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National whines about Cullen’s appointment – they should know about cronyism

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When it comes to a repulsive cocktail of double standards, self-interest, and hypocrisy, National is the party that just keeps on giving…

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Listener <letters@listener.co.nz>
date: 25 November 2017
subject: Letters to the editor

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The editor
The Listener

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On 23 November, the Coalition government fulfilled another of it’s election pledges. Finance Minister Grant Robertson and Revenue Minister Stuart Nash announced that Michael Cullen would head the planned Taxation Working Group to look into issues surrounding a fairer taxation system.

National’s political strategist and former minister, Steven Joyce responded with a predictable jerk-of-the-knee;

“Sir Michael is many things but a politically independent voice on taxation policy he is not. Let’s face it, he was Labour’s last Finance Minister and one of the key coalition negotiators for the Labour Party.”

Joyce’s reprehensible swipe at Cullen’s appointment was hypocritical for two reasons.

Firstly, it was National that appointed Cullen  as deputy chairman of NZ Post in April 2009. By November 2010, then SOE Minister, Simon Power, had promoted Cullen to Chair of NZ Post, saying;

“I look forward to working with Dr Cullen to develop NZ Post’s strategy to accommodate declining mail volumes and a challenging financial environment.”

Secondly, when it comes to cronyism, National is hard to beat. Just some of their political appointees include Jackie Blue, Wyatt Creech, Mervyn English, Sir Wira Gardiner, Catherine Isaac,  Judy Kirk, Richard Long, Wayne Mapp, Stephen McElrea, Jim McLay, Belinda Milnes,  Ravi Musuku, Brian Neeson, Kerry Prendergast, , Katherine Rich, Jenny Shipley,   Ken Shirley, Roger Sowry,  and Penny Webster.

One of National’s worst instances of cronyism was the hugely wasteful, so-called “Rules Reduction Taskforce“, which produced it’s “loopy rules report”. Half the “Taskforce”, appointed by Paula Bennett in 2014, consisted of former National MPs such as Tau Henare, John Carter, and former party candidates Mark Thomas and Ian Tulloch. They were each paid $500 a day.

Eventually the “Taskforce” reported that many of the contentious bureaucratic regulations  did not exist in reality. They were urban myths.

Thank you Steven Joyce for reminding us how National excels at cronyism.

-Frank Macskasy

[address and phone number supplied]

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Further on the issue of the so-called Rules Reduction Taskforce”, Green Party MP, Julie-Anne Genter,  said at the time;

“We’re getting to that point where the National government is losing all perspective or sense of touch with reality – when they think it’s okay to pay their former MPs or candidates and donors to undertake what’s ostensibly some sort of taskforce work, it’s really just an exercise in PR and spin.”

That little exercise cost taxpayers a cool $750,000.

Around the same time, the Wanganui Chronicle reported that community NGOs were suffering badly, with several such as Relationships Aotearoa and the YWCA, closing entirely;

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Fellow blogger,  Curwen Rolinson, was also less than impressed at  Joyce’s naked hypocrisy, pointing out on Facebook;

But hold on just a moment. I’ve literally lost count of the number of consultative bodies and even straight-up *Inquiries* that the National Party *quite pointedly* staffed the chairing of with their own people, flunkies, and other such questionable appointments.

I mean, as an example of this – their placing of John Shewan at the head of the group convened to look into slash “dispel” the perception of New Zealand as a tax-haven, for instance, was quite directly a case of placing a fox in charge of a hen-house [Shewan’s private sector activities including quite a spate of tax-“consultancy” and linkages to a series of potentially dodgy international firms in this regard].

Or, worse, the series of appointments of [now Dame – guess why she got the gong, eh?] Paula Rebstock to head Inquiries into everything from Peter Dunne’s ‘alleged’ leaking of materials around the GCSB’s illegal conduct through to the ‘Leask’ affair concerning MFAT information being anonymously passed to the Labour Party.

Curwen continued to strip away National’s faux outrage;

Further, if I recall correctly, the previous National Government’s “2025 Taskforce” on pensions and the like was convened to be *chaired by* none other than arch-neoliberal [and former National Party Leader] Don Brash. I don’t seem to recall the National Party raising any issue with “politically tied” appointments to policy working-group style arrangements THEN…?

What’s different about Cullen on the Tax Working Group, I wonder…?

But when it came to cronyism mixed with  commercial self interest, Judith Collins’ involvement in the Oravida milk company scandal was hard to top, as political commentator, Bryce Edwards put bluntly;

Justice Minister Judith Collins has revealed she had a dinner with the head of Oravida and a senior Chinese government official while in China last year and admits she was wrong not to disclose the dinner last week. Mrs Collins has been under pressure to explain her dealings with the milk company Oravida, where her husband is a director;

Perceptions of corruption, cronyism and conflicts of interest can be incredibly damaging to any government, and National will be very wary of a narrative developing that this administration is infected with political sleaze.

Nothing makes a government look more tired, out-of-touch, and arrogant than scandals that suggest governing politicians are ethically compromised and governing in the interests of the powerful rather than the public.

Judith Collins’ milk endorsement scandal is beginning to have a serious impact on the Government’s reputation. But unfortunately for National, there are a number of similar stories dogging it at the moment, and they all come on the back of previous allegations of cronyism related to the scandals over John Banks as well as the SkyCity convention centre procurement process.

The scandal over Judith Collins and her allegedly favourable treatment of the milk company that her husband helps run has allowed National’s opponents to make some strong attacks on the character of, not only the Minister of Justice, but the whole National administration

By August 2014, the allegations of sleaze, corruption, conflicts of interest became over-whelmingly and Collins was forced to step down from her ministerial roles.

There were many other instances of cronyism revealed during National’s nine years in office. Several resulted in ministerial resignations.

If the appointment of a former Finance Minister to a working group focused on Finance issues (ie, taxation) is the worst that National can throw at the new Coalition government – then it is lobbing damp squibs.

Considering National’s own recent murky history, the issue of cronyism is one where it might be wiser to keep a very, very, very low profile.

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Appendix

A roll call of some of National’s cronies – ex-members of Parliament appointed to various government bodies, organisations, NGOs, working groups, etc;

Blue, Jackie

Creech, Wyatt

English, Mervyn

Gardiner, Sir Wira

Isaac, Catherine

Kirk, Judy

Long, Richard

Mapp, Wayne

McElrea, Stephen

McLay, Jim

Milnes, Belinda

Musuku, Ravi

Neeson, Brian

Prendergast, Kerry

Rich, Katherine

Shipley, Jenny

Shirley, Ken

Sowry, Roger

Webster, Penny

This list is not complete.

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References

Fairfax media:  Sir Michael Cullen to head tax working group, GST changes possible

NZ Herald:  Cullen leaves politics for NZ Post role

NZ Herald:  Cullen to replace Bolger at NZ Post

Fairfax media:  Cullen appointed NZ Post chairman

Radio NZ: National accused of cronyism over ‘loopy rules’ report

Wanganui Chronicle:  Concern over lack of funding for NGOs

Facebook: Curwen Ares Rolinson – 24 November 2017

NZ Herald:  Bryce Edwards – The National Government is looking sleazy

Radio NZ: Collins resigns after ‘smear campaign’

Frankly Speaking: Cronywatch

Additional

Radio NZ:  National accused of cronyism over ‘loopy rules’ report

NZ Herald:  Bryce Edwards – The National Government is looking sleazy

Other Blogs

AmeriNZ Blog:  Is John Key’s government corrupt?

The Standard:  Cabinet Club

Previous related blogposts

The Fletcher Affair – a warning for Labour

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

Crony Watch!

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This blogpost was first published on The Daily Blog on 26 November 2017.

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The Mendacities of Mr Key # 17: The sale of Kiwibank eight years in the planning?

11 April 2016 8 comments

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we will give you honest government - yeah right

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National Makes Good on 2008 Threat to Sell Kiwibank

NZ Post’s, announcement on 6 April that it intends to sell-down  45% of it’s subsidiary, Kiwibank, appears to make good on Bill English’s inadvertent threat in August 2008 that Kiwibank would “eventually be sold”.

English was secretly recorded by an un-named person during a 2008 National Party Conference, and encouraged to talk freely on the prospect of selling Kiwibank;

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English - I didn't choose my words well - NZ Herald - Kiwibank sale

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English subsequently complained; “I did not choose my words well“.

However, it now appears that English expressed his words honestly,  disclosing a secret agenda to sell Kiwibank to someone he believed was a loyal National Party apparatchik.

Another secret recording, this time from National MP Lockwood Smith, also hinted at a secret agenda held by National;

“There’s some bloody dead fish you have to swallow, to get into government to do the kinds of things you want to do. Once we have gained the confidence of the people, we’ve got more chance of doing more things.

We may be able to do some things we believe we need to do, perhaps go through a discussion document process. You wouldn’t be able to do them straight off.”

With the 2008 General Election only three months away, and with a new, untested Leader of the National Party (John Key) facing a seasoned, popular Prime Minister, the secret recordings forced National’s hierarchy to take rapid steps to “kill” the story.

Both English and Key issued public statements  resiling from any intention to sell Kiwibank;

It’s not my view. It’s not my private view. I simply used loose language – I made a statement I shouldn’t have.” – Bill English

We would never make a change to that decision without a mandate.” – John Key

Again in 2008, Key resiled from any sale of Kiwibank;

“I’m ruling out selling Kiwibank at any point in the future.”

And again in 2010,

“National would not sell Kiwibank at any stage, ever. We have ruled it out.”

Making a Promise

On 25 February 2014, our esteemed Dear Leader, John Key, announced to the nation that National’s asset sales programme was over;

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“Just as we did before the last election we’re making our position on share sales clear to New Zealanders before we go to the polls later this year. We’ve achieved what we wanted with the share offers in energy companies and Air NZ. We’re now returning to a business-as-usual approach when it comes to [state-owned enterprises]. The truth is there aren’t a lot of other assets that would fit in the category where they would be either appealing to take to the market or of a size that would warrant a further programme, or they sit in the category that they are very large like Transpower but are monopoly assets so aren’t suited.”

Just as we did before the last election we’re making our position on share sales clear to New Zealanders before we go to the polls later this year. We’ve achieved what we wanted with the share offers in energy companies and Air NZ. We’re now returning to a business-as-usual approach when it comes to [state-owned enterprises]. The truth is there aren’t a lot of other assets that would fit in the category where they would be either appealing to take to the market or of a size that would warrant a further programme, or they sit in the category that they are very large like Transpower but are monopoly assets so aren’t suited.”

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Two years and nearly two months later, and Key’s promise- like so many other committments he has made – appears to have been watered-down to permit a de-facto partial-sale.

The intended purchasers would be two other SOEs,  NZ Superannuation Funds (25%) and ACC Funds (20%);

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NZ Post to sell 45 per cent of Kiwibank for $495m cash injection

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Breaking the Promise

Even as NZ Post’s Directors were announcing the partial sale of their subsidiary, Kiwibank,  Finance Minister Bill English was engaged in some well-rehearsed damage-control.

No doubt with considerable prompting by Party strategists and media-minders, English reassured the public that National would not allow the people’s bank to end up in private ownership, as the former Postbank did February 1989 when it was sold to the ANZ Bank.

English promised;

“Kiwibank will remain 100 per cent government-owned – that is a bottom-line. To ensure this occurs, the proposal includes a right of first refusal for the Government over any future sale of shares – which we would exercise.”

To be blunt, National cannot be trusted to keep it’s word.

Key knew in advance!

Despite  Key’s  committment to end asset sales on  25 February 2014, it appears from Michael Cullen’s own statements that our esteemed Dear Leader was already aware at around the same time, that a partial asset-sale was being planned by NZ Post.

During a video-taped press-briefing by Fairfax media, Cullen admitted that he and Key had discussed the partial-sale of Kiwibank that year (2013/14).

@ -14.56

So Brian [Roche] and I after discussion, and [I] think I remember correctly, I had a brief discussion with the Post Board, went to see the Prime Minister, to see whether there would be a kind of visceral reaction from the government, as our ultimate share holder, to that happening. That was not the case. Mr Key indicated he was very comfortable with that prospect and on that basis therefore we began to proceed...”

So when Key made his public promise on 25 February, 2014, that National’s asset sales programme was over – he was making that committment whilst knowing full well that the partial sale of Kiwibank was already underway.

Broken promises and secret agendas – this story has it all.

Who Pays? Loyal Kiwibank customers do!

There is a hidden cost to the partial-sale of  Kiwibank.

As David Hargreaves from Interest.co.nz reported;

The move could see Kiwibank’s credit rating slip by one notch from the current A+ to A as NZ Post will likely not guarantee Kiwibank’s future obligations once the deal proceeds.

When a financial institution’s credit rating is reduced, it means (generally) that they become a greater risk of lending money to them.  According to Investpedia;

“…While a borrower will strive to have the highest possible credit rating since it has a major impact on interest rates charged by lenders, the rating agencies must take a balanced and objective view of the borrower’s financial situation and capacity to service/repay the debt.

A credit rating not only determines whether or not a borrower will be approved for a loan, but also the interest rate at which the loan will need to be repaid.

… and a high interest rate is much more difficult to pay back.”

It is entirely likely that when a credit down-grade occurs (as happened to New Zealand under National in September 2011), the cost of borrowing funds will increase for the bank.

Which is precisely what Hargreaves reported;

Standard & Poor’s has indicated that following the announcement of the proposed transaction, Kiwibank’s long term issuer credit rating (A+) will be placed on credit watch negative pending the proposed termination of the standing guarantee provided by NZ Post. Should the guarantee be terminated, Standard & Poor’s has indicated it will result in a one notch downgrade to Kiwibank’s long term issuer credit rating (from A+ to A). 

That cost will either have to be absorbed, reducing their profit margins and making it easier for Key and English to justify full privatisation – or will be passed on to the banks customers.

English will most likely not permit Kiwibank’s profit to fall as that would mean lower dividends paid into government coffers.

Which leaves Kiwibank’s Mum & Dad customers  to foot the bill for the partial-sale.

The Agenda #1

The sale to ACC and NZ Super Fund is a clever ploy. On the face of it, Kiwibank remains in wholly State ownership, albeit shifting it’s shareholders around, from one SOE (NZ Post) to three (NZ Post, ACC, NZ Super Fund).A kind of multi-million dollar Musical Chairs.

At the same time,  this would allow a healthy dividend payment (an amount  yet to be disclosed) to be paid to the government. As Cullen said on 6 April;

“The proceeds would allow New Zealand Post to invest in its core parcels, packages and letters business and pay down debt. It is anticipated that a special dividend would also be paid to the Crown…”

This was confirmed a day later by Bill English speaking with Guyon Espiner, on Radio NZ’s Morning Report;

@ 2.10

Guyon Espiner: “Ok, let’s look at what happens to the $495 million that NZ Post gets from this sale. I understand it doesn’t go to generate any extra capital for Kiwibank, it goes to NZpost to pay down debt and invest in it’s parcel and mail business, right?”

Bill English: “That’s right, and then if there’s, subject to negotiations there may be special dividend passed back to this [inaudible] government.”

English said any dividend payable to the government would “likely be several hundred million“. This would prove a godsend to English who otherwise would be struggling to create another Budget surplus in his May budget.

The Agenda #2

National has not only increased it’s revenue, thereby alleviating a major headache for Bill English, but they have pulled the rug out from under the Greens who, three days earlier, had been calling for increased $100 million investment in Kiwibank. As Greens co-leader James Shaw stated in a recent policy announcement;

“Our plan will help Kiwibank lead a change in New Zealand banking, by giving it a clear public purpose that requires it to drive competition to generate better interest rates for New Zealanders.

We’ll help Kiwibank to grow faster by injecting $100 million of capital into the bank and let it retain more of its profits.

Strengthening Kiwibank so it can create competition in the banking sector is the smartest way to ensure all banks pass on the best interest rates to Kiwis.”

The Agenda #3

A deeply cynical person might suspect that after the defeat of John Key’s pet vanity-project  (the recent flag referendum debacle) that National has decided to exact revenge against the many Labour and Green voters who voted to retain the current flag,  by partial privatisation of a favourite state owned enterprise.

Does such  cynicism border on paranoia? In an era of Dirty Politics; tax-havens with trillions hidden away; and increasingly corruption of state leaders, officials, organisations, and institutions –  the demarcation between healthy scepticism and paranoid fantasies blur, merge, and are tomorrow’s headlines waiting to be made public.

Labour’s Response?

Labour and the Green Party both responded to Cullen’s announcement. As Stacy Kirk wrote for Fairfax Media on 6 April;

The response of opposition parties has been mixed, with the Greens calling it a step down the path of privatisation. 

Labour leader Andrew Little said it was important Kiwibank stayed in public ownership.

“And this does that, there are some good conditions around it,” he said. 

“This provides a way to get extra capital from these sovereign wealth funds, and hopefully for NZ Post to use the funds that they raise from the sale, to put more capital into Kiwibank. 

Meanwhile, Labour Party state-owned enterprise spokesman David Parker said Cullen should be congratulated on the idea. 

“Michael Cullen should be congratulated for securing a route to expand KiwiBank and keep it in public ownership, given the refusal of National to provide more capital for NZ Post or KiwiBank.

“Michael Cullen’s solution only works to ensure the bank will remain in public ownership if National promises that if ACC or the Super Fund sells its shares, then the government of the day would exercise its first right of refusal and buy them back.” 

Labour’s response has not only been weak and naive – but it also appears that David Parker is not “up to speed” with the terms of the sale. It is extraordinary that both Labour’s SOE Spokesperson, David Parker,  and Labour’s Leader, Andrew Little, believe that;

“This provides a way to get extra capital from these sovereign wealth funds… to put more capital into Kiwibank” and that “Michael Cullen should be congratulated for securing a route to expand KiwiBank”.

Nothing of the sort will happen.

Both Cullen and Bill English have been crystal-clear and surprisingly honest in stating that;

  1. “The proceeds would allow New Zealand Post to invest in its core parcels, packages and letters business and pay down debt.” “
  2.  “It is anticipated that a special dividend would also be paid to the Crown.”
  3.  Kiwibank will get nothing.

So where Parker and Little get their cozy ideas about “putting more capital into Kiwibank” is unclear.

Instead,  Green Party co-leader, James Shaw, seemed more cognisant to National’s real agenda;

“The fact is the Government forced Kiwibank’s hand and today’s announcement will make it easier than it was before to move Kiwibank into private ownership.”

Labour needs to get it’s act together on this issue.

The future of the people’s bank depends on it.

As for the mainstream media, it is high time they became aware of the many promises made by both Key and English – and their subsequent breaking. Otherwise, they too are failing the public.

National, in the meantime, has carried out the  perfect bank “heist”.

It only took eight years to accomplish.

 

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References

Fairfax Media: NZ Post to sell 45 per cent of Kiwibank for $495m cash injection

NZ Herald: English – I didn’t choose my words well

TV3 News: National hit by more secret recordings

Fairfax Media: Facebook Video – NZ Post to sell 45 per cent of Kiwibank for $495m cash injection

NZ Herald: PM pledges not to sell Kiwibank after all

Faifax Media: Key – Why I should be the PM

Otago Daily Times: Key not ruling out Kiwibank sale in future

NZ Herald: PM – no more SOEs to sell after Genesis

Fairfax Media: Key ‘no GST rise’ video emerges

NZ Treasury: Income from State Asset Sales as at May 2014

Interest.co.nz: NZ Super Fund and ACC proposed as new minority shareholders in Kiwibank

Investopedia: Credit Rating

NZ Herald: S&P cuts NZ credit rating

Radio NZ: Bill English – Kiwibank will stay 100 percent New Zealand-owned

Green Party: Greens will repurpose Kiwibank and save Kiwis hundreds of millions

Additional

Fairfax media: Kiwibank tape catches English

Scoop Media:  Bill English Talks On KiwiBank Being Sold (audio)

Other bloggers

No Right Turn: Plunder

The Daily Blog: KiwiBank another privatisation by stealth – Robbing Fred to bribe Dagg to pay John

The Dim Post: A fascinating precedent

The Standard: Kiwibank sale to NZ Super, ACC privatisation by stealth

Previous related blogposts

Westpac, Peter Dunne, & Edward Snowden

The Mendacities of Mr Key # 12: No More Asset Sales (Kind of)

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the sale of kiwibank - nz herald cartoon - john key

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This blogpost was first published on The Daily Blog on 11 April 2016.

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Dear Michael Cullen: the GCSB is not International Rescue!

18 March 2016 6 comments

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TB5

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When a spokesperson for the government tries to employ scare-tactics to persuade the public that increasing surveillance powers for various arms of the State – in this case the Government Communications Security Bureau (GCSB) – is warranted, then suspicions arise.

In the week following the release of the first review of intelligence organisations in New Zealand, Michael Cullen  offered no less than three scare-tactics, that on the face of it, should send children and the naive running into the arms of spymasters at the SIS and GCSB.

On 10 March, Kathryn Ryan interviewed Michael Cullen on Radio NZ’s ‘Nine to Noon‘ show. Cullen was  one of the reviewers of our spy agencies.  In reply to questioning why the GCSB needed increased powers, he said;

@ 10.04

“…Suppose, let’s take an example, you know that a Chinese agent is arriving on a plane at an airport, for whatever reason you also know that they’re only going to be here for a short time but you’ve no idea what it is they’re going to be up to, and you can’t find a judicial commissioner, you know you’re only half an hour out from a landing kind of thing…”

@ 10.34

“…In extreme circumstances where you can’t find the Attorney General, or the the Minister deputed [sic] by the Prime Minister [to] act on the Attorney General’s behalf, or the judicial commissioner, then the Director can issue a warrant, but that’s in the case of immediate threat to life or the fact that if it doesn’t happen quickly then the opportunity to gather that intelligence will have passed…”

Aside from a “Yellow Peril” hint to Cullen’s reference to “a Chinese agent”, one has to ask why he is suggesting that the imminent arrival of such a person would strike fear into the heart of our government and it’s agencies.

Did the announcement that we are at war with China miss the 6PM news bulletin on both TV1 and TV3?

If  such a mythical “Chinese agent” is a “threat” to our security and well-being, then a simple phone call to New Zealand Customs should be sufficient to  detain the person and return him/her home on the next available flight.  NZ Customs already has this power, as Mario Quintela learned to his misfortune last February;

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Portuguese tourist gifted free flight to NZ after immigration debacle

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Not only was Mr Quintela detained after disembarking his flight; he was held for ten hours, and promptly deported thereafter. (As the story reports, Customs then had to pay for Mr Quintela‘s flight back to New Zealand.)

So why the “imminent arrival” of a foreign agent should send the GCSB or other state agency into a tizzy is unclear. Our Customs department already ‘has our backs’ on such matters.

Cullen then painted a frightening picture where “in extreme circumstances where you can’t find the Attorney General, or the the Minister deputed  by the Prime Minister [to] act on the Attorney General’s behalf or the judicial commissioner”.

Really? In the 21st century, with mobile phones, smartphones, email, faxes, landlines – Cullen is deeply concerned “where you can’t find the Attorney General, or the the Minister deputed [sic] by the Prime Minister [to] act on the Attorney General’s behalf, or the judicial commissioner“?!

If such an unlikely scenario ever eventuated, my concern would not be for the GCSB unable to have a warrant-to-surveil signed   – but where the hell our Attorney General, or the the Minister deputed [sic] by the Prime Minister [to] act on the Attorney General’s behalf, or the judicial  commissioner” were, that they could not be easily located.

Perhaps the most disingenuous,  anxiety-laden scenario from Cullen was his implausible Lost At Sea fantasy.  On Radio NZ’s Focus on Politics, Cullen maintained that expanding the GCSB’s surveillance powers was a “safety” issue;

@ 2.30

“Let us suppose a New Zealander is in imminent danger, in terms of their life overseas. Maybe lost at sea or some other example. Under this legislation as the GCSB feels it has to interpret it, the GCSB’s capacity to trace an individual’s cellphone and to say exactly where it is, cannot be used.

We have no way of finding out where that person is, using that capacity, in order to take immediate and urgent action, in whatever way, to try to protect the safety of that New Zealander.”

I call total bollocks on Cullen’s example.

Aside from the fact that most yachties and other vessels now use modern emergency locator beacons, if a New Zealander is in “imminent danger”, a bunch of spooks sitting in Pipitea House, Thorndon, listening in on conversations and reading emails and txt-messages are hardly likely to be in a position to facilitate rescue operations to assist a person “ lost at sea “.

Checking Google, using the search parameters “spy agency locates lost person at sea” did not yield a single example of a spy agency finding anyone in such dire straits.

The GCSB is a spy agency. International Rescue, it is not.

If by some bizarre chance the GCSB did pick up an SOS call, or locator beacon, no person in their right mind would object if the information was passed on to rescue services. By definition,  SOS calls cannot be considered “private communications” since they are broadcast far and wide to anyone capable of picking up the transmissions.

Cullen is fear-mongering.

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In the report,  Intelligence and Security in a Free Society Report of the First Independent Review of Intelligence and Security in New Zealand, under a section headed “Key Issues Identified“, the authors write;

7. It quickly became apparent to us that there were a number of deficiencies in the Agencies’ current legislative frameworks. The legislation establishing the Agencies is not comprehensive, is inconsistent between the two agencies, can be difficult to interpret and has not kept pace with the changing technological environment. This has led to some significant problems.

8. First, lack of clarity in the legislation means the Agencies and their oversight bodies are at times uncertain about what the law does and does not permit, which makes it difficult to ensure compliance. Critical reviews in the past have led the Agencies, particularly the GCSB, to take a very conservative approach to interpreting their legislation. While we understand the reason for this, and it is certainly preferable to a disregard for the law, this overly cautious approach does mean that the GCSB is not as effective or as efficient as it could be. The legislation needs to set out clearly what the Agencies can do, in what circumstances and subject to what protections for individuals.

It appears that Cullen and his co-author, Dame Patsy Reddy, are repeating the very same justifications that Key and other National ministers spouted in 2013, when they implemented an expansion of GCSB’s powers to legalise Bureau surveillance of New Zealanders.

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Michael Cullen and Report co-author Patsy Reddy

Michael Cullen and Report co-author Patsy Reddy (Radio NZ)

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On  9 April 2013, our esteemed Dear Leader claimed that the GCSB – as it stood at the time – was not “fit for purpose”;

In addition, the Act governing the GCSB is not fit for purpose and probably never has been.  It was not until this review was undertaken that the extent of this inadequacy was known

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The advice we have recently received from the Solicitor-General is that there are difficulties interpreting the legislation and there is a risk some longstanding practices of providing assistance to other agencies would not be found to be lawful.

[…]

It is absolutely critical the GCSB has a clear legal framework to operate within.”

Now it appears that Cullen and Reddy are parroting the same rationale for advancing the “need” to expand the Bureau’s surveillance powers.

This appears to be the stock-standard meme that will be trotted out every time the government pushes for further extensions to State surveillance powers.

Council for Civil Liberties, chairperson, Thomas Beagle, was correct when he pointed out the obvious “mission creep” of stealthily increasing State surveillance in this country;

“I think it’s part of a shift towards an overall surveillance society and I think it’s part of a wider shift towards a government which is not of the people but a government which is actually working on the people.”

Cullen and Reddy have played their part in this latest chapter of an on-going process.

What next in two, five, or ten years’ time?

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References

Parliament: Intelligence and Security in a Free Society Report of the First Independent Review of Intelligence and Security in New Zealand

Radio NZ: Nine To Noon – Spy law shake-up, heightened protection or erosion of privacy? (alt. link)

TVNZ News: Portuguese tourist gifted free flight to NZ after immigration debacle

Radio NZ: Focus on Politics – 11 March 2016  (alt. link)

Beehive: PM releases report into GCSB compliance

Radio NZ: Spy review aims to clarify powers

Additional

Radio NZ: Canada stops sharing Five Eyes data

The Guardian: Canada spy agency stops sharing intelligence with international partners

Other Blogs

Dim Post: Security and intelligence legislation: then and now

No Right Turn: As predicted

No Right Turn: The problem with the intelligence review

The Standard: New report on GCSB spying powers

Previous related blogposts

Audrey Young, Two Bains, old cars, and… cocoa?!?!

National Party president complains of covert filming – oh the rich irony!

An Open Message to the GCSB, SIS, NSA, and Uncle Tom Cobbly

Dear Leader, GCSB, and Kiwis in Wonderland

One Dunedinite’s response to the passing of the GCSB Bill

The GCSB Act – Tracy Watkins gets it right

The GCSB Act – some history

The GCSB – when plain english simply won’t do

The GCSB law – vague or crystal clear?

The Mendacities of Mr Key #1: The GCSB Bill

Campbell Live on the GCSB – latest revelations – TV3 – 20 May 2014

The real reason for the GCSB Bill

Letter to the Editor: John Campbell expose on Key and GCSB

A letter to the Dominion Post on the GCSB

Big Bro’ is Watching You!

The GCSB law – Oh FFS!!!

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No more anarchy

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This blogpost was first published on The Daily Blog on 13 March 2016.

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Questionable assumptions ‘bad for small democracies’

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smells like media bullshit

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This item in Fairfax’s Dominion Post caught my eye a few days ago;

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Labour governments bad for small business

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In this story, author John Anthony is reporting on a study by two  academics –  Massey University economics and finance senior lecturer Dr Chris Malone, and associate professor, Hamish Anderson. They came to the astonishing conclusion;

Small listed companies have performed significantly worse under Labour governments over the past 40 years because of major policy changes, a report says.

[…]

“The smaller firms have done abysmally poor during Labour terms of office.”

Funny thing about this article – it’s mostly rubbish. The Labour government in the mid/late 1980s was hardly a traditional left-wing administration as it implemented neo-liberal, free market policies at breakneck speed. It was the government that gave us the term “Rogernomics“.

In essence, it was a Labour government in name only, having been hijacked by future-ACT MPs and neo-liberal cadres. It was a foretaste of how Brash seized power in 2011 after a putsch overthrew Rodney Hide as ACT’s leader.

Yet the heading of the article is utterly misleading;

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Labour governments ‘bad for small business’

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Indeed, anyone glancing at the story would come away with entirely the wrong impression until their attention was caught by this bit;

The main reasons for poor performance in small firms during Labour governments included market under-performance, periods of falling inflation, harsh default-risk and credit conditions and the introduction of deregulation in 1984 that opened up firms to increased foreign competition and exchange rate pressures.

Notable features were the two Labour governments of the 1980s under Prime Minister David Lange.

In the first term from 1984 to 1987 the mean returns were amongst the highest in the sample but in the second term the smaller firms had a mean monthly return of minus 7.2 per cent.

Roger Douglas’s neo-liberal “free” market reforms truly kicked in during Labour’s second term in office (1987-1989) and the academic’s report is not very flattering;

“…in the second term the smaller firms had a mean monthly return of minus 7.2 per cent”.

It is interesting to note that overseas ratings agencies (Standard & Poors, Moodies, and Fitch) also seem to have a somewhat dim view of right-wing governments. Note the credit rating movements during right-wing Labour/National governments compared to the Clark-led Labour government;

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new-zealands-foreign-currency-credit-rating-history2

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Note the credit downgrades (red underlined) in the chart above and detailed belowed;

  1. Standard & Poors: From AA+ in April 1983,  to AA in  December 1986  (Rogernomics Labour)
  2. Standard & Poors: From AA in  December 1986, to AA- in January 1991 (National)
  3. Moodys: From Aa1 Stable Outlook, February 1996, to Aa1 Negative Outlook on 30 January 1998 (National)
  4. Standard & Poors: From AA+ Stable Outlook in January 1996, to AA+ Negative Outlook on 10 September 1998 (National)
  5. Moodys: From Aa1 On Review for Possible Downgrade  on 5 June 1998, to Aa2 Stable Outlook on 24 September 1998 (National)
  6. Fitch: From AA+ Stable Outlook on 28 November 2008, to Aa+ Negative Outlook Reaffirmed on 16 July 2009 (National)
  7. Fitch: From Aa+ Negative Outlook Reaffirmed on 16 July 2009  to AA Stable Outlook on 24 September 2011 (National)
  8. Standard & Poors: From AA+ Negative Outlook Reaffirmed on 22 November 2010 to AA Stable Outlook on 30 September 2011  (National)

Eight credit down-grades under two Right-wing governments.

By contrast, during Clark’s more left-wing Labour administration,  from 2000 to 2008;

  1. Standard & Poors: From AA+ Negative Outlook on 27 March 2000, improved to AA+ Stable Outlook on 7 March  2001
  2. Fitch: From AA on 27 March 2002, improved to AA+ on 16 August 2003
  3. Moodys: From AA2 Stable Outlook on 24 September 1998, improved to Aaa on 21 October 2002
  4. Fitch: From AA on 27 March 2002, improved to AA+ on 16 August 2003

Eight years, four credit upgrades.

As Labour’s economic development spokesperson,  Grant Robertson, stated in the same article,

“The last Labour government ran nine surpluses in a row while having the highest average growth rate of any government for 40 years.”

He’s right. Under Labour’s administration of the economy,

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New Zealand New Zealand Government Debt To GDP 2000-2014

Graph

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New Zealand unemployment rate 2000-2014

Graph

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New Zealand Building Permits 2000-2014

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  • The NZ stock market showed a steady rise, until the 2007/08 Global Financial Crisis;

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New Zealand Stock Market (NZX 50) 2000-2014

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New Zealand GDP 2000-2014

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  • Consumer Confidence vs Business Confidence – showed conflicting results, with consumer confidence staying bouyant whilst business confidence appeared to fall. (It seems bizarre that whilst customers were happy to open their wallets/purses to spend – businesses remained gloomy until nearly two years after the initial effects of the GFC   were felt and the Recession was biting hard. Masochistic tendencies appear at play here?)

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New Zealand business - consumer confidence To GDP 2000-2014

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It seems farcical in the extreme that two academics – with the willing assistance of an uncritical  journalist – have presented “research” which brands the Labour Party as “bad for small business” when the 1984-89 Lange-led administration was an undemocratic aberration that was closer to the ACT Party than the Kirk or Clark governments.

In essence, Malone and Anderson have passed judgement on  governments implementing right wing, neo-liberal economic policies and, rather unsurprisingly,  given them a *fail* mark. But you wouldn’t think it with the headline “Labour governments ‘bad for small business’” and the statement that “smaller firms have done abysmally poor during Labour terms of office”.

But at least this has given  right-wing bloggers some joy – even if those same bloggers have been less than honest at what Malone and Anderson have actually written. But that’s the right wing for you; never let inconvenient truths get in the way of a good propaganda moment.

 

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References

Fairfax media: Labour governments ‘bad for small business’

New Zealand Debt Management Office: New Zealand Sovereign Credit Ratings

New Zealand Debt Management Office: Summary of Direct Public Debt

Trading Economics: New Zealand Government Debt To GDP

National Party: What about the workers?

Statistics NZ: Unemployment Rate Falls to 3.4 Percent

Trading Economics: New Zealand Unemployment Rate

Ministry of Business, Innovation, & Employment: Previous minimum wage rates

Trading Economics: New Zealand Stock Market (NZX 50)

Trading Economics: New Zealand Building Permits

Trading Economics: New Zealand GDP

NZ Treasury: Recent Economic Performance and Outlook

Trading Economics: New Zealand Consumer Confidence

Trading Economics: New Zealand Business Confidence

Kiwiblog: Labour bad for small business


 

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National dance to corporate interests

Above image acknowledgment: Francis Owen/Lurch Left Memes

This blogpost was first published on The Daily Blog on 30 May 2014.

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That was Then, This is Now #19 – A “Decade of Deficits”

27 December 2013 4 comments

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19. decade of deficits

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This blogpost was first published on The Daily Blog on 20 December 2013.

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Previous related blogpost

That was Then, This is Now #18

References

Fairfax media: Nats blame Labour for ‘decade of deficits’

TVNZ: Breakfast Show

National: Government Share Offer

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Nats, Lies, and Videotape

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backbencheslogo

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National MP, Mark  Mitchell, was a  guest on  Prime TV’s  “Backbenches” on 1 May, along with   Damien O’Connor (Labour Party); Jan Logie (Green Party), and Peter Dunne (Peter Dunne Party).

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Mark Mitchell

Mark Mitchell

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Usual political rah-rah, blah blah, from the Tory politician, until he came up with this throwaway remark,

We inherited ten years of deficits from the previous Labour Government...”

Now, quite simply, anyone with a passing knowledge of  Labour’s  fiscal record during their term in office from 2000 to 2008 will know that is a blatantly untrue comment.

In fact, it’s bullshit.

Under Labour, Government Debt to GDP dropped from 31.4% of GDP to 17.4%.

Government debt did indeed rise – under National, as the graph below amply demonstrates;

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New Zealand Government Debt To GDP

Acknowledge: Trading Economics/NZ Treasury

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National’s government  debt is now twice as high as when Labour left office in 2008.

Some will even recall that Labour Finance Minister, Michael Cullen, posted several surpluses during his tenure as Finance Minister – reaching $7.9 billion by 2007;

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$2,300,000,000: Dr Cullen’s finest hour (29 May 2002)

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Cullen prepares to trumpet high surplus (21 Feb 2003)

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Cullen Unwilling To Share Fiscal Surplus Through Tax Cuts (18 Oct 2004)

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Hide attacks Cullen for hiding huge surplus (16 March 2005)

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Record surplus, but Cullen ‘won’t know about tax cuts until December’ (11 Oct 2006)

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Cullen confirms huge surplus (10 Oct 2007)

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Cullen quick to emphasise volatility after surplus hit (19 Feb 2008)

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Just as well that Cullen resisted strident calls for massive tax cuts. Instead, perhaps being the wisest man in the decade, realised that common sense demanded that we pay down our sovereign debt, rather than splurge out on an almighty cash-lolly scramble.

Mitchell should know all this. He probably does. In which case we can only wonder if  he was perpetuating a right wing lie about Labour’s track record.

If Mitchell isn’t aware of the reality of  Labour record whilst in government, then he is woefully ignorant.

And, as pointed out above,  is Mitchell aware the govenment debt under National watch has doubled from 17.4% in 2008 (left by Labour) to 37% (generated by National)? Having to borrow billions to pay for two unaffordable tax cuts in 2009 and 2010 certainly did not help (see: Govt borrowing $380m a week ).

Let’s ask Mr Mitchell, shall we?

Date: Fri  3 May 2013,  at 12.09pm
From: Frank Macskasy <fmacskasy@yahoo.com>
Subject: Budget surpluses and deficits
To: Mark Mitchel <mark.mitchell@parliament.govt.nz>
Cc: Dominion Post <editor@dompost.co.nz>, NZ Herald <editor@herald.co.nz>,
    Otago Daily Times <odt.editor@alliedpress.co.nz>,
    Morning Report <morningreport@radionz.co.nz>,
    Nine To Noon RNZ <ninetonoon@radionz.co.nz>,
    Kim Hill <saturday@radionz.co.nz>,
    Chris Laidlaw RNZ <sunday@radionz.co.nz>

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Kia ora Mr Mitchell,

Recently, on 1 May, you made a statement on Prime TV’s “Backbenches” to the effect,

“We inherited ten years of deficits from the previous Labour Government…”

I was surprised that you would make such a comment.

Are you aware that under Labour, Government Debt to GDP dropped from 31.4% of GDP to 17.4%?

https://fmacskasy.files.wordpress.com/2013/05/new-zealand-government-debt-to-gdp.png

Government debt rose thereafter, from 17.4% in 2008 to  37% – generated by your government.

Labour’s surpluses were well publicised in media reports, reaching $7.9 billion by 2007,

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$2,300,000,000: Dr Cullen’s finest hour (29 May 2002)

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Cullen prepares to trumpet high surplus (21 Feb 2003)

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Cullen Unwilling To Share Fiscal Surplus Through Tax Cuts (18 Oct 2004)

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Hide attacks Cullen for hiding huge surplus (16 March 2005)

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Record surplus, but Cullen ‘won’t know about tax cuts until December’ (11 Oct 2006)

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Cullen confirms huge surplus (10 Oct 2007)

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Cullen quick to emphasise volatility after surplus hit (19 Feb 2008)

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Can you explain how you’ve managed to turn a near-decade of surpluses, and paying down sovereign debt, into “ten years of deficits from the previous Labour Government”?

It is obvious that your statement on Labour’s fiscal track record was somewhat  in error.

Will you be issuing a media  correction on this issue? If not, why not?

Please note that any statement you provide  may be published in a blog.

Regards,
-Frank Macskasy

This blogpost will be updated  upon Mr Mitchell’s response.

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Bill English – do you remember Colin Morrison?

4 February 2013 21 comments

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A message to the Hon. Bill English;

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English slams Shearer's speech

Source

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From the NZ Herald on 27 January, uttered by Bill English,

On top of that, Labour still hasn’t apologised for their wasteful policies the last time they got their hands on the economy.

See: IBID

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Firstly, let’s review recent history in decidely more accurate terms,

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New Zealand Government Debt To GDP

Source

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The IMF (International Monetary Fund) chart above shows that from 2000 to 2008, the Labour government paid down debt, from 33.4% in 2000 to 17.4% in 2008  (a near-halving of our sovereign debt) to  when National took the reigns of government.

Some will even recall that Labour Finance Minister, Michael Cullen, posted several surpluses during his tenure as Finance Minister,

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$2,300,000,000: Dr Cullen’s finest hour (29 May 2002)

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Cullen prepares to trumpet high surplus (21 Feb 2003)

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Cullen Unwilling To Share Fiscal Surplus Through Tax Cuts (18 Oct 2004)

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Hide attacks Cullen for hiding huge surplus (16 March 2005)

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Record surplus, but Cullen ‘won’t know about tax cuts until December’ (11 Oct 2006)

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Cullen confirms huge surplus (10 Oct 2007)

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Cullen quick to emphasise volatility after surplus hit (19 Feb 2008)

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Just as well that Cullen resisted strident calls for massive tax cuts. Instead, perhaps being the wisest man in the decade, realised that common sense demanded that we pay down our sovereign debt, rather than splurge out on an almighty cash-lolly scramble.

Had Cullen yielded to calls for tax cuts instead of addressing our debt, our current sovereign debt would probably be approaching  Greece’s.

But Bill English and other National/ACT sycophants don’t want us to know this. It makes Labour look good. And that’s the last thing they want.

After 2008, as National gave away tax revenue on the form of two unaffordable tax cuts in 2009 and 2010, debt skyrocketed from 17.4% to 37% of GDP.

Now, if  one was to use the same mis-information as Bill English, John Key, et al, I could shout from the roof-tops that the rise in debt was due wholly to National’s mis-management of the government books.

The reality, of course, is that the 2007/08 Global Finance Crisis – as well as National’s incompetance in giving away tax cuts we could ill afford – both had a part to play in our increased borrowing.

Secondy, let’s deal with English’s claim,

On top of that, Labour still hasn’t apologised for their wasteful policies the last time they got their hands on the economy.

Budget expenditures from the early 1990s to 2012 reveal an interesting story,

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New Zealand Government Budget

Source

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The early 1990s (characterised by Finance Minister, Ruth Richardson) was one of massive cuts to health, welfare, sale of State houses,  and other social services. The same can be said of the late 1990s, where de-regulation; so-called “reforms“; cuts to state services;  and increasing User Pays led to growing poverty and the widening income gap.

Eventually, those cuts to state services had dire consequences. For example, the health sector was particularly badly hit,

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Claim many burned out by health sector reforms – (21 Dec 1996)

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More health changes tipped – (8 March 1997)

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Must pay for ‘wants’ – (19 July 1997)

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Cuts to hospital services expected – (8 Aug 1997)

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‘Serious flaws’ in Govt’s health funding formula – (31 Jan 1998)

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GP hits out at health reforms – (3 Feb 1998)

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Funding for Dunedin Eye Clinic Slashed – (26 Feb 1998)

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Shipley, Bolger sorry for deaths of patients  – (3 April 1998)

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Health cuts spell doom for services – (30 April 1998)

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Hospitals now owe $1.3 billion – (4 June 1998)

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Staff shortages could hit patient care, say nurses – (4 May 1999)

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Public hospital ills blamed on funding – (20 Aug 1999)

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Health spending rates poorly  – (24 Aug 1999)

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The Health “reforms”, along with chronic under-funding, had their inevitable consequences,

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Death The Northland Way (15 Oct 1997)

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Died waiting for by-pass  (6 April 1998)

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Rau Williams and Colin Morrison – both with entirely different lives;  living at opposite ends of the country; one Maori, the other Pakeha – both suffered the same fate. They died because government cutbacks on spending (see red square in  above chart) had reduced the Health budget, and as media reports above show – were impacting harshly on our society.

These two men – and  perhaps others who died quietly, shunning the glare of publicity – died on Bill English’s watch.  As Minister responsible for Crown Health Enterprises and later Minister of Health, English could not shift responsibility to anyone else.

At one point, English was forced to concede that the Health system and funding mechanism was “flawed”,

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English may review waiting list funding  (11 April 1998)

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English agrees system flawed (19 May 1998)

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Tragically, Mr English’s “Road to Damascus” experience was too late for Mr Williams and Mr Morrison and their families.

Is it me, or does  it seem that everything National touches turns into one, big, steaming cow-patty?

Finally, by 1999 the country had had enough. On 27 November, the country went to the polls and National and their coalition ally, NZ First, were roundly defeated.

The incoming Labour-Alliance government was faced with a crippled health sector (amongst other state services that had been cut back) that had been impoverished and  was struggling to perform it’s most basic core services,

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Cancer patients face string over staff shortage – (9 June 2001)

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Maternity crisis set to get worse –  (6 July 2001)

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Despair at lack of young doctors – (11 Nov 2001)

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Local cancer patients die waiting for radiotherapy – (17 Nov 2001)

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A crisis that could only be remedied by a hands-on government prepared to make appropriate funding decisions,

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Waiting lists for elective surgery cut – (24 April 2000)

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Health Minister will end user-pays wards – (9 July 2000)

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More money promised to fund GPs, health clinics – (17 Nov 2001)

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$1.5b injection for health – (9 Dec 2001)

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Upshot of this, Mr English?

Any increase in funding of state services was necessary. After savage cuts, National created a situation where our healthcare system was unequivocally unsafe.

In fact, it had  become lethal. People were dying for lack of appropriate medical intervention.

That was the legacy of the National Government, 1989 – 1999.

So before Mr English or any of his cronies complain that Labour  spent more than National did – damn right they did. And the increased health funding under Labour probably saved an unknown number of lives.

Tell us, Mr English, do you remember Colin Morrison and Rau Williams?

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Addendum 1

By the way, Mr English, with reference to your criticism of the Green Party regarding job creation,

And to make it worse, at the same time their coalition partners the Greens are up in Auckland busy working out how to stop everything they don’t like – which includes everything to do with growth and jobs.

Source

There’s no need to point the finger at the Greens and blame them for lack of growth and jobs. The  inept National Party are quite efficient at stifling the economy and creating rising unemployment,

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New Zealand Unemployment Rate jan 2012 - dec 2012

See: Unemployment rate lifts to 6.7pc

See: 8000 more jobless as rate hits 6.8pc

See: Unemployment up to 7.3pc – a 13 year high

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Economy may be going backwards

See: Economy may be going backwards

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No need to invoke the Green Party (who aren’t even part of the National-led coalition) – it seems National is quite adept at grinding  the economy into the ground.

Credit where it’s due, Mr English, credit where it’s due.

Addendum 2

The Bolger-led National cut taxation-revenue by implementing two tax cuts, in 1996 and 1997. (see: Reserve Bank – New Zealand’s remarkable reforms)

Why does this sound more and more familiar?!

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References

Reserve Bank: Reserve Bank – New Zealand’s remarkable reforms (4 June 1996)

OECD: Economic Surveys: New Zealand 1996

Treasury: Briefing to Incoming Government 1996 (12 Oct 1996)

NZ Herald: McCully: Jobs backtrack no surprise

Dominion Post: Key hands-on in MFat restructuring

NZ Herald: Defence Force plan to cut costs a failure – Auditor-General

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