The freezing cold invisible hand of neo-liberalism

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Genesis Energy CEO Marc England

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Following the power brown-out through the north island on Monday night – something that supposedly happens only in developing or marxist nations and not developed free market economies – Genesis Energy, chief executive, Marc England was interviewed on RNZ’s Checkpoint by Lisa Owen.

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Trying to ascertain where responsibility lay for power cuts ping-ponged between Transpower and Genesis Energy until Mr England made this astounding admission;

“We don’t have any legal or regulatory accountability for security of supply in New Zealand, our only accountability is to be sure we can supply our customers.”

To emphasise the point; the CEO of one of our main electricity gentailers; currently 51% State-owned/49% privatised; formerly a 100% state owned enterprise; and prior to that, part of the Electricity Corporation of New Zealand has formally expressed his company’s zero obligation for “any legal or regulatory accountability for security of supply in New Zealand“. His only concern was “to be sure we can supply our customers“.

Let that sink in for a moment: ““We don’t have any legal or regulatory accountability for security of supply in New Zealand“.

That is where the splitting up of state electricity generation and retailing; partial privatisation; and the so-called “free market” has led us: “We don’t have any legal or regulatory accountability for security of supply in New Zealand”.

Being a commercial entity, the sole purpose of all gentailers is to return a dividend to shareholders.

It can do that any number of ways but it has no “regulatory accountability for security of supply in New Zealand“. It’s only “regulatory accountability” is to it’s shareholders. End of.

If it can achieve higher dividends by reducing power generation and thereby pushing up prices by virtue of scarcity – then that is it’s priority.

Not to New Zealand.

Not to customers.

But to shareholders.

It is noteworthy that since part-privatisation in 2014, Genesis Energy has not built any further power generation.  There are no incentives for it (nor any other gentailer) to do so. To generate more electricity would increase supply and drive down prices. By keeping generation static – especially in moments of high demand – it can drive up prices.

Electricity consumers can expect prices rises in  months to come.

Welcome to the logical – if insane – conclusion to the neo-liberal experiment.

The only solutions are;

1. Regulation by government to force gentailers to build more renewable energy generation (geothermal, solar, hydro, tidal, and wind).
2. Re-nationalise.
3. Close close all coal-burning at Huntly and elsewhere.

Otherwise, New Zealanders can expect more-of-the-same: static or reduced generation; rising prices; brown outs.,

Otherwise, as Mr England stated with crystal clarity: “We don’t have any legal or regulatory accountability for security of supply in New Zealand”.

The free market has spoken.

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Caretaker Leader Judith Collins

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Responding to the power brown-outs on Monday night, National’s caretaker leader, Judith Collins made these two asinine posts on Twitter;

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Note the time-stamps on both: 9.05PM and 9.06PM.

Ms Collins would have had no understanding why the brown-outs were occurring. In  fact, for much of the affected areas, they were still in darkness. So no one knew what was happening or why.

Yet, that did not prevent Ms Collins from posting two childish “digs” at the government.

This is indicative of her personality; vindictive and willing to lash out.

It is clear that with each successive political poll, as her standing among voters continues its downward trajectory, she is becoming more desperate. And more erratic.

This woman is not fit to be Prime Minister. She is barely suitable as party Leader for National.

#CaretakerLeaderCollins

#NationalNotFitToGovern

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References

RNZ: Checkpoint – Power outages – Genesis CEO says Energy Minister scapegoating, but Woods has questions

Wikipedia: Genesis Energy

Wikipedia: Electricity Corporation of New Zealand

Wikipedia: Genesis Energy – Power Stations

Twitter: Judith Collins – Thanks Labour – 9.05PM –  Aug 9, 2021

Twitter: Judith Collins – Natural off shore exploration ban is looking a bit short sighted – 9.06PM  Aug 9, 2021

Additional

RNZ: UN sounds ‘code red for humanity’ warning over irreversible climate impact

Other Blogs

No Right Turn: The electricity market screws us again

The Standard: When We Needed Electricity, it Was Shut Off

Previous related blogposts

Judith Collins wins a Hypocrisy Award

Politics through a crystal ball, palmistry, or chicken entrails?

History Lesson – Tahi – Electricity Sector “reforms”

The Vote, Electricity, and Sex! (That’ll grab your attention!)

Labour, Greens, NZ First, & Mana – A Bright Idea with electricity!

Do National Party supporters prefer higher electricity prices?

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Acknowledgement: Dylan Horrocks

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Liked what you read? Feel free to share.

Have your own thoughts? Leave a comment. (Trolls need not bother.)

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= fs =

Advertisement

The Free-market, Hyper-individualism… and a Culture of Cruelty?

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Up till recently, I had believed that there were two facets comprising to create a  neo-liberal economy (not “society” – neo-liberalism does not recognise community or society where individuals organise for a greater collective good).

The first was a free market predicated on minimal regulation; reduced government; greater reliance of private enterprise to deliver services; and a lower tax-take which forces future left-leaning governments to curtail vital infra-structure and social-spending.

As Coalition Finance Minister, Grant Robertson clearly told the told the country in March this year;

“We’ve put aside $42bn over the next four years for capital investment but you know what? It won’t be enough. We understand that we need to take a more innovative approach to the financing of infrastructure.”

Which was well understood by National’s former Finance Minister, Steven Joyce,  when he accused Labour of a so-called “$11.7 billion fiscal hole” in their pre-election costings.

National’s tax cuts of 2009 and 2010 were not just an election bribe at a time the country could ill afford them – they were a strategic move to constrain a future Labour-led government in a tight fiscal straight-jacket.

Then-Finance Minister, Bill English, said that the 2009 tax cut represented a $1 billion loss of revenue to the National government;

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

The following year, National’s tax would be estimated to cost the State at least $2 billion in lost revenue.

This was well-under-stood by commentators, analysts, politicians. National-leaning John Armstrong explained this in straight-forward terms;

The message is Labour – if it wins – is not going to spend money the new Government will not have…

… is not going to make promises in advance he cannot keep.

[…]

The yawning chasm of the Budget deficit meant there was no new money to spend. Some cherished policies would have to be introduced progressively – rather than in one go. Savings would have to be found; sacrifices would have to be made. And so on.

That was penned by Mr Armstrong in 2011. It still holds true today.

The second facet of neo-liberalism is promulgation and amplification of the Cult of the Individual. Whether this means cheaper imported goods at the expense of local industry and jobs; doing away with retailing restrictions (or even planned, deliberate breaking of the law); easier access to alcohol and subsequent social impacts; the primacy of the Individual’s rights for self-interest and gratification would trump communities expectations of collective  responsibility; social cohesion; the health and wellbeing of the population, and the greater good.

For example, attempts by communities to restrict and reign in plentiful availability of cheap alcohol is usually  met with a predictable vocal chorus of indignant outrage from people for whom the Right To Buy When/Where-ever supercedes any societal problems. The most spurious arguments are presented, attempting to portray consumers as hapless “victims” of “bureaucracy-gone-made”. Or “Nanny statism”.

Yet, the cost of alcohol abuse was estimated to be approximately $5.3 billion in 2016. That’s $5.3 billion that could have been invested in education, health, public transport,  housing, conservation and pest control, increased research in green technologies, etc.

The heavy  costs of alcohol abuse is socialised, whilst profits are privatised to business and their shareholders. For many, it is more important to be able to buy a drink at 4am in the morning than social problems arising from easy availability.  For some individuals, that convenience outstrips whatever harm is occurring elsewhere. “It’s not my problem”, is the thought that often runs through the minds of many who demand their rights – regardless of consequences.

But there is a third aspect – like a third leg to a three-legged stool – that must exist if neo-liberalism is to thrive: Cruelty.

A certain amount of callousness; disdain; and outright hatred must replace  compassion, egalitarianism, and a sense of community cohesion if the neo-liberal version of “society” is to operate successfully.

It is the reason why neo-liberalism never took hold in Scandinavian countries.

It is the reason why – once a foothold was gained in the late 1980s – successive governments ensured the neo-liberal model was maintained in this country.

Almost by definition, neo-liberalism cannot operate in a society which has values diametrically opposed to it. It took an “economic crisis” in 1984/85 for the Lange-led Labour government to impose Rogernomics.

In 1991, Ruth Richardson used the “BNZ Crisis” to implement drastic cuts to health, education and welfare. Housing NZ tenants were forced to pay market rents. User-pays was introduced for hospitals and schools – though the public resisted and ignored the $50/nightly charge for public hospitals.

Neo-liberalism could not have been introduced so easily without the convenient constructs of various so-called “economic crises”. The mainstream media at the time was complicit in the “reforms” sweeping every aspect of New Zealand’s cultural, social, and economic activity.

But once introduced, the speed of so-called “reforms” accelerated and opposition became harder. Mass protests seemingly had little or no effect. The change of government in 1990 from Labour to National only made matters worse – Richardson’s “Mother of All Budgets” plunged the country further into recession.

For the following thirty years, the neo-liberal paradigm ruled unchallenged, with perhaps the rear-guard action from the now-defunct Alliance, and a few stubborn media commentators who still asked uncomfortable questions where we were heading as a country.

By 2002, the Alliance was crippled and forced out of Parliament.

The remaining critical voices of media commentators grew fewer and fewer.

The “revolution” was all but complete. Neo-liberalism was bedded-in, supported by a propertied Middle Class feeling “wealthy” with bloated house-values and bribed with seven tax cuts since 1986.

But all was not well in Neo-liberal Nirvana.

There were embarrassing reminders that the notion of “trickle down” – now repudiated by the New Right as an ‘invention’ by the Left – was not working as per expectations of devotees of the Chicago School model. As Budget Director for the Reagan Administration, David Stockman, said;

“It’s kind of hard to sell ‘trickle down, so the supply-side formula was the only way to get a tax policy that was really ‘trickle down.’ Supply-side is ‘trickle-down’ theory.”

It became apparent that the promises of neo-liberalism were largely faith-based. Enormous social problems were being caused as corporate power increased;  union power waned; wages stagnated; wealth drained away to a tiny minority; and simple things like home ownership rates were falling dramatically.

Tellingly, it was the gradual loss of the great Kiwi Dream of home ownership that was a litmus test-paper for the toxicity of neo-liberalism’s false premises and empty promises.

Ironically, this was happening at a time when mortgage money was easier and cheaper to obtain from the banks. But only if you earned a high income or already owned property to borrow against. Or could rely on the Bank of Mum and Dad.

Those who already had the assets could hope to get more.

Those at the bottom, or struggling middle classes, would miss out.

For many, they discovered that hitting rock-bottom wasn’t as low as you could go. For growing numbers of New Zealanders, “bottom” meant a shredded welfare safety-net  that had gaping holes in it under the National government;

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Added to a mounting housing crisis, various National ministers exploited every opportunity to portray the poor; the homeless; the chronically sick; unemployed; young people; in the worst possible light. They were authors of their own misfortune, according to former PM, John Key;

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National’s Bill English disdain for young unemployed was made abundantly clear on several occasions;

In 2016;

“ A lot of the Kiwis that are meant to be available [for farm work] are pretty damned hopeless. They won’t show up. You can’t rely on them and that is one of the reasons why immigration’s a bit permissive, to fill that gap… a cohort of Kiwis who now can’t get a license because they can’t read and write properly and don’t look to be employable, you know, basically young males.”

Last year;

“ One of the hurdles these days is just passing a drug test. Under workplace safety you can’t have people on your premises under the influence of drugs and a lot of our younger people can’t pass that test.”

And again in December this year;

“Government’s fees-free policy will ‘soak up staff out of McDonald’s’...”

English’s demonisation of unemployed and young New Zealander’s appeared at complete variance with those same people desperate for paid work. But that did not make him pause in his attacks.

Housing for the poor, the homeless, and vulnerable was also on National’s “hit list”, as they pursued their agenda to down-size state activity in housing.

First came the “reviews” and people’s live upended as National ended tenancies based on an ideological notion that state houses were not for life. The social problems resulting would be euphemistically known later as “unintended consequences”;

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National’s response was predictable,

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Therein lay their own seeds for electoral  defeat three years later.

In the years that followed, National portrayed welfare beneficiaries and Housing NZ tenants as negatively as they could possibly get away with.

The meth-hysteria portrayed HNZ tenants as hopeless, lazy drug fiends. National was only too happy to fan the flames of demonisation, as it allowed National to evict tenants and sell off state houses.  Their policy in September last year was unequivocal, and linked gangs and drugs, with Housing NZ tenants;

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The press statement above was issued by former welfare beneficiary-turned-National Minister, Paula Bennett. The same Paula Bennett who, only eight months later, lamented on Radio NZ;

“I’ve always had concerns… I just didn’t think that the 0.5 [microgram limit] sounded right. I questioned [the Health Ministry] in particular who had set that standard, questioned Housing NZ numerous times, got the Standards Authority involved.”

She suggested tenants should be compensated. That was ‘big’ of her.

She also stated,

“[I] was horrified that people might be smoking P in houses, I’m not going to shy away from that.

Then I started seeing reports and I remember one in particular from an expert – he said, ‘You can just about get more P residue off a $5 note than you could have at some of these houses with 0.5 micrograms’ and so that raised alarm bells for me.

But … then who am I to be standing in and saying at what level I felt that [the limit] should be?”

Maybe she could have asked Sir Peter Gluckman. He was the government’s Science Advisor at the time. The one appointed by John Key. Yeah, that one.

Or, she could have paid more attention to a 2014 MSD report which revealed a staggeringly low rate of drug-use amongst welfare beneficiaries;

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Yeah, that one!

But that would have gotten in the way of National’s cunning plan.

Plans that drove thousands of welfare rolls, as Key’s administration struggled to balance the government’s books after two unaffordable tax cuts in 2009 and 2010;

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In September 2017, on TV3’s ‘The Nation‘,  then Welfare Minister, Anne Tolley, described National’s drive to reduce welfare recipients in the most Orwellian way;

“But we do have a significant number of people who are looking for work, who are capable of working, and so most of them, it’s just a light touch to help them along the way.”

In the same interview, Lisa Owen challenged Minister Tolley on the fate of welfare beneficiaries who had been pushed off welfare. Minister Tolley admitted that she and the National government had no idea what had happened to the thousands of people, including families with children;

Lisa Owen: How do you know that they’re going on to a better life?

Tolley: Look, there’s a whole lot of people that don’t want the state in their lives. Tracking people is awful. They go off the benefit—

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Anne Tolley: They go off the benefit for a whole variety of reasons.

Lisa Owen: How can you claim success, though, for that when you don’t actually know if they’re earning more money than they were on the benefit—?

Anne Tolley: We do track if they come back on to benefit, and we do have a close look at what has happened. As I say, we do do a lot of training. We do provide a lot of opportunities for people to retrain.

Lisa Owen: But you don’t know what’s happening to those people. You’ve got no idea.

Anne Tolley: We have 44% who self-identify to us that they’re going off into work. You know, people go overseas. They age into superannuation. There’s a whole lot of reasons why.

Lisa Owen: All right, so you don’t know.

Thankfully, former PM John Key was more forthcoming in 2011 that New Zealand’s “under class” was growing.

As National ramped up it’s campaign of  denigration and punitive action against welfare beneficiaries and Housing NZ tenants, compliant State organisations were reaping their victims.

One was forced to suicide;

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One was a victim of damp housing and poverty-related disease;

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One was chased for a welfare debt she could have no chance of repaying – but MSD pursued it “in case she won Lotto“;

MSD was trying to recover approximately $120,000 from a chronically-ill beneficiary in her 50s who will never be able to work again. The Ministry has pursued her for years and spent a large amount on the case, even though it is plain the woman has no money and her health will never allow her to work again.

The judge asked the Crown lawyer whether it was worth continuing to pursue the beneficiary.

The lawyer responded that it was, as the beneficiary might win Lotto and would then be able to repay the money.

And the most recent example of victimising the homeless simply defies comprension;

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Homeless men at the “drop-in centre” were shaken awake through the night every half hour.

All because the facility was not compliant with fire and building consents. To it’s credit the Rotorua Lakes Council said “fire and building consents were being rushed through so people could sleep at the shelter“.

But Mr Deane – the organisor of the facility ” was told yesterday [5 July] that they had to remain awake until the necessary  consents were granted”.

The common term for this is sleep deprivation.

It should not be forgotten that the practice of sleep deprivation was one of the five techniques used by the British government against Northern Irish citizens arrested in 1971. Subsequently, in January 1978, in a case taken by the government of Ireland against Great Britain, in the the European Court of Human Rights, ruled that the five techniques – including sleep deprivation – “did not occasion suffering of the particular intensity and cruelty implied by the word torture … [but] amounted to a practice of inhuman and degrading treatment“.

Sleep deprivation was determined to be a breach of the European Convention on Human Rights.

In 2010, the British government lost a Court appeal to prevent public release of a report revealing the practice of sleep deprivation torture had been used against British resident, Binyam Mohamed. The Court judgement stated;

“The treatment reported, if it had been administered on behalf of the United Kingdom would clearly have been in breach of  [a ban on torture].

Although it is not necessary for us to categorise the treatment reported, it could be readily contended to be at the very least cruel, inhuman and degrading treatment of BM by the United States authorities.”

In 2014, the UN committee against torture condemned the United States for allowing sleep deprivation to be used as a torture technique against prisoners at Guantanamo Bay. The United States governments calls such practices “enhanced interrogation”.

To discover that sleep deprivation is being used against homeless men in New Zealand is disturbing.

To realise that a practice considered torture by various international organisations has barely been reported by the mainstream media – is deeply troubling.

We have reached rock-bottom as a society when people are being subjected to “a practice of inhuman and degrading treatment” – simply because they are homeless.

This is the definition of  abuse against the vulnerable: they are unable to fight back because they are utterly powerless.

If this practice of sleep deprivation was carried out in our prisons, there would be a major Royal Commission of Inquiry.

But not when the subject of this abuse is the homeless. Their powerlessness is worse than men and women incarcerated in our prisons, despite being “free”.

The cruelty shown to our welfare beneficiaries; to Housing NZ tenants; and to the homeless, has been sanctioned by a sizeable ‘chunk’ of our population;

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(2008) (2011) (2014) (2017)

Fully a quarter of the country’s population has continued to endorse the National Party at four consecutive general elections.

What does this say about a quarter of the population’s attitude to what has amounted to a campaign of vilification and  denigration against those at the bottom of our social-economic ‘ladder’ – a campaign that has been skillfully carried out to facilitate pushing people off welfare and selling off state houses.

This degree of callous cruelty has been led by various  ministers in the previous National government who have mis-used information; misled the public; and made derogatory comments against those whose sole ‘crime’ was to be poor.

This was bullying from the highest level of power, toward those at the lowest level of powerlessness.

National’s subtle and graduated vilification of the poor made cruelty permissable in a country which once valued tolerance, fairness, and egalitarianism.

When depriving homeless men barely merits a mention in our media, and few bat an eyelid, what other possible conclusion can be made?

This Coalition government is constrained fiscally when it comes to welfare and state housing.

It suffers no such constraints when it comes to showing strong moral leadership to reject State-sanctioned cruelty.There is no fiscal cost to compassionate leadership that lifts up the powerless.

There are good men and women in Labour, the Greens, and NZ First. That is perhaps their strongest common bond between all three; a rejection of the culture of callousness that has seduced and poisoned the hearts and minds of so many New Zealanders.

Every Minister in this coalition government can reject decades of a culture of cruelty by reaffirming the humanity of the unemployed; solo-mums; youth; sickness beneficiaries; state house tenants; the drug and alcohol addicted; and the homeless.

Every Minister in this coalition government can use their position of power to speak on behalf of the powerless.

Every Minister in this coalition government can remind all New Zealanders that we are not bullies; we are better than that. If we cannot look after the powerless in our own society – then what possible hope is there for us and our children’s future, to be a compassionate society?

This will be the defining point of difference between what we have been – and what we hope to become.

This is what will inspire New Zealanders to choose what we aspire to be, and what kind of leadership will take us there.

Cruelty or compassion? Hopefully that will be the true point of difference in 2020.

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~ In Memory ~

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~ Emma-Lita Bourne ~

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~ Wendy Shoebridge ~

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References

Radio NZ: Robertson on infrastructure – $42bn ‘won’t be enough’

Fairfax media: Steven Joyce sticks to $11.7 billion hole in Government budget

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

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

NZ Herald: John Armstrong – Labour confined to a fiscal straitjacket

Dominion Post: ‘Pressure valve’ medics patch up night’s drunks

Fairfax media: Alcohol – How can we reduce the harm it causes?

RBNZ: Banking crises in New Zealand – an historical perspective

NZ Herald: July 1984 – When life in NZ turned upside down

The Encyclopedia of New Zealand – Te Ara: The ‘mother of all budgets’

Wikipedia: The Alliance

NZ Initiative: Defeating the trickle-down straw man

The Atlantic: The Education of David Stockman

NZ Herald: Home ownership rates lowest in 66 years according to Statistics NZ

Interest.co.nz: Housing mortgage rates are more likely to go down rather than up

Fairfax media: Bank of mum and dad could be NZ’s sixth largest first-home mortgage lender

NZ Herald: Auckland teen couple face sleeping in car

TVNZ: More homeless people sleeping in cars

Mediaworks/Newshub: The hidden homeless – Families forced to live in cars

NZ Herald: Minister spells out $43,000 ‘salary’ claim for solo mum

NZ Herald: Benefit cuts for drug users defended by PM

NZ Herald: Bennett increases pursuit of welfare ‘rorts‘

Fairfax media: Key – Mums of one-year-olds better off working

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

NZ Herald: Beneficiary birth control ‘common sense’ – Key

Fairfax media: House call plan to nab benefit fraudsters

NZ Herald:  Unions demand Bill English apologise for describing jobseekers as ‘pretty damned hopeless’

Fairfax media:  Bill English says employers are regularly telling him that Kiwis can’t pass drug tests

Twitter: Newshub – Bill English “soak up staff out of McDonalds”

Frankly Speaking:  Fact Sheet – Employment-Unemployment and Queues for Vacancies

Dominion Post: State tenants face ‘high need’ review

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

Fairfax media: Housing policy will destabilise life for children

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

Fairfax media: Housing policy will destabilise life for children

NZ Herald: ‘No point’ in new state houses – Bill English

National: New crack down on gangs and drugs

Radio NZ: Paula Bennett: HNZ too cautious on meth testing

Beehive: PM appoints Chief Science Advisor

NZ Herald: Minister claims low drug result as victory

NZ Herald: Bennett trumpets 5000 fewer on DPB

Fairfax media: Number on benefits drops, reaction mixed

NZ Herald: Over 5300 benefits cut due to info sharing

NZ Herald: Benefits cut for 13,000 parents in new regime

NZ Herald: 11,000 disabled children lose welfare benefit

Radio NZ: About 2000 children hit when parents lose benefits

Radio NZ: Thousands losing benefits due to paperwork

Mediaworks/TV3: The Nation – Welfare Debate

NZ Herald: Key admits underclass still growing

Fairfax media: Aggressive prosecution focus at MSD preceded woman’s death, inquest told

NZ Herald: Damp house led to toddler’s death

Catriona Maclennan: Loans to feed kids are income and disqualify benefit, says MSD

Radio NZ: Homeless shaken awake as Rotorua shelter awaits consents

European Court of Human Rights: Case of Ireland v. The United Kingdom

BBC: Binyam Mohamed torture appeal lost by UK government

The Guardian: UN torture report condemns sleep deprivation among US detainees

Wikipedia: New Zealand general election, 2008

Wikipedia: New Zealand general election, 2011

Wikipedia: New Zealand general election, 2014

Wikipedia: New Zealand general election, 2017

Additional

Gordon Campbell:  Ten Myths About Welfare – The politics behind the government’s welfare reform process

Other Blogposts

Public Address: We are, at last, navigating out of the “meth contamination” debacle

Pundit:  Beneficiary ‘impact’ highlights poverty of social policies

The Daily Blog: A Fair suck of the sauce bottle!

The Daily Blog: New Government response to MSD sadism is just not good enough

The Standard: Loans to feed kids are income and disqualify benefit, says MSD

Previous related blogposts

Week Watch – 7 June

Easter Trading – A “victimless crime”?

Professor Bill English lectures young New Zealanders on free education

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

Tracy Watkins – Getting it half right on the “Decade of Deficits”

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This blogpost was first published on The Daily Blog on 10 July 2018.

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The “free” market can’t even build a bloody hotel?!

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Our crisis in construction reaches tipping point

According to recent reports in the media, New Zealand is no longer able to build and complete major projects;

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Speaking to Radio NZ on 8 February,  Building Recruitment managing director, Kevin Everett, lamented our chronic shortage of skilled building staff;

“There’s astronomical demand, there’s shortages everywhere from skilled to semi-skilled, to labours. We just can’t get reliable people.

The feedback we’re getting for 2018 from our clients is that they’re all expecting a big year this year and that’s putting pressures on everyone because they just can’t get the manpower.

I’ve heard of people going in and getting 40, 50 people in one hit. We’re looking at doing a campaign just now to go across to the UK, so we’re going to go to London, Manchester, and Glasgow and try and bring people in. We’re looking for at least 100 people in all different skill sets, in residential and commercial.”

The $200 million Park Hyatt hotel project was first announced on 4 July 2016 as a j.v. (joint venture) between Hawkins Group and China State Construction Engineering Corporation (CSCEC), the latter being one of the world’s largest construction companies;

In 2012, The Economist named CSCEC as the world’s biggest builder by revenue, then at US72.6 billion, ahead of China Railway Construction, China Railway Engineering and giant French builder Vinci which in 2003 had been the world’s biggest construction company.

Now, CSCEC has revenue of about US$100 billion.

The Economist article said Japanese builders had now disappeared from the world’s top 10 builders, overtaken by Chinese construction companies.

Fu Wah International Group itself is is a Chinese-owned multi-billion corporation. According to Forbes Fu Wah’s chairman, Chan Laiwa, ranked number 36 on the China Rich List and was worth an estimated  US$5.9 billion.  The hotel project is being built by a Chinese construction firm for it’s Chinese owners.

The Park Hyatt will be Fu Wah’s first project in New Zealand. The company has agreed to spend  an additional $2.5 million on  a public promenade, walkway and art display in the vicinity of the hotel.

In the Hawkins Construction 2016 press release Fu Wah New Zealand General Manager, Richard Aitken, said;

“Together with China Construction, they have the resources, experience and skills to deliver an outstanding outcome for Auckland.”

Panuku Development is a Auckland Council CCO responsible for the regeneration of eighteen hectares of Auckland Council-owned land in the Wynyard Quarter. This includes the Park Hyatt hotel construction site, which it apparently retains ownership of.  Panuku Development’s  then-Chief Executive, John Dalzell, echoed the sentiment;

“This appointment by Fu Wah International Group is a testament to the quality of work Hawkins has delivered on a number of Wynyard Quarter projects to date.”

In September 2015, as the Park  Hyatt project gained resource consent, then-PM John Key was singing the “benefits” accruing to the region;

“ The new $200 million Park Hyatt in Auckland and the $35 million Sofitel in Wellington will create jobs during construction and when the hotels are up and running.”

Gambling with promises of jobs

The arrangement sounds remarkably similar to a deal in between the National government and SkyCity Casino. In 2012, SkyCity was granted approval for up to 500 new pokie machines in return for a $350 million international convention centre in downtown Auckland.

At the time, Key also touted the promise of 900-plus construction jobs from the the Skycity development. This optimistic promise  was quickly revealed to be another of his shonkey “loose connections with the truth”;

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By June 2016, the reality of the Skycity deal revealed at least a hundred jobs going to offshore to an American contractor in Thailand. National’s response? This was “how the free market operated“.

Increasing tourism and “more jobs” appear to be the two main reasons touted for the Park Hyatt project.

But even the prospect of more jobs has recently been questioned.

Earlier this month (8 February), concerns were voiced that two hundred extra  workers from  China would have to be brought in from China, to “help the 300 local staff already on site“. According to Building Recruitment managing director, Kevin Everett, New Zealand evidently lacks the prerequite skills to complete the Hyatt project;

“There’ll be a number of skills mainly around fine decorating including stone work, tiling, wallpapering, painting, veneer work – there’s quite a lot timber veneer within the hotel, so they’ll bring those skills to us.”

Which is remarkable, as New Zealand once built and completed vast construction projects such as the Clyde Dam with minimal foreign labour;

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Clyde Dam is the largest concrete gravity dam in New Zealand consisting of one million cubic metres of concrete. It’s height is 100 metres, width at base is 70 metres, width at crest 10 metres and length at crest 490 metres.

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Plans to bring in two hundred Chinese workers appears to be part of China’s long-term strategy to engage and strengthen their state-owned construction companies. As The Economist pointed out in October 2012;

China’s construction firms have become good at finishing big projects on time. But analysts doubt whether they are ready for rich countries. Julian Bu of Jefferies, an investment bank, says their main advantage – low labour costs – is little help in places where they cannot bring lots of Chinese workers over. 

So much for claims that the project would create more jobs.

Fu Wah even issued a veiled warning that the Hyatt project could face disruptions and delays if  Chinese workers were not allowed into the country immediatly.

At a time when unemployment is still at 122,000 (most likely that figure is an under-estimation as Stats NZ has a narrow definition of unemployment) and under-employment has increased;

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– it is difficult to understand why New Zealand continues to import labour from overseas. Suggestions from some on the Right that these 122,000 constitute a group “unwilling” to work is not credible when taking into account that the under-employed group has risen sharply by a massive 7,000.

The economy – a legacy from nine years of National’s indifference to job-training and thirtyfive years of neo-liberal free market “hands off” ideology – appears paralysed and unable to engage with unemployed and under-employed for re-training. The new Coalition government Minister for Workplace Relations and Immigration, Iain Lees-Galloway, said as much on 8 February;

“We know that construction is a sector where the previous government failed to invest in the skills that New Zealanders need to participate in that sector, and there are significant shortages in the construction sector as we’re seeing a lot of infrastructure and a lot of construction being undertaken at the moment.”

It seems cheaper simply to import labour when needed, and return them to their home countries when that need has ended. That let’s businesses off the hook having to invest heavily in training local workers. It also increases labour exploitation by unscrupulous bosses.

The Property Council’s acting CEO, Matt Paterson, frankly admitted that foreign companies and labour could be used as a weapon to lowering prices (including wages), when he disclosed in July 2016;

“One of the issues holding back the development and construction market in New Zealand is high prices, so any additional competition we get is good. We do need to make sure competition is also bringing us quality and they’re not taking short cuts with materials or labour. Construction costs have been high in New Zealand for a long time. We need to develop a stronger, more competitive, capable construction sector. In the short term, there’s work that needs to be done and overseas firms can play a part in that. But we need to build stronger New Zealand industry.”

In the case of Fu Wah and the Hyatt hotel project, at least one construction company disclosed to Radio NZ that they had attempted to tender for the contract;

However an Auckland company, which did not want to be named for fear of losing out on future work, told RNZ they had voiced their interest at the start of the project in 2016.

A staff member said soon after Hawkins and China Construction were appointed as the main contractors, his company was contacted about what the programme of work would be and asked whether they would be able to do it.

“We went back and said ‘yes, everything’s fine, things are going to be a little bit tight here, things will be fine here’, but nothing major that would lead us to believe we’d been crossed off as a potential subcontractor.”

He said while it was emphasised that they should lock in subcontractors early because of a busy schedule to meet the deadline, it was never an issue of lack of skills.

“At that point in time we more or less had a year or two to lock in labour resource, to build up the labour teams that we have if necessary. But we heard nothing for a couple of years, in fact we never even heard back in the end on whether we could tender for the main package.”

When asked whether they had the staff to do the work now, he said they did.

There appear to be several aspects to this story – all inter-related;

Globalisation

The drive toward globalisation is not simply a free movement of goods from one nation to another. Globalisation also requires a free, unhindered,  movement of services and labour. Allowing cheap labour to move around the planet has it’s predictable consequence, as Rana Foroohar wrote last year for the Financial Times;

The US’s economic model over the past 40 years has been predicated on a kind of globalisation that encourages low wages and outsourcing. The idea was that cheaper stuff would offset the loss of jobs and lower wages. But in an economy made up of 70 per cent consumer spending in which wages haven’t risen for most of the population since the 1990s, that maths stops working. “Globalisation can’t be just about outsourcing and low wages,” says [former General Electric CEO] [Jeff] Immelt (there’s an increasing body of research showing that low wages are a cause, rather than just a symptom, of the problems of globalisation).

In 2014, our own right-wing think-tank, the NZ Initiative (formerly Business Roundtable) said;

As technology improves, many of the unskilled jobs in advanced economies such as New Zealand will simply be replaced.

Even more pertinent, those unskilled jobs that can’t be replaced by technology are likely to be outsourced to those who can provide the cheapest labour, namely, developing countries.

Globalisation has already seen this effect occurring to a large extent.

Leaving labour to Market Supply & Demand

The free market sees unionised protection for workers as anathema to the concept of Supply and Demand for skilled, semi-skilled, and low-skilled workers.

During last year’s election, the supposedly “free market”  party, ACT, promised to increase teacher’s salaries – but with strings attached;

David Seymour is proposing to boost funding for schools – but only if they agree to take teachers out of collective pay agreements.

He said teachers had lost ground against the average wage over the past 30 years.

And Mr Seymour said the reason was a 1970s style pay system.

“The unions insist on paying the best teacher and the worst teacher in New Zealand exactly the same and often protecting under-performing teachers.

“What we’re saying is that we’ll raise teacher pay on average by $20k, but we won’t have that model anymore.”

The ACT Party education policy encourages “…schools to opt out of union contracts”. (Which seems to forget that teachers unions are already voluntary. People have a choice and can already opt-out of membership. Though the ACT Party espouses “personal freedom”, the word “choice” is strangely missing from their Principles statement.)

So what’s gone wrong?!

So if New Zealand has a free-market economy that according to one group is the third most open in the global economy – what’s gone wrong? Why do we have 126,000 unemployed and a further 108,700 under-employed when we have a skills shortage in the construction trade? (Note: Stats NZ’s definition of what constitutes an unemployed person is narrow and actual  numbers are most likely even higher than “official data” states.)

The Christchurch earthquakes of 4 September  2010 and 22 February  2011 damaged and destroyed large parts of the city.  In late 2011, the National-led government at the time was keenly aware that the cost of rebuilding was estimated to cost around NZ$13.5  billion. By 2014, Treasury increased that estimate to a jaw-dropping NZ$15.4 billion.

The need for skilled labour should have been obvious to all.

Obvious to everyone except the government at the time: the Key-led National government.

National’s “response” – an exercise in incompetence

National’s response to on-going problems in the construction industry can best be summed up in a March 2012 comment made by then Earthquake Recovery Minister, Gerry Brownlee;

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Leaving citizens to the “tender mercies” of the free market seems National’s de fault setting.

Which had its inevitable conclusions as the Christchurch re-build is yet to be completed; the entire country is suffering a housing crisis; affordability worsens; and homelessness increases. Even retiring “baby-boomers” have not escaped our deepening housing crisis;

“We risk discovering that New Zealand is going to have a population of homeless pensioners,” Salvation Army spokeswoman Sue Hay told Radio New Zealand.

Compounding housing unaffordability and homelessness was a critical shortfall in skill tradespeople.

At a time when over a hundred thousand New Zealanders were out of work and under-employment was rising, National was practically sitting on it’s hands.

Post 2008 Global Financial Crisis, enrollments for ITO trainees fell dramatically;

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In 2013 – two years after the second Christchurch earthquake, Waikato Plumbing Services office administrator,Gayelene Woodcock, warned presciently of a looming critical shortage of skilled tradespeople;

“During the early 1990s the same thing happened. When there was a decline after the 1987 crash it didn’t actually affect the whole industry until the early 1990s.

The lack of apprentices taken on there showed through about four or five years later when there was an extreme shortage of tradesmen.”

Labour’s Grant Robertson could also see the rushing train bearing down on us;

“We have a shortage now in skilled tradesmen. It’s welcome that the Government worked out they need to do something but the impact of that skilled shortage is being seen at the moment. It’s being seen in Christchurch and it’s likely to be seen around the country.”

Report Card: F for Failed

We now have a shortage of tradespeople so critical that the viability of some  building projects’ is threatened.

Whatever tepid measures National implemented failed to address the growing problem. After the 2011 Christchurch earthquake, National had clear warning of the problems confronting the construction industry.

It chose to tinker with half-hearted solutions, but  these proved ineffectual seven year later as one media report after another highlighted the crisis.

One immediate solution has been to remove barriers such as tuition costs. The  Productivity Commission’s report appeared to reluctantly confirm this barrier;

There is some evidence that differences in subsidy, fee and student support arrangements can influence the study decisions of students (and employers). For example, members of the ITO sector expressed concern about these influences on decisions on undertaking industry training while in full-time employment through an ITP, PTE or ITO…

[…]

The University of Waikato submitted that fees combined with geographic distance may still represent a substantial barrier to obtaining a university education. In particular, it notes:

While parents with professional incomes and substantial net assets may not be concerned about their
children acquiring large amounts of debt to fund tertiary study, the poorest families with minimal net
assets will quite rationally be averse to their children acquiring large amounts of debt. (University of
Waikato, sub.93, p.6)

[…]

The evidence suggests that higher fees reduce demand, that students in non-university tertiary education and lower-income students are more price-sensitive, and that some minority groups may be more price-sensitive (Leslie & Brinkman, 1987; Heller,1997). Where the actual cost students will pay is not transparent,
because various grants or discounts apply that mean actual cost is lower than the advertised price, students from lower-income families are more likely to be discouraged. The availability of loans and allowances will offset this, although students from lower-income households may also be more debt-averse.

In plain english, low-income families were “debt averse” – a scenario which contradicts many right-wing reactionary prejudice which parrots the myth that poor families are in debt because they make “poor choices”. In this case, a student debt is a poor choice that such families will unsurprisingly seek to avoid.

The new Labour-led Coalition government – not fettered by the dead-weight of user-pays ideology to which National is chained to – has understand this simply reality and taken blindingly obvious steps to remove this barrier;

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It took National nine years to allow the current mess we now have in the construction industry. A mess whereby over a hundred thousand New Zealanders are unemployed whilst the building industry is seeking to import cheap, skilled labour from offshore.

It has taken the Coalition just over three months to begin to tackle National’s toxic legacy of mis-management.

Postscript1

In March 2017, Fu Wah  applied to build 330 apartments on the Auckland waterfront, adjacent to the Hyatt Park hotel.

At this stage it is unclear who will  provide the labour for this project. Familiar claims have been made that the proposed NZ$500 million apartment project would “create more jobs”.

Past evidence suggests those claims should be regarded with caution.

Postscript2

Globalisation continues to wreak havoc with our local industries As Fletcher Building announced on 25 February has it has pulled out of the Ormiston Town Centre building project. This is the latest in building projects that Fletchers has either withdrawn from, or will not be tendering for, as local companies find it  impossible to compete with low-priced offshore competitors.

Postscript3

Fletcher’s chairperson, Ralph Norris announced his resignation from the debt-ridden company on 14 February.

Norris was also chairperson of the Business Roundtable until September 2001. The Business Rountable (later re-branded as the so-called “NZ Initiative”) was a pro-free market lobby pressure group  that was instrumental in the neo-liberal “reforms” of the late 1980s and 1990s. Part of those neo-liberal reforms was globalisation: allowing offshore companies to bid for contracts in New Zealand alongside local industries.

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References

Radio  NZ:  200 Chinese tradies to complete Akl hotel

Hawkins:  Hawkins and China Construction JV signs up for Park Hyatt Auckland

NZ Herald:  World’s biggest builder arrives in NZ for $375m in contracts

Forbes:  Profile – Chan Laiwa & family

TVNZ News:  $200M luxury hotel under way in Auckland’s waterfront

Panuku Development Auckland: Wynyard Quarter

NZ Herald:  New Chinese hotel investment for Wynyard Quarter

Panuku Development Auckland: Home Page

NZ Institute of International Affairs: Speech to the NZIIA – 3 May 2015

NZ Herald:  Go-ahead for $200m Auckland waterfront hotel

Fairfax media: Key defends Sky City casino deal

TVNZ:  Key defends convention centre job predictions as offshore contract raises fears

Radio NZ:  SkyCity centre steel jobs go to Thailand

NZ Herald:  Hyatt’s new $200m hotel ready for 2018

Wikipedia: Clyde Dam

The Economist:  Great wall builders

Radio NZ: Minister requests more info on Chinese tradies

Statistics NZ:  Unemployment falls to a nine-year low

The Wireless:  Left without a choice – How international students are exploited in New Zealand

Radio NZ:  Chinese tradies – Company says not given tender opportunity

Radio NZ:  300 apartments for Auckland waterfront

Financial Times: Why US big business listens to Bernie Sanders

NZ Initiative:  Degrees no longer a ‘golden ticket’

Radio NZ:  ACT leader blames unions for teachers’ poor pay rates

ACT Part: Education

ACT Party: Principles

Heritage: Economic Freedom – Country Rankings

Statistics NZ:  Unemployment rate down to 4.6 percent

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

Mediaworks:  Unemployment – Bad news NZ, it’s much worse than you think

NZ Parliament:  Economic effects of the Canterbury earthquakes

Treasury: 2014 Budget –  Rebuilding Christchurch

Fairfax media: Christchurch rent crisis ‘best left to market’

Radio NZ:  Housing report paints ‘sobering picture’ of crisis

Fairfax media:  More NZ retirees will become homeless without action on housing – Salvation Army

Productivity Commission: Student characteristics and choices (pgs 41, 60, 73, 74)

TVNZ:  Shortage of skilled tradespeople exacerbating Auckland’s housing problem

BCITO:  Prime Minister encourages construction apprentices

Radio NZ:  Fletcher out of running on another big-ticket build

Noted:  Unfair overseas competition hurting NZ forestry, says industry leader

Fairfax media:  ‘Incompetence’ behind Fletcher Building’s woes, admits chairman Sir Ralph Norris

NZ Herald: Ralph Norris retires

Additional

NZ Herald:  Brian Gaynor – How to fix Fletcher Building

Fairfax media: Dearth of tradesmen foreseen

Other Blogs

The Standard:  Fonterra and Fletcher Building

Previous related blogposts

Roy Morgan Poll: Unemployment and Under-employment up in New Zealand!

Lies, Damned lies and Statistical Lies

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

MSM catches up on Unemployment stats rort

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This blogpost was first published on The Daily Blog on 26 February 2018.

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The Mendacities of Mr English – The covert agenda of high immigration

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Context

Bill English was recently caught on-the-spot when challenged why National was permitting high immigration at a time when unemployment was still high, and rising.

Make no mistake, National has opened the floodgates of immigration because it is an easy way to artificially  stimulate the economy. This was pointed out in May 2011,  by then-Immigration Minister, Jonathan Coleman, who trumpeted the contribution made by immigration to economic growth;

“All of us have a vested interest in immigration and I’m pleased to share with you some specific actions the Government is taking to enhance Immigration’s contribution to the economy, service improvement and changes to business migration.

[…]

…I’m confident that you will acknowledge the partnership approach that Immigration is now taking to provide tangible improvements to help support New Zealand’s economic growth.

[…]

Considering the economic challenges the country faces, lifting immigration’s economic contribution takes on more importance.”

Justifying the need for high immigration to generate  economic growth, Coleman cited “New Zealand [going] into deficit in 2009 after several years of surpluses and the economic situation has been compounded by the September and February earthquakes” and unsustainably “borrowing $300 million dollars a week to keep public services ticking over“.

Coleman  admitted that “If we were to close off immigration entirely by 2021… GDP would drop by 11.3 per cent“. He revealed that, “new migrants add an estimated $1.9 billion to the New Zealand economy every year“.

Easy money.

The downside to high immigration has been to put strain on critical services such as roading and housing, and reduce demand for locally trained workers to fill vacancies. There is a downward pressure on wages, as cheaper immigrant-labour is brought into the workforce.

As Treasury pointed out in June last year;

“There is a concern that recently there has been a relative decline in the skill level of our labour migration. The increasing flows of younger and lower-skilled migrants may be contributing to a lack of employment opportunities for local workers with whom they compete.”

Faced with increasingly negative indicators from high immigration, English was forced to explain why we were seeing high immigration at a time of rising unemployment;

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English’s response was predictable if not offensive.

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Playing National’s Blame Game

As per  usual strategy, English defaulted to National’s strategy of Default Blame-gaming. When in trouble;

1. Blame the previous Labour government
2. Blame ‘welfare abuse’/Release a ‘welfare abuse’ story in the media
3. Blame Global Financial Crisis or similar overseas event

(If the trouble is Auckland-centered, Default #4: Blame Auckland Council/RMA/both.)

This has been the pattern of National’s policy to shift blame elsewhere for it’s consistently ineffectual policies;

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The Blame Gaming was applied recently to National’s appalling do-nothing record on housing;

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Resorting to Deflection #2, English had the cheek to blame young unemployed for our high immigration level;

“One of the hurdles these days is just passing the drug test … Under workplace safety, you can’t have people on your premises under the influence of drugs and a lot of our younger people can’t pass that test.

People telling me they open for applications, they get people turning up and it’s hard to get someone to be able to pass the test – it’s just one example.

So look if you get around the stories, you’ll hear lots of stories – some good, some not so good – about Kiwis’ willingness and ability to do the jobs that are available.”

His comments on 27 February were echoing previous, similar sentiments in April last year, when he again abused unemployed workers as “hopeless”;

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Quite rightly, English’s comments were condemned by many. English admitted that his comments were based solely on “anecdotal evidence” . This is the worst form of evidence possible as absolutely no confirmation by way of actual, real data is involved. “Anecdotal evidence” panders to prejudice – a  difficult thing to shift even when real evidence proves to the contrary.

Real evidence surfaced only a day after English made his slurs against the unemployed, when it was revealed that out of over 90,000 (approx) welfare beneficiaries, only 466 failed pre-employment drug tests over a  three year period. That equates to roughly to 155 failed tests out of 30,000 per year.

As Radio NZ’s Benedict Collins reported;

Government figures show beneficiaries have failed only 466 pre-employment drug tests in the past three years.

[…]

The Ministry of Social Development said the 466 included those who failed and those who refused to take the test.

Some failed more than once.

The ministry did not have the total figure for how many tests were done over the three years, but said there were 32,000 pre-employment drug tests in 2015.

Those 466 over a three year period consisted of (a) those who failed the test, (b) those who refused to take the test, and (c) some failing more than once.

Put another way, 155 failed tests out of 30,000 per year  equates to half a percent fail rate.

Which means that 99.5% of beneficiaries are clean, according to MSD’s own collected data.

There was further confirmation of low fail rates from another media story. On the same day as the Ministry of Social Development released it’s data on failed drug tests, The Drug Detection Agency revealed that fail-rates were as low as 5%;

While the rate of positive tests has remained at about 5 percent, the company is doing more tests and therefore failing more people, said its chief executive, Kirk Hardy.

“We’ve seen an increase overall in our drug testing and we now, annually, conduct about 144,000 drug tests,” he said.

Looked at another way, 95% of the workforce was clean.

Which simply confirms Bill English to be the typical manipulating, lying, politician that the public so consistently distrust and despise.

However, English has his own  sound reasoning for blaming welfare beneficiaries for this country’s immigration-caused problems. He has to do it to obscure the two reasons why National has opened the tap on immigration as far as they can possibly get away with…

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Cargo-cult Economics

Remember that in May 2011,   then-Immigration Minister, Jonathan Coleman revealed;

“If we were to close off immigration entirely by 2021… GDP would drop by 11.3 per cent“.

A 11.3% fall in GDP would have pushed New Zealand into a deep recession, matching that of the early 1990s.

This was especially the case as only a few years ago the economy was suffering with an over-valued New Zealand dollar. Manufacturing and exports had slumped;

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Combined with the multi-billion dollar Christchurch re-build, mass-immigration was National’s “quick-fix” solution to boosting the economy. It might cause problems further down the track, but those were matters that National could address later. Or better still, leave for an incoming Labour-Green government to clean up the resulting socio-economic mess.

This is  quasi-cargo-cult economics, 21st century style.

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The Not-so-Free-Market

In Coleman’s May 2011 speech, he also referred – indirectly – to the second rationale for opening the floodgates of mass-immigration;

“If we were to close off immigration entirely by 2021… The available labour force would drop 10.9 per cent“

This was critical for National.

A crucial tenet of free market capitalism  (aka neo-liberalism) is that the price of labour (wages and other remuneration) should be predicated on supply and demand;

The higher the wage rate, the lower the demand for labour. Hence, the demand for labour curve slopes downwards. As in all markets, a downward sloping demand curve can be explained by reference to the income and substitution effects.

At higher wages, firms look to substitute capital for labour, or cheaper labour for the relatively expensive labour. In addition, if firms carry on using the same quantity of labour, their labour costs will rise and their income (profits) will fall. For both reasons, demand for labour will fall as wages rise.

Note the part; “At higher wages, firms look to substitute capital for labour, or cheaper labour for the relatively expensive labour“.

Mass immigration may or may not supply cheaper labour per se, but more people chasing a finite number of jobs inevitably “stabilises” or even drives down wages, as migrants compete with local workers. As pointed out previously, this is precisely what Treasury warned off in June last year;

“There is a concern that recently there has been a relative decline in the skill level of our labour migration. The increasing flows of younger and lower-skilled migrants may be contributing to a lack of employment opportunities for local workers with whom they compete.”

National is wary of wages rising, thereby creating  a new wage-price inflationary spiral, reminiscent of the 1970s and 1980s. English said as much on TVNZ’s Q+A in April 2011;

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

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

[…]

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

[…]

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

National is circumventing their own neo-liberal ideology by importing large numbers of workers, to drive down wages (or at least permit only modest growth).

In times of scarce labour, wages should grow. Demand. Supply.

This is the counter to recessionary-times, such as the 2008 Global Financial Crisis, when wages remain static, or fall, due to heightened job losses and rising unemployment. Supply. Demand.

But National is subverting the free market process by ‘flooding the labour market’ with immigrant labour. The price of labour cannot rise because National has interfered with the process of supply  by widening the field of the labour market. The labour market is no longer contained with the sovereign borders of our state.

This reveals “free market economics” to be a fraud. It is permitted to work unfettered only when it benefits the One Percent, their business interests, and their ruling right-wing puppets.

The moment there is a whiff that the “free market” might benefit workers – the goal-posts are shifted. (Just ask Nick Smith about shifting goal-posts.)

The game is fixed. The dice are loaded. We cannot hope to beat the House at their game.

Time to change the game.

Inevitable Conclusion

Welfare beneficiaries. Drugs. Drug testing.  It was never about any of those.

The real agenda is for National to create a false impression of economic growth and reign-in wage growth, through immigration. Anything which threatens to expose their covert agenda is to be countered. Especially before it becomes fixed in the public consciousness.

Welfare beneficiaries are very useful as National’s go-to scapegoats. Or herring of a certain hue…

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Postscript: A case of REAL workplace drug abuse

Meanwhile, in what must constitute the worst case of workplace drug abuse, took place on 14 June 1984;

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…Muldoon had made up his mind.  In one of the biggest miscalculations in our political history he decided that he would go to the country. At 11.15pm a visibly intoxicated Muldoon made his announcement to waiting journalists.

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References

NZ Herald: Beyond the fear factor – New Kiwis can be good for us all

Fairfax media: NZ unemployment jumps to 5.2 per cent, as job market brings more into workforce

Fairfax media: New Zealand’s economic growth driven almost exclusively by rising population

Beehive: Immigration New Zealand’s contribution to growing the economy

NZ Herald: Budget 2016 – Feeling the Pressure

NZ Herald: Treasury warns of risk to jobs from immigration

TV3 News:  Bill English blames unemployment on drug tests

Radio NZ: Employers still struggling to hire NZers due to drug use – PM

Radio NZ: Farmers agree Kiwi farm labourers ‘hopeless’

Radio NZ: Tens of thousands drug-tested, hundreds fail

Radio NZ: Drug use not the whole worker shortage story – employer

NZ Herald: Willie Apiata our most trusted again

Radio NZ: Exporters tell inquiry of threat from high dollar

Wikipedia: Cargo cult economics

Economics Online: The demand for labour

TVNZ: Q+A – Guyon Espiner interviews Bill English – transcript

Radio NZ: Unemployment rises, wage growth subdued

Statistics NZ: When times are tough, wage growth slows 

Fairfax media: Shock rise in unemployment to 7.3pc

TVNZ: Frontier Of Dreams – 1984 Snap Election

Additional

TV3 News: Government gets thumbs down on housing

Other Blogs

The Standard: English hammered on druggies smear

Previous related blogposts

Election ’17 Countdown: The Promise of Nirvana to come

When National is under attack – Deflect, deflect, deflect!

National under attack – defaults to Deflection #2

National under attack – defaults to Deflection #1

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This blogpost was first published on The Daily Blog on 5 March 2017.

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Foot in Mouth award – Former ACT MP exposes flaw in free-market system

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Meet Ken Shirley;

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Most folk won’t remember who Ken Shirley was, prior to his current ‘gig’ as  CEO of the Road Transport Forum (RTF), representing road transport interests since July 2010.

From 1984 to 1990, Shirley was nominally a Labour Party MP. He was closely aligned with the likes of Roger Douglas, Richard Prebble, and other right-wingers who had seized control of the party during the 1980s.

From 1996 to 2005, Shirley was an ACT Party MP. As such, he was an acolyte of  the neo-liberal school of economics and a strong adherent of free market forces. Part of ACT’s policies is to scrap the minimum wage.

Indeed, to under-score ACT’s abhorrence of the minimum wage, ACT’s current leader (and sole MP), David Seymour, condemned a recent rise in minimum wage levels. On 26 February this year, Seymour was scathing;

“The new $15.25 minimum wage will hit regional employers especially hard… In Auckland, $15.25 might not sound like much, but small businesses in the regions who generally charge less will struggle to bear the cost. Hikes to the minimum wage will discourage new employment, and lead to more lay-offs and business failures.

The first employees to suffer will be young, low-skilled workers who won’t be offered a chance to prove their worth. Pulling up the jobs ladder will only add to poverty in low-income areas.

This is a wage set for the distorted Auckland economy. Why should the rest of the country have to bear the same costs?”

[Fun Fact: As a Parliamentary Under-Secretary, Seymour is currently a taxpayer-funded beneficiary on a salary of $185,098 p.a. – which equates to nearly $89 per hour. One wonders if “small businesses in the regions who generally charge less will struggle to bear the cost” of Seymour’s salary?]

But returning to Ken Shirley; as an ex-ACT member of Parliament he is still most likely an  advocate for the abolition of the minimum wage.

On 5 May, Shirley was invited to be a commentator on Radio NZ’s afternoon Panel, hosted by Jim Mora;

 “Ken Shirley of the Road Transport Forum discusses what’s behind logging truck crashes and what needs to be done.”

At one point in the discussion, a suggestion was made that low wages in the trucking industry is not attracting the most highly-skilled and experienced workers;

@ 7.50

Jim Mora: “How bad do you think, Ken, is this situation with truck driving?”

Ken Shirley: “Oh, the spate we’ve had in Northland is just unacceptable. There’s no excuse for roll-over[s]. We know we have some difficult roads in New Zealand with topography, Northland’s is particularly difficult.

But there’s an obligation on the drivers and the forestry companies who hire the drivers to make sure they drive to the conditions. That’s the obligation on all drivers, and the spate we’ve had is just unacceptable, and I think inevitably it seems it’s not mechanical failure, it is driver error.

Whether it’s speed, inattention, or fatigue.”

Jim Mora: “So, it’s a…what, is it a hiring of drivers problem, hiring the wrong drivers, or is it a keeping-costs down problem, Ken? What do you think?”

Ken Shirley: “Well, the two are related of course. We have a chronic shortage of H5 drivers in New Zealand. That’s the heavy combination driver, the truck and trailer. It’s a global problem, but it’s particularly severe in New Zealand at this time. We’ve had it for many years, but with the activity in the economy now, that we are currently having, there is a chronic shortage of drivers.

Many of our members throughout the country are just saying they simply cannot get drivers. And I guess inevitably, you can, in that situation, such a tight situation, out of desperation, you can perhaps hire someone who’s not as skilled as you would like or need, out of sheer necessity. But at the end of the day, there’s no excuse. This should not be happening. We’re taking it very seriously.

We’ve actually instigated a series of roll-over prevention seminars in conjunction with NZTA around the country. They started some six weeks back. And these are actually very good seminars. But we have to educate the drivers, the loaders, the dispatchers, the transport operators themselves, but we must not have this level of roll-over.”

Jim Mora: “Ken, is it the… what is it deep down? Is it the meager wages paid, as some people are saying? You’re just not attracting the skills to the industry?”

Ken Shirley: “Ah, no, you do, it’s, you know, you can have a driver error. But it’s, it’s… you have to have better training, better awareness, that has to be the answer.”

Jim Mora: “So, there was this work-force development strategy, wasn’t there, ah, put into place a wee while back to try and try to entice more people to become truck drivers because of that shortage. But what is the point of a work-force development strategy if we know what the problem basically is, which I’m interpreting as maybe a lack of training and a lack of procedures put in place in the industry – [garbled].”

After a further exchange between Jim More, Peter Elliot (one of the panelists), and Ken Shirley, the host returned the discussion to the matter of wage rates;

Jim Mora: “It does seem though, with the wage rates that we see talked about, that you might not be getting the optimum recruits for the job? Is that a fair criticism, or not?”

Ken Shirley: “Well we know that the skilled labour market across the economy, whether it’s a diesel mechanic, a skilled driver, all of of those industries are, are, reporting severe chronic shortages. And because they are so highly skilled, reliant on a high level of, of, of, experience, when there is a chronic shortage, there is a temptation to often, out of desperation [to] take what you can get. And, and, that’s, that’s when you start to get into issues that like we are seeing and that’s when you start introducing potential road safety problems.”

Jim Mora: “I understand, but would you solve your chronic shortage if you paid higher wage rates?”

Ken Shirley: “Well, indeed, and all the members I speak to want to, but there’s been a race to the bottom, it’s –

[panelist scoffing (?) noise]

… such a fiercely competive industry…”

Shirley’s admissions are astounding.

His comments appear to be a frank admission that the free market has experienced a spectacular  failure on a key point in the Northland logging industry;  that if there is a shortage of  skilled labour, the price of that labour (heavy-truck drivers in this case) should rise – not fall – to attract skilled labour. That is a basic tenet of supply and demand in the free market system.

As the guru of free market economics, Milton Friedman put it;

“But when workers get higher wages and better working conditions through the free market, when they get raises by firm[s] competing with one another for the best workers, by workers competing with one another for the best jobs, those higher wages are at nobody’s expense. “

And Investopedia described a free labour market thusly;

Assuming there are a large number of employers in a region, or that workers are highly mobile geographically, the wages that a company will pay workers is dependent on the competitive market wage for a given skill set. This means that any company is a wage taker, which is simply another way of saying companies must pay competitive wages in order to obtain workers.

None of which seems to be happening in Northland at present.

To the contrary, logging companies – according to their own spokesperson, Ken Shirley – are engaged in a “a race to the bottom” with drivers’ wages.

To compound the problem, in April of this year, Shirley specifically opposed and condemned outright any attempt to increase the wages of drivers;

“The link between remuneration and road safety is highly questionable and as a recent PWC report highlights, the system will result in a net cost to the Australian economy of more than A$2 billion over 15 years.

It is therefore very concerning that the Labour Party here advocated for the same policy and campaigned on it during the last election.”

National awards and government-imposed orders are not the way to lift industry wage rates or make the industry safer. All they do is saddle the industry with inflexible and time-consuming obligations and additional costs.

Let’s not repeat Australia’s mistake in New Zealand. It has been proven that national awards burden the economy and cost jobs and I hope that Labour and other political parties here will accept that reality and ditch the concept once and for all.”

Shirley’s comments last month are in stark contrast to his public lamentations on Radio NZ.

Not only has the free market failed in one of it’s key tenets – but Shirley is actively opposed to raising wages by any means necessary, to attract skilled, experienced truck drivers.

This should serve as a clear lesson that the innate contradictions of the free market ideology – many of which are little more than articles of faith – will eventually become more and more apparent.

Shirley has inadvertently helped with the slow dismantling of the neo-liberal fantasy.

Appendix1

Unfortunately, knowing how the system operates  in this country,  it will takes catastrophic events with several tragic deaths, before the government acts on this growing problem.

That’s how we roll in New Zealand.

Over bodies.

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References

Wikipedia: Ken Shirley

ACT NZ: Welfare and family

ACT NZ: Minimum wage hike whacks regional employers

Parliament: Current MPs – David Seymour

Parliament: Salaries payable under section 8 of Members of Parliament

Radio NZ: The Panel with Peter Elliott and Susan Guthrie

Good Reads: Milton Friedman

Investopedia: Breaking down ‘Demand For Labor’

Scoop media: Government imposed remuneration orders have no place in NZ

NZ Herald: Tourist dies in logging truck crash near Matamata

Additional

Road Safety Remuneration Tribunal: About road safety remuneration orders

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This blogpost was first published on The Daily Blog on 10 May 2016.

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Johnny’s Report Card – National Standards Assessment – Sunrise, Sunset, and Outlooks

To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.

The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.

Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc)  in 2008 and four years in office to make good on it’s election promises.

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Sunrise, Sunset, and Outlook for 2013

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“We need businesses producing high-value products for overseas markets and businesses using R&D to develop those products which drives other benefits, like better production processes and marketing.  Basically it’s about using innovation to drive our economy.

We have some of these companies already – the likes of Fisher and Paykel, Tait and Rakon. Our world-leading dairy industry also owes much of its success to innovation.” – Jonathan Coleman,  Associate Minister of Finance, 1 July 2011

See: EDANZ National Economic Development Forum – Speech Notes

It’s a funny old world we live in…

Sunrise Industries…

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Sex, gambling, tobacco, alcohol – the new profitable industries of the 1st century? We seem to have left out other “growth” industries, the modern sex-slave trade in women and children, and arms manufacturing.

Oh. Wait. Maybe not,

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Oh well, National and it’s  free-market fellow-travellers will be delirious with joy. If there’s a buck to be made from vices and weapons, they’ll be happy as a pig in mud.

Now if only they can find the price of a soul, and a market for it…

And the Sun sets on…

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Meanwhile…

“ Basically it’s about using innovation to drive our economy. We have some of these companies already – the likes of Fisher and Paykel, Tait and Rakon. ” – Jonathan Coleman,  Associate Minister of Finance, 1 July 2011

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Oh well, one (Tait) out of three still seems a ‘goer’. How long for, I wonder?

Meanwhile, how are our export and related sectors doing?

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And the stats back up the ODT story above,

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Source: New Zealand in Profile: 2012 – Economy

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Not too good it seems.  The red-highlighted sectors all declined from 2006 to 2011.

National’s “hands off” doctrine, in deference of the ‘Invisible Hand of the Market’, is certainly achieving one result; giving advantage to our exporting competitors from other nations. The Nats seem resigned (hellbent?) to more job losses; more exporters going under; more skilled tradespeople leaving for Australia; and a further decline ineconomic growth,

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What the hell!? The export sector is a “declining industry“?!?!

When even National’s allies – the Manufacturers and Exporters Association – are calling for government intervention about the high New Zealand dollar, it really drives home the seriousness of the crisis. An economic crisis that this time had it’s origins on Molesworth Street – not Wall Street.

For National to persist in it’s “hands off”  and obedience to Free Market dogma will have nasty consequences for our economy.

For 2013, expect,

• unemployment to rise
• the export sector to worsen
• growth to remain low, under 1%
• an early election this coming year, as Dunne and the Maori Party desert the National-led coalition.

It’s easy to predict – we’ve seen it all before.

Previous related blogposts

New Zealand’s OTHER secret shame

New Zealand’s OTHER secret shame – *Update*

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

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

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The Benign Neglect of the Free Market

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Nuplex joins a long line of other industries, manufacturers, retailers, government departments, SOEs, etc, who plan to shed jobs,

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The announcement of redundancies adds to a shocking list of job losses this year alone,

• ANZ; 1,000 redundancies
• Wire by Design, 55 redundancies
• Hakes Marine; 15 redundancies
• Telecom; 400 redundancies
• Brightwater Engineering; 40 redundancies
• Pernod Ricard New Zealand; 13 redundancies
• Depart of Corrections; 130 redundancies
• Summit Wool Spinners; 80 redundancies
• Ministry of Foreign Affairs and Trade; 80 redundancies
• Cavalier/Norman Ellison Carpets; 70 redundancies
• IRD; 51 redundancies
• Flotech; 70 redundancies
• NZ Police; 125 redundancies
• CRI Plant and Food; 25 redundancies
• Te Papa; 16 redundancies (?)
• PrimePort Timaru; 30 redundancies
• Kiwirail; 158 redundancies
• Fisher & Paykel; 29 redundancies
• Goulds Fine Foods; 60 redundancies
• Canterbury University; 150 redundancies (over three years)
• Solid Energy; 363 redundancies 460 redundancies
• Tiwai Pt aluminium smelter; 100 redundancies
• Axiam Metals;  44 redundancies
• Norske Skog; 120 redundancies
• Goodman Fielder; redundancy numbers t.b.a.
• Dunedin City Council/Delta: 30 redundancies
• Blue Sky Meats; 100 redundancies
• Kaipara Ltd/Stockton Alliance; 63 redundancies
• Wainuiomata New World; 44 redundancies
• Nuplex; 64 redundancies
• Newmont Waihi Gold; 20 redundancies
• Ministry of Justice; 70-200 redundancies
• Salisbury School in Nelson and McKenzie Residential School in Christchurch; 90 redundancies
• Rakon; 60 redundancies

What sets Nuplex’s announcement apart from others was this extraordinary statement from New Zealand Manufacturers and Exporters Association president, Brian Willoughby,

“New Zealand Manufacturers and Exporters Association president Brian Willoughby said Nuplex’s decision would have come after all other options were exhausted. “Nuplex would have been working really hard to be as effective as it could, like the other companies that have announced these closures and layoffs. This is the end game – they can’t make it work.”

He said the Government, and past governments, clearly understood the reasons why manufacturers and exporters were facing such challenges.

“They have all operated with benign neglect and let it get to this,” said Willoughby. “There are so many buttons that could be pushed.”

He said the Reserve Bank could lower interest rates, which would help keep the New Zealand dollar’s strength in check.”

See: Ibid

“Benign neglect“, Willoughby calls it.

Another term is the free market in full operation.

Were it not for the fact that thousands of New Zealanders are losing their jobs on a weekly basis, pushing up the unemployment rate, I would find Willoughby’s remarks laughable.

Businessmen and women are quick off the mark to demand less State interference and more market de-regulation to suit their vision of a pure free market.

Both National and Labour governments  have been happy to comply, reducing company tax rates, as well as personal marginal tax rates for high income earners.

In the last four years, company tax rates have been slashed from 33% to 28%.

See: IRD – For businesses and employers

Industrial labour “reforms” have included the 90 Day “trial rate” to allow employers to take on more staff more easily (and still unemployment is rising?!) since 1 Aprl last year.

See: Ministry of Business, Innovation and Employment – 90 Day Trial Period

And FTA deals are being planned all over the place.

If National was any more “business friendly”, politicians would be literally climbing into bed and sleeping with business people. (No inferences made.)

And business sector groups are now whinging that past governments  ” have all operated with benign neglect “?!

Ungrateful buggers.

As if Brian Willoughby’s whining wasn’t enough, Catherine Beard, executive director of Manufacturing NZ, made this stomach-churning complaint,

” She said measures the Government could take to address the strong dollar included reducing debt, to take the pressure off interest rates, and putting an end to “poor quality spending” such as Working for Families and student loans. “

See: The axe falls: Industry boss blames cuts on Govt

Yeah. Why should families raising kids  and young people starting out in life get all the breaks, huh?

I look forward to Ms Beard advocating  an end to namby-pamby laws protecting workers’ conditions so that children can have real choices in life.

Like whether to work in sweat shops or clean the insides of chimneys.

Choice is important.

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When a failure of neo-liberal policy is pointed out to a right winger…

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… they will always default to one of three positions;

1. Blame the previous government
2. Blame the welfare state and/or beneficiaries
3. Blame the global recession (but not for an increase in welfare beneficiaries – that’s a “lifestyle” choice”)

Pick a public on-line messageboard at random. Look at the postings on  political discussion-threads. Note the response from right wingers and neo-liberals.

When confronted by a failure of the ‘free market’, the neo-liberal and/or right winger will always respond with one of the three  options above.

Rule #1 of the Right Wing mentality: never accept responsibility. (That’s only for  welfare beneficiaries and the poor.)

It’s all they have to explain the failure of their ideology.

 

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A little trick borrowed from the former Soviet bloc…

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In the late 1970s, I had the opportunity to visit my parent’s homeland, behind the Iron Curtain. It was possibly the most educative experience of my life, and I had an opportunity to witness, first hand,  an economic and social system that was quite alien to me.

Some of the lessons I learnt…

1. Extreme economic policies – whether marxist-leninist or neo-liberal – don’t work, and will ultimately fail. Neither cater for human needs, individually or socially.
2. It’s true what they say about centralised planning and the public transport system; it was incredibly cheap, efficient, and very user-friendly.
3. Alway take extra jeans with you to sell on the black market.
4. Do not mess with the local police. Ever.
5. Unemployment doesn’t exist in a socialist country – though they have three or four people doing the job of one. That’s the trade-off; unemployment or over-staffing. Which do you prefer? (At least with over-staffing, there were few idle hands for mischief-making and you didn’t have to waste money on unemployment benefits.)
6. New Zealand was actually more egalitarian (or socialist or whatever you want to call it) in the 1970s, under Norman Kirk and Robert Muldoon – than an actual Soviet Bloc country. Weird – but that’s how it felt.
7. There was no such thing as inflation. Oh no – they just changed the labels. So Brand X of coffee at 100 forints would disappear off the shelf, to be replaced with Brand Y, at 110 forints. Or a lower weight. That was marxist/leninism’s version of capitalism’s “creative accountancy”.

And it appears that, judging by recent media reports, New Zealand businesses have caught on to Item #7. Instead of raising prices, simply reduce the content.

The only thing is… it didn’t work very well for the Soviet Bloc, and their economies  eventually all but collapsed by the late 1980s, or early 1990s.

Just a thought for us smug Westerners. Reducing content and/or brand-name replacement is only a temporary sticky-plaster and hides fundamental problems with the economy.

As if the lessons of the global banking crisis and resultant recession wasn’t enough of a clue for the West…?

Ok, who’s up for a 150 135 gr bar of Cadbury?

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“Whatever happened to the Golden Mile?”

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“Whatever happened to the Golden Mile?” asks right-wing Auckland Councillor;  National Party member; supporter of ACT politicians; and one-time almost-ran National Candidate, Cameron Brewer.

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ACT MP John Banks, David Lumsden, Cr Cameron Brewer

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Cr Brewer is complaining about the transformation of  Auckland’s “Gold Mile” in Queen Street. He says,

“Now it has come down to these little shoebox shops selling absolute rubbish.

You really have to wonder the logic of the council wanting to spend nearly $500 million on CBD and waterfront upgrades over the next 10 years, when at the same time it’s signing off these awful little developments.

It completely runs counter to the mayor’s vision of creating a world class city centre.

Pocket traders would only send good retailers and shoppers away to the suburbs.

Only five years ago Queen St had about $50 million of ratepayers’ money spent on it, and more recently the same amount was spent on Aotea Square and millions on turning some side streets into shared spaces.

Then council allows this. It’s very frustrating. The planning department needs to start talking to the economic development department, because things have got to change.” – Ibid

Then he added, quite oddly,

“Sometimes it’s more about getting a migrant visa, than creating a sustainable business.”

Am I getting the impression that Cr Brewer just took a ‘dig’ at immigrants?!

The irony here is that Mr Cameron is a National Party member, and has worked for ACT’s Rodney Hide and John Banks. Part of  the National/ACT ideology is that the free market determines the nature of business – not the State.

This is the same Free Market ideology which allowed dozens of state assets to be privatised; electricity production to be corporatised and sold at a profit; removal of tariffs and flooding NZ  with cheap goods from low-wage countries; the de-unionisation of the workforce; corporate competition forcing down wages; and which determines the price of everything from anzac biscuits to Zoo tickets.

This is the ideology which has transformed many Council Organisations from previously council-run enterprises – to independent, profit-oriented, corporate entities.

In short, the New Right, neo-liberal ideology is that the State has no business being in business, nor creating “unnecessary” impediments and restrictions  to business.

Cameron Brewer is not averse to supporting business, as he stated in a press release on 20 September 2011,

“ Auckland Council’s draft economic development strategy was peer reviewed by Greg Clark who advises international cities on how to lift their performance. Mr Clark believes Auckland’s number one priority should be creating a “business-friendly well run-city, with enabling business and investment climate”. “

When Cr Brewer asks “Whatever happened to the Golden Mile?“, the answer is quite simple: the free market is what happened.

And that’s the thing about the “free market” which I would point out to Cr Brewer;  control of our society; the way our communities live; is now at the mercy of  market forces.The bottom-line rules; the Consumer is King; and everything is by the power of the Contract.

Welcome to New Zealand, post-1984.

Eventually, of course,  those same market forces will impact our lives in unintended ways, and cause consequences   that the Cameron Brewers of New Zealand, will not welcome, and will bitterly resent.

After all, how many people in South Auckland angrily resent the proliferation of alcohol outlets in their communities, selling cheap booze at all hours of day and night?

How many people revile the pokie machines that suck  millions of dollars out of families’ pockets, and impact so tragically on communities throughout the country?

Even as Cr Brewer quoted Greg Clark above,

“…Mr Clark believes Auckland’s number one priority should be creating a “business-friendly well run-city, with enabling business and investment climate”. “

So Cr Brewer need wonder no more as to “Whatever happened to the Golden Mile?”

He got what he voted for.

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Related Blogposts

A kronically inept government

You’ll have a free market – even if it KILLS you!

Booze – it’s time for some common sense

Unfortunate Outrage

Media reports

NZ Herald:  Shoe-box retailer debate heating up

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National signals epic fail – and waves flag of surrender (Part #Rua)

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When National took office in November, 2008, unemployment was on the way up. From a record low of 3.4% in December 2007, it stood at 4.8% a year later.

By December 2009, the Quarter Household Labourforce Survey unemployment rate had risen  to 7.3%,

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Source

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The unemployment rate has since dropped back to 6.3%, for the December 2011 quarter. The slow drop from 7.3% to 6.3% has taken two years to achieve – and even the cause of that outcome is debateable, as New Zealand  “baby boomers”  start retiring and others  escape our stagnating economy to Australia.

I will make one thing clear; I do not lay blame nor responsibility for the doubling of our unemployment at the feet at National. The 2008  global banking crisis, ongoing recession, and massive debt-problems were issues beyond any political Party in any country. National inherited an international situation not of it’s direct making. (Though National does espouse a neo-liberal ideology which most certainly contributed to the crisis in capitalism.)

As an interesting aside; National and it’s groupies  (quite rightly) blame the 2008 recession for our high unemployment rate. However, they conveniently ignore the 2008 recession when engaging in beneficiary-bashing – then the issue of  increased unemployment is a “lifestyle choice”.

However, this blogger maintains that whilst the rise in unemployment was not National’s fault – that National has been derelict in it’s duty to address the crisis in joblessness. Bashing beneficiaries and painting them as lazy layabouts indulging in a “lifestyle choice” will not create one single job.

Blaming beneficiaries for a global situation they had no hand in making is an abrogation of responsibility by National.

I think we all know by now that National hasn’t a clue when it comes to job creation. They have no policies to generate jobs, and what what they have been doing has been tragically counter-productive,

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This blogger is aware of one solo-mum who used the TIA to go through University; upskill; find a well-paid job;   move of welfare; and is now a tax-paying member of society. But I guess that is not the meme that National wants  entering the public consciousness. Their agenda is better served by scapegoating solo-mothers. (But never solo-dads.)

See:   Once upon a time there was a solo-mum

Paula Bennett  used the TIA to put herself through University; upskill; and then move on to a more well-paid benefit; she became Minister of Welfare.

See: Hypocrisy – thy name be National

Bennett’s axing of the TIA and other cutbacks in training and upskilling is what is colloquially known as a false economy.  It may save a few million bucks now – but will only delay the Day of Reckoning when we end up with an untrained, low-skilled society.

Even John Key made this a theme of his speech four years ago,

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“The National Party has an economic plan that will build the foundations for a better future.

• We will focus on lifting medium-term economic performance and managing taxpayers’ money effectively.
• We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.
• We will cut taxes, not just in election year, but in a regular programme of ongoing tax cuts.
• We will invest in the infrastructure this country needs for productivity growth.
• We will be more careful with how we spend the cash in the public purse, monitoring not just the quantity but also the quality of government spending.
• We will concentrate on equipping young New Zealanders with the education they need for a 21st century global economy.
• We will reduce the burden of compliance and bureaucracy, and we will say goodbye to the blind ideology that locks the private sector out of too many parts of our economy.
• And we will do all of this while improving the public services that Kiwis have a right to expect.  

Because the hard truth is that Labour’s economic underperformance hasn’t delivered the social dividend they promised us.  

So, make no mistake: this election won’t be fought only on Labour’s economic legacy.  National will be asking Labour to front up on their social legacy, too. Many of the social problems the Government said it would solve have only got worse.

This time a year ago, I talked about the underclass that has been allowed to develop in New Zealand. Labour said the problem didn’t exist.  They said there was no underclass in New Zealand.

But who now could deny it?  2007 showed us its bitter fruits. The dramatic drive-by shooting of two-year-old Jhia Te Tua, caught in a battle between two gangs in Wanganui. The incidence of typhoid, a Third World disease, reaching a 20-year high. The horrific torture and eventual death of three-year-old Nia Glassie. The staggering discovery of a lost tribe of 6,000 children who are not enrolled at any school.” – John Key, “State of the Nation Speech”,  29 January 2008

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John Key finished of that speech  by saying,

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“We will not sweep problems under the carpet.  We will not meet the country’s challenges by quietly lowering our expectations.”

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So how has National performed?

Not so good, I’m afraid. (But that’s hardly surprising.)

Aside from cutting back on training, National seems to be engaged in a clandestine programme to actually keep wages depressed. Bill English admitted as much last year, on TVNZ’s Q+A when he let slip that New Zealands lower wages were a competitive advantage to Australia,

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

“… we need to get on with competing with Australia. So if you take an area like tourism, we are competing with Australia. We’re trying to get Australians here instead of spending their tourist dollar in Australia.” – Bill English, 10 April 2011

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Despite a low-wage economy being counter-intuitive for a multitude of common-sense reasons, it appears that – with National’s coded  assent – some local industries are attempting to drive down wages and develop a low-wage economy.

The current industrial disputes with AFFCO and Ports of Auckland Ltd are based purely around driving down wages  by cutting conditions; casualisation; and crushing unions in the workplace.

In October last year, the Seafood Industry Council (SeaFIC) told a ministerial inquiry into Foreign Charter Vessels that their industry needed more cheap foreign labour,

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“SeaFIC says FCVs hiring Asian crews was no different to companies going to low wage countries.

“Many New Zealand businesses have exported jobs previously done in New Zealand to other countries with wage rates considerably less than minimum wage rates in New Zealand.” ” – Source

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See: Is this where New Zealand is heading?

See: Foreign fishing boats, Hobbits, and the National Guvmint

The prospect of slave crews on foreign fishing vessels in our territorial waters was a step too far, even for right-wing blogger and National Party cadre, David Farrar. He seemed horrified at what a ministerial inquiry and US journalist had uncovered. (Or perhaps it was faux-disgust, to try to distance National from slavery on New Zealand’s high seas. Who can tell.)

See: A Slave By Any Other Name

However, it was not a good look for one of our industries to be lobbying National to permit more cheap labour into New Zealand. Even if it was to be far out at sea, out-of-sight-out-of-mind, our US-based clients were not too happy when they found out what was going on under our noses, and from which we were seen to be profitting,

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Now, National’s inaction on job creation, training, and upskilling is beginning to bite. Reliance on the free market has not achieved any desirable, measurable goals. In fact, business is still luke-warm at hiring and training new staff.

Global finance and accounting firm Robert Half’s director director, Andrew Brushfield, expressed surprise at  the “cautious hiring predictions among New Zealand CFOs”. Really? No sh*t, Sherlock.

So where does that leave us;

• A National government that is cutting training allowances
• No government employment-creation programme to speak of
• No state apprenticeship programme
• Leaving job creation and training to the ‘market’
• The ‘market’ being reluctant to generate employment

No wonder unemployment is still at 150,000.

And little wonder that, with 150,000 jobless, and no jobs training, the Christchurch re-build is now hampered by a shortage of skilled tradespeople,

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To illustrate how short-sighted National (and it’s right wing hangers-on and sycophantic businesspeople),  Weltec offers seventeen week (full time) courses in the painting trade,

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If has been fourteen months since the tragic, devasting quake of 22 February 2011. We could have had a small army of in-training workforce ready to go by now.

FBG Developments managing director, Fletcher Glass,  could have his 50 painters – and more – instead of complaining bittlerly,

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“You can’t train skilled tradespeople in two years, and even if you could train 24,000 tradespeople, you would over-saturate the market after the rebuild.  If you get tradespeople from other parts of the country, you will deplete those places of tradespeople, and that will drive rates up. That will make house prices go up, so buying a house would be even less achievable.’

Hiring overseas workers would prevent Christchurch from turning its problem into a nationwide problem. If you need 6000 painters at the peak of the rebuild, that’s every painter in Dunedin and Wellington.” – Ibid

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What absolute rubbish.

I have a sneaking suspicion that Mr Glass , like SeaFIC, is seeking  painters from Southeast Asia because they will accept minimum wage.

So we can add the following to the above list, as to why we have a shortage of trained tradespeople to take part in Christchurch’s re-build,

• Employer self-interest

As a point of interest, the above media article also conducted a poll. It asked a simple question,

Should New Zealand fast track visas for overseas tradesmen?

Yes, we need more workers urgently
85 votes, 20.4%

No, we should train more NZers
332 votes, 79.6%

Nearly 80% of New Zealanders have enough common sense to realise what we should be doing. Obviously, none of those 80% are represented by any of National’s current  59 members of Parliament.

In case anyone is foolish enough to accuse this blogger of being fiscally naive, I refer to a BERL report, last year,

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Industry training has billions in benefits – study

” A new study suggests the country could lose between $7.2 and $15.1 billion dollars annually if the Government withdrew its investment in industry training.

The study by the Business and Economic Research Limited (BERL) sets out to quantify the costs and benefits of industry training both to businesses and to the country.

According to one model, it found a cut in all public funding towards industry training would result in a loss in gross domestic product of 0.6 to 1.8 percent by 2014, and between 2.9 and 6 percent by 2021.

That equated to a loss of between $1.2 and $3.7 billion annually in the short-term and between $7.2 and $15.1 billion in the long term.

BERL said under such a scenario, the loss of skilled labour would have a detrimental effect on the export sector, crimping its capacity and reducing its competitiveness as industries competed for a smaller pool of talent.

The report, commissioned by the Industry Training Federation, said the results underlined how the country’s skill levels could ”positively impact on the quality and value of the goods and services produced, and the standard of living in New Zealand”.

However, it also noted the economy was complex and warned that ”any attempts to prioritise or isolate particular industries, sectors, occupations or skills as being more or less important are economically unsound  “.  – Source

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Training up unemployed New Zealanders who’ve lost their jobs over the last four years of recession; it’s not just a good idea or a “nice to have” – it’s bloody well obvious!

National’s faith in free market forces is admirable. But the rest of us gave up believing in Father Christmas, Easter Bunny, and Superman as we grew up. (Though having Superman around might be useful.)  It is high time that John Key and his Merry Band gave up their quasi-religious belief in the Invisible Hand of The Free Market.

Ideology will not re-build Christchurch. We need many hands – trained up and paid well – to do the work. 150,000 pair of hands!

I leave (almost) the last word to  Dear Leader,

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“We know this isn’t as good as it gets.  We know Kiwis deserve better than they are getting.  We are focused on the issues that matter and we have the ideas and the ability to bring this country forward. 

National is ambitious for New Zealand and we want New Zealanders to be ambitious for themselves. ” – John Key, “State of the Nation Speech”,  29 January 2008

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Wouldn’t that be a fine thing?

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= fs =

History Lesson – Toru – Jobs

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Another look back into our recent history. Just to remind ourselves, that what is past, is prologue…

Firstly, too many of our simple-minded fellow New Zealanders still cling to the bigotted fantasy that those on welfare benefits are there “by choice”.  Currently, our unemployment stands at 150,000 – or 6.3% of the workforce.

But was it always so…?

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6 June 2002

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14 September 2002

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New Zealand’s growth rate in the early to mid 2000s was between 4% and 6%, and the skilled labour shortage reflected an economy that was doing well,

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Tony Alexander, the BNZ’s chief economist, was reported to have said that “businesses are also going to have to consider helping with basic education. They are going to have to take on less  skilled people and train them up in reading, writing, and arithmetic“,

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24 October 2002

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Unemployment dropped to a record low of  3.8%  by December 2007. Interestingly, as the recession impacted on our economy, unemployment soared. It is no secret that unemployment and recessionary periods are closely intertwined,

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28 October 2002

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Our GDP (per capita, adjusted by purchasing power parity) rose steadily in the 2000s, levelling of post-2008,  as the global banking crisis hit New Zealand, creating into a full-blown recession,

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The result of leaving everything up to the free market – a skills shortage. It became readily apparent that businesses demanded well-educated, trained, experienced workers – but were not prepared to pay for that upskilling. That was the role of the State. So much for the State staying out of  the Market – when the Market could not/would not, invest in skills training as required,

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20 November 2002

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As the economy boomed, the government post surplus after surplus. (So much for the mischief-making  from certain National/ACT agitprops who scurrilously spread the lie that the previous Labour Government mis-managed the economy.) The actual data is  on record for all to see,

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Which, in turn, allowed Labour’s finance minister, Michael Cullen to pay down our sovereign debt,

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As always, the building industry was affected. Which is in marked contrast to builders who, in the last couple of years were finding work hard to come by. But in 2002, it was a completely different world,

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25 November 2002

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Even though the economy was growing and unemployment was dropping, it was evident that people’s skills (or lack of) did not match the demands of employers for their businesses. This failure of the Market to upskill workers, to meet the needs of business, is  yet more clear evidence that without State assistance and intervention, economic growth is stifled.

If the self-regulating “Invisible Hand” of the Marketplace acted as per theory, then unskilled unemployed should be upskilled by businesses as required.  This did not happen,

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2 December 2002

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The point of this history lesson is that a poorly performing economy will not maximise the use of available human labour. Or to put it more plainly, if the economy is in recession – expect high unemployment.

That is fairly simple to understand.

Those politicians, and their groupies, who talk about a “welfare lifestyle” or “welfare dependancy” are being deliberately disingenuous. These  politicians are well-educated, sophisticated men and women who have a clear understanding of economic forces and their consequences.

Politicians understand that very few people are on welfare as a “lifestyle”. And “dependancy” should actually mean being dependant on state assistance – or the alternative being to starve. Those who are unemployed are as “welfare dependent” as an astronaut in space is “spacesuit dependent”.

In truth, when the likes of John Key, Paula Bennett, et al, talk of  “welfare lifestyle” and/or “welfare dependancy” – they are using ‘code’ to paint welfare recipients as being the architects of their misfortune.

Because, dear fellow New Zealanders, as we all know, the unemployed here in New Zealand were sitting in the Boardrooms of  Goldman Sachs, AIG, Bank of Scotland, General Motors, Lehmann Bros, etc, etc, etc, and were responsible for the chaos and misery of the 2008 Recession.

When a politician attempts to paint a welfare beneficiary as “welfare lifestyle” and/or  “welfare dependancy” – they are shifting responsibility from themselves – the people with power – onto welfare reciepients – the most powerless in society- for the pitiful state of the economy here in New Zealand, and  throughout the world.

I wonder if welfare beneficiaries know that they crippled the revered demi-god of Western Capitalism, and brought Wall St and City of London, to it’s knees?

Damn crafty, these benes, eh?

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The “Invisible Hand” of the Free Market?

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The latest evidence of the inability of the “invisible hand” of the Free Market to cope with  the modern complexities of 21st Century society and economy. From an article by Richard Meadows,  in  todays Faixfax website;

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“Despite unwillingness to hire, New Zealand businesses paradoxically saw the lack of a skilled workforce as a major impediment to growth in 2012.

Grant Thornton New Zealand partner Peter Sherwin attributed the apparent discrepancy to an overall caution among employers after ”a couple of false dawns”.

Firms did signal concern about the availability of skilled workers 39 per cent, which was 12 per cent higher than the previous period in 2011, he said.

”We have unemployed people but do they have the skills for the jobs that are going to be available? This gets back to one of the real challenges for New Zealand, which is to get a better match between tertiary education and industry.”

Sherwin said there was ”a clear disconnect” between what the education system was producing and industry demands, and he called for a collaboration between industry, the education sector and government to improve the ”connection’‘.” – Source

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What?

Since when does the “invisible hand” of the free market required assistance from the State?

At what point did Business decide that it requires Central Government to fulfill it’s needs?

Since Roger Douglas implemented his neo-liberal “reforms”, the State was to be rolled back and private enterprise allowed to get on with it. We were told time and again;

• business is more efficient than the state
• business can meet its own needs
• the State cannot meet the needs of an economy – that is the role of  business
• Business = good, Government = bad
• Business does not need subsidies
• etc, etc, etc.

In which case why is private enterprise not training and upskilling it’s own workforce?

Why is the “invisible hand” of the free market not providing a skilled workforce, according to laws of Supply & Demand?

Because, my dear fellow, New Zealanders; like the “trickle down” theory, the “Invisible Hand” of the free market is bollocks.

The “free market” an  ideological scam; a confidence trick fed to the public to justify rolling back the State; cutting social services; implementing User Pays; and reducing taxes for the rich. Like a carefully constructed religious cult, the New Right scammers have their loyal  followers who have been sucked into this little ‘game’, to spread the “Gospel of Greed”.

Every so often, though, aspects of the truth appear and we glimpse the reality behind the facade.

The reality is that a modern state cannot function without government; an effective civil service; and social services that are available to all citizens regardless of their material wealth (or lack, thereof).

The reality is that taxes cannot be cut without cutting something in return;  healthcare; education; public transport; and the back-office support staff that allow these services to function.

If we cut the back-office support staff – as this government has done in the last three years – be prepared for some serious stuff-ups. As Anne Tolley discovered recently to her discomfort.

And ultimately, we will see more of this,

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Full Story

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National handed out two tax cuts – April 2009 and October 2010 – and that money had to come from somewhere. Much of it was borrowed from overseas (at $380 million a week) – and the rest was achieved by cutting back on social services.

Like education.

And jobs training.

Which means businesses complaining about a lack of skilled workers;  “Despite unwillingness to hire, New Zealand businesses paradoxically saw the lack of a skilled workforce as a major impediment to growth in 2012.”

As BERL pointed out in December last year,

“A new study suggests the country could lose between $7.2 and $15.1 billion dollars annually if the Government withdrew its investment in industry training.

The study by the Business and Economic Research Limited (BERL) sets out to quantify the costs and benefits of industry training both to businesses and to the country.

According to one model, it found a cut in all public funding towards industry training would result in a loss in gross domestic product of 0.6 to 1.8 percent by 2014, and between 2.9 and 6 percent by 2021.

That equated to a loss of between $1.2 and $3.7 billion annually in the short-term and between $7.2 and $15.1 billion in the long term.

BERL said under such a scenario, the loss of skilled labour would have a detrimental effect on the export sector, crimping its capacity and reducing its competitiveness as industries competed for a smaller pool of talent.

The report, commissioned by the Industry Training Federation, said the results underlined how the country’s skill levels could ”positively impact on the quality and value of the goods and services produced, and the standard of living in New Zealand”.

However, it also noted the economy was complex and warned that ”any attempts to prioritise or isolate particular industries, sectors, occupations or skills as being more or less important are economically unsound”.” – Source

Because many of our skilled workers have had a gutsful and left for Australia.

And around and around and around it goes…

Why? Because relying on the “free market” to achieve certain outcomes is akin to waiting for The Rapture to arrive. Folks, it ain’t never gonna happen.

Eventually the good people of New Zealand are going to realise that National is spinning us a yarn, and is simply relying on ideological dogma for better times.

Personally, I’m putting my money on The Rapture coming first.

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Acknowledgement

To Fear Facts Exposed for source.

Additional Blog Entries

Greed is Good?

“Building better public services” – Really?

Further Reading

Greed of boomers led us to a total bust

Rich list shows rich getting richer

New Zealand’s wealth gap widens

Industry training has billions in benefits – study

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Party like it’s Nineteen Fifty Two!!

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Superintendent Paula Rose, the public face of road safety policing in this country, reported that the road toll for last year (2011) was the lowest on record since 1952. Certainly, 284 fatalities is a remarkable feat when compared to the 800+ that was killed in just one year alone in the decade of the 1970s.

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Source

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Even more remarkable when the population was almost half what it is now, and with a lower vehicle-fleet on the roads,

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About now, you might be wondering what this piece has to do with politics.

It’s quite simple.

The drop in road crashes, fatalities, and demands on our hospital services was not a natural occurrence that happened spontaneously.

The lowest road toll since 1952 – despite a steady increase in population, vehicle fleet, roads, and social mobility– happened because society and successive governments took decisive measures to achieve certain objectives.

Through a mix of advertising campaigns; tough legislation; proactive policing; and measures that extended into every aspect of our lives, work, recreational pursuits, etc – society acted collectively to meet desired outcomes.

The free market; individualism; neo-liberal ideology had zero part to play in reducing the road toll from 800+ in the 1970s to 284, last year. If anything, laws that were enforced regarding,

• reducing drink-driving
• wearing seat belts
• reducing speed
• outlawing cellphone usage whilst driving
• toughening up on vehicle WoF safety
• etc

… all played a part in ensuring that 500 people are alive today that – had the road toll not changed – would be dead and in the ground, or scattered ashes, last year. This is where the Cult of the Individual and the Free Market falls down badly. Not with just road safety – but the needs of society as a whole. Those who decry the collective action taken to reduce the road toll as “Nanny Statism” might care to reflect that they themselves could have ended up as a statistic in a walnut coffin.

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Instead, the collective action of governments and community action has kept them alive.

The amazing reduction of the road toll is a vivid example of what  society can achieve when it works together, for the common good.

The enacting of laws; diligent policing; ubiquitous advertising campaigns; and communities that had had enough of losing loved ones to an endless series of horrific crashes – achieved a goal of saving lives. It was (and still is!) an incredibly complex programme – but determination from government; enforcement agencies; and communities working  in unison made it happen.

Imagine if we, as a nation, and starting with good leadership from the community, determined that our goals for the next few years would be;

• eliminating poverty
• creating jobs
• reducing the wealth-gap
• ensuring a healthy environment for our children

In a previous Blog piece entitled New Year’s Wish List for 2012, I outlined just such goals. A correspondent, Debbie -bless her heart – asked,

“However, what are the chances?”

I think the chances are about the same as the magnificent achievement that Superindentant Paula Rose was congratulating us for.

There is no reason on Earth why the four goals above cannot be made into reality.

The benefits would be as positive as reducing the road toll and our country would truly be the envy of the world.

What are the chances, Mr Key? Mr Shearer?

And will you rely on the free market to do it? Because as sure as evolution made little green apples – it wasn’t the free market that saved 500+ people from the grave last year.

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Additional

Inside Child Poverty

Rolls Royce sales rocket as super-rich drive in style

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The “Free Market” is a fair-weather friend.

Ir seems quite likely that New Zealand will soon be joining the ranks of Japan and San Francisco, where earthquake insurance is either highly expensive, or unavailable to home owners,

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Full Story

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Earthquake Recovery Minister Gerry Brownlee may chest-thump and bellow till the cows come home, but if insurance companies – as Chris Ryan is suggesting – no longer consider New Zealand property a safe risk to insure against earthquakes, then he had better start taking notice.

Internationally, the insurance industry has been hard-hit after the severe floods in Queensland; two major quakes in Christchurch; and a triple-whammy in Japan; earthquake, tsunami, and atomic reactor disaster.  Insurance companies have been hard hit, as Reuters reported in March,

“Some analysts said the disaster, combined with heavy losses already suffered this year from floods in Australia and last month’s New Zealand earthquake, could push up global insurance prices, boosting insurers’ shares.

“In our view the loss will be so large that it will probably provide the trigger to ensure a re-rating of the non-life sector,” Panmure Gordon analyst Barrie Cornes wrote in a note.” Source

Climate-related disasters were also impacting on the insurance industry,

“Climate change is largely to blame for Australasia putting in almost a quarter of the world’s natural disaster insurance claims last year.

Data from major reinsurance provider Munich Re, shows that from 1980 to 2009, Australasia was responsible for 3% of natural disaster insurance claims in dollar terms. But after the Christchurch earthquake, floods in Queensland, and enormous hailstones in Melbourne and Perth, that skyrocketed to 22% last year.

Munich Re, in its own report on the deluge of natural disasters, said climate change “is real and continuing” and cited floods in Pakistan and wildfires caused by a heatwave in Russia. The Christchurch quake was not climate-change related.

Munich Re said 2010 was one of the warmest years since 1850 and featured the second-highest number of loss-related weather catastrophes since 1980, when it started keeping data.

Niwa principal climate scientist Dr James Renwick agreed that weather events like heavy rain were linked to global warming. “It’s possible part of the change since the 1980s is natural variation, but I’m sure there’s a climate change component. We know the globe has warmed and it’s well-documented that the occurrence of extreme rainfalls around the world has increased in a way that’s consistent with the climate models,” he says.

“It’s just what you’d expect – you warm things up, more moisture, more energy, more rain falls. There’s definitely a climate change component in extreme rainfalls around the world.” ” Source

So it seems a little strange that Gerry Brownlee is (a) attempting to dismiss Chris Ryan’s warnings as “scaremongering” and (b) is in denial that re-insuring properties in this country will not be a major problem in future. Of course it will be a problem! How can it not?

Insurance companies and their re-insurers have suffered billions of dollars worth of claims over the last year – $34 billion estimated for the Japanese ‘quake and tsunami, alone, according to a Bloomberg report.

Mr Brownlee should know how the free market works. After all, his party – National – espouses the doctrine of the free market as part of it’s core-philosophy.

Even as we face the prospect of the insurance industry abandoning  New Zealand households – we may be  left  to our own devices when it comes to insurance. Which may be the EQC.

Whilst the EQC is not a full-insurance company in the sense of Tower, AMI, AMP, etc, it has provided a level of protection to New Zealanders since it’s inception in 1945.

The only thing is – it’s broke. Two calamitous earthquakes in Christchurch have effectively emptied the Commission’s ‘war-chest’. Source. As John Key said in February of this year,

“”The good news part of the story is that EQC had about $6 billion before that (quake), that’s going to be exhausted, but we pay in on a continuous basis and we had significant re-insurance in the order of $5b, that will be exhausted.””  Source

Irrespective of Mr Brownlee’s futile rantings against the Insurance Council, it should be abundantly clear that in the near future we will not have the insurance cover that we once enjoyed. Those days are over.

We will have to rely on our own resources and our own ingenuity, whether we like it or not. (Most likely ‘not’, going by past experiences of Baby Boomers who like to Spend Now, Pay Later (or Never, preferably – let the kids pay). To that end, the Greens – as usual – have once again realised what must be done,

“So, it seems, the Greens were right all along – a special levy to fund the costs involved with the Christchurch earthquake still makes good sense, if only (this time around) to replenish the funds available to the Earthquake Commission. Yesterday, it became apparent that the likely cost of the Christchurch rebuild had risen by a massive $4 billion.

This blowout means the EQC couldn’t cope with an additional major disaster (ie anything costing over $2.5 billion) and the government would have to pick up the tab, directly. There are three options on the table : (a) a special levy on all taxpayers (b) a further additional charge attached to insurance premiums already expected to rise significantly, or (c) a rise in income taxes.”  – Gordon Campbell,  Source

However, in the light of Chris Ryan’s warnings, we may have to reconsider the role of the EQC to adopt a more wide-ranging, pragmatic role in earthquake and flood insurance. The EQC may have to step in where private insurers once provided a service – or else face the prospect of uninsured properties.  That would have serious consequences for current and prospective building owners.  (Banks currently insist on full insurance cover before they will consider extending a mortgage over a property.)

Once upon a time, we owned an insurance company called – quite simply – State Insurance.   State Insurance was sold in June 1990 by the Bolger-led, National  government of the day.

It now seems that may have been a mistake (as most asset sales were). The people of this country may yet discover that the Free Market is a Fair Weather friend and when times are tough, we will  have to step up and put in place our own, Very Kiwi Solution(s).

The time for a new State-owned insurance company – “EQC-Plus” –  has come.

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A Taste of the Free Market?

Welcome to the Free Market, a-la New Zealand, where anything goes…

Brothel manager, Grant Thomas, said he “did not consider the sign to be in bad taste”. Well, that probably sez more about Mr Thomas’s standards of taste than anything else.

Personally, I have nothing against sex work, nor the industry as a whole, nor the reforms that the previous Labour government implemented in 2002. What consenting adults do in the privacy of their own bedrooms (or a hired bedroom) is their business, and not mine.

But standards of appropriate advertising apply to ALL commercial activities. That includes the sex industry. The liberalisation of prostitution was not meant to be a carte blanche to do whatever/whenever. Rules and standards apply to all businesses.

The sex industry is expected to abide by them.

High milk prices? Well, now we know why…

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I guess this explains why milk, other dairy products, tomatoes, etc,  are so expensive.

And the Minister for Agriculture, David Carter, can save taxpayers the expense of a Parliamentary inquiry into why milk is so expensive here in NZ…

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I guess it wasn’t such a bright idea to allow supermarkets to buy each other up, until we had only two, nation-wide chains remaining. Duopolies are not noted for promoting competition and keeping prices down.

New Zealand’s supermarket duopoly:

Progressive Enterprises

Foodstuffs

Chalk up yet another cock-up for the free market, unregulated economy?

I think so.

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+++ Updates +++

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Parliament’s Commerce Select Committee inquiry into milk prices gets under way,

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Full Story

Full Story

Full Story

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Related issues

Why did the fat kiwi cross the road?

Hey, People! Leave our kids alone!

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Silly Idea # 341,907,774

Floating cities: PayPal billionaire plans to build a whole new libertarian colony off the coast of San Francisco

• Ocean state would have no welfare, no minimum wage, and few restrictions on weapons
• Platforms would house 270 people and hundreds could eventually join together

PayPal-founder Peter Thiel was so inspired by Atlas Shrugged – Ayn Rand’s novel about free-market capitalism – that he’s trying to make its title a reality.

The Silicon Valley billionaire has funnelled $1.25million to the Seasteading Institute, an organisation that aspires to launch a floating colony into international waters, freeing them and like-minded thinkers to live by libertarian ideals.

Mr Thiel recently told Details magazine: ‘The United States Constitution had things you could do at the beginning that you couldn’t do later. So the question is, can you go back to the beginning of things? How do you start over?’

Life on the ocean wave: A design for one of the floating cities which Peter Thiel wants to start constructing next year off the coast of San Francisco

Green land: An aerial view of the city, complete with landcaped gardens. Mr Thiel believes many of the islands could eventually be joined together

Design for living: This island even has a high-level helicopter pad. The cities would be constructed on oil-rig like terminals

The floating sovereign nations that Mr Thiel imagines would be built on oil-rig-like platforms anchored in areas free of regulation, laws, and moral conventions.

The Seasteading Institute says it will ‘give people the freedom to choose the government they want instead of being stuck with the government they get’.

Mr Theil, the venture capitalist who famously helped Facebook expand beyond the Harvard campus, called Seasteading an ‘open frontier for experimenting with new ideas for government’.

After making his first investment in the project in 2008, Mr Thiel said: ‘Decades from now, those looking back at the start of the century will understand that Seasteading was an obvious step towards encouraging the development of more efficient, practical public sector models around the world.

‘We’re at a fascinating juncture: the nature of government is about to change at a very fundamental level.’

Light city: Peter Thiel called the project, Seasteading, an ‘open a frontier for experimenting with new ideas for government’

Mr Thiel and his colleagues say their ocean state would have no welfare, looser building codes, no minimum wage, and few restrictions on weapons.

Mr Thiel said: 'the nature of government is about to change at a very fundamental level'

Aiming to have tens of millions of residents by 2050, the Seasteading Institute says architectural plans for a prototype involve a movable, diesel-powered structure with room for 270 residents.

The long-term plan would be to have dozens and eventually hundreds of the platforms linked together.

Patri Friedman, a former Google engineer who is working on the project told Details that they hope to launch a flotilla of offices off the San Francisco coast next year.

‘Big ideas start as weird ideas,’ Mr Friedman said.

He predicted that full-time settlement will follow in about seven years.

But while some Ayn Rand acolytes may think the idea is brilliant, it’s not without its critics.

Margaret Crawford, an expert on urban planning and a professor of architecture at Berkeley, told Details: ‘it’s a silly idea without any urban-planning implications whatsoever.’

Big ideas: A close-up of how one of the islands could look. The billionaire founder of Paypal has invested $1.25million to create a floating island utopia

Mr Thiel told an audience at the Seasteading Institute Conference in 2009 that: ‘There are quite a lot of people who think it’s not possible.

‘That’s a good thing. We don’t need to really worry about those people very much, because since they don’t think it’s possible they won’t take us very seriously. And they will not actually try to stop us until it’s too late.’

Source

I fully support founding such a colony. In fact, I’ll donate $100 for a (one way) ticket for Don Brash to migrate there.

I’ve suggested – on several occassions – that neo-liberals who want to live in a free-market, minimalist government, zero-tax, user-pays society have just such a country to migrate to: Somalia.

Somalia is perfect and meets their criteria in every respect.

Of course, as part of user-pays, they would have to pay for their own security; their own private police force. And why shouldn’t they? After all, why should other taxpayers pay for protection of someone elses’ property, in a User Pays nirvana?

Strangely enough, as far as I’m aware, no neo-lib has ever taken up my offer.

And stranger even still, neo-libs seem to prefer living in New Zealand; a country built on collective efforts by it’s citizens to build up every aspect of present day society; electricity sector, education, railways, health, roading, police, bridges, libraries, etc. Even telecommunications, airlines, and television started off as tax-payer funded services. All paid by our taxes.

Private enterprise was focused on providing citizens with supermarkets, clothing, shoes (once upon a time), and other consumer goods. It was a good balance.

“Mr Thiel and his colleagues say their ocean state would have no welfare, looser building codes, no minimum wage, and few restrictions on weapons.”

No minimum wage? But… who would clean their toilets?

No building codes? On a free-standing oceanic city? Oh, I can see that working… not.

Few restrictions on weapons. I can see gun nuts loving that. Including gentlemen like Anders Behring Breivik, David Gray, Martin Bryant, et al.

Call me cynical, but I doubt if Peter Thiel’s  ‘Seasteading’ project will succeed. For one thing, human nature is involved – and as we all know, human nature can be a bugger of a thing to deal with.

Secondly, what happens if Thiel’s ‘island’ gets in trouble? Perhaps struck by a hurricane? Will the Seasteaders expect rescue from the international community? And will they be willing to PAY for assistance? (User pays, of course.)

The article further states,

“The Seasteading Institute says it will ‘give people the freedom to choose the government they want instead of being stuck with the government they get’.”

Uh oh. That sounds perilously close to that pesky concept popularly know as “de-mo-cra-cy”. Damned dangerous, that “de-mo-cra-cy”. What happens if, in time, the population of ‘Seastead’ elect a government that is more interventionist?

Will Thiel then build another libertarian community? To get away from the first ‘Seastead’, taken over over “leftists”?

Personally, I think Somalia would still be a cheaper option.

Let’s be honest here, though.

This is about one thing: money. Thiel wants to keep as much of his money as possible and not pay taxes.  There may be other, immensely wealthy individuals, who feel lifewise.

Well, I say “good luck” to them. Let them set up their little sovereign “Island State”. Let them learn the hard way that a functioning, balanced,  society involves more than just having a bloated bank balance. A dynamic society is a collection of mutually supporting groups and individuals – not just a handful of wealthy people.

My guess is that this little “Profit Paradise” will not last long. Nor will it be self-sufficient. And, the inhabitants will still want to spend (most of) their time on the US mainland, socialising, doing business, and all the other things that the rest of us enjoy.  Their Island State will be nothing more than a taxation “bolthole”; a floating bank account.

And herein lies the dishonesty of such an idea.

But if billionaires want to spend their entire lives on such an Island, and not leave, then they are welcome to it.  Imagine being forced to live your life in one little area; never leaving; and associating only with others of your ilk.

It’s called “prison”.

Great Myths Of The 21st Century (#1)

Perhaps the greatest urban-myth, perpetrated and perpetuated by those whose interests it serves, is that the unemployed are there-by-choice, and unwilling to work.

Of course, this is absurd and an outright falsehood.

Fact 1:  The New Zealand December 2007 Quarter Household Labourforce Survey unemployment stood  at 3.4% . This was prior to the global recession hitting NZ.

Fact 2:  By the end of 2008, the New Zealand December Quarter Household Labourforce Survey unemployed rose to 4.6%.

Fact 3:  The New Zealand December 2010 Quarter Household Labourforce Survey unemployed rate increased to 6.8% .

Fact  4: In three years, the Household Labourforce Survey unemployed doubled from 3.4% to 6.8%

Fact  5: In other countries such as the US, unemployment went from 4.8%  in the fourth quarter of 2007 to stand at 9.1%  by July of this year.

Whether the largest economy on Earth, or one of the smallest, the impact of the global banking crisis and following recession caused companies to collapse; down-size; and “rationalise” (reduce) staff. This caused unemployment to skyrocket.

Events in Wall St, USA, had an impact on Main Sts, New Zealand;

“Jobs to go at textile factories”

“Headlines do not reveal true picture of job losses”

“‘Another kick in the guts for rural NZ'”

“Job losses to hit military next week”

“Lower Hutt jobs to go as shops shut”

“Hellaby’s closes: 18 jobs go”

“Australasian Colorado shops closing”

“Grim day of redundancies”

“Jobs to go at troubled baker Yarrows”

“KiwiRail plans to lay off Dunedin staff”

“Thirty-five jobs may go at Niwa”

“Ovation confirms 304 job losses “

“Dunne defends Greymouth IRD job cuts announcement”

“NZ Post shutting stores, axing jobs”

“Ballantynes faces post-quake job cuts”

“Lane Walker Rudkin 470 Redundancies A Tragedy”

And many more here .

As unemployment increased, the number of job-seekers increased. Even the Prime Minister, John Key, has remarked,

“We’re part of a global environment so we can’t control all of the factors that affect New Zealand, but all the indications we have is that 2011 will be a better year.”

Dozens, and often hundreds of unemployed job-seekers would turn up at businesses, that were hiring staff;

It is apparent that the global recession has caused the demise of some businesses, and forced others to greatly reduce staffing numbers. This is beyond the control of any individual in this country.

So why is there a perception amongst some individuals and groups that the jobless have chosen their unemployment as some kind of “lifestyle choice”? Especially when is it clear that WINZ unemployment benefits are nowhere as generous as some might believe.

Trying to apportion responsibility for people losing their jobs is victim-blaming  and is utterly  repugnant. Such victim-blaming is an unwelcome aspect of the human capacity for bigotry.

Why do people do it?

* The Opportunists.

It serves the purpose of some political parties such as National and ACT to blame unemployed for their predicament.

It allows National the opportunity to escape any possibility of responsibility at addressing this critical economic and social problem. And it’s a vote-winner with the next group,

* The Greedy.

For many neo-liberals who cherish the ideology of the free-market and minimalist-government, any form of taxation by the State is “theft”. And when the State hands over some of that tax-money to the Unemployed so that they can survive – they resent it. And do they complain bitterly!

These neo-liberal free-marketeers resent having to contribute their fair share to the society they live in. (Though they think nothing of driving on tax-payer funded roads; being cared for in tax-payer funded A&E Hospital Wards; protected by tax-payer funded Police; educated in tax-payer funded schools, etc.)

Greed – it does funny things to peoples’ humanity.

* The Perpetually Angry.

The uninformed, perpetually angry, people who obtain their information through TV news and/or Talkback radio. They have friends,, who know someone who has heard of a person, who apparently lives in luxury on the dole…

These are people who have very little experience of the society they live in and generally have a circle of friends who validate their misconceptions.  For them, everyone is a dole-bludger; the recession happened to Someone, Somewhere Else; and everyone should be living comfortably, regardless of circumstances. Their worldview generally doesn’t extend much past their front door.

Anger – it stops people thinking clearly.

Unfortunately, The Greedy and The Perpetually Angry have no constructive solutions to offer us.

One hopes that  the National government will reconsider their decision to  cut almost $146 million from skills training.

Nor does it help when we export jobs overseas,

“Army shifts $2m contract to China”

“Chinese firm beats Hillside to KiwiRail contract”

So not only are New Zealanders losing their jobs because of corporate greed and mis-management in Wall St, USA – but our current policies actually encourage contracts to be awarded to other countries,  in effect “exporting” jobs.

Is this making sense to anyone?

Is it little wonder we have high unemployment, who need the dole to simply survive?

Because demonising a vulnerable group in our society will not achieve a single damn thing; create a single damn job; nor give us the Decent Society that we once enjoyed living in.

So far, my fellow New Zealanders,  there is precious little decency going on here.

And so it came to pass…

It is a basic tenet of belief, amongst the Left, Liberals, and Social Democrats, that everything in a society is inter-connected, whether we like it or not.  That inter-connection applies as much to macro-economics and  governmental policies as it does to how much money you and I have in our pockets to spend.

Accordingly, where there are severe social problems such as mass unemployment; poverty; lack of opportunity; an alienated, angry youth; easy availability of cheap alcohol; dislocated communities; and a general sense of despair and hopelessness – which co-exists with a consumerist society; upwardly mobile professionals; and wealth accumulated by a small minority – there is a powder keg of frustration waiting to explode.

Four days ago, the explosion happened in London.

It was predictable.

And the UK’s  “Guardian” newspaper did predict it, here,

Note the date: Friday, 29 July:  one week before the riotting exploded onto London’s streets.

The article describes severe cut-backs to various local community groups. These are the groups trying to pick up, and hold together, the fragmented pieces of a society stressed by the inhuman forces of neo-liberalism.  As unemployment escalates and even the safety net of the welfare system is cut back – wealth continues to accumulate in the hands of a privileged few.

Unfortunately, the British Prime Minister, David Cameron, just doesn’t seem to get it,

‘This is not about poverty, this is about culture,’ David Cameron told parliament. ‘In too many cases, the parents of these children – if they are still around – don’t care where their children are or who they are with, let alone what they are doing.’

The man is either deluded, or is playing to a very angry public audience.

In case my fellow New Zealanders believe that the powder-keg of social unrest cannot happen in Godzone, it may do us well to reflect in the following;

»  We have a National-led government that is pursuing policies similar to the Conservative-led government in the UK; cutbacks; attacks on welfare beneficiaries; resisting wage-growth; opening up the economy to foreign control; and not addressing unemployment in this country in any meaningful way.

»  Tax cuts in April 2009 and October 2010 benefitted the highest income earners in the country. Those on the bottom recieved not just less in tax cuts – but found themselves paying more for food, goods, and services as GST increased from 12.5% to 15%.

»  The top 150 wealthiest individuals in New Zealand increased their wealth  from $38.2 billion to $45.2b – about a 20 percent increase.

»  Unemployment is still high, at 6.5%. Youth unemployment in NZ is at nearly 18%. The figure for Maori (25%) and Pacific Islanders (28%) remains high.

»  Government is cutting back on social services; reducing government workers via forced redundancies; and has launched an election-year campaign targetting welfare recipients.

»  Despite the devastation in Christchurch, employment in the construction sector actually  fell by 12,700 people compared to a year ago.

As Irish comedian, Andrew Maxwell put it, so very succinctly,

“Create a society that values material things above all else. Strip it of industry. Raise taxes for the poor and reduce them for the rich and for corporations. Prop up failed financial institutions with public money. Ask for more tax, while vastly reducing public services. Put adverts everywhere, regardless of people’s ability to afford the things they advertise. Allow the cost of food and housing to eclipse people’s ability to pay for them. Light blue touch paper. “

In essence, the same conditions that exist in Britain, as ouitlined in the “Guardian” article – exist here in New Zealand (though probably not yet on the same scale).

The riots on the other side of the world should serve as a salient warning to us all; society cannot endure severe social problems such as mass unemployment; poverty; lack of opportunity; an alienated, angry youth; easy availability of cheap alcohol; dislocated communities; and a general sense of despair and hopelessness  – without consequence.

With the economic mess in Europe and a near-bankrupt United States, it is obvious that the unfettered unregulated “free market” has left us all much worse off. The neo-liberal experiment is as much a failure in economic ideology as the old Soviet marxist-leninism. Both are extremes. Both are inflexible and thus vulnerable to crises. Neither offer a practical solution to the demands of society and commerce.

The question is – do our leaders have the wit to realise this?

Or more important still – do we?

And what are we going to do about it?

What killed Rugby?

We all know the saying about killing geese that lay eggs made of precious metals… But the the lesson seems to have firmly evaded those who organise rugby in this country, and indeed, worldwide.

It seems that huge truckloads of cash has severely blinded the IRB and NZRU to what this game should be about;  enjoying rugby.

Instead, it has became an exercise in marketing, ticket sales, squashing anyone who wants to sell pizza, and branding. It’s all about money, money, and more money.

Firstly, common sense has eluded the mind of Rugby World Cup minister Murray McCully, who okayed the use of cans at all rugby venues.

Up till now, beer had been served in featureless, light, disposable plastic cups. This was to prevent cans and bottles being used as unguided missiles by intoxicated rugby fans.

But Heineken is a major sponsor, and they want their brand prominent at all 13 games. That means selling cans, with the brand-name ‘Heineken’ clearly visible, instead of the safer, unbranded, plastic cups.

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So what Heineken wants, Heineken gets: cans.

Never mind if  someone is injured by drunken hoons tossing cans. That evidently doesn’t matter. Evidently what matters is branding. Heineken wants you to know that the can that flew across the bleachers and concussed you was a Heineken – and not one of their competitors. This is important – so please remember to tell the medics when they arrive to treat you.

Money speaks with a very loud voice.

Then, in April, we heard the unbelievable situation that RWC fans will only be able to use cash, or mastercard (another sponsor) eftpos terminals at the games’ stadia.

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Evidently a third form of payment will be available; “Tap & Go” cards. But these are not re-chargeable and fans will have to pay $5 to $10 for each new card.

So expect your method of payment to be controlled.

Though I’m surprised the WRC organisors haven’t tapped John Key on the shoulder and asked for a law change. At present, cash is the legal tender of this country. Imagine if the IRD/NZRU could deny fans the right to use cash.

Though I guess the government could always re-print our currency, with an WRC sponsor’s name on each bill. Why not? They’ve already shown a willingness to change our laws for other corporations.

Perhaps the worst example of greed is local bodies charging extortionate amounts for local businesses to amend their hours to cater for the influx of rugby fans.

For example, “to open later on game days, Papa’s Pizza and nearby businesses will have to pay between $7500 and $12,800 to a special Rugby World Cup “enabling” authority to hurry up the usual resource consent process.”

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“Enabling Authority”? More like a local protection racket! But all quite legal according to the Rugby World Cup 2011 (Empowering) Act 2010, Part 3.

What a money-extorting piece of legislative bureacracy this is!!

And all enacted by a National Government that constantly harps on about how bureacratic “red tape” is strangling entrepreneurial business in this country.

So what gives with the Rugby World Cup 2011 (Empowering) Act?!

If this isn’t political interference in little business – then someone tell me what is?!?!

Auckland Council licensing and compliance manager Carole Todd admitted that costs to applicants for Part 3 approvals were “fairly high”, and said that,

“However these charges are set down in regulations and cannot be modified.”

The Ministry of Economic Development administers the Act.  Ministry senior solicitor Robert Rendle said,

“There are going to be a lot more people in Auckland who are going to be frequenting bars so it might be financially beneficial to pay the cost.”

In other words – pay up, schmuck! Or Luigi over there will put the heat on ya, reallll good.

Perhaps that is not as cheeky as Heineken/DB Breweries secretly reducing the size of their beer  glasses from 425ml to 400ml – whilst keeping the price of each pour the same. So 25ml less beer – for the same price. DB has also increased keg, Heineken, Export, Tui, Monteiths and DB Draught tap prices.

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It seems that milk drinkers aren’t the only ones being milked in this country. Although the irony here also hasn’t escaped me; we were expecting to “swindle” overseas visitors with high accomodation charges – not be rorted ourselves.

In answer to media questioning, DB Breweries’ hospitality general manager Andrew Campbell said,

“In light of events in Christchurch, and in recognition of the challenges many operators are facing in this recessionary environment, we decided to delay our price increase [from April 1] until June.”

They’re blaming price rises and furtive reduction in glass sizes on the earthquakes in Christchuurch???

WTF???

Well, I guess that makes a change from blaming sunspots, I guess.

And of course, there will be special “Sponsor Police” roaming the country, looking for anyone daring to “cash in” on the WRC without “authorisation”, or to prevent “ambush marketting”.

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Economic Development Ministry solicitor Rob Rendle said there were no plans to set up special courts in New Zealand, to catch and prosecute unauthorised business activity although it could be appropriate to have judges on call to consider urgent matters that came up. “It’s just a possibility at this stage.”

Special courts? Oh, perish the though, Rob. Just summary execution out the back of the Stadium.

There.

Sorted.

Are we having fun yet, peeps?

In case not, even those offering free, humanitarian assistance are being targetted by the vengeful alien fiends that currently pose as human beings running the WRC.

I refer to the St Johns ambulance service (the humanitarian assistance – not the vengeful aliens).

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Yes, my fellow kiwis, the WRC organisors have “leaned” hard on St Johns – forcing them to cover up the sponsors of their ambulances, equipment, and clothing that may have been sponsored by community groups or business organisations in this country.

St Johns is a charity that relies on the generosity of businesses (such as the ASB) so they can go out and save lives.

St Johns is not a business itself.

St Johns has not charged a blimmin cent (that I know of) to the WRC for their services.

In return, to show their gratitude, the WRC have demanded that St Johns cover up the ASB logos of their sponsor. That’s pretty damned low.

If I’d been St Johns, I would have politely told the WRC to go take a flying leap into White Island, and hire their own medics and ambulances. Let the NZRU pay for emergency services if they’re going to be so miserly.  At the very least, I expect NZRU to make a very generous donation to St Johns for all this carry-on.

And when I say “generous”, I’m talking six figures, minimum.

What are the chances? Well, judging by the common sense and generosity of spirit shown by the WRC and sponsors… Nil.

Contemptible.

Perhaps the most bizarre of all this naked greed; shameless price gouging; and merciless strong-arm tactics is this,

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To quote the NZ Herald, to show I’m not making up this farce;

“Heineken is keeping a close watch on Lion Nathan after its Steinlager “white can” advertising campaign inched near to breaching its Rugby World Cup rights.

And the brewer – represented by DB Breweries in this country – is confident World Cup rights managers IMG will blow the whistle if its future ads go too far.

Heineken is an official sponsor of the tournament at a global level, while Steinlager is a sponsor of the All Blacks team. This means it can use its association as the All Blacks’ official beer, but it can’t claim any association with the Rugby World Cup.”

Both Breweries are sponsors – but they sponsor slightly different aspects of the event. I can’t even begin to tell you how utterly absurd this situation is.

Not content with harassing fans or small businesses, even the sponsors are beginning to cannibalise and consume each other?

Which brings us to the present, and current debacle,

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Perhaps someone from On High can explain to me, and to 4.4 million other New Zealanders; how did we get to this?

How did we get to a situation where a foreign corporation now owns the clothing rights to a  “brand” that is one of our  most cherished institutions (the All Blacks – in case you had forgotten what this was all about – and I bet you had!) and can sell goods back to us with that “brand”, at exorbitantly high prices?!?!

Of course, I guess this was inevitable, really. We’ve been busily selling off our state assets, businesses, and farms to all and sundry – and then buying back the products/services that we once produced ourselves.

I bet it was only a matter of time before it happened to one of our most iconic institutions.

How did it get to this?

The answer is idiotically simple. We allowed it to happen. Because, truth to tell, my fellow New Zealanders – sometimes we are none-to-bright when it comes to dealing with big companies apparently offering us truckloads of money.

Oh, for the simple days, when rugby was rugby, and sponsorship consisted of a few plastic-corflute boards placed around a playing field.

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We have well and truly given away our innocence. That, folks, is what killed rugby.

Are we having fun yet?

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+++ UPDATE: More RWC Silliness +++

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Full story

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Full Story

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Full Story

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Full Story

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Copy of sign seen in Greater Wellington Region, erected by supermarket. Clever buggers! (Sign’s corporate colours and company name have been redacted. This blog has no wish to assist RWC “sponsorship police”.) Note the blackened-out rectangle – what could that possibly signify?

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Further Reading

Tew threatens to pull out of next World Cup

NZRU boss Steve Tew lobs a grenade at the IRB

Aussies back NZRU over World Cup complaint

NZ must reap what it has sown over World Cup

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Are we being milked? asks Minister…

So the Commerce Commission decided not to hold an inquiry into milk pricing in New Zealand?

But Minister of Agriculture, David Carter, still wants a Parliamentary inquiry to investigate the matter?

Hmmmm…  it’s not because the election is only three months away, and National is fearful that Labour and the Greens will be making this an election issue? Surely, politicians can’t be that cynical and manipulative?

Of course not.

What was I thinking.

Perhaps if I might be so bold, and offer Mr Carter a word of explanation as to milk pricing. The price of milk is determined by the free market. The same free market that National endorses, advocates, and embraces with all it’s manly  ‘love’.  The same free market that National has ordered TVNZ to pursue, by cancelling it’s Public Charter. The same free market it chases with the Trans Pacific Partnership free-trade negotiations.

Yes, National is the party of the Free Market. As John Key told our American cuzzies on 22 July,

“At the most basic level, we share a commitment to the democratic, capitalist system.”

So there you have it, folks.  In a nut-sell. Or milk bottle, if you prefer. We are a capitalist system,which means that the price of milk is determined by what you, the public, are willing to pay for it.

Something to consider of 26 November – Election Day.

As for Mr Carter’s call for a  Parliamentary Inquiry – my money is on nothing ever coming off it. Much like National’s much-vaunted Jobs Summit in February, 2009.

Remember that little farce?

Postscript #1;

On TVNZ’s Q + A,  David Carter was interviewed by Guyon Espiner, who asked the Minister if two supermarket chains offered enough competition at the retail end of milk distribution. Carter replied that there was competition and said,

“Well, if people want to buy the expensive brands, they can pay $4.80 up to $5.40. They can buy a cheaper brand at that supermarket for $3.30. They can go round the corner to a dairy, quite often, depending on where they live, and perhaps buy that for $2.90. What I’m saying is there’s a big variation on the retail price of milk.”

‘Scuse me?!?!

Milk is cheaper at corner dairy’s, and on sale for $2.90?!?!

Pray tell, Mr Carter – what colour is the sky on your planet? Because on our world, corner dairy-stores are the more expensive option to buy goods.

National members of parliament – out of touch with reality since 1936.

Full transcript of interview

Postscript #2;

Postscript #3;

*sighs* I didn’t have to be Ken Ring to know this was going to happen (though Ken would’ve been a month wrong in his predictions).  It’s Election Year. This is when politicians play silly buggers up to November 26th…