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National – what else can possibly go wrong?!

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A contributor to The Standard blog, ‘Jenny’, made a very simple – but insightful post, detailing National’s track record in the last three and a half years,

This is a government determined to gift everything they could possibly wish to the rich and powerful, and on behalf of this greedy sector force onto the rest of New Zealanders.

More Pokies

More drilling

More fracking

More booze

More junk food

A fire sale of public assets

More pollution

More corruption

More scandal

Less sovereignity

Less civil liberty

More toadying to foreign powers

More toadying to foreign corporates

More spying snooping and videoing of New Zealand citizens

More bail-outs

More tax cuts

More job cuts

More benefit cuts

Have they actually done anything worthwhile or positive?

See:  Katherine Rich on the Health Promotion Board: The next outrageous piece of Nat cronyism

Jenny posits the question, “Have they actually done anything worthwhile or positive?

Try as one might, despite inane rhetoric and vague promises, no National Party MP, functionary, or groupie could possibly point to any success achieved by John Key and his colleagues.

Not . One.

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1.Economic Growth

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National’s “Master Plan” for economic growth and job creation seems to revolve around four events – none of which have been particularly successful,

  1. The rebuild of Christchurch. Despite being an opportunity to upskill 160,000 unemployed and a major boost to the economy – nothing much is happening. Instead, National is content to allow tradespeople from overseas to come into the country and carry out  the work. With few apprenticeships, we are woefully unprepared for the looming demand for tradespeople – a damning lack of planning by National and it’s naive reliance on the “free market” to provide skilled workers.
  2. The Rugby World Cup – far from being a major boost, seems to have contributed very little to our economy. In the last three months of 2011, GDP grew  just 0.3% – half  that  predicted by economists. It seems that Dr Sam Richardson’s prediction, that $700  million was a hopelessly unrealistic expectation proved to be unerringly correct.  Who is ultimately responsible for National throwing $200-plus million of our tax dollars at this exercise in outrageous extravagance? Murray McCully? Steven Joyce? John Key?
  3. The Sky City/Convention Centre deal. Our illustrious Dear Leader promised 1,800 jobs from this planned project, in return for re-writing gambling legislation and permitting Sky City to increase pokie machine and gaming tables by up to 500. Potential social fall-out surrounding increased problem gambling was casually dismissed by both John Key and Sky City’s CEO Nigel Morrison.    Unfortunately, as with most of John Key’s figures and promises, the expectation of 1,800 jobs was as fictitious as much of what he says.
  4. Asset sales. With weak growth; a stagnant economyhigh unemployment; and New Zealanders continuing to escape to Australia, National’s one (and only) trump card appears to be the partial-privatisation of five state owned corporations. As has been pointed out, ad infinitum, floating shares in these SOEs will not contribute to economic growth; nor create new jobs (in fact,  it is likely to result in redunancies, if past privatisations are any guide); nor create real wealth. It simply shuffles bits of paper (shares) around from investor-to-investor-to-investor. And if investors need to borrow to buy these shares, we are using overseas funds for speculative purposes. Which sounds suspiciously like our love-affair with speculative housing-“investments”.

As Business NZ has stated, our economic growth has been ‘unspectacular’. And that’s coming from one of National’s own business allies. (Just as Business NZ seemed somewhat unimpressed as National’s lack of planning and direction last year, just prior to the election.)

Otherwise, National’s Grand Plan can be summed up as a reliance on a “two pronged” approach to growing the economy; a hands-off “free market” approach, and tax cuts. Not only have neither worked terribly well, but these measures have been counter-productive.

Tax-cuts  gave massive increases in income to the richest 10% of New Zealanders – whilst the GST increase has made life harder for the poorest and lowest-paid in this country.

Right wing cheer-leaders who bleat on about their rich masters “working hard and deserving  increased wealth” may be aspirationists who one day hope to become one of the Master Class – but I hope they’re not holding their breath. That day will be a long time coming.

Tax cuts have also resulted in a government budget blow-out. Borrowing $380 million a week, whilst claiming that National is “not borrowing for tax cuts is credible only to National; their salivating sycophants; and low-information voters (for whom “The GC” is the height of documentary-making).

Tax cuts have also not delivered the promised boost to the economy by increasing spending and consumption. This is not surprising, as the tax cuts were given to the wrong sector of society.

High income, wealthy, asset-rich families tend to use their tax-cuts to reduce debt or spend on investments (shares, kiwisaver,  etc) that do not directly help small businesses.

Low income, poor, families spend everything. These are the the people who will buy more food to put on their tables; clothes; shoes; medication; and other consumables. These are the people that small businesses rely on on for their custom. And the retail supermarket sector is suffering a massive drop accordingly.

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Middle income families continue to stuggle not to fall behind. Any tax increase they may have gained has been swallowed up by increased gst, government charges, increased user-pays, etc.

I think most people have since ‘twigged’ that National has indeed borrowed for tax cuts. And we’re having to pay back those massive borrowings by  cutting services; slashing the state sector; and selling our state assets.

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2. Asset Sales

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National’s asset sales programme has been an unmitigated disaster from Day One.

Since National first announced their decision to partially privatise Meridian, Genesis, Mighty River Power, Solid Energy, and Air New Zealand, this issue has been opposed by the public.

National has used it’s so-called “mandate” from last year’s election to proceed with their policy, and passed enabling legislation only last Tuesday (26 June).

Any notion of a “mandate” is shaky and open to interpretation.

Whilst the National-ACT-Peter Dunne Coalition has 61 seats, and Labour, NZ First, Greens, Mana, and Maori Party have 60 seats – the number of Party votes cast tells a different story.

National , ACT, United Future Party Votes Labour, Greens, NZ First, Maori Party, Mana, and Conservative Party votes

National – 1,058,636

Labour – 614,937

ACT – 23,889

Greens – 247,372

United Future – 13,443

NZ First – 147,544

Maori Party – 31,982

Mana – 24,168

Conservative Party* – 59,237

TOTAL – 1,095,968

Total – 1,125,240

The irony of the Conservative Party gaining more Party Votes than ACT and United Future combined – yet winning no  seats in Parliament  – will not escape most fair-minded people. Adding the Conservative’s 59,237 party votes to the anti-asset sale bloc, yields a majority of voters opposed to National’s programme.

It is only the current rules of MMP (now under review) that allows this quirk to take place.

Add to that, opinion poll after opinion poll showing  60% to 80% of respondents  opposed to asset sales, and National’s mantra that “We have a Mandate” becomes patently untenable.

A recent  NZ Herald poll, where respondents were asked to leave a comment, as well as a “Yay” or “Nay” vote yielded results that were thoroughly predictable,

For: 151

Against: 552

The National Party understands this only too well. Hence their desperate, ad hoc  schemes to bribe the public with all manner of ‘sweeteners’,

  • giving first option to buy shares  to “mum and dad” investors
  • a bribe of “loyalty” shares
  • promise of “affordable” shares  for investors

There is a considerable degree of arrogance in National’s pursuing of their asset sales, despite considerable public anger.

On 26 October last year,  Dear Leader  said,

They don’t fully understand what we’re doing. My experience is when I take audiences through it, like I did just before, no-one actually put up their hand and asked a question. “

On 3 May, as a 5,000 person march wound it’s way through Wellington, John Key grinned to reporters and cheekily said,

How many people did they have?  Where was it? Nope wasn’t aware of it. So look, a few thousand people walking down the streets of Wellington isn’t going to change my mind. “

And on 26 June, Key tried to dismiss TV3 journalist John Campbell with this demeaning insult,

No, um, and with the greatest respect to your financial literacy, you’ve proven that you don’t actually have any. “

Key said pretty much the same about Greens co-leader, Russel Norman,

With the greatest respect to [Green Party co-leader Russel Norman], I’m sure he’s a great bloke, he doesn’t know much about economics. “

It is fairly obvious that Key has very little time for anyone who opposes his views. In fact, he gets downright belligerent and  derisive.

Who does he remind me of? Someone else who used to belittle and deride anyone who dared disagree with him – especially in economic matters. Who else was famous for his arrogance? Another Prime Minister,

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Despite public opposition and several valid commercial reasons made clear that these sales will be financially disadvantageous to our economy, National carries on, oblivious to all but it’s own ideological fanaticism.

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This is a Party totally out of touch with the rest of the country.

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3. Welfare

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In 2008, the GFC (Global Financial Crisis) hit the world with a social and economic recession not seen since the 1920s/30s. Coporations like Lehmann Bros collapsed. General Motors filed for bankruptcy protection. Others had to be bailed out with billions of taxpayers’ dollars. Millions lost their jobs and homes, and unemployment skyrocketed. Europe is tottering on the brink of a domino-like collapse of their currency.

Here in New Zealand, unemployment doubled from 3.4% by the end of 2007, to 7.3% by the end of 2009.

When criticism is levelled at National’s inability to address our stagnating economy, John Key and Bill English point to the GFC, stating it’s not their fault,

We did inherit a pretty bad situation with the global financial crisis.” – Source

This is a global debt crisis and you certainly wouldn’t want to add more debt at that time unnecessarily.” – Source

The economic downturn that may occur on a pronounced basis in Europe is factored into our books.” – Source

But when it comes to those who are the casualties of the economic downturn; the unemployed, National suddenly sings a different tune when it comes to Cause-and-Effect,

The Government is considering requiring beneficiaries to immunise their children.” – Source

Social Development Minister Paula Bennett yesterday said contraception would eventually be fully funded for female beneficiaries and their 16 to 19-year-old daughters. ” – Source

Prime Minister John Key says beneficiaries who resort to food banks do so out of their own “poor choices” rather than because they cannot afford food.” – Source

Under the Government’s new youth welfare policy, announced by Prime Minister John Key at the weekend, 16- and 17-year-old beneficiaries would receive a payment card for food and clothes from approved stores.” – Source

And perhaps – worst of all – was  this piece of vileness from Finance Minister, Bill English,

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[click on image to go to TV3 website]

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English’s smirking disdain, for all those New Zealanders who have lost their jobs due to the global financial crisis, was plain to see.  Shame on him; his revolting attitude; and shame on every person in his electorate who voted for this arrogant little man.

The National Creed

1. The  Global Financial Crisis – a handy excuse for poor economic policies and mismanagement.

2. The Unemployed – a handy scapegoat for National’s inability to grow the economy and create new jobs.

3. If in doubt, never take responsibilty; refer to #1 and #2.

Latest redundancies;

Will drug testing be used to  “sort this lot out smartly”, Mr English?

And more bizarre is Paula Bennet’s admission that National “has ruled out universal drug testing of all beneficiaries, with drug and alcohol addicts being exempted from sanctions for refusing or failing a drug test when applying for a job“.

See:  Addicts escape beneficiary drug testing

Which means that if addicts and alcoholics are not tested – that leaves only those  workers who’ve been unfortunate enough to lose their jobs through New Zealand’s ongoing stagnating economy.

Adding insult to injury doesn’t begin to cover the humiliation which National intends to thrust upon workers who’ve lost their jobs.

And all because National has no job creation policies.

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4. Sky City/Convention Centre

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This is perhaps one of John Key’s shonkiest deals. It is no wonder that the Auditor General is investigating the Sky City “arrangement” – so I have little faith that the investigation will yield much that is incriminating of Dear Leader.

As Key stated with utter confidence, on TV3’s ‘The Nation‘ on 17 June,

KEY: The involvement I had, as Minister of Tourism was to go and talk to a number of critical players, and as part of a general conversation say to them, “Hey, look, New Zealand’s interested in building a convention centre. Did that with Sky City. I did that with people out at ASB Centre The Edge. I did that with Ngati Whatua. That’s not unusual.  I mean, and to argue that that would be unusual would be to say, well, look I have discussions with people in Whangarei about building a museum there. And I have discussions  with people in Auckland about building  a cycleway.

So now what we’re  talking about about is, ok, was there undue influence or was the process correctly handled, that’s what the auditor general  will say.

So let me tell you this, for a start off, ok, in terms of the expression of interest process, my office had absolutely no involvement, no correspondence, [ interuption by Rachel Smalley] no phone calls, absolutely nothing. So when the auditor general  comes in there will be no correspondence, no phone calls, no discussions, zero. “ – Source (@ 6.37)

That statement does not instill confidence in me. Dear Leader has just stated, on record, that no evidence exists of his meeting(s) with Sky City management. Key admitted meeting with Sky City’s Board in late 2009,

I attended a dinner with the Sky City board 4 November 2009 where we discussed a possible national convention centre and they raised issues relating to the Gambling Act 2003“. – Source

But what was said or agreed on, we don’t know. As Key has stated, “when the auditor general  comes in there will be no correspondence, no phone calls, no discussions, zero”.

This is not a very good  example of transparency. It is certainly not the “transparency in government”  that Key has promised this country on several occassions.

In fact, it’s dodgy as hell.

See:  Doing ‘the business’ with John Key – Here’s How

In the same  blogpost ( Doing ‘the business’ with John Key – Here’s How )  dated 23 April, this blogger outlined John Key’s somewhat dubious tactics for pushing through dubious policies,

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Promise Big Numbers.  It doesn’t matter if the numbers never eventuate because they were fictitious to start with. By the time the media and public realise the true facts, the issue will be all but forgotten. A week may be a long time in politics – but a year positively guarantees  collective amnesia for 99% of the public.

From December, 2010,

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Cycleway jobs fall short

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6:00 AM Wednesday Dec 8, 2010

The national cycleway has so far generated just 215 jobs – well short of Prime Minister John Key’s expectation of 4000.

In May, Mr Key said he expected the $50 million project, which involves building 18 cycleways throughout the country, to generate 4000 jobs.”Source

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Who can remember the initial cycleway project and the promise of 4,000 new jobs?

Precisely.

From March, this year,

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Key defends casino pokie machine deal

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08:23 Mon Mar 5 2012 – AAP

Opposition parties are accusing the government of selling legislation through an agreement that will see Auckland’s Sky City build a $350 million convention centre in return for more pokie machines…

…  But Mr Key says it’s a good deal for New Zealand.

“It produces 1000 jobs to build a convention centre, about 900 jobs to run it… ” Source

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In a year’s time, who will recall the promise of 900 new Convention centre jobs?

Who will care that only a hundred-plus eventuate?

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Well, it didn’t take one year. It took only a matter of  months. On 5 March, John Key asserted,

 “It produces 1000 jobs to build a convention centre, about 900 jobs to run it, and overall the number of pokie machines will be falling although at a slightly lower rate.”

See:  Key defends casino pokie machine deal

But then, on 5 June,  the NZ Herald reported,

Job numbers touted by Prime Minister John Key for a proposed international convention centre at SkyCity are much higher than official estimates.

Mr Key has said a deal allowing SkyCity more gambling facilities in exchange for funding the convention centre would provide 900 construction jobs and work for 800 people at the centre.

But the figures are much higher than those in a feasibility study done for the Government by hospitality and travel specialist analyst Horwath Ltd.

Horwath director Stephen Hamilton said he was concerned over reports the convention centre would employ 800 staff – a fulltime-equivalent total of 500.

He said the feasibility study put the number of people who would be hired at between 318 and 479. “

See:  Puzzle of Key’s extra casino jobs

Sprung! Another of Dear Leader’s “little white lies” uncovered.

Next ‘cast iron guarantee’ from Dear Leader, who said on his website,

SkyCity has agreed to pay the full construction costs of the centre – estimated at $350 million. The company has asked the Government to consider some alterations to gambling regulations and legislation.”

See:  John Key -Convention centre development moves ahead

Yeah, I’ll bet that Sky City has “asked the Government to consider some alterations to gambling regulations and legislation“…

In business, it’s called a ‘contra-deal‘.

But it’s seems that even this deal is not as “free” for tax-payers as Key has made out. In fact, it has been uncovered that  taxpayers are definitely ‘stumping up’ some of their hard-earned cash,

Budget documents reveal that if the plan goes ahead, taxpayers will contribute up to $2.1 million to ensure its design and facilities meet Government expectations...  The Prime Minister, however, is defending the budget allocation of millions of dollars towards a potential Sky City convention centre.

John Key says he has always said his preferred position is that no taxpayer money would be spent – and that if it does go ahead, it will have economic spinoffs. “

See:  Govt misleading public over Sky City: Labour

So… Key has (once again) mis-led the public, and his stock-standard explanation is that “if it does go ahead, it will have economic spinoffs .”

John Key  claims that “a new convention centre would bring 144,000 additional nights of Auckland stays for business tourists, who generally spent twice as much as other tourists“.

See:  Casinos safer than pubs, Key says

But as Bob McCoskrie, National Director of Family First NZ, said somewhat more convincingly,

Tourists come to see the country and the culture – not the casinos. If tourists were really focused on gambling, they would be going to Las Vegas – not the Sky City casino venue in Auckland.

See:  Tourists Come to See Country & Culture – Not Casinos

What’s the bet that the forecast for “economic spinoffs” will be as accurate as National’s predictions for spin-offs from the Rugby World Cup or national cycleway?!

See:  Weather and World Cup fail to lift GDP

See:  Current account deficit widens to $2.7 billion

See:  Growth slows – GDP up just 0.3pc

How many times have we heard Prime Minister John Key make all sorts of promises that this or that will deliver jobs and economic growth – only to see the promise fail. Which is then  usually followed by an excuse relating to the global economic slowdown?

It’s getting rather predictable and tedious.

What Dear Leader has tried to gloss over and  dismiss is the inevitable consequence of increasing pokie machines: more problem gambling. Both John Key and Sky City CEO, Nigel Morrison,  have tried to trivialise this growing social problem,

The incidence of harm cited from Lotto is greater than that from pokie machines in casinos. Getting those facts across is difficult.  We’re not just on about growing our gaming machines.  We would like to grow our table games product and expand our operations to meet the growth of Auckland. “

See:  Casino boss: Lotto does more harm

Gambling addiction in many way is as pernicious – if not worse – than alcohol and drug additions. A compulsive gambler can damage not only his/her own life – but those around them. Houses have been lost; businesses crippled or closed down; families torn apart,  as problem gamblers suck others down into a whirlpool of uncontrollable gambling.

See:  Barred gambler coaxed back to casino

See:  Mum steals $330k from marae to feed pokies

From a Ministry of Health  report,

Overall, the prevalence of problem gambling in New Zealand adults was 0.4% (about 13,100 adults). Additionally, the prevalence of moderate-risk gambling was 1.3% (representing a further 40,900 people). In total, 1 in 58 adults (1.7%, or 54,000 adults) were experiencing either problem or moderate-risk gambling.

Other key findings of this study include:

  1. Maori and Pacific people experience more gambling-related harm than other people
  2. people living in more socioeconomically deprived areas are more affected by gambling-related harm.
  3. this study may help to inform the provision of problem gambling intervention services and public health activity, as the study showed that:
    • problem gamblers can be found in both urban and rural areas
    • Maori and Pacific people appear to be under-represented in intervention services
    • people experiencing gambling problems are more likely than other people to be current smokers, have hazardous drinking patterns, have worse self-rated health, and have a high or very high probability of a mood or anxiety disorder. “

See:  A Focus on Problem Gambling: Results of the 2006/07 New Zealand Health Survey

Interestingly, the above report, using 2006/07 data, and posted online in 2009, is the most recent Ministry of Health report available. Nothing more recent – and perhaps more damning of current gambling policies – is apparent on the Ministry of Health website.

Why is that?

On a more personal level, this blogger is aware of an elderly couple who were both addicted to pokie machines. Badly in debt, they were forced to down-size their family home and buy a smaller, more modest,  property. One of the couple died soon after, leaving the other who continued her gambling habit.

Not only has this elderly woman lost her surplus cash from the house-sale, but has gambled using equity in her current home.  She often ‘borrows’ money from her grown up children.

Her  modest house is deteriorating through lack of maintenance.

Not only has this woman lost all equity in her home, she is now more reliant on  both the State and her family.

Meanwhile, this article on Sky City’s most recent posted profits should be cause for concern,

”  Sky City Entertainment, one of the biggest gambling operators in the country, has seen a significant rise in profits over the course of the last year. The company attributes this growth to the earnings generated by the Sky City Casino in Auckland.

Over the course of 2011, profits for Sky City rose by over $10 million to $78 for the year. The company believes that the changes made to Sky City Auckland are to thank for this impressive profit increase over the course of the past year.

$50 million was spent on renovating the gambling facilities available the casino, but the company still managed to offset the costs with improved profits. In addition to building a new VIP lounge, Sky City also renovated other areas of the casino to make them more attractive to players.

Slots [pokies]  brought in the amount of increased revenue, seeing a rise by 17%. Non-gaming elements also helped to boost profits. Auckland’s recently-revamped hotels and restaurants garnered a great deal of attention from patrons.

It seems that the adage “you have to spend money to make money” is true for Sky City.  “

See:  Sky City Sees Huge Revenue Jump

If the convention centre is National’s only scheme to grow the economy and to create 170,000 new jobs – we are in deep trouble.

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5. TVNZ7

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Nothing best illustrates  National’s narrow vision of the role of government than the demise of TVNZ7. Nothing.

Whether the previous Broadcasting Minister, Jonathan Coleman, or the current Minister, Craig Foss – their attitude has been the same; market forces shall prevail – and public-interest programming shall be the responsibity of NZ On Air, who shall contract such programmes to current commercial broadcasters.

Except that this is a cop-out.

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The beauty of TVNZ7 is that public broadcasting was, in the main, focused on a single broadcasting platform. The public knew where to go to watch certain types of programming.

Just as the public now go to supermarkets to buy their meat, fish, veg & fruit, and bread – instead of going to a butchers; a fish shop; a  fruit & veg produce store; and a bakery. Imagine the uproar if John Key told us we must go to five different food retailers to buy five different sorts of foodstuffs?! Dear Leader would have a size 9 boot imprinted on his backside.

TVNZ7 fulfilled the same public demand; niche programming on a niche broadcaster.

Just as, currently we have racing on the TAB channel; Chinese programming on CTV; parliament on Parliament TV, etc.

Ironic that politicians have no problem broadcasting their “debates” (inverted commas used deliberately), deeming their squabbles and shrill screams a must have – but not public, non-commercial TV.

Or, that we can have non-stop horse racing on a free-to-air TV channel.

But we are not entitled to have access to non-commercial public TV.

Whatever concept National has of public television, it is clear that Broadcasting Minister, Craig Foss’s vision is different to the rest of New Zealand,

“…  the government was ‘committed’ to supporting local content through NZ on Air, instead of directly funding single broadcasters. “

See:  No help for titanically pointless bill

Having public TV through NZ On Air is akin to selling vegetarian/vegan food products in butcher shops. You have to go looking for it. It’s not easy to find. And it’s buried amongst ‘crap’ you’d rather not have to put up with.

And what makes NZ On Air funding of  ‘Media7/Media3‘  “public television” – when it will have advertisements peppered throughout?

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Take out the advertising of underarm deodorants; cat/dog food; toilet ducks; panty shields;  the latest 4WD monstrosity from Korea; promos for the latest US crime/cop shows; reality TV shows; home improvement shows; US sitcoms; and voyeuristic, soft-core porn like “The GC”,  and a 30 minute current affairs programme from TVNZ7 becomes a 20 minute show on TV3.

There goes our chance to focus on critical social issues, as commercial advertisers compete for our attention.

What next? Advertising in Tolstoy’s  “War and Peace”? Shakepeare’s “Macbeth”? Anne Frank’s Diary?

We are being ripped off in more ways than one. We deserve better than this.

But not, it seems, according to National; there is more than an element of vindictiveness in their decision to can TVNZ7. As if it was their opportunity to “stick it to us” after their embarrassing backdowns on mining in conservation schedule four estates; their attempt to cut teacher numbers and increase classroom sizes; and ongoing resistance to state asset sales.

The closure of TVNZ7 is a clue what National thinks of us. And it ain’t very pleasant.

See: Pundit – TVNZ kills ad-free channels to grow profits

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6. Education

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Current cutbacks to state and social services is a re-run of the 1990s. National’s cuts now, mirror those of last century.

Bolger, Richardson, Shipley, and Bill English  ran amok – slashing health, education, police, military, and anything else they could lay their cold, clammy, neo-liberal hands on.

At one stage, in the late 1990s, the health system was so badly run down that   patients requiring critical surgery were not receiving it – and were dying on waiting lists.

See: Died waiting for by pass

See:  Funding cut puts centre in jeopardy

See:  Myers warns few jobs, more poor, ahead for NZ

This year, as part of National’s on-going agenda to cut government services; reduce the size of the State; and to pass on savings  as tax cuts to the rich, National has cut staffing levels; departmental budgets; and services.

The New Zealand middle class tolerates this – until it affects them, personally.

Enter: 24 June – Minister Parata and her plans to slash teacher numbers and increase class sizes.  That was a step too far, and a teacher-parent-principal-Boards alliance fought back. Hard.

Bill English – a bloodied veteran of the Bolger-cum-Shipley administration of the late 1990s –  recognised the signs that a revolt of the middle classes was in the offing.   National’s merciless cuts to social and government services in the ’90s had resulted in an electoral thrashing in the November 1999 elections.

Upshot: 7 July – Government u-turn on cost-cutting policy.

This is now the second major policy u-turn by National. Their previous bloodied-nose, in July 2010, when Gerry Brownlee was forced to announce a back-down on National’s proposals to mine schedule 4 conservation land, was a stunning exercise in people-power.

In my previous blogpost (Why Hekia Parata should not be sacked), I argued that Educational Minister, Hekia Parata should not be forced to step down from her ministerial role. As I pointed out, “sacking Parata for policies that every other Minister has been implementing seems pointless. Especially when National’s essential policy of cutting expenditure and services would remain unchanged”.

However, recent revelations from OIA-released  document have revealed,

The papers for the education budget reveal class size funding ratio changes went even further than what was announced.

Education Minister Hekia Parata originally urged changes that would seen 1300 fewer teachers hired over the next four years than would have happened under the existing funding formula.

That plan to curb growth in teacher numbers would have seen a “a minimal net reduction” in staffing of about 260 after four years.

The Government eventually decided on a less aggressive plan to cap teacher numbers, with almost the same number proposed to be employed in 2016 as now.

That plan to save $174m over four years was agreed and written in to the Budget but Parata was forced in to an embarrassing backdown earlier this month, which cancelled the plan and returned to the status quo.

However Parata’s original plan was to cut $217m. “

See:  Deeper teacher funding cuts ditched

It appears that Ms Parata’s inclination was for even deeper cuts to Education services  than, (a) the public was initially aware of and (b) that her National ministerial colleagues could stomach.

This explains, in part, why Key torpedoed  Parata’s plans to cut education services; he was thoroughly exasperated with an an incompetant  Minister who badly overestimated her abilities and could not “sell” even a watered down version of her plans. He must have been spitting tacks that, had Parata’s initial plans to cut $217 million (instead of $174 million) gone ahead,  she would have found herself in a much deeper hole, and the fallout to National would have been much worse.

This blogger has come to the conclusion that Hekia Parata is way over her head, and should step down as Education Minister forthwith.

At any rate, she will be gone at the next cabinet re-shuffle.

Tea-lady might be a good, safe role for her?

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7. ETS – Another of Key’s broken promises

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John Key is adamant that National will not consider slowly raising the retirement age from 65 to 67, because it is a committment he has promised to keep,

I’ve made it quite clear it would be my intention to resign from parliament if I broke that promise to New Zealanders.”

See:  Govt against raising retirement age

This blogger finds it hard to understand Key’s reticence to “breaking” an election promise. After all, he’s broken promises not to raise GST; to retrieve the bodies of the Pike River miners;  to address growing youth unemployment; stem the flow of migration to Australia; grow the economy; and now, to implement an ETS.

In May 2008, Key stated,

Key outlined a series of principles an ETS should have, including…

… It should be closely aligned with Australia’s ETS.

It should not discriminate against small and medium businesses in allocating emissions credits and purposes. “

See: Nats call for a delay to emission trading scheme law

At the time, Key also stated,

This not about National walking away from an ETS, we support that. . . we just simply want to get it right and we now have the time to get it right.  “

That was four years ago.

Since then Australia has implemented it’s own carbon tax that will lead in to a full ETS by 2015,

The A$23-a-tonne price on carbon emissions started yesterday [1 July 2012] , directly affecting 294 electricity generators and other companies.

The federal Government is aiming to cut carbon emissions by 5 per cent by 2020, with the carbon tax shifting to an emissions trading scheme in 2015. “

See: Protests greet day one of Aussie carbon tax

By contrast, National has been delaying implementing New Zealand’s own version of an ETS, and has now “postponed” it until 2015.

And yet, four years ago, Key stated that New Zealand’s emissions trading scheme should ” be closely aligned with Australia’s ETS  “.

Our Aussie cuzzies have already started their carbon tax/ETS.

With National postponing the ETS for farmers, industrial and commercial polluters, until 2015 – that means that Dear Leader’s “postponement” will have lasted seven years – over two Parliamentary terms.  How long does Key need to ‘get it right’ ?

Ten years?

Two decades?

Perhaps the turn of the 22nd century?

Let’s cut through the BS here. John Key is not “postponing” the ETS – he is postponing it indefinitely. National has no intention of ever implementing it. So much for Key’s statement,

Ours is not a political agenda here, we want a good ETS that works.”

That deserves to be immortalised,

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See also: Tumeke – Blue ignores Red to pretend to be Green while turning to Brown to subsidize big polluters

See also: Tumeke – The Emissions Trading Scam and the audacity of Farmers

The sooner the Nats admit this deception, the better for the entire country. Until then, the only sector paying the ETS is… us, the public.

Which leads on to…

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8. Tax Cuts & Government charges

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In 2009 and 2010, National cut taxes.  The rationale, as National explained in their 2008 document,

In the short term, National’s tax package will give households confidence and some cash in their back pockets to keep the economy going and to pay down debt.

In the longer term, our tax package encourages people to invest in their own skills and make best use of their abilities, because they get to keep more of any higher wages they earn. It encourages them to look for and to take up better and higher-paying jobs that make more use of their skills.

See: National Party  Tax policy

However, what National giveth with one hand; National taketh with the other.

Any benefits from the ’09 and ’10 taxcuts have been more than swallowed up (for low and middle income earners) by increases in a myriad of government and SOE charges.

The most recent have been Family Courts fees, which have risen astronomically.

From July 1 2012, services which used to be free to couples in dispute, now incur considerable court fees,

  • Child custody disputes: $220
  • Property disputes: $700
  • Hearing of any application for each half-day, or part half-day: $906

Of all National’s user-pays regimes, charging couples who are separating; highly stressed; and where violence may be involved, is mind-boggling. We thought it was miserly when National decided to tax children in the last budget – but these user-pays Family Court fees hit people who are vulnerable in the extreme,

But Family Law Specialists director Catriona Doyle says most families try to avoid handing custody and property decisions to a judge and only use the Family Court as a last resort in irresolvable conflicts.

The few people who waste the court’s time by filing repeatedly or unnecessarily won’t be put off by the fees because they’ll either be wealthy enough to afford it or earning little enough to have the fees waived, she says.

“It’s going to hit the middle class and lower income families where $220 is a lot of money.”

Women especially will be hit hard, as they are often financially disadvantaged when a relationship breaks up, Ms Doyle says.

Rather than trying to keep children out of court, the ministry should be aiming to resolve conflicts before children are affected by them, she says.

“Leaving children in a conflict situation where the parents are at war is neglect and abuse. The kids who live in that situation are damaged.”

A judge should be the person to decide if a case is genuine or flippant, especially when children are involved, she says.

“It’s not something that should be addressed by Parliament or a court registrar”.

See:  Family court fees will hurt women – lawyer

Minister of Courts, Chester Borrows, stated plainly,

What we are trying to do here is have a disincentive for people to be able to bring these matters before the court. “

See:   Family Court fees tipped to hit low earners, children

(Note: As a matter of interest, Chester Borrows is the very same Minister who stated he would be buying shares in SOEs, when they were partially-privatised. See:  Conflicts of Interest? )

National complains that  court costs have risen  from $84 million in 2004/2005 to $142m in 2010/2011 – hence Family Court fees must be imposed.

This is faulty logic, and is penalising people who are attempting to sort out damaging relationship breakdowns.  Using Family Courts is preferable to taking the law into one’s own hands. Disincentiving people from using the law – which Parliament put in place to protect us all – is like disincentivising people from calling the Police if you’ve been burgled.

Instead, if we are being “encouraged to resolve issues ourselves”, find the burglar; beat the crap out of him; and retrieve our stolen property ourselves.  That is what Borrows is advocating.

Further using Borrows’ “logic”, National should implement high user-pays charges in public hospitals, as  ” a disincentive for people ” to use hospitals.

It sounds ridiculous? It is ridiculous.

It is also dangerous. Borrows and his idiotic fellow ministers are playing with peoples’ lives. Putting expensive, punitive barriers up at a time when families most need society’s help defies logic, common sense, and most of all, compassion.

But then – when did anyone ever accuse the National Party of being compassionate?

And will the Dear Leader, John Key,  take responsibility if something goes horribly wrong, and an emotionally-stressed family explodes into violence because they had no way out through the Family Court? Like hell he will.

This is a death waiting to happen.

On your miserable head be it, Mr Borrows.

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9. More on those tax cuts

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As an aside, National’s 2008 Tax document makes this derisable claim,

” This makes it absolutely clear that to fund National’s tax package there is no requirement for additional borrowing and there is no requirement to cut public services.

Jeez. No wonder people don’t trust politicians.

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10. Alcohol law reforms

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The latest offerings of irrationality from John Key’s Universe; evidently Dear Leader does not believe that minimum pricing for alcohol would work. He suggests (with a straight face, no doubt) that minimum pricing for booze would not work because it could drive people to drink lower quality liquor instead of reducing consumption,

What typically happens is people move down the quality curve and still get access to alcohol.”

See:   PM sceptical dearer booze will cut consumption

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Mr Key, how do I mock thee? Let me count the ways… (with apologies to Elizabeth Browning)

 How do I mock thee? Let me count the ways.
I ridicule thee to the depth and breadth and height
My soul can reach, when laughing at you hard
For the ends of Banality and Idiotic Government.
I mock thee to the level of every day’s
Most quiet need, by sun and ecobulb-light.
I deride thee freely, as men strive for human rights.
I caricature thee purely, as they turn from praise.
I jeer at thee with the passion put to use
In my old griefs, and with my voter’s faith.
I scorn thee with a scorn I seemed to lose
With my lost saints. I sneer at thee with the breath,
Smiles, tears, of all my life; and, if  The People choose,
I shall but take the piss better after you are voted out.

Why so contemptuous, you ask?

Because raising the price of  tobacco has been the number one tool of both Labour and National governments.

As recently as 12 June, John Key stated on a Fairfax online interview,

The Government is unashamedly trying to deter people from smoking through price, particularly young people who are very sensitive to rising tobacco prices. I know this is difficult for those that have smoked for quite some time, but for your long term health I can only encourage you to try and give up. “

See: Blogpost –  Fairfax; An hour with Dear Leader (@ 12.57)

So high-pricing for tobacco is useful for ” the Government is unashamedly trying to deter people from smoking ” – but not for alcohol?

Raising prices to deter smoking works. But raising prices to deter binge-drinking doesn’t?

It boggles the mind how Dear Leader can hold two conflicting viewpoints, simultaneously, without suffering a brain explosion.

Or is it simply that the liquor industry is a generous donor of funds for National’s election campaigns?

In the meantime, life goes on,

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See:   Ambulance base for Wellington party central

See:   ‘Pressure valve’ medics patch up night’s drunks

See:   BERL Report – Costs of harmful alcohol and other drug use

See:   Drunk kids flooding our hospitals

See previous blogpost: A kronically inept government

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11. Government Cost cutting = Economic suicide

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On 12 May, this blogger posted a piece on National’s slashing of our MAF biosecurity.

In part, I posted this dire warning,

Now, we have the prospect of  having entire suburbs in Auckland being contained in some kind of loose “quarantine”, after a Queensland fruit fly was caught in a pest surveillance trap,

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Considering that the Queensland fruit fly costs the Australian economy approximately  $160 million a year, this is a very real threat  to New Zealand’s own $5 billion annual horticultural industry.

Five billion dollars, per year, every year. All under threat because this government wanted to save a few million bucks by employing fewer biosecurity staff.

As if the discovery of a  painted apple moth in 1999; the varroa mite infestation of our honey hives in 2000; and other isolated instances of pests found in this country did not serve as a warning to us – National  proceeded to cut back on biosecurity staffing.

This blogger wonders sometimes (actually, all the time) what goes through the minds of our esteemed Honourable Ministers of Her Majesty’s Government. These are supposedly well-educated men and women, with support from thousands of University-educated advisors – and yet they still manage to accomplish the most incredibly moronic decisions conceivable.

National has put at risk this country’s  $5 billion industry – simply to save a few million dollars.

They have risked horticulturalist’s businesses; workers their jobs; and all the down-stream economic activity – to save a small percentage of billions.

This blogger has three pieces of advice for all concerned,

  1. John Key must  accept the resignation of  David Carter, Minister for Bio-security immediatly.
  2. National must reinstate biosecurity services to pre-2009 levels.
  3. Horticulturalists (and others who own farms and other agricultural businesses) should carefully consider whether National is working on their behalf – or for the sake of implementing false economies. What is the point of an orchardist voting for National – if National is going to screw his/her business by cutting back on essential government services such as biosecurity?!?!

Hopefully, this  fruit fly is a lone bug; perhaps a stowaway in someone’s bag or in a container offloaded at Ports of Auckland.

If so, once again we’ve been lucky.

But how long will our  luck hold out?

See previous blogpost: Bugs and balls-ups!

It seems our luck ran out some years ago,

The kiwifruit growers’ association is considering legal action over the outbreak of the vine disease PSA and says it can’t rule out seeking compensation.

An independent review released on Wednesday into how the bacterium came into New Zealand has found there were shortcomings with biosecurity systems, but it does not say that caused the entry.

The disease was first confirmed near Te Puke in 2010 and has infected 40% of the country’s kiwifruit orchards. It is expected to cost the industry $410 million dollars in the next five years.

Ministry for Primary Industries director general Wayne McNee asid the review did not determine how PSA came into the country but does show where improvements can be made.

NZ Kiwifruit Growers president Neil Trebilco says he can’t rule out that compensation will be sought by growers.

See:   Kiwifruit growers take legal advice over PSA

A damning report into the outbreak of kiwifruit virus PSA is another in a series of warnings over the biosecurity system that the Government has failed to act on, Labour’s biosecurity spokesman Damien O’Connor says.

The independent report was commissioned by the Ministry for Primary Industries (MPI) following the devastation caused by the virus in the Bay of Plenty orchards with an estimated cost of $400 million.

The report, released yesterday, found “shortcomings” in New Zealand’s biosecurity system although it could not say how the incursion had occurred.

It said MPI could improve protections and must work more closely with industry groups.

The report also suggested resources be moved from low-risk industries to high-risk ones such as the kiwifruit sector.

O’Connor said there needed to be a complete overhaul of the biosecurity system.

The National Government cut biosecurity funding in 2009 and had accepted the growing risk caused by faults in the system, he said.   “

See:  Labour: Govt ignored biosecurity warning

Anyone with two inter-connecting neurons would’ve figured out very quickly that if a government cuts biosecurity then we put ourselves at dire risk of pests entering our country. Like the varroa mite. Or PSA bacterium.

With approximately  550,000 shipping containers and 4.5 million people entering New Zealand each year, it stands to reason that we are at extreme risk of unwanted organisms being brought into the country.

National was warned as far back as 2009, when 60 Biosecurity jobs were “dis-established”.  It therefore defies understanding as to why National believed that cuts could be made to frontline MAF Biosecurity without serious consequences.

Spelling out those consequences,

  1. Millions – even hundreds of millions of dollars of valuable export dollars lost,
  2. Jobs lost,
  3. Businesses ruined,
  4. And not one single government minister taking responsibility.

The only question now remaining to be asked: how many farmers and horticulturalists will vote for National at the next election?

Remember:  you get the government you deserve.

This time, it is farmers and horticulturalists who have been warned.

See:   Risks involved in cutting MAF Biosecurity jobs

See:   Farming at risk if biosecurity jobs cut, PSA warns

See:  Minister warned about biosecurity concerns

See:  Fruit restrictions in place

See:  Biosecurity savings ‘false economy’

See:  Biosecurity NZ webpage

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12. The Terminally Ill

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During the 2008 general election, Prime Minister  John Key adopted the Herceptin campaign.

Pharmac was funding herceptin treatment for women suffering from breast cancer only up to a nine week period.  Breast cancer patients wanted treatment extended to twelve months. Pharmac refused, stating there was no evidence that an extended treatment period would prove beneficial,

Pharmac CEO,  Matthew Brougham, said,

A fresh review of the science and other information has failed to convince us that 12-month treatments offer any additional benefits over the concurrent nine week treatment.”

See:  Nats pledge funding for 12-month Herceptin course

Enter,  John Key. As the 2008 election campaign swung into full force, Key leapt upon the issue,

National recognises that many Kiwis have limited access to modern medicines. We will improve that access.

“We will boost overall funding for medicines and speed up the registration of new medicines, with final approval remaining in New Zealand.

“These initiatives will be funded within the indicative health spending allocations in the Prefu [Pre-election Fiscal and economic Update].

“They are also further examples of our determination to shift spending into frontline services for patients, rather than backroom costs.”

See:  Key says Nats would fund 12-month Herceptin treatment

The election promise was one of many that Key made (along with tax cuts and the perennial “getting tough on crime), and on 10 December 2008, the Prime Minister-elect announced,

I am proud to lead a government that has honoured such a commitment to the women of New Zealand.

“The commitment was part of National’s first 100-days action plan.  I am pleased that the Herceptin funding policy effectively applies from the swearing in of the Government on 19 November.”

See:  Government honours Herceptin promise

Unfortunately, John Key’s belief that ” National recognises that many Kiwis have limited access to modern medicines. We will improve that access. We will boost overall funding for medicines and speed up the registration of new medicines, with final approval remaining in New Zealand   seems only to apply during election campaigns.

At other times, Key  does not seem to want to know.

Allyson Lock is one of five New Zealanders who suffers from Pompe Disease. It is a terminal condition.

There is medication available (called Myozyme ), but it currently receives no funding from Pharmac agency Pharmac.  It is an expensive drug, but without that medication, Allyson and her fellow sufferers will not survive.

See: Mum not prepared to wait and die

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Frank Macskasy Frankly Speaking Blog Pompe

IN SEARCH OF CURE: Allyson Lock will travel to Brisbane every fortnight for five years to receive treatment for the rare incurable disease Pompe.

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Allyson and her group have appealed to John Key for funding for their medication – without success. In fact, Key wants nothing to do with Allyson and other Pompe sufferers.

At a recent “on-line  chat” with John Key, hosted by Fairfax Media, several people including this blogger attempted to put a question to the Prime Minister; why was National not prepared to fund medicine for Pompe as they had for breast cancer sufferers?

See previous blogpost:   Fairfax; An hour with Dear Leader

After all, Pharmac had expressed the same reservations regarding the efficacy of  Myozyme as they did with long-term  herceptin treatment. Yet, that did not stop Key from ensuring breast cancer sufferers had full access to a year-long course of herceptin.

John Key and Health Minister Tony Ryall have wiped their hands of Allyson.

It is not election year.

So there are no political points to be scored in saving the lives of five fellow New Zealanders.

I look forward to John Key proving me wrong; a link to this blogpost will be sent to media as will as the Prime Minister’s office. The rest is in his hands.

To Prime Minister, John Key;

Fund treatment for Allyson and others, Mr Key. They deserve no less than breast cancer sufferers. You can either oversee funding for their treatment – or attend their funerals.

Your call, Mr Prime Minister.

See previous blogpost:   Priorities?

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Related blogpost

The wheels are coming off, and there’s a funny ‘plink-plink’ sound

A John, a Tony, and a Winston

Additional

David Cunliffe:  Speech – The Dolphin and the Dole Queue

Gordon Campbell:  Efficiency Is Not Your Friend

Acknowledgement

Thanks to ‘S’  for proof-reading.

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History Lesson – Toru – Jobs

20 March 2012 4 comments

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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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Authors of our own mis-fortune?

20 February 2012 5 comments

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“Those who would actively choose to drive New Zealand into further debt to pay for tax cuts lack real ambition for our economy.”Finance Minister Michael Cullen, 7 March 2008

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“…in 2005 we promised tax cuts which ranged from about $10 to $92 a week, roughly $45 a week for someone on $50,000 a year. I described it as a credible programme of personal tax cuts and I’m committed to a credible programme of personal tax cuts. I believe that an ongoing programme of personal tax cuts that delivers the sort of magnitude that we’ve had in the past is potentially possible.”John Key, Leader of the Opposition, 20 May 2008

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“National will fast track a second round of tax cuts and is likely to increase borrowing to pay for some of its spending promises.” –  John Key, Leader of the Opposition,  2 August 2008

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“Our tax policy is therefore one of responsible reform…  We have ensured that our package  is appropriate for the current economic and fiscal conditions… This makes it absolutely clear that to fund National’s tax package there is no requirement for additional borrowing and there is no requirement to cut public services… National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing.”John Key, Leader of the Opposition, 20 October 2008

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“Taxpayers do not want further tax cuts if they mean more government borrowing, a new survey shows. The survey comes as social welfare campaigners say tax cuts failed to help those most in need. The New Zealand Business Council for Sustainable Development survey found that while most people wanted tax cuts planned for 2010 and 2011, they did not want them if it meant further borrowing… The survey found most people would spend the tax cuts on living expenses, while others looked to credit-card debt and mortgage payments. “New Zealand Business Council for Sustainable Development, 11 April 2009

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In 2008, National campaigned on promises of tax cuts knowing full well this country could not afford them. By November 2008, as New Zealand went to the polls, the international global banking crisis was in full swing, and recession was beginning to hit nearly every single nation on Earth (Australia and China were the lucky exceptions).

By March 2008, the US Federal Deposit Insurance Corp had identified 76 American banks as “in trouble”.

By July 2008, US financial giants, Fannie Mae and Freddie Mac were in trouble – and by September, both corporations were placed into a form of receivership.

A week later, and Lehmann Bros – one of the largest financial institutions in the US filed for bankruptcy. On the same day, the Russian stock market was forced to close, as shares plunged by up to 20% in a day.

On 26 September 2008, it was officially declared that New Zealand was in full recession.

(See full Time here.)

Against this backdrop, National proceeded with it’s election promises of tax cuts. As unfolding events would show, they were irresponsible promises – and carrying them out in April 2009 and October 2010 was even more reckless,

“John Key has defended his party’s planned program of tax cuts, after Treasury numbers released today showed the economic outlook has deteriorated badly since the May budget. The numbers have seen Treasury reducing its revenue forecasts and increasing its predictions of costs such as benefits. Cash deficits – the bottom line after all infrastructure funding and payments to the New Zealand Superannuation Fund are made – is predicted to blow out from around $3 billion a year to around $6 billion a year.”NZ Herald, 6 October 2008

Fast-forward four years, and we are now having to pay for those taxcuts – which were funded by borrowing other peoples’ savings from offshore banks,

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Source

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Full Story

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Full Story

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It is obvious to all but the most blinkered National/ACT supporter that our debt is growing because we have a shortfall of revenue, caused by this government’s ill-conceived tax-cuts. That shortfall is in the order of $1.4 billion.

A business columnist for the NZ Herald wrote,

“Just how much became apparent yesterday with the $1.4 billion drop in forecast tax revenue for this financial year.

The overall upshot is the Government’s cash deficit has blown out from $13.3 billion to $15.6 billion this year taking into account the unexpected expenditure and the drop in forecast tax revenue.”Fran O’Sullivan, 15 December 2010

CTU President, , Helen Kelly wrote,

“The unsuccessful tax switch (we called it a “tax swindle” at the time) last year was not fiscally neutral as was claimed. There is a $1.4b revenue hole. It wasn’t a fair switch. The gap in take- home pay between someone on $30,000 and someone on $150,000 a year grew by $135 a week as a result of tax cuts made by this Government.”Helen Kelly, 23 May 2011

And ex ACT MP, Muriel Newman said,

If we look back at the state of the books just before the last election, the impact on the country of the recession and the earthquakes become more evident. Crown revenue today is $1.4 billion lower than three years ago and Crown expenses $2.2 billion higher.Muriel Newman, 14 November 2011

Interestingly, Ms Newman blames the  blow-out in  government debt on “the recession and the earthquakes” – but makes no reference to the ’09 and ’10 tax cuts. In fact, she pours petrol on a bon-fire by saying that “ACT would lower the top rate of income tax to 25% and the company tax to 12.5%“.

One can imagine what that would do to the government deficit! (But then again, ACT would sell every single state-owned enterprise and scrap most welfare, to fund their deep tax cuts.  A society governed under ACT policies would be utterly alien to anything most New Zealanders could have dreamed of. I suspect Australia’s population would rise by four million, practically overnight.)

And, spelling it out in even simpler terms, the PSA’s analysis of the figures,

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“Tax Cuts Widen the Gap Between Rich and Poor

  • Government chose to make tax cuts in worst recession in 70 years
  • Total tax cuts worth $5.5 billion
  • Top 10% income earners got tax cuts worth $2.5 billion
  • GST increased to 15% – hurts low and middle income most
  • Tax cuts + GST left $1.4 billion hole in budget

Since 2008, National has introduced tax cuts that cost New Zealand around $5.5 billion a year in lost revenue. Most of the benefit has gone to the wealthiest.

National’s first set of tax cuts – the personal tax cuts and ‘Independent earner rebate’ taking effect in April 2009 – cost approximately $1 billion a year.

The second set of cuts – cutting the top income tax rate from 38% to 33%, and the company rate to 28% – will cost $4.5 billion a year, according to figures from the 2010 Budget. That gives a total of $5.5 billion.

National claimed that because it was also increasing GST, the tax changes would be “revenue neutral” – that is, the increase in GST would cancel out the income tax cuts. In fact, the losses from the income tax cut will outweigh the gains from GST by $1.4 billion. In other words, the so-called “tax switch” has blown a $1.4 billion hole in the budget.

The tax cuts have also made New Zealand a less fair place. According to Labour, the wealthiest 10% of New Zealanders will get 43% of the tax savings. And the gap in take-home pay between someone on $30,000 and someone on $150,000 a year grew by $135 a week as a result of the tax cuts.

New Zealand’s income tax rates are among the lowest in the OECD, as the Tax Working Group acknowledged.

In Australia , for example, income over $80,000 is taxed at 37%, and income over $180,000 is taxed at 45%.

Figures from the OECD itself show that, before National’s tax cuts, New Zealand’s “all in” top income tax rate – a measure that includes all taxes on income, including local and regional ones – was 38%. In contrast, the all in top income tax rate in Australia was 47%, and in most countries it was higher still.”PSA.org.nz

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This blog can confirm the PSA’s statement that “figures from the OECD itself show that, before National’s tax cuts, New Zealand’s “all in” top income tax rate – a measure that includes all taxes on income, including local and regional ones – was 38%“.

Why did they do it? Why did National make a $1.4 billion committment it knew we could ill-afford?

Answer:

  1. Because they could.
  2. Because they wanted to be the government. Badly. And nothing quite wins votes like promises of tax cuts (even unaffordable ones).
  3. Because they probably had no idea how bad the recession would be? Rubbish. Of course they knew: John Key’s background was in international finance. He knew precisely how bad the Recession was – and how bad it was likely to get in Europe.

The question is: why did we, the voters, do it? Why did 1,053,398 New Zealanders cast their vote for National in 2008? Why did we vote for tax-cuts – something we knew was unaffordable?

Whatever the reason, we are having to pay for those tax-cuts – or rather, the $1.4 billion in revenue short-fall that we now have to borrow from overseas.  In doing so, as this government continues to post budget deficits, it continues to cut back on services; raise government charges; and sack those state workers who have spent many years of their lives doing all the things we expect done for us in education, health, defence force, border control, conservation, etc.

It is inevitable that, unless New Zealand wins the international equivalent of Lotto, this government (or it’s successor, sometime in the next three years) will have to raise taxes again. Or, steal a page from Gareth Morgan’s book and implement a new, Land/Wealth tax. There is no other way to pay of our debt and pay for Christchurch’s re-build.

Something for all New Zealanders to ponder, next time National (or any other Party) promises us a tax cut, in return for our votes.

In the mean time, Bill English signed a document last year called a “PREFU” – Pre Election Economic & Fiscal Update,

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This document is now worthless. It may have only one use left.

And finally, will Finance Minister Bill English accept “overall  responsibility for the integrity of the disclosures within the Update“?

Does any politician ever accept responsibility for anything?

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The Great NZ Sell-Off Continues…

7 September 2011 4 comments

Despite recent assurances from the Prime Minister, John Key, to restrict foreign purchases of NZ farmland, his assurances that,  “I think we’re making progress in this area” seems to be based on empty words and little more.

As the Dominion Post  reported last year, “an average of 82 hectares of agricultural land per day has been approved for sale to offshore investors”.

Some recent headlines bear out that report,

It seems quite clear that John Key’s optimistic view that ” I think we’re making progress in this area” is wildly misplace. As usual, his soothing, reassuring words bear little relationship to reality.

But voters have yet to figure that out, collectively.

What the New Zealand public does understand, with crystal clarity, is that selling our farmland to overseas investors is counter-productive; counter-intuitive; and short-sighted economically.

It also cheats our children of their birthright.

New Zealand farmland is over-priced and farmers have gotten into trouble with massive bankloans and reducing equity. In part, this is due to the weasy credit that has been available to NZ society since 1985, when our banking system was de-regulated by you-know-who.

De-regulation meant that vast amounts of money flowed into NZ, for banks to lend out as mortgages, investments, loans, etc.

It also meant that, as money-supply increased, so did property prices. Quite simply, we could expect to sell our properties because there was an endless supply of money available from banks. Purchasers could borrow 80%, 90%, and sometimes 100% for mortgages.

So property prices went up. Our borrowings went up. Demand went up, as speculation was tax-free (remember that there is no Capital Gains Tax in NZ). It was an uncontrolled spending spree, without any consideration that eventually, the bubble would burst.

Well, in 2008, the bubble burst. In early 2008, there were signs that there was a crisis looming in the US banking industry. On 3 March 2008, the Federal Deposit Insurance Corp, the US federal agency that backs bank deposits,  identified 76 banks as in trouble , a 52% increase from a year ago.

By July 2008, Freddie Mac and Fannie Mae, were in severe financial  trouble.

On 15 September 2008, Lehmann Bros, in Wall St, New York, filed for bankruptcy. The subsequent chain reaction of banking failures sparked a global financial crisis and the world fell headlong into a recession.

Here in NZ, credit dried up, and suddenly our farms were no longer worth the high prices that people had been paying for them. The property boom came grinding to a halt, and the “bubble” well and truly burst.

We  could no longer afford to buy over-priced properties to make speculative profits that had been financed using money borrowed from overseas. It was time to pay the Piper.

For many owners of farmland, the obvious solution seems to be to sell properties to overseas interests. Foreigners have the necessary capital – which local New Zealanders do not.

Unfortunately, in doing so, we are effectively locking-out our next generation from the opportunities that our generation – the massive-borrowing, heavily-indebted, Baby Boomers – had enjoyed. We have played “monopoly” with our farms; making ever-increasing profits; as we sold land to each other in a kingd of mad, money-go-round.

Now, we can only save our indebted ‘skins’ by selling out to foreign interests.

This is simply another chapter of the story I told here; “Greed is Good?“.

Is it fare, I ask myself, that we have priced farm land out of reach of our children?

Is it fare, I ask myself, that instead of our children enjoying the same opportunities that we did – that instead it will be Germans , Americans, Swiss, Chinese, etc, who will now reap the benefits?

The greed and naked self-interest of Bany Boomers is well known. It is no secret that we have looted the wealth of this country, and have left our children with fewer prospects than we enjoyed. No wonder so many of them have left New Zealand, and plan never to return,

“A Victorian-based Kiwi with a student loan debt, who did not want to be named because he did not want to be found by the Government, said he did not intend to pay back any of his student loan.

The 37-year-old’s loan was about $18,000 when he left New Zealand in 1997. He expected it was now in the order of $50,000. The man was not worried about being caught as the Government did not have his details and he did not want to return to New Zealand.

“I would never live there anyway, I feel just like my whole generation were basically sold down the river by the government. I don’t feel connected at all, I don’t even care if the All Blacks win.

“I just realised it was futile living [in New Zealand] trying to pay student loans and not having any life, so I left. My missus had a student loan and she had quite a good degree and she had paid 99c off the principal of her loan after working three years.” – Source

As we lose more and more farmland to overseas ownership, we should also expect some fairly noticeable consequences to follow;

1. Profits will flow back overseas, to offshore investors’ banks. This will impact on our Balance of Payments (negatively, I might add). This, in turn, will affect our sovereign credit rating; the interest rates we pay for money we borrow… and finally, our mortgages.

2. As farm produce fetches higher prices overseas, expect to see this reflected in the price of dairy products and meat that we purchase in our supermarkets. We have already experienced the high cos of milk and cheese, due to high prices overseas. Expect this to worsen.

Property and farm owners may object. They will squeal like stuck pigs, in fact. But the sale of our land to foreigners, whether American or Chinese; Australian or German; will eventually impact impact negatively on our economy and on the prospects of our children.

Enough is enough.  No more pandering to the self-interest of Baby Boomers.

It is time that common sense kicked in. The sell-off of our country has to stop. Otherwise, as John Key warned, we will become tenants in our own land.

To hell with that.