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Posts Tagged ‘australia’

Letter to the editor – Time to milk a tragedy again, by our Dear Leader

17 December 2014 4 comments

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Frank Macskasy - letters to the editor - Frankly Speaking

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Dominion Post <letters@dompost.co.nz>
date: Tue, Dec 16, 2014
subject: Letter to the editor

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The Editor
Dominion Post

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Once again, predictably, our esteemed Prime Minister has exploited a tragic situation for his own political ends.

I refer to his comments on Radio NZ, on 16 December, where he referred to the lone gunman in Sydney as the product of an “ISIS outreach programme”.

There is no evidence whatsoever of any ISIS or any other organisational involvement. Thus far, the gunman appears to have been a narcissistic, deranged individual facing criminal sex-related charges in Australia.

Then Key justified the increase of SIS/GCSB surveillance powers by referencing this lone gunman.

Though good gun-control laws help, no amount of legislation will ever fully curb determined, lone nutters, as David Gray in Aramoana in 1990 showed. Or Martin Bryant in Port Arthur in 1996.

If this is his justification for turning our country into a Police surveillance state, then we have been grievously misled.Shame on Key for exploiting this tragedy and mis-stating the facts for political opportunity.

I would have thought he had learnt his lesson from his Pike River Mine involvement and broken promises.

-Frank Macskasy

 

[address & phone number supplied]

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References

Radio NZ:  A tragedy for the Australian families – Key


 

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No more anarchy

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Radio NZ: Focus on Politics for 14 February 2014

16 February 2014 3 comments

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– Focus on Politics –

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– Friday 14 February 2014  –

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– Chris Bramwell –

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A weekly analysis of significant political issues.

Friday after 6:30pm and Saturday at 5:10pm

Legislation to introduce plain packaging of tobacco products passed its first reading in Parliament this week with almost unanimous support.

Listen to John Banks’ prioritising the right of Big Tobacco company’s “intellectual property rights” over the health and wellbeing of New Zealanders.

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Radio NZ logo - Focus on Politics

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Click to listen: Focus on Politics for 14 February 2014 ( 16′ 07″ )

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Acknowledgement: Radio NZ

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A taste of racism…

9 January 2014 6 comments

This item was Stuff (the Fairfax news media) caught my attention,

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'Racist' label angers Kiwis in AustraliaSource

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Having lived briefly in Australia, I can vouch for the racist attitude that many Australians have toward migrants. New Zealanders are no exception, and also suffer the wrath of prejudice from some of our Aussie cuzzies.

Which is ironic, as we ourselves have a long way to go, to examine our own racist attitudes and how desperately we (or some of us) cling to prejudice to preserve our place in society’s hierarchy.

Nisbet’s cartoons, published mid last year (2013) are a case in point;

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290513 The Marlborough Express Al Nisbet cartoon

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Al Nisbet's racist cartoon (2)

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Those who did not see Nisbet’s cartoons as racist and offensive could be placed in two broad (sometimes over-lapping?) groups; those who are ordinary racists and who saw the cartoons as a validation of their views; and the Uninformed who – whilst not consciously racist – probably didn’t recognise the nature of the images and the messages they were conveying. They simply had no political consciousness that could *switch on* a light-bulb in their minds and instantly recognise what Nibet’s cartoons represented.

And really, any one of us can fall into that particular trap on occassion. An image that might seem innocuous to one person might be utterly reprehensible to another.

The difference between the racist and the uninformed is that the latter can learn and when understanding comes, the *lightswitch* comes on.

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For a cartoonist to be truly subversive, their art should express  critical attention on society’s unpleasant prejudices; irrational contradictions; and those who exploit  traditions to maintain positions of power. These are the things that demand to be challenged.

Nisbet’s cartoons did not challenged popular prejudices – they reinforced and gave credence to them. It gave “comfort to the enemy” – the enemy being ignorance and bigotry. It reinforced rather than scrutinised or challenged.

The cartoonist below, on the other hand, challenged the knee-jerk mindlessness of parroted bigotry,

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racism-cartoon-go-home

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The unknown (American?) creator of the above cartoon subverted the “logic” of the racist, showing it to be what is truly is; untenable when taken to it’s ultimate, ludicrous conclusion.

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Returning to the Stuff article above, it’s not often that white New Zealanders get a taste of what racism feels like. Experiencing it at the hands of others suddenly widens our perception as we find ourselves walking in someone elses’ shoes.

This blogpost was first published on The Daily Blog on 2 January 2014.

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References

Fairfax media: ‘Racist’ label angers Kiwis in Australia

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A letter to our Aussie cuzzies…

8 September 2013 14 comments

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old-paper-with-quill-pen-vector_34-14879

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A condolence letter sent to our Aussie cuzzies…

 

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from:     Frank Macskasy
to:     Sydney Morning Herald <letters@smh.com.au>
date:     Sun, Sep 8, 2013 at 4:13 PM
subject:     Letters to the Editor

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The Editor
SYDNEY MORNING HERALD
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Sir/Madam,
Now that Australian voters have made their decision at the ballot box, they can look forward to a change in government.  They can also look forward to tax cuts promised by incoming PM, Tony Abbott.
But what else do Australians have to look forward to?
Well, if his government is anything like the National government we’ve had since 2008, Australians can also look forward to cuts in Federal government spending; massive redundancies in the state sector; a rise in unemployment;  cuts to social and other government services; union-busting and fall in wages;  and a resulting recession as a drop in spending flows through your economy as a whole.
Here in New Zealand, that is precisely what has happened, with cuts to everything from early childhood education to border bio-security control (with resultant influx of foreign pests).

As for tax cuts – beware of sneaky governments. They tend to raise charges, sales taxes, fringe taxes, and other government fees to make up for the revenue shortfall.

So welcome to our world of fiscal austerity; entrenched high unemployment; and lower and lower wages.

You seem to have caught our ‘bug’ – the “New Zealand Disease”.
I wish you luck. You’ll be needing it.

 

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-Frank Macskasy

(Address & phone number supplied)

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

23 March 2013 15 comments

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closing the wage gap with Australia as promised by John Key

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1. Backgrounder

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

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

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

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

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

Acknowledgement: National Party – “Environment Policy Launch

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

Acknowledgement: Government statement

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

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

Which sounded all well and good…

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

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2. Present Day

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As this blogger wrote last year;

On 9 October (2012), Labour Minister Kate Wilkinson announced that National intended to introduce a new Youth Rate, to take effect in April (2013). The rate would be set at $10.80 an hour – compared to the minimum rate of $13.50 [soon to be $13.75]  an hour currently, and would include 16 to 19 year olds.

As Scoop.co.nz reported,

That equates to $10.80 an hour, or $432 before tax for a 40-hour week. From April next year, the ‘Starting Out Wage’ will apply to 16- and 17-year-olds in the first six months of a job, to 18- and 19-year-olds entering the workforce after spending more than six months on a benefit, or 16 to 19-year-olds in a recognised industry training course.”

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

It is doubtful if National’s Youth Rates will actually create new jobs. More likely, a drop in youth wages will simply create more ‘churn’ in employment/unemployment numbers.

As David Lowe, Employment Services Manager for the Employers and Manufacturers Association, inadvertently revealed,

Without an incentive an employer with a choice between an experienced worker and an inexperienced worker will choose experience every time.”

Acknowledgement:  Scoop – Starting-out wage will help young people onto job ladder

So there’s no new job for the  younger worker – s/he is merely displacing an older worker. Which probably results in  older workers joining the migration to Australia.

End result; a loss of skill and experience for New Zealand, and a gain for our Aussie cuzzies.

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

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

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

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

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

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

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

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

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

[…]

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

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

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

So how did that work out?

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

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Unemployment Rate - july 2010 - march 2013

Acknowledgement: Trading Economics/Statistics NZ

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

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

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

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

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

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

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

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

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

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

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

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

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Unemployment persons - july 2010 - march 2013

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Acknowledgement: Trading Economics/Statistics NZ

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

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

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

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

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

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

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

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

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

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

GUYON But is it a good thing?

BILL Well, it is a good thing if we can attract the capital, and the fact is Australians- Australian companies should be looking at bringing activities to New Zealand because we are so much more competitive than most of the Australian economy.

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

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

GUYON But you said it was an advantage, Minister.

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

Acknowledgement:  TVNZ Q+A – Interview with Bill English

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

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

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

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

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

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Previous related blogposts

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

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

References

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

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

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

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

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Bolivia, New Zealand, and Tony Kokshoorn

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As the economy continues to stagnatebusiness confidence plummets, unemployment remains stubbornly high, and other negative social and economic indicators feature in our daily media reporting,  National’s desperation for any means for economic growth becomes more apparent.

The national cycleway fizzled out; the Christchurch re-build moves at a snail’s pace; and the Sky City convention centre has become a liability as the public is (rightly) concerned about increasing problem gambling.

National continues to look at easy, quick-fix solutions. And nothing is easier as a quick-fix than digging a hole and extracting precious stuff. You can’t get easier than that.

Facing staunch public opposition, on  20 July 2010, National announced that it was backing away from mining in Conservation land. In an attempt to allay mounting public anger, Energy Minister Gerry Brownlee stated categorically,

At the time the discussion document was released, I made it clear that it was a discussion. There were no preconceived positions from the Government. We have no intention of mining national parks.”

See:  Govt confirms no mining Schedule 4, national parks

But it seems that the Nats cannot help themselves.  Like a kleptomaniac drawn to shiny things, National disclosed on 25 June,

The Government has confirmed plans to survey for minerals in world heritage sites on the West Coast.

Aeromagnetic surveying will be conducted in the South Island from Haast to Karamea, including large chunks of Te Wahipounamu South West New Zealand world heritage area.

The surveying follows a similar project in Northland last year, when more than 13,590 square kilometres of the region were surveyed from February to August. That was followed by an announcement from Energy and Resources Minister Phil Heatley this month, of a competitive tender process for exploration permits for metallic minerals in the region. “

See:  Mineral hunt in heritage areas

They said were  “just looking“.

On the following day – probably sensing rising public unease – Dear Leader John Key rushed to reassure the public,

I can give you an assurance we won’t be mining on world heritage sites.   What we are doing is gathering information for a variety of other reasons.”

See:   Key: No mining in world heritage areas

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One wonders what Key’s “ variety of other reasons  ” are?!

As one media report states,

The Conservation Department says it is one the great natural areas of the world, with “landscapes of untouched beauty”.

The West Coast surveys will not include areas protected under Schedule 4 of the Crown Minerals Act. However, the schedule does not prevent mining in world heritage areas such as Te Wahipounamu.

Economic Development Ministry spokeswoman Tracy Dillimore said yesterday that Te Wahipounamu would be surveyed to provide a good understanding of the geology and mineral potential of the wider area.

“New Zealand is potentially highly prospective for a wide range of minerals. The Government would like to see New Zealand maximise the benefits of safe and environmentally responsible development by reputable operators”.  “

See:  Mineral hunt in heritage areas

On 11 July, in response to a Herald-Digipoll, Grey District mayor, Tony Kokshoorn was invited to comment on the issue of mining on the West Coast, on Radio New Zealand’s  ‘Afternoon With Jim Mora’s‘ show.

To say that Kokshoorn was enthusiastic about mining – including open cast mining – would be the understatement of the year,

” … Look the benchmark has always been talked about in the last two years was when Gerry Brownlee said they were going to actually mine on Schedule 4  [DoC] land. What happened was you had a big protest  that was just alluded to a minute ago, down Queen Street and they said 50,000 went down there and that was taken as the benchmark and people were against mining on Conservation land.

But the benchmark is totally wrong. I mean, it’s a well known fact it was nothing like 50,000 people. It was more like only 25,000 or 30,000 people that marched in the first place, so it’s all out of kilter. The bottom line here is that  West Coasters  and a lot of people in New Zealand, they do want mining. They want to actually get  the wealth that’s in the ground, out, so we can have  good health, education, and policing. 

Why would we send our workers to Australia and the rest of the world, to earn big wages and earn those countries valuable overseas exchange when we can have it, and we can have wealth ourselves?

Jim Mora asked,

Even if it’s open-cast, a lot of it?

Mayor Kokshoorn replied,

Yes, of course. Look, it’s a pin-prick  on the surface. The West Coast runs from Karamea to Haast, which is the equivalent of Wellington through to Auckland.  It’s a huge, huge, area. We’re not going to ruin the crown jewel that we have, and which is our rain forest. We’re gonna make sure they stay intact.

There’s a big tourist industry round that and you got to go back to the fact that the Resource Management Act 1991 was put in place for that exact reason, and was to get a win/win so we can actually manage our environment and at the same time get economic development for our region. So for anyone to think that somehow we’re going to ruin it; we’re going to get the chainsaws out again; or we’re going to get the bulldozers out, that is just absolute rubbish.

Those days went many, many years ago. “

Source: Radio NZ   The Panel with David Slack and Ali Jones (Part 2)

Tony Kokshoorn sez “we’re not going to gret the bulldozers out again”. In which case,  pray tell, Mr Mayor, how do you propose to dig an open-cast mine? With f*****g teaspoons???

And how can he say that “those days went many, many years ago” – of chainsaws and bulldozers – when that is precisely how open cast mines are dug out of ground or mountains. Let us be absolutely candid and straight up; open cast mines are excavated with bulldozers and other massive earth-moving equipment.

The waste material – millions of tonnes of rock – has to be dumped somewhere.  Much of those tailings contain toxic heavy metals and other elements,

Mining can cause serious long-lasting water pollution through acid mine drainage. Copper, lead, zinc, cadmium and arsenic can leach out when water contacts the exposed rock in mine workings or tailings. This pollution is very serious and can be a problem that remains long after a mine is abandoned.

On Mt Te Aroha, poisonous waste –  from just 90,000 cubic meters of tailings of the Tui mine, (which was abandoned in 1970 when the mining company went bankrupt) , is costing taxpayers over $17.5 million to attempt to fix. The Martha Mine will have over 40 million cubic meters of toxic tailings.  Which means the Tui Mine tailings are just 0.225% of  the volume of the Martha mine tailings !

See:  How would outstanding  areas  be degraded by gold mining?

To remind folk what an open-cast mine looks like, this is the Newmont mine in Waihi,

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Perhaps the most dubious claims made by the likes of Tony Kokshoorn, Steven Joyce, et al,  is that mining will create new jobs and increase our wealth.

As recently as 5 July, Key stated,

New Zealanders, mostly, understand that while we owe it to future generations to do everything we can to protect our environment, we must also do all we can to leave them with a robust and sustainable economy where they can expect a good job and a good standard of living.

We have always believed that New Zealand’s mineral wealth can play a large part in the economy, and we have also always believed this can be done with a minimal impact on our environment”. “

See: Poll backing for more mineral searches cheers Key

They almost always point to Australia as an example.

However, Australia’s wealth is predicated on several other factors as well,

  • A$1.3 trillion-dollar compulsory savings fund
  • Stable political system and economy
  • Strong trade union movement that ensures regular wage increases and protection of conditions
  • The service sector of the economy, including tourism, education, and financial services, accounts for about 70% of GDP. Source

Far from rolling in cash, Australia has a balance of payments that is more than 7% of GDP negative, and has had persistently large current account deficits for more than 50 years. Source

As well,

”  One single factor that undermines balance of payments is Australia’s narrow export base. Dependent upon commodities, the Australian government has endeavoured to redevelop the Australian manufacturing sector. “

See:  Balance of payments of Australia

So it appears that the mining industry is not quite the ‘gold mine‘ that many believe for Australia.

More to the point, in de-constructing the illusion that mining is some kind of economic ‘panacea‘,  is the example set by Bolivia. A cursory comparison of fiscal indicators between Bolivia and New Zealand yields some interesting facts,

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Bolivia

New Zealand

Population

10,629,000 [2]

4,416,000 [1]

Gross domestic product (2011)

US$24.604 billion [2]

US$161.851 billion [1]

Gross domestic product per capita (2011)

US$2,314.826 [2]

US$36,648.204 [1]

GDP Purchasing Power Parity (PPP) Total (2011)

$50.904 billion [2]

$122.193 billion [1]

GDP Purchasing Power Parity (PPP) per capita (2011)

$4,789.212 [2]

$27,668.367 [1]

Gini coefficient [3]

58.2 (high, 2009) [3]

36.2 (medium, 1997) [3]

Unemployment

5.5% (est.) [4]

6.5% (est.) [5]

Growth

5.1% (2011 est.) [4]

2% (2011 est.) [5]

Inflation

6.5% (2011 est.) [4]

4.5% (2011 est.) [5]

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Sources

[1] Source IMF

[2] Source IMF

[3] Source Wikipedia – The Gini coefficient measures the inequality among values of a frequency distribution (for example levels of income). A Gini coefficient of zero expresses perfect equality where all values are the same (for example, where everyone has an exactly equal income). A Gini coefficient of 100 expresses maximal inequality among values (for example where only one person has all the income) .

[4]CIA Factbook

[5] CIA Factbook

Bolivia’s economy is heavily dependent on oil, gas, and mining,

Bolivia’s estimated 2011 gross domestic product (GDP) totaled $23.3 billion. Economic growth was estimated at about 5.1%, and inflation was estimated at about 6.9%. The increase in GDP primarily reflected contributions from oil and gas production (7.9%); electricity, water, and gas distribution (7.6%); construction (7.2%); transport and communications (6.0%); and financial services (5.5%). Exports rose by more than 30% between 2010 and 2011 to $9.1 billion, due mostly to increased commodity prices, not increased volume.

In 2011, Bolivia’s top export products were: hydrocarbons (45% of total exports), minerals (27%), manufactured goods (24%), and agricultural products (4%).

See: Wikipedia Bolivia Economy

Quite simply, Bolivia’s reliance on mining and hydrocarbons does not seem to have yielded the wealth that people like Key, Joyce, Kokshoorn, and others, are telling us should be our reward for digging bloody big holes in the ground.

Whilst the Bolivian GDP grew two and a half times that of New Zealand, the income appears not to  have “trickled down” to ordinary Bolivian workers.

In fact, as the chart above shows, GDP per capita and GDP Purchasing Power Parity per capita is greater for New Zealanders by several orders of magnitude, than it is for Bolivians.

Further GDP per Capita rankings can be found here:  List of countries by GDP (nominal) per capita. Despite Bolivia’s higher  GDP growth, New Zealanders’ per capita incomes are far higher. Our standard of living is greater.

Accepted wisdom tells us  that our more diverse economy is more productive, and a  subsequently greater wealth-producer. Opportunities for higher wages (than Bolivia) abound throughout our economy that includes food processing, wood and paper products, textiles, machinery, transportation equipment, banking and insurance, tourism, as well as mining and hydro-carbon extraction.

As David Slack said on the same panel, hosted by Jim Mora, when he addressed the NZ Herald-Digipoll ‘support’ for mining,

I’m  kinda dismayed that there’s still this Lotto mentality that wants to just find a way to just happen upon our wealth rather than developing  our economy so  that we’ve got more high value business so that we’ve got perpetual wealth from that…  [host interuption]

… Yeah, well you’ll have it once then it’s gone, and you’ll only be getting the royalties off it, not the whole damn thing.

If mining was such a quick-fix wealth creator, then Bolivia should be light-years ahead of us. It clearly is not, and this blogger believes that our higher per capita income can be attributed to the  diversification  and sustainability of our economy.

It should also be remembered that, as David Slack  pointed out, New Zealand does not earn $100 million from the extraction of Mineral X. We benefit from only the royalties (currently set at  1 or  5 %), some taxes, and a few thousand jobs.

See: Taxation and Royalties for Mining Companies

This Fairfax article is  illuminating,

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Full story

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Compare,

” Crown royalties from the mining industry returned just $6.5 million last year… “

With,

” Mining was a $2b a year industry, with $1.1b in exports… “

Obviously, New Zealand makes bugger-all from mining royalties.

And if the mining companies are owned by offshore interests (eg; New Zealand’s two biggest gold mining companies; Newmont, which owns the open pit Martha Hill and underground Favona mines at Waihi, is US-based; and Australian-based OceanaGold), then profits made are remitted overseas, worsening our balance of payments. Only company tax (which can be minimised) and employment of local people provide any measurable benefits to our economy – and even those are minimal.

Where the mining activities result in a tax loss, this loss may be set off against income from non-mining activities, although the benefit of the mining loss is reduced by 50%; ie $300 of mining losses are required to be offset against $200 of non-mining income. The reasons for these unusual offset arrangements relate back to a period when mining companies paid a lower rate of tax than ordinary companies.

Mining companies are prohibited from grouping their profits or losses with other mining companies or with non-mining companies.

Despite these limitations, the tax regime for mining companies is generally regarded as concessionary. For example, it allows mining companies to immediately deduct their exploration expenditure and any expenditure incurred in the development of the mining licence. Thus buildings, mine-shafts, plant and machinery, production equipment and storage facilities, which would ordinarily be capitalised under standard accounting conventions, may be deducted immediately for income tax purposes.

See: Taxation and Royalties for Mining Companies

Further regarding taxation, the Fairfax article   states,

“… but the Government had not yet done any work on how much more tax or jobs could be created from expanding mining into conservation land.”

“More tax”?

Doubtful.

Dear Leader is already on record opposing the Capital Gains Tax, and any other tax for that matter,

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

See: Key ‘no GST rise’ video emerges

And lastly; jobs.

How many workers does the mining industry employ?

Number employed: 4,000 directly, another 8,000 indirectly, as suppliers of goods and services

See: Key Facts of New Zealand Mining

By comparison, the tourism sector plays a significant role in New Zealand’s economy,

Tourism Satellite Account 2011 Report [1 MB PDF]

Year to March 2011 (released October 2011)

  • Tourism Expenditure
    Total tourism expenditure was $23.0 billion, an increase of 2.1 percent from the previous year. 
  • Tourism Contribution to GDP
    Tourism generated a direct contribution to GDP of $6.9 billion, or 3.8 percent of GDP.  The indirect value added of industries supporting tourism generated an additional $8.8 billion to tourism. 
  • Domestic and International Segments
    Domestic tourism expenditure was $13.2 billion, an increase of 2.5 percent from the previous year. 
  • Tourism Export Earnings
    International tourist expenditure in 2011 ($9.7 billion) represents 16.8% of the total export earnings ($52.4 billion).  Tourism is New Zealand’s second largest export earner, followed dairy ($11.6 billion or 19.9% of exports) in 2011. 
  • Tourism Employment
    The tourism industry directly employed 91,900 full-time equivalents (or 4.8 percent of total employment in New Zealand), an increase of 0.6 percent from the previous year.
  • Tourism Contribution to GST
    Tourists generated $1.7 billion in goods and services tax (GST) revenue.

See:   Ministry of Economic Development – Tourism satellite account

It should not escape anyone that there is a high degree of irony here. A multi-billion dollar industry (tourism) relies on the very environment that the Mining industry would despoil with their activities.

To sum up;

  1. Mining is not as beneficial to a modern economy as some insist.
  2. Bolivia is a mining nation and is lagging behind New Zealand in per capita income.
  3. Bolivia’s GDP is growing 2.5 times faster than ours – but so is their inflation, whilst incomes still lag behind ours.
  4. Australia’s mining wealth is considerable – no doubt – but their balance of payments  is more than 7% of GDP negative, and has had persistently large current account deficits for more than 50 years
  5. Australia is far too reliant on mining wealth; their economy is far too dependent on commodities; and they need to diversify.
  6. Crown Royalties are minimal – 1-5% .
  7. Big profits by foreign-owned mining companies leave New Zealand.
  8. Open cast mining creates a considerable impact on the environment, despite claims to contrary.
  9. Mining companies enjoy  a taxation regime that  “is generally regarded as concessionary”.
  10. And far more New Zealanders are employed in the Tourism sector than in the mining industry.

To repeat David Slack’s comments from Radio New Zealand,

I’m  kinda dismayed that there’s still this Lotto mentality that wants to just find a way to just happen upon our wealth rather than developing  our economy so  that we’ve got more high value business so that we’ve got perpetual wealth from that…  [host interuption]

… Yeah, well you’ll have it once then it’s gone, and you’ll only be getting the royalties off it, not the whole damn thing.

Whilst Dear Leader John Key stated,

New Zealanders, mostly, understand that while we owe it to future generations to do everything we can to protect our environment, we must also do all we can to leave them with a robust and sustainable economy where they can expect a good job and a good standard of living.

We have always believed that New Zealand’s mineral wealth can play a large part in the economy, and we have also always believed this can be done with a minimal impact on our environment.

See:  Poll backing for more mineral searches cheers Key

I know who I believe.

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Additional

NZ Herald:  Optimism dips in struggling economy

NZ Herald:  Poll backing for more mineral searches cheers Key

Fairfax Media: NZ economic growth ‘unspectacular’

NZ Herald:  Unemployment rate lifts to 6.7pc

Crown Minerals Act 1991

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Dear Leader; prescriptions, airline taxes, and priorities

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Frank Macskasy Blog Frankly Speaking

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Continued from: National prescribes bad medicine for the poor

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Whacking the poor and bashing the benes…

National thinks nothing of raising prescription charges, from $3 to $5. As Dear Leader has assured New Zealanders, the poor have nothing to fear about more expensive medication.

John Key, with an estimated value of $55 million, of course understands what it’s like for the poorest in our society to pay for healthcare.

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prescription-charges-to-go-up Frank Macskasy Blog Frankly Speaking

Full Story

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Frank Macskasy Blog Frankly Speaking pm-says-low-income-earners-will-benefit-from-health-improvements

Full Story

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Once upon a time, prescriptions used to be free of charge. Then a “part charge” of 50 cents per prescription was introduced during the 1980s/90s  neo-liberal “reforms”.

The argument was that everyone could afford 50 cents.

Then the charge was raised to $3 per item.

Now National will raise it to $5.

This is what is colloquially known as The Slippery Slope. The Slippery Slope is where a governments wants to implement a certain policy – but knowing that it will be highly unpopular, will introduce it gradually, in small increments.

Fifty cents. $3. $5. Next – ?

Meanwhile…

Key is up in arms about the Australian government’s plans to increase it’s airport departure tax from A$8 to A$55, per traveller.

See:  Travel chiefs declare war on airline tax

Evidently, according to one of Dear Leader’s  spokespeople, Key  “would raise the matter with Julia Gillard “shortly”.”

It’s reassuring to know that John Key takes his Tourism portfolio so seriously. This is a vital issue.

After all, no unemployed person; solo-parent; part-time worker on the minimum wage; or superannuitant wants to be distracted from their re-budgetting, to take into account more expensive medicines,  by the worrisome issue of  tourists facing higher airport charges.

Thankfully, Dear Leader is on the job.

John Key knows what his priorities are.

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Postscript

In a previous blogpost, National prescribes bad medicine for the poor , this blogger stated that tax cuts must inevitably result in reduced services and/or increased User Charges,

Common sense will tell even the most die-hard National groupie that if you reduce revenue, then one  has to cut expenditure and services; borrow to make up the shortfall; raise  user-charges; or all three. There ain’t no other way.”

Dear Leader has confirmed this by saying that because National was planning  a “zero Budget” (aka Black Budget), that would result in  “either an increase in charging or a reduction in expenditure“.

Key has stated that we should expect more increases in User Charges.

Message to National Party supporters and voters:  still enjoying your tax cuts?

See:  Opposition attacks prescription charge hike

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