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Ripples in History

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Question: What is the difference between Free Trade and Fair Trade?

Answer, later.

On 26 December 1991, the Soviet Union was formally dissolved. Two years earlier, the Berlin Wall had been physically torn down by jubilant Berliners. (The symbolism of the Berlin Wall as divisive and an affront to the human spirit seems not to have be well understood by the current demagogue-President of the United States, who is maniacally pursuing his own version of a Dividing Wall between neighbouring nations.)

The reasons for the collapse of the Soviet system have been well traversed. But in the end, it boiled down to a simple reality: people simply no longer believed in, or cared about, the Soviet brand of authoritarian “socialism” and apathy reigned (as related to me by Hungarians in the late ’70s and early ’80s).

As the former Soviet Union broke apart and it’s bulwark of Eastern European nations looked westward for  their future, the fallout from the demise of one of the three great super-powers created ripples that would last for decades. Some of the unintended consequences are still not fully widely appreciated.

The United States, for a while, was hailed as the “the sole global superpower“. Writing in 2012, Mikhail Gorbachev said;

This event led to euphoria and a “winner’s complex” among the American political elite. The United States could not resist the temptation to announce its “victory” in the cold war. The “sole remaining superpower” staked a claim to monopoly leadership in world affairs. That, and the equating of the breakup of the Soviet Union with the end of the cold war, which in reality had ended two years before, has had far-reaching consequences. Therein are the roots of many mistakes that have brought the world to its current troubled state.

Declarations of an “American victory” were somewhat premature. In reality, with the rise of the Chinese economy and a resurgent Russia, the 21st Century would be anything but American.

The break-up of the former Soviet Union was also hailed as a “signal” to  humanity that the experiment of  collectivisation and state ownership of all means of production was a failure. As Indian Marxist, E.M.S. Namboodiripad wrote in 1991;

Today, however, talks are going on that not only have the socialist experiments in the USSR and Eastern Europe failed, but world socialism has collapsed. Adversaries of the socialist movement argue chat, far from the Soviet Union being the starting point of humanity’s transition from capitalism to socialism, the socialist countries in Eastern Europe including the Soviet Union have begun their march from socialism to capitalism. From this they go on to add that the theory of Marxism-Leninism itself has failed.

We Marxist-Leninists are above all realists and, as realists, we concede that the recent events in Eastern Europe and the Soviet Union are a major setback to world socialism. We are therefore engaging ourselves in the process of a deep examination of the reasons why these developments took place and whether the trend that manifested itself in these developments can be reversed.

But there were other strands of fallout. The term “socialism” became – as the word “fascism” was after 1945 – a disparaging epithet to throw at one’s political rival. Post-Soviet Union, “socialist” and “socialism” was equated with failure.

Socialism could no longer be seen as a credible alternative to the fad of neo-liberal, free-market, globalisation sweeping the world. Championed by Thatcher in the UK and Reagan in the US, it reached New Zealand’s shores in the mid-1980s.

The NZ Labour Party – supposedly a social democrat/socialist party for the working class – implemented radical liberalisation of trade, banking, commerce, labour laws. Economic “reforms” went hand-in-hand with social reforms such as the 1986 Homosexual Law reform in 1986, de-criminalisation of prostitution/solicitation  in 2003, and the marriage equality act in 2013.

The Labour Party had been well and truly captured by apostles to Thatcher and Reagan. It could no longer conceivably be called a social democratic or socialist party.

Aside from the short-lived Alliance Party (which imploded in 2002 over New Zealand coalition government’s decision to participate in the invasion of Afghanistan), the only other Parliamentary parties that feasibly represented left-wing voters were the Mana Movement, led by MP Hone Harawira, and the Green Party.  The Mana Movement itself was destroyed after an unholy alliance in 2014 between Labour,  National, NZ First, and the Maori Party to support the Labour Party candidate, Kelvin Davis.

Which currently leaves the Green Party to represent the Left of Aotearoa New Zealand’s political spectrum.

The Green Party itself is currently under attack from both ends of the Body Politic in this country.

Some media pundits and the Right  are calling for the Greens  to return to their “environmental base” whilst the Left are decrying the Greens as not left-wing enough.

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Meanwhile, the rise of populism and the far right paralled the spread of neo-liberal “reforms” around the world.

In 1998, only two nations in Europe – Switzerland and Slovakia – had governments made up in part by populist parties.

By February of this year, the number of  European nations with populist parties in coalition governments had increased to more than eleven. (More, if countries like Russia and Ukraine are included.)

Europe’s populism has been matched with Trump in the United States;  Erdogan in Turkey; Duterte in the Philippines; Jair Bolsonaro in Brazil, etc. Throughout the world, populist parties – mostly (though not always) of a right-wing persuasion – have been on the rise.

The most obvious causes for the rise in right-wing populism has also been well-canvassed;

Most have tapped into a backlash against immigration and a globalized economy that many people feel has left them behind..

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The common thread dates back to the 2008 financial crisis, which opened the door for many populists. Rising inequality and the perception of an unjust — if not corrupt — response to the crash eroded trust in the ability of established leaders to address shifts in the global economy, including technological change and the rise of China.

In Hungary, right-wing populism has taken on a distinct air of neo-fascism;

The biggest advances have been made in central and eastern Europe. All four so-called Visegrád countries are governed by populist parties including Viktor Orbán’s Fidesz in Hungary – where populist parties secured 63% of the vote in this year’s elections – and Jarosław Kaczyński’s Law and Justice in Poland.

Both parties only started showing their true colours – populist, culturally conservative, authoritarian – after they were first elected. They are now attacking core liberal institutions such as the independent judiciary and free press, increasingly defining national identities in terms of ethnicity and religion and demonising opponents, such as the Hungarian-born Jewish financier George Soros, in language reminiscent of the 1930s.

The public backlash against immigration, globalisation, with a concomitant loss of well-paying jobs, and the flow of wealth to the top 1 Percent is well known, understood, and documented;

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What is not well understood is why voters have generally turned away from traditional left-wing parties and policies, and increasingly voted for right-wing (and often far right-wing) populist parties.

In Europe, the backlash against orthodox neo-liberalism/globalisation resulted not in the election of a left-wing government – but in Brexit. In choosing to shun the European Union, British voters by a small majority literally walked away from the continental bloc.

Whether consciously or sub-consciously, this blogger contends the public view the Left as having failed the ultimate  test. The former Soviet Union – a super-power in the 20th century rising from a feudalistic monarchy to becoming a nuclear-armed, space-faring nation with global influence and aspirations – failed. And it failed dramatically with the whole world watching.

Since 1989/91, the televised spectacle of the collapse of the former Soviet Bloc has imprinted itself in the psyche of most of the world’s population. The message was made abundantly clear as the Berlin Wall came down; the Red Army retreated from Eastern Europe; and President Gorbachev passed laws making his Soviet Presidency redundant: the Left were unable (or unwilling) to staunch the neo-liberal/globalist orthodoxy.

Indeed, in almost every country, neo-liberalism/globalisation had ‘captured’ supposedly social democratic or centre-left parties such as the Labour Party in UK; the Democrats in US; Labour in Aotearoa New Zealand and Australia, etc.

Thus the parliamentary wing of  social democratic/centre-left offered no solutions. They were seen by the voting public as part of the problem.

If Nature abhors a vacuum, the same applies to the Political Environment. The fall of the former-Soviet Union created a political vacuum on the established Right-Left continuum.

That political vacuum would soon be filled as people sought solutions to what many perceived as an attack on their national identities; falling standard of living; unfulfilled aspirations; unresponsive traditional political parties, and the rise and rise of a tiny wealthy elite.

So it came to pass. The vacuum was filled, as it was in the 1920s and ’30s, by populist parties and demagogic leaders who offered quick-fix, simplistic solutions. Cue: the trumpets of nationalism, racism, intolerance of minorities, and the emboldening of even worse extremism on the far-right and alt-right.

To compound the worsening political climate, the Left continued to make itself largely irrelevant to the everyday struggles of working and middle class New Zealanders.

A cursory look at blogposts on The Daily Blog, for example will quickly reveal that up until recently (17 April, to be precise) most blogposts were fixated on the issue of “free speech” and the Green Party. Green Party MP, Golriz Ghahraman, to be concise.

Meanwhile, out in the Real World…

teachers, mid-wives, and medical professionals were on strike for better pay.

… the environment continued to be polluted out of existence.

greenhouse gas emissions continued to rise.

mental health continued to be in crisis.

… savage covert cuts to disability funding were planned.

homelessness was still a ‘thing.

… our security apparatus failed us spectacularly by spying on the wrong people.

… the coalition government buckled to property speculators.

For many on the Left, though, the priority was “free speech”.

If ever there was an instance of a public “Meh!” moment,  this was it.

Just as the GCSB, NZSIS, NZ Police, and Uncle Tom Cobbly were all distracted by Greenpeace, environmental activists, journalists, bloggers, Maori activists, Christchurch Earthquake  survivors, et al, instead of keeping an eye on white supremacists/neo-fascists – the left-wing blogosphere was seemingly distracted by it’s own Shiny Thingy.

The recent furore on the issue of “free speech” and the Green Party’s call to address hate speech appeared to suggest that Aotearoa New Zealand was about to become a quasi-Stalinist state with bloggers and journalists rounded up and despatched to re-education camps on Stewart Island. The unhealthy obsession with the Green Party – Green MP, Golriz Ghahraman, to be precise – drew anger usually reserved for the likes of Don Brash, Mike Hosking, Duncan Garner, et al..

Although, with considerable grim irony, some on the Left were quite happy to protect the “free speech” for the likes of Southern, Molyneux, Brash, et al, whilst launching tirades against Ms Ghahraman.

There remains an ongoing systematic vilification of Ms Ghahraman instead of addressing the issues surrounding “free speech/hate speech”. Some of the vitriol heaped on Ms Ghahraman took on sinister under-tones of misogyny and racism.

That some of the personal abuse has appeared on left-wing forums is especially troubling.

Yet, despite hysterical screams of outrage that the Green Party was advocating stifling “free speech”, a closer examination of their proposal was anything but.

In a recent post on social media, Ms Ghahraman posed a valid question;

“You’re not allowed to harass, or to make up lies that harm an individual. It’s against the law.

However you are allowed to spread hate and lies about a group of people based on their religion or gender, without consequence.

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So why are individuals protected from defamation,  or harassment,  but whole groups of people aren’t?”

The capitalist system is built on the primacy of individualism, property ownership, and reputational interests (which has a direct bearing on an individual’s commercial activities).

To protect that fundamental underpinning of capitalism, the rights of the capitalist individual was elevated above all else. Including above the needs of society itself.

In October 1987, British Prime Minister, Margaret Thatcher – architect of Britain’s neo-liberal, free-market “reforms” – was famously quoted in an interview saying;

And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first…”

Western law reflects the capitalist precept that the rights of individuals are recognised – but groups of people are not. (Class-action lawsuits are a rare exception, usually reserved for physical loss, such as mechanical failures, financial malfeasance, medical botch-ups, etc.)

Under the capitalist system, social groups are a nullity under the law.

Recent high-profile public defamation lawsuits have centered on Matthew Blomfield, Earl Hagaman, and Colin Craig.

All three cases involved lawsuits claiming defamation; suffering because of harmful untrue public statements, and sought awards for damages.

The case of Mr Blomfield successfully suing far-right blogger, Cameron Slater, was recently commented on The Daily Blog. Comments posted after the main article generally approved of businessman, Matthew Blomfield’s victory.

Yet, the right to sue does not extend to groups based on religion, ethnicity, gender/sex, etc.

That privilege is reserved solely for individuals. Those individuals are usually wealthy, white, and not women.

That was the point Green MP, Golriz Ghahraman was making. Or trying to make, as the issue was drowned out amidst a hysteria that veered well into moral panic.

It is salient to  note that “free speech” advocates remain mostly silent on this issue.

Free speech is not absolute. A person can be hauled before a court and sued for considerable sums of money if found guilty of defamation.

The legal system protects the rights of individuals.  Groups – not so fortunate. Because as pointed out above, capitalism is about the Individual. Groups – not so much.

At the beginning of this blogpost, I posed the question: What is the difference between Free Trade and Fair Trade?

Free trade is unfettered. It protects and serves the interests of  corporations. The goal is to maximise profits for individuals (shareholders) at the expense of all else.

Fair trade serves the interests of communities, as well as individuals in those communities. The goal is to better the lives of people, but not at the expense of all else (eg, the environment, workers’ rights, etc).

The Left prides itself on the point of difference from the Right in that we act for the collective good. The primacy of the Individual, at the expense of the greater good, is not something we generally look favourably upon.

We want our trade to be fair. Should we expect less for our public discourse?

It is a contradiction to our much vaunted progressive values that we extend the right to Individuals to legally defend themselves in a Court of Law against defamation and harm – yet deny that same right to groups who might also suffer defamation and harm.

We talk the talk when it comes to collective action for the greater good. We demand the right for workers to act collectively and join unions. We demand adequate taxation to pay for public education, healthcare, housing for the poor, environmental protection, support services for the disabled, etc, etc.

Yet, when it comes to walking the walk to extend the right to legal protections for groups –  some (many?) on the Left balk at extending the same legal rights extended to Individuals – usually wealthy businessmen or politicians in positions of power.

The irony is inescapable; that some on the Left seem wholly comfortable with wealthy businessmen being privileged with a legal right to defence against harmful speech that entire groups of people are not.

If we, as a society, are willing to have defamation laws available, they must be available to everyone, groups as sell as wealthy individuals. The law must be for all. Or not at all.

Those days of privilege can no longer be tolerated.

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References

CNN: Fall of the Berlin Wall – On 29th anniversary, it’s a different world

Norwich University: Exploring 5 Reasons for the Collapse of the Soviet Union

Noam Chomsky: Barack Obama and the ‘Unipolar Moment’

The Nation: Is the World Really Safer Without the Soviet Union?

E.M.S. Namboodiripad: ‘An Experiment that Failed’?  (alt. link)

Huffington Post: Trump Knocks Socialism And Bernie Sanders Does Not Look Pleased

NZ Herald: Prostitution decriminalised, brothels to be licensed

Scoop: Why The Alliance-Left Rebelled

Fairfax media: Winston Peters backs Labour’s Kelvin Davis

NZ Herald: Election 2014 –  Hone’s call to arms after Winston backs Kelvin

Fairfax media: Kelvin Davis blasts Mana Party  (alt. link)

Mediaworks/Newshub: Lloyd Burr – The Greens have lost their way

The Daily Blog: If you think that the NZ Green Party (who are just as wedded to neoliberalism as Labour is) are your new political home, you are delusional

The Guardian: How populism emerged as an electoral force in Europe

Bloomberg: The Rise of Populism

Wikipedia: Right-wing populism

Vox: Forms and sources of inequality in the United States

The Irish Times: Conor O’Clery – Remembering the last day of the Soviet Union

Radio NZ: ‘No mandate’ for capital gains tax – PM

Fairfax/Stuff media: Secondary school teachers to strike, citing lack of patience with contract negotiations

Radio NZ: Midwives to strike next week

Fairfax/Stuff media: Resident doctors call back planned pre-Easter strike

Mediaworks/Newshub: New Zealand’s ‘dirtiest industry’ blasted over environment report

Climate News Network: Human carbon emissions to rise in 2019

Noted/The Listener: Youth mental health is in crisis and NZ is failing to keep up

NZ Herald: Limited showers, no meal prep – ‘Ruthless’ plans to cut disabled care revealed

NZ Herald: New report reveals the sharp end of homelessness in Wellington

Mediaworks/Newshub: Jacinda Ardern announces Royal Commission into security agencies after Christchurch attack

Twitter: Golriz Ghahraman – Hate speech – 8:47am  17 April 2019

Margaret Thatcher Foundation: Woman’s Own – interview – 31 October 1987

The Daily Blog: The Human Rights Review Tribunal has upheld a complaint against Cameron Slater and order that he pay $70,000 damages to Matthew Blomfield, one of the highest awards ever made.

Justrade: Prof Jane Kelsey & Jim Stanford

Additional

Green Party Aotearoa: Golriz Ghahraman speech in response to the Christchurch mosque terror attacks

Fairfax/Stuff media: MP lacks credibility in urging hate speech law

NZ Herald: Political Roundup – Outlawing hate speech and hate crimes

NZ Herald: Christchurch mosque shootings – Does New Zealand need hate speech laws after terror attacks?

Other Blogposts

Pundit: Doesn’t hate-speech need to include some hatred?

The Standard: Reflections on Free Speech and Public Discourse

The Standard: The Green Party on the Mosque murders

TDB:  Hone Harawira – Blaming black boys for a white boy massacre

TDB:  Recognising Hate Speech When You See It.

TDB:  Green Party start their campaign to curtail free speech – the danger of Millennial micro aggression policing culture defining hate speech

Previous related blogposts

National – the Party of free speech?! Yeah, right.

“Free speech” – The Rules according to the Right

The Christchurch Attack: is the stage is set for a continuing domino of death?

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This blogpost was first published on The Daily Blog on 23 April 2019.

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= fs =

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

3 March 2018 2 comments

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Our crisis in construction reaches tipping point

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Gambling with promises of jobs

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Globalisation

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

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

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

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

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

Leaving labour to Market Supply & Demand

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

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

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

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

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

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

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

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

So what’s gone wrong?!

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

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

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

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

National’s “response” – an exercise in incompetence

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

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

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

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

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

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

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

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

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

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

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

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

Report Card: F for Failed

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

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

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

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

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

[…]

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

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

[…]

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

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

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

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

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

Postscript1

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

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

Past evidence suggests those claims should be regarded with caution.

Postscript2

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

Postscript3

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

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

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References

Radio  NZ:  200 Chinese tradies to complete Akl hotel

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

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

Forbes:  Profile – Chan Laiwa & family

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

Panuku Development Auckland: Home Page

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

Radio NZ:  300 apartments for Auckland waterfront

Financial Times: Why US big business listens to Bernie Sanders

Treasury: 2014 Budget –  Rebuilding Christchurch

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

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

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

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

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

BCITO:  Prime Minister encourages construction apprentices

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

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

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

NZ Herald: Ralph Norris retires

Additional

NZ Herald:  Brian Gaynor – How to fix Fletcher Building

Fairfax media: Dearth of tradesmen foreseen

Other Blogs

The Standard:  Fonterra and Fletcher Building

Previous related blogposts

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

Lies, Damned lies and Statistical Lies

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

MSM catches up on Unemployment stats rort

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

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Roy Morgan poll confirms blogger’s prediction – National is in freefall

2 December 2017 4 comments

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On 12 November, I made the following observation;

Polling Decay in Opposition

The longer the Nats remain in Opposition, the  faster their public support will erode. Post 2008, Labour’s polling continued to plummet, whereas National’s ascendancy continued to build on it electoral success…

[…]

The longer National stays in Opposition, the further it’s public support will fall. It is hard to imagine that it’s election night result of 44.4%  will be maintained to the next election in 2020.

In short, the Nats risk growing irrelevancy the longer they stay out of government.

It’s taken faster than I thought possible, but the first post-election poll – from Roy Morgan – has the Labour-led coalition rising  whilst National’s support is falling;

In November support for the newly elected Labour/NZ First/Greens Government was 54.5% (up 6% since early October) ahead of National/Act NZ on 41% (down 5.5%) with minor parties outside Parliament attracting the remaining 4.5% of support.

  • Support for Labour/NZ First is at 44.5% (up 7% since early October), a slight increase from their election result of 44.1% while coalition partners the Greens are on 10% (down 1%).
  • Support for National is at 40.5% (down 5.5%) and down 3.95% from their election result of 44.5% while their right-wing colleagues Act NZ are stuck unchanged on 0.5%.

Hence why National’s chief party strategist, shit-stirrer, and head-kicker – Steven Joyce has been so vocal lately. His on-going carping about the new government is a desperate attempt for his party to stay relevant.

The longer the Coalition has to implement it’s reforms and fix up thirty years of neo-liberal mis-management, the harder it will be for the Nats to offer themselves as a viable alternative in 2020 or 2023. Or 2026.

Who would vote for a party whose nine years in office saw nothing of any practical value except a cycleway (that failed to deliver promised 4,000 new jobs) and bloated house-values for a minority of middle class property-owners in Auckland and Wellington?

Who would vote for a party whose former Dear Leader smiled and waved his way through eight years in office; who bullied a powerless waitress; wasted $26 million on a pointless referendum; and left a legacy of Kiwi families living in cars, garages, or crammed into mouldy, delapidated housing?

And then there’s this;

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rivers too polluted to even swim in.

Nine years of National has proven to be an expensive exercise  in futility for this country.

But more so thirty years of a dogmatic neo-liberal experiment which has failed on almost every level (unless you are the 1% or an Auckland property owner).

TV3’s ‘The Nation‘  on 25 November emphasised the grim problems we face, as the entire episode was taken up with the socio-economic problems faced by Northlanders.

That one, single, episode was award-winning journalism. It was Reality TV unlike the inane bullshit we get from “The Block“, “Home Improvement“, “Survivor Whatever/Wherever“, “The Bachelor/ette“, “My Kitchen Cooks“, etc, etc, et-bloody-cetera.

It made for grim watching and deserves to be re-broadcast at prime time.

It is against this back-drop that National’s strategists should understand one thing very clearly: people’s expectations over the last three decades have been low. The pressing social and economic problems we face have been accepted with a shrug from a sizeable chunk of the voting population.

It was presented for a generation that this was as good as it gets.

But if Labour, NZ First, and the Greens can prove that a better alternative exists – then watch National’s poll rating plummet even further. The Roy Morgan Poll gave us a hint of this;

Government Confidence increased substantially during November after New Zealand First chose to form Government with the Labour Party installing Jacinda Ardern as New Zealand’s new PM.

The Roy Morgan Government Confidence Rating jumped 15.5pts to 146.5pts in November (the highest for nearly eight years since January 2010 early in the reign of Prime Minister John Key) with 66.5% of NZ electors (up 8% from October) saying NZ is ‘heading in the right direction’ cf. 20% of NZ electors (down 7.5%) that say New Zealand is ‘heading in the wrong direction’.

The Nats are on borrowed time. Their relevancy will continue to diminish.

And it is when the Right have their backs against the wall that they will be most dangerous.

Labour, Green, and NZ First Ministers and MPs need to be on-guard at all times. Stay focused on what needs to be done.

The Roy Morgan poll shows we are on track…

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Sunday Star Times <letters@star-times.co.nz>
date: 26 November 2017
subject: Letters to the editor

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The editor
Sunday Star Times

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The latest Roy Morgan poll must be sending shivers down the backs of the National Party hierarchy.

Not because support for the newly elected Labour-led coalition was up 6% to 54.5%, with National/ACT free-falling 5.5% on 41%.

But because the same poll revealed that “66.5% of NZ electors (up 8%) said NZ is heading in the right direction”.

This is a clear message from the people that they have had enough of a market-led, minimalist-government regime that has seen growing child poverty; widening income/wealth inequality; stagnating wages; corporates rorting the tax system; worsening housing affordability; growing homelessness with entire families living in garages or cars; degraded rivers; and a grossly under-funded health system.

National was quick of the mark cutting taxes in 2009 and 2010, for which they had to borrow from overseas to fund, despite assurances that would not happen.

But not so quick to address the critical problems that really matter to New Zealanders.

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-Frank Macskasy

[name and address supplied]

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References

Wikipedia:  Opinion polling for the New Zealand general election, 2011

Electoral Commission:  2017 General Election – Official Result

Roy Morgan Poll:  New PM Jacinda Ardern drives surge in New Zealand Government Confidence

NZ Herald:  Cycleway jobs fall short

Mediaworks:  New Zealand housing most unaffordable in the world – The Economist

Fairfax media: Prime Minister John Key pulled waitress’ ponytail

Radio NZ:  Flag referendum ‘waste of money’

Fairfax media:  New Zealand’s poor housing is making our children sick

Fairfax media:  ‘Serious pressures’ facing rivers, Government report finds

Mediaworks: The Nation – Turning around the far north

Mediaworks: The Nation – What happened to Moerewa?

Mediaworks: The Nation – Fixing Northland

Other Blogs

The Standard:  Latest Roy Morgan Poll – Labour and Greens surge as National flounders

Previous related blogposts

The Legacy of a Dismantled Prime Minister

“Fool me once”

St. Steven and the Holy Grail of Fiscal Responsibility

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That was then…

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This is now…

 

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This blogpost was first published on The Daily Blog on 27 November 2017.

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Observations on the 2017 Election campaign thus far… (toru)

9 September 2017 Leave a comment

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Parliament’s Grassy knoll: who tried to character-assassinate Winston?

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The leaking  of Winston Peter’s superannuation over-payment is well known. Also known is that Ministers Paula Bennett and Anne Tolley were briefed by Ministry of Social Development and State Services Commission, respectively, on Peters’ private details regarding the over-payment before it was leaked to the media and made public knowledge.

Also briefed – though it is unclear why, as he was not a warranted Minister of the Crown – was political appointee, Chief of Staff, Wayne Eagleson.

Evidently the only person in the entire country not briefed was the Prime Minister, Bill “Double Dipper from Dipton” English.

Bennett, Tolley, and Judith Collins have all denied any involvement in the leak.

Paula Bennett was adamant;

“I don’t actually go around the back scuffling around doing leaks. I actually, if I’ve got something to say, I say it directly and up front and kind of bluntly. “

Which is true, in a Bizarro World kind of way. In 2009, when Bennett mis-used her Ministerial powers to reveal personal details of two solo mothers on the DPB, it was done in a very public manner.

However, Bennett never apologised publicly for the breaking of the two women’s privacy. And she stubbornly insisted she would do it again;

Asked if she would do the same thing again, Bennett said “it would depend on the circumstances”.

Perhaps Judith Collins, who disclosed a State servant’s name and personal information to a right-wing blogger, was involved in the leaking of Peters’ situation?

Prime Minister John Key has conceded it was “unwise” for Judith Collins to give Cameron Slater a public servant’s name, job title and phone number which was then used in an attack post on his Whale Oil blog.

However, John Key says no disciplinary action will be taken against the Justice Minister because the action pre-dated the final warning he gave Ms Collins over the Oravida scandal.

Mr Key says he still stands by the Justice Minister.

“I think the passing of private information, in terms of phone numbers, I think that’s unwise. It’s unwise of a Minister. Look in the end it’s one of those things,” Mr Key says.

Collins also refuse to accept she had done anything wrong – despite being forced to resign in 2014;

“I absolutely and strongly deny this and any suggestion of inappropriate behaviour. I am restrained in clearing my name while I am still a Minister inside Cabinet and I believe the right thing to do is to resign as a Minister so I am able to clear my name.

I have asked the Prime Minister for an Inquiry into these serious allegations so that my name can be cleared. I will, of course, cooperate with any Inquiry.”

Only Minister Tolley has not been accused of a direct privacy violation of any individual(s) – at the moment. However, MSD is know to leak like a sieve and it was MSD that briefed the Minister regarding Winston Peters.

One thing is for certain; some Ministers are not averse when it comes to leaking personal details of individuals who run foul of this government.

They have ‘form’.

Postscript

Recent revelations that blogger and activist, Martyn Bradbury, has had his private bank details scrutinised by Police shows how little National and its state agencies respect the privacy of individuals.

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Especially those who dare criticise the current regime.

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A face-palm moment for ACT candidate, Anneka Carlson

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Meet Anneka Carlson, ACT’s New Plymouth candidate and number seven on their Party List;

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Carlson is seventh on the list and would enter parliament if ACT gained 5 per cent of the party vote.

The 28-year-old never dreamt of being a politician but standing for ACT in her home town “just feels right.”

“It was meant to happen.”

Parliament needed people with life skills and her life experiences would help stand her in good stead if she is elected, she said.

The former West Auckland police officer owned her own business in New Plymouth, is a North Taranaki SPCA board member, and ran fitness programmes for cancer support groups.

She is also completing a business studies degree extra-murally at Massey University. 

“I’m fairly young, and I’m surprised to be high on the list because I’m a bit of political newbie, but I’ve already seen lot of things from working in the police.

All well and good – engaging young New Zealanders to enter politics should be encouraged. It should never be  the sole “happy hunting grounds” for Baby Boomers seeking to feather their own nests, at the expense of younger generations.

Unfortunately, there are times when youth counts against a candidate.  Such as when Ms Carlson lamented ACT’s lack of public support;

“It makes me wonder why people don’t know more about ACT in New Plymouth.”

It should be no surprise to anyone that Ms Carlson wonders why ACT is not supported more at the ballot box. It’s not because “people don’t know more about ACT“.

Quite the contrary – most New Zealanders middle-aged and over – are very clear about ACT and what it stands for. After all, we lived through ACT-style so-called “reforms” in the late 1980s and into the 1990s.

That is why ACT is not well supported except by a tiny minority of unreconstructed wealthy, privileged extremists. (Aka, the One Percent.)  At 28, Ms Carlson would be oblivious to all this.

But at least Ms Carlson understands how privileged she is as a middle-class pakeha from an economically well-supported background. As she herself admitted;

“I’ve come from a fairly privileged upbringing…”

At least Ms Carlson has a measure of self-awareness. Given time and experience she may understand how that privileged upbringing gives her a head start in life that is denied many others.

She may even experience that critical Road-To-Damascus revelation that ACT’s market-driven ideology has made matters much, much worse since 1984.

I suggest the next cuppa tea she has is not with David Seymour, but Jim Bolger.

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Another poll indicates coming change in government

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A recent Horizon Poll released on 1 September reconfirms the rise of Jacinda Ardern’s popularity with voters;

Jacinda Ardern has a 6% lead over Bill English as preferred Prime Minister among definite voters.

Among the 860 adult respondents who are both registered to vote and 100% likely to vote, Ardern leads English by 43% to 37%.

Among all of the 960 respondents to the August 11-15 Horizon Research poll Ardern leads 45% to 32%.

Winston Peters is preferred Prime Minister by 15% of all respondents and 14% of definite voters.

James Shaw, the Green Party leader, is preferred by 2%, and David Seymour of ACT and Te Ururoa Flavell of the Maori Party each by 1%.

Coincidentally, English’s current popularity at 37% is similar to Key’s Preferred Prime Minister ratings before he stepped down as Dear Leader Prime Minister.  By May last year, Key’s PPM rating had  fallen to 36.7% – continuing a steady downward trend.

Which means Ms Ardern is now more popular than John Key was, prior to his resignation.

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Another step back from globalisation

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Queensland’s Premier, Annastacia Palaszczuk, has announced a major step back from neo-liberalism’s prime enabler, globalism, by announcing that the State government would prioritise local businesses for contracts. The aim is to create more local jobs.

Ms Palaszczuk was unapologetic in renouncing globalisation;

“ Our new procurement strategy is unashamedly a ‘Buy Queensland’ one.  No longer will we be constrained by free trade agreements that have seen jobs go off-shore or interstate.

Wherever possible, one regional and one Queensland supplier will be invited to quote or tender for every procurement opportunity offered. Preference must be given to local subbies and manufacturers on significant infrastructure projects of $100 million or more.

This money comes from Queensland taxpayers, it is only right we spent it in a way that benefits Queensland businesses and workers as much as possible.”

According to the SBS report, Queensland spent  A$14 billion per annum  on supplies, services, plus A$4 billion  building and maintaining State infrastructure.

Ms Palaszczuk made a valid case for buying-local when she pointed out “this money comes from Queensland taxpayers, it is only right we spent it in a way that benefits Queensland businesses and workers“.

The prime role of a government in a Western-style democracy has always been (or should be!) to protect and enhance it’s citizens. Creating an environment where local jobs flourish  is part and parcel of that dictum.

Governments are not “in business” to create  jobs in other countries at the expense of their own workers.

ExportNZ’s Executive Director, Catherine Beard, was predictably hostile;

The ‘Buy Queensland’ promotion should be about encouraging Aussies to buy their local product, just like ‘Buy NZ Made’ encourages New Zealanders to buy Kiwi-made. It’s OK to encourage your people to buy local, but it’s not OK to mandate State Government weightings that amount to protectionism.

The protectionism in Queensland’s policy is completely contrary to Closer Economic Relations between New Zealand and Australia.

In plain english, Ms Beard is fine with “it’s OK to encourage your people to buy local,” but “it’s not OK to mandate State Government weightings that amount to protectionism” because it harmed the interests of her members.

Tough. It’s about time globalisation began to be rolled back instead of continually exporting jobs and entire businesses to off-shore jurisdictions where labour is cheaper and easily exploitable because of lax (or unenforced) labour laws.

We need fair trade, not so-called “free” trade. “Free” trade is not free when we, the tax-payers, have to foot the bill to pay for welfare, because workers became unemployed after their jobs were exported to China, Vietnam, Pakistan, Fiji, etc, or cheaper (and often shoddier) goods imported to unfairly compete with locally-made products.

Queensland’s Premier understands this. She wants jobs created for her own workers – not in some other country. Especially when those workers in other nations won’t be paying tax in Queensland.

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References

Radio NZ:  Timeline – Winston Peters’ superannuation overpayments saga

NZ Herald:  Beehive knew of Winston Peters’ super payments weeks ago

Mediaworks:  Paula Bennett says she doesn’t go ‘scuffling around doing leaks’

Fairfax media:  Bennett won’t rule out releasing beneficiary details

Mediaworks:  Collins ‘unwise’ to pass information to Slater

NZ Herald:  Statement from Judith Collins

Fairfax media:  Government backs down over collecting individuals’ data until security confirmed

Fairfax media:  Former promotional ‘hype girl’ keen to get more dancing to ACT’s tune

Fairfax media:  Tick party vote for ACT to bring quality candidates into parliament, leader says

Fairfax media:  The 9th floor – Jim Bolger says neoliberalism has failed NZ and it’s time to give unions the power back

Fairfax media:  Hamilton social service providers dispute PM’s ‘almost’ no homeless claim

Horizon Poll:  Ardern preferred Prime Minister with 6% lead

Mediaworks:  Newshub poll – Key’s popularity plummets to lowest level

SBS: Qld govt to prioritise local businesses

Scoop media:  Trade Ministers need firm hand over Queensland

Other Blogs

Martyn Bradbury:  My case against a secret NZ Police investigation that breached my privacy and my civil rights

Previous related blogposts

The slow dismantling of a Prime Minister – downward slide continues

Observations on the 2017 Election campaign thus far… (tahi)

Observations on the 2017 Election campaign thus far… (rua)

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This blogpost was first published on The Daily Blog on 4 September 2017.

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

10 March 2017 1 comment

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if-you-repeat-a-lie-often-enough

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Context

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

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

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

[…]

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

[…]

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

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

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

Easy money.

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

As Treasury pointed out in June last year;

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

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

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bill-english-blames-unemployment-on-drug-tests

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English’s response was predictable if not offensive.

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Playing National’s Blame Game

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

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

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

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

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national-and-john-key-blames

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

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housing-crisis-national-blame-game

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

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

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

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

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

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farmers-agree-kiwi-farm-labourers-hopeless-radio-nz-bill-english-beneficiary-bashing

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

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

As Radio NZ’s Benedict Collins reported;

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

[…]

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

Some failed more than once.

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

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

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

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

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

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

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

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

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

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

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Cargo-cult Economics

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

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

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

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

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exporters-tell-inquiry-of-threat-from-high-dollar

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

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

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The Not-so-Free-Market

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

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

This was critical for National.

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

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

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

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

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

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

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

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

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

[…]

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

[…]

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

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

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

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

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

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

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

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

Time to change the game.

Inevitable Conclusion

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

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

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

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Postscript: A case of REAL workplace drug abuse

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

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

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References

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

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

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

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

NZ Herald: Budget 2016 – Feeling the Pressure

NZ Herald: Treasury warns of risk to jobs from immigration

TV3 News:  Bill English blames unemployment on drug tests

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

Radio NZ: Farmers agree Kiwi farm labourers ‘hopeless’

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

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

NZ Herald: Willie Apiata our most trusted again

Radio NZ: Exporters tell inquiry of threat from high dollar

Wikipedia: Cargo cult economics

Economics Online: The demand for labour

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

Radio NZ: Unemployment rises, wage growth subdued

Statistics NZ: When times are tough, wage growth slows 

Fairfax media: Shock rise in unemployment to 7.3pc

TVNZ: Frontier Of Dreams – 1984 Snap Election

Additional

TV3 News: Government gets thumbs down on housing

Other Blogs

The Standard: English hammered on druggies smear

Previous related blogposts

Election ’17 Countdown: The Promise of Nirvana to come

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

National under attack – defaults to Deflection #2

National under attack – defaults to Deflection #1

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

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An earthquake separates John Key and ‘The Iron Lady’, Margaret Thatcher

24 November 2016 3 comments

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In October 1987, British Prime Minister, Margaret Thatcher – apostle of Britain’s neo-liberal, free-market “reforms” – was famously quoted in an interview saying;

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And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour…

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Twenty-nine years later, as much of New Zealand is ravaged by a 7.5 earthquake, John Key makes an appeal to the people of Aotearoa on Radio NZ’s ‘Morning Report‘;

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The one thing I’d we’d just say to New Zealanders at the moment is stay close to your family and friends. Make sure you listen to the radio and listen to the best information that you’re getting. And if you do have certainly older neighbours or family, if you could go in and check up on them that would be most appreciated. Because there will be people feeling genuinely alone.

 

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Far from decrying Key’s sound advice, I would applaud him for giving it at a time when the country is rattled by ongoing,  severe,  seismic activity.

But it illustrates one fact with crystal-clarity;  Thatcher was wrong. There is such a thing as ‘society’.  We are our Brothers and Sisters Keepers; and functioning solely and purely  for our own Individualistic and immediate Familial benefit is not to our  advantage.

For without it, we are very much alone and left vulnerable to the immense, implacable, forces of nature.

Which is why the dictates of neo-liberalism – the so-called “invisible hand of the free-market” and selfish Cult of Individualism –  is doomed to failure. That is why the international  arm of neo-liberalism – globalisation – is  being rejected from country to country.

Because at the end of the day, when this country is hit by earthquakes that tear apart our roads, bridges, offices, community facilities, factories, ports, schools, and our own homes – I don’t see the “Invisible Hand of the Free Market” coming to our assistance, “invisible” or not.

Only people, working collectively for the greater good, can achieve mutual support – quite often for no personal benefit or gain.

Defenders of the neo-liberal/free market/globalisation ideology should stop and consider; we cannot have the Primacy of the Individual in good times, and then seek sanctuary within the strength of society in bad. People acting together as a community is either within us all the time, or not at all.

It is time for the leader of New Zealand’s free-market, pro-neo-liberal, political party to understand this simple truth.

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References

Margaret Thatcher Foundation: Woman’s Own – interview – 31 October 1987

Radio NZ: Morning Report – John Key urges New Zealanders to look out for their neighbours

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This blogpost was first published on The Daily Blog on 19 November 2016.

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When Life is a Lottery

20 November 2016 2 comments

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Fun Fact #1: Between 2006 and 2013,  the number of homeless grew by 25%. Based on Census data;  one in 100 were homeless in 2013; one in 120 in 2006, and one in 130 in 2001.

Fun Fact #2: In 1986, home ownership in New Zealand stood at 73.5%. By 2013, Census data showed home-ownership had fallen to 64.8%.

Fun Fact #3: In August this year, Auckland’s average house price reached – and passed – the $1,000,000 mark.

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Make no mistake, housing has become a crisis in New Zealand as this May poll for  a TV3/Reid Research Poll highlighted;

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Even 61% of National voters accepted the new reality in our once-egalitarian nation. Housing unaffordability (for the middle classes) and homelessness (for beneficiaries and the working poor)  could no longer be ignored.

Stepping back to 20 August 2007, National’s newly-elected leader, John Key, made an impassioned speech to the  Auckland branch of the New Zealand Contractors Federation. In it, he excoriated the then-Clark-led Labour government;

“Over the past few years a consensus has developed in New Zealand. We are facing a severe home affordability and ownership crisis. The crisis has reached dangerous levels in recent years and looks set to get worse.

This is an issue that should concern all New Zealanders. It threatens a fundamental part of our culture, it threatens our communities and, ultimately, it threatens our economy.

The good news is that we can turn the situation around. We can deal with the fundamental issues driving the home affordability crisis. Not just with rinky-dink schemes, but with sound long-term solutions to an issue that has long-term implications for New Zealand’s economy and society.

National has a plan for doing this and we will be resolute in our commitment to the goal of ensuring more young Kiwis can aspire to buy their own home.”

Nine years later, Key’s description of New Zealand’s housing crisis has changed markedly. It is now a “challenge“, as he painfully tried to explain on TVNZ’s Breakfast programme;

“I don’t think it’s a crisis, but prices are going up too quickly. There are plenty of challenges in housing, and there have been for quite some time.”

On 9  November, a Hibiscus Coast couple were the incredibly lucky couple to win the latest multi-million dollar Lotto prize;

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The Radio NZ story further reported;

The man’s wife said at first she thought her husband was joking about the win.

“My head started spinning, my heart was racing and I got the shakes.”

The couple claimed their prize at Lotto’s head office on Thursday afternoon.

“As we sat in the winner’s room, he kept turning to me and saying ‘Am I in a dream?’ and I kept turning to him and saying ‘is this real?'” the woman said.

“We’ve been busting our guts trying to buy our first home,” the winner said.

“We just went to the mortgage broker earlier this week to see what they could do to help. But they just couldn’t make anything work for us.

“We were absolutely gutted and I just said ‘maybe that ship has sailed’.

“But my wife tried to stay positive and said ‘don’t worry, something good will happen for us’.

“I don’t think either of us thought that the something good would be $44 million.”

Note what the woman said here;

“We’ve been busting our guts trying to buy our first home. We just went to the mortgage broker earlier this week to see what they could do to help. But they just couldn’t make anything work for us. We were absolutely gutted and I just said ‘maybe that ship has sailed’.”

When couples have to rely on winning Lotto to be able to afford to buy their first home,  there is something seriously askew in society.

Remember Dear Leader Key’s own words;

“We are facing a severe home affordability and ownership crisis. The crisis has reached dangerous levels in recent years and looks set to get worse. This is an issue that should concern all New Zealanders. It threatens a fundamental part of our culture, it threatens our communities and, ultimately, it threatens our economy.”

In the United States, commentators from the msm, politics, dissident community; and further afield, have rapidly come to the realisation that Donald Trump’s unlikely, unforeseen, and up-till-now improbable victory in the 2016 Presidential  race was predicated on the belated understanding that globalisation and neo-liberalism  have left behind millions of people.

In the Voting Booths across the United States, Consumers became Citizens again, and cast their ultimate sanction against the political establishment and those who supported the neo-liberal orthodoxy. The status quo of Margaret Thatcher and Ronald Reagan (the latter, ironically a Republican like Trump) was utterly repudiated.

The disenchantment and alienation of the Working and Middle classes germinated during the 2008 Global Financial crisis and resulting Great Recession – the effects of which are still with us, eight years late. In the United States, millions of Americans lost their homes.

More than four million Americans have lost their homes since the housing bubble began bursting six years ago. An additional 3.5 million homeowners are in the foreclosure process or are so delinquent on payments that they will be soon. With 13.5 million homeowners underwater — they owe more than their home is now worth — the odds are high that many millions more will lose their homes.

Most telling was this criticism by

Housing remains the biggest impediment to economic recovery, yet Washington seems paralyzed. While the Obama administration’s housing policies have fallen short, Mitt Romney hasn’t offered any meaningful new proposals to aid distressed or underwater homeowners.

Writing for the Huffington Post a year later, David Coates pointed out

“… the vast majority of those four million lost their homes because they lost their jobs, not because they had in better times taken out mortgages that they could not afford.

[…]

It is not the rich who are being foreclosed. It is those on the margin of the core middle class. It is particularly middle class minorities who have taken the greatest hit on both their personal wealth and their associated credit scores. Falling house prices since 2008 have pulled median white net-worth down by 27 percent but median black net-worth down by anywhere between 40 percent and 53 percent.”

All the promises of neo-liberalism had come to nought. Instead millions had lost their jobs and those lucky enough found new work in low-paid service industries. Take-home pay was cut – and Humiliation applied in abundance as ‘compensation’.

The Working and Middle Classes not only lost their job and homes – their new status in low-paid work was precarious.

Events post-2008 hastened the  demise  of the American Dream and the rise of the Precariat, as Richard  McCormack wrote, in February of this year for the Manufacturing and Technology News;

The effects on the U.S. economy caused by 30 years of offshore outsourcing of production and jobs is starting to drive major changes in the American political system. The rise of a “precariat” class of Americans — those who are living “precarious” lives — has created a populist movement that shows no sign of acquiescing to the “establishment” in both the Democratic and Republican parties.

The new precariat comprises a growing class of people who are going nowhere in their jobs, who are insecure and unstable. The group is “experiencing the breaking apart of the American Dream, which is what historically held the country together — the rise of the middle class, with everyone doing better,” notes visiting scholar John Russo of Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor. “It’s not working that way any more.”

Driving the rise of the precariat is a society that is not generating enough wealth. De-industrialization, the shift of major goods-producing industries to foreign nations, and both the Republican and Democratic establishment’s embrace of free trade, are leading to a populist uprising.

The precariat is becoming one of the largest classes of Americans, encompassing far more than blue-collar workers who have been slammed by economic forces outside of their control. It now includes millions of Americans with college degrees who are under compensated or can’t find full-time employment with benefits.

As white-collar jobs have been outsourced, Americans with more than high-school degrees are starting to see their prospects “mirror those of the working class,” says Russo. “That insecurity and instability is now part of their life. That is why this new group is not yet a class in itself. It hasn’t defined what it is going to be.”

It is fragmented, but it is big, and much of it is angry.

In his article, McCormack quotes John Russo from the Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor;

“As steady formal work has been disappearing over time, informal work began to move beyond traditional concepts such as consulting, internships, subcontracting, privatization and intermittent employment,” Russo explains. “Rather than the continued rise of the formal economy, it is the informal economy that is growing.”

The precariat is “potentially all of us united by the fear of insecurity,” he notes. It is made up of “individuals living precarious and insecure existences lacking employment security, job security, income security, skill security, occupational security and labor market security.”

This is no longer the underground economy, but includes displaced individuals from the public and private sectors, millennials dealing with mountains of student debt, and baby boomers forced into early retirement without enough savings to support themselves.

There is little public assistance for the precariat class and “they’re not making demands to get better wages or improved benefits [because they] are replaced easily,” Russo notes.

Three years after Coates’ story,  and nine months after McCormack’s insightful analysis of the public mood, Trump’ ascendance as America’s 45th President was complete. Trump won the States where blue-collar workers had suffered the most.

The story of globalisation and neo-liberal “reforms” of our own economy has followed a familiar story; loss of long-term employment; ever-increasing need for re-training; the rise casualisation and contract piece-work; and the increase of lower-paid service-work.

Depressingly, economist Shamubeel Eaqub has predicted;

“The workplace is likely to be further casualised. “

Which adds further hopelessness to New Zealanders increasingly locked out of what was once known as the Great Kiwi Dream of home-ownership.

The National government ostensibly understands the notion of aspiration, as Dear Leader Key said six years ago;

“I want New Zealanders to be aspirational – to want more for themselves and their families, and to know that they have opportunities to do that.”

Those words ring hollow as National scrambles frantically to make itself  “look busy”, trying to alleviate the dual crisis of  worsening home ownership and homelessness.

Bennett’s suddenly-announced  policy of bribing state house tenants with (up to) $5,000 was widely seen as a panic-driven, ad hoc policy. It certainly caught Finance Minister Bill English by surprise, having no forewarning of Bennett’s media announcement on the issue.

The twin tsunami-waves of homelessness and housing unaffordability appears to have utterly over-whelmed National Ministers.

As Trump’s victory in the US Presidential election has demonstrated with crystal clarity, Consumers can easily become  Citizens again, re-discovering the power of their Vote. When Citizens’ anger becomes focused, and a perceived solution (or even just an opportunity to say “FUCK YOU!” to the Establishment) is put before them – they will vote for it.

Especially when they have lost so much, and have little left to lose.

Such was the case of  the US presidential elections, and before that, the ‘Brexit’ Vote.

As New Zealanders become more and more conscious of how much they have lost in the last thirty years, they too, will find themselves pissed off.

The opening lines of the song  from ‘Les Miserables’ – Do You Hear The People Sing? – should serve as a reminder to the political establishment in this country;

“Do you hear the people sing?
Singing the song of angry men?”

The Great Kiwi Dream of home ownership was never predicated on the long-odds offered by  a little yellow piece of paper;

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Home ownership should not be a Lottery.

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References

Otago Daily Times: Homelessness increasing in NZ

Fairfax media: NZ home ownership at lowest level in more than 60 years

Radio NZ: Auckland’s average house value tops $1 million

TV3 News: Government gets thumbs down on housing

Scoop: Key – Speech to New Zealand Contractors Federation

TVNZ: Is there a housing crisis? John Key fails to say yes or no after being put on the spot

Radio NZ: Claimed – $44 million lotto prize

NY Times: The One Housing Solution Left – Mass Mortgage Refinancing

Huffington Post: America’s Half-Forgotten Housing Crisis

Manufacturing and Technology News: The Rise Of The American ‘Precariat’ – Globalization And Outsourcing Have Created A Combustible Political Culture

Chicago Tribune: How Trump won the presidential election – Revenge of working-class whites

Fairfax media: Shamubeel Eaqub – Job casualisation a global phenomenon

NZ Herald: John Key’s speech to the National Party convention

Interest.co.nz: Paula Bennett announces plan to offer $5,000 to homeless Aucklanders and state house tenants to leave Auckland

TV3 News: Govt to help fund Auckland homeless to move

Metrolyrics: Les Miserables – Do You Hear The People Sing?

Previous related blogposts

Can we do it? Bloody oath we can!

Budget 2013: State Housing and the War on Poor

Budget 2013: State Housing and the War on Poor

National recycles Housing Policy and produces good manure!

Government Minister sees history repeat – responsible for death

Housing Minister Paula Bennett continues National’s spin on rundown State Houses

Letter to the Editor – How many more children must die, Mr Key?!

National under attack – defaults to Deflection #1

National Housing propaganda – McGehan Close Revisited

Housing; broken promises, families in cars, and ideological idiocy (Part Tahi)

Housing; broken promises, families in cars, and ideological idiocy (Part Rua)

Housing; broken promises, families in cars, and ideological idiocy (Part Toru)

Another ‘Claytons’ Solution to our Housing Problem? When will NZers ever learn?

National’s blatant lies on Housing NZ dividends – The truth uncovered!

National and the Reserve Bank – at War!

The seductiveness of Trumpism

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This blogpost was first published on The Daily Blog on 15 November 2016.

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The seductiveness of Trumpism

15 November 2016 9 comments

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The 5 percent of Americans with the highest incomes now account for 37 percent of all consumer purchases, according to the latest research from Moody’s Analytics. That should come as no surprise. Our society has become more and more unequal.

When so much income goes to the top, the middle class doesn’t have enough purchasing power to keep the economy going without sinking ever more deeply into debt — which, as we’ve seen, ends badly.

[…]

The real reason for America’s Great Regression was political. As income and wealth became more concentrated in fewer hands, American politics reverted to what Marriner S. Eccles, a former chairman of the Federal Reserve, described in the 1920s, when people “with great economic power had an undue influence in making the rules of the economic game.” With hefty campaign contributions and platoons of lobbyists and public relations spinners, America’s executive class has gained lower tax rates while resisting reforms that would spread the gains from growth.

Yet the rich are now being bitten by their own success. Those at the top would be better off with a smaller share of a rapidly growing economy than a large share of one that’s almost dead in the water. – Robert Reich, New York Times, 3 September 2011

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Neoliberalism as never been, and is not, a coherent set of economic principles, the presence or absence of which in any given policy prescription determines the strength or weakness of its ideological credentials. Indeed, neoliberalism, far from being some sort of neo-classical economic crusade, is what it has always been: the fearsomely coherent political project of global capitalism’s ruling elites.

Its anti-state/free market propaganda notwithstanding, neoliberalism’s purpose has always been to use the coercive power of the state to thwart and/or reverse any and all attempts to empower the many at the expense of the few.

As Professor David Harvey notes in his A Brief History of Neoliberalism:

“Redistributive effects and increasing social inequality have in fact been such a persistent feature of neoliberalisation as to be regarded as structural to the whole project. Gérard Duménil and Dominique Lévy, after careful reconstruction of the data, have concluded that neoliberalisation was from the very beginning a project to achieve the restoration of class power”.” – Chris Trotter, Bowalley Road, 30 May 2015

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“…the share of population living in poverty is at a very high level. The latest data shows almost 15 percent of the American population of 46.7 million people living in poverty, and those numbers are even higher, if you concentrate on certain groups, particularly minority, single parents, especially female-headed families, and it is heavier for young people and those with disability.

So, with such large share of the population living below the poverty line, this has important macroeconomic issues, let alone the concern that is of a more political nature, which we will not address. But if we look at the macroeconomic impact, not only does poverty create significant social strains, it also eats into labor force participation, and undermines the ability to invest in education, to invest in health, to invest in training, and by holding back economic and social mobility it creates not only a poverty impact on this generation, but it certainly can make it more sustainable inter-generationally.” – Christine Lagarde, Managing Director, IMF,  22 June 2016

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In America, the full impact of a neo-liberal agenda hit Kansas so harshly that  comedian/commentator, Seth Meyer, was unflinching with his scathing, mocking, satire at the travesty that had resulted;

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After his election in 2010, Republican  Kansas state governor, Sam Brownback, made massive cuts personal and business income taxes on the neo-liberal premise  that low (and in some cases, nil) taxes  would result in massive job-creation and increased economic activity by local businesses.

The tax-cuts were heavily supported by right-wing billionaire Koch Brothers;

Kansas also completely erased the income tax bills for the owners of certain “small” businesses, totaling 330,000 by this year and including a host of subsidiaries of Wichita-based Koch Industries. The Koch-funded organization Americans for Prosperity helped Brownback push the bill and has remained a staunch defender of the changes.

The result was utterly predictable;

The predicted job growth from business expansions hasn’t happened, leaving the state persistently short of money. Since November, tax collections have fallen about $81 million, or 1.9 percent below the current forecast’s predictions.

[…]

Last month, Brownback ordered $17 million in immediate reductions to universities and earlier this month delayed $93 million in contributions to pensions for school teachers and community college employees. The state has also siphoned off more than $750 million from highway projects to other parts of the budget over the past two years.

School teachers, college employees, the State University, schools, poverty-programmes, medicare, and other services all faced budgetary cuts.

The business website, Bloomberg, was less than impressed;

Kansas has lagged Nebraska in job creation since 2011, and the gap has widened since late 2014. Instead of adding the 25,000 jobs a year that Brownback promised, Kansas actually lost 5,400 jobs over the 12 months ending in February.

The author, Justin Fox,  made the eye-brow-raising under-statement of the year by declaring;

This doesn’t look great for Kansas.

There’s an age-old saying for such  under-statements. Click here.

Little wonder that Fox headed his article; “Kansas Tried Tax Cuts. Its Neighbor Didn’t. Guess Which Worked“.

The owners/editor of Bloomberg appeared to ‘freak out’  at the prospect of publishing a story so utterly revealing of such an epic fail of  neo-liberal dogma. The editor/owner posted at the bottom of Fox’s article;

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Of course not. That might be embarrassing. Having to admit to the Masses that one of neo-liberalism’s main tenets is actually bullshit, is not a good look.

Even Governor Brownback’s fellow Republicans were panicking, as they faced re-election this month, and the wrath of voters;

Now many of the same Republicans who helped pass Brownback’s plan are in open revolt, refusing to help the governor cut spending so he can avoid rolling back any of his signature tax measures.

[…]

“Let him own it,” Republican Rep. Mark Hutton said. “It’s his policy that put us there.”

[…]

“We’re growing weary,” said Senate President Susan Wagle, a conservative Republican from Wichita. While GOP legislators still support low income taxes, “we’d prefer to see some real solutions coming from the governor’s office,” she said.

In an example of how Republican’s take personal responsibility, Governor Brownback told journalists who was to blame for his “real live experiment“;

“You’ve got some global issues that are going on that we have absolutely no control over.” 

That’s how you take Personal Responsibility: blame others.

As Kansas is slowly bankrupted, Trump appears not to have learned from Brownback’s economic ineptness, saying;

Under my plan, I’ll be reducing taxes tremendously, from 35 percent to 15 percent for companies, small and big businesses. That’s going to be a job creator like we haven’t seen since Ronald Reagan. It’s going to be a beautiful thing to watch. Companies will come. They will build. They will expand. New companies will start. And I look very, very much forward to doing it.” – Donald Trump

Trump’s plan to cut taxes mirrors the Republican “experiment” in Kansas. It simply remains unclear why Trump believes the results will be any different.

Meanwhile, here in New Zealand, the re-distribution of wealth up-ward, through successive tax-cuts for the richest, echoed that taking place thousands of kilometres away in a central US state.

In 2009 and 2010, National cut taxes and increased gst. (There have been seven tax cuts since 1986.) This shifted wealth up-ward to higher-income earners.

As government revenue fell, budget cuts to spending on services followed;

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Even as recent tax cuts resulted in wealth re-distributed upward; wage growth remaining low or stagnant; and social services reduced – New Zealanders are still not facing the dire economic and social hardship faced by our American cousins.

In September 2011, forward-thinking American economist Robert Reich explained how a worsening economic crisis in the US was affecting the middle classes;

Some say the regressive lurch occurred because Americans lost confidence in government. But this argument has cause and effect backward. The tax revolts that thundered across America starting in the late 1970s were not so much ideological revolts against government — Americans still wanted all the government services they had before, and then some — as against paying more taxes on incomes that had stagnated. Inevitably, government services deteriorated and government deficits exploded, confirming the public’s growing cynicism about government’s doing anything right.

Some say we couldn’t have reversed the consequences of globalization and technological change. Yet the experiences of other nations, like Germany, suggest otherwise. Germany has grown faster than the United States for the last 15 years, and the gains have been more widely spread. While Americans’ average hourly pay has risen only 6 percent since 1985, adjusted for inflation, German workers’ pay has risen almost 30 percent. At the same time, the top 1 percent of German households now take home about 11 percent of all income — about the same as in 1970. And although in the last months Germany has been hit by the debt crisis of its neighbors, its unemployment is still below where it was when the financial crisis started in 2007.

How has Germany done it? Mainly by focusing like a laser on education (German math scores continue to extend their lead over American), and by maintaining strong labor unions.

THE real reason for America’s Great Regression was political. As income and wealth became more concentrated in fewer hands, American politics reverted to what Marriner S. Eccles, a former chairman of the Federal Reserve, described in the 1920s, when people “with great economic power had an undue influence in making the rules of the economic game.” With hefty campaign contributions and platoons of lobbyists and public relations spinners, America’s executive class has gained lower tax rates while resisting reforms that would spread the gains from growth.

Yet the rich are now being bitten by their own success. Those at the top would be better off with a smaller share of a rapidly growing economy than a large share of one that’s almost dead in the water.

The economy cannot possibly get out of its current doldrums without a strategy to revive the purchasing power of America’s vast middle class. The spending of the richest 5 percent alone will not lead to a virtuous cycle of more jobs and higher living standards. Nor can we rely on exports to fill the gap. It is impossible for every large economy, including the United States, to become a net exporter.

Reviving the middle class requires that we reverse the nation’s decades-long trend toward widening inequality. This is possible notwithstanding the political power of the executive class. So many people are now being hit by job losses, sagging incomes and declining home values that Americans could be mobilized.

And mobilised they have been.

Whatever one thinks of Republican presidential candidate, Donald Trump, he has tapped into the psyche of the disaffected; the disenchanted; and the dispossessed. And they are legion in number.

According to US Census Bureau, there are some 43.1 million Americans currently living in poverty – 13.5%. (The Bureau states that poverty has fallen by 3.5 million people since 2014.)

The lives of ordinary Americans is now stressed and wretched, as Australia’s ABC journalist, Elle Hardy recently reported;

When fun-loving 34-year-old George Tabor died suddenly in the town of Tifton in America’s Deep South, his family was bereft.

It confirmed again that the American Dream is a vision that’s moved beyond the reach of millions of its citizens.

George’s family struggled with the immense grief of his loss, but they were also plunged into a financial crisis, not knowing how they could fund his funeral or medical bills.

“The very first day, as we were dealing with the fact that he’s gone, the first thing that was in my mind was that all these bills were about to fall on us,” his older sister Doris Stafford, 36, said.

George and his sisters all worked. Their mother had worked her whole life too. Yet, as workers on minimum pay rates, just coping with weekly needs is an endless treadmill.

George Tabor was in good
healthbefore he suddenly fell ill.
(Supplied: Doris Stafford)

Having savings to buffer sudden emergencies, or even a plan for a more secure future, is a story from Fantasyland for this family, and for up to nearly 70 per cent of Americans, according to a recent survey.

In this election year, as the anger of the marginalised and threatened has taken centre stage, it’s rocked the established verities of American political culture.

The IMF warned in June of social strains if the US fails to address soaring rates of poverty, in this richest of First World economies.

On the ground, it’s the immediate daily strains that occupy people’s minds.

George’s sister Sherry Smith, 31, began receiving George’s medical bills at the apartment they’d shared. Meanwhile, Doris was working out how to come up with $US5,100 ($6,610) for his funeral.

For workers earning about $US290 ($375) a week, the challenge is astronomical.

Robert Reich’s simple infograph (below) demonstrates convincingly that pay rose with productivity until the late ’70s /early ’80s. At that point in our global history, Thatcherism and Reaganism impacted on their respective nations, the UK and USA.

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New Zealand followed half a decade later. We now face our own social fall-out from the introduction of neo-liberalism; high-unemployment; under-employment; unaffordable housing; low wages; student debt; growing child poverty; and a widening wealth/income gap;

In its latest survey of household wealth, Statistics New Zealand found the country’s richest individuals – those in the top 10 percent – held 60 percent of all wealth by the end of July 2015. Between 2003 and 2010, those individuals had held 55 percent.

It is little wonder that with  increasing globalisation, corporations have shifted  jobs  to developing nations where wages are low and working conditions next-to-nil.

Western workers have lost out to their counterparts in China, India, Pakistan, Vietnam, etc.

That has meant vast swathes of US industries closing down until major cities such as Detroit – once a major economic powerhouse for the nation – went bankrupt in 2013. Millions of workers have lost their jobs or have taken lower-paid employment.

The story of George and his family continues;

If there was any mercy in George’s death, it was that when it came, it was immediate. But in the weeks leading to it, there was much that was preventable.

When a persistent cough started nagging, he put it down to smoking. When the hacking began, a doctor’s charges and medicine costs were off-putting.

Finally, coughing and unable to breathe, he asked friends to take him to hospital. Some laughed it off as another prank.

“We didn’t find out he was sick until he’d been in hospital for three days,” Doris says. “We found out on Facebook.”

George had pneumonia. As he lay in a coma, the family assumed he was insured through his job and contacted his employer. Low-wage workers rely on employer-provided health care, or they go without.

“Applebee’s said he wasn’t eligible for insurance until next January, even though he’d been working there a year and a half,” Sherry said.

Frequent visits from the hospital’s “financial people” compounded their stress.

The family believe that if George had medical insurance, the hospital would have let him stay. Tests revealed he had an abnormal swelling in a heart blood vessel. Corrective surgery was scheduled for November 1, but the hospital sent him home.

“He was sent home with no medication,” Sherry says. “He couldn’t walk, his feet were still swollen. He tried to stand and he fell over.”

Private health insurance costs thousands of dollars a year in the US. Even the much-vaunted Obamacare seems to miss its targets.

“At first I thought Obamacare would be a good idea,” Doris says. “When they told me the price, $57 a week — it was $57 I didn’t have in the first place.”

The family has always voted Democrat. But this time it’s different. With worries about jobs, and living in quiet despair, the Republican candidate is winning her over.

George Tabor’s family was not alone. There were millions of George Tabor Families throughout the United States. And they were no longer listening to the political establishment.

In a moment of prescience, Billionaire investor Warren Buffett warned;

Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.

Buffett wrote his words in August, 2011.

Since the late 1970s, both Republican and Democrat parties have failed to address the growing threat to Middle Class stability, and to Working Class aspirations in the US. Both parties had deserted their constituents, leaving people stressed, desperate, and fearful.

The forces of globalisation/neo-liberalism/free market has robbed millions of American families of what they considered their birthright – a high standard of living unparalleled in the world, and opportunities for their children.

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There was a vacuum left by the political establishment, and Donald Trump shrewdly colonised that space. Trump had created the new “reality” that Buffett warned us about.

The feeling of desperation and alienation from both Working and Middle classes is now so palpable that mainstream media are finally coming to terms with that disaffection and understand what constituted the almost-irresistable force that propelled an ego-driven, political novice to the  White House.

Despite Trump being a seriously flawed, undisciplined individual who has alienated large numbers of American voters; women, blacks, Hispanics, LGBT, disabled – I think we all underestimated the anger of the Masses that Trump was feeding off.

I glimpsed a miniscule fraction of that anger last week when I watched ‘Sixty Minutes‘. A journalist was talking to five disaffected blue-collar workers in Ohio.

These were supposedly Democrat-voting, Union-loyal, workers.

But at least three openly declared their intention to vote for Trump (story starts at 25:12);

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It was at that point that I finally understood what inexorable force was propelling a bloated billionaire to the most powerful position on this planet.

As former Republican Party operative, Mike Lofgren, wrote in September 2011;

It should have been evident to clear-eyed observers that the Republican Party is becoming less and less like a traditional political party in a representative democracy and becoming more like an apocalyptic cult, or one of the intensely ideological authoritarian parties of 20th century Europe. This trend has several implications, none of them pleasant.

[…]

What do the Democrats offer these people? Essentially nothing. Democratic Leadership Council-style “centrist” Democrats were among the biggest promoters of disastrous trade deals in the 1990s that outsourced jobs abroad: NAFTA, World Trade Organization, permanent most-favored-nation status for China. At the same time, the identity politics/lifestyle wing of the Democratic Party was seen as a too illegal immigrant-friendly by downscaled and outsourced whites.

While Democrats temporized, or even dismissed the fears of the white working class as racist or nativist, Republicans went to work.

Lofgren‘s entire piece is worthwhile reading.

So the ground was fertile for someone who would supposedly articulate the feelings of betrayal and loss for millions of disaffected, confused, resentful Americans.

People are pissed off, and they ain’t going to take it any more. They are fighting back. Like their British counter-parts during the “Bexit/EU” referendum, a considerable segment of American voters lashed out at “The Establishment”. It’s as if millions of Americans suddenly woke up, realising the supreme power of their vote.

The system could take away their jobs; their standard of living; their aspirations – but their right to vote was cast in granite-stone. Like their right to “bear arms” and casually shoot each other at whim, it was guaranteed by their Constitution.

Early last century, when Russians lashed out at the autocratic Establishment  of the Russian royal family, they installed a far-left  regime, the Bolsheviks.

But Americans don’t do left-wing revolutions.

When Americans revolt en-masse, they lurch to the Right.

In this case, a dangerously nationalistic, reactionary Right that is closer to the French National Front than the US Republican Party. (Though many would assert that the only real difference between the French National Front and the US Republican Party is that the latter is willing to tolerate immigrants for cheap, exploitable labour.)

Those who voted for Trump have done so for a myriad of reasons, many of which are fluid and inter-changeable. They see Trump as someone outside the political Establishment; someone who will be their champion.

But Donald Trump will not be that champion. Demogogues with simplistic answers to complex problems rarely are. History is replete with demagogues who have exploited peoples’ legitimate discontent to  gain power and subsequently wreaked havoc.

If Americans think they have just elected the solution to their problems, they are sadly mistaken.

Their problems have only just begun.

Meanwhile, from a global perspective, the Left is confronted with a serious crisis of confidence: when Working Class people turn to jingoistic demagoguery for solutions, why is our message not getting through?

Perhaps that is the real crisis confronting us.

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References

New York Times: The Limping Middle Class

International Monetary Fund (IMF):  Transcript of a Press Conference on the Conclusion of the 2016 Article IV Consultation Mission with the United States

Youtube: Kansas Tax Cuts –  A Closer Look

Motherjones: Trickle-Down Economics Has Ruined the Kansas Economy

The New Yorker: Covert Operations

CBS News: Kansas loses patience with Gov. Brownback’s tax cuts

Kansas City Star: Gov. Sam Brownback cuts higher education as Kansas tax receipts fall $53 million short

Bloomberg: Kansas Tried Tax Cuts. Its Neighbor Didn’t. Guess Which Worked

Democracy Now: Expanding the Debate – Jill Stein “Debates” Clinton & Trump in Democracy Now! Special – Part 1

NZ Kindergartens Inc: Funding cuts take effect

NBR: Leaked document shows 10 District Health Boards face budget cuts – King

Fairfax media: Police shut 30 stations in effort to combat budget cuts

Radio NZ:  Patients suffering because of surgery waits – surgeon

NZ Family Violence Clearinghouse: Lead up to Budget 2016 – Govt announces funding cuts, increases and reprioritising

Radio NZ: Funds cut from parents-as-teachers scheme

TVNZ News: Kiwi charities and NGOs face closure with impending funding cuts

Radio NZ: Unemployment rises, wage growth subdued

ABC News:US election: Life and death in Georgia and the end of the American Dream

US Census Bureau: Income, Poverty, and Health Insurance Coverage – 2015

USA Today:  Detroit becomes largest U.S. city to enter bankruptcy

Radio NZ: 10% richest Kiwis own 60% of NZ’s wealth

Truthout: Goodbye to All That – Reflections of a GOP Operative Who Left the Cult

The New York Times: Stop Coddling the Super-Rich – Warren Buffett

Prime TV: Sixty Minutes

Other Blogposts

Bowalley Road: Clever Strategy vs Desperate Tactics – Hillary Clinton Allows Donald Trump To Survive The Second Presidential Debate.

Bowalley Road: Raising Nixon’s Ghost

Bowalley Road: Why the Greater Good requires Americans to vote for the Lesser Evil – Hillary Clinton

Bowalley Road: The Better Angel: Why Birgitte Nyborg Beats Donald Trump

Gordon Campbell: on the US election home stretch

Kiwipolitico: Social origins of the Politically Absurd

No Right Turn:  This is not what democracy looks like

Public Address: The Long, Strange Trip

The Daily Blog: LaQuisha St Redfern vs Donald Trump

The Daily Blog: The horror of Clinton winning vs the horror of Trump winning – voting for the lesser of two evils is still voting for evil

The Daily Blog: American Demockery

The Daily Blog: The latest Trump/Clinton machinations and why gender is the real societal fault line this election

The Daily Blog: Fear And Loathing Of A Democratic Presidency: Where To For The American Left

The Standard: Trump final campaign ad

The Standard: Donald Trump is good

The Wireless: Uncovering the art of an ugly election

Previous related blogposts

Letter to the editor – Donald Trump and the lessons of history

Dumber and dumber, scarier and scarier

When Fact Follows Fiction – The Weird World of U.S. Politics

Trump – the cultivation of demagoguery

Black Ops from the SIS and FBI?

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

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= fs =

Expose: Winston Peters; the 1997 speeches; and neo-liberal tendencies

13 September 2016 3 comments

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winston peters no yes maybe who the fuck knows

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On Radio NZ’s Morning Report, on 5 September, NZ First leader  Winston Peters, told Guyon Espiner that his party would be a force for major economic change. NZ First, he insisted, would spell an end to neo-liberalism;

“It’s no use having what we’ve had, perhaps you can call it tweedledum and tweedledummer, who have persisted with the neo-liberal experiment. Who have gone along with allowing the foreign banks to dominate New Zealand market for example. Allowed the overseas ownership of our share martket which went from 19% when this experiment started to beyond 70% now.

[…]

New Zealand First is not going to swap one side for the other side because they think it’s their turn so that they can carry on the same economic direction they’re going.

[…]

You’ve got a group on the Right, with a whole lot of cling-ons. You’ve got an unholy wedding or pre-nuptials on the Left, and we don’t want to be part of either of those things. We’re out for economic change and we intend to be successful.

[…]

We believe, if we’ve succeeded in getting our message away then economic and social direction change is a certainty.

[…]

And we’re not going to go around starting negotiating pre-election, with parties who have proven since the last 32 years, one started this economic disaster and the other one has continued it.”

Peters’ repudiation of the neo-liberal economic model had been made two months earlier on TVNZ’s Q+A, when he told Corin Dann;

Corin Dann: Do you think globalisation has failed?

Winston Peters: Of course it has. Because, see, it’s not so much about free trade, so to speak; it should be about fair trade, and there’s a world of difference.

Corin Dann: What is the alternative to globalisation if you believe that it’s failed? Is it a return to protectionism, nationalism?

Winston Peters: No, no, it’s not. It’s being like Norway; it’s being like Switzerland; it’s being like Taiwan. It’s being as smart about protecting the interests of the economy you’re trying to build rather than just going along with being told internationally what you must accept. There’s a world of difference, and right around the Western world, there is a coming now rejection of the neoliberal experiment after 30, 35 years. It is under serious challenge now.

Corin Dann: Mr Peters, globalisation has lifted millions and millions of people out of poverty. It’s brought New Zealand great diversity; it’s brought us all of the mod cons that we take for granted – our phones – everything like that. Hasn’t globalisation been great?

Winston Peters: You’re just confusing sound trade arrangements with globalisation. Globalisation in the UK consequence meant they were being told, out of the European Commission – unelected, in the UK Parliament – they were being told how their laws would be. 55% of the laws in the UK were being dominated out of Brussels. Now, no self-respecting country’s going to take that.

Peters’ comments roundly rejected globalisation, free trade, neo-liberalism. He  inferred protectionism when he told Dann, “It’s being as smart about protecting the interests of the economy you’re trying to build rather than just going along with being told internationally what you must accept“.

However, in a speech made in 1997, when Peters was Treasurer in the National-NZ First Coalition Government, he told the NBR Deloitte Touche Tohmatsu Government to Business Forum that he would be pursuing conservative fiscal management; supporting  an “open, internationally competitive economy”; lower taxes; and a de-regulated market.

Peter’s speech is in the form of a hard-copy in this blogger’s possession. It is headed “Office of the Deputy Prime Minister & Treasurer” and is dated 11 February 1997.  It was embargoed till 8.35am for that day, when Peters made his speech at Wellington’s up-market Park Royal Hotel.

Peters began by saying that there were “four core economic principles at the heart of the government’s strategy;

  • “sound, stable government
  • ensuring an economic climate conducive to sustainable development and growth, more employment opportunities, high quality education and social services, a strong commitment to low inflation, prudent and conservative fiscal management and over time, lower taxes and reduced public debt
  • an open, internationally competitive economy, a strong export sector, and policies to stimulate private sector and individual performance
  • planning for the country’s future, emphasising intergenerational fairness and increasing the nation’s saving”

Later in the speech, Peters reiterated the Coalition’s fiscal policy;

“That is why we are committed to low inflation, prudent and conservative fiscal management, lowering taxes and reducing public debt.”

Peters made clear that those were the core principles of the National-NZ First  Coalition. They  also happen to be core ideological tenets of neo-liberal doctrine.

Peters’ “core principles” are mirrored by the so-called “NZ Initiative” (formerly the Business Roundtable), a right-wing, neo-liberal think-tank;

We [NZ Initiative] are committed to developing policies that work for all New Zealanders, and we believe that promoting such policies will benefit all of our members as a matter of fact. But we are certainly an Initiative that usually prefers Adam Smith’s invisible hand to government’s visible fist.

Most of all, though, we believe that our goals and values are similar – if not identical – to what most New Zealanders want to see achieved:

  • A good education system.
  • Affordable housing.
  • An open economy.
  • A free and democratic society.
  • The protection of our natural resources and heritage.
  • Sound public finances.
  • A stable currency.

The NZ Initiative/Business Roundtable also promotes lower taxes; a competitive, open economy; and prudent and conservative fiscal management – in short all the core principles expressed by Peters in February 1997.

In case his audience did not understand Peters’ commitment to “an open, internationally competitive economy” he repeated himself again, in his speech;

“The key to maintaining an open internationally competitive economy  will be:

  • stable macroeconomic policies;

  • de-regulated, competitive and open market;

  • quality public services provided as efficiently as possible;

  • and the lowest possible taxes”

He went on;

“Another reform… removing restrictions on air services to and from New Zealand is important for reducing barriers to trade and tourism. To this end, the government remains committed to reciprocal liberalisation where possible…

[…]

To make the most of the opportunities a global economy provides…”

Not content to cement in an  adherence to a neo-liberal agenda, Peters then attacked the social welfare system in this country – another prime target of the New Right;

“What distinguishes this government is the prominence given to the value of self-reliance… moving people away from State dependence to independence.”

Bear in mind that Peters was giving his speech only six years after Ruth Richardson’s notorious “Mother of All Budgets” in 1991. By the time Peters addressed the Government to Business Forum in 1997, 19% of households were already living below the poverty line and unemployment was at 6.8%. By June the following year it had ballooned to 7.9%.

Peters’ response was to attack and demean the welfare system that  kept many of these people alive as the scourge of neo-liberalism ravaged the country.

Peters’ speech continued, parroting many of neo-liberal cliches that we are now so familiar with;

“We want to create an environment which encourages New Zealanders to move away from welfare dependency to employment. And for those who still need welfare support, we want a move away  from a welfare mentality to a positive attitude  and greater acceptance of social obligations.

It is also about people taking greater responsibility for their futures rather than simply relying on the state.”

Peters was promoting the Cult of  Individualism and cutting back state support – another basic tenet of neo-liberalism.

Next, he took a swipe at families and their “reliance” on welfare;

“A prime area needing attention is the family… this government will create an environment which instils greater levels of parental responsibility.

Our destiny is ultimately in the hands of individual New Zealanders. Breaking the cycle of dependency means taking primary responsibility for our own welfare and the welfare of our families.

This government expects each and every New Zealander to… live up to their responsibilities…”

This speech and it’s conservative message sounds ominously as if the  ACT Party might have given it;

“To alleviate poverty, reduce dependency and shift able-bodied people from welfare to work.”

“To put personal responsibility, self-reliance and work above welfare dependency.”

“Welfare must not put children at risk by undermining the two-parent family.”

“True compassion demands welfare that provides a hand up to work, independence and a better future.”

Source: Welfare and The Family, ACT Party policy, September 2014

In  a later speech by Peters, on 28 February 1997, to the American Chamber of Commerce in Auckland, Peters reiterated his commitment to a free market regime;

“…Maintaining an open, internationally competitive economy, supporting a strong export sector, particularly  by managing cost structures downwards and continuing deregulation and policies to stimulate private sector and individual performance.

[…]

The government’s approach to fiscal management is orthodox and consistent

[…]

Maintaining an open and competitive enterprise economy is essential because an open and competitive economy drives New Zealand firms to lift their game, and provide a more profitable investment base for our savings.

Let me be clear, this government is not opposed to foreign investment. When it is in the national interest we welcome all investment that boosts employment, productivity and growth.”

Peters was reassuring his capitalist audience; this man was not for ‘turning’.

Conclusion

There is little clear evidence that Peters is hostile to neo-liberalism, whether of the brutal Ruthenasia variety or the more insidious neo-liberalism-with-a-relaxed-face.

Instead, the evidence from his 1997 speeches is there for all to see. Peters may profess to have distanced himself from the neo-liberal experiment, but his own words betray him.

There is not one monolithic conservative/centre-right party in New Zealand, but two, distinct parties on the conservative spectrum. Just as Australia has the Liberal Party and it’s own rural-based National Party,  we have National and NZ First. Like left-wing voters who have a choice between Labour or the Green Party,  conservative voters in this country have a choice between National and NZ First.

As long as everyone is crystal-clear on this; NZ First’s leader remains committed to neo-liberalism.

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Addendum1

The following are scanned images of Winston Peters’ 1997 speech to the Government to Business Forum;

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Winston Peters - Government to Business Forum - 1997 (1)

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Winston Peters - Government to Business Forum - 1997 (2)

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Winston Peters - Government to Business Forum - 1997 (3)

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Addendum2

The following are scanned images of Winston Peters speech, on 28 February 1997, to the American Chamber of Commerce in Auckland;

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winston peters - american chamber of commerce - 1997 (1)

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winston peters - american chamber of commerce - 1997 (2)

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winston peters - american chamber of commerce - 1997 (3)

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winston peters - american chamber of commerce - 1997 (4)

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winston peters - american chamber of commerce - 1997 (8)

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Addendum3

All media enquiries can be made to the author at fmacskasy@gmail.com.

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References

Radio NZ: Morning Report – NZ First leader targets youth (audio)

TVNZ: Q+A – Winston Peters interviewed by Corin Dann

NZ Initiative: About Us

NZ Initiative: The Case for Lower Taxes

Business Roundtable (NZ Initiative): Submission to the Finance and Expenditure Committee on the 1997 Budget Policy Statement (March 1997)

Te Ara Encyclopedia: Mother of All Budgets

Ministry of Social Development: Assessing The Progress On Poverty Reduction

Statistics NZ: When times are tough, wage growth slows

ACT Party: Welfare and The Family

Other Blogs

Fightback: Nationalism and the left: A reflection on Winston Peters and the Northland by-election (2015)

The Standard: Can We Trust Winston Peters?

Previous related blogposts

An open letter to Winston Peters…

John Banks and Winston Peters, Apples and Oranges

Winston Peters recycles pledge to “buy back state assets” – where have we heard that before?

Northland by-election – a damning poll and a damnable lie?

The Mendacities of Mr Key # 18: “No question – NZ is better off!”

A Message to Winston; A Message to John Key; and a Message to the Regions

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This blogpost was first published on The Daily Blog on 7 September 2016.

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Andrew Little’s “dangerous” speech – a cunning plan for the Middle and the Left

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Labour Party - Andrew Little - pre-budget speech (24)

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Wellington, NZ, 22 May – Speaking to a fully packed downtown conference centre in Wellington, on a cold, gloomy rainy afternoon, Labour-leader, Andrew Little launched into a fiery attack on the current National Government focusing  on it’s inarguably lack-lustre track record for the past eight years.

With a heavy media presence, Rimutaka MP, and Labour spokesperson for Education, Chris Hipkins, was tasked with making the introduction;

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Frank Macskasy Frankly Speaking blog fmacskasy.wordpress.com Labour Party - Andrew Little - pre-budget speech

 

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Hipkins said;

“Certainly there is a mood for change around the country now and that mood for change is increasing.  But the question that everybody has been asking us, is is Labour ready? And that’s a fair question to ask.”

“They say that being the leader of the Opposition is the toughest job in politics. Well I can tell to tell you that Andrew has taken to that tough job in politics like a duck to water.”

“In all of that time that he has been doing that job, and all the hours he has put in, he has never forgotten why is there; for people. And that is why the Labour Party is here.”

The short  introduction over, the audience of committed Labour members clapped enthusiastically as Little mounted the podium;

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Frank Macskasy Frankly Speaking blog fmacskasy.wordpress.com Labour Party - Andrew Little - pre-budget speech

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To say that Little had plenty of material to work with would be an understatement as the growing crisis for both affordable housing; skyrocketing rentals; and shortage of state houses have been well publicised in the media and by bloggers.

From just one day in Wellington’s Dominion Post Monday 23 May edition;

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dominion post - housing crisis

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Jane Bowron’s piece especially – Marae shows up Government with haere mai to homeless  – is a must-read, head-on assault on the warped ‘values’ which currently afflict our government and some peoples’ thinking.   Yet, the Dominion Post is hardly known as a bastion for marxist agitation.

Little wasted no time as  he launched into a recitation of National’s failures after eight years in government;

“It’s becoming harder for many people to get ahead.  Harder to find a good job or get a pay rise. Harder to find a home, put some savings aside, or get the health care you need. Parents are paying more for their childrens’ education, but our schools aren’t performing as well.

[…]

Look at the headlines from the last couple of weeks: Children sleeping in cars or forced to lives in houses that make them sick; plummeting home ownership; rising unemployment, [and] stalled wages for many people.

[…]

And while the few at the very top got to enjoy special rules that meant they didn’t have to pay their fair share – everyone else is paying the cost.

We’ve seen increases in unemployment. There are now 144,000 people out of work in New Zealand, 40,000 more than when National took office.”

Little is correct on those stats. According to the convenient graphs and data from US website, Trading Economics, the increase in unemployment in New Zealand has remained stubbornly high;

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unemployed persons 2008 - 2016

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Little explained that the unemployment problem was worse than just sheer numbers;

“And it’s not just that more people are out of work – it’s that many more are out of work for longer.  Under this government the number of people unemployed for more than a year has tripled – up over 11,000 since they took office.

The situation is especially tough for our young people. Under this government the number of young people who aren’t in work, education or training has risen by more than 26,000.

The truth is those are the young people this government has given up on – the ones they label as ‘pretty damn hopeless’.”

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Bill English describes some Kiwis looking for work as 'pretty damned hopeless'

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Little pointed out the numbers who had not gotten any wage increase in the last year, and more importantly that workers were missing out on the benefits of economic growth;

For those in work, getting a pay rise has become harder. 43% of New Zealanders saw no increase in their incomes at all in the last 12 months.

[…]

Under the last Labour government, the share of economic growth going to wage and salary earners was over 50%.

Today, it’s 37%.

The slice of the economy going to workers has fallen each year under National.

This year, that lost income works out to be fifty bucks a week for the average family.

His comments will most likely resonate with those workers who feel they are working harder and longer hours – and yet do not seem to be progressing. The back-stories of mega-rich tax-evaders hoarding their wealth in tax havens will fuel feelings of resentment by those who work and pay their  taxes so we can have roads, hospitals, schools, etc;

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Panama Papers investigation 'NZ absolutely, conclusively is a tax haven'

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Little then hit the big story of the last few weeks – growing homelessness in New Zealand. Coupled with a fall in home ownership rates since 1991 (from 74% in 1991 to 64% in 2015), and we get a clear picture how “free” market economics has impacted on our society.

National’s response was to deny that a problem existed in New Zealand at all. According to Social Housing Minister Paula Bennett;

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"I certainly wouldn't call it a crisis. I think that we've always had people in need."

“I certainly wouldn’t call it a crisis. I think that we’ve always had people in need.” – Paula Bennett, 20 May 2016

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Andrew Little’s response was less dismissive of the challenges facing 21st century New Zealand families;

“When kids are sleeping in cars. That’s a crisis.

When families are crowded into garages. That’s a crisis.

When an entire generation is locked out of ever owning their own home, that is a crisis.”

He firmly sheeted home blame for our current predicament, in no uncertain terms;

“Instead of owning up to that and fixing it, the government is siding with property speculators and land bankers, while everyone else misses out.

Every initiative our bumbling housing minister Nick Smith has tried on housing has failed. Rather than go after the causes of the problems, he’s flailed around with gimmicks.

Remember special housing areas? Fewer than 1000 homes actually built.

Remember his gimmick from the last Budget? Releasing crown land? It turned out to include substations, cemeteries and even the back yard of Government House.

While the government’s been tinkering, the problem’s gotten so much worse.

In March, the average house price in Auckland rose by over $2,200 a day.”

For maximum effect, Little repeated that startling factoid to the audience and media;

“Let me say that figure again. Over twenty two hundred dollars a day.”

On Radio NZ’s political panel on Monday, 23 May, former Labour Party President, Mike Williams complimented Andrew Little’s speech, referring to it as “dangerous”;

“Middle New Zealand is concerned about health, education, housing, and the economy. And I think, as far as John Key is concerned, this is the most dangerous speech a Labour leader has given since Helen Clark resigned.”

Williams also made an interesting observation regarding how Middle New Zealand felt about their rising house values;

“I think there’s a bit of schizophrenia going on in Middle New Zealand which is showing up in the UMR numbers. If you own a house you are feeling pretty good because the value of your asset has been going through the roof. However, if you’ve got kids, you’re worried about their schooling; you’re worried about will they get a house; and  you’re worried about will they get a job that pays enough  to pay for a house. So I think, that, yes,  home-owning New Zealanders [are]  feeling ok, but parents are not.”

Little then addressed the growing under-funding of  public healthcare;

According to Infometrics, we’ve had $1.7 billion dollars cut in real terms from our health budget over 6 years.

That’s meant that 160,000 people in the last 5 years have been unable to get the appointment they need with a specialist.”

Which seems to be a replay of National’s cuts to the Health budget in the late 1990s;

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acute-heart-surgery-list-nearly-400-otago-daily-times-5-february-1998

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In response, Little promised;

“Under Labour, Kiwis will know that if they get sick, the public healthcare system will be there for them.  That’s why we are committed to meeting the cost pressures that are depriving people of the care they need…

…Budgets are about priorities, and under Labour, health will be a priority again. We shouldn’t be spending money on $3 billion of unaffordable tax cuts when we could be fixing our health system instead.”

Which, if the previous Clark-led Labour government’s actions are anything to go by, can be counted as a solid committment;

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1-5b-injection-for-health-9-dec-2001

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Little was also scathing at National’s taxpayer subsidies being thrown at Charter Schools;

“At the same time as National has poured millions of dollars of taxpayers’ money into privately run charter schools, our public education system is struggling.

In the last year alone, National has cut funding for pupils by $150 each.

And so schools load more costs on to parents in order to fill the gaps.

Ask any parent and they’ll tell you the cost of uniforms, class activities, camps and of course ‘voluntary donations’ just keep on rising.”

For all of National’s much-vaunted “reforms” in our education system, the results are less than impressive. Little rattled off a list of stats that should raise concern with all New Zealanders;

But here’s the thing: while costs are rising, standards are falling.

In 2006, we were ranked 5th in the world for reading.

Now we’re 13th.

We were 7th in science.

Today? 18th.

And in maths? We’ve fallen from 11th to 23rd.

So much for National Standards. And so much for the neo-liberal ideology that has not only not delivered on promises of excellence in our education system – but has seemingly damaged it. Our fall in international rankings are stark evidence that National’s policies in education have failed spectacularly.

Little then offered what can only be  described as Labour’s manifesto for the 2017 General Election;

  • We’ll crack down on the offshore speculators who are driving up house prices and locking families out of the market.
  • Labour will launch a mass home building programme to deliver new, affordable homes in Auckland and around the country.
  • That’s why we are committed to three years’ free post-school education so that Kiwis can train and retrain across their working lives, without having to take on huge debt. That’s how we support our people and its how we tackle the challenge of the future of work.
  • We’ll introduce a dole for apprenticeships scheme to give young people the opportunity to get into paid work.
  • We’ll raise the number of hours people can work without having their benefit cut.
  • We will feed hungry kids in schools…

In six, short, sentences, Andrew Little has put the boot into neo-liberal so-called “reforms”. If elected, and if Labour does not water-down it’s promises, we will be witnessing the dismantling of thirtythree years of the neo-liberal paradigm in New Zealand.

No wonder right-wing commentator, Matthew Hooton, seemed perturbed by Little’s speech during his regular ‘slot’ on Radio NZ’s Nine to Noon programme on 23 May.

Perhaps the most revolutionary aspect to Little’s promises is that of  “three years’ free post-school education“. This is, in effect, partially undoing user-pays in our tertiary institutions.

But the most clever aspect to Little’s speech is that it is “talking” to two different parts of New Zealand.

His reference to “that lost income works out to be fifty bucks a week for the average family” is a direct pitch to Middle New Zealand that feels it is not progressing whilst the mega-rich rort the tax system.

But his reference to abandoning part of user-pays in tertiary education is directed at the Left who are demanding that the Labour Party make a public commitment to renouncing it’s Rogernomics past.

The trick for Labour’s hierarchy and strategists is to achieve both – appealing to Middle New Zealand and the Left – but without spooking the former, or further alienating the latter.

In effect, Labour has taken a firm step-to-the-left – and the public have not noticed.

Mike Williams was right: this was a “dangerous” speech from Andrew Little.

And a damned clever one.

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Addendum

Full text of Andrew Little’s speech here.

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Labour victory

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References

Fairfax: Jane Bowron – Marae shows up Government with haere mai to homeless

Trading economics: New Zealand Unemployed Persons 

Fairfax media: Bill English describes some Kiwis looking for work as ‘pretty damned hopeless’

TV1 News: Panama Papers investigation – ‘NZ absolutely, conclusively is a tax haven’

Interest.co.nz: Collapse in home-ownership rates among families formed since 1991 is an unfolding disaster for NZ’s economy

Radio NZ: No housing crisis in NZ – Paula Bennett

Radio NZ: Nine to Noon – Political commentators Mike Williams and Matthew Hooton

Scoop media: Andrew Little: Pre-Budget Speech 2016

Related

Pundit: Have We a Housing Policy?

Other bloggers

Chris Trotter: Left Unsaid: What Andrew Little Didn’t Say In His Pre-Budget Speech

Kiwipolitico: Not Quite But Getting There

No Right Turn: National should give us our $13,000 back

The Standard: Little’s $50 a week message getting through

Copyright (c) Notice

All images stamped ‘fmacskasy.wordpress.com’ are freely available to be used, with following provisos,

» Use must be for non-commercial purposes.
» Where purpose of use is commercial, a donation to Child Poverty Action Group is requested.
» At all times, images must be used only in context, and not to denigrate individuals or groups.
» Acknowledgement of source is requested.

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capitalism taking from those who work

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This blogpost was first published on The Daily Blog on 25 May 2016.

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= fs =

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

22 April 2016 7 comments

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national-and-john-key-blames

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As I have pointed out in previous blogposts, when threatened with bad headlines or a scandal of some description, National’s automatic defense is to generally to default to one of three* deflections;

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

There are plenty of past instances of this kind of strategy.

In February 2013, the Auditor-General found that National gave Skycity special treatment when negotiating a convention centre in return for 500 additional pokie machines. In a damning report, Deputy Auditor-General Phillippa Smith said;

“Although decisions were made on the merits of the different proposals, we do not consider that the evaluation process was transparent or even handed.”

National’s response was immediate. The following day, Associate Social Development Minister Chester Borrows launched into an attack on so-called welfare fraud;

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government-cracking-down-on-benefit-fraud

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In May 2014, faced with mounting criticism over National’s incompetent mis-handling of legalised synthetic marijuana, our esteemed Dear Leader announced a new policy to introduce a new, restrictive, regulatory framework for psychoactive substances. Key had no shame in blaming Labour for the  Opposition attempting to offer solutions to a botched drug-policy that National was wholly responsible for;

Mr Key said that, in hindsight, the Government should have taken an ultra conservative view last year and not given any legal high substances a waiver.

And he said the Labour Party forced his Government’s hand over announcing a new ban on synthetic drugs, which will take effect on 8 May.

The Government’s new ban was announced late on Sunday after the Labour Party said it would announce on Monday its own plan to immediately stop the sale of synthetic cannabis and other psychoactive substances.

Mr Key said his cabinet decided last Tuesday on a ban but wanted to keep quiet about it to cut down on stockpiling by consumers.

He said the Labour Party has not affected the Government’s policies on synthetic drugs but forced its hand in terms of the announcement.

Also in mid-2014, National was hit with multiple bad-news media stories;

Smith gives nod for open-cast coal mine on conservation land

NZ unprepared for a deep water oil spill,  Greens say

Consumers hard hit by hefty electricity price rises

National’s fix over GCSB draws a storm of protest

Loans door shutting on first-home buyers

High petrol prices hit struggling families

Job ad stall hints at unemployment rise

SkyCity deal doesn’t add up: Treasury

Housing plan ‘a weak compromise’

Right on cue,

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thousands-stopped-from-getting-benefits-not-entitled-to

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Currently, our esteemed Dear Leader is facing political, media, and public heat over New Zealand being a party to the tax-haven industry. When challenged, Key first denied that New Zealand was a tax haven;

“Tax havens are where there is non-disclosure of information – New Zealand has full disclosure of information, and so all you’ve got is New Zealand’s taken a different view from a lot of different jurisdictions and that’s because the way we tax is we tax a settlor.

In other words, it’s all about making sure New Zealanders pay their fair share of tax, what we’ve got is quite a legitimate regime.”

As mounting evidence from several sources disproved Key’s weak assertions, he was forced to announce an enquiry into the country’s trust laws.

Then Labour Leader, Andrew Little, challenged Key to disclose his tax-returns – which Key refused point blank.

Again, on cue, National’s media strategists dropped a Deflection #2 ‘bomb’ into the public discourse, with this offensive vilification of ” basically young males” from Bill English;

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Farmers agree Kiwi farm labourers 'hopeless' - radio nz - bill english - beneficiary bashing

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English’s disparagement of young, unemployed New Zealand men was roundly condemned by fair-minded New Zealanders – but the demonisation tactic had worked. For a moment, the public and media had taken their eyes of the Tax Haven ball. Which would not be the first time;

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hey everyone look up there

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However, in making that ill-advised comment, English may have accidentally opened a can of inconvenient but still-salient facts;

  1. Prior to the 2007/08 GFC, unemployment stood at around 3.4% – or 78,000 workers.
  2. As the GFC/Recession impacted on our economy, unemployment reached 7.3% by 2013 – throwing 154,000 people out of work.
  3. Seventysix thousand people lost their jobs as a result of dubious activities in the financial markets. Or did those 76,000 suddenly decide to voluntarily give up their jobs to go on the dole for $200 a week?
  4. Though the official unemployment rate is currently at 5.3% – there still remains 133,000 out of work.
  5. In 2009, National scrapped the Training Incentive Allowance which benefitted many solo-parents looking to re-train and move off welfare into paid employment

The history of entrenched high-unemployment can be seen to have taken root in the late-1980s, as right-wing economic “reforms” were implemented by Roger Douglas and his cronies. Note the rise of unemployment rate and numbers from late 1987 and early 1988, when neo-liberalism was introduced into the economy and workplace;

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trading economics - unemployed persons - 1986 - 1989

 

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trading economics - unemployment rate 1986 - 1989

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Reference: Trading Economics – Unemployed PersonsUnemployment Rate

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So not only was English blaming 133,000 workers for being out of work as the global economy was slowly recovering from the Global Financial Crisis – but is evidently blaming workers for the steady rise of unemployment since the implementation of neo-liberal economics in this country.

Free trade agreements have also played a role in the destruction of jobs in New Zealand. As more and more manufacturing and service jobs were relocated to low-wage societies (China, Vietnam, Pakistan, Fiji, India, etc), the numbers thrown out of work increased in our own country.

Cheap clothes and shoes from low wage societies are not cheap. They were paid for with the jobs of our fellow New Zealanders.

Bill English’s repugnant diatribe at Federated Farmers – where his ignorant, red-neck views no doubt found sympathy with certain elements from the crudely-informed rural community – are in stark contrast with his stated comments on 28 May 2009. As the GFC storm was beginning to buffet our economy, English was full of sympathy as more and more people were ending up unemployed;

“We are particularly concerned that the economy creates new jobs. The burden of a recession falls most harshly on those who lose their jobs and on their communities. We owe them every effort to create the opportunity for a new job.”

Mr English apparently no longer believes “we owe them every effort to create the opportunity for a new job” and has shifted the “burden of recession” firmly back onto the shoulders of the unemployed.

Or perhaps it is high time that people started asking the acolytes of the Church of Neo-liberalism – at what point do they understand and accept that blaming the victims of their failed, inflexible, free-market doctrine will not make that ideology work?

How long do we have to wait, Mr English?

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stock-photo-9680569-square-peg-in-a-round-hole

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Postscript

* In Auckland’s on-going housing-crisis situation, a fourth Deflection can be applied as a useful tactic to take the heat of National’s inept policies;

4. Blame the RMA

Number 4 deflection can be used in conjunction with Number 1 deflection. Or even Deflection #2, for maximum reactionary responses from the ill-informed.

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References

Fairfax media: SkyCity report slates Government ministers

Radio NZ: Govt cracks down on benefit fraudsters’ partners

Radio NZ: Legal highs to be regulated by July

Radio NZ: Thousands stopped from getting benefits not entitled to

Radio NZ: NZ’s ‘world-class’ tax system defended

Parliament: 3. Prime Minister—Statements

TV3 News: ‘No doubt’ NZ is a tax haven – expert

Radio NZ: Farmers agree Kiwi farm labourers ‘hopeless’

Fairfax media: ‘Hopeless’ comment a sign of a tired Government

Employment.govt.nz: Employment and unemployment – March 2008 Quarter

Trading Economics: Unemployed persons

Statistics NZ:  Household Labour Force Survey: September 2012 quarter

Statistics NZ:  Labour Market Statistics: December 2015 quarter

NBR: Bennett cutting a benefit that helped her – Labour

Scoop media: Speech – Bill English – Budget 2009

Additional

Radio NZ: Deputy PM will not apologise for comments (alt. link) (audio)

Other bloggers

The Daily Blog: Hypocritical narrative blames the victim rather than the cause for economic ‘failings’

The Standard: Trickledown has failed

The Standard: Offers of help flood in to Bill English

Previous related blogposts

Benefit fraud? Is Chester Borrows being totally upfront with us?!

The Mendacities of Mr Key #2: Secret Sources

John Key – Practicing Deflection 101

National under attack – defaults to Deflection #1

National under attack – defaults to Deflection #2

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Yellow-crosses

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This blogpost was first published on The Daily Blog on 17 April 2016.

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= fs =

Living in John Key’s “rock star economy”

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This piece, from a regular Facebook user and commentator on public and political issues, caught my attention;

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Dear Mr. Key.

The following report is indicative of the reality of living in your Rockstar economy. This crap is the daily norm in the lives of Mum & Dad victims all over the country. Some of them are fortunate to just get robbed as against getting stabbed to death. Do these sort of issues ever affect you in Remuera or Omaha or Hawaii ? Why not have a quiet word to the comedy duo Collins and Tolley and see if one or both are remotely interested in fulfilling their sworn oaths of office ?

Have a self centered weekend.

Edmond.

 

Jenny Petera works hard to make a go of Birdie’s Cafe in Kaitaia’s main street. So…

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It reminded me of something John Key said, in one of his many election speeches ranting about the many supposed “failures” of the Labour government. Specifically, on 29 January 2008, in a speech entitled A Fresh Start for New Zealand;

 

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This time a year ago, I talked about the underclass that has been allowed to develop in New Zealand. Labour said the problem didn't exist. They said there was no underclass in New Zealand. But who now could deny it? 2007 showed us its bitter fruits. The dramatic drive-by shooting of two-year-old Jhia Te Tua, caught in a battle between two gangs in Wanganui. The incidence of typhoid, a Third World disease, reaching a 20-year high. The horrific torture and eventual death of three-year-old Nia Glassie. The staggering discovery of a lost tribe of 6,000 children who are not enrolled at any school. The list goes on and on. The fact is, that under Labour, there has been no let-up in the drift to social and economic separatism. We don't need more of their hand-wringing, their strategies, and their interdepartmental working groups. What's needed is the courage to make the tough calls to fix these problems. Today, I'm going to announce a new set of policies which will leave you in no doubt that National has that courage.

“This time a year ago, I talked about the underclass that has been allowed to develop in New Zealand. Labour said the problem didn’t exist. They said there was no underclass in New Zealand.
But who now could deny it? 2007 showed us its bitter fruits. The dramatic drive-by shooting of two-year-old Jhia Te Tua, caught in a battle between two gangs in Wanganui. The incidence of typhoid, a Third World disease, reaching a 20-year high. The horrific torture and eventual death of three-year-old Nia Glassie. The staggering discovery of a lost tribe of 6,000 children who are not enrolled at any school.
The list goes on and on. The fact is, that under Labour, there has been no let-up in the drift to social and economic separatism.
We don’t need more of their hand-wringing, their strategies, and their interdepartmental working groups. What’s needed is the courage to make the tough calls to fix these problems.
Today, I’m going to announce a new set of policies which will leave you in no doubt that National has that courage     […]      Violent youth crime is at an all-time high. Robbery is up. Grievous assaults are up. Aggravated robbery is up. Young criminals are graduating from petty crime to more serious crime; unexploded time-bombs on a fast-track to Paremoremo. The victims are people like you and me. Innocent Kiwis randomly beaten by teens on the North Shore. A Wellington Uni student beaten to a pulp on his walk home. A dairy worker stabbed to death in South Auckland last week. A 14-year-old arrested at the weekend for a fatal stabbing in Tokoroa. The list goes on and on. Rather than being the hope for our future, these young people represent our future fears. The habit of the Clark Government is always to shy away from these problems. They prefer to poke their noses into the lives of good parents while ignoring the ticking time bombs right in front of them. That’s not my approach. Today, I’m going to outline some new policy that forms part of National’s plan for giving young people the future they deserve. This Youth Plan will have two major aspects to it. One part is about education. The other part is about rolling up our sleeves to prevent New Zealand’s youth crime problem from becoming tomorrow’s crisis. This plan is about giving all young people the opportunity and responsibility to better themselves, no matter what their circumstances, abilities, or track record. That’s the Kiwi Way.”

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Beware of Tories banging on about “being tough on crime”;

 

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National Party staying strong on crime

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Electioneering on being “tough on crime” is easy. Any loud mouth Tory fool, desperate for our votes, can do it.

Actually addressing the root causes of crime – unemployment, poverty, increasing inequality, social dislocation, youth alienation, easy availability of cheap liquor, viewing humans as “consumers” rather than citizens; and the neo-liberal cult of selfishness/individualism all contribute to social stresses on the individual.

Let me point to two different commentators on the concept of society;

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“And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour…”

“And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour…” – Margaret Thatcher, Former UK Prime Minister

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

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

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So which view is closer to the truth?

It may be worth pondering that if Margaret Thatcher was correct, that there is no such thing as society“, then the notion  of “anti-social” behaviour is difficult to sustain. How can one be “anti” something that does not exist?

The free marketeers; the neo-liberals; those who promote the Individual rights over Community needs, seem surprised that after decades of implementing their philosophy that only the Individual exists – that there exist individuals who care very little (if anything) for their communities and other people.

For those individuals, as Margaret Thatcher once maintained, there is no such thing as society, or community.  There is only Me. And what I want.

Now… light blue touch paper. Let’s see what happens.

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References

Facebook:  Edmond Slackbladder

Northern Advocate: Second raid leaves cafe owner fuming

John Key: A Fresh Start for New Zealand

Margaret Thatcher Foundation: Woman’s Own – interview – 31 October 1987

Previous related blogposts

Random Thoughts on Random Things #6


 

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Kirk

Above image acknowledgment: Francis Owen/Lurch Left Memes

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= fs =

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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Letter to the Editor: Neo-liberalism by incremental steps

4 January 2014 4 comments

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old-paper-with-quill-pen-vector_34-14879

 

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FROM:     "f.macskasy" 
SUBJECT:   letter to the ed
DATE:      Sat, 04 Jan 2014 12:28:44 +1300
TO:        "Dominion Post" letters@dompost.co.nz 

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The Editor
Dominion Post

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Key and Obama "play" golf - the rich and powerful continue
to “play” and plot, whilst the poor and powerless
continue to struggle on…

Oh, middle classes throughout the world, if only you raised
your heads from reality TV programming and your penchant for
non-stop shopping, long enough to look around you –
you’d be aghast at what our society has become…

Meanwhile, pressure must be applied to Labour to throw out
the TPPA should it be signed. This document cannot be
allowed to stand.

Otherwise the New Right; National; et al; will keep doing
these things each time they become government.
Neo-liberation by incremental, little steps.

Neo-liberalism cannot be rolled back, as new Labour leader
Cunliffe states, unless these things are undone at every
opportunity.

Labour must clearly state it’s position on this problem.

-Frank Macskasy
(Address & phone number supplied)

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= fs =

Detroit – neo-liberalism’s “Grand Success”

29 July 2013 3 comments

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Detroit files for bankruptcy

Source: Radio NZ – Detroit files for bankruptcy

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America’s grand experiment in neo-liberal capitalism has claimed it’s third bloody sacrifice; Detroit (after Jefferson County, Alabama, and Stockton, California).

Detroit now owes US$18.5 billion in debt. It has declared itself officially bankrupt – the largest US city ever to do so.

There are no doubt several reasons for Detroit’s current economic decline and its inevitable urban decay, but it is a dying city nevertheless,

The governor painted a picture of a city in collapse. Citizens wait 58 minutes for the police to respond to calls, compared to a national average of 11 minutes. Only a third of ambulances were in service in the first quarter of 2013. There are approximately 78,000 abandoned buildings in the city. The unemployment rate had nearly tripled since 2000 and the homicide rate was at its highest level in 40 years, he said. Detroit is unable to meet its most basic obligations to its residents, let alone its creditors.

Source: UK Guardian – Detroit becomes largest US city to file for bankruptcy in historic ‘low point’

Jobs in the industry have dropped by 40 percent since 2000, from 1.3 million to 800,000“, wrote Evan Soltas for Bloomberg.

Michael Snyder, writing in theeconomiccollapseblog.com, posted  17 Facts About The Decline Of The U.S. Auto Industry That Are Almost Too Crazy To Believe,

#1 The average age of an automobile in the United States has gone up more than 50% since 1990 and is now sitting at an all-time record of 10.8 years.  The average length of a marriage in the United States that ends in divorce is only 8 years.

#2 Germany made 5.5 million cars in 2010.  The United States made less than half that (2.7 million).

#3 When you add up salary and benefits, the average auto worker in Germany makes $67.14 an hour.  In the United States, auto workers only make $33.77 an hour in salary and benefits.

#4 Back in 2000, about 17 million new automobiles were sold in the United States.  During 2011, less than 13 million new automobiles were sold in the United States.

#5 Do you remember when the United States was the dominant manufacturer of automobiles and trucks on the globe?  Well, in 2010 the U.S. ran a trade deficit in automobiles, trucks and parts with the rest of the world of $110 billion.

#6 Japan builds more cars than anyone else on the globe.  Japan now manufactures about 5 million more automobiles than the United States does.

#7 In 2010, South Korea exported approximately 12 times as many automobiles to us as we exported to them.

#8 According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to new tariffs.

#9 U.S. car companies are spending hundreds of millions of dollars building shiny new automobile factories in China.

#10 In 1970, General Motors had about a 60 percent share of the U.S. automobile market.  Today, that figure is down to about 20 percent.

#11 The combined U.S. market share of the “Big Three” American car companies fell from 70% in 1998 to 53% in 2008.

#12 Detroit was once known as the “Motor City”, but in recent decades automobile production has been leaving Detroit at a staggering pace.  One analysis of census figures found that 48.5% of all men living in Detroit from age 20 to age 64 did not have a job during 2008.

#13 Today, only Chrysler still operates an automobile assembly line within Detroit city limits.

#14 Since Alan Mulally became CEO of Ford, the company has reduced its North American workforce by nearly half.

#15 Today, only about 40 percent of Ford’s 178,000 workers are employed in North America, and a significant portion of those jobs are in Canada and Mexico.

#16 The average Mexican auto worker brings in less than a tenth of the total compensation that a U.S. auto worker makes.

#17 In the year 2000, the U.S. auto industry employed more than 1.3 million Americans.  Today, the U.S. auto industry employs about 698,000 people.

Item #9 is off particular relevance to New Zealand, because we are doing precisely the same thing;

U.S. car companies are spending hundreds of millions of dollars building shiny new automobile factories in China.

As Forbes posted in May 2010, in an article  U.S. Companies That Invest Big In China,

General Motors and Volkswagen have invested billions in China, starting more than a decade ago. Ford is rushing to catch up by adding production capacity and expanding its dealer network in China. Ford and its joint-venture partner, Chang’an Ford Mazda Automobile, plan to start producing next-generation Ford Focus models at a new, $490 million plant in Chongqingin 2012.

Essentially, the United States car manufacturing industry has been busy exporting it’s production facilities and jobs to other low-wage  countries – China and Mexico to give two examples.

Here in New Zealand, we’ve done pretty much the same thing; gutted  our manufacturing sector by  busily exporting it to China (and elsewhere) where wages are low, in comparison to New Zealand workers*,

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Rakon blames job cuts on high dollar

Source: Radio NZ – Rakon blames job cuts on high dollar

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This, essentially, is the end-result of eliminating tariffs with so-called “free trade” agreements. Except, these agreements are not  “free” at all. They cost jobs.

For every pair of cheap Skellerup  “Red Band” gumboots you and I buy at The Warehouse – New Zealander’s jobs were sacrificed,

The first pairs of Red Band Men’s gumboots retailed for twenty five shillings and 11 pence. Red Band gumboots continued to be made at Skellerup’s Woolston factory in Christchurch until the late 1980s when economic considerations forced the company to move production offshore.

Source

So how cheap are those gumboots made in China?

The economic cost of  people out of work is astronomical: $805,759,000 for the 2012/13 period alone (Unemployment Benefit and Emergency Benefit (M63) – Vote Social Development – Estimates of Appropriations 2013/14)

The social cost is beyond a dollar value.

And yet, it was not always like this. Once upon a time, we had full employment.

In 1973, the numbers of registered unemployed (not including overall jobseekers) stood at 2,321. (source)

By June 2008 the number of registered unemployed (not including overall jobseekers) had increased to 17,710. (Pre Global Financial Crisis recession.)(source)

Forty years later, by June this year, after de-regulation, free trade treaties, abolition of tariffs, and the dismantling employment legislation and the trade union movement, the number of registered unemployed (not including overall jobseekers) increased to 48,438. (IBID)

The actual numbers of jobless, according to regular Household Labour Force Surveys, is much higher (currently at  146,000). (source)

It could be said that the cost of those  cheap, foreign-made Redband gumboots (and other consumer goods)  is costing taxpayers $805,759,000 per annum.

Conformist middle class consumers, if they read this, would probably shrug and dismiss it from their minds. Such matters as Detroit and the pernicious consequences of  the “free” market (which, as I have shown, is not “free”) on our employment, economy, and social fabric is beyond their ken.

It doesn’t affect them directly so they blot it from their minds.

They simply look at a pair of  Redband gumboots and see the printed pricetag.

After all, the capricious nature of neo-liberalism such as the fate of Detroit could never happen here, right?

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Wellington Dying - John Key - 7 May 2013

Capital a dying city says Prime Minister – Dominion Post – 7 July 2013

Source: Dominion Post (scanned hard-copy)

Related story: Dominion Post – Shearer slams PM over capital dying quip

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* Yes, there are other serfs in the world paid less than Kiwis.

This blogpost was first published on The Daily Blog on 24 July 2013.

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= fs =

The wealthy pontificating to the poor…

30 June 2013 4 comments

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Of all the preposterous assumptions of humanity over humanity, nothing exceeds most of the criticisms made on the habits of the poor by the well-housed, well- warmed, and well-fed. - Herman Melville, 1819-1891

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And with that comment in mind, our household watched, and cringed, and boiled with anger, as we watched The Vote on TV3 last Wednesday (19 June).

First of all was the  question that TV3 deemed we should consider and reply to;

Our kids: The problem’s not poverty, it’s parenting. Do you agree? Yes. No.”

What a loaded question!

Why not, “Our kids: The problem’s not poverty, it’s low incomes?

Or, “Our kids: The problem’s not poverty, it’s successive governments enacting neo-liberal policies?

Or – and I personally love this one –  “Our kids: The problem’s not poverty, it’s the middle classes who have grown  comfortable with their lot and have given up on the notion of an egalitarian society?

The problem with the alternative questions is that they involve complex ideas;  recent history; and looking at choices that Middle Class voters have made since 1989. In short, those questions involve thinking.

As the question stood on the night; “The problem’s not poverty, it’s parenting” – there was no real thinking involved. It was all about how people  felt on trigger words such as  social welfare; solo-mums; parental responsibility; etc.

Once those trigger words began to percolate through the minds of aspirationist middle class and angry working-class viewers, the results were wholly predictable; 63% voted ‘Yes’. (And the 36% who voted ‘No’ correlates roughly with the percentage of voters who supported Labour and the Greens at the 2011 general election  – 38.54%).

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The Vote 63 - 37

Source: The Vote

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If we were ever truly a caring, sharing, egalitarian society, it’s hard to see  how.

The very nature of the question invited an emotive, rather than an considered, intelligent, response.  It practically demanded plain old repetitive bigotry rather than insight, and the three panellists, Christine Rankin, Bob McCoskie, and Hannah Tamaki – all social conservatives – were more then happy to oblige.

Platitudes; cliches,  mis-information,  and smug instructions on how to feed a family on $20 a week… all came from the well-fed; well-clothed; expensively groomed; healthy; and high-income earning likes of Tamaki, McCoskrie, and Rankin.

It fed perfectly into every stereotype that New Zealanders have seen and heard since Once Were Warriors blew in our faces on our big screens in 1994.

And right on cue, the prejudiced; the mis-informed; and the plain spiteful came out and vented their bile on The Vote’s Facebook page. I was going to provide a  few examples – but why bother? We’ve seen that kind of bigotted response already.

So how accurate was the voting response? There were claims that people could send in multiple votes from the same ‘platform’ (cellphone number, IP number, Twitter account).  If so, the result would be rendered meaningless. One could imagine 3,000 Destiny Church members texting repeated ‘Yes’ votes with unholy speed.

Ten text messages, on average, from each member would equate to 30,000 “votes”. And with texting fees kindly waived by telcos, people could text to their hearts’ content. Free of charge. Ad nauseum.

(By contrast, our household studiously played the game fairly; we each voted once only, by text.)

However an unattributed statement from TV3’s ‘The Vote‘,  on Bryan Bruce’s Facebook page, Inside Child Poverty, stated categorically that “you can only vote once on each platform“.

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The Vote - only voting once

Acknowledgement: Inside Child Poverty New Zealand

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If that is true (and it is by no means a given), then that raises equally disturbing questions about the nature of our society.

If the 63% “Yes” voters are reflective of New Zealanders then that says something about our much vaunted reputation of being a fair-minded, compassionate, egalitarian society.

Perhaps it was never so. Perhaps only a third of us can lay claim to being fair minded and tolerant – whilst the remainder two thirds simply make use of the generosity of their more liberal fellow-Kiwis?

I would like to think that is not true. I would like to think that is not true.I desperately want to believe it is not true.

Instead, perhaps the real emotion at play by those Two Thirds is not hatred of the poor – but fear of becoming like them. Add to that mix an unwillingness by many to even accept that poverty exists – hence endlessly repetitive  cliches such as “Real poverty only exists in Africa” or “They spend all their money on Sky, pokies, booze, and cigarettes”.

It’s all a defense mechanism, of course. By denying a problem, you don’t have to do anything about it. Nor feel guilty at not doing anything about it.

My belief is that the poor are being blamed not simply because they are poor – but because they have not succeeded under neo-liberalism. They are poor despite the promises neo-liberal “Bright New Future” . The architects and builders of this Neo-liberal Nirvana don’t like being shown that their new paradigm is severely flawed not working as it should.

That is why there is so much anger being directed at the poor. They are the proof that the School of Chicago theory of economics – that the Market  shall provide – is a fraud.

Neo-liberalism’s acolytes, the  politically powerful; the wealthy; the aspirationist Middle Classes; the technocrats – all  stand accused of failure  by the poorest; most powerless; most vulnerable people in our society. The mere presence of the poor and dispossed points an accusatory finger at the neo-liberal establishment and those in society who support it.

And doesn’t that just piss them off?

So come 2014 (if not earlier) let’s piss Neo-liberal’s Acolytes off a little further. It’s time for a center-left wing government to take office. Because after my shame, anger, and frustration wore of, I was filled with even more determination to play my part in changing our society.

We need to re-set our nation’s moral, social, and economic compass.

And watching The Vote was just the determination I (and our household) needed. So thank you Ms Tamaki, Ms Rankin, and Mr McCoskrie – I feel more motivated than ever to make New Zealand a decent society again.

We will not surrender.

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We need to give the homeless and other disenfranchised a voice. Homelessness is not a choice, a decision, a lack of effort.

When I first came to New Zealand there were hardly any homeless people but now there are heaps, so where have we gone wrong?” – Simon Buckingham, Auckland Lawyer and one-time homeless person

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Meanwhile, in another Universe far, far away…

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£13tn hoard hidden from taxman by global elite

Acknowledgement: The Guardian – £13tn hoard hidden from taxman by global elite

This blogpost was first published on The Daily Blog on 24 June 2013.

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Other Blogs

The Daily Blog: 126 Meals for $20 – show us how?

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= fs =

Radio NZ’s new CEO is announced…

… and it is Paul Thompson, replacing outgoing CEO, Peter Cavanagh.

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Paul Thompson.

Paul Thompson.

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The appointment of Paul Thompson was (is still?) a bit of a worry.  His background, as Radio NZ disclosed in a Scoop.co.nz press relelease is firmly rooted in the world of commercial media,

Paul Thompson is currently the Group Executive Editor of Fairfax Media in New Zealand and a former award winning editor of the Christchurch Press and the Nelson Mail.

Peter Cavanagh

Acknowledgement: Scoop – Appointment of Radio NZ Chief Executive and Editor-in-Chief

Why is this of concern?

This report, in the NZ Herald, five months ago, for starters;

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Radio NZ on the hunt for next chief executive

Acknowledgement: NZ Herald – Radio NZ on the hunt for next chief executive

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Note the references made  by Herald reporter, John Drinnan,

However, a source said the board was expected to appoint a new chief executive more amenable to change, particularly over sponsorship income…

[…]

… Critics say that has been at the expense of innovation and by resisting Government calls for new funding sources.

Acknowledgement: IBID

Radio NZ is one of the few state entities that earns very little income (if any); makes no profit; and requires constant  funding by the government of the day.

It is anathema to a right-wing party such as National – which instead prefers to lavish tax-payer funded largese on private corporation such as Warner Bros.

As such, Radio NZ’s annual budget of $31,816,000 has not changed since 2009, after National’s election to power the previous year.

Despite a successful Save Radio New Zealand Facebook campaign in February 2010, there is still considerable apprehension that National has a dark, neo-liberal agenda for Radio NZ. The Nats want Radio NZ commercialised. Commercialisation would ‘gut’ the broadcaster and turn it into a radio-version of TVNZ.

And we all know what TVNZ serves up to it’s audience…

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Pressure is also coming from right-wing bloggers and “columnists”, such as this piece of propaganda BS from conservative Karl Du Fresne, RNZ’s bias needs to be tackled. (Du Fresne’s allegations of “left wing bias” is strange, considering that he and  several other right wing commentators are often guests on various Radio NZ programmes, such as Jim Mora’s 4-5 Panel.  See previous related blogpost: Karl Du Fresne has a public baby waa-waa cry-session)

The commercialisation of Radio NZ  can only be achieved if, at first, the broadcaster’s leadership is changed, and someone more ‘amenable’ to National’s destructive monetarist ideology, is appointed.

Paul Thompson would seem to fit that bill perfectly.

However, there is a glimmer of hope that the last bastion of non-commercialised public broadcasting will not be corrupted by a National Party stooge. If Paul Thompson is being straight up with us, and his comments can be taken at face value, then he is no stooge of this shabby, incompetant  government,

I think any form of commercialisation of any of the stations or the content would be a bad thing.

The funding is what the funding is, and lets hope in future at some stage that changes. In the mean time I’m sure that we can continue to do a very good job.”

Acknowledgement: Radio NZ – Incoming RNZ head rules out sponsorship

For more on Paul Thompson’s comments on this issue, Listen to Paul Thompson on Morning Report

Let’s hope Mr Thompson is a man of his word. I think it is no exageration to say that the fate of one of New Zealand’s best known iconic institutions lies in his hands.

Don’t stuff it up please, Mr Thompson.

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Related blogpost

Talkback Radio, Public Radio, and related matters

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 = fs =

Shock News: Roy Morgan predicting change in government!!!

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Red Green Up

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A current shock Roy Morgan poll predicts a  change in government, if the results are carried through to the next general election.

The poll results are as follows;

National: 41% (down 3%)

Labour: 35% (up 3%)

Greens: 12%  (unchanged)

NZ First: 4.5% (down 0.5%)

Conservative Party: 2.5% (up 1%)

Maori Party: 2% (unchanged)

ACT:  0.5% (down 1%)

United Future: 0.5% (unchanged)

Mana Party: 0.5% (down 0.5%)

A Labour-Green Bloc together would win 47%  of the Party Vote – beating National’s 41%.

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Latest New Zealand Roy Morgan Poll

Acknowledgment: Roy Morgan

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What makes this poll stand out above recent television and Fairfax-IPSOS polls are;

  1. The poll results appear more realistic in terms in terms of negative public sentiment to National’s policies,
  2. Roy Morgan polling has been more consistent,
  3. The polling takes into account respondents contacted via cellphone – a major criticism of other polls which only contact landlines.
  4. The figure of 41% echoes a comment made by National Party supporter and right-wing commentator, Matthew Hooten, on Citizen A on 16 May.

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The fact that polling is including respondents who may rely solely  cellphones gives Roy Morgan an added advantage over other pollsters, who only call land-lines.

As Statistics NZ tabulates it’s recent census data, we will soon have a better understanding of how many households rely solely on cellphones, with an absence of landlines. (See related blogpost: Census, Surveys, and Cellphones)

As well, note Matthew’s comment at 27.15, where he says,

“The impact of gay marriage. The private polling by the major parties shows both National and Labour sharply down. National in one private poll has a poll number with a ‘3’ in front of it…”

His ‘slip’ (?) and reference  to “a poll number with a ‘3’ in front of it” backs up Roy Morgan’s poll results perfectly.

The National Party hierarchy must be fully aware that the TV and Fairfax polls are inflated and unrealistic. Which is one reason why the Nats recently ‘caved’ to public pressure and implemented a restricted ‘Claytons‘   food-in-schools programme.

National’s support of State provision for  feeding children came as a bizarre  after-thought to the main Budget, and it could only have occurred if massive public pressure had been brought to bear. This kind of socialised service provision does not come naturally to a right wing Party like National.

Keep an eye on future Roy Morgan polls.

We are witnessing the inexorable decline of one government – as the next,  government-in-waiting, prepares to take the reins.

However, one Big Question remains: what will a new, left-wing, Labour-Green government do, once in power? For a further viewpoint on this vexing issue, read Morgan Godfery’s blogpost; What the left can learn from Lusk.

Do we unpick and wind back neo-liberalism? Or should we be content merely to ‘contain’ it?

NZ Power was a good start and received favourable support from the electorate. But that is only a start.

After thirty years of failed neo-liberalism, and with around 270,00 children living in poverty, there is much work to do.

The rebuild of Christchurch is under way.

The re-build of New Zealand is yet to begin.

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Previous related blogposts

Census, Surveys, and Cellphones

References

Roy Morgan Poll 29 May 2013

Citizen A 16 May 2013

Other blogposts

What the left can learn from Lusk

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It’s Official, The Sky Will Fall – Phil O’Reilly

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The sky is falling

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As the rightwing and their business foot-soldiers are continuing their mad panic (or more accurately, their mad attempts to panic the public) over the Labour-Green proposal for a single electricity buyer-desk, aka, NZ Power – the public have moved on.

Not that the right wing have noticed. Their fear-campaign is still cranking out all manner of garbage to strike the Fear Of Mammon into the hearts and minds of the Great Unwashed Masses.

Chief executive of BusinessNZ, Phil O’Reilly, had this op-ed piece published yesterday (30 April);

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NZ Power - electricity - Greens - Labour -  lower power electricity prices

Acknowledgment: Fairfax Media – More competition good for power sector

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After only the first paragraph, O’Reilly launches into a list of dire sky-is-falling list of Doomsday scenarios;

  1. Price controls harm investment.”
  2. New Zealand is dependent on overseas investment. Without it, home mortgages would become more expensive and harder to get…”
  3. New Zealand is dependent on overseas investment. Without it …  and more expensive to get investment to grow businesses and create jobs.”
  4. History shows that in places with price controls – the former Soviet Union, Venezuela, North Korea, or New Zealand under the Muldoon wage and price controls – the result is capital flight, run-down industries and poorer populations.”
  5. This threat also almost immediately destroyed millions of dollars of value built up by small investors in the NZ Superannuation Fund, KiwiSaver and private power companies.”
  6. Electricity prices must take into account the cost of building new generators – if they didn’t, we’d find the lights would go out the moment we exceeded our capacity.”

O’Reilly left out terrorist attacks, alien invasion, and God striking us down with thunderbolts.

Some of his rhetoric is so bizarre that you have to wonder if O’Reilly actually believes his own BS. Take for example this remark,

Electricity prices rise because a growing population and growing economy bring growing demand for power, and growth in demand requires investment in new generation plant, which is large-scale, long-lived and expensive to build.

Acknowledgment: IBID

O’Reilly then goes on to claim,

Much of the 64 per cent price rise under Labour resulted from interventionist policies.”

Acknowledgment: IBID

So if I have this straight; according to Mr O’Reilly, “Much of the 64 per cent price rise under Labour” is due toa growing population and growing economy bring growing demand for power”?!

Because that’s what he is implying;  growing population + economy = 64% in electricity price rises.

That’s utter bullshit.

The population of New Zealand grew from 3.8 million in January 2000 to our current 4.4 million. (See:   Trading Economics – New Zealand Population) That’s an increase of 600,000 – 15.8% (hopefully my math is correct on this calculation).  Somewhat short of the 64% that O’Reilly quotes.

As for suggesting that New Zealand’s economy grew by 64% during Labour’s term in office – as much as every left-winger  would love to acknowledge that – no. There has never been that degree of growth in New Zealand between 2000/08 or even 2000/13. Or any other decades;

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NZ GDP 2000 - 2008

Acknowledgment: Trading Economics – GDP Growth Rate

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After all the fear-mongering and name-calling, the only word left to describe O’Reilly’s piece is; laughable. His assertions are derisable; his “facts” are dubious and unsupported by evidence (ie; he’s made it up); and his fear-threat of more expensive mortages is  bogey-man stuff.

It may come as a shock to Mr O’Reilly – but whilst some of the public can be gullible, we are not that thick.

Nor do we willingly believe absurd claims like this,

Electricity prices must take into account the cost of building new generators – if they didn’t, we’d find the lights would go out the moment we exceeded our capacity.”

Acknowledgment: Fairfax Media – More competition good for power sector

Yes, we have had power cuts in the past. Usually due to low water storage in the dams; transmission line failure; or other equipment break-downs or shut-down for maintenance.

But let’s not forget the our entire past electricity generation infra-structure, such as Manapouri, Benmore,  Clyde Dam, etc,  were the  result of State  interventionist investment in energy infra-structure.

None of it was built by private enterprise in response to “consumer demand”. Private investment has been a relatively recent advent, such as Contact Energy’s Te Mihi development – a project, by the way that was under-taken during  Labour’s administration. (See: Te Mihi Power Station)

New Zealand has built up it’s energy infra-structure. We can do it again, when required. We most certainly did not rely on private enterprise.

But these are all “inconvenient facts” that the Right refuse to deal with – or even acknowledge. Right wingers like O’Reilly tend to re-write history in an Orwellian fashion, to suit their neo-liberal agenda.

Well, you can fool some of the people some of the time…

The associated poll with O’Reilly’s op-ed piece is hardly scientific, but as an indicator, it shows that people are waking up to the biggest con of the last thirty years of New Right “reforms”,

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More competition good for power sector  (2)

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Nearly two-thirds think that cheaper electricity is “about time”.

Just over a third want to “stick to what we’ve got”. Bloody National supporters – thick as two planks.

Well, I have a perfect solution to the demands for both groups;

  • Those 60.6% who want cheaper power can sign up to NZ Power, and recieve cheaper electricity through a single-desk buyer.
  • The remainder, 34.8%, can keep buying their electricity at “market” rates; paying whatever their powerco demands from them.

Both groups are catered for.

Those who want it, will get cheaper power.

National supporters (and we know who you are, you very thilly, thilly people) can keep getting gouged.

Choice is good, eh?

I’m happy.

This blogpost was first published on The Daily Blog on 3 May 2013.

Choice for everyone, eh?

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Additional

NZ Herald:  Lid blown on power price rort (3 Feb 2013)

NZ Herald:  The 30-year power price hike (3 Feb 2013)

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= fs =

The Politics of Power and a Very Clear Choice – Part Toru

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new zealand high electricity prices

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Continued from: The Politics of Power and a Very Clear Choice – Part Rua

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On a more Positive Note

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With all the scare-mongering from some quarters (National, right wing blogs, conservative media commentators), and naked threats of economic sabotage (JB Weir, Brian Gaynor, etc), there have been commentators with a more positive, up-beat assessment of the Green-Labour proposal for NZ Power.

Bernard Hickey wrote,

“But sometimes the sheer size of the profits becomes so obvious that it invites a backlash. The National Government realised the power-consuming public was nearing the end of its tether in 2008, so it acted to force more competition with its 2009 sector review and the very successful “Whatsmynumber”. It helped increase the switching rate over the past couple of years towards 20 per cent. Annual residential power price inflation halved from 8 per cent in the decade from 1998 to 2008 to 4 per cent since then.

But it is still running at quadruple the general inflation rate and it’s clear that “competition” hasn’t worked to reduce or even restrain power prices for voters, as opposed to businesses.

[…]

The SOE sales programme changed all that. It proposed handing those super profits to the richest New Zealanders in the form of shares and dividends.

That was the moment the Government and the industry crossed that red line and triggered the regulatory backlash promised this week by Labour and the Greens.”

Acknowledgement:  NZ Herald – Bernard Hickey: Power barons fail to fool the public this time around

Vector chief executive, Simon Mackenzie, seemed to agree,

The electricity policy announced by the Labour and Green parties could be made to work and the current debate is overly emotive, says the chief executive of the regulated monopoly electricity and gas network owner, Vector.

Simon Mackenzie told BusinessDesk he was encouraged by the fact the proposed central purchaser system would incentivise commercially rational investment in energy efficiency, and that the Opposition parties were not pursuing direct subsidies.

He also welcomed the fact Labour was proposing to simplify regulation of lines companies, which has become enmeshed in the courts after policies Labour implemented was “not tracking as was intended,” Mackenzie said.

There was “no perfect model” for electricity systems, and other countries used similar methods to set prices and to procure investment in new power plants as demand rises. At present, new generation is procured by competing generators identifying the “next least-cost” of new generation and deciding to build it.

[…]

“The model is used in other jurisdictions. It has its pros and cons. It’s made to work.”

Acknowledgement:  NZ Herald – Labour-Greens plan could work, says Vector CEO

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Inevitable Conclusions

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1. The term “Government-in-Waiting” is well known.

But there is a corollary to this concept.

The Green-Labour policy has not only put National on the “back foot” with the audacious nature of the plan – but has placed National Ministers – from John Key up – into a ‘No Man’s Land’ of a Government-in-Opposition role.

National finds itself faced with a policy that is so novel; so unforeseen; that their initial reactions were indignant splutterings of “North Korean school of politics”; candles; brown-outs; “United Soviet Socialist Republic of New Zealand” [sic]; threats of economic collapse; economic “sabotage”, and other doomsday scenarios.

The responses could be likened to the indignant temper-tantrums of a teenager who has been used to getting things all his/her life – and was suddenly being brought to heel by exasperated parents.

Key has said he never wants to be in Opposition again,

“I don’t think it suits me as a person. I’m not a negative person and a lot of Opposition is negative.”

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

Well, that is precisely where he now finds himself: the new quasi-Opposition in Parliament. The Green-Labour coalition is setting the agenda, and National can only react,

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Labour-Greens plan forces government to suspend MightyRiverPower offer, amend documents

Acknowledgement:  Sharechat – Labour-Greens plan forces government to suspend MightyRiverPower offer, amend documents

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2. On 20 April,  Labour finance spokesperson, David Parker, told  TV3′s The Nation,

It’s not like the money disappears from the economy, just that people have more money in their pockets. Instead of spending it on inflated power prices, they’re spending it somewhere else in the economy.”

Which is pretty much the rationale that National used to justify it’s fiscally irresponsible tax cuts in 2009 and 2010,

“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.”

Acknowledgement: National – Economy/Tax Policy

3. If New Zealanders could tick National in 2008 for their promised tax cuts (in 2009 and 2010, despite being unaffordable and demanding massive borrowings to fund) – then I’m sure as hell confident they’ll be ticking Labour and/or Green in 2014 (if not earlier) for cheaper electricity.

There is nothing as easy to sell to voters than giving them what was theirs in the first place. That applies equally, whether tax dollars or electricity.

Unlike the academic nature of who owns our State Assets – which for the poor underclasses means very little – everyone can understand a very simple concept of cheaper power.

Consider if those 800,000 missing-in-action,  non-voters were asked the simple question; do you want cheaper electricity?

If the answer is “yes” – they need only tick the box for Labour and/or Greens.

For the Nats: game over.

Continued at: The Politics of Power and a Very Clear Choice – Part Wha

This blogpost was first published on The Daily Blog on 26 April 2013.

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Previous Related Blogposts

History Lesson – Tahi – Electricity Sector “reforms”  (4 March 2012)

John Key: Man of Many Principles (28 Sept 2012)

Labour, Greens, NZ First, & Mana – A Bright Idea with electricity! (10 March 2013)

References

NZ History Online:  Dancing Cossacks political TV ad

NZPA: Splitting up ECNZ expected to cut wholesale power price (16 Dec 1998)

NZPA:  Reforms aimed at business – Luxton (21 April 1999)

Otago Daily Times: Power Prices Set To Soar (12 May 1999)

Otago Daily Times: No case for regulation (24 May 1999)

Otago Daily Times: Lower power prices coming says Bradford (3 June 1999)

Otago Daily Times: Power prices to rise by up to 15.1% (29 June 1999)

Otago Daily Times:  Reforms blamed for hike (13 July 1999)

Scoop: Alliance to hold Winston Peters accountable (8 Oct 1999)

NZ Herald: Peters ‘forgets’ NZ First support for power reforms (13 Aug 2008)

Fairfax: Government to seek inquiry into power price rise  (30 September 2008)

NZ Herald:  Put prices on hold, Brownlee tells power companies (21  May 2009)

NZ Herald: Mighty River directors’ 73pc pay rise realistic – Key (5 April 2013)

Scoop:  Labour-Greens to rip up the book on electricity pricing (18 April 2013)

NZ Herald:  Labour-Greens plan could work, says Vector CEO (19 April 2013)

NZ Herald:  National gobsmacked at Labour idea (19 April 2013)

NZ Herald: Power plan likened to Soviet era (19 April 2013)

NZ Herald: MRP chief slams socialist’ plan (21 April 2013)

TVNZ:  Q+A – Transcript of Steven Joyce interview (21 April 2013)

NZ Herald:  Bernard Hickey: Power barons fail to fool the public this time around (21 April 2013)

Radio NZ: Power prices nearly double since 2000 (21 April 2013)

Other blogs

Robert Guyton: Murray Kerr on MRP

Kiwiblog: Electricity Prices

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The Politics of Power and a Very Clear Choice – Part Rua

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new zealand high electricity prices

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Continued from: The Politics of Power and a Very Clear Choice – Part Tahi

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Evidently, the sky will fall if New Zealand proceeds with Labour-Green’s NZ Power proposal…

The four Donkeys of the Fiscal Apocalypse

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  1. Lack of New Infra-structure – The argument goes that without massive profits, state owned powercos will not have sufficient funds to pay for new power production or to maintain transmission lines. Really?! In which case, how on earth did we ever build up this country’s energy infra-struction in the first place???
  2. Brown Outs – We’ve been told we’ll have brown outs (see Collin’s Tweet above).  Really?! It beggars belief how we ever got out of bed in the mornings and tied our shoelaces, prior to to introduction of neo-liberalism. What a hopeless lot we must’ve been.
  3. Share Falls – Yes, the sharemarket will fall if  the NZ Power propopsal goes ahead. In fact, they’ve already dropped (see:  Power shares keep falling). So what people like Nick Lewis, an analyst at Wellington-based brokers Woodward Partners, is telling us is that the sharemarket is dependent on the New Zealand public held to ransom by way of exorbitant power pricing? We’re subsiding the sharemarket?  I wonder what reaction the share market might have if competition really worked, and drove down power prices???
  4. Investors abandoning NZ – Yes, for a while, the jittery bastards at Boston, Beijing, or Berlin  might panic and withdraw investment funds. For about half-a-f*****g second. Then they will get over themselves and return to invest elsewhere in our economy. Such as green technology in power production – technology which can be exported overseas for a tidy profit.

The fear-mongering from National, business, conservative media commentators, and other assorted right-wing nutjobs, assumes that New Zealanders are little children who are easily frightened by shadows.

We are not (much).

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Max Bradford and That ‘Dip’

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After Bradford’s reforms, power prices went north, skyrocketing by a jaw-dropping 87%  since 2000. If food had increased that much since 2000, there’d be wide-spread starvation in this country. And wide-spread rioting that would make the 2010 London riots pale by comparison.

Bradford, though, has insisted that his “reforms” would have worked, had the new  Labour government not ‘tinkered’ with them in the early 2000s. On TV3′s “The Nation“, on 21 April, Bradford stated,

“When the competive market was allowed to work, prices fell. And, ah, between 1998 and 2002, before Labour started fiddling with the market, prices did fall. So if you let the competitive market work,  then prices will either rise more slowly than  otherise they would, or  they fall. ”

Acknowledgement:  TV3 – The Nation

On Kiwiblog, David Farrar kindly provided a graph, attempting to support  Bradford’s claims,

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Electricity-Prices-1982-2012 - ex kiwiblog

Acknowledgement:  Kiwiblog/Stats NZ

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The graph is even helpfully marked with a black line and labelled “Bradford Reforms”, between 1997 and 1998.

Unfortunately, this in itself is not quite correct.  Despite Bradford’s Electricity Industry Reform Act 1998  taking effect in mid-1998,  the electricity sector  reforms did not fully take effect until April 1999, when Contact Energy was privatised and ECNZ was split in three; Mighty River Power, Meridian, and Genesis.

In the same year – 1999 – power prices surged (see:  Power prices to rise by up to 15.1%, see; Reforms blamed for hike), as Farrar’s own graph shows  with crystal clarity.

But then, curiously, there is a considerable dip in 2000 and 2001, followed by  a sharp, massive series of rises thereafter.

So, what happened in 2000 and 2001?

The Asian Crisis is what happened, folks.

As then-governor of the RBNZ, Don Brash reported,

“In July 1997 the Thai baht fell sharply, triggering a period of turbulence in the financial markets of East Asia. Many currencies declined p re c i p i t o u s l y, along with share markets and real estate prices.

The banking sectors of the countries most affected were severely damaged, and real economic activity fell, in some cases sharply, for the first time in decades. The direct effect on the New Zealand economy was adverse and substantial, and looks likely to continue for some time. The indirect effect, through business and household sector confidence, was also significant. The impact of the Asian situation reduced inflationary p re s s u res in New Zealand markedly.

[…]

Inflationary pressures had been slowing for some time previously, so that as far back as December 1996 monetary policy began to ease in response. Then late in 1997 and into 1998 the Asian financial crisis added to the slow-down, as growth prospects in many Asian economies, including Japan, deteriorated (see box 2). In December 1997, when easing monetary policy further, the Bank cited the likely impact of the Asian crisis on the New Zealand economy, and noted that the disinflationary impact of that crisis could become markedly worse. During 1998, this happened, and in response monetary policy was eased more aggressively still.

[…]

For New Zealand, reduced exports to the region, which previously accounted for 36% of our merchandise exports, had a negative impact on economic activity. The likely effects of the crisis were a particular focus in each of the Bank’s quarterly Monetary Policy Statements from December 1997 onwards. In the Reserve Bank’s March 1998 projections, we judged that the severity of the crisis was being underestimated by many observers. As a result the Reserve Bank eased monetary policy by more than New Zealand markets had expected.”

Acknowledgement:  – Don Brash, Reserve Bank of New Zealand Annual Report 1997-1998

Here is the NZ Reserve Bank chart of economic growth, measuring Real Gross Domestic  Product (GDP), from 1990 to 2012,

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reserve bank of nz real gross domestic product 1990_2012

Reserve Bank of New Zealand – Real Gross Domestic  Product, 8 January 2013

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Note  the RBNZ statement, from the above  January 2013 report,

Following the 1998 “Asian crisis” New Zealand’s Gross Domestic Product (“GDP”) recovered strongly. Annual GDP growth from 2001 through to 2004 (on average) exceeded that of its major trading partners, partly as a result of strong net inward migration and associated population growth.

 

Acknowledgement: IBID

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Now let’s compare the period from 1997 to 2002, on both graphs,

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RBNZ - GDP - electricity prices

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A closer look at the 1997 – 2002 period,

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NZ GDP annual growth rate Jan 1997 - Jan 2002

Acknowledgement: Trading Economics/Stats NZ – New Zealand GDP Growth Rate

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Aside from a “dead cat” bounce in the Third Quarter of 1999, the  correlation between economic activity and power prices is self-evident. The drop in electricity prices in 2000 and 2001 followed a slump in economic activity in Asia, and it’s subsequent global flow-on effects.

As PBS Frontline reported,

The Asian financial crisis that was triggered in July 1997 was a shocker. Even two years after it ended, anxiety still loomed over global financial markets. What was at the time perceived to be a localized currency and financial crisis in Thailand, soon spread to other Southeast Asian countries–including Malaysia, Indonesia and the Philippines.

By the fall of 1997, the contagion extended its reach to South Korea, Hong Kong and China.  A global financial meltdown had been ignited. In 1998, Russia and Brazil saw their economies enter a free-fall, and international stock markets, from New York to Tokyo, hit record lows as investors’ confidence was shaken by the volatility and unpredictability in the world’s financial markets.

Acknowledgement: PBS – Timeline of the Crash

As the Reserve Bank stated above, “annual GDP growth from 2001 through to 2004 (on average) exceeded that of its major trading partners” – and 2001 is when power prices started to rise again.

Also worthy of attention is  that the electricity CPI also drops in 2009 and 2011, during the latest Global Financial Crisis and resulting Great Recession.

Unfortunately, for reasons of their own (but which we can guess at), Mr Farrar and his National Party friends fail to point out this salient fact. The Right will mis-represent facts and re-write history to suit their own  narrowly-defined ideological agenda.

Labour-Green’s NZ Power is a threat to that ideologically-based agenda.

Continued at: The Politics of Power and a Very Clear Choice – Part Toru

This blogpost was first published on The Daily Blog on 25 April 2013.

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Previous Related Blogposts

History Lesson – Tahi – Electricity Sector “reforms”  (4 March 2012)

John Key: Man of Many Principles (28 Sept 2012)

Labour, Greens, NZ First, & Mana – A Bright Idea with electricity! (10 March 2013)

References

NZ History Online:  Dancing Cossacks political TV ad

NZPA: Splitting up ECNZ expected to cut wholesale power price (16 Dec 1998)

NZPA:  Reforms aimed at business – Luxton (21 April 1999)

Otago Daily Times: Power Prices Set To Soar (12 May 1999)

Otago Daily Times: No case for regulation (24 May 1999)

Otago Daily Times: Lower power prices coming says Bradford (3 June 1999)

Otago Daily Times: Power prices to rise by up to 15.1% (29 June 1999)

Otago Daily Times:  Reforms blamed for hike (13 July 1999)

Scoop: Alliance to hold Winston Peters accountable (8 Oct 1999)

NZ Herald: Peters ‘forgets’ NZ First support for power reforms (13 Aug 2008)

Fairfax: Government to seek inquiry into power price rise  (30 September 2008)

NZ Herald:  Put prices on hold, Brownlee tells power companies (21  May 2009)

NZ Herald: Mighty River directors’ 73pc pay rise realistic – Key (5 April 2013)

Scoop:  Labour-Greens to rip up the book on electricity pricing (18 April 2013)

NZ Herald:  Labour-Greens plan could work, says Vector CEO (19 April 2013)

NZ Herald:  National gobsmacked at Labour idea (19 April 2013)

NZ Herald: Power plan likened to Soviet era (19 April 2013)

NZ Herald: MRP chief slams socialist’ plan (21 April 2013)

TVNZ:  Q+A – Transcript of Steven Joyce interview (21 April 2013)

NZ Herald:  Bernard Hickey: Power barons fail to fool the public this time around (21 April 2013)

Radio NZ: Power prices nearly double since 2000 (21 April 2013)

Other blogs

Kiwiblog: Electricity Prices

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The Politics of Power and a Very Clear Choice – Part Tahi

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new zealand high electricity prices

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Historical Background

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New Zealanders, by and large, are not stupid.

We can recognise a rort when we see it. And in the case of electricity prices, we see it on a regular basis in our power bills and media headlines,

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2008

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Government to seek inquiry into power price rise - 2008

Acknowledgement: Fairfax: Government to seek inquiry into power price rise

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2009

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More profit than power for state-owned energy companies - 2009

Acknowledgement:  NBR – More profit than power for state-owned energy companies

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2010

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High spot prices hint at power price rise - 2010

Acknowledgement: Fairfax Media – High spot prices hint at power price rise

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2011

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Power bills set to rise up to 8pc from March - 2011

Acknowledgement: NZ Herald- Power bills set to rise up to 8pc from March

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2012

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Electricity prices tipped to rise steeply - 2012

Acknowledgement:  Fairfax Media –  Electricity prices tipped to rise steeply

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2013

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Power prices rise by average $120 nationwide - 2013

Acknowledgement:  TVNZ –  Power prices rise by average $120 nationwide

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We all know the facts and figures by now,

None of Bradford’s promises came to fruition and on 27 November 1999, Bradford lost his Rotorua seat to Labour’s Stephanie Chadwick (see: Rotorua – New Zealand electorate).

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A Bold New Plan

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On 18 April, Labour and the Greens announced a bold new policy initiative to reign in escalating power price rises. Called NZ Power, the reform would work thusly,

Key to the proposals is the creation of a central buying and electricity system planning agency, dubbed NZ Power, which would drive down power prices because of its market power and would not be required to make a profit.

It would also be the market regulator.

“It will not just supervise the market, it will be actively involved,” said Labour’s finance spokesman David Parker, a Minister of Energy in the 1999 to 2008 Labour-led administration.

It would tender for new electricity generation, or potentially energy efficiency measures, rather than the current crop of generators competing to identify the next least costly unit of new generation when demand rises.

In some cases, industrial users would be able to contract directly with NZ Power.

Power prices would be set not by reference to the cost of the next new unit of generation, but by average costs that include the anticipated price of new generation. However, there would still be a traded market in wholesale electricity, which could reflect regional variations.

Acknowledgement: Scoop –  Labour-Greens to rip up the book on electricity pricing

This new plan was the confirmation (if any was needed) that National’s grand experiment in privatisation and “competition” in the electricity sector was not working. Only  fools  (mostly those posting on right-wing, pro-National Kiwiblog) could possibly argue that the current system was “succeeding”.

In fact, even as far back as May 2009, National Minister Gerry Brownlee demanded that power generators put price rises on hold. He stated,

There is something fundamentally wrong in the way in which we’re marketing electricity in New Zealand.

Acknowledgement: NZ Herald –  Put prices on hold, Brownlee tells power companies

And even the architect of this ill-conceived “reform”, Max Bradford, was reported in May 1999 in the media as planning to regulate electricity line charges,

Enterprise  and Commerce minister  Max Bradford  is to press ahead with regulations to control electricity line charges, but sees no reason to implement regulation in the competitive end of the market.

Acknowledgement: Otago Daily Times – No case for regulation

So even National ministers reluctantly concede that the electricity sector cannot work in an unregulated “freemarket” model, and is unable  to deliver the ‘golden fruits’ of de-regulation and so-called competition.

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Carping & Criticisms

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After the press conference on 18 April, criticism flew thick and fast from National ministers; right wing bloggers;  pro-National sycophantic elements of the media, and their ideologically-wedded fellow-travellers.

On Steven Joyce’s twitter account,

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Steven Joyce - Tweet - NZ Power - soviet style nationalisation

Source: Twitter/Steven Joyce

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Judith “Crusher” Collins added this bit of gratuitous fantasy-fear mongering,

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Judith Collins - Tweet - NZ Power - soviet style nationalisation

Source: Twitter/IBID

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From Simon Bridges, this little bit of muppetry,

They may want to return to sort of United Soviet Socialist Republic of New Zealand days but National certainly doesn’t.”

Acknowledgement: NZ Herald – Power plan likened to Soviet era

It was  actually the Union of Soviet Socialist Republics, Mr Bridges, not “United” Soviet Socialist Republic. Get your Evil Empires  right, mate.

And anyway, most of New Zealand’s centralised planning occurred during National’s administration, from 1975 to 1984, under the late Robert Muldoon. Remember the price/wage freeze?

Mighty River Power chief executive Doug Heffernan, also called the plan “socialist” (by the way, is that a bad thing?) He declared,

“What you’ve just described is a socialist consumer model.”

Acknowledgement: NZ Herald – MRP chief slams socialist’ plan

To which I would point out to the reader,

  1. Heffernan benefits from a $1.49 million p.a. salary – whilst Mighty River Power keeps raising it’s power prices. So the gentleman has a vested interest in this issue.
  2. In February this year, Heffernan announced that Mighty River Power’s half-yearly profit has quadrupled; prices had risen by 2%; despite demand “being flat”. (see:  Mighty River Power profit quadruples )
  3. Saying that “Mighty River Power would not have made the $1billion investment into geothermal energy that we’ve made in the last five years … The risks would have been too high” – insults our intelligence.  Mighty River Power was built up by the State, with taxpayers’ money.  Heffernan forgets himself; MRP is not a private company.
  4. And anyway,  is it the role of  SOE chief executives to be promoting privatisation?

Steven Joyce added to the “red menace scare”on TVNZ’s Q+A on 21 April,

“By definition, it’s socialism.

“They are not just talking about the price, they’re talking about telling the generators when they can generate, which generating assets they can use, which ones they can introduce to the markets.”

The Minister said the proposed plan would also scare off investors, with evidence of this seen late last week when the market dropped.

“On Thursday and Friday, the market dropped nearly $600 million across three companies because they said, ‘Jeez, we’re not interested in this’.”

Which is rather strange… Joyce, Bridges, Collins, Key, et al, are likening Labour-Green’s plans to “North Korean economics” or “Soviet style socialism”.

But when did the former USSR or the current North Korea ever have a share market or multi-party Parliamentaty democracy?!?!

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hyperbole will sink legislation

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Could it possibly be that National ministers have no intellectual, rational response  to the proposed NZ Power scheme?

Could it be that they must rely on fear-mongering?  Which reminds me of this,

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dancing cossacks - national fear mongering

Acknowledgement: NZ History Online:  Dancing Cossacks political TV ad

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Could it possibly be that National ministers are placing their faith in free market economics – vis-a-vis the partial sale of state powercos – to get prices to drop? (Which, after 14 years is yet to happen for the domestic consumer.)

Could it be that National ministers are… panicking?!

Because as NZ Herald columnist, John Armstrong wrote on 19 April,

“There may be good reasons for the seemingly constant above-inflation hikes in retail prices. But politicians have given up explaining because consumers long ago stopped listening.

All this would suggest there is fertile ground for Labour and the Greens, who yesterday foreshadowed plans to slash power prices by setting up a new agency, NZ Power, to act as a single buyer of wholesale electricity.

National was truly gobsmacked. It accused Labour of “Muldoonism”, “loony tunes” policy making and “North Korean economics”.

National accepts that at the outset there might be lower prices. But it argues the policy would distort price signals that are so vital to matching supply and demand. That could lead to power shortages. The policy would distort and even discourage investment in power generation.”

Acknowledgement: NZ Herald:  National gobsmacked at Labour idea

Gobsmacked” is about right.

And ironically enough, “Muldoonism” was a product of the National Party – not Labour. Hilarious stuff, indeed!

This is nothing less than a full-scale retreat from market-driven political orthodoxy. In effect, Labour has done the unthinkable; it has publicly announced that neo-liberalism and it’s supposed “free” market economics does not, and cannot,  deliver all of society’s needs.

We get a glimpse  of what it must have been like in 1989 when Mikhail Gorbachev sat down with his colleagues in the Soviet Politburo and announced to a stunned meeting,

Comrades, our communist ideology and centralised economic system has failed.”

Mark 18 April 2013 on your calendar as the day that one of our two main Parties (or, two out of our three main Parties, if  Green political support keeps increasing) renounced neo-liberal free market ideology as a failure.

There is now a clear, unequivocal difference between an increasingly  right wing, ideologically-driven  National, and a decidely more-leftist – but  pragmatic – Labour.

And the public now has a clear choice as well, for whom to vote;

Option A (for the Blue Team): maintain the neo-liberal status quo; proceed with privatisation; and hope-like-hell  that Max Bradford’s promises eventually, maybe, one day, will  come true.

Option B (for the Red Team): vote for change; abandon our slavish adherence to neo-liberal dogma; and, as a side-effect, enjoy cheaper power bills.

Continued at: The Politics of Power and a Very Clear Choice – Part Rua

This blogpost was first published on The Daily Blog on 24 April 2013.

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Previous Related Blogposts

History Lesson – Tahi – Electricity Sector “reforms”  (4 March 2012)

John Key: Man of Many Principles (28 Sept 2012)

Labour, Greens, NZ First, & Mana – A Bright Idea with electricity! (10 March 2013)

References

NZ History Online:  Dancing Cossacks political TV ad

NZPA: Splitting up ECNZ expected to cut wholesale power price (16 Dec 1998)

NZPA:  Reforms aimed at business – Luxton (21 April 1999)

Otago Daily Times: Power Prices Set To Soar (12 May 1999)

Otago Daily Times: No case for regulation (24 May 1999)

Otago Daily Times: Lower power prices coming says Bradford (3 June 1999)

Otago Daily Times: Power prices to rise by up to 15.1% (29 June 1999)

Otago Daily Times:  Reforms blamed for hike (13 July 1999)

Scoop: Alliance to hold Winston Peters accountable (8 Oct 1999)

NZ Herald: Peters ‘forgets’ NZ First support for power reforms (13 Aug 2008)

Fairfax: Government to seek inquiry into power price rise  (30 September 2008)

NZ Herald:  Put prices on hold, Brownlee tells power companies (21  May 2009)

NZ Herald: Mighty River directors’ 73pc pay rise realistic – Key (5 April 2013)

Scoop:  Labour-Greens to rip up the book on electricity pricing (18 April 2013)

NZ Herald:  Labour-Greens plan could work, says Vector CEO (19 April 2013)

NZ Herald:  National gobsmacked at Labour idea (19 April 2013)

NZ Herald: Power plan likened to Soviet era (19 April 2013)

NZ Herald: MRP chief slams socialist’ plan (21 April 2013)

TVNZ:  Q+A – Transcript of Steven Joyce interview (21 April 2013)

NZ Herald:  Bernard Hickey: Power barons fail to fool the public this time around (21 April 2013)

Radio NZ: Power prices nearly double since 2000 (21 April 2013)

Other blogs

Kiwiblog: Electricity Prices

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Still someone else’s country

10 February 2013 6 comments

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someone-elses-country

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Wellington, Newtown, 9 February 2013 – As the issue of state asset sales and other New Right policies are on National’s impending  agenda, the Newtown-branch of the Mana Party considered it worthwhile taking the time to look back at recent history. The events of today are firmly rooted in the past.

The New Right had taken power in Britain with the election of Margaret Thatcher in May 1979, and in the United States, with the election of Ronald Reagan in November 1980. Our turn came in July 1984, with the snap election called by an inebriated Rob Muldoon. (Intoxication on power and alcohol – not a very healthy mix.)

The Labour government that was swept to power (see: New Zealand general election, 1984) was not the Labour Party that people thought they were voting for. In total secrecy, Labour had been captured by a cabal of fanatical neo-liberal reformers. It was a government firmly under the control of  what we know today, as the ACT Party.

Twenty nine years later…

Mana’s Newtown Branch decided to hold a public screening of Alister Barry’s hard-hitting, insightful, 1996 documentary, “Someone elses’s country“. The story told within that hour-and-a-half documentary is as valid today as it was three decades ago. (In fact, watch “Someone elses’s country” and then watch Bryan Bruce’s 2011 documentary, “Inside Child Poverty in New Zealand” – and the linkages of the radical transformation of our country is all but complete.)

Prior to the screening, the audience was welcomed by Mana Newtown organisor, Ariana, who gave a brief rundown of the content and it’s impact on our society,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com Someone elses's country - public screening - 9 february 2013 - Mana Party

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Many in the audience were young people who either had not been born in the 1980s, or were too young to remember the calamitous events that were unfolding. To these people, the events we now understand as Rogernomics and Ruthenasia would have been like the 1951 Waterfront Lockout dispute that rocked the nation.

Following Ariana, a brief introduction to the film was made by sitting Wellington Councillor, Bryan Pepperell,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com Someone elses's country - public screening - 9 february 2013 - Mana Party

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Pepperell said,

It’s getting into it’s final stages where the agenda to actually get democracy out of the way of business is actually  now reaching a high-point.There’s an awful lot of window-dressing and democracy in New Zealand context has become that,  substantially window dressing…”

He then  shared with the audience when his first disquiet over the election of the Lange Government came to him,

When David Lange actually said on national television – and I remember the day when I sat and I watched it and I thought I can’t believe what I’m hearing – ‘from now on business is going to make the major decisions’. And that was actually a fairly startling thing as far as I was concerned… unfortunately poor old David probably got quite into something that was bigger than him, and here we are today with the consequences of those early decisions.  And of course the National Party is utterly committed to helping it’s friends further the direction that we started in.”

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The introduction completed, the screening began,

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Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com Someone elses's country - public screening - 9 february 2013 - Mana Party

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For many of us who lived through the period, memories of the time came flooding back. In some instances, several people in the audience even recognisedthemselves – with much younger faces – in stills and video footage of protest actions.

It is also worth recalling that despite calls from throughout the country,  TVNZ’s Board rejected calls for widespread broadcasting claiming it it “too political”.

“Too political”?!?!

Of course it was bloody political!

It was so damn political that TVNZ’s boardmembers would have  soiled their panties at the thought of upsetting their Ministerial masters in the Beehive.

As the doco’s producer, Alister Barry , said in November 2009,

It was no accident that Someone Else’s Country wasn’t screened on TVNZ when it was completed in 1996.

It wasn’t that the Business Roundtable needed to actually tell the TV programmers not to screen it. Television executives knew perfectly well where their salaries came from and that TVNZ was being readied for sale.

Fourteen or fifteen minutes of every television hour – the very limit of viewers’ tolerance – was filled with messages carefully and expensively constructed to reach into their fears and appetites. Clutches of advertisements urged New Zealanders to “buy”, to think and feel like frustrated consumers. Airing a documentary which led viewers to think of themselves less as consumers and more as citizens capable of taking political action was not in the interests of the big corporations controlling the advertising dollar.”

See: Someone Else’s Screen

It was not until 2003 that TVNZ finally mustered the courage to air  “Someone elses’s country” – on a Sunday afternoon. Hardly peak viewing time.

Barry also had this pointed insight to make,

It had been anticipated by New Zealand’s New Right revolutionaries, that by the early 2000s our values would have changed and we would have come to think like them, accepting poverty and extreme wealth as both normal and necessary. To pursue personal advantage and to care less about our neighbours. But studies show that in fact our values haven’t changed much from those of our parents and grandparents.
 
What is happening though, is that we are forgetting how things used to be and who changed them. Even as the human and environmental costs of the neoliberal experiment increase, we are finding it harder and harder to imagine how things could be better.

I hope you will find this film a useful antidote to forgetfulness.”

See: IBID

Which is what this country so desperately needs – an antidote to the collective amnesia which so many of our countrymen and woman so often succumb to.

As this blogger noted above; imagine the disquiet and anger that would result if  “Someone elses’s country” was broadcast at prime-time, on a major tv channel – and then followed by Bryan Bruce’s, “Inside Child Poverty in New Zealand“…

Addendum 1

The neo-liberal agenda continues. National plans to partially-privatise three power companies; a mining company; and Air New Zealand (which was privatised once before on 17 April 1989).

National is implementing a privatised form of education via “Charter Schools”.

And the economy is to be further “de-regulated”  and made the rights of foreign corporations extended.

Addendum 2

In a society run along neo-liberal lines, it becomes dangerous to upsets one’s masters investors,

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Hollywood gets heavy over Hobbit

Full story

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And shame upon shame to Jackson and his mates for aiding and abetting Hollywood’s Heavies.

What are they hiding?

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Additional Info

Mana Party

Mana Party – Feed the Kids

Copyright (c)  Notice

All images are freely available to be used, with following provisos,

  •     Use must be for non-commercial purposes.
  •     At all times, images must be used only in context, and not to denigrate individuals.
  •     Acknowledgement of source is requested.

Anti asset sale rally – this Wednesday 13 February

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frank kitts park no to asset sales 13 feb

Source

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Johnny’s Report Card – National Standards Assessment y/e 2012: migration

9 January 2013 3 comments

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

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

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

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Migration

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The rhetoric:

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national_party_leader_john_key_stands_in_front_of__2136807254

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One of National’s biggest election issues was that of migration. Key and his mates practically crucified the incumbent Labour government in 2008 over the continuing loss of New Zealanders to Australia.

Even one of their election hoardings (see above) made the migration issue a prominent feature of National’s attack-advertising.

And Key poured it on in thick layers of election rhetoric,

When the going gets this tough, is it any wonder that Kiwis look longingly at our Aussie cousins?  Our Aussie cousins, who get paid a third more than us for doing the same job.  Our Aussie cousins, who have been given a tax cut in every Budget for the past five years and who will continue to have their taxes cut for Budgets to come.

Too many Kiwis are looking at those stats and choosing to join their cousins across the ditch.  We have to give them better reasons to stay .” – John Key, 29 January 2008

See: 2008: A Fresh Start for New Zealand

We want to make New Zealand an attractive place for our children and grandchildren to live – including those who are currently living in Australia, the UK, or elsewhere. To stem that flow so we must ensure Kiwis can receive competitive after-tax wages in New Zealand.”  – John Key, 6 September 2008

See: Environment Policy Launch

Over the last three years I believe we’ve made some progress, so much that we have been closing that after-tax wage gap, we are building an economy that is now growing at a faster rate than Australia, but it will take us some time to turn that around.” – John Key, 23 November 2011

See: Kiwi exodus to Australia nears record levels

In effect, National – led by our  Smile & Wave Dear Leader – was promising New Zealand voters that they, alone, knew the secret to stemming emigration and the loss of New Zealanders to Australia and beyond. It was a bold committment to make to the electorate.

Short of erecting a new Berlin-style wall; with armed guards; and patrolling gunboats to detain Kiwi boatpeople attempting to flee to Australia, how could National  perform such a feat?

The reality:

Despite National’s rhetoric and attacks on Labour, their own track record in persuading New Zealanders to remain here and not leave for greener (or browner, in Australia) pastures was utterly abysmal.

In fact,quite the contrary, Statistics NZ revealed that the Great Escape to Oz has accelerated,

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Permanent and Long Term (PLT ) Net Migration

of NZ Citizens/Residents To/From Australia

Year to November Departures Arrivals Net Loss/Gain(linked to source)

2005

34,730

13,430

-21,300

2006

33,873

13,371

– 20,502

2007

40,786

13,621

– 27,165

2008

48,500

13,200

– 35,300

Sub-Total

157,889

53,622

– 104,267

2009

34,100

14,600

– 19,500

2010

35,800

15,800

– 20,100

2011

50,100

14,400

– 35,800

2012

53,500

14,600

– 38,800

Sub-Total

173,500

59,400 – 114,200

Sources: Statistics NZ International Travel and Migration – information releases

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After four years of National, net migration to Australia (excluding other countries such as the UK, etc) has increased by   ten thousand people more than under Labour.

To be fair, migration involves factors that are often beyond the control of governments from either end of the political spectrums.

The true issue here is not whether Labour or National or Uncle Tom Cobbly can stem migration. The real issue here is that National cynically exploited migration for purely selfish, political ends. They manipulated the public debate and exploited people’s concerns.

This is why the public view politicians with such odium and distrust.

Little surprise then, that politicians consistantly rank at the bottom of  ‘Reader’s Digest ‘ list of respected professions, usually below Used Car Salespeople and just above tele-marketers. See previous blogpost:  League Tables that really count! )

Another issue here is that despite National’s right-wing reforms, tax cuts, and partial-asset sales/share floats – New Zealanders are continuing to vote with their feet. An increasing number of families and young people are departing our shores in  a vote of no-confidence in John Key and his administration.

It also suggests that the neo-liberal concept of the atomisation of  “society” – replaced by  the Individual and  families – has reached it’s inevitable consequence. If all that matters is the Individual and their own needs, then concepts such as national identity and cultural heritage are hopelessly out-dated concepts. In which case, people will simply follow the money and nothing else matters.

If we are ever to attract New Zealanders back to our country, and to persuade those already here that it is worthwhile being part of this society, then we have to move away from raw Individualism and self-interest. To encourage people to be a part of a society, that society has to be vibrant, strong, and offer more than just cash incentives.

This is why National will never be able to reverse the outward flow of people and loss of talent  overseas;  the Nats are part of the neo-liberal paradigm for whom society will always take a back seat to the rights and primacy of the Individual. Key and his mob will always be trapped by their own neo-liberal dogma, and can offer us nothing except much hand-wringing; more excuses; and well-worn election rhetoric.

The last word goes to this chap, who no doubt sums up the feelings of many New Zealanders who have departed our shores,

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.

See: Student loan avoiders told to pay up

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Report_Card_migration

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Tax cuts and jobs – how are they working out so far, my fellow New Zealanders?

10 November 2012 14 comments

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Setting the scene

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The Rhetoric…

National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing.”

National Party: Tax Policy 2008

The Reality…

The public service has slashed 555 jobs in the past year and is expected to lose almost 400 more by June 2014, the government has revealed.”

Fairfax Media: 555 jobs gone from public sector

“Treasury today published the Government’s financial statements for the 10 months ended April 30, which showed the debt mountain had grown to $71.6b.”

Fairfax Media: Government debt rises to $71.6 billion

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The Rhetoric…

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.”

National Party: 2008: Personal Tax

The Reality…

Thousands of New Zealanders – including many disillusioned immigrants – are looking for new jobs and new lives in Australia…

… And, judging by the long queues for the $15 event, it seems many of the employers will have no problem finding takers among job seekers who say they are fed up with New Zealand and believe the lifestyle, pay and opportunities are far better across the Tasman.”

NZ Herald: Fed-up Kiwis head to Oz en masse

The unemployment rate rose half a percentage point to 7.3 per cent in the September quarter, the highest level since June 1999, according to Statistics New Zealand’s household labour force survey.

NZ Herald: Unemployment up to 7.3pc – a 13 year high

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Consequences

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On 1 October 2010, as National implemented it’s second round of tax cuts, John Key made this statement,

Our changes to the tax system are about:

  • Helping hardworking families get ahead
  • Boosting growth to create jobs and lift incomes
  • Encouraging savings and investment
  • Making the tax rules fairer for all New Zealanders.

Many of you have told me that you are worried about the increasing cost of living. That’s why the tax changes are so important.

From today, the average family will be about $25 a week better off, even after the increase in GST. The average earner will be about $15 a week better off. A retired couple receiving only NZ Super will be about $11 a week better off.

National was elected to secure a brighter future for New Zealanders and we are delivering on our promises.”

See: National Party: Special Edition – Tax cuts today

It is a common theme amongst the New Right and neo-liberal dogma that cutting taxes equates to more jobs. The idea is that with more money in people’s pockets; they spend more; consumption rises; industry has to produce more; and subsequently hires more staff.

That’s a lot of assumptions to make. As John Key, Bill English, and other National ministers stated, many people used their tax cuts to save and/or pay off debt,

One of the things we are trying to do is lift the national savings rate. When you lift the consumption taxes and lower personal taxes, you encourage people to save. That’s definitely happening, we’ve got a positive savings rate in New Zealand now.” – John Key, 2 April 2012

See: Key defends tax cuts in light of zero Budget

And I think it is going to keep dropping. Kiwis have got the message that debt is a bad thing” – but they had been convinced about the merits of saving more. People do want to save and they know there is no free lunch.” – Bill English, 14 March 2012

See: Debt being paid off, but savings not growing

And even if people do spend more, there is no guarantee that businesses will hire more staff. Much of our consumer goods now originates from overseas, and what we spend here in NZ probably has little effect with overseas manufacturers.

Even locally, there is certainly no guarantee that an extra $15 or $20 in taxcuts will result in more jobs. Especially when gst, fuel, electricity,  and government charges have risen to eat up tax cuts for low and medium paid workers.

New Zealand finance bosses are feeling good about the economic recovery, but research shows that optimism doesn’t extend to hiring new staff.

Global finance and accounting firm Robert Half’s survey of 200 chief financial officers and finance directors found 79 per cent were confident about the prospects of national growth in 2012.

Those who thought their own company would pick up speed in the year ahead made up an even higher proportion, at 87 per cent.

However, the rise in confidence did not translate to more jobs – just 13 per cent planned to take on new finance and accounting staff. “

See: Confidence up, but jobs still not a priority

So John Key’s hopelessly optimistic vision of   “boosting growth to create jobs” has become a distant dream, based on -?

  • Naive faith in a discredited “free market” dogma?
  • Helping out his rich mates?
  • A misguided belief that creating jobs could be easily done at the stroke of a pen?
  • Free Market fairies and Employment angels?!
  • All of the above?

To make the picture complete, I present for the reader’s interest this graph, correlating the ’09 and ’10 tax cuts, with unemployment levels,

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Source

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The graph above vividly illustrates the fallacy linking tax cuts to job creation.

Indeed, after two taxcuts, this country has little to show for it except slashed state services; thousands of state sector workers sacked; and having to borrow billions more from overseas to make up for the shortfall in the tax-take.

The closure of two schools for disabled children, Salisbury Residential School in Nelson and McKenzie Residential School in Christchurch, is perhaps the most tragic face of National’s harsh policies.  When we cut taxes, we cut essential state services, there is no other option.

National supporters and low-information voters may hold cherished beliefs  that cutting taxes are a good thing – until they themselves, or a family member,  requires a state service that has been wound back, or eliminated altogether.

Whilst most of us understand that cutting taxes does not lead automatically to the Holy Grail of  more jobs, our Dear Leader seemed stunned by the shock rise in unemployment,

I’m very surprised with the numbers I’ve seen this morning, goodness knows what the next one will look like.

Oh goodness, Dear Leader. “Surprised”, were we?

How can he have been surprised when unemployment has been rising since January, when it was at 6.4%?!

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Source

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Was he not paying attention – much like his briefing at GCSB offices when Kim Dotcom’s arrest was discussed?

Mr Key really needs to bring his mind back from the golf courses of Planet Key.

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Postscript

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Speaking from Japan (where it’s probably the safest place for him, right about now) John Key dismissed ideas of investing in job creation policies, saying,

 “It would be a dangerous precedence for us to start saying we are going to support a particular industry over another where there’s change. If you want to roll that all the way back we’d still be producing cars in New Zealand and that probably wouldn’t be in New Zealand’s best interests.

See: No tax break plans to keep jobs in NZ – Key

Key is happy to throw  tax breaks at the highest income earners in this country – but thinks that tax breaks for preserving jobs “wouldn’t be in New Zealand’s best interests“?!?!

And let’s not forget the generous tax breaks he gave to Warner Bros – a multi-billion dollar corporation – as a ‘sweetener’ to keep “The Hobbit” in New Zealand (when there was in reality no risk of production going overseas, according to Peter Jackson).

This man may have been raised in a state house, by a solo-mum, but it appears that he has lost all perspective. His fitness to be Prime Minister has to be seriously questioned.

Only six months earlier, Key was reported in the Dominion Post thusly,

The number of unemployed people increased 6.1 per cent to 160,000 but the labour force participation rate also rose, by 0.6 points to 68.8 per cent.

Key said the unemployment rate was “a very weird one at the moment”.

About 9000 jobs had been created and the Government was on track to create 170,000 over four years, he said.” – Dominion Post, 7 May 2012

See: Key – “Europe shows zero Budget wisdom”

Deluded? Make up your mind after  he went on to say the following (Warning: Contains Crazyiness),

The number of people looking for work or in work is virtually a record in New Zealand, the second highest rate ever. What that shows you is that New Zealanders are more confident the economy is coming right and actually bothering to look for work. I know it sounds crazy.” – John Key, 7 May 2012

See: Ibid

Well, yes; crazy.

Only John Key could be so utterly disingenuous as to laud rising unemployment as ” New Zealanders are more confident the economy “.

Batshit crazy, actually.

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Sources

Fairfax Media: Key defends tax cuts in light of zero Budget

National Party: Special Edition: Tax cuts today

Radio NZ: Tax breaks to save jobs ‘a dangerous precedent’

TV3: Opinion – Is our economy collapsing?

Sh*t to p*ss you off

TV3: NBR Rich List 2011 – NZ’s wealthy doing just fine

NZ Herald: We’re doing all right, says English, despite GDP slowdown

NZ Herald: Fed-up Kiwis head to Oz en masse

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