Archive

Posts Tagged ‘budget surplus’

Anne Tolley’s psycopathy – public for all to see

26 October 2015 7 comments

.

msd logo1

.

14 October: Surplus

On 14 October, seven years after National came to power, Finance Minister Bill English, announced that  his government had posted it’s first surplus; $414 million for the last financial year. English said,

“So that means the government has to take a different approach to reducing debt and maintaining surpluses than we have done in previous cycles.

So there won’t be any sense of the constraints coming off because I think in the past that has been the expectation after a period of constraint. It’s important that we continue to focus on improving our expenditure management so that we don’t slip into old habits and put that 10 kilos back on again.

The Budget 2015 one was pretty slim. We’ve had six months of growth that were softer than expected, that seems to be coming right now. But we’ve yet to see what impact that will have on the forecast.”

.

14 October: Death by Deficit

From a story broken by Radio NZ on 14 October;

Minister of Social Development Anne Tolley admitted that having to provide monthly medical certificates in the early stages of cancer was difficult, but said the government had to draw a line somewhere.

She said cancer patients could not expect special treatment, because then everyone would want it.

“Where you draw the line is always the issue,” she said.

“You start creating a whole lot of layers and there would be, I’m sure, other groups of people that would come forward and say, ‘we need special consideration too’.

According to the Radio NZ report by Alex Ashton – and released on the same day as Bill English announced his “surplus” – people suffering from cancer and about to undergo critical surgery, were being harassed by MSD/WINZ to undertake “job seeking obligations”;

Hundreds of cancer patients are being placed on the Jobseeker benefit while they are getting treatment.

One woman, who does not want to be identified, applied for a benefit when she was diagnosed with breast cancer.

She was put on Jobseeker Support, which replaced the sickness benefit after the 2013 welfare reforms.

She said she had to pay for a medical certificate every month to prove she could not work – even though her surgeon insisted she would be off for much longer.

“The letter from the hospital wasn’t sufficient. I then had to go back and get a doctor’s note to keep them happy, just to prove the fact that I was going in for surgery,” she said.

“Then I also had to, on the day of my surgery, get someone from the hospital to fax through that I had been operated on.”

Cancer Society chief executive Claire Austin said the woman’s story was common, and the system lacked common sense and sensitivity.

She said many cancer patients had never been on a benefit before, and deserved help while they were going through an extremely tough time.

“The situation really is ludicrous. We’ve got people who are already in work, who are unable to work because they are either sick and have to go through treatment, or have surgery.

“They have to then apply for a benefit, which is a benefit that requires them… to be available to work.”

The welfare “reforms” of 2013 were carried out by Paula Bennett – herself a former solo-mother and receiver of a free tertiary education paid by WINZ.

When the extraordinary situation of cancer patients forced to undergo work-testing and fulfill job-seeking obligations was put to the current Minister of Social Welfare, Anne Tolley, her response was less than sympathetic;

Minister of Social Development Anne Tolley acknowledged that having to provide monthly medical certificates in the early stages of cancer was difficult, but said the government had to draw a line somewhere.

She said if cancer patients were given special consideration, other people would want those considerations as well.

“Where you draw the line is always the issue,” she said.

“You start creating a whole lot of layers and there would be, I’m sure, other groups of people that would come forward and say, ‘we need special consideration too’.

Tolley  complained that if cancer patients were given special consideration, other people would want those considerations as well ?!

Well, yes. If “other people” were equally sick,  critically injured, or suffering some degenerative condition – they would need state support. After all, that is why we have a welfare system. That is why Ms Tolley is the Minister for Social Welfare, and is  on an annual salary of $272,581 (plus some very generous allowances, retirement  perks, and superannuation fund).

Tolley has exhibited questionable behaviour in the past. As previous Minister for Police, she made a spectacle of herself standing atop a crushed car that had been seized from some teenage boy-racer. She positively gloated at it’s destruction;

.

anne tolley - crushed car - boy racers - minister of police

.

Interviewed on TV3 News in June 2012, she even taunted boy-racers to carry on breaking the law by challenging them to “bring it on“, so their cars could also be confiscated and destroyed.

Thankfully, boy-racers apparently  had the good sense to ignore Tolley’s dangerous school-yard ‘dare’, leaving the Minister’s childish words hanging embarrassingly in the air – though not before an editorial in the NZ Herald voiced it’s own distaste at her actions;

“What, then, was the Police Minister, Anne Tolley, doing dancing on the bonnet of a crushed car at a Lower Hutt scrapyard this week? This was a crass stunt unbecoming of any minister of any government.

[…]

But worse than the undignified celebration of such a dubious landmark was the message being delivered by Ms Tolley. She was suggesting, in effect, that when on top, the boot should be put in as far as possible. That it was fine to wallow in the misfortune of others.”

Three years later, on 21 June this year, political reporter Corin Dann interviewed Social Development Minister, Anne Tolley for TVNZ’s Q+A. The interview was brilliant, in that we, the public, caught a further glimpse of a person who apparently has very little empathy or concern for those less fortunate than herself.

To re-cap from my previous blogpost;

Last year, two year old old Emma-Lita Bourne died last year from a brain haemorrhage. Emma-Lita had been suffering from a pneumonia-like illness in the final days of her short, misery-filled, life, leading up to her death.

In a coronial  inquest, Coroner Brandt Shortland concluded;

“I am of the view the condition of the house at the time being cold and damp during the winter months was a contributing factor to her health status.”

Corin Dann pointedly asked Tolley about Emma-Lita’s  death;

@ 6.35 –

“Some would argue with the recent case, for example, with Emma-Lita Bourne who died in the state house, [a] damp house, why not just give those families more money to pay their power bill, rather than give the organisations money to come in and work and all the rest of it?”

Tolley responded;

@ 6.54 –

“And, and, when you look at something like Whanua Ora, they are doing some of that. See, see, what we’ve got with the focus on individual programmes and agencies working in silos, families don’t work like that. They’re very complex issues so if I don’t know the details of that particular family…”

A member of the public listening to Tolley’s  comments where she admitted to “[not knowing] the details of that particular family” might have forgiven the Minister for an unfortunate turn-of-phrase  that simply came across as someone who didn’t care.

However, when placed alongside her  recent comment on 14 October, on Radio NZ’s report;

“Where you draw the line is always the issue. You start creating a whole lot of layers and there would be, I’m sure, other groups of people that would come forward and say, ‘we need special consideration too’.

–  and Tolley’s  apparent lack of interest in children dying in cold, damp State houses, coupled with an obvious  delight in crushing cars – confirms an impression of a somewhat indifferent, cold, and unpleasant personality.

But is that the sum-total of why Tolley refuses to understand the needs of families living in damp houses, or cancer-sufferers being forced to jump  through bureaucratic hoops for no discernible good reason?

14 October: Where the money went

Last year, the outlook for National to meet it’s self-imposed goal of a surplus for the 2014/15 financial year seemed bleak.  This was a problem for National, as Radio NZ’s Brent Edwards explained with simple clarity  on 21 November 2014;

“From National’s perspective, it has been a key political argument to perpetuate the narrative that only it can be fiscally responsible while in contrast Labour is irresponsible with taxpayers’ money.  Setting a surplus target of 2014-15 has been an important part of that political strategy.”

The Opposition were prepared to make the most of National’s impending failure to meet it’s own goal of generating a surplus.

It’s reputation, according to public perception, of being the Party of Responsible Fiscal Management would be badly damaged if it failed to deliver on it’s promise of a 2014/15 surplus.

English’s task was made harder by the deteriorating state of the economy, as Brent Edwards reported. English lamented;

“This combination of lower commodity prices and low inflation means that the nominal or dollar value of New Zealand’s economic output will not grow as fast as previously expected. This will affect farm and company incomes and we expect this to flow into the Government’s books through lower revenue.”

If National could not balance it’s books by tax-revenue, it had only one other option available to it – reduce spending.

And cut spending the government did – by a whopping $1.081 billion  in ten Vote areas. According to Treasury, Total Crown Expenses cuts comprised of;

  • Government Superannuation Fund: cut by  $2 million
  • Health: cut by $52 million
  • Education: cut by $235 million
  • Core government services: cut by $42 million
  • Law and order: cut by $96 million
  • Transport and communications: cut by $304 million
  • Primary services: $108 million
  • Housing and community development: cut by $97 million
  • “Other”: cut by $140 million
  • Forecast new operating spending: cut by $7 million

Note that many of the areas cut were those relating to health, education, justice, and housing/community development – four of the most critical areas of any government’s spending.

No wonder so many hospitals are in the ‘red’ with their budgets.

No wonder so many schools cannot afford maintenance on their delapidated buildings.

The cut to Law and Order did not just affect prisons, courts, and policing. As Radio NZ recently discovered, it also impacted on legal aid for domestic violence victims;

.

Legal aid rules not failing domestic violence victims says minister

.

The Radio NZ report explains;

The Ministry of Justice took over legal aid in 2011, and introduced a series of budget cuts aimed at saving $250 million.

[Criminal Bar Association president Tony] Bouchier said things had deteriorated since then, and more funding was the answer.

“The whole idea of legal aid is to give people the opportunity of access to justice which is an absolute basic right in this country,” he said.

“It comes down to whether the government is going to properly fund the legal aid system; that’s where we’re at at the moment.

“The legal aid system is not being fully provided for and it’s causing all sorts of issues of justice in our court system – it’s legal aid on a shoestring budget.”

Remember Anne Tolley’s rebuke to cancer sufferers;

“Where you draw the line is always the issue. You start creating a whole lot of layers and there would be, I’m sure, other groups of people that would come forward and say, ‘we need special consideration too’.”

Fair-minded people would not  expect that women (and others) needing protection under the law, from violent partners,  should be denied access to a lawyer, and expect legal aid if they required it. Especially if their safety, and that of their children, depended on it.

But not according to this government.

According to this government, cancer sufferers and victims of domestic violence should not expect ” special consideration “.

14 October: Spending on ‘important stuff’

“I suppose that’s possible, we put the allowance in there three years ago…[and] we’ve always got the capacity to move that around.”

The Herald, though, was less than impressed at loose talk of tax cuts, suggesting instead that National address the ballooning $60-plus billion debt (see Appendix1) racked up by National;

The surplus is worth celebrating, even if it does not last long. But it would be wrong to give it away in tax cuts, even if it proves to be sustainable.

It’s editorial headline, “Use surplus for benefit of everyone” was positively socialist.

.

  • National Ministers had an early Christmas when they gifted themselves 34 new BMWs. The last batch – bought in 2011 – are to be replaced only after about three years’ use.Cost? Unknown. According to National, the price is “commercially sensitive”. (Code for *politically embarrassing*.)

.

  • National loves to invest. Cycleways. Aluminium smelters. ‘Hobbit‘ movies. Even farms in the middle of the Saudi Arabian desert. Cost to taxpayer: $11.5 million

.

.

.

  • Subsidies and special tax concessions to Warner Bros for ‘The Hobbit‘, and to other movie companies? Cost – ongoing.

.

Anne Tolley asked; “Where you draw the line is always the issue”.

The above list might be a good start.

National’s “achievement” of a $414 million surplus was paid for by ordinary New Zealanders; sick people suffering from cancer; State house tenants with sick and dying children; women bashed by their partners. Children living in poverty. The unemployed and solo-parents (mostly women) pushed off welfare for most trivial reasons. All have also paid dearly for this government’s excesses.

Some who are “paying dearly for this government’s excesses” may not have expected to be victimised.  Cancer Society chief executive, Claire Austin, suggested that up to 800 cancer sufferers could be on a jobseeker’s benefit, without  an official WINZ work exemption excusing them from job seminars, interviews, and other bureaucratic hurdles. She stated;

[There were] probably just as many who gave up because it’s just too distressing, too complex, there’s a lack of sensitivity in terms of the process”.

One wonders how many of those estimated 800 cancer sufferers who are on the jobseekers benefit, and are being chased by WINZ  to fulfill work-ready obligations, also voted National?

If one quarter of the population are represented by the 1,131,501 voters who voted for National last year, then it would be fair to assume that a similar ratio of one quarter (200) of those 800 cancer sufferers voted National.

Is this what they expected from their charismatic Prime Minister, that nice, friendly, easy-going Mr Key?

Which sector of New Zealand society will be next to feel the cold, dead hand of this penny-pinching government? A government that refuses to invest in  New Zealanders who need assistance the most – but has no hesitation throwing money at luxury limousines; multi-million dollar residences; subsidies to corporations; and a farm in the middle of nowhere in a Saudi desert.

Who will be next?

More than ever, I am reminded of this;

.

 

FIRST-THEY-CAME

.

Appendix1

According to Treasury, as at 30 June 2015, net government debt currently stands at NZ$60.631 billion. That equates to 25.2% of GDP.

In 2008, net debt stood at around NZ$10 billion, as the Treasury chart below shows;

.

net debt 2005 - 2015

.

Current net debt is six times what it was, seven years ago.

.

.

.

References

Interest.co.nz: Treasury reports OBEGAL surplus of NZ$414 million in year to June 30, 2015

Radio NZ: Jobseeker benefit for cancer patients ‘ludicrous’

Radio NZ: Welfare should be a safety net not a trap – Bennett

Legislation.govt.nz: Parliamentary Salaries Determination 2015

TV3 News: Car crushing ‘discredits law’ – expert

NZ Herald: Editorial: Car crushing an undignified stunt

TVNZ Q+A:  Revolutionary changes in store for social services (14:11)

Radio NZ: Power Play with Brent Edwards

NZ Herald: No surplus this year – Treasury

NZ Treasury: Analysis of Expenses by Functional Classification for the year ended 30 June 2015

Radio NZ: Legal aid rules not failing domestic violence victims says minister

Fairfax media: Tax cuts ‘possible’ after first surplus for NZ government

NZ Herald: Editorial – Use surplus for benefit of everyone

Fairfax media: Crown looks to trade in its luxury limo fleet

NZ Herald: Govt backtracks on limo statements

NZ Herald: Complaints laid against Murray McCully over Saudi farm deal

Fairfax media: NZ government shells out $11m on New York apartment for UN representative

Fairfax media: NZ diplomat involved in decision to buy $6.2m luxury Hawaiian mansion

Otago Daily Times: Smelter gets Meridian, Govt lifeline

Rio Tinto.com: Rio Tinto announces a 10 per cent increase in underlying earnings to $10.2 billion and 15 per cent increase in full year dividend

Fairfax media: Poverty-stricken kids resort to scavenging

Fairfax media: Cancer Society attacks ‘ludicrous’ benefit requirements for cancer patients

Wikipedia: 2014 General Election

Additional

NZ Treasury: Financial Statements of the Government of New Zealand for the Year Ended 30 June 2015

NZ Treasury: Year End Financial Statements – 14 October 2015

Previous related blogposts

Hon. Paula Bennett, Minister of Hypocrisy

The law as a plaything

A fitting response to National MP’s recent personal attacks on Metiria Turei

On ‘The Nation’ – Anne Tolley Revealed

“I don’t know the details of that particular family” – Social Development Minister Anne Tolley

.

.

.

bill english - cuts - budget

.

This blogpost was first published on The Daily Blog on 21 October 2015

.

.

= fs =

Advertisements

Christchurch City Council – Having your asset-cake and eating it

28 March 2015 2 comments

.

christchurch city council logo

.

Prelude

On 29 January 2013, Prime Minister John Key announced that the rebuild of Christchurch would be a Herculean, multi-billion dollar task;

New Zealand also faces a domestic construction boom. That will be centred, of course, on Christchurch, where the total spend is now estimated to be around $30 billion.”

By 15 May 2014, National’s Finance Minister, Bill English delivered his sixth Budget speech to Parliament. The cost of the Christchurch re-build  had escalated by $10 billion;

The total cost of the rebuild has been estimated at $40 billion and the Government’s share will be significant.

On current estimates, the Government’s contribution to the rebuild is expected to be $15.4 billion, of which $7.3 billion will be incurred by the Earthquake Commission, net of reinsurance proceeds.

Despite central government’s massive re-build bill for Christchurch, in his Budget Conclusion, English was at pains to repeat his new mantra;

The Government’s books are on track to surplus next year and are the envy of most developed countries.”

The surplus English referred to was an Operating balance Before Gains and Losses (OBEGAL),  forecast to be a hair-thin  $86 million for 2014/15.

English’s  Budget document pointed out;

Government is still borrowing a net $78 million a week, and in dollar terms, net debt is expected to peak at $64.5 billion in 2015/16...”

Little wonder that English stated, with blinding obviousness four days earlier;

It means we will need to maintain firm expenditure control beyond our return to surplus...”

Which is why an increasingly nervous Finance Minister, conscious of spiralling re-build costs, came down hard and crushed any suggestion that taxpayer’s money be used to subsidise the proposed SkyCity convention centre;

There’s no contingency for that. If the less preferred option ended up being the option then that money would be part of the Budget process.”

Firm expenditure control in this case meant that the government-purse was firmly shut. And padlocked.

National Government’s Predictable Response

In May 2011, barely three months after Christchurch’s devastating earthquake that killed 185 people, there were already suggestions from Gerry Brownlee that the Christchurch Council would have to sell part of their community-owned assets to fund the re-build.

National’s mis-handling of the economy, with two unaffordable tax-cuts,  as well as the Global Financial Crisis and resultant recession,  had left the government’s books deep in the red.

At first, Brownlee was coy at any suggestion of asset sales;

I don’t foresee the council having to sell any assets, though in the end that will be their choice.

But in the next breath, he added;

I would suspect that Treasury have had a look at the city council’s balance sheet, given that we are going to have to take a whole lot of debt onto our [the Government’s] balance sheet.

It’s only natural we would have a look at what the council can stand [to pay].

Yes, there is provision in this legislation for Cera [Canterbury Earthquake Recovery Authority] to suggest to council that they might need to sell something.

Brownlee denied that government or Treasury had been scoping CCC assets with a view to partial (or full) privatisation;

The accusation is that Treasury have been looking at council assets with a view to what the council will sell. That is, I think, completely erroneous.

On 9 February 2012, a year after the second earthquake,  Brownlee admitted in Parliament (in response to questioning by the future mayor of Christchurch, Lianne Dalziel);

In the days leading up to that particular injudicious comment from me there were numerous discussions going on with the council—between the senior executives, the mayor, me, and the senior executives of the Canterbury Earthquake Recovery Authority—over a number of issues that we want the council to take some responsibility, alongside us, for. Although Treasury officials will have talked to the council, I am unaware of exactly what that discussion would have been about. But let me tell you that when the Government is spending $5.5 billion anywhere we expect the recipients of that to have some plan for how they will participate in what will be a very, very expensive recovery, and that plan has to be a lot better than saying “We’re just going to put up the rates, and we’re going to borrow a lot more money”.”

Brownlee would have us believe that he was “unaware of exactly what that discussion would have been about” between Treasury officials and  Christchurch council?  As Minister of Earthquake Recovery of that devastated city, that proposition is simply not credible.

Brownlee was not being truthful.

The Minister’s denial was further shown to be less than truthful with this evasive response in Parliament on 2 August 2012;

I have received advice from Treasury and the Canterbury Earthquake Recovery Authority on a range of funding options for the rebuilding of Greater Christchurch, to which the Government has committed $5.5 billion to date. Alongside the Christchurch City Council, I support the regeneration of our city, which will be enhanced by the development of the central city plan, released on Monday. I have publicly acknowledged the funding challenges for both the city council and the Government. Councillors and I have agreed to discuss, alongside our respective organisations, a sensible and achievable time line and funding programme for the delivery of the blueprint. I approach these discussions in good faith, as the thousands of city residents would expect us to do so. I intend to say no further on this matter.

The full text  of a remarkable, and somewhat ‘testy’ exchange between Minister for Canterbury Earthquake Recovery, Gerry Brownlee, and the then-Speaker of the House, Lockwood Smith, under-scored the sensitivity of any suggestion that central government was putting the “squeeze” on Christchurch to sell community-owned assets and relieve pressure on English’s struggle to balance the books.

By May 2013, all pretences that asset sales were not being discussed were firmly kicked to the side, with John Key entering the political fray (and Gerry Brownlee standing pensively and obediently in the background);

.

Christchurch rebuild - Council needs to come to the party - PM

.

Key was clear with Christchurch residents in his expectations;

The only other option available to it is that it doesn’t actually embark on some of the projects it might want to embark on. In the end Cantabrians will have to have a say on what they think is the right mix.

I actually personally hold the view that for Canterbury, where you love sport, happen to be pretty darn good at it, and have climatic conditions that argue that a covered stadium might make sense, then actually it could be a really sensible thing to do.

And if it was up to me I would make that choice in a heartbeat if it meant changing the mix of assets, but I understand for lots of other people they might not hold that view.

This is the chance to get it right. I just urge everyone to think that through.  There is the opportunity to have some quite fantastic facilities here.

The Government is quite happy to step up and put $15bn in, and there is a limit as to how much we can put in, and some of it must come from the council.

The threat is obvious; ‘cough up the extra cash by selling some of the family silver, or  no more rugger for you lot’!

Faced with National firmly closing off any options to meet ever-increasing re-build costs, Christchurch was faced with few alternatives and on 1 August last year the Council caved to central government pressure in the form of a report from investment bankers, Cameron Partners. As Mayor Lianne Dalziel admitted;

We’ve got nothing, there isn’t even wriggle room any more, there’s just nothing there, we’re over the line and we have to pull it back before 2017.

Creating financial certainty will attract much needed investment in the rebuild. We want to work alongside the Canterbury earthquake Recovery Authority (CERA) to scope the possibilities for a one-stop landing point for both local and foreign investors.”

Note the year Dalziel refers to: 2017. An election year.

Dalziel’s reference to “both local and foreign investors” is an oblique acknowledgement that the Christchurch City Council will have to part-privatise community assets to raise money that will not be forthcoming from Key’s government.

She was more forth-coming here, on the same day;

Releasing capital from our balance sheet alongside the other options, (including increased income, reduced operational expenditure and government assistance), is clearly one of the ways we can address the uncertainty around the city’s finances.

Dalziel also hinted at why Christchurch was forced to undertake asset sales;

The purpose of releasing capital would be to generate funds to assist in solving the identified funding shortfall; provide the level of confidence and certainty required to develop a credible long term financial strategy and get on with the rebuild of our community facilities, infrastructure and housing; allow CCC to buffer Christchurch residents and businesses from the exponential rates increases; and allow CCC to align our vision and strategic objectives for the rebuild with our asset portfolio – that is, what we own and operate.

It is simply untenable – both from a commercial perspective, as well as morally – that citizens in one city should be forced to pay for the rebuild of their infra-structure. This was a disaster not of their making.

Any suggestion that the cost should not be spread more evenly around the country would create a precedent that we are each solely responsible for any disaster that might befall our own region. Do New Zealanders really want to go down that road? They should think long and hard if that is the kind of society they want for themselves and their children.

Earthquake Recovery Minister could not endorse the Cameron Partners report fast enough, releasing this statement on the same day – 1 August;

The Cameron Partners report makes it clear some major areas of financial uncertainty are causing headaches for Christchurch City, including the cost of repairing and replacing the city’s essential horizontal infrastructure [pipes, roads, waterways].

When we signed the cost-sharing agreement with the council in June 2013 we foresaw this and undertook to do a thorough review of where the shared costs of the rebuild lay by 1 December this year.

Once we have this information we can consider if any amendments are required to the cost-sharing agreement.

Officials from CERA and the Treasury are working with the council already to ensure the review provides Christchurch City with the clarity it needs to help make some of the big decisions ahead of it.”

National had won.

Brownlee had successfully forced Christchurch Council to adopt unofficial National Party policy; that Council’s were expected to divest themselves of strategic assets if funding for extraordinary projects was required. This was the same policy that Brownlee had forced on Auckland, to fund it’s rail loop, and which he outlined on TV3’s ‘The Nation‘, on 30 June 2013;

Rachel Smalley:John Key said on Thursday that Auckland should consider selling its assets in order to meet some of these costs. Should the Council consider that?”

Gerry Brownlee: Well I think it’s one of those things that’s inevitably going to be on the table. Remember that we’ve got a programme that is now set out for the next 10 years, and as we come up to the point where you’re getting the business case together for the city rail link and that huge expense that’s involved in that, and recognise that you’ve got a 2016 Local Body Election as well, I’d be very surprised if it wasn’t something that was considered by some people.”

But more was come on 6 December 2014, Brownlee was demanding that Christchurch Council increase the level of asset sales;

So it’s a positive step but it’s not the end yet. I do have some worries that it might be a little timid and particularly if it were to lead to much higher rates there in Christchurch.

Murray Horton, from the lobby group ‘Keep Our Assets Canterbury’, was correct when he warned;

Once a chunk of ownership of those assets, the council’s assets, is gone then it won’t be long before there are calls for more to go.

Horton’s prescience was proved barely three months later.

Costs & Consequences

On 26 February, 2015, four years and four days after the city’s second quake, the Christchurch City Council voted;

“...subject to public consultation, the council will release $750m in capital through the sale or partial sale of assets the council owns through its commercial arm, Christchurch City Holdings, to help plug its $1.2 billion funding shortfall.

By the following day, Brownlee was demanding more asset sales, which he repeated more forthrightly on TVNZ’s Q+A on 

I don’t think you can put a particular price on it. What I think they need to do, and I’m sure that the council will get there. I’ve got to say the council have been edging their way to a position that I think will leave them in a good space progressively. What really is necessary is a sales process that gets you the highest possible price. If you go out and say, ‘Look, I’m just going to sell a little bit of this and a little bit of that,’ then you’re not going to get any premium on it at all. And if you’re going to sell something, you may as well get as much for it as you possibly can. That’s my real point.

[…]

…if you look at something like the airport. It’s essentially a real estate company that just provides parking for planes. You could break it down to being that simple. It’s still going to get used. It’s still going to provide the service the city requires whoever owns it. It is partly price controlled through the Commerce Act, as is Orion. Completely price controlled. So the idea that someone else would buy it and the pricing of your electricity lines are going to become completely out of control is completely wrong. ”

The sale of community assets is a perfect fit with National’s ideological and fiscal needs;

  1. Ideologically, National is as wedded to privatisation as it ever was. It is only held back from a  more radical asset sales programme by public opinion – a point no doubt reinforced through National’s on-going secret polling.
  2. Fiscally, forcing local territorial authorities to finance infra-structure through sales of community-own assets lets central government off the hook, and gives English his desperately needed surplus.

Territorial Authorities have little control over Point 2.

With regards to Point 1, however, Territorial Authorities finding themselves under financial pressure can be more strategic when it comes to finding ways and means to navigate political pressure from the likes of right-wing governments and ministers like Gerry Brownlee.

One such mechanism is found within Christchurch City Council’s own document, “Council decision on proposed Financial Strategy“, where it states;

The sale of 14.3 % of Orion on condition that the shares are only offered to another public entity, such as another TA [Territorial Authority], or an institutional investor such as NZ Super Fund, and that any agreement would be subject to the shares returning to the CCC should the investor wish to sell down its share at a future date.

The same document suggests the sale of 34% of Lyttleton Port Company and 9% of Canterbury International Airport Ltd to “a suitable strategic partner“.

The latter measure opens the proverbial slippery slope to further down-selling of Christchurch Council’s shares in both companies. As such, it would be unacceptable to most Cantabrians (and New Zealanders, who have experienced the down-side of sales of strategic assets).

The NZ Super Fund would be an ideal partner for a Territorial Authoritory such as Christchurch Council. At present the NZSF’s investment in New Zealand amounts to only  13.8% in 2014  (down from 14.2% in 2013).

Not only would the NZSF offer an ideal means by which to keep these assets in New Zealand ownership, but would retain the profits instead of seeing them sent off-shore, worsening our Balance of Payments even further.

It would also fulfil the Super Fund’s  2009 directive from the Minister of Finance “requiring us to, while always investing in a prudent and commercial manner, identify and consider opportunities to increase the allocation to New Zealand assets in the Fund“.

Lastly, the Christchurch Council could eventually re-purchase the shares from the NZSF once the city’s re-build was essentially completed and it’s books were back to some semblance of normality.

The first option should always be that local strategic assets remain in local ownership, so that everyone in the community benefits.

In the face of intransigence from an ideologically-bound, and fiscally inept National Government, the best we can hope for is Plan B.

Plan B: transferring ownership, by temporary sale, to the New Zealand Super Fund. It ticks nearly all the boxes.

Additional – Christchurch City Asset Holdings

  • Christchurch City Holdings Ltd (CCHL) is the commercial/investment arm of the Christchurch City Council.
  • CCHL manages the Council (ratepayers’) investment – worth around $2.6 billion – in these seven fully or partly-owned council-controlled trading organisations.
  • CCHL is forecasting to paying $46 million in dividends for 2015/16 period.
  • CCHL Special dividend for 2015/16 period: $549,300,000
  • “The return on our CCHL investment from cash dividends has averaged 3 per cent in the last three years and 4 per cent in the last 10 years. When the appreciation in the capital value of its investments is taken into account, CCHL has achieved an internal rate of return over the past five years of 8.0per cent a year, or 25.9 per cent a year since its inception in 1996.” (Source)

Trading Organisations

Orion New Zealand Ltd: 89.3% shareholding

Christchurch International Airport Ltd: 75%

Lyttelton Port Company Ltd: 78.9%

Christchurch City Networks Ltd (trading as Enable Networks): 100%

Red Bus Ltd: 100%

City Care Ltd: 100%

Selwyn Plantation Board Ltd: 39.3%

[Acknowledgement Fairfax Media]

 

.


 

References

National Party: Prime Minister’s Statement to Parliament

NZ Treasury: 2014 Budget Speech

NZ Treasury: Rebuilding Christchurch

NZ Treasury: Budget Priorities

Beehive.govt.nz: Budget will confirm track to surplus in 2014/15

Interest.co.nz: Finance Minister prefers not to spend taxpayer cash to avoid Sky City ‘eyesore’; no money in Budget 2015 for it

Fairfax media: Christchurch door open for asset sales

TV3 News: Government accounts show $18.4 billion deficit

Scoop media: Parliamentary Questions And Answers Feb 9 2012

Green Party: Eugenie Sage questions the Minister for Canterbury Earthquake Recovery on Christchurch asset sales

NZ Herald:  Christchurch rebuild – Council needs to come to the party – PM

Fairfax media: Cameron Partners Review – full report

TV One News: Christchurch facing huge financial black hole

Sharechat.co.nz: Christchurch considers selling strategic assets stake to fund rebuild

The Press: Council asset sales mooted to help raise $900m

Scoop media: Brownlee says its up to Len to sell assets for loop

Radio NZ: Asset sales plan ‘may be too timid’

The Press:  Christchurch City Council votes for $750m asset sales

The Press: Gerry Brownlee says Christchurch rate rise as ‘too much’

Scoop media: TV1 Q+A – Govt will protect identities of NZ troops – Brownlee

NZ Super Fund: 2014 Annual Report

NZ Super Fund: 2009 Ministerial Directive

Statistics NZ: Balance of Payments and International Investment Position – December 2014 quarter

Christchurch City Council: Christchurch City Long Term Plan 2015 – 2025

Christchurch City Council: Council decision on proposed Financial Strategy

Additional

Christchurch City Council: Long Term Plan consultation document adopted

Previous related blogposts

Christchurch, choice, and charter schools

Christchurch – Picking the bones clean?

The “Free Market” is a fair-weather friend


 

.

key1

.

This blogpost was submitted to the Christchurch City Council as a submission to the Long Term Plan, on 22 March 2015.
This blogpost was first published on The Daily Blog on 23 March 2015.

.

.

= fs =

Radio NZ: Focus on Politics for 23 May 2014

.

– Focus on Politics –

.

– Friday 23 May 2014  –

.

– Brent Edwards –

.

A weekly analysis of significant political issues.

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

Youth unemployment has decreased since the last election but that still leaves 75 thousand young people in New Zealand who are not doing any kind of work, training or education.

 

.

Radio NZ logo - Focus on Politics

.

Click to listen: Focus on Politics for 23 May 2014 ( 17′  5″ )

  • Budget 2014, Paid Parental Leave, Free medical care for Under 13s
  • Income inequality & child poverty
  • Youth unemployment (NEETs)
  • wage growth, jobs
  • external deficit, exports, China, dairy industry, tourism
  • housing, capital gains tax
  • government surplus, research and science, innovation
  • health spending, education spending, superannuation spending
  • superannuation age of eligibility, Bill English
  • tax cuts

.

Acknowledgement: Radio NZ

.

.

= fs =

Labour: the Economic Record 2000 – 2008

16 November 2011 49 comments

.

.

There has been considerable commentary made by Labour’s critics and political opponents that Labour was an incompetant economic manager, during their nine year term in office. The reality, though, is somewhat different. There are many things that Labour did well and some not-so-well.

But the records speaks for itself.

The following is data, in the form of easily understandable graphs, from Trading Economics, an American website. They collect data from the IMF, World Bank, Statistics NZ,  the Reserve Bank of NZ, etc,  (the usual motley crew of subversive, left wing organisations) to compile their finished presentations.

Each category will be presented via two graphs. Eg,

“New Zealand GDP Growth Rate”

Graph 1: 2000 – 2011

Graph 2: 1990 – 2011

National was in power from 1990 to the end of 1999.

Labour governed from the beginning of 2000 to the end of 2008.

National took office After November 2008.

.

.

New Zealand Population 1960 - 2011

.

New Zealand Unemployment Rate

.

New Zealand Unemployment Rate 2000 - 2011

.

New Zealand Unemployment Rate 1990 - 2011

.

Long-term unemployment (% of total unemployment) in New Zealand

.

Some politicians use long-term unemployed as an election weapon, to win electoral support. However, despite their mis-use of the facts and figures, long-term unemployment was dropping in the last ten years. Not that certain politicians would admit it, though.

.

Long Term Unemployment (% of Total Unemployment) in NZ 2000 - 2008

.

Note how long-term unemployment rose in the late 1980s and spiked in the early to mid 1990s. Can we remember what happened to New Zealand in that time? The terms “Rogernomics” and “Ruthanasia” might jog our memories.

.

Long Term Unemployment (% of Total Unemployment) in NZ 1990 - 2008

.

New Zealand Employment

.

New Zealand Employment 2000 - 2010

.

New Zealand Employment 1990 - 2010

.

New Zealand Government Debt To GDP

.

Despite claims that Labour “spent up large” during their nine year term, the truth is completely different.  As the IMF data shows with crystal clarity, Labour paid down debt. It was not until National came to office that debt levels took of again.

It could be said, with considerable truth, that Finance Minister Michael Cullen ran the government accounts with a fiscal discipline that would make Scrooge sit up and take notice.

.

New Zealand Government Debt To GDP 2000 - 2011

.

The IMF data shows fairly well why Labour had such massive debt kevels to pay down. It was an inheritance from the previous Bolger-led National Government of the 1990s. (Though National were addressing that debt, the reduction slowed from 1997 onward.)

.

New Zealand Government Debt To GDP 1990 - 2011

.

New Zealand GDP

.

One of the many “charges” made by neo-liberals against the Labour Party is that centre-left governments are poor stewards of the economy and are anti-business. Yet, the World Bank data below shows quite dramatically how well New Zealand’s economy fared in the 2000s. Our growth was such that a common complaint from business was a lack of skilled, experienced staff.

.

New Zealand GDP 2000 - 2010

.

The early 1990s were marked by “Ruthanasia” – a continuance of Roger Douglas’s extremist neo-liberal, free market policies. All socio-economic indicators worsened during Ruth Richardson’s tenure as Minister of Finance. The World Bank data below shows how New Zealand’s economy was practically crippled under the tender mercies of the New Right.

It was not till 2003, under Labour’s governance, that the economy began to grow.

As an aside, there were took tax cuts during the 1990s. Result: minimal benefit for the economy.

Labour increased taxes for top income earners in the early 2000s. Except for a short-term ‘dip’, the tax rise doesn’t seem to have impacted on the economy.

.

New Zealand GDP 1990 - 2010

.

New Zealand GDP per capita

.

New Zealand GDP per capita 2000 - 2009

.

New Zealand GDP per capita 1990 - 2009

.

New Zealand Interest Rates

.

New Zealand Interest Rates 2000 - 2011

.

New Zealand Interest Rates 1990 - 2011

.

New Zealand Inflation Rates

.

New Zealand Inflation Rate 2000 - 2011

.

New Zealand Inflation Rate 1990 - 2011

.

New Zealand Current Account

.

This is the bit which shows how much we sell overseas (export), compared to what we buy (import). Exports can be wool, timber,  fish, dairy products, company profits, etc. Imports can be fuel, consumer products, vehicles, raw materials, heavy machinary, etc. The shaded gray should be above the ‘O’ line, instead of below it.

.

NZ Current Account 2000 - 2011

.

NZ Current Account 1990 - 2011

.

New Zealand Government Budget

.

This graph is an interesting bit. When John Key and Bill English refer to the previous Labour government expanding State expenditure, this is what they are referring to. And they are correct – but only half correct. As per usual, they are telling you only half the truth – and leaving out the  next, important bit.

Look at the next graph below, 1990 – 2000.

.

New Zealand Government Budget 2000 - 2011

.

In the graph below, it is clear that the National government from the early to mid 1990s (commonly referred to as “Ruthanasia”) and in the late 1990s, consistantly cut back on expenditure. Some of you may recall horror stories of those times; ex psych patients living rough, in toilets, with no State-community support; market housing rentals; and hospital waiting lists far longer than anything we have today.

On 3 April 1998, Southland dairy farmer Colin Morrison (42) died on a waiting list, awaiting a triple heart bypass surgery. In death, Mr Morrison symbolised everything that was terribly wrong with the health system in the late 1990s.  Public anger mounted as an unpopular government seemed unable to respond to concerns that our public services were being run down in the name of “efficiency”.

Little wonder that there was a 11.55% swing toward Labour in the 1999 General election – the electorate had had a gutsful of neoliberal policies resulting in growing inequality and social problems that seemingly went unheeded.  Contrasts

That is the reason why Labour spent so much during it’s term: to make up for the lack of social spending in the 1990s, and to meet growing public clamour for social services to be better resourced.

.

New Zealand Government Budget 1990 - 2011

.

Cash surplus/deficit (% of GDP) in New Zealand

.

Contrary to the fantasies of some history-revisionists, trying to paint the previous Labour Government as “bankrupting the country”, Cullen actually posted some fairly respectable surpluses.

.

Cash surplus-deficit (percent of GDP) in New Zealand

.

New Zealand Sovereign Credit Ratings

.

The following data-sheet shows New Zealand’s credit downgrades from 1977, when Rob Muldoon was Prime Minister, to the present.

Note that three credit downgrades happened duting three National governments; 1991, 1998, and this year. And if you include the Rogernomics period – that makes FOUR neo-liberal governments that were downgraded.

Do credit ratings agencies  seem “risk averse” to new right governments? Do they prefer centre-left governments?

First, look at 10 September 1998 (National government) – AA+ (negative outlook)

But when Labour came to power – 7 March 2001 – AA+ (stable outlook)

.

Source

.

New Zealand Prison Population trend since 1980

.

The prison sentenced population demonstrates continuous and steady growth since 1986. The seasonal pattern of reduced numbers toward the end of each year is well established, and reflects the influence of the prisoner Christmas release policy 1 , as well as cycles of activity involving Police and the Courts. Notable is the sharp upturn in numbers which commenced in mid-2003, continuing through to June 2007.

Source

.

A closer look at the period 1962 to 1996. Note the huge ‘spike’ in the prison population from 1986 onwards. Except for occassional dips, the prison population has continued to rise steadily since the mid-1980s.

It cannot be a coincidence that New Zealand’s entire socio-economic fabric was unravelled and “reformed” in a process commonly referred to as “Rogernomics”. The process of “economic reform” continued  into the 1990s, referred to as “Ruthanasia”, up until 1996.

The prison population, though, continued to rise.

The ongoing effects of “Rogernomics/Ruthansia” are ongoing to the present day.

.

Total prison population 1962 to 1996

Source

.

[This page still under construction – more data to follow. Keep checking back for more info.]

.

.