote Internal Affairs and an additional 39 staff“.

Ms Shaw is correct, and the cost of transitioning – according the the 2013/14 Budget – $1.354 million.

Even with three related costings included, the sum reaches only $3.6 million. This hardly explains why the PM’s Department’s budget has doubled since 2008.

(7)  Ms Shaw’s final explanation for the budgetary increases for the DPMC was perhaps the most galling, citing “an increase in 2015/16 reflecting the expected costs of supporting the process to consider changing the New Zealand Flag“.

However, Shaw’s explanation is not convincing. The 2015/16 Budget reveals a figure of $4.4 million for the DPMC’s “Supporting Flag Consideration Process” – not the full estimated costing of $26 million.

Even so, considering that Ministers have consistantly fetishsised  the “need for fiscal restraint”, it is hard to see that funding the flag referendum is a necessity that excuses the need for on-going “fiscal restraint”.

Especially when agencies such as Radio NZ have not had funding increases for seven years.

It appears that money can be readily found when John Key needs it.

Solutions?

On 17 September, broadcasting spokespeople for Labour, the Greens, and NZ First were approached for comment on Radio NZ’s funding.

The Greens and NZ First did not provide any response.

Labour’s Clare Curran responded and said;

In October I released a private member’s bill to put to an end Radio New Zealand’s punishing
six­year funding freeze that matches funding to inflation and population growth and assists
the broadcaster’s transition to a multimedia public service network

The Radio NZ (Catch­Up Funding) Amendment Bill, which has been placed in the private
member’s bill ballot, provides for an 11 per cent increase based on total inflation and an
overall population increase of 6.7 per cent from June 2009 to June 2015.

Current NZ on Air funding for Radio New Zealand for the 2015/16 year is $31,816,000. The
one­off ‘catch up’ for the 2015/16 year would be an increase of around $6.5 million.

The Bill provides for the catch­up funding to be sustained and for inflation and population
adjustments to occur annually. It is the first step in a broad strategy by Labour to improve the
quantity and quality of New Zealand voices in broadcasting.

Public service broadcasting is gradually being eroded in New Zealand. Despite the population
of New Zealand growing ever larger and more diverse, the range of voices in broadcasting is
narrowing.

This bill is a stake in the ground on the importance of public interest media.

Ms Curran also replied to several specific questions I put to her,  if Labour was to be part of the next government, post­-2017;

Frank Macskasy: Will you make an immediate capital-injection into Radio NZ, to take into account inflation since 2008?

Clare Curran: Labour’s broadcasting policy for 2017 is yet to be announced. However I draw your attention
to the private member’s bill in my name which provides for an immediate funding increase
for RNZ based on inflation since 2008 and population increase.

FM: Will you inflation-index any subsequent funding for Radio NZ?

CC: Bearing in mind we haven’t announced formal policy I think you take that as a yes.

FM: What strategy do you have, if any, to entrench regular funding increases for Radio NZ to take such funding  decisions away from ministers and eliminate/reduce potential covert political interference by chronic under-funding?

CC:  This is an excellent question and one that Labour takes very seriously. We are undertaking
community engagement as we speak about these very matters. As Broadcasting
spokesperson, and as a former journalist, I believe editorial independence from ministerial
interference is a fundamental tenet of democracy. Recent events inside Maori TV have raised
serious questions about the ability of a Minister to influence programming decisions which he
doesn’t like. Political party That’s deeply concerning no matter which political party is
involved.

I don’t believe our publicly ­funded media is arms­-length enough from government. What’s
happening in Australia with the ABC and even in the UK with the BBC is testament to that.

In order for true democracy to flourish, commercial –free public interest media is an essential
pillar. Just as we have established and entrenched the watchdogs of government in the
Ombudsman, Auditor General, Human Rights Commission, Privacy Commissioner etc.. so
must we ensure that our public media entities are given a public mandate to operate
independently from state influence, overtly or surreptitiously. As you rightly point out,
removing funding decisions from ministers may be an important mechanism to do that.

However, I make the point that it must be a political policy decision to move in that direction.
I signal that Labour will move in that direction.

FM: Would an independent decision-making body, such as the Remuneration Authority which rules over MP’s salaries, be a practical solution to this problem?

CC: This is a matter for further discussion which I welcome and will participate in, in any forum.

Clare Curran’s response was appreciated.

It also gives hope that a future progressive government will not only restore Radio NZ’s funding – but will implement a policy that will entrench and safeguard this taonga from covert under-mining by unsympathetic governments.

The job of media is not to serve up infantilised ‘pap’ for an increasingly disconnected audience. The job of media is to hold truth to power, full-stop.

A democracy simply cannot function without a flourishing, well-resourced, critical media.

Governments without a watchful media is authority without brakes. It is political power without independent over-sight. It is dangerous.

At a time when print media is “down-sizing” (ie, sacking) skilled, experienced staff, and electronic media serves up a daily evening diet of superficial “current affairs” and even more vacuous “news”; gormless formulaic “reality shows”; and a never-ending stream of stomach-churning crime “drama” – Radio NZ is the last bastion of serious, professional media.

It is the last institution left standing. It is holding the line.

But only barely.

Note1 – Minister Adams responded to my OIA in one and a half weeks. This is an outstanding achievement for any National Minister’s office. Most National Ministers take weeks, if not months, to respond.

NZ Treasury: Budget 2015 – Vote Prime Minister and Cabinet

Additional References

NZ on Air: The Board

NZ on Air Annual Report: 2008

NZ on Air Annual Report: 2009

NZ on Air Annual Report: 2010

NZ on Air Annual Report: 2012

NZ on Air Annual Report: 2013

NZ on Air Annual Report: 2014

NZ on Air Annual Report: 2015

Additional

The Daily Blog: CBB supports Private Members Bill to increase funding to Radio NZ

Labour: Labour bill to stop stealth cuts to Radio NZ

The Standard:  David Cunliffe on the state of the media in New Zealand

Parliament: Radio New Zealand (Catch-up Funding) Amendment Bill

Previous related blogposts

TVNZ7, Radio New Zealand, and distracting trinkets.

State Media Bans Dissident!

Karl Du Fresne has a public baby waa-waa cry-session

Karl Du Fresne has a public baby waa-waa cry-session – part rua

Talkback Radio, Public Radio, and related matters

NZ media; the Good, the Bad, and the Very, Very, Ugly

Campbell Live, No More

The Donghua Liu Affair: One Year On

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charlie hebdo

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This blogpost was first published on The Daily Blog on 21 November 2015.

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= fs =

As clear as mud

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= That Was Then =

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Enter “John Key transparency” as  parameters in a Search Engine field, and you get about 820,000 results from ‘Google’ and 2,360 from ‘Bing’. (Does the latter seems to know something we don’t?)

Transparency was one of Key’s major “buzz words” for his election campaign in 2008 and last year. He mentions it often, as in a speech he gave Local Government NZ on 26 July 2010, where the word was used six times,

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"It’s worth noting here also that the world has changed in terms of the appetite for transparency around the way we spend money...
... Of course, transparency is as important as ever in election year – be it local body elections or central government elections."

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Indeed, Dear Leader, indeed. Transparency is very important.

We’re glad you’re so supportive of transparency in government. Now, let’s check ‘your score-card’…

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= This is Now =

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Regrettably,  National appears to have abandoned all notions of transparency, and has closed down several issues from public scrutiny.

Two issues, in particular have all but been shut down by National. A veil of secrecy has been draped over the Judith Collins/ACC scandal  and National’s negotiations with Skycity to amend legislation so that the casino can expand by increasing it’s pokie machines by an estimated 350 to 500.

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Full Story

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As Economic Development Minister David Carter revealed, on 20 January, National was in negotiation with SkyCity to extend  its licence beyond its current 2021 expiry, and  to increase the number of gaming tables and pokie machines at SkyCity’s Auckland casino.

The deal would go like this; in return for building a $350 million convention centre, National would relax or amend bits of legislation that would allow Skycity to expand it’s gambling operations. Some estimate an extra 350 to 500 pokie machines would be added to the casino.

Skycity chief executive, Nigel Morrison, was quite clear that without government concessions  to their gaming license, the proposed convention centre would be only a “breakeven proposition for Skycity”.

Marcus Curley, equity analyst for Goldman Sachs was somewhat more candid when he told Interest.co.nz,

More recently, media reports (NZ Herald, February 2, 2012) have pointed to a potential increase in machine numbers at Auckland Casino between 350 and 500. Any proposed changes to gambling legislation would be subject to a full public submission process under the usual select committee process. We believe the incremental revenue from additional machines and tables will be critical in achieving an acceptable financial return on the convention centre project. “

Meanwhile, community groups, anti-gambling organisations, Opposition Parties, and even conservative-moral organisations such as Family First have condemned any suggestion for Skycity to expand it’s gambling operations. The results would be obvious except to (a) the most naive (b) the most blind, that more gambling tables and pokie machines would lead to more problem gambling.

(By coincidence, the small minority  who support Skycity’s plans are National MPs and some vociferous right wing/free market extremists/nutcases. As I said, naive and blind.)

Quite rightly, on 12 June 2011, John Key stated categorically,

Any changes to gambling regulations will be subject to a full public submission process. ” – Source

Unfortunately, as we all know by know, what John Key says – and what he eventually ends up doing – are not always the same thing.

All negotiations between National and Skycity are now being conducted in strictest secrecy. Neither John Key nor Economic Development Minister Steven Joyce are publicly disclosing what concessions National is prepared to make to Skycity.

Outgoing Internal Affairs Minister, Amy Adams, has refused to release any information or reports on government negotiations, citing “commercial sensitivity”. This is a common feature of the gambling industry, as Statistics NZ  reports,

The social and economic costs and benefits of gaming are difficult to measure as official statistical information on the industry is limited. Detailed financial information is often hard to access for reasons of commercial sensitivity…” – Source

In December 1997, as public opposition to casinos grew, a moratorium was passed on new casinos opening in New Zealand.

End of story: no more casinos.  (Oh, yeah, right… )

What Skycity is intending – with National’s secret complicity – is to by-pass that moratorium by expanding their existing  casino. No new casino – just 500 more tables and pokie machines. Because gambling is now a multi-billion dollar industry, as this data from Statics NZ sadly shows,

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Source

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This is grossly dishonest. It shows that National is willing to assist a corporation to circumvent the law and public opinion. And John Key is more than willing to allow all this to happen in secrecy, without public scrutiny.

The most absurd aspect of National’s refusal to disclose to the public what is taking place, is their constant buck-passing and referral to “commercial sensitivity”.

What “commercial sensitivity”? Skycity is the only casino in Auckland. It has very little competition as there are no other casinos competing for their clientele.

So why is it “sensitive” for National to disclose it’s negotiations with Skycity?

How can  “any changes to gambling regulations be subject to a full public submission process” if we, the public, don’t know what’s going on?

Why this paranoid need for such secrecy?

What is John Key and National hiding?

In an almost prophetic article written by Gordon Campbell in November 2008, he said,

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The Key government has made it clear that public –private partnerships (PPPs) will be a major part of the country’s planning over the next decade. These projects entail a major commitment of taxpayer funds and public liabilities.

Before we begin down that track, what kind of commitments will the new government provide that ‘commercial sensitivity” will NOT be invoked to conceal from the public the details of these contracts ? Upfront, there needs to be a commitment to utter transparency in the structure and ongoing outcomes of PPP contracts – and the firms bidding for the work need to be told beforehand that their acceptance of such transparency will be a condition of them getting the work. In Canada and in Australia, it has proved extremely difficult for the public to find out just how PPP contracts involving hundreds of millions of dollars of their money are structured, and how the patterns of risk and profit will actually play out, over time.

Why, without a commitment to forego commercial sensitivity on PPPs, we may never know how well or badly the Key government is performing in one of its pet areas. Key has promised “outcomes, results and accountability” from the new Cabinet that is being sworn in today. The media is currently celebrating that kind of talk – without bothering its pretty little head unduly about how, and whether, they will be able to measure the walk. ” – Source

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Full Story

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In a move reminiscent of John Key’s use of the Police as National’s private para-military security force, in the Teapot Tape fiasco, ACC Minister Judith Collins  has laid a complaint with the Privacy Commissioner. She has also, allegedly, issued a defamation lawsuit against Labour MPs Trevor Mallard, Andrew Little, and Radio NZ. It is unclear, at this stage if she has actually carried out her threat of legal action.

It is this blogger’s belief that Collins has little interest in any actual investigation by the Privacy Commissioner, nor lawsuit against the two MPs and Radio NZ.

What we are witnessing is a cunning plan by the Minister. It is a plan so cunning that… she has all but succeeded in closing down one aspect of the ACC/Pullar/Collins/Smith/Boag/Slater/??? scandal.  She has successfully extricated herself from the issue by claiming some sort of “sub judice” principle,

Order Paper and questions

Questions for oral answer

3. Accident Compensation Corporation—Release of Personal Information

[Advance Copy – Subject to minor change before inclusion in Bound Volume.]

3. ANDREW LITTLE (Labour) to the Minister for ACC: When was the email she received between 12 March 2012 and 18 March 2012 from Michelle Boag concerning Bronwyn Pullar and the involvement of both in a meeting over a mass privacy breach first printed by her or a staff member in her office?

Hon JUDITH COLLINS (Minister for ACC) : Since this matter is before the Privacy Commissioner, it is not in the public interest for me to answer that.

Andrew Little: Does she stand by her statement in an interview on Radio Live this morning, commencing at 8.22 a.m., that “I know exactly what has happened in terms of my office and myself.”?

Hon JUDITH COLLINS: I stand by all my statements.

Andrew Little: In whose custody and control was the copy or copies of the email that was made in her office placed?

Hon JUDITH COLLINS: That matter is before the Privacy Commissioner, and it is not in the public interest for me to answer that.

Mr SPEAKER: Order! I want to hear Andrew Little’s question.

Andrew Little: What instructions did she give to any staff in her office, or any ACC staff member, in relation to the Michelle Boag email or any copy of it?

Hon JUDITH COLLINS: Since that matter is before the Privacy Commissioner, it is not in the public interest for me to answer that. ” – Source

Collins has been repeating, by rote, “that matter is before the Privacy Commissioner, it is not in the public interest for me to answer that“.

It means every time the media, an Opposition MP,  or anyone else asks Collins to respond to an embarressing question regarding her involvement in the ACC/Pullar/[Collins]/Smith/Boag/Slater/??? scandal – she has a convenient excuse to avoid answering.

In which case, one can only wonder what it is that Collins does not wish to  comment on?

Ignoring an inconvenient question by responding with “No Comment” used to be the stock response of politicians caught in the public spotlight and media glare. It often signified that they were keeping their mouth firmly shut to avoid further implicating themselves in whatever scandal was the order of the day.

But “no comment” became synonymous with “I’m guilty as sin”.

Hence why the spin doctors, media advisors, political strategists, and other sundry Party apparatchiks now have a new means to protect their wage-paying  Parliamentary masters: sub judice.

The process is  ridiculously simple;

  1. Lay a complaint with Police/Courts/Commissioners – or alternatively initiate  an Inquiry
  2. Deflect any questions thereafter by saying “That matter is before the – – – – “
  3. Then shut up.

Easy-peasy.

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So much for Key’s committment to “tranparency”. His government is as transparent as a muddy river.

When a government resorts to this sort of subterfuge, it’s fairly obvious that transparency has given way to furtiveness and secrecy. It indicates a government that is badly on the back-foot; vulnerable to criticism; and in a defensive mode.

It took Labour three terms to achieve such a state of hyper-sensitivity to criticism.

National has achieved it after only one term. Not exactly a position of strength and confidence in which to begin their second term.

It is the first subtle indication of a government on it’s way out.  God knows how they will end this term, if this is how they are starting out.

Not very well, I suspect. In fact, prepare for an early election or change of government.

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Previous Blogposts

Drugs & Gambling – NZ’s 21st Century Growth Industries?

John Key has another un-named source???

Other Blog’s posts

Citizen A online NOW – ACC fratricide, Ports of Auckland legal failure and convention center bribes

Fearfactsexposed: Government’s control of media sends a shiver down democracy’s spine

Additional

Listen to more on Radio NZ’s  Morning Report

Gordon Campbell: 90s Cabinet Gets Key Coat of Varnish

Statistics NZ: Gaming: an economically significant industry

Casinos safer than pubs, Key says

SkyCity would need at least 350 extra gambling machines for NZ$350 mln convention centre investment to be worth it, Goldman Sachs analyst says

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