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Jobs Summit: 2012

10 October 2012 5 comments

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1. Problem

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If we’re going to have to wait for National’s policies kick-in and create the 170,000 new jobs they promised us last year, the  rate of progress will be so glacial that continental drift will  propel New Zealand to crash into the Australian sub-continent before anything happens.

Oh well, at least we won’t have to fly to Australia to find jobs. We’ll just be walking across the beach to Sydney.

Unfortunately, that may take the better part of 50 million years, give or take.

All hilarity aside, the point that should not escape us is that National’s policies are simply not growing the economy and not delivering the jobs we need to reduce  162,000 jobless numbers.  Their obstinate  reliance on ‘The Market’ to deliver job-growth has ham-strung National’s ability to address growing redundancies and unemployment.

Bullying the unemployed – as Bennett has been doing with her bizarre “social obligations”, compulsions, and sanctions  – is little more than a vote-grabbing exercise for rednecks and low-information voters, but otherwise of no practical value in creating even one single job.

John Key’s much-vaunted “Jobs Summit” in early 2009 appears to have  generated only limited success, with John Key’s “darling” project – the Cycleway – not living up to hype for job creation,

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Source

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National clearly has no inkling of how to generate jobs.

Indeed, their own neo-liberal doctrine demands that all job-creation be left solely up to ‘The Marketplace’,

Nothing creates jobs and boosts incomes better than business growth. For New Zealand to build a more productive and competitive economy, we need more innovative companies out there selling their products on the world stage.” – John Key, 24 August 2012

Although when it suits Key, he can be  unashamedly “Janus-faced” when it comes to whether or not the State has a role to play in job-creation,

We agree with you, it’s the government’s responsibility to do everything within it’s powers to try to get people jobs.” – John Key,  17 November 2011

Indeed, Mr Key.

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2. Solution

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It is patently obvious to all but the most partisan neo-liberal National/ACT disciple, that the last 30 years of  “orthodox” market ideology has not delivered the ‘goods’.  Rogernomics/Market economy/crony capitalism  – call it what you will – has failed at nearly every level.

Only a few have benefitted,

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Full pathetic story

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The EPMU (Engineer Printing Manufacturers Union) is not waiting around for John Key and National to get of their chuffs and act.

They have called for a summit, to be held this Friday (12 October), in Auckland.

EPMU national secretary, Bill Newson, said,

No one who has seen the mass redundancies of recent months or the numbers of Kiwis heading to Australia can be unaware of the deepening jobs crisis in this country and the need for a new approach.

“Every day we’re seeing redundancies and the impact these have on communities all over New Zealand. At the same time we’re talking to employers who tell us they don’t want to lay people off and are looking for any support they can get to keep people in jobs.

“The common thread through all of these redundancies is the hands-off approach of the last 30 years, which says the Government should keep out of the economy, leave our exchange rate to be set by speculators and accept the decline of manufacturing in this country as somehow inevitable.

“Our union is part of a growing consensus that the hands-off approach to the economy is broken and we need the Government to step up and support our manufacturing sector and the jobs it provides.

“There are alternatives, and as a country we need to discuss them. This summit is about bringing together the new consensus and we welcome anyone interested in the future of our country to join us in planning a new way forward.”

See: EPMU calls summit to tackle jobs crisis

See: EPMU call urgent meeting to tackle job crisis

Those invited to the Summit include,

  • Russel Norman, Green Party co-leader
  •  David Parker, Labour’s finance spokesperson
  • Winston Peters, NZ First leader
  • Peter Conway, NZ  Council of Trade Unions
  • Nick Inskip, Heavy Engineering Research Association
  • Selwyn Pellett, technology entrepreneur
  • John Walley, NZ Manufacturers & Exporters Association
  • Hugh Whitaker, University of Auckland

This is a good start and is something that the next incoming government should take on board and run with.

But rather than a “talkfest” and propaganda exercise, such as National’s 2009 exercise-in-futility, a real New Zealand Summit should include representatives from all industry groups, Iwi, trade unions, and other community, business, and activist representatives.

A real New Zealand Summit should have firm targets to address, with a committment from a new government to find solutions.

Such a Summit must have, as it’s priorities,

  1. Jobs, jobs, jobs.
  2. Elimination of child poverty
  3. Economic growth with entrenched  environmental conservation

As a society we  need to reappraise our values, our goals, and what sort of nation we want for ourselves and our children.

Do we want to live as a highly individualistic “society” of  minimal taxation; minimal social and state services; a greater degree of user pays; and where those left behind rely on struggling charities to survive? And where jobs and services are left purely for Market Forces to deliver?

Or do we want a more cohesive society where we pay sufficient taxation to deliver comprehensive social and state services; where we do not tolerate child poverty and adopt a collective responsibility to assisting those who need it? And where the State, Business, and Unions work together to deliver jobs; good wages; a productive economy with sensible investment/monetary policies; and where the environment is considered our #1 wealth asset?

We need to ask ourselves ,

  • Why is it acceptable to provide vast amounts of electricity to the Rio Tinto/Tiwai aluminium smelter at vastly subsidised prices – and yet our nation opposes subsidised electricity to New Zealand families and retirees?
  • Why is it acceptable to give the movie industry a $100 million tax break to produce fantasy films here – whilst at the same time objecting to a $4-$20 million dollar programme to provide healthy meals in schools for our children who face the harsh reality of poverty?
  • Why is it suddenly necessary that we need overseas investment and foreign “expertise” in our farms – when we lead the world in dairying and agriculture? Why are New Zealanders investing in housing speculation – forcing farmers and businesspeople tro look overseas for investment?
  • How is it we can produce the cleanest, safest food in hygenically maintained factories – and yet we foul our riverways and lakes to the point where many are no longer safe to swim in?
  • Where is the logic of allowing our Dollar to be speculated on by overseas money traders; investment bankers; and outright crooks – and it’s our workers who have to pay the price by losing their jobs when our exporters are no longer able to sell their goods overseas?
  • Why do we have a crisis in housing in this country, and then to top it off, our skilled tradesmen and women head off to Australia?
  • Why are our young folk not in education, employment, or training – with rising joblessness and hopelessness – and then 1 million of us vote for a government that has no solution except to use sanctions to take away what little money they have? And then we wonder where crime, poverty, and lack of hope springs from?

These are a few critical problems (I refuse to call them “issues”) , and it is high time we addressed them instead of opting for soft-options such as unaffordable tax cuts and blaming the unemployed for daring to be unemployed.

Being adrift on the vast sea of ‘Market Forces’ and “muddling through” is no longer acceptable.

Electing inept governments that rely more on ideology than common sense will no longer be of any benefit to us.

Personally speaking, if National wants to participate in a new New Zealand Summit, then so be it.

But in my view, I consider them part of the problem, and their ideology of more-of-the-same is simply a waste of time and energy.

National is part of an unfortunate economic experiment in market liberalism and raw Individualism. They are as much a failure in outcomes as was the great marxist-leninist experiment in the former-USSR.

It took our Russian cuzzies 72 years to realise that their grand experiment in State collectivism was unworkable and failing.

Let’s hope we can make that same determination in only half the time, when it comes to neo-liberal capitalism.

I applaud the EPMU for taking the first steps in beginning a conversation that is long over-due, and which we can no longer avoid.

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Does this man never learn?!

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Frank Macskasy Blog Frankly Speaking

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On 22 November 2008, Prime Minister-elect, John Key, presented a speech to an APEC meeting where he told a gathering of some 500 business leaders from 21 countries,  that financial regulation was urgently needed to pull the world out of the global financial crisis.

Key said, in part,

“... It is no news to anyone that the global economic outlook for 2009 is weak.

Not since the Great Depression has the world experienced such a significant financial crisis as we have seen in recent months. We have seen an expansion of credit and leverage at levels that were so unprecedented and arguably so uncontrolled that they now threaten the very stability of the world’s banking system…

… To understand the potential scope of the changes that may be required is to understand the changes in the global economy over the past 10 to 15 years.

Over the past decade or so the global economy was fuelled by a private sector credit boom made possible by a combination of large macroeconomic imbalances with and between economies, relatively low global inflation, new waves of financial innovation, and huge amounts of leveraging by hedge-funds and other financial institutions.

These forces were, in turn, fuelled by excessive optimism in asset markets, and a more relaxed, and in many cases, recklessly complacent attitude to risk…

… Our banks have, in large part, escaped significant exposure to the destructive products such as the sub-prime market that has wreaked havoc in other jurisdictions…

… Beyond our ability to trade and interact with each other, the second and most obvious effect of the financial changes of the past 10 to 15 years has been a large increase in asset prices, greatly increased demand and, most crucially, a huge expansion in credit.

This in itself isn’t new. The difference is in the magnitude and scale relative to the real economy and the inability to quantify the risk due to a lack of transparency.

This has led to two new challenges. First, relating to the effectiveness of monetary policy in dealing with asset cycles and price bubbles in particular, and second, relating to the adequacy of regulation of financial institutions... “

It is abundantly obvious that Key was well aware of the part played by hedge funds and other financial institutions in the mess that was the Global Financial Crisis (GFC). That crisis led to massive taxpayer-funded bailouts of corporations deemed TBTF – To Big To Fail.

The ‘side effects’ were millions losing their jobs; their homes; and governments cutting back on expenditure and state services.  Many likened the 2008 Great Recession to the Depression of the 1920s/30s.  Only because 21st century Western nations have a well-developed social welfare system did we not have a repeat of the soup-kitchen lines; entire homeless families living in the streets; and shanty towns springing up to offer some semblance of shelter.

In Europe, the effects of the Crisis continues to worsen, and we are seeing another dangerous sign that social stresses are beginning to impact; the rise of neo-nazi political organisations.

The greed of Wall Street, and the unfettered power of  neo-liberal Globalist-Corporatism  is dragging the world to the precipice. It is a precipice that even  distance will not protect us, here in New Zealand.

Just as we were not exempt from the Great Depression in the 1920s/1930s; the rise of fascism; and it’s awful consequence; World War Two.

Key continued,

In recent months the world has focused on the spectacular collapses of companies like Lehman Brothers and my old firm, Merrill Lynch.

What is now apparent is that as the pressure to boost profits grew, Wall Street assumed more and more risk. The quantity, and also the complexity, of this risk saw investment banks evolve into pseudo hedge funds with balance-sheets and risk exposures well beyond what anyone would have previously deemed acceptable.

But leverage wasn’t, and hasn’t been, the sole preserve of the banks.

The hedge-fund community has mushroomed in size and significance. Gone for the most part is the traditional macro hedge fund, where risk was based on the views of an individual trader who undertook conviction trades that bore some sense of balance when compared to the overall size and structure of the market.

Today, hedge-fund leverage is for the most part unregulated, opaque and, arguably, globally unmanageable. The regulation that does occur is for the most part focused on the fitness of the manager to report to their investor.

All of these factors have helped contribute to the explosion in credit, completely out of proportion to the real economy, with cheap equity leveraged to the hilt.

So now the party is over and the taxpayers of the world are left to underwrite – in one form or another – the liabilities and obligations of banks and, by extension, their hedge-fund clientele.

We can no longer afford to ignore the fact that the amount of risk that hedge funds are able to take through the leverage of their funds is arguably completely disproportionate to the real economy.

These realities and the associated bailout of financial institutions are expected to prompt a widespread review of financial regulation. This is entirely appropriate.

I emphasise, however, that this will require a change of mindset and a global approach – especially as the home of many financial institutions, including hedge funds, is no longer the traditional economies.

We must proceed with caution.”

Indeed: “We must proceed with caution.

Which is why it totally beggars belief that Key was planning to invite those very same Global Corporatists to New Zealand  to set up some kind of  “zero tax rated financial services hub”. The proposal was led by banker, Craig Stobo, who  told National’s 2009 Jobs Summit that “an economic boost would result if the Government created a zero tax rating for foreign investors who invested in international funds” in New Zealand.

The then-Economic Development Minister Gerry Brownlee, appointed Stobo as chairman of an advisory group the following year to determine what incentives would draw  financial corporates  to New Zealand to participate in the proposed “financial hub” proposal.    Brownlee paid  Stobo’s group  fees ranging up to $655 a day, on top of an up-front allocation of $500,000.

(Maybe that’s why prescription charges are going up from $3 to $5 each?  Advisors don’t come cheap.)

As this media report further outlined,

Stobo’s appointment came after the Government’s Capital Markets Taskforce expanded the initial zero-tax idea into an ambitious plan to compete directly with tax havens Luxembourg, the Cayman Islands and Ireland to host international funds investing in the Asia-Pacific region.

However, Treasury comment on a draft version of Stobo’s report in July 2010 said it did “not present a convincing case that the funds domicile industry could be effectively developed in New Zealand and that it would provide net economic benefits to New Zealand”.

Confidential research by Oliver Wynam, conducted for the Capital Markets Taskforce which was charged with reviving New Zealand’s capital markets after the finance company crash and recession, were withheld from the Sunday Star-Times.

However, summaries of the research seen by this paper estimate New Zealand could secure 17 per cent of the Asia-Pacific market for fund domiciles, generating annual revenues of $1 billion by 2015 and providing up to 5000 high-quality jobs.

Official advice later poured cold water on these numbers. A February 2010 Treasury report noted: “The benefits appear overstated, including the estimate of the number of sustainable jobs.”

But the Wyman report went global, and plans were drawn up for Key to discuss the proposal with senior international bankers when he visited New York in September 2009.

That was the trip when the prime minister made headlines with a turn on The Late Show with David Letterman, but Treasury documents show during this visit he was briefed for proposed meetings with the chief executives of Goldman Sachs and Citibank where the hub was to be discussed.

In December 2010 Key said that a major international bank offered to shift business to New Zealand if tax policy changes were forthcoming. ” –  Key backs off ‘hub’, 13 May 2012

Note the last paragraph; “…Key said that a major international bank offered to shift business to New Zealand if tax policy changes were forthcoming“.

Oh indeed?! And where have we heard that before? Changing legislation to encourage a business to invest here?  Warner Bros? Sky City?

It apprears that Dear Leader has been making rather a habit of selling our  legislation for deals!

Key’s meeting with Goldman Sachs is also disturbing.

Goldman Sachs has been implicated in dubious dealings on Wall St, and benefitted from selling many of the dodgy “products” that led to the GlobalFinancial Crisis in 2008,

As  Allan Sloan, a senior editor for ‘Fortune’  magazine, said on 15 October 2007,

So let’s reduce this macro story to human scale. Meet GSAMP Trust 2006-S3, a $494 million drop in the junk-mortgage bucket, part of the more than half-a-trillion dollars of mortgage-backed securities issued last year. We found this issue by asking mortgage mavens to pick the worst deal they knew of that had been floated by a top-tier firm – and this one’s pretty bad.

It was sold by Goldman Sachs – GSAMP originally stood for Goldman Sachs Alternative Mortgage Products but now has become a name itself, like AT&T and 3M.

This issue, which is backed by ultra-risky second-mortgage loans, contains all the elements that facilitated the housing bubble and bust. It’s got speculators searching for quick gains in hot housing markets; it’s got loans that seem to have been made with little or no serious analysis by lenders; and finally, it’s got Wall Street, which churned out mortgage “product” because buyers wanted it. As they say on the Street, “When the ducks quack, feed them”. ” –  Source

In 2010,  Goldman Sachs faced legal action from the US Federal financial watchdog,

On April 16, 2010, the Securities and Exchange Commission (SEC) announced that it was suing Goldman Sachs and one of its employees, Fabrice Tourre. The SEC alleged that Goldman materially misstated and omitted facts in disclosure documents for a synthetic CDO product it originated called Abacus 2007-AC1. Goldman was paid a fee of approximately $15 million for its work in the deal.

The allegation is that Goldman misrepresented to investors that an independent selection agent, ACA, had reviewed the mortgage package underlying the credit default obligations, and that Goldman failed to disclose to ACA that a hedge fund, Paulson & Co., that sought to short the package, had helped select underlying mortgages for the package against which it planned to bet.

The SEC further alleged that “Tourre also misled ACA into believing that Paulson invested approximately $200 million in the equity of ABACUS 2007-ACI (a long position) and, accordingly, that Paulson’s interests in the collateral section [sic] process were aligned with ACA’s when in reality Paulson’s interests were sharply conflicting.”  Goldman Sachs stated that the firm never represented to ACA that Paulson was to be a long investor, and that as normal business practice, market makers do not disclose the identities of a buyer to a seller and vice versa.

The complaint states that Paulson made a $1 billion profit from the short investments, while purchasers of the materials lost the same amount. The two main investors who lost money were ABN Amro and IKB Deutsche Industriebank.IKB lost $150,000,000 within months on the purchase.ABN Amro lost $840,909,090. ” – Source

Barely three months later, Gioldman Sachs settled out of Court. Three months!?!?

For the American judicial system, where cases like this can take years, or even decades – this is the legal system’s version of travelling in a spaceship at the speed of light,

”  Goldman Sachs has agreed to pay $550 million to the Securities and Exchange Commission, one of the largest penalties ever paid by a Wall Street firm, to settle charges of securities fraud linked to mortgage investments.

The S.E.C. filed a lawsuit against Goldman in April, accusing the bank of securities fraud. The settlement came just days before Goldman is scheduled to report its second-quarter earnings.

Under the terms of the deal, Goldman will pay $300 million in fines to the Treasury Department, with the rest serving as restitution to investors in the mortgage-linked security. Goldman will not admit wrongdoing, though it will admit that its marketing materials for the investment “contained incomplete information”. ” – Source

John Key was to meet this man, Goldman Sachs CEO Lloyd Blankfein, in New York,

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Frank Macskasy Blog Frankly Speaking

CANCELLED: John Key was to meet Goldman Sachs CEO Lloyd Blankfein in New York.

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The proposed meeting with Blankfein was to take place during the same visit to New York when Key appeared  on ‘Letterman’, in September 2009, for that cringeworthy appearance, “Top Ten Reasons to visit New Zealand“.

Treasury analysis of  Stobo’s report in July 2010 stated,

[It did] not present a convincing case that the funds domicile industry could be effectively developed in New Zealand and that it would provide net economic benefits to New Zealand” . – Source

Treasury warned that the proposal could risk,

“… a wealth transfer from New Zealand taxpayers to overseas financial institutions.

Treasury also noted that the OECD was “cracking down” on tax havens in Europe (Luxembourg, Ireland, etc) so it remains to be seen why New Zealand would put itself in a similar position.

This blogger considers Key’s plans for a “tax haven” and his plans to draw Goldman Sachs into the equation as apalling bad judgement on his part.

Considering that Goldman Sachs was one of the financial corporations that Key had railed against in November 2008,

“We must proceed with caution.

What is even more mind-boggling and incredible is that Key himself advocated for reforms at that same APEC meeting, when he stated,

”  What we all know, however, is that transparency is possible and must be demanded…

… My Government is firmly committed to working with other governments and businesses like yours to not only grapple with the immediate pressures on our economy but to, in turn, address the underlying issues that led to today’s financial crisis. ” – Source

Turning New Zealand into a tax haven for companies to hide their fortunes, and shield them from legitamate taxes, and dealing with one of the prime movers in the Global Financial Crisis, which had been sued by a US Government financial watchdog – is not “addressing  the underlying issues that led to the global financial crisis”.

Thankfully, this harebrained scheme went nowhere. When the  ‘Sunday Star-Times‘  approached Key on this issue, evidently he “distanced the government from the controversial aspects of the plan“. (In plain english: he ducked for cover.)

But it should serve as ample warning that the man who is our Prime Minister deserves the hard scrutiny that the media have been according him.

Thankfully, we still have a reasonably critical and independent media in this country.

And thankfully, they can keep an eye on John Key.

God knows someone needs to.

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Postscript:

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Frank Macskasy Blog Frankly Speaking

Full Story

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Acknowledgement

Dominion Post/Sunday Star Times

Additional

Junk mortgages under the microscope

Goldman Sachs  SEC  Fraud Civil Lawsuit

Goldman Settles With S.E.C. for $550 Million

Key blames ‘reckless’ money men for crisis

Address to the CEO Summit, APEC Business Advisory Council (ABAC)

Key backs off ‘hub’

JPMorgan CEO offers blunt apology

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New Year’s Wish List for 2012…

29 December 2011 9 comments

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My New Year’s wish list for 2012. Nothing too extravagant – just a few things that, in my ‘umble opinion, would make New Zealand the egalitarian social democracy we once had – before someone thought that pursuing the Almighty Dollar was more important than building communites.

In no particular order,

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  Stop the asset sales process. This government has no mandate to privatise any of our SOEs. There is also no rationale for any privatisation, as dividends  exceed the cost of borrowing by the State.

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  Halt the Charter Schools programme. There is little evidence that Chart Schools achieve better results  than  non-Charter Schools, and at least one major research project on this issue indicates that Charter Schools are a waste of time.

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  Introduce “civics” into our classroom curriculum. I’ve never considered this a necessity – up until now – but our recent low voter turnout – coupled with peoples’ apalling knowledge of how how political system works – is disturbingly. A modern democracy can only flourish if the public participate; contribute; and take ownership of the system.  Apathy breeds cynicism, frustration, and ultimately disengagement, disempowerment, and a violent response.

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  Implement programmes to assist those in poverty – especially families with children. Meals in schools (breakfasts and/or lunch) would be a great start. Build more state housing. Support programmes that help get young people  into training, upskilling, and  other constructive activities.

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  Stop bene-bashing and tinkering with the welfare system. Our high unemployment is a symptom of the current economic recession – not the cause of it. Instead, government must focus on job creation policies; training and upskilling of unemployed; and spending on infrastructure that maximises new jobs – not reduces them.

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  It’s time to wind back our liberalisation of liquor laws in this country. That particular experiment has been a colossal failure. Split the drinking age to 18/20; ban ALL alcohol advertising; put in place minimum pricing; reduce hours of retailers and bars; give communities greater voice and control of liquor outlets; make public drunkeness an offence; and implement the other recommendations of the Law Commission’s report, ‘Alcohol In Our Lives: Curbing the Harm‘.

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  Increase funding for Pharmac so that sufferers of rare diseases, such as Pompe’s,  can have hope for their future, instead of mortgaging it merely to postpone death for another day. We can do this – we must do this.

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  Release and make public all relevant information regarding the Trans-Pacific Partnership Agreement (TPPA). Making such deals in secret is hardly the transparency-in-government that John Key says he supports.

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  Maintain and keep funding TVNZ7. The planned closure of this station – and replacement with a shopping channel – would be a blow to decent public television in this country. We can, and must do better, than simply a channel devoted to more mindless consumerism.

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  Cease from further cuts to the civil service. Sacking loyal, conscientious, workers is not the “capping” – it is adding to the unemployment dole queues. It is gutting the system that makes a modern society function and we are losing decades of collective skills and experience for no discernible purpose. We went through this in the late ’80s; early ’90s; and late ’90s – and our services suffered as a result.

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Raise the minimum wage to $15 an hour. Stat!

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  The Ministerial committee on poverty is set to end homelessness by 2020. This is simply not good enough!!! Bill English was interviewed on Radio NZ  on 16 December, and his responses to Kathryn Ryan’s questions were not reassuring. This excerpt from the interview was most telling,

RYAN: “It’s to report every six months, the committee. What measures will it use?”

ENGLISH: “Well, look, we won’t  spend a lot of time arguing over measures, there’s any number  of measures out there ranging from gini co-efficients  to kind of upper quartile [and] lower quartile incomes. Lot of of that is already reported in the MSD social report that it puts out each year…”Bill English and the new ministerial committee on poverty

If the Committee doesn’t monitor itself, how will it be able to measure it’s success (or fail) rate?

Poverty and unemployment have to be the top priorities of this government. Nothing else is as important.

Like the way in which the Jobs Summit, in early 2009,  sank beneath the waves,  I do not hold out for much success though.

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  Less spent on roads – more on rail and other public transport. Our continuing reliance on imported fossil fuels will not help our economy or environment one iota.

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  No mining on the Denniston Plateau (or any other Conservation lands). This ecologically-sensitive wilderness area needs to be preserved for future generations.  If we want to make money our of our environment – tourism is the way to go, contributing to approximately 10% of this country’s GDP.  John Key. Minister of   Tourism (NZ – not Hawaii), take note.

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  No deep-sea oil drilling. The stranding of the ‘Rena’ and subsequent loss of  of 350 tonnes (out of around 1,700 tonnes) of oil into the sea is the clearest lesson we’ve been taught that NZ is simply not prepared to cope with a massive deep-sea oil spill. An event such as the Deepwater Horizon oil disaster in the Gulf of Mexico, last year in April, by comparison lost 780,000 cubic metres of oil. An event of that magnitude would be catastrophic to our countrry.

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  Free healthcare for all young people up to 18.  And children to have first priority when it comes to our resources and funding. The future of our nation depends on healthy, well-educated, balanced children growing up as productive members of our society. Who knows – if we look after our children properly, they might feel more connected to our country and more motivated to live here instead of leaving for Australia. If we want our children to have committment to New Zealand – we need to be committed to them.

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Those are a few of my New Year’s wish list.  There are probably others that I may add at a later date – but they’ll do for now.

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Once Were Warm-hearted…

16 December 2011 14 comments

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Source

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Once upon a time…

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1935 First Labour government takes office

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The first Labour government assumed office as a result of its landslide victory in November’s general election. Led initially by the charismatic Michael Joseph Savage, it is best remembered for its landmark social welfare reforms.

One of the most significant aspects of this welfare policy was the 1938 Social Security Act, which has been described as ‘the greatest political achievement in the country’s history’. The Act combined the introduction of a free-at-the-point-of-use health system with a comprehensive array of welfare benefits. It was financed by a tax surcharge of one shilling in the pound (5%). The family benefit was extended to all mothers irrespective of the family’s income, increasing the number of allowances overnight from 42,600 to 230,000. This policy, which was often described as looking after New Zealanders from the ‘cradle to the grave’, was a key factor keeping Labour in power until 1949.

nzhistory.net.nz

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Which led to the beginnings of our modern society – a society which placed a high value on fairness; healthy families; and giving children every opportunity to grow up healthy. It truly was a concept of “no child left behind” – but put into practice and not just empty rhetoric,

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The family in the 1930s and ’40s

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The need for the New Zealand government to promote national interests during the Depression and the Second World War created a renewed appreciation of the role of the family within society. From 1935 the Labour government’s social policies supported young families with children, and from the 1940s there was an emphasis on preventative child welfare.

Much of this concern for children and their families stemmed from the perceived need to maintain a healthy nation: one capable of providing robust workers and, if necessary, soldiers for defence. It was also felt, in the spirit of egalitarianism, that everyone should have access to the nation’s resources.

Housing

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By the early 1940s there was a serious shortage of adequate housing in inner-city areas. A ‘needy families’ scheme, administered by the Child Welfare Branch, was set up in 1941. This provided assistance, primarily by re-housing large or poor families to maintain the household unit. By 1946 the scheme had helped over 900 families and more than 5000 children.

The Family Benefit

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In October 1945, Deputy Prime Minister Walter Nash introduced legislation for the Universal Family Benefit. The maternal figure of the family was to be sole beneficiary. William (Bill) Parry, Minister of Internal Affairs, explained: ‘We have to create such enthusiasm for the service the mother renders, that it will be lifted to the highest pinnacles of service in the nation.’ This benefit and other measures such as cheap housing and a well-funded health system did much to contribute to stability of household income and, in turn, to raise living standards.

nzhistory.net.nz

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Which in turn led to this, perhaps one of the most ambitious programmes to lift the health of our nation’s children,

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1937: Free Milk Every Morning

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Young New Zealanders once lined up for a free bottle of milk at school every morning. This scheme was introduced in 1937 to help children who had become undernourished during the Depression. It was also enthusiastically supported by famous dramatist, George Bernard Shaw, when he visited this country in 1934. And so, for the next 30 years, school children sat down for their daily half-pint. Crates of bottles were carried into the classroom by official milk monitors, who were also responsible for collecting up the empties after the session. Occasionally, an older amber glass bottle would arrive with the morning delivery and prove an attraction for keen consumers.

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Linton schoolboys delivering the school milk c. 1941.

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School milk bottles in the 1950s had cardboard tops which had a small hole for the straw and were often put to further use. Lengths of colourful wool were wound tightly around a pair of these cardboard discs to produce a decorative pom-pom.

In the 1960s 3,500,000 gallons of milk was distributed to the schools of New Zealand each year, but the value of the scheme was now being questioned. There were mixed views on the matter; some felt it had become unnecessary and was a disruption to the class, while others claimed that a number of New Zealand children still came to school without an adequate breakfast…

kiwianatown.co.nz

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1967: End of free school milk

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…  The scheme was a world first. Each day, milk monitors supplied a half-pint (284 ml) of milk to each pupil. By 1940, the milk was available to over 80% of schoolchildren. For a few years during the Second World War, pupils also received an apple a day.

The scheme lasted until 1967, when the government dropped it on cost grounds — and because some people were starting to question the benefits of milk…

www.nzhistory.net.nz

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I’m of the age where I can vaguely recall the crates of milk left in the concrete “pill-box” at my Primary School. I recall the “powerful” position of the Milk Monitor… and using the straws as make-shift blow-guns to fire small paper darts at my near-by class-mates.

It is interesting to consider that by 1967, the government-of-the-day decided that school milk was no longer required. Perhaps Keith Holyoake, the Prime Minister of the day, considered that it was a relic from a by-gone age of Depression, poverty, and extreme childhood health-problems that by the mid-1960s were but a distant memory.

New Zealand in the 1960s was healthy; single-incomes were sufficient to live on; and the country exported more than it earned because of our special relationship with Great Britain. But all this was to change…

  • Britain entered the EEC in 1973, impacting on our sheep-meat trade with that country. Suddenly we had lost our  major export market.
  • The oil shocks of 1973 and 1979 drove our balance of payments into the red, as we struggled to cope with  higher and higher fuel-prices.
  • Property prices skyrocketed in 1979, as people abandoned the outer suburbs and satellite-towns, in favour of inner-suburbs, to cut down on fuel costs.
  • Inflation soared, unemployed rose.
  • And in 1984, New Zealand elected a Labour Government with a secret agenda to implement neo-liberal “reforms” to create a free-market; reduce and eliminate trade trariffs; implement a  massive programme to sell state assets; and “reduce government expenditure” (ie; cut services).

We were assured that the implrementation of these “reforms” would generate wealth and that this would “trickle down” to lower socio-economic (ie, poor people) groups in our society.

The rest, I think, we can all remember without too much trouble.

“Trickle down” has proven to be a singularly poor joke – without much of a punch-line.

Wealth has certainly been generated – at the top.

We went from one income to double-incomes to maintain a household. Now even that is insufficient for many families.

Seven tax cuts have benefitted mainly high-income earners and the wealthy.

And wealth disparity has become so bad that even the OECD has taken notice and commented on it, in a recent report.

The Prime Minister, meanwhile, has his own thoughts on why we having worsening poverty in our once egalitarian country,

But it is also true that anyone on a benefit actually has a lifestyle choice. If one budgets properly, one can pay one’s bills.

“And that is true because the bulk of New Zealanders on a benefit do actually pay for food, their rent and other things. Now some make poor choices and they don’t have money left.” – John Key, 17 Feb 2011

Thank you for that, Dear Leader.  By the way, how is your  pay increase of $11,000 p.a. that you were recently given?

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How is it that we have arrived at a situation where, once again, we are returning to 1937 – and having to resurrect milk-in-schools?

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Full Story

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Full credit and kudos to Fonterra for going ahead with this plan.  There are many low-income families that find it hard to buy sufficient quantities of good, wholesome, nutritious food for everyone. After rent, power, rates, phone, etc, is paid for, food is usually at the bottom of the list.

This is especially so for the 90,000+ people who have lost their jobs in the last four years as the global recession hit our economy and impacted on communities.

However, ingrained poverty has been with us since the 1980s, and many of the gains of the last century have been lost.

Little wonder that Bryan Bruce’s recent documentary, “Inside NZ: Child Poverty” generated such a heavy, nationwide response.  Bryan Bruce laid it out for all to see, that poverty had returned to this country and that governments had no idea how to address this growing crisis. Or were unwilling to.

Clearly, we have a choice in front of us. Do we continue down our present course, and keep hoping for the best? Or admit that policies over the last thirty years have been a failure;  change tack; and proactively address the root causes of wealthy disparity and income gaps?

If the latter, then we have the wrong government in power to make good on three decades of failed economic policies.

Bill English was interviewed on Radio NZ this morning (16 December), and his responses to Kathryn Ryan’s questions were not reassuring,

Bill English and the new ministerial committee on poverty

This excerpt from the interview was most telling,

RYAN: “It’s to report every six months, the committee. What measures will it use?”

ENGLISH: “Well, look, we won’t  spend a lot of time arguing over measures, there’s any number  of measures out there ranging from gini co-efficients  to kind of upper quartile [and] lower quartile incomes. Lot of of that is already reported in the MSD social report that it puts out each year…”

If the Committee doesn’t monitor itself, how will it be able to measure it’s success (or fail) rate?

Why has the government not set measures in place – that it expects of every other government department to assess what value they give back to taxpaters?

And how does English’s rejection of measures compare with the National-ACT coalition agreement which stated, in part,

Key features of the agreement are:

• Continuation of ACT’s focus during the last term on publicly monitoring progress on improving the country’s economy wide performance using international benchmarks, and building on the work of the 2025 Taskforce, with a requirement for Treasury to report annually on the progress being made to improve the quality of institutions and policies, raise productivity, and reduce the income gap with Australia.Source

So the “country’s economy wide performance” will be measured using “international benchmarks” – but the Ministerial Committee on Poverty “won’t  spend a lot of time arguing over measures“?

Ok, got it.

We’ve got that, if anything, it is apparent that the so-called “Ministerial Committee on Poverty” is simply going to be another talk-fest, along the lines of the “Jobs Summit” in early 2009. Does anyone recall how many jobs came out of that “summit”? Perhaps this many.

At most, the so-called “Ministerial Committee on Poverty” appears to be little more than a sop to  Maori Party members, to justify the decision of party leaders to coalesce with National.

So here we are: New Zealand, circa 2011A.D.  Poverty. Low incomes. School milk. Growing wealth gap. New Zealanders migrating en masse to Australia. And paralysis/inertia in  our political leaders.

Seventysix years after Michael Joseph Savage implemented radical, bold, policies to create a new, egalitarian society – we are back at Square One.

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SAD STATISTICS

Children who go to school without breakfast – 17 per cent.

Households with children which run out of food – 22 per cent.

Households with children who use food banks – 10 per cent.

Source: Ministry of Health 2003 survey of 3000 children aged 5-14

Source

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Postscript

To all the food-faddists, right wing reactionaries and Me First people – your negative reaction to Fonterra’s plan to reintroduce milk to low-decile schools is simply apalling. Your knee-jerk hostility is not only unhelpful – but is a stark illustration as to why this once healthy and wealthy country is slipping further down on nearly every international and local  indicator-ranking.

Food faddists:  If you think milk is evil – fine. Don’t drink it. But leave our kids alone. They have the rest of their lives to live, whilst your particular food-fetishes come and go with the latest seasonal-fad. Their growing bodies need the calcium, vitamins A, D, etc, and other nutritional benefits of this simple food. Children cannot live on fresh air and sunshine  alone.

Right wing reactionaries: New Zealand has been the experimental “hot house” for neo-liberal, free market policies, since 1984. That’s about 28 years. In that time, the top income earners and 150 Rich Listers have increased their wealth. The rest of society has stayed still or gone backwards.

Latest reports confirm that the wealth-gap continues to widen – and you can’t dismiss  the OECD as some dastardly socialist satrap.

How much longer before this experiment is labelled a failure?

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Additional

Govt likely to back milk inquiry

Minister seeks parliamentary milk price probe

Woolworths lifts NZ supermarket earnings

Special inquiry into milk prices opens today

Soft drinks win in milk debate

Rolls Royce sales rocket as super-rich drive in style

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