Witnessing the slow decay of a government past it’s Use-By date

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There is something unpleasantly familiar about the recent appalling events surrounding the current National government and it’s embattled leader, John Key and his strange relationship with Cameron Slater.

Searching my memory, it dawned on me: I am witnessing a replay of the closing years of the Shipley Administration, before it was eventually turfed out of office in November 1999.

The Shipley-led minority-National government was racked with crises.

One such was the Saatchi Affair, where then-PM, Jenny Shipley, was found to have lied about a dinner engagement with Saatchi & Saatchi boss, Kevin Roberts. Shipley’s recall of that dinner engagement – and the topics of discussion – were at variance with what Roberts had claimed took place.

Shipley had misled public; the media; and the public. The headlines at the time pilloried her;

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Sound familiar?

To call the National government of that time a “decaying government” would be a gross under-statement. As well as beset with scandal after scandal; cuts to the budgets for police, health, education,  etc; deeply unpopular measures such as state house sales, and a crazy, hundred-million-dollar  plan to move/demolish the Beehive (and extend the original Parliament Building); there were other events which drew a rising chorus of criticism and condemnation from a wide sector of society.

On 27 November, 1999, New Zealanders had had a gutsful and threw out the National government.

The recent “txt-gate” scandal is simply the most recent scandal to envelope the current Prime Minister, John Key.

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In terms of past events; past scandals; and past instances where the PM has been caught out – it is by no means the worst.

This time, however, matters have reached a critical flash-point. The media has awoken to a smell of a government on the defensive and where Dear Leader has pushed the envelope once too often. Journalists and media commentators are no longer as tolerant;  no longer awed; and no longer willing to be mollified by a popular prime minister.

The Shipley Factor has kicked in.

At this point, nothing that National does will counter the  same style of growing clamour of criticism it’s predecessor faced in the late ’90s.

Even the distractions of a costly flag referendum; growing ‘softening’ of the public for a New Zealand  presence in Iraq; or another bout of bene-bashing will not work to deflect attention from an increasingly embattled PM. Such distractions will be quickly revealed, and dismissed,  for what they are.

If National’s current problems translate into public odium, the upcoming flag referendum may well become a referendum on Key’s administration – much like the  September 1997 referendum on compulsory retirement savings became a referendum on the National-NZ First Coalition government.

An extraordinary 80.3% of voter turn-out resulted in 91.8% voting “No”. However, the wisdom at the time suggested that the massive “No” vote was more of a reflection on the National-led government of the day, rather than the actual issue of superannuation.

Perhaps the clearest indication that the tide has turned against Key (and his government) is that the most trenchant criticism has come – not from the Left; nor from the Parliamentary Opposition; nor even from Key’s nemesis, Kim Dotcom – but from the Right and a previously compliant media.

On 25 November last year (2014), John Armstrong, from the NZ Herald wrote;

The Key administration has plumbed new depths of arrogance and contempt for the notion of politicians being accountable for their actions in its response to today’s hugely embarrassing report by the independent watchdog who maintains oversight over the Security Intelligence Service.

Rather than take the findings of the report by the Inspector-General of Intelligence and Security Cheryl Gwyn on the chin, National sought to bury the report.

[…]

John Key may have effectively been cleared by Gwyn for having only a “very limited” involvement in the disgraceful release of information by the SIS to Whale Oil blogger Cameron Slater.

That gets Key personally off the hook. But that does not absolve him of ministerial responsibility. In fact. he is doubly responsible both as the the minister-in-charge of the intelligence agencies and as the person responsible for the behaviour of his Beehive office.

This morning’s statement by the Prime Minister in reaction to the Gwyn report places all the blame for this shoddy affair on the SIS.

Key’s statement unsurprisingly makes no mention of an email revealed in the report from one of his political advisers, Jason Ede, the man who Hager cites as central to the dirty tricks campaign being run out of Key’s office. In the email to Slater, Ede said that “he might be in the shit” over the way he has used SIS information. Slater replied that he would simply state he had a source within the SIS – a statement Gwyn took to mean that Slater was seeking to protect Ede.

No heads will roll. Most of the participants in this unsavoury episode have since moved on or retired, while Key gives assurances that lessons have been learned and a more effective oversight regime is now in place.

That is not good enough. The public need an assurance that nothing like this will ever happen again…

Four days later, Armstrong offered yet more trenchant criticism of Key’s administration;

The subsequent fibs, half-truths, memory blanks and – worst of all – the misleading of Parliament on the Prime Minister’s part in the wake of the report’s release has so far not seen the electoral ground that Key has so successfully occupied for so long shifting from under him.

Key has been his own worst enemy in seeming to be in denial of Gwyn’s confirmation of the dirty tricks operation run out of his office and first exposed by Nicky Hager in his book Dirty Politics.

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Key then topped that by misleading Parliament by not fessing up to his text conversation when specifically asked whether there had been any such contact.

Such reckless and consequently self-incriminating behaviour left most observers and voters completely gob-smacked. So gob-smacked that the torrent of criticism raining down on Key went into temporary abeyance.

When it came to trashing his credibility, Key seemed to be doing enough on his own without assistance from outside.

Armstrong continued by really putting the boot firmly into Key’s backside;

But the absence – so far – of any public backlash against the Prime Minister bar those who already detest him is a source of of intense frustration for Opposition parties. And more so the more Key’s memory lapses impede on serious matters of state.

What began with a failure to recall whether he was for or against the 1981 Springbok Tour was followed by forgetfulness over how many Tranz Rail shares he owned.

Then there was the inability to remember how he voted on the drinking age, along with the sudden case of amnesia surrounding the identity of the passengers who flew to New Zealand aboard a mystery CIA jet.

Things started to get even more worrying when Key confessed to being unsure if and when he was briefed on Dotcom by the Government Communications Security Bureau.

They got even more dodgy when Key professed he could not remember whether he had phoned the brother of an old school pal urging him to apply to become the director of the GCSB.

This is the power and collective memory of the media at work. Citing past instances which paint a consistently negative picture of a political figure is something usually left to bloggers these days. One of the best examples was a list of lies, half-truths, broken promises, etc made by Key and compiled by a writer-known-only-as “BLiP”.

No doubt that list will be much lengthier, nearly two years later.

It will prove to be a valuable resource for any journalist digging back into Key’s track record since 2008.

Meanwhile, the media are running stories openly questioning Key’s integrity, such as this piece by Hamish Rutherford, in November last year;

Prime Minister John Key is fighting off accusations of lying, claiming confusion about his contact with WhaleOil blogger Cameron Slater stemmed from wanting to give a “general” answer to reporters rather than a specific one.

Yesterday he was forced to admit he had corresponded with Slater on several occasions since Nicky Hager’s book, Dirty Politics, was published.

On Tuesday, Key told reporters that Slater “sent me a text one time, but I can’t remember when that was”.

It later transpired that Key and Slater had corresponded by text message the previous evening, in what Key has now described as a “gossipy” exchange.

The details emerged after Key admitted he had misled Parliament on Wednesday, when he denied having corresponded with Slater about a report by Justice Lester Chisholm into the conduct of former justice minister Judith Collins and the intelligence watchdog report on disclosures of SIS information.

Key claimed he misunderstood the question, citing noise in the debating chamber, leading him to believe Labour MP Megan Woods was referring only to one report.

In fact, Woods asked two consecutive questions about both reports.

This editorial in Rotorua’s Daily Post, was unequivocal;

 You would think that with the stench of Dirty Politics still lingering in the corridors of power after this year’s madcap election build-up, Mr Key would know better than to conduct a text conversation with the figure at the centre of the controversy.

Mr Key, who gave Mr Slater his new cellphone number after he changed it during the election campaign, says he is “fundamentally not” in contact with Mr Slater, and hadn’t rung him or “proactively texted” him.

Though according to at least one report he also said he phoned Mr Slater on Wednesday to confirm his recollection of what they discussed in their text exchange on Monday night as he’d deleted the texts.

On Wednesday night he had to back down on his earlier claims he’d had no contact with Mr Slater ahead of the release of Inspector-General of Intelligence and Security Cheryl Gwyn’s report into the SIS’s role in Slater’s 2011 political attack on former Labour leader Phil Goff.

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Earlier news reports say Mr Key refused to answer questions about his contact with Mr Slater, saying it was in his capacity as National Party leader, not as Prime Minister.

That really doesn’t cut it. When you’re Prime Minister, everything, even dropping your kids off at school, is done in your capacity as Prime Minister.

Fran O’Sullivan was equally scathing;

There is considerable angst that Key is continuing to engage with a high-profile blogger at the expense of his own reputation as Prime Minister. The texting bout episode when he responded to a communication from that particular blogger when prudence would have dictated that he should have just blanked Whale Oil is a case in point.

Key’s failure to realise he would be likely to be filleted when it was inevitably leaked defies credibility.

But trying to mask the obvious backtracking was a step too far.

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There are many inconsistencies in the Prime Minister’s response to the inquiry by the Inspector-General of Intelligence and Security into the release of information by the Security Intelligence Service to a blogger.

A simple apology on behalf of his office for the obvious black ops would have done a great deal to defuse the issue.

But Key has simply resorted to semantics and tried to hold his ground.

NZ Newswire political columnist, Peter Wilson, described Key’s actions as “causing more trouble than the dubious tactic was worth“, and wrote;

Key’s assertion that he was acting in his capacity as leader of the National Party when he spoke to or texted Slater is raising issues as well.

Radio New Zealand pointed out that the High Court has ruled Slater is a journalist.

That being the case, in what capacity does Key interact with press gallery journalists?

Winston Peters is wondering whether Richard Nixon would have been allowed to escape responsibility for Watergate if he’d argued that he was acting in his capacity as leader of the Republican Party.

And Slater suggests Maurice Williamson should ask for his ministerial job back, because surely he was acting in his capacity as an electorate MP when he called the police to ask about a court case.

Brent Edwards, from Radio NZ, injected a large measure of sarcasm into Key’s denials of reality;

The Inspector-General of Intelligence and Security, Cheryl Gwyn, apparently wrote two reports into the way the SIS released information embarrassing to former Labour Party leader Phil Goff in 2011.

There is the report Ms Gwyn released publicly on Tuesday which found the Security Intelligence Service had released inaccurate and misleading information leading to unfounded criticism of Mr Goff.

This report also found that staff in Prime Minister John Key’s office had passed on information to right-wing blogger Cameron Slater about briefings the then SIS director, Warren Tucker, had said he had given to Mr Goff about speculation Israeli spies had been caught up in the February 22 earthquake in Christchurch in 2011.

The other report – the one Mr Key apparently received – does not find that his staff played any part in feeding Mr Slater information or in helping the blogger make his Official Information Act request to the SIS.

John Key is adamant the report finds no such thing. It’s a line repeated by his ministers, including the Attorney-General Chris Finlayson.

Yet on page 63 of the report Ms Gwyn states: “I did, however, find that Mr Ede provided the details of relevant documents to Mr Slater and was in fact speaking to Mr Slater by phone at the exact time that Mr Slater submitted his OIA request.”

When not publishing pieces by right-wing columnist, or editorials, all attacking this government that they are supposedly friendly to – there are other stories appearing which also paint a less-than-rosy picture of Key’s administration.

This op-ed by Bruce Bisset, last September in Hawkes Bay Today,  outlined hard facts that have rarely been published in msm papers – and usually more the province of  political blogs. Bisset wrote;

Back when Labour was in power we had constant carping about Clarke’s “nanny state” and how welfare and social reforms were running up debt like there was no tomorrow.

Still we hear that mantra repeated – and surprisingly, most of the time it goes unchallenged.

But it’s pure myth. New Zealand’s national debt was less after nine years of Labour than when they were elected. The Clarke government was fiscally ultra-conservative, because the books really did balance.

Contrast that with debt under Key’s government. Starting at around $18 billion, it has blossomed to a staggering $86 billion today. That’s a five-fold increase, in just six years.

Yes, we’ve had the global financial crisis and Canterbury earthquakes and tax cuts for the wealthy that have to be paid for somehow. We’ve also had record commodity prices, significant departmental cost-cutting, and the sell-off of major state-owned assets. Plus very little new spending.

Yet we’re running up debt at more than $13 billion per year – to merely tread water.

It doesn’t add up. These guys are supposedly the whizz-bang flash moneymen. So how come we’re so indebted it now costs over $4 billion per year just to service the interest?

Truth is, the economic recovery is itself a myth.

Since last year,  the noise surrounding Slater/txt-gate/SIS report  all but died down. They have become largely forgotten by the public who are fed a daily diet of dumbed down “news” on TV1 and TV3; puerile garbage as entertainment, but precious little serious current affairs analysis; and a dazzling, mesmerising, cornucopia of ever-increasing consumer-goods dangled in front of their slack-jawed faces.

Radio NZ temporarily joined the mind-numbing dumbness of commercial radio’s ranks from December 24 to January 19. Insight, analysis, and commentary were on temporary hiatus for nearly a month.

If the last six years have shown us one thing, it is that the next scandal and revelations of dodgy ministerial practices and inept Prime Ministerial behaviour is not too far away.

The media are alerted. The public now have some awareness of dirty politics behind the scenes. And journalists are starting to exercise a form of collective memory.

It is said that the public no longer care about politics, and that Key has “de-politicised” it. But, like the continuing bad stories that finally destroyed Jenny Shipley’s government, continuing negatives stories can have a corrosive effect on this government.

The more times Key is caught out lying or being tricky with the truth or breaking promises – the more that the public will slowly but surely distrust his “brand”.

Even four years ago, a sizeable ‘chunk’ of the public were suspicious of Key’s honesty;
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It will only get worse for Key and his cronies. Especially as social issues continue to dog this government.

Housing is fast becoming a real problem in this country as more and more New Zealanders find themselves locked out of the market and forced into a lifetime of renting.

Housing was also a critical issue during the dying days of Shipley’s government, as they enacted an unpopular policy of selling state houses.

New Zealanders may have surrendered their Citizenship in preference to becoming zombified Consumers – but housing is a commodity, and Consumers will not be denied the opportunity to acquire said commodity.

Even if it means a change of government

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References

NZ Herald: Shipley on the run

MKiwi: Beehive Parliament Buildings Wellington

Wikipedia: 1999 General Election

Fairfax media:  Key claims confusion over texts with Slater

NZ Herald: John Key defends cost of flag referendums

Radio NZ: PM spells out IS deployment dangers

Wikipedia: Referendums in NZ

NZ Herald: John Armstrong – National’s response not good enough

NZ Herald: John Armstrong – Outrageous behaviour leaves Key on the edge

The Standard: An Honest Man?

Fairfax media: Key claims confusion over texts with Slater

The Daily Post:  Editorial – Key’s whale of a tale

NZ Herald: Fran O’Sullivan – Key’s choice: bloggers or business community

NZN: Key’s question time tactic goes wrong

Radio NZ: POWER PLAY with Brent Edwards – PM’s over-sight not very intelligent

Hawkes Bay Today: Bruce Bisset – Nats have buried us in debt

Dominion Post: John Key – Safe hands, forked tongue?

NZ History: The state steps in and out – State housing

Previous related blogposts

Are Cameron Slater and Judith Collins bare-faced liars?

Doing ‘the business’ with John Key – Here’s How (Part # Rua)

Teflon Man No More

When the teflon is stripped away

Letter to the editor – Witches, foreign fighters, and other bogeymen

Associated groups

Facebook:  Housing NZ Tenants Forum

Facebook:  Tamaki Housing Group- Defend Glen Innes

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This blogpost was first published on The Daily Blog on 1 February 2015.

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The National Party, common sense, and sausage sizzles

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I’ve been involved in politics, in one form or another, for much of my life. I think I have a fairly good ‘handle’ regarding politicians; their ideologies; and their Parties.

I’ve seen Muldoon come and go; Bolger and Richardson; Shipley and English; and now Key and English, try their hand at managing our economy and spending our tax dollars.

Without exception, folks, every single National Government, from Robery Muldoon onwards, has been an apallingly bad fiscal manager.

National’s modus operandi,

1. Cuts short term spending, worsening long-term social problems, which will become more expensive eventually, as social ills remain unaddressed,
2. Cuts state sector employees and services, then realises that essential issues still remain,
3. Cuts taxes when we can least afford it,
4. Implements fiscal, political, and social policies that impact negatively on economic and social indicators,
5. Borrows from overseas lenders when it was never necessary in the first place (or reduced borrowing, had tax cuts not been implemented)
6. And generally makes bad choices that, long term, will cost the taxpayer more.

So – how on Earth has National ever built up a reputation of being a “sound fiscal manager” of our economy?!?!

Because every time National has been in office, it has left the country in an absolute economic shambles.

From Ruth Richardson’s “Mother of All Budgets”, to Jenny Shipley’s and Bill English’s “slash and burn” of the health sector,  state housing, Police force, and other essential state services in the late 1990s – National  has proven time and again it’s ineptness.

This Party is utterly clueless when it comes to simple matters of cause-and-effect.

One thing, though, has escaped me utterly.

How have they  sucked in the public to effect a (undeserved) reputation of sound fiscal management?

Whilst National runs deficits,  Labour, in the 2000s, ran surpluses. (A fact National attempts to hide by clumsily  persisting in re-writing history.)

See previous blogpost: Labour: the Economic Record 2000 – 2008

Case in point; Dear Leader and his minions has made a great deal about slashing the state sector. National has made deep cuts into state sector services and sacked over 2,500 much-needed employees,

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Full Story

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As 2,500 people were sacked from their jobs – all for a grand saving of $20 million,  National belatedly realised that their slash-and-burn was little more than a false economy.

It soon became apparent that many of the sacked workers were much-needed experts in their field, and essential personnel to make the State function smoothly.

National took “appropriate action”,

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Full Story

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Full Story

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Full Story

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Two thousand, five hundred of our fellow kiwis lost their jobs for “savings” of $20 million.

The Economic Development Ministry alone  increased spending on consultants, contractors, etc,  from $6.7 million in 2008-09 to $19.2 million in 2010-11. Other ministries most likely spent several million on their consultants, contractors, advisors, and Uncle Tom Cobbly.

See: ‘Consultancy culture’ cost $525m last year – Labour

So much for “savings” of $20 million.

One can only try to imagine what those 2,500 people who were sacked by National, must be feeling right now.

So the question remains; how has National managed to paint itself as a “responsible steward” of the country’s economy? Especially when a cursory study of their real performance reveals otherwise?

Tracey Watkins, writing in today’s (19 May)  ‘Dominion Post‘, may have  offered a clue,

” But while these sorts of measures might be an annoyance, they do not cause widespread pain.

And in a perverse way, Europe helps Bill English’s cause. It maintains a sense of crisis while the sight of workers marching in the streets only underscores the gentle and low-fuss nature of our own austerity drive.

This is why Labour has struggled so far to run a coherent argument against National’s management of the books – the danger has always been that protesting any cuts to date look not only shrill, but profligate. To voters, less is more at the moment. “

See: Kiwis are tolerating moderate austerity

“ A sense of crisis “. It may well be that the Middle Classes have been panicked by overseas events. There may be an under-lying fear that – like households in tough times – the country needs to cut back on spending, to avert a Greece-like melt-down in our own economy.

There may be an underlying belief  within the collective consciousness of New Zealanders that, in “tough times”, National is better at cutting than Labour. In “tough economic times”, cutting expenditure may appear to the public as more of a priority than, say, job creation.

Such feelings are not necessarily based on any reality or logical analysis of the country’s true economic situation; nor of the side-effects of cutting back on State expenditure. These may be deep-seated feelings based on how people may view the economy.

Generally speaking, people have very little experience with macro-economics; Keynesian-vs-Friedmanite economic systems; nor any real understand of how government economic policies work.

For most folk, their only experience is running the finances of their own households. Doing a household budget; paying bills;  and balancing the chequebook is the extent to most peoples’ exposure to finances.

And yet, government finances is not like household finances at all. The former is more complex, with control over fiscal and taxation policy; revenue streams;  and policies that can work to generate income for the state. The State has access to borrowings (if necessary) not open to ordinary households. By widening the tax-base, the State can increase its revenue – no easy task for ordinary households.

In short, the State has options not readily available to households.

But  through a dumbed-down media which focuses mostly on superficial political issues; mindless entertainment; and on the Here-And-Now, the public have become low-information voters.

By not being aware of the true extent of the State’s abilities, the public are trapped in a narrow paradigm of  the State being akin to “household budgets”.

So when National cuts expenditure, services, and jobs – it appears to the public to be a “common sense” plan to follow.

The public are not so aware that austerity measures can have negatives impacts on our economy and society, even in the short-term. Cutting back on government economic activity means a drop in all-round economic activity.

It is no coincidence that following Ruth Richardson’s “Mother of all Budgets“, that unemployment, company liquidations, economic growth, and other indicators worsened.

This is a Party that I would barely trust to run a sausage sizzle. They’d get rid of the volunteers; sell the barbeque; pay themselves a hefty fee; and claim success,

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The ‘mother of all budgets’

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Prime Minister Jim Bolger and Finance Minister Ruth Richardson make their way to the House of Representatives for the presentation of the 1991 budget. Richardson was from the radical wing of the National Party, which promoted individual liberty and small government. This was reflected in the budget, which severely cut government spending, including on welfare. Richardson proudly proclaimed her plan as the ‘mother of all budgets’, but such was its unpopularity among voters that it – along with high levels of unemployment – nearly cost National the next election.

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In the above graph, note the two ‘spikes’ in unemployment. The first in the early 1990s, after cuts (through the “Mother of all Budgets”)  created a rise in unemployment. The second rise occurred in the late 1990s, when the Shipley/English government again cut government services.

However, unemployment fell after the election of a Labour-led government in late 1999.

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The implications of austerity policies should be crystal clear to everyone:  reducing government expenditure and activity in the economy dampens overall economic activity.  Everyone is affected – no one escapes the inevitable downturn.

Hence why the new French President, Francois Hollande, has rejected austerity policies for his country. President Hollande understands full well that cutting government expenditure will result in reduced state services; more unemployment; and a drop in economic activity and  growth.

As long as the public are aware of these facts, then they can make decisions accordingly.

Ignorance of these facts will be painful, as anyone with memories of the 1990s will attest to.

In this case, ignorance is not most definitely not ‘bliss’. And no one will be exempt.

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Additional

Dominion Post: Public service cuts get deeper

Bloomberg:  Hollande Vows to Fight Austerity After Beating Sarkozy

References

Te Ara: Story – Business failures and corporate fraud

Te Ara: Story – National Party

Trading Economics: New Zealand

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National – The End is Nigh (Part #Rua)

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As this blogger has been predicting over the last few months, National is continuing to slide in the polls, and will most likely face electoral defeat at the next elections.

National’s drop in popularity can be attributed to several, distinct factors,

1. Economic factors continuing to worsen; rising unemployment; stagnant economy; ballooning government debt
2. No obvious plan from National to create jobs and get the economy moving again
3. Constant cuts which seem to achieve nothing, and which are beginning to impact of social services
4. Unpopular policies such as asset sales
5. A growing perception that National is demonising unemployed workers and solo-mothers, and treating them as scapegoats for government-failures
6. Scandal after scandal after scandal – with the John Banks-Dotcom affair being the worst example of political pragmatism trumping ethical decision-making by Key

All of which happened in the late 1990s, with the previous Bolger/Shipley-led National governments,

See previous blogpost:  Learning from history?

See previous blogpost:  Learning from history?

See previous blogpost:  History Lesson – Toru – Jobs

See previous blogpost:  History Lesson – Rua – Police

A Roy Morgan poll released today (Friday 18 May)  shows a distinct drop for National and rise for Labour.

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2011 Election Results

National: 47.31%

Labour: 27.48%

Greens: 11.06%

Mana: 1.08%

Maori Party: 1.43%

United Future: 0.60%

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Roy Morgan Poll for 2 April 2012 – 15 April 2012

National: 49.5%

Labour:  26.5%

Greens: 12.5%

NZ First: 6.5%

United Future: 1%

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Current: Roy Morgan Poll for 30 April  – 13 May 2012

National: 44.5%

Labour:  30%

Greens: 15%

NZ First: 5.5%

Maori Party: 1%

Mana Party: 0.5%

ACT: 0%

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A Labour-Green-NZ First Coalition would equal 50.5%, giving 61 seats in a 120 seat Parliament (no allowance made for potential overhangs). With Hone Harawira winning Te Tai Tokerau, and giving his vote for Supply & Confidence to a Labour-led, government, a possible coalition would have a two seat majority.

This blogger believes that National will continue to trend down in further polling, and a Labour-led coalition will increase it’s majority.

Furthermore, this blogger predicts,

• ACT will not return in the next election
• Colin Craig’s Conservative Party will not break the 5% threshold
• Peter Dunne has a less than 50/50 chance of  holding his Ohariu electorate if he votes with National to privatise state owned corporations

We are seeing the decline of National, and the last term of John Key as Prime Minister.

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References

NZ Herald: Key says he’ll quit politics if National loses election

NZ Herald: National support slips further – poll

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Weak Comments of the Week – 31 March

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This week, two comments by public figures vie for top placing as the Foot in Mouth, Weak Comment of the Week. Both are so unbelievably unconvincing that it speaks volumes about how these people view the public as fools…

Candidate #1: Tony Gibson, CEO of Ports of Auckland Ltd (POAL)

” However, Ports of Auckland chief executive Tony Gibson said the back down was an attempt to reduce pressure on the supply chain, where the company was “acutely aware” that customers and businesses were hurting. ” – Source

” POAL has listened to the wishes of the Court, as well the views of the Mayor and all other stakeholders”, Gibson said. ” – Ibid

Oh gosh, Tony, you think ?!

The port workers collective employment agreement  expired on 30 September 2011, and formal negotiations had been ongoing since 5 August 2011 – over half a year!

In that time, POAL announced an agenda to casualise the workforce ; contract out jobs;  workers have been forced to resort to strike action to secure their jobs and conditions; and the company  exacerbated the crisis with needless, expensive  lockouts.

Even the Employment Court found that the port workers had an “arguable case“.

In all that time, as weeks turned into months, and the intransigence of POAL Board and management worsened, importers and exporters were bleeding money,

” Weekly trade worth around $27 million – and $90,000 to $100,000 a week for the port – will instead be rerouted through the ports of Tauranga and Napier from the end of the month.” – Source

Has it taken six months for Tony Gibson to recognise that ” customers and businesses were hurting “?

Nah, rubbish.

Gibson, Pearson, et al, have endured an embarressing bollicking from the Employment Court decision that their lockout was illegal; they had most likely broken the law (vis-a-viz the Employment Relations Act) in terms of bargaining in good faith; and that the Maritime Union had an “arguable case”.

Claiming to be suddenly concerned for the welfare of Auckland businesses and  that  ” the back down was an attempt to reduce pressure on the supply chain ” is disingenuous.

And just a little bit darkly cheeky.

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Candidate #2: Michelle Boag, ex National Party President

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This one is a ‘classic‘, and I think most folk will understand why I had a tough time trying to determine whether Gibson or Boag’s comments merited the most derision,

” One of her advisers, anticipating that a confidential settlement might be reached, said it would be wise to include all the people who were aware of the dispute so that if any of them asked afterwards, Bronwyn would not be accused of breaching confidentiality. ”  – Source

The comment refers to Bronwyn Pullar’s letter to her insurance company Sovereign, seeking $14 million in compensation for a head accident she suffered ten years ago. (I make no judgement on this matter. Personal experience with other individuals has shown me that head injuries can create long-lasting mental and emotional effects.)

However, in Ms Pullar’s letter – which yet again was leaked to the media (TVNZ’s “Close Up” programme) – she listed twentyeight people  as members of her supposed “support/advisory team” including Prime Minister John Key, ex-Prime Minister  Jenny Shipley, National Party fundraiser Selwyn Cushing,  and ex-minister Wayne Mapp.

John Key has steadfastly denied any involvement in being  included in the list.

Wayne Mapp and Selwyn Cushing have admitted involvement.

Now, for Ms Boag to suddenly claim that ” it would be wise to include all the people who were aware of the dispute so that if any of them asked afterwards, Bronwyn would not be accused of breaching confidentiality ” – is simply bizarre. It makes no sense.  It is clutching at straws and offering the most feeble excuse imaginable to explain why Ms Pullar’s letter  required 28 high-powered New Zealanders to have their names included in her letter.

In short; bollicks.

Anyone with two inter-connected, firing, neurons would understand that listing 28 prominent individuals would be done for one reason only; to add weight to Ms Pullar’s claim against Sovereign Insurance. In effect, she’s saying, “Look here! I know all these High Ups! Don’t mess with me or they may do ‘XYZ’ to you! So gimme the cash and I’ll go away.”

That would tie in with allegations (unsubstantiated) that she requested two years’ worth of benefits from ACC “to move forward”.

So, no, Ms Boag. Your rational for why those 28 names were included in Ms Pullar’s letter is nonsense. More than that, it’s an insult to our intelligence.

If you’re going to bullshit us, can you at least make it convincing?

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History Lesson – Tahi – Electricity Sector “reforms”

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"Those who cannot remember the past are condemned to repeat it" - George Santayana, 1863 - 1952

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With the current National government on course to partially privatise Mighty River Power, Meridian Energy, Genesis, Solid Energy, and further down-sell of Air New Zealand, it may be an appropriate time to look back at our recent history and remind ourselves of a previous National Government’s blunders…

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In 1999, Jane Kelsey wrote,

“The privatisatisation of local electricity supply companies and state-owned generators was also very lucrative and open to abuse to market power by transnationals. Driven by theory, governments had progressively dismantled the integrated state electricity system since 1986. This involved separating transmission from generation, splitting the state-owned generator into competing companies, and converting the elected non-profit power boards into profit-driven electricity supply companies. The Labour government began the process by corporatising the electricity department in 1986.

The local power boards were transformed into electric power companies in 1990, and into commercial electricity supply companies with diverse ownership structures in 1993.

A rash of hostile takeover bids and friendly mergers followed; during this time, supplying electricity seemed almost a sideline.

The main foreign-owned players were Alberta-based TransAlta and Utilicorp from Kansas. The companies raised their electricity prices to cover debt servicing and profit requirements. [My emphasis – FM]

The government expressed concern that electricity companies were abusing their monopoly over the power-lines and supply contracts to block the entry of competitors. The Electricity Industry Reform Act 1998, passed in July under urgency, prohibited any company from owning both electricity line businesses and retail or generation businesses from 1 May 1999.

Labour opposed the move, claiming the government had taken “an electricity industry that was working pretty well in practice and ripped it to bits, because it was not working well in theory”. The existing companies, supported by ACT, complained that the split reduced their value and amounted to expropriation. TransAlta  threatened to pull out of the country if the government proceeded with the plan.

At the same time, the change created new opportunities for mergers and takeovers (at grossly inflated prices), consolidating control of electricity into fewer, and increasingly transnational, hands.

The government also split the state-owned generator into two companies, Contact Energy and ECNZ; ECNZ was later split into three companies.Contact Energy was publicly floated in March 1999. Some 175,000 local investors applied for priority registration. But the government had decided there had to be a 40 percent ‘cornerstone’ shareholder. Only two companies were in the final bidding – TransAlta and US-based Edison Mission Energy. TransAlta was already the country’s largest energy retailer, with 530,000 customers, and was returning a dividend of around 6 percent. In October 1998 the Ministry of Consumer Affairs condemned its customer contracts as ‘onerous and harsh on consumers’.

The Commerce Commission cleared TransAlta to take up to 50 percent of shares in Contact Energy. That would have given the company one million of the country’s 1.6 million electricity customers, control over two-fifths of New Zealand’s generating capacity, and rights to nearly half its gas production.

The strategic stake went instead to Edison, for $1.21 billion…

[abridged]

… Contact Energy ended up nearly 62 percent overseas-owned. In addition to Edison’s 40 percent, another 18 percent of shares were reserved for offshore institutions, 14.4 percent for New Zealand/Australian institutions and 27.6 percent for the New Zealand public. Investment anlyst Brian Gaynor calculated that half the shares issued to offshore institutions  were sold for instant profit in the first three days. He partly attributed the priority given to offshore buyers to “broker self-interest”, estimating  that they earned $7.6 million on the 109 million shares issued to northern hemisphrere institutions (much higher than the proportionate income from Australasian sales).

Gaynor questioned why government officials put so much effort into selling the country’s assets to foreign interests , thus worsening the balance of payments , instead of working to stimulate export growth. [My emphasis – FM]

The government insisted that the changes would lower electricity prices to consumers (although Commerce Minister  John Luxton said ‘it was not promised that householders would necessarily get cheaper power’). But they failed to do so, as the companies sought to recoup their excessive spending.  [My emphasis – FM]

In anticipation of winning the Contact Energy bid, TransAlta had paid $171 million for the retail business of Orion, owned by the Christchurch City Council; the operation was independently valued in 1997 at around $13 million. In March 1999 TransAlta announced price rises of between 5 and 15 percent for it’s 530,000 customers. Energy Minister Max Bradford blamed the line companies for abusing their  monopoly and not passing on savings from the transfer of metering costs to the retail companies.Orion backed off its suggested price increase. TransAlta did not. Bradford insisted that competition among the supply companies would eventually force prices down, so only the monopoly line businesses needed regulation.

Back in 1998, Bradford had proposed only light-handed regulation: ‘to enhance the credibility of the threat of price control’, the Commerce Commissionwould be given powerto limit prices, where it was efficient to do so, and after a lengthy period of review. By May 1999 he had been forced to introduce legislation that could regulate monopolies generally, with specific provisions for line  companies.  The Commerce Commission would be required to authorise  a price for line company charges by 31 December 1999 for the largest companies, and dates in 2000 for the rest.” – “Reclaiming the Future“, August 1999

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There are many lessons to be learnt from the de-regulation and privatisation of the electricity industry in this country…

1. In buying up companies, the new owners raised electricity prices for consumers so as to re-coup the costs of their multi-million dollar investments.
2. Many of the electricity companies wound up in overseas investors’ control. As Brian Gaynor said, this made our Balance of Payments much, much worse – for no discerible, logical gain.
3. Competition did not bring “cheaper power prices”. There simply was no competition.

It probably occurs to many people that, thirteen years later, another National Government is on-course to repeat the same mistakes.

“Those who cannot remember the past are condemned to repeat it”

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