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Posts Tagged ‘Phil Heatley’

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

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Lying National lying john key

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

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

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Like so many of  the Prime Minister’s promises, that “Key Committment” did not last long. Not even a year.

As Fonterra’s payout to farmers collapsed and weakening exports to China’s slowing economy began to impact on the government’s tax-take,   Bill English’s much-heralded promise of a Budget surplus sank deeper than the m.v. Rena in 2011. English promised almost exactly a year ago on 16 May 2014;

It’s a real surplus and it follows a string of improvements in deficits starting at $18 billion four years ago, this year about $2.5b and next year a surplus of $370 [million], and then bigger surpluses after that.

Barely three months after the 2014 elections, Treasury had bad news for English and the National government;

Treasury this morning delivered a body blow to the Government’s hopes of returning to surplus, saying it now expects a deficit of over half a billion dollars for the June financial year.

At this morning’s Half Year Economic and Fiscal Update, Acting Treasury Secretary Vicky Robertson said despite solid growth in the economy, the Crown’s finances would take a hit from lower than previously forecast tax take.

That had seen Treasury change its forecast operating balance before gains and losses (Obegal) for the 2014-15 year from a slim surplus of $297 million to a deficit of $572 million.

Treasury said softer outlook for economic drivers of the tax such as lower dairy prices and interest rates had seen the expected tax take for the year fall by $600 million.

In the same Herald report, English and Key  were both frantically doing their best King Canute impersonations since King Canute took a day to go to the beach;

But Finance Minister Bill English was this morning still clinging to the hope Treasury is wrong and the books will indeed be back in black this year as he and Mr Key have promised for some years.

I’m hopeful we will,” Mr Key told reporters this afternoon.

The view of the Minister of Finance is that we can still achieve that surplus. There’s a lot of different factors moving around here at the moment.

By 2 May of this year, even  National’s spin-meisters had run out of steam, and on TV3’s ‘The Nation‘, English was forced to admit that the world was indeed round and not flat; money-printing pixies did not exist; and dreams of a budget surplus were a Tory fantasy;

No, I don’t call it a failure. It is what it is, and that is for the 14/15 year, we budgeted $370 million surplus. It looks like it will be a $500 or $600 million deficit, and the surplus will be the next year. So we’re on track.”

So “the surplus will be the next year“?

The Minister had better be hoping that the Christchurch re-build; the Auckland housing boom; and renewed growth in China’s economy,  will continue to stimulate the economy. Otherwise, that “500 or $600 million deficit” will balloon into $1 billion or $2 billion or…

National’s expensive, multi-billion dollar 2009 and 2010 tax cuts may not have been such a clever move after all.

English, though, is not about to surrender. His government’s policies may be predicated on tax revenue from re-building a semi-destroyed city; an unsustainable housing boom in Auckland; and waning dairy exports – but National’s Finance Minister has other ideas up his sleeve.

In his 2 May interview on ‘The Nation‘, English committed the government not to cut spending;

Lisa Owen: Okay. Well, before on The Nation, you said that the Government would not make any cuts to reach surplus. Is that still your plan?

Bill English: That’s right. We’re not going to make any specific extra decisions now just because our tax revenue’s a percentage point – 1 percent down.

If past experience has taught us one thing about this government; if they promise you one thing, you can be sure that somewhere, in some back room; they are planning something completely different.

English has committed the government not to “make any specific extra decisions now just because our tax revenue’s a percentage point – 1 percent down”.

It’s just a shame we can’t believe a word of what he says. The cuts had begun long before English uttered his lies to Lisa Owen.

The story unfolds…

16 May 2014…

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Budget 2014 - Surplus real, says English .

National’s “economic whizz-kid” had promised the country a “$372 million surplus” – as well as “an increase to paid parental leave from 14 weeks to 18, free doctors’ visits and prescriptions for children under 13,  extra money to ease the cost of early-childhood education, eligibility for paid parental leave extended, and the existing parental tax credit to  rise“.

Labour’s social policies had been nicked by National. English basked in political glory. Sceptics were ignored. The country went to the polls four months later.

20 September 2014…

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National Party wins third term

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And then reality began to reassert itself.

16 December 2014…

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No surplus this year - Treasury

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National’s core policy; it’s raison d’être; it’s reputation amongst New Zealanders who are only vaguely politically conscious – is it’s so-called “reputation for fiscal prudence and responsible economic manager”, and it was rapidly being sucked down a flushing toilet of indebtedness. If it couldn’t deliver on it’s promise of returning the books to surplus – as Labour’s Finance Minister, Michael Cullen, had done between 2000 and 2008 – then what good was it?

English looked at his options to cut spending, and to raise money without creating headlines that shrieked “panic” or “broken promises”.

28 January 2015…

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Up to 8,000 state houses could be sold under John Key's radical plan - asset sales

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So much for Key’s assertion that “the truth is there aren’t a lot of other assets that would fit in the category where they would be either appealing to take to the market or of a size that would warrant a further programme”.

Truth and John Key parted company a long time ago. Key’s announcement that up to 8,000 State houses could be sold came only eleven months after his earlier committment to New Zealanders that no further state assets would be sold.

13 April 2015…

John Key denies there is a housing crisis in New Zealand;

No, I don’t think you can call it a crisis. What you can say though is that Auckland house prices have been rising, and rising too quickly actually.

21 April 2015…

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No free GP visits for all children - Government - broken promises - health cuts - National - under 13s

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National’s broken promise flew in the face of committments made prior to last year’s general election, as then-Health Minister, Tony Ryall said;

Free doctors’ visits and prescriptions for children aged under six will be extended to all children aged under 13 from July next year, Health Minister Tony Ryall says.

Budget 2014 is investing $90 million over three years from 1 July 2015 so primary school-aged children can go to a doctor for free, any time of the day or night, and get their prescriptions free as well, he says.

“National brought in the policy of free GP visits and prescriptions for children under six, including free after-hours visits. Thanks to our prudent management of the health budget, we are extending this policy to all children under 13.

This is what careful financial management can deliver to Kiwi families.

Interestingly, there was a very minor – but all-important word missing between two otherwise identical Facebook postings by John Key and the National Party;

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Facebook - free GP visits for all children - Government - broken promises - health cuts - John Key - under 13s

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Facebook - free GP visits for all children - Government - broken promises - health cuts - National Party - under 13s

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Note the one missing word – “all” – from Key’s Facebook statement.  Otherwise, the statement is identical to the National Party Facebook page. Someone in the National Party’s politburo obviously wasn’t keeping track of re-writing their election promises.

Green Party Health and ACC spokesperson, Kevin Hague, hit the nail on the head when he demanded;

If one in ten kids have to pay up to $38 to go to the doctor when they have an accident, then that visit is not free and that’s a broken promise. It begs the question: what other promises are the Government going to renege on this year in a bid to save a bit more money?  This shows how desperate the Government is to reach a surplus that it’s trying to pinch pennies from injured children.”

30 April 2015…

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Government offloads 2800 state houses to Auckland development company

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Attempting to justify the transfer, English announced;

Over half of the new houses will be sold to help offset construction costs, and the remainder will be retained as social housing. Our bottom line is that there will be at least as many social houses in Tāmaki as the 2800 there now.

As with previous promises, National’s assurances cannot be relied upon. Ministers will utter soothing reassurances one day – and weeks, months, or years later will find justification why they had to retract.

National ministers simply cannot be trusted to keep their word. Even if 7,500 new homes are built, there is no guarantee that “half of the new houses will be … retained as social housing“. National will find a reason to sell them.

English further stated;

The Government owns one in 16 houses in Auckland and we need to do a better job with them for the sake of tenants and aspiring homeowners, as well as for the neighbourhoods they live in and the wider city…

…This transfer of ownership of HNZC properties and the responsibility for tenancy management to TRC will enable faster construction of warm, dry and safe houses that better meet people’s needs.”

His comments are a repetition of National’s spin that NZ Housing properties are ‘badly run down and in dire need of maintenance’;

Finance Minister Bill English has confirmed the Government will need to spend $1.5 billion upgrading state houses as they are sold to social housing providers.

Mr English conceded many state houses were not up to standard and had not been properly maintained.

He said the cost of deferred maintenance had risen to $1.5 billion and that the matter had been raised during discussions with social agencies considering buying state houses.

“They’ve highlighted that. So part of the benefit of the process we’re going through is that these agencies are going to apply a very tight scrutiny to the state of the houses that maybe they might be looking at buying.”

Mr English blamed the former Labour-led Government, saying it had focused more on building new state houses than on maintaining existing homes.

English’s apportioning of blame to the previous Labour government is disingenuous.

The sole reason why Housing NZ has not been able to maintain it’s properties is that it has had to pay dividends from income (rent paid by low-income/beneficiary tenants) to successive governments. According to National’s Building and Housing Minister, Dr Nick Smith;

The average dividend under the 5 years so far of this Government has been $88 million. The dividend this year [2014] is $90 million…

Fairfax reported Nick Smith as stating;

Smith said the dividend had been been fairly consistent in the past several years – $71m in 2010, $68m in 2011, $77m in 2012 and $90m in 2013.

Four years worth of dividends – $306 million – were paid to the government’s Consolidated Fund. No wonder Housing NZ is unable to maintain it’s properties.

National was brutal in it’s expectations of huge windfalls from Housing NZ;

The letters reveal that on six occasions ministers asked for dividends to be hiked, or paid faster. In March 2010, Maurice Williamson wrote: “I expect . . . a significantly higher annual return to the Crown.”

Phil Heatley, when he was housing minister, asked that in 2011-12 and 2012-13 the dividend be $45m higher than that forecast in the 2011 Budget. Later he revised expectations upwards, to $251m over three years.

In July last year, Smith said “dividend levels should be significant enough to represent a challenge”.

These demands from National ministers were placed on a government department charged with housing the poorest and most vulnerable in our society. Williamson, Heatley, and Smith were content to bleed Housing NZ and let tenants live in cold, damp, miserable conditions.

Williamson, Heatley, and Smith – National’s 21st century slumlords.

As with Solid Energy, National exploited government departments and SOEs such as ACC, as “cash cows”, with which to balance their books to return to Budget surplus. (see: Solid Energy – A solid drama of facts, fibs, and fall-guys )

It is also worthy to note that National Ministers are employing spin when it comes to state house  sales. English and other ministers use the term “transfer” and not sale.

On 6 May, Bill English stated that  houses would not be sold “unless tenants get better services and taxpayers get fair and reasonable value“.

On TVNZ’s Q+A on 10 May, Minister for Social Housing, Paula Bennett, admitted that her government was selling state housing;

@ 2.13

Corin Dann: “But the point is, they are going to get these houses, they’re going to be sold these houses, aren’t they? You say transfer but it’s a sale of houses at a discount, right?

Paula Bennett: “Well, I’m sure it’ll be less than the market value, yes.

These are sales, not a transfer. “Transfer” implies a change of ownership without cost or exchange of money. There is Big Money involved in state house sales.

[Incorrect information deleted. – FM]

6 May 2015…

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 Invercargill and Tauranga chosen for first state house sales

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The Great Sell-off of Housing continues under National – with the government disposing of all state housing in Tauranga and Invercargill. Radio NZ reported;

The Government has announced it will begin selling off up to 1600 state houses in Tauranga and Invercargill to social housing groups.

There are 370 state houses in Invercargill and 1250 in Tauranga and it’s understood all of them could be sold if buyers come forward.

Only vetted and registered community housing providers will be able to buy them and, depending on their negotiations with the Government, they may not have to pay the market price.

There is nothing to stop private developers from acquiring state houses through back-door means, as this report on a landlords website explained;

The state houses will only be available for sale to registered Community Housing Providers (CHPs).

However, Housing NZ Minister Bill English said that registered CHPs can partner with other organisations to acquire and develop social housing.

Any transfer of houses will not affect the rent tenants pay or their eligibility for subsidised housing, and properties transferred as social houses will also have to stay as social housing unless the Government agrees otherwise.  In both Tauranga and Invercargill, Housing New Zealand owns a significant number of houses so there is potential for more than one organisation to acquire houses for community ownership.

This means there could be scope for private investors to get involved in the provision of social housing – either by becoming a registered CHP or by partnering with a registered CHP.

Speaking on TVNZ’s Q+A on 10 May, Minister for Social Housing, Paula Bennett confirmed that private investors could “partner” with Community Housing Providers to purchase state houses; re-develop the properties; and sell new residences at a profit.

On 6 May, English assured the public;

Any transfer of houses will not affect the rent tenants pay or their eligibility for subsidised housing, and properties transferred as social houses will also have to stay as social housing unless the Government agrees otherwise.”

Of course National will agree. This is a wholesale sell-off of state housing. Why wouldn’t they agree to new owners on-selling these properties for a profit? Otherwise new owners would be stuck with old, dilapidated properties, requiring expensive repairs, and soon getting into deep debt.

This is privatisation, by stealth,  through the back-door, using intermediaries. This is a whole new level of government subterfuge.

It also exposes John Key’s assurance – that state assert sales have ended – as a lie.

Conclusion

Finance Minister Bill English is desperately scrabbling for every dollar he can claw back. Miserly does not even begin to aptly describe this government’s actions.

It seems that the tax cuts of 2009 and 2010 are being paid for by paperboys and girls; sick children; welfare beneficiaries; and Housing NZ tenants.

It remains to be seen what further cuts in social spending Bill English has planned. His reassurances on 2 May 2015 – that there would be no cuts to social spending – are to be treated with the same contempt as other promises, assurances, and committments that have been made, and broken, by John Key, Bill English, et al.

Governments are at their worst and most dangerous, when desperate. And this is a desperate government.

Addendum1

Karol, writing for The Standard, has more on this issue. See: “Key Govt asset stripping state housing‘.

Addendum2

Registered community housing provider, Habitat for Humanity Invercargill-branch  chairman, Stephen Falconer, is an enthusiastic cheerleader for National’s covert privatisation programme. He told the Otago Daily Times on 7 May;

We’re a private organisation, essentially, and we think that private enterprise can actually do a better job than Government on most things.

Because private enterprise has done such a stirling job thus far in meeting demand for housing in Auckland, Christchurch, and elsewhere?

It is disappointing that an ostensibly community organisation like Habitat for Humanity has bought into the government narrative, complete with parroting neo-liberal cliches that “private enterprise can actually do a better job than Government“.

If it were true that “private enterprise can actually do a better job than Government“, then why does Habitat for Humanity exist?

Addendum3

Social Housing Minister Paula Bennett is interviewed by Corin Dann on TVNZ’s Q+A. Along with Bill English’s admissions, her comments are a disturbing indication where National is going with state housing.  See:  Govt social housing target 3000 homes

 

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References

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

John Key: My key commitments to you

NBR: Weak dairy prices prompt analysts to pull back Fonterra forecast payout for next season

The Independent: How China’s slowing GDP growth could drag down the global economy

TV3 News: National Party wins third term

NZ Herald: No surplus this year – Treasury

Fairfax media: Budget 2014 – Surplus real, says English

TV3: The Nation – Bill English

Fairfax media: Budget 2014 – Surplus real, says English

TV1 News: Up to 8,000 state houses could be sold under John Key’s radical plan

Radio NZ: Key denies Auckland housing crisis

NZ Herald:  No free GP visits for all children – Government

National Party: Free doctors’ visits, prescriptions for under 13s

Facebook: John Key

Facebook: National Party

Scoop media: Govt breaks free doctors visit promise to kids

Fairfax media: Government offloads 2800 state houses to Auckland development company

Radio NZ: Govt to spend $1.5b fixing up state houses

Parliament: Hansards – Questions for Oral Answer — Questions to Ministers – 8 May 2014

Fairfax media: Nats milking Housing NZ – Labour

Fairfax media: Not much in the cupboard for English to dine on

NZ Herald: State houses in Tauranga and Invercargill to go on the market

TVNZ Q+A: Govt social housing target 3000 homes

Landlords – For Kiwi Property Investors: State houses to go on sale in Tauranga & Invercargill

NZ Herald: Budget 2012 – ‘Paper boy tax’ on small earnings stuns Labour

Fairfax media: Invercargill and Tauranga chosen for first state house sales

Radio NZ: Tauranga, Invercargill state houses to be sold

Otago Daily Times: Invercargill among first state house transfer sites

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!

Our growing housing problem

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)

“It’s fundamentally a fairness issue”- Peter Dunne

Solid Energy – A solid drama of facts, fibs, and fall-guys

The Mendacities of Mr Key #11: Sorry, Prime Minister, what ‘mandate’ were you referring to?!

Other blogs

Polity: Housing horrors

The Jackal: Nationals housing failure

The Standard: Key Govt asset stripping state housing

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I will never turn my back on the poor

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This blogpost was first published on The Daily Blog on 10 May 2015.

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Phil Heatley

22 January 2013 5 comments

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Whangarei MP Phil Heatley demoted in reshuffle

Full story

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Was Heatley pushed because he wasn’t rebuilding State housing fast enough – or because he wasn’t selling off state housing stock fast enough?

National’s track record and a good dollop of cyncism suggests the latter.

Either way, it doesn’t matter. The whole lot has done inculable damage to our economy and should resign.

We need a fresh election. This year. Stat!

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Categories: The Body Politic Tags:

National recycles Housing Policy and produces good manure!

19 November 2012 3 comments

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Prologue…

On 10 August 2010,  the resignation of  former Labour Pacific Island Affairs Minister, Winnie Laban,  triggered a by-election in the Mana electorate.

The by-election was contested by almost every  party on the New Zealand political spectrum; Alliance,  Aotearoa Legalise Cannabis,  ACT,    Labour, Libertarianz,  Green Party,   Matt McCarten  (Independent), and the National Party. Only NZ First and United Future did not stand candidates.

The by-election was bitterly fought between Labour and National and was seen by many as a de facto “vote of confidence” in the current National-led coalition government.

National stood Hekia Parata, a List MP, as their candidate.  (She had also previous stood in the Mana electorate in the 2008 general election.)

October 2010: Gateway Project ON!

As part of National’s campaign to win Mana from Labour, Housing Minister Phil Heatley announced a new housing programme called the “Gateway Housing Assistance“. According to their press release,

Housing Minister Phil Heatley has today launched a new programme which will make it easier for first-time buyers and those on lower incomes to build or purchase their own homes.

Gateway Housing Assistance allows purchasers to build or buy a property but defer payment on the land.

“It is important the Government provides opportunities for people to move into home ownership. Affordable homes schemes such as Gateway is another way we can assist more people into a home of their own,” says Mr Heatley.

“Under Gateway full and final payment for the land can be deferred for up to ten years. This ten year period allows people on lower incomes to concentrate on designing and building, or buying, their homes before they assume the additional burden of paying for the land,” says Mr Heatley.

[…]

“Gateway will be yet another tool in the affordable housing tool-box. The Government already supports housing affordability through a number of other measures including Kiwisaver First Home Deposit Subsidy and the First Home Withdrawal, Welcome Home Loans, the Housing Innovation Fund and the Tenant Home Ownership Programme.

“We have also cut unnecessary bureaucracy and red tape to streamline building processes, which reduces the cost of building for everyone,” says Mr Heatley. “

See: Gateway to improve housing affordability

It was an election stunt, of course. Much like National’s “sudden interest” in upgrading State housing in the Porirua area,

National Party by-election candidate and Mana-based List MP Hekia Parata has welcomed the Government’s commitment to better maintaining state houses.

“It was great to get Housing Minister Phil Heatley out to Cannons Creek to see how the Government’s commitment to catching up on maintenance is making a difference. But it’s also been a good opportunity to reinforce with him that there’s been a long period of neglect.”

She’s commenting after visiting the Cannons Creek renewal project in Hampshire and Flora Streets today, and accompanying the Minister to the Government’s new Gateway Housing initiative, which was also launched in Porirua.

“The Minister revealed that beginning today, a further 360 upgrades will be carried out on state houses in Porirua City during the 2010/2011 financial year. That’s on top of the 275 houses that have received upgrades in the 2009/10 year.”

See: State housing improved in Porirua

The by-election was won by  Kris Faafoi, three months later on  20 November.

May 2012: Gateway Project OFF!

Having lost the Mana by-election, and as National scrambled to cut  state services; close schools; and scrap any  projects it could get away with (avoiding any public backlash in the process)  the “Gateway Housing Assistance” programme became a casualty,

John Key has defended a decision to cancel sales of affordable housing in an Auckland development, saying low interest rates are making it easier for first-time buyers and people on low incomes to afford their own homes.

The Hobsonville Point development, started in 2009, allocated up to 100 of 3000 houses under the Gateway scheme, a helping hand for lower-income first-home buyers who could not afford to buy in Auckland.

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The Prime Minister defended the decision not to include more of the Hobsonville development in the Gateway scheme.

“The Government has looked at that programme and decided that’s now not the most effective way of going forward”.”

Key added,

He said one of the positive stories at the moment was that mortgage rates had fallen.

“So we think the capacity for lower income New Zealanders to own their own home is greatly enhanced by the fact interest rates are lower.

“If you have a look at the average home owner in New Zealand, they are paying about $200 a week less in interest than they were under the previous Labour Government”.”

See: Key backs cut-off for cheap homes plan

It’s a shame that  Dear Leader spends so much time swanning around the golf courses on  Planet Key, that he obviously hasn’t heard of the critical housing shortages in Auckland and around the rest of the country; the astronomical prices for Auckland properties; nor the shortage of rentals.

On 19 November, Labour Leader David Shearer delivered a speech to  his Party conference, promising to implement a mass-construction project to build 100,000 homes for desperate families.

November 2012: Gateway Project ON (again)!

Having gotten ‘wind’ of Shearer’s plans for “Kiwi Build”, National scrambled to dust off it’s Gateway Project, three days before the Labour leader’s speech,

The Government has reinstated plans to allocate a percentage of the houses at Hobsonville Point in Auckland as affordable homes priced under $485,000.

In 2009, 100 of the 3000 homes at the development were tagged as affordable under the Gateway scheme, giving lower-income first-home buyers a helping hand.

Only 17 were sold, 14 for less that $400,000.”

See: Quota reintroduced for Hobsonville housing development

Heatley was keen to reassure the voting public that National would “do it’s bit” to help Kiwi “mums and dads” into their own homes – something that has become a distant dream during National’s term. Heatley stated,

This initiative will both add to Auckland’s housing supply, and demonstrate innovative commercial market-based solutions that could be replicated in the affordable housing market elsewhere in New Zealand.

Twenty per cent of the 2500-3000 new homes at Hobsonville Point will be priced at $485,000 or less. This means 500 to 600 more affordable homes will be built in this Auckland development alone.

The Hobsonville Land Company, a subsidiary of Housing New Zealand, will introduce a simple scheme to prioritise home-ownership access to some of the houses.”

All very plausible-sounding, though he was quick to allay any possible impression  of “nanny statism” or “socialist” interference in the Holy Grail of the Free Market by adding,

This initiative will both add to Auckland’s housing supply, and demonstrate innovative commercial market-based solutions that could be replicated in the affordable housing market elsewhere in New Zealand.

[…]

To protect taxpayers, the project’s lifespan will be determined by market conditions and the need to achieve a reasonable rate of return on the taxpayer’s investment.”

See: Hobsonville Point a boost for Auckland housing

One aspect to Housing Minister Heatley’s press release (Hobsonville Point a boost for Auckland housing) that is painfully evident is National’s luke-warm approach to the housing problem in this country.  Having read it, one cannot avoid the conclusion that their heart simply isn’t in it, and each word in their press release must have felt like pulling teeth.

Just by comparing the two releases of housing policies, one could easily gauge which Party was more enthusiatic;

National: a press release

Labour: a major policy speech,  given by the Leader of the Labour Party, at the Party annual conference, and released via television, internet, newspapers, etc.

National is not interested in assisting New Zealanders into their own homes. In this instance, National was more interested in trying to up-stage and undermine Labour’s release of  a major policy initiative.

It is apalling that National can play childish games with critical problems such as housing. This is naked politicking – at our expense.

Epilogue

National’s on-off-on-again approach to housing gives Flip-Flopping a whole new meaning.

Personally speaking, this blogger gives the Gateway Project another six to twelve months – and then it will be scrapped again.

It will then be resurrected during the 2014 (or earlier) election.

Are we having fun yet?

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Previous related blogposts

Can we do it? Bloody oath we can!

National prescribes bad medicine for the poor

Frankly speaking on Budget 2012

David Shearer: New Zealand – A new direction

Other Sources

Scoop: Gateway to improve housing affordability (11 Oct 2010)

National Party: State housing improved in Porirua (11 Oct 2010)

TVNZ: Loans for housing on crown land (11 Oct 2010)

NZ Herald: Labour’s Kris Faafoi wins Mana by-election (20 November 2010)

NZ Herald: Key backs cut-off for cheap homes plan (18 May 2012)

Scoop: Hobsonville Point a boost for Auckland housing (16 November 2012)

NZ Herald: Quota reintroduced for Hobsonville housing development (16 November 2012)

Additional

Wikipedia: Mana by-election, 2010

Other blogs

Red Alert: Housing response a sham

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Guaranteed Jobs? Big bloody ‘Tui’ to that!

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Frank Macskasy Frankly Speaking Blog

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National appears to be up to it’s old tricks, promising gold at the end of the rainbow,

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Frank Macskasy Frankly Speaking Blog

Full Story

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So let’s get this straight; Energy and Resources minister Phil Heatley is promising  that if locals submit to National’s proposals to dig bloody great holes throughout the Northland countryside, that jobs will be “guaranteed” to New Zealanders?!

Oh… really?

Is this a Real Promise?

Or is it one of National’s “promises” – along the lines of,

  • 170,000 new jobs? (Source)
  • stemming rising migration to Australia? (Source)
  • raising wages to parity with Australia? (Wage rises lowest since 2001)
  • not raising GST? (Source)
  • that cutting taxes and raising gst are “fiscally neutral”? (Source)
  • that tax cuts are “affordable”? (Source)
  • to “cap” the state sector and not cut jobs? (Source)
  • to recover the bodies of the 29 Pike River miners?
  • “National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing.” (Source) (Source)
  • “If we ended up as tenants in our own country, then I can’t see how that would be in our best interests.” (Source)
  • “We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.” (Source)
  • National promised not to cut or change any aspect of Kiwisaver. (Source)
  • There is no housing crisis in Christchurch? (Source)

The reader will excuse my cynicism, but this blogger has heard it all before from the Nats and their right wing allies. To be blunt, I wouldn’t believe a single word that came out of their mouths.

If Heatley is promising “guaranteed jobs for locals”, I’ll put my money on precisely the opposite.  As is happening in Christchurch, and elsewhere,

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Frank Macskasy Frankly Speaking Blog

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Frank Macskasy Frankly Speaking Blog

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Frank Macskasy Frankly Speaking Blog

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I rest my case.

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Three Jokers and an Ace

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This has been one of those strange weeks that only a National-led government can give us. Part of that strangeness has been described in a previous blog, with the antics of  Paula Bennett, Pita Sharples, and a slow train-wreck called ACT.

See: 20 May: End of the Week Bouquets, Brickbats, & Epic Fails

But before the weekend was over, there was more neo-liberal nonsense to follow. One thing you can always count on with the Nats – they’re good for a facepalm on a regular basis…

First Joker: David Carter

Local Government Minister, David Carter’s performance on TVNZ’s  Q+A, on  20 May,  was an exercise in National’s  ‘Daddy State‘ policies revving up several notches.

Not content with forcing assets sales, fracking, and deep sea drilling on us – the NPPB (National Party Politburo of Bunnies)  is now issuing diktats from on-high to local body councils.

Firstly, Kommissar Karter instructed local bodies what was  acceptable “core services” by local body councils,

GREG

Okay, core services – what on earth are core services? Because there seems to be a lot of scope in what a core service is and what a council should be taking care of.

DAVID

Well, it’s certainly clear what core services are, and they are rates and rubbish and water, et cetera. But this legislation’s not about saying to councils, ‘You can only embark on core services.’ It is still the responsibility of the council to engage with its community and find out what services that community wants. But we want that debate to be far more transparent than it has been in the past.

GREG

Well, hold on. It sounds like the Government’s wanting a bob each way in this. They’re wanting to say they keep in touch with what’s happening with the rates, but they’re only to go and do core services at a local level or not. Which way is it to go?

DAVID

We are not saying that councils can only do core services. If you take my Christchurch City Council, for example, and it runs the Ellerslie Flower Show in Hagley Park. You could argue that’s not a core service. The council has determined that there is value in delivering that show for the people of Christchurch, and, frankly, I meet a lot of people on planes who are travelling from all over New Zealand to come to that. The council’s decision is to run the Ellerslie Flower Show, and that is a decision for the council to make. It’s certainly not a decision for central government to make or for myself as minister.  “

Then the Minister advised the Great Unwashed what was not acceptable “core services”,

”  DAVID

We’re certainly going to get local government to be far more focused on what activities it undertakes. In the past, some councils have stepped too far and undertaken activities, Hamilton city, for example, with the Grand Prix racing. I think that was an activity that went far beyond where local government should have gone. It cost local government in that area a lot of money. We’re not saying you cannot run race cars; we’re saying you need to think very very carefully before undertaking that activity. And by putting these financial management tests in place, I think councils will think more carefully about some of those longer-term extraneous activities they’re undertaking than they did in the past.  “

So according to Kommissar Karter,

  • V8 car races – out
  • Flower shows – in
  • Asset sales – in
  • local democracy to choose our own expenditure: out
  • centralised, National Party control over expenditure: in
  • core service by councils – tba

The Minister then added, for good measure in case the proles had not understood his Diktat from On High,

”  DAVID

You’re hitting on the essence of the relationship that should be between local government and central government. It has to be truly a partnership, but it’s not on for local government then to step into the space which is clearly central government’s role. And it is central government’s role to establish the education system in this country. It is central government’s role to establish parameters of measuring the success of that. We can then work with Len Brown and his council, particularly as he tries to develop solutions to some of the social problems in South Auckland, and we’re happy to work with him in a partnership. But the core responsibility still remains with central government.

Which, if implemented, would mean that Otorohanga’s Council-led  and community-based initiatives – which has seen unemployment and youth problems plummet – would not be a core Council responsibility?

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Frank Macskasy Frankly Speaking Blog

Full story

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Had National’s policy of curtailing Council activities been in full-force, youth unemployment and associated problems would remain unchanged, or probably much worse in that small town.

See also:  Youth unemployment a growing problem

Or was the Minister expecting Otorohanga to wait for Central Government to address the worsening crisis of youth unemployment? Youth unemployment which has rocketed from 58,000 to 87,000 this year?

How would National’s policy, to “reign in” local Councils,  impact on other towns and cities that attempted to take steps to address our growing social problems? Would Auckland prohibited from pursuing a programme similar to Otorohanga?

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Frankly Speaking Frank Macskasy Blog

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David Carter’s performance on Q+A was simply breath-taking. If anyone thought that Labour was guilty of  creating a “Nanny State” – they had to watch Carter to see National go several steps further. In effect, central government will be dictating to local bodies what they can or can’t do.

Democracy? Not in our towns or cities, according to Minister Carter.

National is taking over. Curfew at 7PM.

See transcript: Q+ALocal Government Minister David Carter interview

See video:   Q+A: Local Government Minister David Carter (15:28)

The irony here is that whilst National stands by and watches unemployment soar, local communities, through their elected representatives,  are taking steps to address this growing problem.

Meanwhile, National’s response to unemployment is not to implement job creation programmes – their  response is to fiddle with welfare.

Which leads us to the next issue…

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Second Joker: Paula Rebstock

Q+A’s interview with Paula Rebstock – appointed by Welfare Minister Paula Bennett to head a board to oversee the implementation of National’s welfare “reforms” – is continuing National’s mission to demonise the unemployed; widows; solo-mums (but never solo-dads), and others who rely on social welfare to survive.

Since National has no job-creation plan,  Dear Leader and Paula Bennett are shifting responsibility for lack of jobs onto welfare beneficiaries. (Because we know that welfare pays for the mansion, limousine in the drive-way, and the beach house in Hawaii. Oh, wait, no, that’s John Key.)

It is a most pernicious form of scape-goating.

It is shameful, and panders to the nasty prejudices that reside in the dark depths of our vestigial reptilian hind-brain. For the Working and Middle Classes, who have always had the sneaking suspicion that welfare offers an opulent lifestyle – until they themselves are made redundant – only to then discover the true nature of just how paltry welfare actually is.

To put this issue into some context, New Zealand’s unemployment doubled after the global financial crisis and resulting recession,

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Frank Macskasy Frankly Speaking Blog

Source

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Rebstock headed the infamous “Welfare Working Group” in 2010. Some of the  recommendations of the WWG were so punitive and inhumane as to return to the Victorian Era. Even John Key was moved to reject many of Rebstock’s extreme proposals.

In November 2010, Rebstock was interviewed by Paul Holmes on Q+A,

”  PAUL

So that means a bit of government intervention, that means government providing these [jobs], presumably.

PAULA

Well, I don’t know if it does, and I think this is a really important point. If we look at how the labour market in New Zealand has performed, it is true we’ve been in a recession and we’re now moving into a slow recovery and jobs have been an issue, but since 1986 this economy has created more than 500,000 jobs. Now, it responded as well as almost any economy in the world to the economic environment. We had one of the highest employment rates in the OECD. I think that it is a little bit of a cop-out to say that we can’t deal to some of the issues around long-term benefit dependency because of the job market.

PAUL

Oh, come on, Paula, the jobs simply aren’t there. I mean, if you look at 2006, there was a 30,000 net gain of jobs. In 2008 it had gone down a bit – 9,000 net gain. God knows what it is this year.

PAULA

We actually are experiencing a gain in jobs. The labour statistics that came out last week show that. I’m not saying that we haven’t been in a recession, Paul, but this is the time right now to prepare people for the recovery. They need to be ready to take the jobs that are there.  “

See:  Holmes interviews Paula Rebstock (15 November 2010)

Unfortunately for everyone, the jobs were not “out there”.  With the recession is full swing, exports were down, and companies were laying off staff in their hundreds.

Unemployment in November 2010 was 6.4%. By January 2011, it had reach 6.8%. The rate moved up and down, and currently sits on 6.7%.

See:  Unemployment rate lifts to 6.7pc

Fast forward 18 months, and despite the economy continuing to stagnate, National is pursuing it’s scape-goating of unemployed and solo-mothers (but never solo-dads), and Rebstock and Bennett are both  still ‘singing the same song’.

On 16 May, Bennett said,

The cost of today’s total number of beneficiaries is estimated at $45 billion. It makes good economic and social sense to provide targeted support up front to get more people into work sooner.

This new approach will be embedded at all levels of the welfare system and the board will be responsible for ensuring accountability and overseeing the delivery of reforms that will see fewer people on welfare for long periods.

See:  Minister defends new welfare board

Not. One. Word. About. Job. Creation.

National is displaying an almost Obsessive-Compulsive antipathy on welfare issues.  Their sole focus is on welfare and welfare beneficiaries.

As if 80,000+ New Zealanders decided to chuck in their jobs in the last few years, and instead live the life of luxury on $204.96 a week (net).

See:   WINZ  Unemployment Benefit (current)

Yet, not too long ago (29 April), Social Welfare Minister Paula Bennett actually admitted,

PAULA         
No. There’s not a job for everyone that would want one right now, or else we wouldn’t have the unemployment figures that we do.

See:  TVNZ Q+A: Transcript of Paula Bennett interview (29 April)

So why is National spending $1.1 million on Rebstock’s ‘Work and Income Board’ to oversee WINZ – when it ain’t welfare that’s broke. It’s the job market that is 160,000 jobs short?!

See:  Rebstock to head welfare watchdog panel

Bennett goes on to say,

”  I’ve got fantastic frontline staff, I’ve got fantastic upper and middle management that are working hands on with policy changes and implementing that frontline.  “

“Fantastic front line staff”.

“Fantastic upper and middle management”.

“Working hands on with policy changes”.

But no jobs.

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Third Joker: John Key

National’s “Gateway” scheme had its origins during the Mana by-election, in 2010. As some will recall, it was National’s grand plan to beat the Labour candidate, Kris Faafoi.

National’s candidate was… Hekia Parata – the current Minister for Education.

Ms Parata lost by 1,406 votes to Labour’s candidate. (The margin widens when adding centre-left votes for the Greens and Matt McCarten.)

See: Mana By-election 2010

It appears that the “Gateway” scheme was little more than an election bribe for Mana voters; a “lolly” to entice people to vote for Parata.  National lost, and were stuck with fulfilling their policy pledge.

(Damned inconvenient when that happens, I guess.)

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Full Story

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Heatley touted the scheme, grandly proclaiming,

It is important the government provides opportunities for people to move into home ownership. Affordable homes schemes such as Gateway is another way we can assist more people into a home of their own.”

But by May of this year, it seems that it was ‘no longer important the government provides opportunities for people to move into home ownership’.

John Key announced it’s cancellation last week.

For a man who was raised in a taxpayer funded, and subsidised, state home with his siblings and widowed mum, and who benefitted from a societal  value that decent housing was a basic human right – John Key has some very strange attitudes toward providing shelter for the poor and vulnerable,

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Full story

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The Gateway scheme details,

GATEWAY SCHEME
* For first home buyers earning under $100,000 a year
* They can get a mortgage to build or buy a house on state land
* Must have at least a 10% deposit
* Have 10 years to buy the land

It’s interesting to note that Key is unable to deliver “low cost” housing for couples earning under$100,000 and says,

The Government has looked at that programme and decided that’s now not the most effective way of going forward.

So we think the capacity for lower income New Zealanders to own their own home is greatly enhanced by the fact interest rates are lower.

“If you have a look at the average home owner in New Zealand, they are paying about $200 a week less in interest than they were under the previous Labour Government.” – Ibid

His comments raises several issues,

  1. It says a lot about Key’s impression of what constitutes “lower income New Zealanders” when the threshold is up to $100,000 per couple. Perhaps by his multi-million dollar standards, a couple on $100,000 is “poor”?
  2. Derides the previous Labour government and claims credit for lower interest rates, by stating “they are paying about $200 a week less in interest than they were under the previous Labour Government“. As if current low interest rates are a result of National’s intervention? (Interest rates are determined by the Reserve Bank, and are currently low because our economy is stagnant. National can take credit for the latter, but not the former.)
  3. How can  providing decent, affordable housing for low income earners  be “not the most effective way of going forward” ?
  4. Key is living in a millionaire’s fantasyland if he seriously believes that “ the capacity for lower income New Zealanders to own their own home is greatly enhanced by the fact interest rates are lower“.  Dear Leader doesn’t understand that the interest rate can be irrelevant if people can’t afford to buy a home in the first place.

If ever there was ever an instance of the Silver Spoon mentality – look no further than our current Prime Minister, the Rt Honourable John Key.

New Zealanders are deluded if they think this man can relate to their ordinary, everyday, lives.

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The Ace: John Tamihere

As mentioned in a previous blogpost, John Tamihere is hosting an excellent, low-key, intelligent, current affairs chat show on TV3 (Sunday mornings) called “Think Tank“.  Last Sunday’s (20 May) episode focused on child poverty in New Zealand and what practical steps were required to address this growing social crisis.

Last week, it was pokie machines and their effects on communities.

As the show’s name suggests, the goal is not just to look into critical social issues – but to come up with solutions.  The show’s panel of four people offers solutions; and the guests scrutinises each suggestion.

It’s a chat show for sure – but instead of superficial inanities, the conversation is serious and fit for adult consumption.

This is good television. This treats the viewer as   intelligent and capable of considering complex issues.

This blogger can only live in hope that this is the turning point of 21st century television, and we are seeing an end (or at least slow reduction) of the execrable rubbish we have been served up, since  commercialisation and dumbing down became the norm for broadcasting in this country.

John Tamihere is perfect for the role of host for the show. Not a polished or trained media front-person, John Tamihere has walked the hard yards in life and has moved from the tough neighbourhoods of South Auckland to the halls of power in Parliament. He’s lived life. He’s seen things that Middle Class New Zealand has no wish to see or experience, outside of comfortable television shows.

This blogger’s only criticisms revolve around scheduling and lack of promotion.

Scheduling “Think Tank” on Sunday mornings ghettoises the show. It relegates it almost as an ‘after thought’.  It would be an act of naked political subversion to broadcast it during prime time viewing. (That should give National’s/NZ on Air’s,   Stephen McElrea something to howl about!)

The show also needs more promo on TV3. This blogger discovered it only by sheer fluke. Not promoting it leaves us wondering if TV3 doesn’t really want to draw attention to it? Perhaps doesn’t want to draw the ire of certain National Party ministers?

One hopes not.

TV3, as your print-media colleagues used to say, Publish and be damned !

It’s a good show.

Be proud of it.

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Media sources

Loans for housing on crown land

Holmes interviews Paula Rebstock (15 November 2010)

Otorohanga’s success story

Council goes solo to help young jobless

Key backs cut-off for cheap homes plan

Minister defends new welfare board

TVNZ  Q+A: Local Government Minister David Carter (video)

Reserve Bank to keep OCR unchanged though hikes flicker on horizon

References

Official Cash Rate (OCR) decisions and current rate

Previous blogposts

Fear and loathing in the Fascist State of New Zealand

Bennett confirms: there are not enough jobs!

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Key on Banks; Staunch, stupid, or stuck?

30 April 2012 24 comments

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One of the Golden Rules of politics is: learn to count.  This refers to everything from passing legislation to votes of confidence. In short, it means if you don’t have the numbers in government, you might as well call it a day and hand power to the Opposition (or call a snap election).

Counting especially focuses the attention of parliamentary leaders such as Key and Gillard, who have (respectively) one and two seat majorities in their respective Parliaments.

It means, also, that if a government has a generous majority, it can afford the luxury of holding their own Ministers to account and make grand exhibitions of standing down those who have done something naughty.

Conversely, if a government has only the slimmest majority, that same government will hang on to, and defend to the bitter end, any errant Minister or MP.

Some recent history should illustrate how this works…

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That Was Then

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2008 – 2011 National-led government majority: 16

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Richard Worth

Richard Worth was  Minister of Internal Affairs, Minister for Land Information, Minister Responsible for Archives New Zealand, Minister Responsible for the National Library, and Associate Minister of Justice, in the Fifth National Government.

In March 2009,  reports emerged that Worth’s trips to India were a conflict of interest. It was alleged he spoke on behalf of the Government while engaging in  private business deals.

On 3 June 2009, Prime Minister John Key announced Worth’s resignation from his Ministerial portfolios, after several allegations of inappropriate behaviour toward woman.

John Key said,

Dr Worth tendered his resignation to me last night, and I have accepted it.  He advised me of some private matters in respect of which he felt it appropriate that he should resign as a Minister. I accepted his resignation and have advised the Governor-General accordingly.”

See: PM’s Statement on Richard Worth’s resignation

On 12 June 2009, Worth announced his resignation from Parliament.

See:  Embattled MP quits Parliament

In October 2010, Richard Worth was  appointed to a  diplomatic role, “to the surprise of the prime minister”, as  Monaco’s honorary consul to New Zealand.

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Pansy Wong

Former National Party politician. Ms Wong was New Zealand’s first Asian MP, serving as a member of parliament for the National Party from 1996 to 2011. She was also the first Asian Cabinet Minister, with portfolios;  Minister for Ethnic Affairs, Minister of Women’s Affairs, Associate Minister for ACC, and Associate Minister of Energy and Resources in the 2008-11 National Government.

In November 2010, it was alleged that Ms Wong mis-used Parliamentary travel funds so that her husband could conduct private business in China.

See:  Pansy Wong’s political future in jeopardy

On 12 November 2010, as allegations surrounding her and her husband’s mis-use of Parliamentary funding were  investigated, Pansy Wong stepped down from her Ministerial portfolios.

John Key said,

At the end of the day she has to take responsibility for the fact her spouse was using her travel discount by virtue of her tenure in parliament, and on that basis she failed to exercise her responsibilities properly. She offered her resignation to me and I though it was appropriate that I accepted that resignation.”

See: Key: Wong ‘paying a very heavy price’

On 3 December 2010, an investigation by Speaker of the House, Lockwood Smith, found “no evidence of systemic abuse” of the Parliamentary allowance,

It found that one trip, a flight from Beijing to Lianyungang, China in December 2008, could have been in breach of the Speaker’s Directions,” Speaker Lockwood Smith said in a statement.

“While this trip was unplanned and inadvertent, it could be construed as having been for a private business purpose.”

The report recommended Mrs Wong and her husband repay the travel rebate for that trip of $237.06 each.”

See: ‘No evidence of systematic abuse’ of travel perk by Pansy Wong

Dissatisfied with the Speaker’s investigation, Labour MP, Pete Hodgson, called for the Auditor-General to carry out an inquiry into Mrs Wong and her husband’s use of the travel allowance.

Eleven days later, on 14 December, Ms Wong made her decision and resigned from Parliament.

See: Pansy Wong resigns as MP

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Phil Heatley

On 25 February 2010, Phil Heatley resigned from his portfolios of  Minister of Housing and Minister of Fisheries after announcing that he had wrongly charged two bottle of wine to his Ministerial credit card,

I charged two bottles of wine already highlighted this week to my account as food and beverages. There was no food included in this purchase, and I accept this could be viewed as an inaccurate representation of the expense.”

See: Phil Heatley’s resignation statement

John Key said,

I spent about an hour saying to him `look, I don’t think you should resign, I think you should stand aside.  I don’t think he’s a dishonest individual, I think he made some mistakes and they were silly, stupid and misguided.”

See:  Key says Heatley “a decent bloke”

However, Heatley did not resign from Parliament, and regained his Ministerial portfolios about a month later.

See:  Phil Heatley to be reinstated as a Minister

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This Is Now

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2011 – ? National-led government majority: 1

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John Banks

Allegations of not disclosing the sources of campaign donations have been made against John Banks. These donations were made by Sky City and web entrepreneur, Kim Dotcom.

In the case of Sky City, Mayor Len Brown received a similar amount of $15,000 from the Casino, and Brown later formerly declared it.

John Banks listed his $15,000 donation as “anonymous”.

In the case of Kim Dotcom, Banks has repeatedly stated, that he,

  • “could not remember” discussing donations with the businessman;
  • “could not recall”  flying in Dotcom’s helicopter;
  • “could not recall” suggesting that Dotcom split the $50,000 donation into two separate amounts of $25,000 each
  • “could not recall” phoning Dotcom to thank him for the donation
  • “barely knew Dotcom” and had met him for only 20 minutes – despite video later emerging of Banks and his wife partying with Dotcom and his wife, at the Dotcom mansion

John Key said,

At the end of the day, he either complied with the law or he didn’t – he said he did, I have absolutely no reason to doubt him. That’s not my responsibility. If somebody thinks that John Banks isn’t telling the truth, there’s a very simple remedy: they go to the police. That’s not my job to do a forensic investigation, my job is to assure myself I can retain confidence in a minister. If he tells me he followed the local government laws, then I accept him at his word.”

It appears  that John Key’s previous standard of accepting Ministerial resignations, whilst investigations are carried out, no longer applies.

What’s changed?

A difference in majority of 15, I would guess.

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Postscript:

PS 1; In yesterday’s NZ Herald, John Banks repeated his now well-known mantra,

I have nothing to hide and nothing to fear...”

The Herald noted that Mr Banks has not been returning their calls.

So much for not hiding or being fearful.

See: ‘I’ve nothing to fear’ – John Banks

PS 2; Police have confirmed they have received two complaints over “anonymous” donations made to John Banks during the 2010 mayoralty campaign.

See: Police confirm Banks complaints received

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Your call, Prime Minister.

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Additional

Banks accused of failing to declare donation

Dotcom’s secret donation to Banks

Banks did not reveal SkyCity as big donor

Banks questioned over Dotcom donation

Calls for John Banks to be stood down as minister

‘I’ve nothing to fear’ – John Banks

PM standing by under fire Banks

PM ‘turning blind eye’ to Banks – Shearer

Radio NZ Interview: Politics with Matthew Hooton and Mike Williams

Previous Blog Posts

Money in the Banks

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Did the Minister lie to New Zealand?

17 April 2012 5 comments

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On 15 April, Minister of Energy and Resources, Phil Heatley, appeared on TVNZ’s Q+A  for an interview on the controversial subject of fracking.

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Fracking has been banned in several countries because of fears it causes earthquakes. The process forces water and chemicals at high pressure into layers of rock to release natural gas or petroleum, and has raised health and safety concerns because of the poisons involved.

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Heatley appears to have made up his mind on the issue, saying,

No. I’ve got no concerns.”

The Minister seemed more focused on potential job creation, citing Taranaki’s petroleum industry,

Well, we know that in the Taranaki, you’ve got about 30- 3500 jobs directly– “

And,

“… in Taranaki, they’ve been doing it for 20 years, and they’ve had no problems.”

When the interviewer, Shane Taurima, asked about the potential of  fracking to cause earthquakes – as has been documented overseas – Heatley replied,

Well, it appears from Taranaki’s experience of two decades, water-quality testing, seismic survey-

… they’ve advised me that where we do it in New Zealand, in the Taranaki, it hasn’t caused it there, and that gives me confidence.

Shane Taurima then referred specifically to fracking around Christchurch.

In November last year, Christchurch’s Spreydon/Heathcote Community Board  unanimously  passed a resolution calling for a moratorium on the process,

The following Notice of Motion was submitted by Paul McMahon:
The Board received the notice of motion:
1.1 and 1.2 are noted in item 11 of this agenda.
1.3 That the Board request the Council to call for a moratorium on any hydraulic fracking in
Canterbury until an independent inquiry into the risks have been conducted by a suitable body
such as the Parliamentary Commissioner for the Environment.
The Board received the notice of motion and, with the consent of Paul McMahon, the addition of
attachment A maps of the permit areas, clause 1.2 and clause 1.3. The Notice of Motion was
seconded by Karolin Potter and being put to the meeting was declared carried unanimously.”

Heatley was questioned specifically on Christchurch’s move (@ 9.30 into the interview) to impose a moratorium,

SHANE
Because- Because the Christchurch City Council are the latest to declare their city-

PHIL
That’s right.

SHANE
free of fracking. They cite these concerns over water contamination and over the links to earthquakes. Are they simply overreacting?

PHIL
Well, the Christchurch City Council have decided unanimously to ban fracking. There has never been any fracking in Canterbury. There currently isn’t any fracking in Canterbury. And wait a minute. There’s no intention to have any fracking in Canterbury, so this council has suddenly come together, made a unanimous decision to-

Minister Heatly is either deliberately lying, or is woefully ignorant.

At least two  permits have been issued which will most likely involve fracking to be conducted around Greater Christchurch and south of the city, in Canterbury. A third permit (# 38264) refers to an area east of Bank’s Peninsula, and extending out to sea, potentially involving another contentious issue; deep sea drilling (by Anadarko).

Permit no 52614 has approval pending.

Permit no 52605 was aproved on 20 September 2011, to L&M Energy Limited. The Permit is of  an exploration type, with a duration for five years from issuance. An area of 3,600 square kilometres is involved.

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L&M Energy states on their website regarding their Canterbury project,

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L&M Energy Coal Seam Gas Permits

PEP52605 (South Canterbury) – 100%

PEP52605 (South Canterbury) is a 3,600km2 onshore permit located in the Canterbury Basin which was granted to L&M Energy on 20th September, 2011.

Prior exploration in this permit area has been minimal, with drilling generally undertaken in order to extend existing coal mines. Four coal and two petroleum wells were drilled in the 1970’s.

Because of the relatively unexplored nature of this permit, limited data is available.  In order to address this insufficiency, L&M Energy’s work programme includes extensive geological modelling and analysis. Additionally, the Company will look to assess the permit potential and evaluate structures, adding considerably to the knowledge base of the area. For more information, see our full work programme at the link below.

See: PEP52605 (South Canterbury) Permit Map from the New Zealand Petroleum & Minerals Website

See: PEP52605 (South Canterbury) Work Programme from the New Zealand Petroleum & Minerals Website

Whilst none of the above documentation refers directly to L&M Energy Ltd, and the company does not readily refer to it’s use, L&M obliquely acknowledges employing the process. The following is known for certain,

  • Permit #52605 is intended to prospect for coal seam gas
  • Coal Seam Gas is extracted by the use of hydraulic fracturing (“fracking”)
  • L&M Energy refers to hydraulic fracturing on their website, “…In the USA recent advancements in horizontal drilling and hydraulic fracturing have lowered the cost of production and increased reserves very rapidly, such that shale gas is now a major contributor to USA gas reserves.
  • L&M Energy’s 2010 report, “Commercialising Coal Seam Gas in Southland”  visually depicts the  “fracking” process, though does not refer to it by name,

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Source

So is  L&M managing director, Kent Anson, telling us the complete truth, when he was quoted on 7 November last year as stating,

L&M has not undertaken fracking in the permit, is not currently undertaking fracking in the permit, and has not formed a plan to undertake fracking in the permit.”

Yet, a month prior to that story in the ‘Canterbury Star‘,  when Kent Anson was interviewed on Radio NZ’s  ‘Checkpoint‘,  he stated categorically,

We wouldn’t handicap ourselves by any means. We will review all areas, involve all stakeholders during that process, but it’s not something which we wouldn’t discount.”

Perhaps  L&M Energy may well be honest when they state that they won’t be employing fracking  during  their exploratory phase of Permit 52605. But  if coal seam gas is discovered in commercial quantities, then the company will most likely  resort to that process because it is a cheaper option. As L&M states on it’s own website,

In the USA recent advancements in horizontal drilling and hydraulic fracturing have lowered the cost of production and increased reserves very rapidly, such that shale gas is now a major contributor to USA gas reserves.” – Source

So when Minister Heatley stated on Q+A last Sunday,

There has never been any fracking in Canterbury. There currently isn’t any fracking in Canterbury. And wait a minute. There’s no intention to have any fracking in Canterbury…”

How can he state there is “no intention to have any fracking in Canterbury” when even L&M’s  managing director, Kent Anson admits that, “it’s not something which we wouldn’t discount“?!

The evidence is clear that L&M Energy has been using fracking in Taranaki, and most likely will use the process in Canterbury.

Minister Heatley is either woefully ignorant of his own portfolio and worryingly doesn’t know what the drilling industry is up to – or he’s telling us fibs.

Either way, Heatley and National need to be up to speed on this issue. “Fracking” has been associated with earthquakes in the United States, and using such a process in a seismically-active region like Canterbury has to be one of the craziest notions yet considered by any corporation or government.

Cantabrians have a right to be concerned at L&M’s intentions. Indeed, this is not just a matter of fracking-chemicals polluting water tables and other environmental concerns – but is likely to be a matter of life and death for people in and around Christchurch.

Nature has been pretty tough on Cantabrians in the last twelve months. The last thing these folk need is more earthquakes – this time caused by stupid human activity.

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Postscript

DIGGING INTO SHAKY GROUND

Does fracking cause earthquakes? In Canterbury, where L&M is exploring for coal seam gas, this question is at the forefront of the fracking debate. The answer, according to a US geophysicist who specialises in induced seismicity, is yes. American geophysicist Michael Hasting told a Christchurch public meeting late last year that the injection of fluids deep underground under huge pressure – in the order of 7000 to 10,000 PSI – causes the rock to fracture, producing “induced” earthquakes.

“You basically need these earthquakes to produce the fracture system and permeability in reservoirs.” Most are too small to feel at the surface, with 95% smaller than magnitude 1. But Hasting says fracking can cause large earthquakes in seismically active areas. “If you’re injecting high-pressure fluids into a fault or near a fault that is active and near failure – that’s stressed to the point where it’s near to going – the fluids can lubricate the fault and cause it to slip.”

It has happened. “In Colorado at the Rocky Mountain Arsenal, they were injecting fluids along a fault over a period of a few years and they noticed increased seismicity in the area. On August 9, 1967, they had a magnitude 5.5 event.” The project, which was to dispose of wastewater, was shut down as a result.

In the Swiss city of Basel, fracking at a geothermal project is claimed to have triggered several earthquakes in the magnitude 3 range between December 2006 and January 2007. It, too, was subsequently shut down. And in 1979 through to the late 1980s at a geothermal field in Baja California, there were several magnitude 5 events allegedly triggered by fracking, with the largest measuring 5.4. So, should fracking go ahead in Canterbury without first checking the earthquake safety of the region?

“No,” says Hasting, who stressed he was a supporter of fracking if it is done well. “You shouldn’t do it. It would be absolutely irresponsible to go out in an area like Canterbury, which is a known area of tectonic fractures, and start injecting fluids without understanding the reservoir, the system, and where you are injecting these fluids. You want to determine where these faults are and how close they are to failure before anything is done. You can’t 100% guarantee that you won’t induce a large event in a tectonically active area like New Zealand.”

Source

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References

Hydraulic Fracturing (“Fracking”)

Q+A: Transcript of Phil Heatley interview

Q+A: Video of  Phil Heatley interview

Report of a meeting of the Spreydon/Heathcote Community Board held on Tuesday 1 November 2011

Ministry of Economic Development Permit Summary #52605

Petroleum Exploration Permit #52605

Ministry of Economic DevelopmentPermit 52605 Report – 16/04/2012

L&M Energy Ltd

Canterbury Star: Fears fracking could cause quakes

Radio NZ:  Fracking could soon be used near quake city

The Listener:  Fracking in New Zealand

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