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Once Upon a Time in Mainstream Media Fairytale Land…

12 October 2017 4 comments

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You can feel mainstream media’s frustration with the news-vacuum created by the two week period necessary to count the approximately 384,072 (15% of total votes) Special Votes that were cast this election.

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Winston Peters has announced on several occasions that he will wait until the Specials are counted and announced by the Electoral Commission on 7 October,  before making any announcements on coalition;

“This will be the last press conference I am going to hold until after the 7th of October… I can’t tell you what we are going to do until we have seen all the facts.

I can’t talk to you until I know what the 384,000 people who have cast their vote said…”

And you know what? He’s 100% right.

All the media pundit speculation; all the ambushing at airport terminals; all the annoyingly repetitive questions are utterly pointless. Peters simply cannot say anything meaningful until 7 October because the 2017 Election has not yet fully played out.

This is not a game of rugby where, after eighty minutes, a score determines a winner and loser (or draw).  In this game of “electoral rugby”, the score will not be delivered for two weeks.

The media – still feeling the adrenaline from Election Night “drama” – appears not to have realised this. The 24-Hour News Cycle is not geared toward a process lasting days or weeks.

One journalist writing for the NZ Herald, Audrey Young, even suggested that initiating coalition talks before the Specials were counted and announced was somehow a “good thing”;

It is surprising that NZ First has not begun talking to National yet, at a point when it has maximum leverage.

Not doing so before the special votes runs the risk having less leverage after the specials are counted should there be no change in the seats, or in the unlikely event of National gaining.

That bizarre suggestion could be taken further; why not announce a government before any votes are counted?

Pushed to maximum absurdity, why not announce a government before an election even takes place?  Banana republics fully recommend  this technique.

It says a lot about the impatience and immaturity of journalists that they are demanding decisions on coalition-building before all votes are counted. It is  doubtful if any journalist in Europe – which has had proportional representation far longer than we have – would even imagine  making such a nonsensical  suggestion.

Little wonder that Peters lost his cool on 27 September where he held a press conference and lambasted the mainstream media for their “drivel”;

“Now frankly if that’s the value you place on journalistic integrity you go right ahead, but the reality is you could point to the Electoral Commission and others and ask yourself why is it that 384,000 people will not have their vote counted until the 7th of October. 

Maybe then you could say to yourselves that may be the reason why New Zealand First has to withhold its view because we don’t know yet what the exact precise voice of the New Zealand people is.

All I’m asking for is a bit of understanding rather than the tripe that some people are putting out, malicious, malignant, and vicious in the extreme.”

The mainstream media did not take kindly to the critical analysis which they themselves usually mete out to public figures. They reported Peters’ press conference in unflattering terms and a vehemence usually reserved for social/political outcasts who have somehow dared challenge the established order of things;

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The Fourth Estate does not ‘do’ criticism well.

Even cartoonists have piled in on Peters, caricaturising him for daring to impede the [rapid] course of democracy;

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Or satirising Peters for being in a position to coalesce either with Labour or National. Despite this being a feature of all proportionally-elected Parliaments around the world, this has somehow taken the mainstream media by surprise;

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Perhaps Winston Peters was correct when he accused  New Zealand’s mainstream media of continuing to view the political landscape  through a First Past the Post prism;

“You ran a first past the post campaign in an MMP environment. And things suffer from that.”

Without a hint of self-awareness of irony, the usually insightful Bernard Hickey  offered this strangely familiar ‘advice’ to Peters;

It could have been so different. He could have simply said he couldn’t disclose his negotiating position until after the counting of the special votes and that he could not say who he would choose. Everyone would have accepted that as a fair stance.

Really? “Everyone would have accepted that as a fair stance”?!

How many timers did Peters tell journalists  that he “couldn’t disclose his negotiating position until after the counting of the special votes and that he could not say who he would choose” and how many times did those same journalists (or their colleagues) persist?

I have considerable respect for Mr Hickey’s researching and reporting skills. He is one of New Zealand’s most talented journalists/commentators.

On this point, however, he has over-looked the stubborn persistence of his colleagues in their unrelenting demands on Peters.

That media drivel has extended to journalists reporting on a non-existent, fabricated “story” – a potential National-Green (or “Teal”) Coalition.

Nowhere was this suggestion made seriously – except by National-leaning right-wing commentators, National party supporters, and National politicians. It should be blatantly clear to the most apolitical person that,

(a) such a coalition has been dismissed by the Green Party on numerous occassions

(b) such a coalition would be impractical due to wide policy differences between National and the Greens

(c) such a coalition scenario was being made only as a negotiation tactic by National to leverage against NZ First, and

(d) such a coalition would offer very little benefit to the Greens.

Green party leader, James Shaw, had to repeat – on numerous occassions – that any notion of a National-Green deal was out of a question;

“Our job is to form a government with the Labour Party, that’s what I said on election night, that’s what I campaigned on for the last 18 months and that’s what we are busy working on.

I said on election night that I think the numbers are there for a new government and that’s what we are working on, so everything else frankly is noise and no signal.”

This did not stop the mainstream media from breathlessly (breathe, Patrick, breathe!) reporting repeating the “story” without analysing where it was emanating from: the Right. Or who it would benefit: National.

Writing a series of stories on an imaginary National-Green coalition scenario, Fairfax ‘s political reporter Tracy Watkins could almost be on the National Party’s communications-team payroll;

Metiria Turei’s departure from the Greens co-leadership seems to be what lies behind National’s belief that a deal may be possible – she was always cast as an implacable opponent to any deal with National. James Shaw is seen as being more of a pragmatist.

But National would only be prepared to make environmental concessions – the Greens’ social and economic policy platform would be seen as a step too far. Big concessions on climate change policy would also be a stumbling block.

On both those counts the Greens would likely rule themselves out of a deal – co-leader James Shaw has made it clear economic and social policy have the same priority as environmental policy.

There is a view within National, however, that a deal with the Greens would be more forward and future looking than any deal with NZ First.

One concern is what is seen as an erratic list of NZ First bottom lines, but there is also an acknowledgement that National was exposed on environmental issues like dirty water in the campaign.

That’s why National insiders say an approach to the Greens should not be ruled out.

But Watkins was not completely oblivious to the Kiwi-version of ‘Game of Thrones‘.  She briefly alluded to comprehending that National is pitting the Greens against NZ First;

Senior National MPs have made repeated overtures through the media that its door is open to the Greens, who would have more leverage in negotiations with the centre-right than the centre-left.

Watkins and her colleagues at Fairfax made no attempt to shed light on National’s “repeated overtures”. She and other journalists appeared content to be the ‘conduit’ of National’s machiavellian machinations as prelude to coalition talks.

Such was the vacuum caused by the interregnum between Election Day and Special  Votes day.  That vacuum – caused by the news blackout until coalition talks begin in earnest after 7 October – had obviously enabled sensationalism to guide editorial policy.

Writing for another Fairfax newspaper, the Sunday Star Times, so-called “journalist” Stacey Kirk cast aside any remaining mask of impartiality and came out guns blazing, demanding a National Green Coalition;

They should, and the reasons they won’t work with National are getting flimsier by the day. But they won’t – it’s a matter that strikes too close to the heart of too many of their base – and for that reason, they simply can’t.

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For all their dancing around each other, National is serious when it says it would be happy to talk to the Greens. But it’s also serious when it says it knows it has to make big environmental moves regardless.

If the Greens are serious about putting the environment above politics – and the long-term rebuild of the party – they really should listen.

Kirk’s piece could easily have emanated from the Ninth Floor of the Beehive – not the Dominion Post Building in downtown Wellington.

The media pimping for a fourth National-led coalition, involving the Greens, would be comical if it weren’t potentially so damaging to our democracy. Media are meant to question political activity such as coalition-building  – not aggressively promote them in an openly partisan manner. Especially not for the benefit of one dominant party. And especially not to install that political party to government.

One person went so far as launching an on-line petition calling for just such a coalition;

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The organisor is one, Clive Antony, a Christchurch “organic fashion entrepreneur”. (That’s a ‘thing’? Who knew?)  Mr Anthony explained why he wanted a “Teal” coalition;

“I genuinely think there is common ground between the National Party and the Green Party, which could result in practical policy wins for New Zealand. Environmental issues such as carbon neutrality and social issues like child poverty come to mind.”

Mr Anthony happens to be a National Party supporter.

Mr Anthony failed to explain what National has been doing the last nine years to protect the environment; why rivers have continued to be degraded; why the agricultural sector has been left out of the emissions trading scheme; why National has squandered billions on new roading projects instead of public transport; etc, etc. Also, Mr Anthony has failed to ask why National has not willingly adopted Green Party policies in the last nine years.

What has stopped them?  Party policies are not copyright.  After all, you don’t have to be in coalition with a party to take on their policies.

Although it helps if National were honest enough to release official reports in a timely manner, instead of the public relying on them to be leaked;

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This is how National demonstrates transparency and integrity.  This is the party that attempts to suppress critical information on climate change.

This is the party that some media pundits are clamouring to enter into a meaningful working relationship with the Greens.

As former Green MP, Mojo Mathers pointed out on Twitter;

“Oh my, National love the Greens now do they? Pity they couldn’t show some love for the environment over the last 9 years. #NoGreenWash

Dirty coal. Polluted rivers. Industrial dairying. Rising emissions. Billion dollar motorways. Seabed mining in blue whale habitat and more.”

Another, former Green MP, Catherine Delahunty, voiced what probably 99.9% of Green Party members are thinking right now;

“I would rather drink hemlock than go with the National Party. The last thing I want to see is the Green Party or any other party propping them up to put them back into power. They’ve done enough damage.”

Green Party (co-)leader, James Shaw, was more diplomatic;

“A slim majority of voters did vote for change, and so that’s what I’m working on… We campaigned on a change of Government, and I said at the time it was only fair to let voters know what they were voting for – are you voting for the status quo, or are you voting for change?”

Other individuals pimping for a Nat-Green coalition are sundry National party MPs such as  Paula Bennett or former politicians such as Jim Bolger.

All of which was supported by far-right blogger, Cameron Slater’s “intern staff”, on the “Whaleoil” blog;

Currently we are sitting in wait for old mate Winston Peters to choose who is going to run the country. After watching all the pundits in media talk about what the next government would look like, it started to annoy me that everyone has been ruling out a National/Green coalition and rightly so as both parties have basically written it off.

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A quick Blue-Green arrangement with the appropriate Government Ministries assigned to Green Ministers would kill the NZ First posturing dead and would probably be the death knell for NZ First forever once Mr Peters resigns.”

National’s pollster and party apparatchik, David Farrar, was also actively pimping for a National-Green Coalition;

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When even the far-right are salivating at the prospect of a Blue-Green coalition, you know something is seriously askew.

However,  judging by comments posted by Kiwiblog’s readers, the prospect of a Blue-Green coalition does not sit well with his audience.

As an interesting side-note, both Whaleoil and Kiwiblog both published their first stories on a Blue-Green coalition around 27 and 28 September. The Tory communications-strategy memo talking up a Blue-Green scenario appears to have been sent to Slater and Farrar at the same time.

It beggars belief that very few media commentators have picked up on what is really the bleedin’ obvious: National’s strategy is obviously a ploy to leverage against NZ First.

Of all the pundits, only one person seems to have sussed what was really happening and why. Otago University law professor and political commentator,  Andrew Geddis,  put things very succinctly when he wrote for Radio NZ on 30 September;

Media coverage of the post-election period echoes this existential angst. With Winston Peters declaring that he – sorry, New Zealand First – won’t make any decisions on governing deals until after the final vote count is announced on October 7, we face something of a news vacuum.

Commentators valiantly have attempted to fill this void with fevered speculation about who Peters likes and hates, or fantastical notions that a National-Greens deal could be struck instead…

That is as close to sensible commentary as we’ve gotten the last two weeks.

The 2017 General Election may be remembered in future – not for Winston Peters holding the balance of power – but for the unedifying rubbish churned out by so-called professional, experienced journalists. In their thirst for something – anything!! – to report, the media commentariate have engaged in  onanistic political fantasies.

They have also wittingly allowed themselves to be National’s marionettes – with strings reaching up to the Ninth Floor.

The National-Green Coalition fairytale promulgated by some in the media was a glimpse into the weird world of journalistic daydreaming. In other words, New Zealanders just got a taste of some real fake news.

Like children in the back seat of a car on a two-week long drive, this is what it looks like when bored journalists and media commentators become anxious and frustrated. Their impatience gets the better of them.

And a politician called them on it;

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When the antiquated, binary system of First Past the Post  was replaced with a more sophisticated; more representative; more inclusive MMP in the 1990s, our political system matured. Our Parliament became more ethnically and gender diverse. We even elected the world’s first transgender MP.

MMP is complex and requires careful consideration and time.

It is fit-for-purpose for the complexities of 21st Century New Zealand.

The Fourth Estate is yet to catch up.

 

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References

Electoral Commission: Preliminary results for the 2017 General Election

Otago Daily Times:  Peters will wait for special vote count

NZ Herald:  Winston Peters – 7 per cent of the vote, 100 per cent of the power

Newsroom:  Winston’s awful start

Fairfax media:  Winston Peters launches tirade on media, stays mum on coalition talks

TVNZ:  ‘Next question!’ – belligerent Winston Peters has press pack in stitches after shutting down Aussie reporter

NZ Herald:   Attack on media, some insults and stonewalling – Winston Peters comes out firing in press conference

Newstalk ZB:  Winston Peters hits out at media in fiery press conference

Radio NZ:  Green Party dismisses National-Green speculation

Fairfax media:  The Green Party also hold the balance of power, but they don’t seem to want it

Fairfax media:  National says don’t rule out an approach to Greens on election night

Fairfax media:  Stacey Kirk – Honour above the environment? Greens hold a deck of aces they’re refusing to play

NZ Herald:  Grassroots petition calls for National-Green coalition

Fairfax media: Govt sits on climate warnings

Twitter: Mojo Mathers

Radio NZ:  ‘Snowball’s chance in hell’ of a Green-National deal

Mediaworks:  ‘I will hear the Prime Minister out’ – James Shaw

Mediaworks:  Winston Peters’ super leak ‘great gossip’ I couldn’t use against him – Paula Bennett

Fairfax media:  Greens have a responsibility to talk to National – Jim Bolger

Radio NZ:  Special votes – why the wait?

NZCity:  Have patience, says Winston Peters

E-Tangata: Georgina Beyer – How far can you fall?

Other Blogs

Kiwiblog:  What could the Greens get if they went with National not Winston?

Kiwiblog:  How a National-Green coalition could work

The Daily Blog: Martyn Bradbury – Let’s seriously consider David Farrar’s offer to the Greens and laugh and laugh and laugh

Liberation:  Cartoons and images about negotiating the new government

Previous related blogposts

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

Observations on the 2017 Election campaign thus far… (tahi)

Observations on the 2017 Election campaign thus far… (rua)

Observations on the 2017 Election campaign thus far… (toru)

Observations on the 2017 Election campaign thus far… (wha)

Observations on the 2017 Election campaign thus far… (rima)

Observations on the 2017 Election campaign thus far… (ono)

Observations on the 2017 Election campaign thus far… (whitu)

Observations on the 2017 Election campaign… (waru)

Observations on the 2017 Election campaign… (Iwa)

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

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“The Nation” reveals gobsmacking incompetence by Ministers English and Lotu-Iiga

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If there is a crystal-clear example why a functioning democracy must have  vibrant, critical current affairs programmes on free-to-air televesion, then  TV3’s ‘The Nation‘ on the morning of 2 May was top-of-the-pile. Without doubt, this land-mark episode was a powerful insight into the general competence (or lack, thereof) of two of the government’s senior ministers; Finance Minister Bill English and Corrections Minister, Peseta Sam Lotu-Iiga.

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Corrections Minister, Peseta Sam Lotu-Iiga -- TV3's 'The Nation' host & interviewer, Lisa Owen -- Finance Minister Bill English

(L-R) Corrections Minister, Peseta Sam Lotu-Iiga — TV3’s ‘The Nation’ host & interviewer, Lisa Owen — Finance Minister Bill English

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The highly talented host-interviewer, Lisa Owen, interviewed both, drilling deep down, and extracting information; admissions; and more critically – waving aside pathetic attempts to fudge legitimate answers. The resulting exchanges did not make for a ‘happy day’ for either government minister, revealing one totally out of his depth, and the other unwilling to admit that his stewardship of the country’s economy has been an abject failure.

1. Finance Minister Bill English

In  the opening months of World War 2, there was a period from September 1939 to May 1940, known as “the Phoney War“. Both the Allied Nations (led by Great Britain) and the expanding Third Reich were technically at war, but major military operations did not commence until Nazi Germany invaded Belgium, the Netherlands and Luxembourg on 10 May 1940.

In New Zealand, we might have referred to those first eight months as a “Clayton’s War” – the war you’re having when you’re not really having a war. (For those old enough to remember, “Clayton’s” refers to a non-alcoholic beverage marketed in New Zealand in the 1970s and 1980s. It was heavily promoted with the catch-phrase, “the drink you have when you’re not having a drink”. The marketing campaign was an advertisers dream-come-true, catching the public’s attention. The product, unfortunately for the manufacturers, was less successful. )

The same could be said of New Zealand’s so-called “rock star economy” and “recovery”.

By nearly all accounts, our recent growth has been predicated on three factors;

  1. The Auckland housing boom/bubble
  2. The Christchurch Earthquakes re-build
  3. Exports – particularly dairy – to China

The first is reliant purely on borrowing from off-shore to fund speculative activity. When that bubble finally bursts, we will be left with a multi-billion debt; thousands of bankruptcies; and an economy in tatters as capital flight takes place.

The second is a short-term growth-spurt which owes it’s origins to two natural disasters – literally disaster capitalism.

The third is built upon China’s unsustainable growth, and has recently fallen away, returning Australia as our number one trading partner, as the value of dairy commodities plummet.

The first two are unsustainable. The last is reliant on a major trading partner’s economic well-being. As with New Zealand’s lamb and butter exports to the UK prior to it joining the EEC in January 1973, we have placed our export “eggs” in one, very big, very fragile, basket.

Against this backdrop of The Phoney Economic Recovery,  the following financial facts should give us cause for concern;

  1. The on-going cost of the 2009 and 2010 tax-cuts, estimated to be around $3.8 billion per year, and up to $4.26 billion last year
  2. Plummeting dairy prices resulting in lower payout to farmers and taking $7 billion out of the economy
  3. Reduced tax-take by the government is around $4.5 billion

In view of unsustainable tax-cuts in 2009 and 2010; the economy taking a $7 billion “hit”; and lower than anticipated tax revenue by this government, it was hardly unexpected that Bill English’s promises of a surplus this year have collapsed.

Lisa Owen challenged the hapless Finance Minister in a sixteen minute long interview. In this excerpt, English is evasive when asked questions about the governments surplus;

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Full interview here

Throughout the interview, English was upbeat and insisted that a surplus was just around the corner;

“Well, okay, it would be nice if the number got there this year; it’ll just take a bit longer. What’s important here is the trajectory. So Government is closing its deficits; it’s getting to surplus. We’ll soon be in a position to start paying off debt. Our expenditure’s under control; the revenue’s a  bit harder. You’ve just seen in the last day or two, dairy prices are going down again; that has an impact. So we’re sufficiently confident in the direction that we’re not going to cut services or cut entitlements to try and chase a larger surplus number.”

Lisa Owen asked the Minister: “Okay. Well, before on The Nation, you said that the Government would not make any cuts to reach surplus. Is that still your plan?

English replied;  “That’s right. We’re not going to make any specific extra decisions now just because our tax revenue’s a percentage point – 1% down.”

Then, incredibly, English maintained that tax-cuts were still on National’s agenda;

Owen: “I just want to look at some of the big promises, like tax cuts. They were meant to come from that $500 million that you now don’t have. But is it fair to say that they’re not really likely now?

English: “As we indicated last year, we wouldn’t be able to contemplate that until 2017 for some of the reasons that you’ve outlined. So at the moment, the ability to deliver some kind of moderate tax cut hasn’t changed and we would have the next couple of budgets to work out how that would happen.”

Owen: “Hang on, Minister. It has changed, hasn’t it, Minister, because you’ve just identified the fact you’ve got less money, so it must have changed.

English: “Well, we’ve shifted the money from next year to the year after; that’s technically what’s actually happened. We’ll deal with that as time goes on, but the point I’m making is our finances are-“

Owen: “Is it likely that your tax cuts then will be delayed as well? Maybe 2018, not 2017?

English: “No, we’re not suggesting that. We said at the end of last year that they would be possible in 2017. We’ve made allowance for that.”

It beggars belief that we have a Finance Minister willing to entertain the notion of tax cuts at a time when dairy prices are dropping; tax revenue is falling; and public debt has ballooned to $59.9 billion  and rising by $27 million per day, every day.

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public debt - NZ Treasury

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Never mind tax cuts – when do we, as a nation, start to repay this debt mountain?!

The reality is that if National proceeds with promises of tax cuts in 2017 (which is an election year – bribe anyone?) New Zealand will have to  borrow from offshore to make up the shortfall in revenue. Our debt mountain will continue to grow.

English himself admitted that the deficit this year will be in the order of around half a billion dollars;

“…It is what it is, and that is for the 14/15 year, we budgeted $370 million surplus. It looks like it will be a $500 or $600 million deficit, and the surplus will be the next year. So we’re on track.”

Somewhere in National’s gross mis-management of the economy, they have gone from a $370 million surplus to a potential $600 million deficit – just shy of $1 billion lost.

How does a government make such a colossal mistake? “It is what it is” is hardly an explanation.

Throughout the interview, English kept repeating the mantra of a future surplus;

“The direction is pretty clear. Our surpluses will come and they will grow, and we’ll be able to pay off debt.”

“The target remains getting to surplus, and in the Budget, you’ll see the details of where the Government is up to with it. But I’m indicating that despite falling a bit short in 14/15, we’re on track for surplus.”

Though English insisted that there would be no cuts to spending, he did use coded language for possible reductions to welfare spending;

Owen: “Is it likely that your tax cuts then will be delayed as well? Maybe 2018, not 2017?”

English: “No, we’re not suggesting that. We said at the end of last year that they would be possible in 2017. We’ve made allowance for that.”

Owen: “Okay. So what about measures to curb poverty, then? Will they have to be delayed? Because the Prime Minister identified them as something of a priority. Is that going to be delayed?”

English: “Well, we’ve been working on these issues for a while, particularly focused on communities and families with persistent deprivation and caught in a cycle of dependence. And so you could expect to see us continue with that sort of programme through this Budget…

… Or sickness and invalids beneficiaries with more support for their health issues and more support for employment, could actually get out of dependency, off welfare and remain in work.

Because as we all know, invalids don’t actually have real disabilities or debilitating injuries or diseases – they are simply on a “cycle of dependence”.

When in trouble, blame someone else. In this case, invalids.

Owen then moved on to the issue of Auckland’s growing housing crisis and nailed English on this government’s spectacular inability to manage and address that city’s housing shortage. English simply blamed the Auckland Council;

“Well, the migration numbers have stayed high, bearing in mind about half of migrants appear to go to Auckland; the other half go to the rest of the country. But there’s pretty clear signals that Auckland City Council need to get on with the job. They are the ultimate decision-maker around the infrastructure and around the consenting for new houses. We’re giving them the toolkit to enable them to do it faster, but there’s clearly a lot more to be done, and we’ll keep looking for more tools to help the Auckland City Council to do the job they need to do.”

When still in trouble, keep blaming someone else. In this case, the Auckland Council.

Thus far, National’s grand strategy to cope with Auckland’s housing crisis is to shift ownership of 2,800 properties from Housing NZ to the Tamaki Redevelopment Company – as if shifting properties around on a giant ‘Monopoly’ board will somehow solve the problem?

Owen pointed out to English that in transferring 2,800 houses to the Tamaki Redevelopment Company, that he was breaking a previous committment;

Owen: “Now, hang on a minute. There you offloaded 2800 houses, and I thought you had a cap on getting rid of state houses of about 2000. So is that cap gone now?

English: “Well, no. What we’ve said is Housing New Zealand will own at least 60,000 houses, and that certainly hasn’t changed. Government remains the owner—”

Owen: “No, you said a cap, Minister. So has the cap gone now with this 2800 houses? The cap’s blown?

English: “No. Government will remain the owner of the Tamaki houses. We’ve simply put them in a different government company, which has been set up specifically to regenerate that community, because it’s a very particular skillset.”

English had all but surrendered to Owen’s persistent questioning by outright admitting his government’s failure to address Auckland’s mounting housing crisis;

“That’s right. We’re not meeting demand. I certainly agree with that. Whether it gets worse before it gets better, forecasters can argue over that. We’ve got plenty to do to meet the demand that’s been there for a while. And as I said, the Government’s supporting Auckland City, trying to get them a better toolkit and making our own contribution through redeveloping our own land in Auckland.”

For English, this interview was possibly the worst in his political career. He had to explain why his commitment to returning to surplus this year was now in tatters, and why his government’s housing plan for Auckland consisted of moving state housing from owner to owner, without adding significantly to the overall stock.

The only reason why National’s reputation for being a “sound prudent fiscal manager” survives intact is because New Zealanders are not paying attention.

But worse was to come when Corrections Minister, Peseta Sam Lotu-Iiga took the chair and was also interviewed by Lisa Owen. What followed was a debacle of Hekia Parata proportions.

2. Corrections Minister, Peseta Sam Lotu-Iiga

With on-going  privatisation of State services dressed up as so-called “Public-Private Partnerships” (PPPs), Lisa Owen put several questions to the Corrections Minister on the role of UK company, Serco, which has been contracted to run the new prison at Wiri.

His responses were jaw-droppingly incompetant. The man was totally out of his depth, as these excerpts show;

Owen: “So are they getting paid and how much?”

Lotu-Iiga: “Well, the contract is between Serco and PlaceMakers, and I’m not privy to those sums, but—”

 

Owen: “So you don’t know how much the business is going to make—”

Lotu-Iiga: “I don’t have the figures on me, but we could ask Serco what the contract’s for.”

 

Owen: “Out of the inmates building framing and having these contracts. So who makes the profit out of the contract?”

Lotu-Iiga: “ Well, we don’t know whether there’s profits being made, but what PlaceMakers—”

 

Owen: “Why don’t you know that, Minister? Because this is under your watch.”

Lotu-Iiga: “Well, I spoke to the managing director of PlaceMakers yesterday, and they said that they will pay a standard contract for fees to Serco. I don’t know what that amount is…”

 

Owen: “Right, so in terms of rehabilitation, but you don’t know who’s making a profit or if one’s being made?

Lotu-Iiga: ” Hang on. They’ve got a commercial transaction between Serco and PlaceMakers. I don’t know what that figure is, but we can work it out.”

 

Owen: “Even with that $30 million? Even with that $30 million profit that they’re making per annum?”

Lotu-Iiga: “I don’t think they’re making a $30 million profit.”

 

Owen: “You don’t think it’ll make $30 million, and what you’re saying is it’s still saving money even though this company is making a profit out of it? It’s still saving us money even though they’re taking that profit.”

Lotu-Iiga: “It’s… Well, it’s saving the taxpayer money. It is saving the taxpayer money.”

 

And then this astounding admission from the Minister that must have had every viewer that Saturday morning choking on his/her milo/tea/coffee, and the Prime Minister speed-dialling his Chief-of-Staff;

Owen: “Who employs those monitors? Who employs the monitor in the prison? “

Lotu-Iiga: “There will be— If I can just finish, there will be an ombudsman. They will be subject to complaints—”

Owen: “So the monitor in the prison, Minister, just to be clear, the monitor in the prison; who employs the monitor?
Lotu-Iiga: “My understand is that the monitors are based in the prisons, but they report to the Department of Corrections.”

Owen: “Who employs the monitor and pays their wages, Minister?

Lotu-Iiga: “Well, I don’t have those facts on me, but they do report—”

Owen: “Well, I do. The person who employs the monitor— the person who employs the monitor is the company, Serco. They employ the monitor, and pay their wages.”

Lotu-Iiga’s spectacular ignorance of his own portfolio has almost certainly destroyed his political career. He will also have disappointed his political strategist and mentor, controversial far right-winger,  Simon Lusk.

Lusk was employed by Lotu-Iiga during the 2008 election campaign for the Maungakiekie Electorate Campaign. In return, as well as being paid by Lotu-Iiga, in his Maiden Speech in Parliament the newly-elected MP openly acknowledged Lusk’s involvement in his election to Parliament. In this Youtube video, Lotu-Iiga mentions Lusk at 3:56. Note who is sitting behind Lotu-Iiga – Aaron Gilmore, another Lusk protégé.

Bad luck, Simon.

It is not often that I feel sympathy for a Minister of a National Government. When I do, it is the pity I feel for a doomed man whose career has come to a grinding, crushing halt.

At the next Cabinet re-shuffle, Lotu-Iiga will be joining Kate Wilkinson, Phil Heatley, and Aaron Gilmore in political oblivion.

Dead Minister Walking.

3. Political Panel

Mike Williams, Bernard Hickey & Jamie Whyte comment on interviews with Bill English and Peseta Sam Lotu-Iiga. Note ex-ACT leader, Jamie Whyte’s cringe-worthy apologistic comments on behalf of English, and why he thinks government debt does not matter.

4. The Programme

All in all, this was one of the most outstanding episodes of “The Nation” with excellent interviews; topical subject matter; and insightful analysis by (most) of the panellists. Lisa Owen joins Kim Hill as two of this country’s most formidable interviewers.

This is the sort of programming Mediaworks should be broadcasting at Prime Time. My “money” would be on people desperate for informative television – who are sick to their stomachs on a sickly diet of “reality tv” – to flock to such a viewer-friendly scheduling.

Good, quality, current affairs should never be tucked away as some sort of “guilty pleasure”.

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References

Wikipedia: The Phoney War

Wikipedia: Claytons

Rabobank: Country Report New Zealand

Farming Show: Australia becomes top trading partner once again

Radio NZ: Price drop another blow for dairy farmers

NZ Herald: Brian GaynorPlans for jump-start reveal differing styles

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

Fairfax media: Dairy prices fall at Fonterra GlobalDairyTrade auction

Beehive: Fact sheet – Personal tax cuts

Radio NZ: English concedes surplus target unlikely

Youtube: The Nation – Can National promise a surplus by 2016?

TV3: The Nation – Interview –  Finance Minister Bill English

Treasury: Debt

Fairfax media: Public debt climbs by $27m a day

Fairfax media: Government offloads 2800 state houses to Auckland development company

TV3: The Nation – Interview – Corrections Minister Sam Lotu-Iiga

Wikipedia: Serco

Simon Lusk: Clients

Fairfax media: The rapid rise of a well-educated man

Youtube: Peseta Sam Lotu-Iiga MP – Maiden Speech

Previous related blogposts

Tax cuts and jobs – how are they working out so far, my fellow New Zealanders?

Did National knowingly commit economic sabotage post-2008?

Budget 2014 – Why we will soon owe $70 billion under this government

The Mendacities of Mr Key #3: tax cuts

When the Rich Whinge about paying tax

Two Tax Strikes against Dunne?

“It’s one of those things we’d love to do if we had the cash”

National’s Ohariu candidate admits contact by Simon Lusk

Power Struggle in the National Party?!

Other blogs

Unframed: John Key has no credibility on debt and no Plan B

Acknowledgement

Tim Watkin, Producer of “The Nation“, for interview transcripts; link to Youtube excerpt featuring Bill English; and valuable insights.


 

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debt-mountain-cartoon.

This blogpost was first published on The Daily Blog on 3 May 2015.

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= fs =

Is this where I insert, “I told you so, NZ!”?

In the last couple of years,  this blogger has been pounding away, wearing out one keyboard after another; shooing cats of piles of documents; drinking enough coffee to deny me sleep for the rest of the decade…

To make a point.

By early 2008, recession was looming following a banking crisis that started in the US,

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John Key’s history in international finance would have alerted him immediatly of the looming crisis. It was irresponsible of him to campaign on tax cuts when he must have known they were unachievable, as New Zealand’s economy began to slump.

To point out the blindingly obvious:  New Zealanders in 2008 voted tax cuts for themselves that we could ill-afford as a nation. We were warned, even as far back as 2008,

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No one who voted for National in 2008 can genuinely claim ignorance – we were warned. News of the building crisis and recession filled the media. New Zealanders’ greed for money simply outstripped their common sense,

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We should have taken note when John Key “assured” us,

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

Yeah, right.

Despite all the media reports; despite all the warnings; despite all the criticisms that National’s programme of tax cuts was unaffordable, on 8 November 2008,  1,053,398 New Zealanders voted for National.

As a result of cutting taxes in April 2009 and October 2010, government revenue dropped. The supposedly “fiscally neutral “tax-switch” wasn’t so much a “switch” as a parlour-trick. It wasn’t our money that John Key was giving back to us – it was money borrowed from overseas.

The first tax cuts kicked in on 1 April 2009. That was followed by this media report,

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The second round of tax cuts took effect on 1 October 2010. Predictably, that was followed by this media report, eight months later,

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Yesterday, the NZ Herald  published this piece penned by Bernard Hickey. It wasn’t just highly critical of the National  – it accused the John Key’s government of;

  • being fiscally irresponsible
  • enacting policies designed to please its wealthy backers
  • borrowing money overseas, to fund taxcuts
  • economic treason
  • and generational selfishness

Bernard Hickey did not mince his words,

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Hickey went on to state,

“The charts reveal the results of the cut in the income tax rate from 39 to 33 cents, which was in theory partly paid for by an increase in the GST rate from 12.5 to 15 per cent. They also reveal a massive reversal in a decade-long trend of improvement in New Zealand’s public debt position.

Our tax-to-GDP ratio has crashed from almost 34 per cent in late 2008 to 29 per cent last year, which means yet more borrowing on the horizon.

At the same time, the tax from individual incomes has fallen from around 32 per cent to around 24 per cent.

This is a direct result of the cut in the top personal tax rate and consumers’ shift to spending less and saving more. This means the higher GST rate is not collecting the revenue expected.

Meanwhile, interest-free student loans and Working For Families are deepening budget deficits. That is being paid for with increased Government borrowing to the tune of 15 per cent of GDP.

A collapse in the corporate tax take is only partly responsible and is largely due to the recession rather than any change in policy. It is now rebounding but the tax-to-GDP ratio is worsening.

This is unsustainable without an immediate and extended surge in economic growth, which few expect.

Voters will have to repay this debt in decades to come. Why are they not revolting at this national act of selfishness?” – Ibid

To illustrate his point, Hickey charted New Zealand’s economic progress (or lack, thereof),

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Hickey condemns the borrowing-funded tax cuts by calling it for what it is: inter-generational theft. It is a massive debt that will have to be repaid by loading that debt onto future generations of taxpayers.

Like hell !!

Many of the next generation won’t have a bar of paying of their parents’ debt. They’ve already decided to take the only logical step,

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Bernard Hickey, and many other political, economic, and social commentators have highlighted the bad decisions that voters continually make. Unsurprisingly, we all like tax cuts – who wouldn’t want more money to spend on nice, new, shiny things.

Voting for wealth is not enough to make us wealthy. Especially if, at the same time, we expect all the nice things that a modern social democracy has to offer; free education; free healthcare; good roads and public transport; a pension at retirement; and lots of other state services funded by – taxation.

Well and truly, we have shot ourselves in the foot. We voted for more wealth, through taxcuts, and comprehensive social services – and we’ve ended up with neither.

And we have no one to blame but ourselves. We did this; 1,053,398 New Zealanders voted for it.

Here’s an idea: every single person who voted for National in 2008 and 2011 should be sent an invoice for their share of our country’s debt. Wouldn’t that be a lovely prospect?

Meanwhile, the final word goes to National’s Finance Minister, Bill English,

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A few previous blogposts on tax cuts

A warning from a very, very rich man (17 August 2011)

Greed is good? (28 August 2011)

Blood from a stone? (27 January 2012)

Tax cuts & school children (2 February 2012)

Authors of our own mis-fortune? (20 February 2012)

The Muppet Show – Kiwi style! (21 February 2012)

Additional

Surplus date looks increasingly tough, says Key

Budget deficit keeps getting worse

 

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= fs =

Capitalism, top heavy and toppling – Bernard Hickey

This is must-read stuff…

Full article here.

It is worth noting that, here in New Zealand, recent tax cuts gave $2.5 billion a year to the top 10 per cent of earners and “practically nothing to the bottom 20 per cent of earners, who got 3 per cent of those cuts”.

It is also worth noting that, as a country, we are having to borrow $380 million  per week to – in part – fund those tax cuts.  That’s $17.6 billion this year alone.

Far from being a “prudent fiscal manager”, National is being highly irresponsible as it continues to woo the  Middle Class for their votes.

Only thing is: eventually it all has to be paid back. Even selling all out SOEs won’t cover that debt mountain, as we simply don’t have enough state assets left after the 1980s and 1990s.