Archive

Posts Tagged ‘Solid Energy’

Wellingtonians rally to send a message to the Beehive! (part rua)

17 February 2013 7 comments

.

SOEs

.

Continued from:

 

Wellingtonians rally to send a message to the Beehive! (part tahi)

 

NZ, Wellington, 13 February 2013 – The first speaker was Peter Love; Te Atiawa, and Board Member of the Wellington Tenths Trust,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Peter Love spoke of having to buy a bottle of water from the dairy – and yet Maori were castigated for trying to assert their own water rights. Holding up a plastic bottle of water, he said it’s not about “Maori owning the water”,

We have to make sure you don’t have to go into a dairy to buy this!

He spoke of countries such as China sending their workers into Pacific Island nations to build infra-structure and buildings for the locals, but for a price.  Peter Love spoke of powerful interests  seeking valuable resources  such as the fish in Cook Islands territorial waters.

He said asset sales would be a magnet for overseas investors,

They’re after our assets!”

Which is why“, he said, “we’re all here this evening challenging the government.”

Peter Love finished with a humorous touch,

My wife said, ‘hullo – don’t get arrested Peter...”

He encouraged the crowd,

“…Don’t forget, keep it up. Sign the petition against it. And we may have to call you again to go to Parliament.”

The next speaker was Peter Love’s mokopuna (grandchild), Kaira Ranginui-Love, of Te Atiawa, who spoke directly to the many young people in the crowd,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Ms Ranginui-Love spoke with deep passion about her feelings for this country, and how others wanted a piece of our paradise,

I love Aotearoa! I don’t know about you but I absolutely love this country. I believe Aotearoa is Heaven on Earth…

… For many of you, Aotearoa has been a home for you and your families since the time of the settlers, and for others.”
 
“… But regardless of how we all got here and what we’re all doing here, I think we can all agree  what connects us is our love for Aotearoa.”

“We are very lucky to live here. We have the oceans, the rivers, the forests, the lands,  and all that dwell therein. So we must look after our country, and be the caretakers, for now and for the future generations to come. We need to be wary that we don’t allow our country to be exploited by those in a position of power. The National government, the National Party, they have an immoral agenda based on monetary gain only…”

“…Is this government listening to our views?”

“I think this govermnment blatantly  ignores it’s people and what they want. What we all want. No thought has gone into the rippling effect that this will have on our futures.”

“…We’ll have no say, and we’ll  have no rights. This referendum will help to stop the government from making a terrible mistake. Remember, everybody wants a slice of our country, our paradise. So it is time to stand up. It is time to fight for this generation and the generations to come….”

“…The time to act is now, before it’s too late.”

Next, the Mayor of Wellington, Celia Wade-Brown – a veteran campaigner against the privatisation of Wellington’s former “Capital Power” company in the 1990s – spoke of her thoughts on selling strategic assets that belong to the people,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Mayor Wade-Brown welcomed people to the rally and acknowledged the hard work by organisors to set up the rally,

Let’s give the organisors a big round of applause!”

This week there’ve been a number of really important issues raised that resonate with all of us; leadership; jobs; a fair go; and a clean environment; public ownership of strategic assets. Those aren’t alternatives to each other, they go hand in hand.”

The Mayor spoke of Deborah Littman visiting Wellington and talking to Council (see: Mayor pushes to give hundreds a pay increase ) about how a living wage has in helped  many aspects of society in Vancouver and London, by raising incomes,

Low pay doesn’t help the local economy; low pay doesn’t educational failure, and low pay doesn’t help poor health. So the living wage is an idea to inspire us, it’s a journey, not an overnight transformation… … a living wage is good for the local economy.”

Mr Wade Brown referred to a Greenpeace economic report which outlined ambitious ideas for new jobs, new prosperity, and a clean economy. She outlined Greenpeace’s ideas for how huge wealth could be created for New Zealand by building an economy based on 100% renewable energy,  energy efficiency, and sustainable transport.

The mayor went on to describe one of her earliest actions soon after being elected to the City Council in 1994,

I voted in one of the earliest political decisions when I was elected on Council against the sale of Capital Power. And now the energy retail and lines businesses have been split up and sold and sold again  and it’s really impossible to assess what they would  be worth now.

But it could’ve been a huge help to the capital city as a basis for a smart grid, for electricity demand management, and for more manageble bills for people on low incomes. So I understand your concerns about selling of power generation companies.

More successfully, Wellington City Council voted against the sale of our Airport shares. Although one third does not give us control. But it does keep us in the loop and it gives us a considerable dividend that keeps your rates down.

And in the ’90s there were really truly mutterings –  I saw Cr Stephanie Cook here earlier and she’ll back this up – there were muttering about selling of our council social housing. It never did get to a vote, thank goodness... “

Social housing for vulnerable tenants was a social partnership, she said.

Mayor Wade-Brown then described Wellington’s water supply and categorically stated,

The basic public infrastructure should remain in public ownership and the charging policies and the conservation policies should be set democratically.”

She took a good natured ‘dig’ at Peter Love with the remark,

And I would like to add that you don’t need to buy in bottles because there are free water fountains along the waterfront.

Ms Wade-Brown told the audience that Council, in partnership with local Iwi, was bringing back alienated land to return to the Town Belt.

The Mayor added,

So local government faces the same financial pressures as households do, as you do,  as business does, and as central government does. But we’re not going to face those pressures by selling of our strategic assets. We won’t sell social housing, we won’t sell water infrastructure, we won’t sell the reserves that make this capital city so special.”

The mayor implored people to sign the petition – but not ten times,

It doesn’t help to sign it ten times, ok guys? If you’ve signed it, you’ve signed it…
… And tonight people are tweeting, blogging, using Youtube, and everything else to have your say. And that’s my main message; stand up and have your say, in the capital city!

Kia kaha.”

Next up – perhaps the country’s sanest, most common-sense economist – Ganesh Nana, rose to tell it from an economist’s  perspective.

Perhaps surprisingly, he wasn’t tied up and thrown into the harbour. Economists in the last thirty years have had a bad rep – perhaps only second to certain policians.

But Ganesh Nana is a rare breed of economist. He sees through the neo-liberal fantasy world of ideology and tells us that the dogma of the New Right simply does not work as ‘the label on the can’ promised,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Ganesh Nana started by saying,

I’m an economist, ok, so I promise not to say anything about ‘The Phoenix’ or anything about cats…”

That elicited a laugh from the crowd and then he launched straight into the issue of asset sales and started by asking,

You might ask why would you at all be interested in hearing from an economist, and I ask the same thing; “why is anybody  interested in hearing from an economist given whate total mess we’ve made of the economy to date, but never mind… You guys should really be asking for an apology from the economists given the mess we’ve made...”

“… But I will apologise on my own behalf for not not actually shouting out a lot louder evertime we’ve made a wrong turn. So today here I am shouting out just a bit louder for making a wrong turn yet again.”

The audience warmed quickly to Ganesh Nana’s self-deprecating comments and clapped at his remarks. Only a lone heckler, yelling out comments he must’ve thought were very hilariously witty (mistakenly),  stood apart from the crowd.

Ganesh Nana continued,

From a business perspective; a business person’s perspective;  this is a very, very, very,  simple problem facing us, or a simple question; why would you sell an asset?

I ask you that question and from my own academic perspective or background, when faced with that question  I go to a dictionary and look up the definition of an asset.

It’s really quite simple… … you’ll find some words around something that is valuable and of use. And then I started to think as a business person or as an ordinary person why would I get rid of something that is valuable and of  use?”

He then asked,

“…These assets that the Crown have, [that] the government on our behalf, [as] taxpayers, are holding. Do they continue to be valuable and useful?

And if so why are we getting rid of them?”

… From a business perspective the only reason I’d get of an asset is if it suddenly became a liability.

That is, it required a lot of upkeep and it wasn’t paying it’s way, so it wasn’t really an asset. And then, yes,  you get rid of it fast.

But is anybody seriously trying to tell me that those electricity generation stations, and all the infra-structure around it,  is something that we, as a nation, ‘ain’t gonna’ need for the next 20, 30, 40, 50 years?

Because if the answer to that is ‘yes’, then let’s get rid of it, because we don’t need it. But if we do need them, we need to hold onto them. It’s really quite that simple.”

Ganesh Nana was also adamant that not all economists follow the neo-liberal, monetarist line,

“…People who think that businesses or economists totally agree with getting rid of assets or following the market path, and there are lots of other reasons we could go into which are far too technical to go into tonight, about following the market and about how government shouldn’t be involved in assets; and shouldn’t be involved in the economy – those are smokescreens.

There are quite surprisingly some economists, myself included, who don’t follow that [ideology], and actually go back to the textbook… If it’s an asset, and it’s going to earn something over the future, you hold onto it for dear life. Because that’s what your future relies on!”

Ganesh Nana’s speech was well-received by the crowd. One could sense  that it was a relief for many who were listening,  that not all economists were wide-eyed free-marketeers demanding the dismantling of the State.

Ganesh Nana was followed by Geoff Bertram, Senior Economics lecturer at  Wellington’s Victoria University, and one who had been closely studying the energy sector. Mr Bertram understands the mechanisms by which our energy companies are valued and re-valued – and his simple explanations quickly reveal these valuations as clever, malevolent, rorts.

The same rorts used to drive up power prices on an almost annual basis,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Now, the government’s aiming to sell off nearly half of some state-owned companies worth about ten billion [dollars], so it’s hoping to get a bit about under half… perhaps $4.5 billion from the sales from anybody prepared to buy the shares that they’re going to issue.

I’m going to talk tonight really about the motivation  that might lie behind those sales, and I personally think it boils down to two things.

The first is the desire of  the Treasury to get the money and run before certain things become very apparent about the way that electricity prices have been set over the last two decades.

And the second reason I think is to close off policy options that might remain open to future governments if the assets remain in full public ownership. Because while the assets are in full public ownership, it is possible to change the way they are managed and change the way that  electricity is supplied…”

Geoff Bertram then made an explosive accusation against the government which, if true, revealed a shocking reason why National is so hell-bent on privatisation of certain state assets,

“… It’s my view that probably the  most important political consequence of the part-privatisation of SOEs is to place private investors in those enterprises  and thereby immunise them against possible future policy that might reduce their value.

And since  I think an important part of an improved government policy would indeed reduce their value, I am opposed to the asset sales…

…The companies have a very high valuation. The reason why they have a very high valuation  is that they have successfully participated in a long-running rort to extract cash from residential electricity consumers by the inexorable driving up of prices of electricity.

That rort, has been possible, because government policy has allowed and has indeed supported the emergeance of a cartel of five, large, vertically-integrated, generator-retailers – three of whom are SOEs  – which have been able to operate without any effective regulation, at the expense of  consumers who were too vulnerable to protect their interests against price hikes.

And if you looked at the tracks of electricity prices over the last 20, 30 years you will have noticed that large industry has protected itself very successfully; commercial electricity buyers have done fine; residential who are the dis-organised, unrepresented, undefended, captive group of customers have seen their prices go up in real terms 100% since 1986.

And the main consequence of the electricity reforms has indeed been that doubling of the cost of electricity to ordinary  households. 

That’s a major cause of energy poverty; it’s been an important part in the growing  inequality of income and wealth in this country; and it’s something that a socially responsible government would,  in my view,  be taking serious action to reverse.”

The audience broke into heavy applause as the implications of Geoff Bertram’s comments sank in.

It is simply extraordinary that none of the media present at the rally that day has reported Geoff Bertram’s amazing – and disturbing – analysis of the energy sector and electricity pricing in New Zealand. Is what he’s saying boring?! Too complicated?! Risking opening a can of worms?!

This should be a prime-time story on TV3’s “Campbell Live” and Radio New Zealand.

Geoff Bertram continued,

“Just to put that doubling of the residential price in context. New Zealand’s pretty much on it’s own in the OECD and if you look at  the figures for other countries around the OECD, from 1986 to the present, the price of electricity to residential consumers  in OECD Europe, in Australia, and in the United Kingdom, is still the same as it was in 1986. In the United States, Japan, and France, prices are down 25% , compared to where they were in 1986, in real terms.  In South Korea they’re down 50%, compared to where they were in 1986.

New Zealand is the only only OECD country that has gone out there and driven up electricity prices 50%. We’re also pretty much the only country that doesn’t have a regulator in place, and where government doesn’t have any particular social policy relating to the pricing of essential services to the public.”

Geoff Bertram then explained what he called “the re-valuation game”, as it applied to electricity pricing in New Zealand,

And here’s how it works.

You take a bunch of assets with a given value, and you look at the existing price, to consumers of the product, and you say “well look, we can get the price up”; so you project  that higher price; you capitalise that; and then if you can get the price up the asset will be worth more; so then you re-value the asset; and then you go and use the higher value of the asset to justify raising the prices, and then you repeat.

And this is the circular process which has been going on in New Zealand now, in electricity, for more than a decade. It is completely legal under New Zealand law.

It is not illegal to profiteer or  to gauge captive customers in this country. [In] very few countries is that true.

And it’s consistant with New Zealand’s generally accepted accounting practice which basically tells you that there’s a rotteness at the core of accounting practices in this country.”

Geoff Betram further described how the ECNZ had sold power stations to the newly formed Mighty River Power, in 1999, at a considerable mark-up. In effect  government sold these power stations to itself and in the process pocketed a huge profit. To pay for those power stations, prices were raised, forcing captive residential consumers to pay more and more for their electricity. He added that we have been,

“…living under a government which for two decades has  become effectively  a corporate predator, in this sector, where once it used to be a social provider.

The applause that followed that statement was louder than before. People were ‘getting’ what Geoff Bertram was telling them. He continued,

Here’s the problem. Electricity was once an essential service provided to households at the lowest price, consistent with covering the industry’s costs. 

Since 1986 the sector has been corporatised and part-privatised, and it’s pricing has been driven by the quest for profit by giant companies that have the market power to gouge their consumers.

As the owner of three of those companies, the New Zealand government has therefore become a predator. And now the Treasury wants to cash in on that rort by selling out half the government’s stake.

What that means in terms of the options for the future for government to turn around and come back from the predator model and return to a social service approach  for energy supply, is being closed off.”

Geoff Bertram suggested that every household in New Zealand could be allocated 300kwh [kilowatt hours] of free power every month, and pay market rates for anything over and over used. He added,

But if you want to deal with energy poverty and get kids out of hospitals with asthma and other respiratory diseases and so on, one of the really good  things that you can do is get cheap energy into New Zealand households and that would be sustainable on the basis of the current government owned assets.

About 300 kwh free. [But if] you sell Mighty River and what’s feasible comes down to 200 [kwh]. You sell Genesis and what’s feasible comes down to 100 [kwh]. You sell Meridian and it’s gone…

What I’m saying is the contract  that supplies the Rio Tinto smelter down at Bluff, the old Comalco contract, is the contract New  Zealand households should have had from the start.

And it still could be done.”

Imagine, every household in the country, receiving a dividend of 300 kwh, each month. The positive benefits for low-income families, in damp, drafty houses, would be incalculable. Coupled with providing free meals in schools for children, it would be a major blow against child poverty in New Zealand.

But not if National get’s it’s way.

A new Labour-Green-NZ First-Mana coalition government must listen to people like Geoff Bertram, Ganesh Nana, et al, if we are to progress forward.

After Geoff Bertram, the crowd was entertained by Maarama Te Kira and Lucky Ngatuere,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Following on from the entertainment, Jane Kelsey, Law Professor from Auckland University, addressed the Rally. Professor Kelsey is also one of the country’s acknowledged experts on globalisation, and a staunch critic of the TPPA (Trans Pacific Partnership Agreement), which is being negotiated in secrecy and condemned worldwide.

Professor Kelsey has also been the target of some fairly vindictive statements from the NZ Herald (see: Gordon Campbell on the NZ Herald’s attack on Jane Kelsey).

Professor Kelsey started by welcoming old friends to the rally,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

“…It was great to see lots of familiar faces from battles of the past, but it was also great to see so many young people here, because these battles are your battles for the future…

… I congratulate not only the organisor here, but  those who have been running the campaign  in Wellington gainst the asset sales, because it’s been a real inspiration across the country, and I know it’s being watched by people outside the country as well.

Some of those who are here will remember those battles we had in the mid 1980s when we were told that state-owned enterprises were simply a way of creating more efficient ways of keeping assets in  our hands. And we said at the time that it was a lie. And we knew it was a lie and they knew it was a lie. And we proved it was a lie and then they sold them off and then we had to buy them back.

Because as we predicted would happen, when you have private owners, especially private foreign owners, who have no stakes in our future, they will strip the assets. And thats what Bell-Atlantic and Ameritech did with Telecom and that’s what Wisconson Railways  did with the railways, and that’s what the [foreign ]banks that still own our banks, did with the Post Office Savings Bank and the BNZ and the Rural Bank, and so on, and we’ve been there and done that and we know what it means.”

At this point, Professor Kelsey held up a metre-square white board with heavy black lettering on it; ‘SAY NO’. It was a take on Winston Peter’s ‘NO’ sign from the Owen Glenn Donations affair in 2008. (see: Peters denies latest Owen Glenn allegations)  The placard provoked laughter from the crowd who obviously recalled the significance of it.

” They also know that the problem [for the neo-liberals] was that we were able to reverse some of those failed privatisations, and other things that failed. Like when they tried to privatise ACC. Like when they tried to de-regulate the electricity market. … So what they have is a new strategy designed to lock-in and make potentially irreversible the kinds of policies that they want to see rule in the interests of their cronies for the indefinite future.
These particularly  toxic legal products are known as Free Trade and Investment Agreements but they have nothing to do with trade, they’re actually investment protection agreements that make it almost almost impossible for us to be able to do the kinds of reversals of failed privatisations we’ve done in the past. We have a number of those agreements already.

And they are potentially causing some problems.
Some of you will have followed what’s happening with the tobacco companies, and their threats to sue over the introduction of plain-packaging tobacco. What we have now now is a particularly virulent strand of this this toxic disease. It’s known as the Trans Pacific Partnership Agreement, or the TPPA. We have other ways of describing the TPPA – Taking People’s Power Away. Toxic Profiteers Plundering Aotearoa.
What it’s designed to do, in particular in relation to investment, is to say ‘You have to open your doors without restrictions to the rights of foreign investors to be able to buy any of the assets within Aotearoa’.
Now, we already have an open door,  and they’ve already signed away the ability to reverse some of that.

But now they want to raise the thresholds even further, so that our ability to vet foreign owners is effectively taken out of our hands. But worse than that, once the foreign investors own the assets, these agreements give special guarantees to those foreign companies. They give guarantees that we will  not alter our future laws and policies in ways that significantly affect the value or the profitability of their investments.
So once we have – or they have – given away our assets, our ability to do anything to recover them is not only constrained by the kinds of threats that we’ve seen in the past and concerns about ‘crisis’ and ‘investor confidence’ and all of that other bullshit – we have threats from foreign investors under an agreement like the Trans Pacific Partnership Agreement, that they will sue our government not only for the loss of the value of their assets but the for the loss of future profits from those assets.
…It will not be a case that will be brought in our domestic Court. It is a case that will be brought in a secret, off-shore tribunal, where there will be three Arbitrators who would sit on the Hearing who last week were acting for an investor, and this week are acting as a judge in the cases brought before them by an investor. There is no system of  precedent, there is no openess so we can see the documents, or even sit in on the Hearings. There may not even be a publication of their judgement at the end of it!
These kinds of secret offshore tribunals are  so discredited now that many  governments are saying  they won’t agree to deals that allow foreign investors to have those powers.  And the Australians have said in the Trans Pacific Partnership Agreement that they won’t agree to foreign investors having those powers.

Our government – when John Key was first asked about this – said, “Oh, well if the Australians don’t think it’s a good thing, it sounds a little bit off-beam to me, so I suppose we’d go where Australia goes”.

Then his officials officials briefed him and said, “Well, actually Prime Miniter, no, we’re going to agree  to foreign investors having these powers”.
So this Trans Pacific Partnership Agreement is currently being negotiated. They want to try to close off the negotiations in October this year. The negotiations are all taking place in secret. We don’t get to see the final agreement until it’s signed off by the eleven countries negotiating it, which includes the US where the big foreign investors are based.
So, effectively the government is negotiating a Bill of Rights for foreign investors not only to enter and buy up this country, but to be able to threaten us in the future if we try to take back control of what is ours.”

Professor Kelsey invited the crowd to join in the campaign to oppose the TPPA, and pointed out information that was freely available on nearby tables. She warned the crowd,

“Join us in the campaign against the Trans Pacific Partnership Agreement, because so many of the things that we care about – We will not be able to effectively regulate in the future; we will not be be able to take back control of our future; if this agreement is passed. Parliament doesn’t get  an effective say on it. This is an agreement negotiated by the  Cabinet, it can be ratified by the Cabinet; and we have no say until it is a done deal.
We know that the Prime Minister is very good at secret done deals. We know that the Prime Minister is happy to do deals on behalf of his cronies. We know that the Prime Minister is prepared to sell out democracy, sovereignty, and tino rangatiratanga. And if we’re going to take back control of our futures then this agreement is a priority to stop this year, along with the asset sales.”

Professor Keley thanked the audience, who in turn cheered and clapped for her.

Meanwhile, Shane and Ariana (?) held aloft the anti-TPPA banner,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Next up, Bishop Justin Duckworth – the Anglican Bishop of Wellington. He had some very personal but salient anecdotes to share with us,

.

aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Bishop Duckworth greeted the crowd and started with this story from his own family,

” I was sitting out before and listening to the speakers, who were awesome, and I was suddenly talking to a new friend, I met a new friend, and he was telling me he was a father like I was a father, and we were discussing our children, and I suddenly remember a story that happened between my wife and my teenage boy. Classic conversation went down about domestic chores. And my beautiful wife, Jenny was saying to my boy, “it’s your turn to do the dishes”.

And he sort of said, “No, I did the dishes last night”.

And then she said, “I vacuumed the floor.”

And then he said, “Well, I watered the garden.”

And then she said, “Well, I dropped you to school.”

And it was escalating. Until my wife finally busted what I thought was the argument to end all arguments. And she said this; “I gave birth to you.”

I thought;  that’s it. Argument stopped. How could you argue with that?

My teenage boy had this comeback, “And your generation destroyed the environment for us.”

Good line, eh?

And it’s true isn’t? It’s true that our generation not only did we destroy the global environment, but  we have also instigated the global recession as well. And I think that the issues that we are talking about today about asset sales; the reason why that this issue in particular hits our public so strongly, and we have such a good turnout to this rally, is that because I think it’s at the core of a whole lot of other issues.

And so, as a man of faith, as a follower of Jesus, I just want to tell you what concerns me. And these are questions I have, I haven’t got the answers, but these are just questions.

Around asset sales I have questions  around the lack of regulation already  in place in the assets that we own…

… I heard Geoff speak, and I also read his articles, the reports about his papers a couple of weeks ago.  I am concerned that that it is simply not fair, and not just …”

“If we were to sell our assets how less a control do we have? If we already have such limited control at the moment on the regulation of them, how much more limited will it be in the future?”

My second question I would have is this. Recognising… that the Kai Tiaki of New Zealand is Tangata Whenua’s Maori people, and the wairua of this country, the spirit of this country is held by that Kai Tiaki, by the Maori people. I would have questions around what happens if we start selling our assets overseas, what does that mean for the Kai Tiaki here?

“… Third question would follow on from the Greenpeace speaker [Bunny McDiarmid – no recording of her speech made; blogger’s stuff-up], and that woud be this; What happens to the environment longer term if we lose responsibility and control of our power companies? What guarantees do we have whether actually our environment and our global climate change issues will actually be positively addressed by our country? I think there are huge issues there if we choose to sell our assets.”

Bishop Duckworth then concluded with this sobering anecdote – something personal, yet with global implications in how we treat each other,

“…Those of you who don’t know, my father was born in Burma – in Myanmar. A few years ago I went back with him; never visited before, me and my brother went back to Burma. Took my dad, visited a whole lot of wider family.

Once we were on a temple tour, as you do on these sort of trips. We were touring around these temples, and me and my brother, having a lot of sibling rivalry, we’d constantly compete to see who could get the best bargain for the little knick-knacks. You know that I mean? Those little things you buy constantly. So me and my brother were constantly competing for who could get the best deal  on knick-knacks.

One night we were just finishing another temple tour and this guy sidled up to me and was selling me hand-painted pictures of Burmese countryside. Now I’ve been around long enought to know what you can normally get these pictures for.

Normally you pick these pictures up for about three US dollars.
But I was militant that night. And I thought I’m going to prove once and for all that I can run the biggest, best bargain in the world. So I drilled that fellow down to get the best  bargain I could. And in the end I managed to get four pictures for five US dollars!

…We were getting a lift home, and I was showing the pictures to my brother and saying, “Look, I’ve got the best bargain ever!”

And the driver of our horse and cart leant over and asked, “Hey, um, what’d you pay for those?”

I said, “I paid five US dollars for the four of them”.

He sez, “Ohhh, it must’ve been a bad day.”

I go, “What do you mean?”

“The man musn’t have been able to sell anything that day, so he had to sell his goods at cost price, at least at cost-price,  just to buy rice for his family.”

And suddenly I realised what was just some crazy game, ideological game, for me, was actually  life and death for other people.

And my big questions I have around this issue is this; is this some crazy ideological issue that we’ve been driven  here, or is it actually about everyday people who are struggling, who need jobs, who need security, who need a future, and who need decent power.

And that’s my question.”

Ariana then troduced Maanu Paul, Chairman of the Maori Council, and  who was currently taking the Government to the Supreme Court over water rights. Maanu Paul had some interesting observations, and made a call to action,

.

Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Maanu Paul offered a greeting to the people at the rally, and then began with,

“When I was asked to come and speak, at this,  I asked, “who makes money out of this lot [asset sales] ‘?

And the answer was, we need to raise the consciousness of our nation in respect of our opposition to the sale of assets. The New Zealand Maori Council has had a long history of opposing the sale of our assets, beginning in 1986, when we established Section 9 of the State Owned Enterprises Act, which we said, “nothing in this Act shall be contrary to the Treaty of Waitangi”.

And then we had the lands case in 1987 when we stopped the sale of state owned land. And then we had a negotiation with the Crown over the sale of the biggest man-made forest in the southern hemisphere – the Kaingaroa Forest. And then they sold the spectra. And  we had an argument with the Crown over who owned the spectra. It’s about the same argumwent as who owns the water.

And the government of the day said, ‘Maori did not know anything about the spectra’. And I shot back to them, ‘Neither did they. An Italian  fellow named Marconi knew about it, and the Poms didn’t know anything about it at all’.

The upshot is that they allocated us a portion of the spectra and now we’re a part of Two Degrees.

Finally we come to the sale of the dams and the capacity to generate power. The whakapapa so far tells us that the constant that is present in all this is that the Maori Council has ensured that state owned assets stay in this country.”

There was strong applause at this point, and with a smile, Maanu Paul continued,

“Thank you. Because I’m going to ask you to put your hands in your pockets, because you owe us.”

More good natured laughter, and Maanu Paul’s smile widened, as the audience understood the nature of his remarks. He explained,

“You owe us because if we didn’t take this government to the Tribunal, to the High Court, and the Supreme Court, our assets would’ve been gone, would’ve been sold by now.

That is the reality of what we’re facing. And so the Council is dedicated to ensuring that we leave the world a better place for our mokopunas. We leave the world a better place that wehen we were born to it. And the world we were born to was, as far as I was concerned, I had the right to go and fish in my foreshore in my foreshore and seabed… heh heh heh…

I had the right to swim in my rivers and my lakes and call them my own. I had the right to do what I wanted with my land without having it confiscated.

And all of these tell me right now, that those rights have been eroded. Those rights have been eroded because this government, and previous governments, have failed to properly honour the Treaty of Waitangi.”

At this point, Maanu Paul called for direct action of a sort that up until now had not been considered. His comments have been reported in the media, and this is what he said, verbatim,

“And so my  message today, to us, is quite simply, is that we need to do more than sign a petition. We need to do more than gather in Frank Kitts Park, and what we need to do is to sit outside of Parliament and demand that we maintain the control of our assets.

What I’m suggesting – and I don’t know whether my Council’s going to agree with me about  this – but what I’m suggesting  is that we have a Noho Kainga [sitting] on Parliament grounds!

And we sit there until a fellow called Winston Peters might have put a Bill in Parliament that says ‘we are wishing to maintain ownership of the assets that we paid for in the taxes that’ve been levied upon us in the name of the public good’.

The audience resoponded enthusiastically to this suggestion, and the feeling was strong that many would’ve upped and left for Parliament’s ground at that very moment.

Maanu Paul continued,

“And the reason I’m saying this to you is that simply because there is no protection of your assets paid for by your taxes, which were levied upon you in the first place, in the name of the public good.

And we are the public and we should have a Nono Kainga to protect to protect our public good.”

Maanu Paul then sang a new “public anthem” to the crowd. This blogger can report that  his singing is something to behold – Maanu Paul has an awesome singing voice. Firstly his song was rendered in Maori, and then for the benefit of those who don’t yet know the language (including this blogger), in English,

‘I am the water, the water is me,

Cascading down,

from Ranginui,

Enveloping all,

The environment,

I am the water,

the water is me.’

Ariana asked the crowd,  “Yes, yes, yes! A sit down at Parliament – who’s up for it?

The response was shouted from the crowd loud and in affirmation.

A new people’s action may be in the offing… Stay tuned, folks. This ain’t over – not by a long shot. Or by John Key’s lamentable imagination.

A new chapter is unfolding.

Continued and concluded at:

Wellingtonians rally to send a message to the Beehive! (part toru)

.

*

.

Additional

TV3: Asset sales referendum likely (6 Feb 2013)

TV3: Govt under fire over Contact redundancies (14 Feb 2013)

NBR: Supreme Court to ignore govt deadline on water rights decision (15 Feb 2013)

Youtube: Say No to Asset sales in Aotearoa NZ.mov

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.

Relevant orgs

It’s Our Future

Keep our Assets

Aotearoa is not for Sale

Aotearoa is Not for Sale | Facebook

.

.

= fs =

Advertisements

Wellingtonians rally to send a message to the Beehive! (part tahi)

17 February 2013 6 comments

.

SOEs

.

NZ, Wellington, 13 February 2013 – Set against an overcast early evening sky, and a chilly southerly, several hundred Wellingtonians of all ages, races, political affiliations, and backgrounds came together at Frank Kitts Park, on Wellington’s waterfront,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Their common unity of purpose was to oppose the partial sale of state-owned assets,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Electricity-dustry expert, Molly Melhuish, with others from DEUN (Domestic Electricity Users Network). Ms Melhuish (center, holding white clipboard)  is  intimately familiar with the working of the electricity industry in this country and was a key member in   campaigns to oppose electricity privatisation in the 1990s – including Wellington’s Capital Power.

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

The messages were simple, and to the point. From Labour,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

.

… to the Mana Party,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

The message for National  was clear – what’s ours is ours,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

This Wellingtonian understood the folly and false-economy of selling state assets which are money-making cash-cows. Right wing politicians know this – but their zealous obedience to neo-liberal dogma seems to over-ride any semblance of common-sense,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Many in the crowd were of an age to recall the sale of Telecom – something that was resisted by 93% of New Zealanders,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

Interestingly, at least one right-wing politician has belatedly realised that selling state assets was a mistake – see: Bolger: Telecom sale a mistake

Dedicated ANFS activist, Frances, had a very simple question for Dear Leader,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

ANFS activist, Athena, handing out leaflets to people in the crowd and discussing issues with them,

.

Frank Macskasy   Frankly Speaking  blog  fmacskasy.wordpress.com  aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

With media filming the event, ANFS co-convenor, Ariana, opened the Rally with a welcome to the crowd and  an introduction of the speakers who had been invited to address the rally, with their thoughts on the sale of state assets,

.

Frank Macskasy  Frankly Speaking  blog fmacskasy.wordpress.com aotearoa not for sale - 13 february 2013 - frank kitts park - wellington - anti asset sales

.

The speakers came from a variety of backgrounds, and each gave their perspective on the issue of selling the people’s assets.

To be continued:

Wellingtonians rally to send a message to the Beehive! (part rua)

.

*

.

Additional

TV3: Asset sales referendum likely (6 Feb 2013)

TV3: Govt under fire over Contact redundancies (14 Feb 2013)

NBR: Supreme Court to ignore govt deadline on water rights decision (15 Feb 2013)

Youtube: Say No to Asset sales in Aotearoa NZ.mov

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.

Relevant orgs

It’s Our Future

Keep our Assets

Aotearoa is not for Sale

Aotearoa is Not for Sale | Facebook

.

.

= fs =

Heather Roy – head down the mine shaft?

5 November 2012 15 comments

.

.

Both TVNZ’s “Q+A” and TV3’s “The Nation” today (4 November) carried interviews with Bernie Monk, regarding  the upcoming royal commission of inquiry report, due for release at 3.45pm this coming  Monday (5 November).

See: Pike River families to get first look at report

The Q+A interview was especially interesting, as the programme followed up with  panellists from the Left, Right, and a Political Scientist. In this case, the panellists were ex-ACT MP, Heather Roy; political pundit, Jon Johansson;  and ex-Labour Party President, Mike Williams.

The issue quickly shifted to the de-regulation of the mining industry, and the gutting of the Mines Inspectorate. All of which happened under the neo-liberal “reforms” of the Bolger-led government in the early 1990s.

As the Dept of Labour website stated (in a belated attempt to justify de-regulation, but which actually turned into a damning indictment of National in the early 1990s) regarding the backdrop to de-regulation,

The HSE Act 1992 and the Department’s role.

45. In broad terms, the HSE Act replaced heavily prescriptive standards (telling duty holders precisely what measures to take in a particular situation) with a performance-based approach, primarily by imposing general duties (sometimes referred to as goal setting regulation) such as to take ‘all practicable steps’ to ensure health and safety, leaving it to the discretion of the duty holder how they achieve that standard. This approach was coupled with greater use of performance standards that specify the outcome of the health and safety improvement or the desired level of performance but leave the concrete measures to achieve this end open for the duty holder to adapt to varying local circumstances. There was also a focus on systemsbased standards. These identify a particular process, or series of steps, to be followed in the pursuit of safety, and may include the use of formal health and safety management systems.

46. New Zealand embraced the Robens philosophy of self-regulation somewhat belatedly, but with particular enthusiasm and in the context of a political environment that was strongly supportive of deregulation. Indeed, in various forms, deregulation (and reducing the regulatory burden on industry more broadly) was strongly endorsed by the Labour Government that came into power in 1984 and by the National Government that succeeded it in 1990. The HSE Act was a product of this deregulatory environment and in its initial version was stripped of some of the key measures recommended by Robens, not least tripartism, worker participation and an independent executive. It was regarded, so we were told, as a ‘necessary evil’ at a time when the predominant public policy goal was to enhance business competitiveness…

[…]

50. Put differently, whereas under the previous legislation, inspectors had been expected to go into workplaces and direct duty holders as to what safety measures they should introduce (the expectation being that the inspector rather than the employer would take the initiative) under the HSE Act employers bear primary responsibility for health and safety while providing information and support, particularly when it comes to establishing and developing health and safety systems and processes and takes enforcement action where the employer fails to meet the practicability standard.”

See: Review of the Department of Labour’s interactions with Pike River Coal Limited

Alt. link: https://web.archive.org/web/20111122210429/http://www.dol.govt.nz/news/media/pikeriver/Pike-River-Mine-review/regulatory-role.asp

The up-shot of  the above report is that instead of actively policing mines and their safety standards, it was all left to individual companies to address. Instead of being “prescriptive” as the DoL laments, individual companies were to adopt a “a performance-based approach” and to “to take ‘all practicable steps’ to ensure health and safety, leaving it to the discretion of the duty holder how they achieve that standard“.

Well, we know how that turned out.

29 men paid dearly for the liberalisation of safety regulations, in one of the most dangerous fields of  work on this planet.

The current state of our mines inspectorate is now so bad that even state-owned coal-mining company, Solid Energy publicly expressed it’s dis-satisfaction and called for the process to be handed over to Queensland for safety oversight,

Solid Energy has called for New Zealand’s mines’ inspectorate to be run out of Queensland, saying the lack of resource at the Department of Labour was partly to blame for the Pike River tragedy.

The state-owned power company is hoping to be the new owner of Pike River Coal, and said the best option to ensure the mine’s safety is to align New Zealand’s framework with that of Queensland.

“We are suggesting Queensland because we believe it is at the forefront of safety in Australia,” said chief executive Dr Don Elder.

“The industry needs research capability to look at the best advances overseas and evaluate how those might be applied locally.”

[…]

However, Elder said because New Zealand mining is a small industry, it would be too expensive to provide all of those services, so the most sustainable option is to contract inspectorate and support services to Australia.”

See: Solid Energy wants Australia to run mines inspectorate

So what was ex-ACT MP, Heather Roy’s, response in the discussion, that followed the interview with Bernie Monk, who lost in son in the Pike River Mine disaster?

Her response, to put it mildly, was eye-opening and jaw-dropping. In what should have been a crystal-clear message to worshippers of  Neo Liberalism, that de-regulation does not always work as intended, she managed to totally ignore the lessons of the Pike River tragedy and deflected the conversation elsewhere,

HEATHER ROY:  Well, in part, but I think Bernie was right when he said the New Zealand public haven’t forgotten about Pike River mine. Things like the Royal Commission are gonna highlight that. The real thing, the tragedy for the families is always going to be ongoing for them. The thing is what lessons can we learn from this, and Mike was outlining some of the things that he thinks should be done. This might be a bit of a watershed for OSH, and that would probably be a good thing in the mining sector. Another thing that needs to be examined is New Zealand’s environmental policies. Should this have been an open cast mine? Should it have been closed? All of those things need to be discussed, not just for Pike River mine, but across the board.

[…]

HEATHER ROY:  I think it’s a red hearing to blame deregulation for everything, though. What is actually important is the accountability that follows on from that. Deregulation in itself is not a bad thing. It’s what checks and balances are put in place so that accountability exists beyond that point– “

Source: TVNZ Q+A The panel

I’ve usually found Heather Roy to be the most rational of the right-wing nutjobs that pass for ACT MPs and supporters. She voices views – even if one disagreed with them – with a measure of coherency and logic that elicited a thoughtful response, rather than a gritting of teeth.

On this occassion, I gritted my teeth.

Right wingers make a fetish of demanding a high degree of personal responsibility from us, the Great Unwashed Masses.

See: ACT – Principles

But right wing political parties rarely (actually, never) take responsibility for their own actions.

It is fairly clear to everyone by now that the de-regulation of the mines inspectorates in the early ’90s was a grave mistake. 29 graves, to be precise.

So for Heather Roy to try to shift the blame onto OSH, when legislative “reforms” specifically stated that mines safety had devolved to individual companies, and was no longer the “prescriptive”  responsibility of the State is more than a little disingenous – it’s downright dishonest and insulting to all New Zealanders.

How can Roy say with a straight face, “I think it’s a red hearing to blame deregulation for everything, though. What is actually important is the accountability that follows on from that. Deregulation in itself is not a bad thing. It’s what checks and balances are put in place so that accountability exists beyond that point” – is beyond comprehension.

One can only assume she is relying on collective brainfade as to what National did in the early 1990s, and public lack of knowledge on this issue,  to try to get away with such bullshit.

How else does one explain her incredible statements,

I think it’s a red hearing to blame deregulation for everything, though.” – What else would one blame, when we went from seven mines inspectors in 1992 to 1, currently? When prescriptive safety regulations were replaced with companies taking voluntary “‘all practicable steps’ to ensure health and safety“?

What is actually important is the accountability that follows on from that. ” – It’s a bit too late for accountability after people have been killed in a disaster that need never have happened had stringent safety regulations not been removed.

Deregulation in itself is not a bad thing. ” – It is a bad thing when de-regulation results in injury or death, that was wholly preventable.

Perhaps Ms Roy would approve of de-regulating road safety rules? Would she endorse removing the speed limit, for example?

It’s what checks and balances are put in place so that accountability exists beyond that point” – At this point I had ground my teeth to nothing.  This comment contradicted her previous statement, “Deregulation in itself is not a bad thing“.

How can we ensure that “checks and balances are put in place so that accountability exists ” – when no regulation exists requiring “checks and balances“?!?!

Nothing Roy has said made any sense, and her assertions defy common sense understanding.

For an educated, articulate woman, she has allowed her natural intelligence to be clouded by the braindead dogma of neo-liberalism, which demands de-regulation and “small government” at any cost.

But there is always a cost.

Just ask 29 families on the West Coast.

.

*

.

Other blogs

Tumeke: The myth of over-regulation and the delusion of self-regulation

The Standard: Two faced John Key on Pike River

Additional

Q+A: Transcript of Bernie Monk interview

Ministry of Labour: A Guide to the Health and Safety in Employment Act 1992

.

.

= fs =

Dirty Dealings with Solid Energy

26 October 2012 15 comments

.

.

Last year, on 19 May,  Solid Energy was one of five SOEs that National announced would be partially privatised (see: Budget 2011: Govt seeks $7 billion in asset sales). Bill English announced, with a naivetee usually reserved for wildly idealistic, wide-eyed  youth,

Well targeted investment in infrastructure helps lift productivity, which over time will mean better wages and higher living standards for New Zealand families.”

To which, as the youth of today might reply,

Yeah, whatever.”

By 29 August, this year,  as   demand from China lessened, and the price of coal dropped, Solid Energy announced plans to make 363 workers redundant.

CEO, Don Elder, said,

I am very aware of the impact these decisions will have on affected staff members and our communities, but we’ve had to make these difficult decisions to cushion the impact of the market and protect as much as we can of the long-term value of the business.”

Source

On 25 September, Key stated,

Now that the coal price is collapsing, essentially Spring Creek is not viable.

It’s never been in the position where it was going to come on to the market today.  It’s been a five-year programme, and if you ask me in three, four, five years’ time, the anwer might be different.” .

Source

Along with Maori Treaty claims over water rights, and papers being filed in the High Court on 23 October (see: Mighty River sale paused during court action) which will see a delay in removing Mighty River Power from the SOE Act, the realisation that Solid Energy was also unsaleable under current economic conditions was another unwanted ‘hiccup’ for National.

On the same day, Solid Energy anounced that redundancies would increase from 363 to 460 and staffing levels would reduce from 1,800 at the beginning of the year, to 1,360.

Christchurch was to lose half of the 313 jobs at Solid Energy’s head office – another ‘hit’ against this quake ravaged city, along with planned school closures; problems with insurance companies; and Cantabrians leaving the area.

Remember that, ostensibly, redundancies were related to international coal prices and profit losses – not the deferred partial-privatisation of the SOE.

Yet, according to Solid Energy’s own Results Announcements 2012 report,  the company’s income was actually better than the preceding year,

Good operating performance overtaken by asset write downs

• Trading performance was good in a deteriorating market with strong NZD. Underlying earnings were $99.7 million (2011: $86.2 million).
• Asset write downs of $110.6 million net of tax and other adjustments have resulted in a $40.2 million loss after tax (2011: $87.2 million).

See: Solid Energy New Zealand Ltd Results Announcement 2012

In plain english (not the mumbled  Prime Ministerial  version), Solid Energy made an after-tax profit of $99.7 million – an increase from $86.2 million in 2011.

Employing a  book-keeping, accountancy “trick”, Solid Energy  reduced their own asset values by $110.6  million. (That’s like saying your house was worth  $300,000 in 2011, but only $250,000 this year. You still have your house and you’re living in it – nothing else has changed. Only the theoretical valuation has ‘reduced’. Next year that valuation could rise back to $300,000 or even more or maybe less. That’s creative accountancy for you.)

The point is that Solid Energy’s profit rose from $86.2 million to $99.7 million.

In fact, Solid Energy’s revenue in 2012 was $978.4 million – almost a billion dollars – an 18% increase from the previous year.

The proposition that Solid Energy is more profitable than either Don Elder or National make out is born out by this interesting article,  in Taranaki’s ‘Daily News‘, on 12 October this year. It appears that Australian coal mining giant, Bathurst, is experiencing a growth in share value as it discovers greater coal reserves at its Buller project on the West Coast,

.

Source

.

Bathurst is proceeding with “an extensive drilling programme” – indicating that the company appears unphased by current coal prices and is investing long-term in recovering this resource.

So what to make of the planned 460 redundancies?

What to make of Bathurst’s share price rising and continuing to invest in a comprehensive drilling programme?

The only conclusion that one can arrive at is that planned redundancies are a covert operation to “maximise” Solid Energy’s value and “efficiency”. The cost of redundancies – estimated at around $10 million – will be paid by the taxpayer and not the shareholders of any future part-privatised company (see:  Foreign workers lured by ‘work for life’ among sacked miners).

Reducing staff numbers – commonly referred to as “re-structuring” – is a common technique for  companies to cut costs in an attempt to return to profitability, or to make it more attractive to potential investors or buyers.

It is interesting to note that National’s secret agenda  of “re-structuring” Solid Energy, to make the SOE viable for privatisation, is a technique quite familiar to our Prime Minister, John Key,

During Key’s brief spell for Merrill Lynch in Sydney in 2001, he helped fire 500 staff as part of savage worldwide retrenchment by the bank. In the past, Key has appeared proud of his ability to sack without feelings. He told Metro magazine: “They always called me the smiling assassin.”

These days he insists these were not cheerful sackings.

“In the end I had to carry out wider responsibilities, but I think I’m fundamentally a nice guy, but have to follow instructions,” he says. “

Source

As  Don Elder said,

I am very aware of the impact these decisions will have on affected staff members and our communities, but we’ve had to make these difficult decisions to cushion the impact of the market and protect as much as we can of the long-term value of the business.”

460 workers face the sack.

No doubt John Key is simply  “having to follow instructions“?

.

*

.

Related previous blogpost

The real cause for Solid Energy mass redundancies? (5 September 2012)

Sources

Sunday Star Times: Who is John Key? (3 February 2008)

NZ Herald: Spring Creek mine work suspended (29 August 2012)

Dominion Post: Miners march on Parliament (25 September 2012)

Radio NZ: Hundreds of jobs going at Solid Energy (25 September 2012)

Daily News: Bathurst lifts Buller coal totals (12 October 2012)

.

.

= fs =

The real cause for Solid Energy mass redundancies?

5 September 2012 5 comments

.

4 September 2012: Citizens of Greymouth, protesting at impending job losses from Solid Energy mines.

.

On 16 August, Solid Energy undertook a review of it’s operations and workforce. CEO, Dr Don Elder,  announced,

 “While many in the industry still expect demand, driven by Asia, to pick up again strongly sometime in 2013 Solid Energy needs to plan to withstand these market conditions for at least the next 12 months and possibly for 24 months or longer.” he says. “As a consequence, we are reviewing all areas of our business, including current and future operations, all fixed and variable costs, and the values of some of our assets, which will result in us taking significant impairments. Our aim is to preserve cash through reduced spending while, as far as possible, maintaining our longer-term value opportunities.”

See:  Solid Energy – Continuous Disclosure

By 29 August, Solid Energy announced  140 jobs to go and a suspension of  operations at Spring Creek mine on the West Coast. A further 123 jobs were  to be cut at Huntly East Mine in Waikato.

See: Spring Creek mine work suspended

The following day, that number had risen to 250 job losses on the west Coast, and as one Greymouth retailer put it,

Two-hundred-and-fifty jobs, we’ve got a population of 8000 – it’s probably the equivalent of 40,000 people in Auckland jobs getting affected, so that puts it in perspective. “

On the same day, Solid Energy  reported a “loss” of NZ$40.2 million in the year to June 30, 2012,  compared to  a profit of NZ$87.2 million in 2011. (More on this shortly.)

See: Solid Energy reports $40m loss on big writedowns

No one can rationally argue that job losses on this scale, with ensuing loss of wages and company spending, will  have a devastating impact of the West Coast economy.  The losses will cause incalculable harm.

Solid Energy has attempted to justify redundancies by pointing to a drop in international coal prices; a fall in demand from  China; and a $40.2 million “loss” in profits.

Two of the above reasons have a degree of merit – the third reason has been mis-represented to the public.

International Coal Prices

Coal prices have indeed dropped.

From a recent high of NZ$185.47 per metric tonne in January 2011 – to NZ$113.33 at the end of July, this year. This is a drop of NZ$72.14 per metric tonne.

However the July 2012 price (NZ$113.33 per metric tonne)  is not  much different to the November 2009 price of NZ$115.52 per metric tonne. As a result of the November 2009 low price, Solid Energy had minimal redundancies,

There were 18 redundancies in the year at a cost of $367,050.”

See:  Commerce Committee 2009/10 financial review questions: Solid Energy New Zealand Ltd

That figure of 18 redundancies is in stark contrast to the 360 redundancies  this year.

.

Source

.

Demand from China

There is no doubt; demand for coal from China has  dropped,

Globally diversified miner Anglo American PLC said the global thermal coal market looks bearish in the short term, partly due to displacement of U.S. coal demand by shale gas and an economic slowdown in China, but it is still an attractive market over the medium to long term.

“In the short term, we will have a bearish market,” Norman Mbazima, chief executive of Anglo American’s Thermal Coal division, told analysts at a seminar. But “there is very good demand outlook for coal. Coal will continue to be the mainstay of electricity production in the world and this will underpin good prices into the future,” he said.

Gareth Griffiths, head of Anglo American’s Thermal Coal Marketing department, said that the main reason behind the recent collapse in thermal coal prices has been a slowdown in Chinese coal consumption growth.”

See: Anglo American – thermal-coal outlook bright (14 June 2012)

Coal demand is also expected to be fragile amid a weak economic outlook for the rest of the year.

A Reuters poll forecasts this year to see the slowest full-year of economic growth since 1999 as demand for China’s factory goods falls due to the debt crisis in its biggest customer the European Union.

“The coal market will remain challenging,” said Ivan Lee, a coal analyst at Nomura Bank.

FACTORY-DRIVEN REBOUND

Chinese coal prices can only rebound if demand recovers considerably, which requires the manufacturing purchasing managers index (PMI) to rise above 50, economic growth to climb above 8 percent and power plants’ coal stocks to fall by half, Lee said.

The data, however, is not encouraging. The latest PMI showed China’s manufacturing sector contracted at its sharpest pace in nine months in August, with the index falling to 47.8 from 49.3 in July.

Even if China decided it needs more coal, which is unlikely, it will not seek it abroad as imports have become more expensive than domestic supplies, traders said.

Australian imports, based on the globalCOAL index, now cost around $3 per tonne more than Chinese prices, although some traders are selling blended material at lower rates.

See: Reuters – Output cuts help steady China’s coal prices, outlook (29 August 2012)

Whilst this may impact on Solid Energy’s profits (as compared to this year and 2011), Solid Energy’s viability does not seem threatened.

The only threat to Solid Energy is it’s saleability.  The more profit Solid Energy makes – the higher the share price when it is floated on the Stock Exchange. By contrast, the lower the the profit, the lower the share price.

Which may explain Bill English’s comment in the media item below, “English – Solid Energy not ready for sale”.

Solid Energy Profits

According to Solid Energy’s own Results Announcements 2012 report,  the company’s income was actually better than the preceding year,

Good operating performance overtaken by asset write downs

• Trading performance was good in a deteriorating market with strong NZD. Underlying earnings were $99.7 million (2011: $86.2 million).
• Asset write downs of $110.6 million net of tax and other adjustments have resulted in a $40.2 million loss after tax (2011: $87.2 million).

See: Solid Energy New Zealand Ltd Results Announcement 2012

In plain english (not the mumbled  Prime Ministerial  version), Solid Energy made an after-tax profit of $99.7 million – an increase from $86.2 million in 2011.

Employing a  book-keeping, accountancy “trick”, Solid Energy  reduced their own asset values by $110.6  million. (That’s like saying your house was worth  $300,000 in 2011, but only $250,000 this year. You still have your house and you’re living in it – nothing else has changed. Only the theoretical valuation has ‘reduced’. Next year that valuation could rise back to $300,000 or even more or maybe less. That’s creative accountancy for you.)

The point is that Solid Energy’s profit rose from $86.2 million to $99.7 million.

In fact, Solid Energy’s revenue in 2012 was $978.4 million – almost a billion dollars – an 18% increase from the previous year.

.

.

See: Ibid

“Good earnings” indeed!

Any “loss” by Solid Energy is there a paper loss only; an accounting mechanism to revalue assets.  It’s profits remain unchanged.

Solid Energy therefore cannot rely on an imaginary “loss” to justify redundancies – because there was no loss.

It is noteworthy that Solid Energy’s decision to “mothball” Spring Creek mine and reduce staff at Spring Creek and Huntly follows one week on from this event,

.

Full story

.

Don Elder rejects all allegations that planned  redundancies are a covert attempt to increase Solid Energy’s profitability by reducing it’s labour costs,

This restructuring is not about increasing value, this is about saying `we have to do what we can afford to do.”

See: Mining job losses unrelated to asset sale: Elder

To which this blogger replies,

  1. There has been a downturn in international coal prices, and,
  2. Despite that, Solid Energy is profitable and it’s 2012 revenue exceeded last year’s, and,
  3. Bill English stated on 21 August that  “We wouldn’t be planning to float it [Solid Energy] any time soon”, and,
  4. A week later Solid Energy announced 250 redundancies and the closure of Spring Creek mine and,
  5. By contrast, there were only 18 redundancies in November 2009, even though the price per metric tonne was similar.

Coincidence? I think not.

Despite Elder’s protestations to the contrary, this blogger has no doubt whatsoever  that Solid Energy employers and the entire West Coast are paying dearly for National’s privatisation agenda.

There are some very dirty back room deals going on, and the wafting smell ain’t methane escaping from West Coast mines.

.

*

.

Additional

English: Solid Energy not ready for sale

NZX: Solid Energy responds to very tough market

Solid Energy: Business Sustainability Principles

Good operating performance overtaken by asset writedowns

Hundreds turn out to support Spring Creek workers

Solid Energy reports $40m loss on big writedowns

Outlook for coal market worse than at the bottom of the GFC, Solid Energy says; ‘Reason why full Crown ownership is not suitable’

Index Mundi: Coal, Australian thermal coal Monthly Price – New Zealand Dollar per Metric Ton

.

.

= fs =

From Parliament, 2011, to Greymouth, 2012

4 September 2012 5 comments

Nothing better illustrates National’s Epic Fail in the matter of generating new jobs than these two events…

Last year, as National delivered it’s budget, Dear Leader John Key stated,

New Zealand can’t keep borrowing money at $380 million a week. We can’t have New Zealanders exposed to high interested rates, New Zealanders need a plan for jobs.

This is a budget that actually delivers that.

Treasury say in the Budget, as a result of this platform on what we’ve delivered, 170,000 jobs created and 4% wage growth over the next three to four years.”*

.

Full Story

.

Fast forward sixteen months later, to Greymouth,

.

Full Story

.

It seems an extraordinary situation  that we have arrived in when New Zealanders have to take to the streets to protest.  Not protesting to save our Conservation estates; nor our state assets from being flogged of;  or in favour of  gay rights; nor any other environmental, political,  or civil rights  issue – but merely to protect jobs in a community.

It is bizarre that this is what we’ve come down to; protesting for jobs.

Unfortunately, this is about as “good” as it gets for a National-led government. National, being a Party that adheres to free market  principles that only private enterprise can create jobs, is trapped in it’s own ideology.

Which means that, unlike the past government of Mickey Savage, National refuses to be proactive. It will not get involved in job creation initiatives because it believes it has no role to play in such an area. That is for the Marketplace to deliver.

We may be waiting for quite a while.

In  May of this year, unemployment stood at 6.7%.

See: Unemployment rate lifts to 6.7pc

By August it had risen to 6.8%.

See: Unemployment rises: 6.8pc

The next Quarterly result, for the September-November period, will most likely show a similar increase.

If  the partial-privatisation of  Meridian, Mighty Rive Power, and Genesis Energy proceeds – expect more redundancies further still.Privatisation nearly always results in job losses (and price increases) to generate greater dividend returns to private investors.

That is what it means to elect National to power.

See:  Highest jobless rate in 2 years

National is so wedded to free market dogma that this situation will worsen until such time as New Zealanders can no longer stomach a right-wing government and follow their French cuzzies into electing a more proactive centre-left government.  Only then will a centre-left government deal with unemployment and focus on proactive stategies to create jobs.

See: Labour shortage here to stay, so we had better get used to it

We’ve been ‘here’ before, in history.  This blogger has seen this political drama repeated decade after decade since the 1970s.  (In fact, it’s getting rather tediously predictable.)

Unfortunately for the decent, hardworking people of Greymouth and elsewhere in New Zealand, the tragic drama  of unemployment, family life disruption,   social dislocation, and harm to business,  must play out before the final Act is staged on Election Night.

.

* At least, that’s what we hope he said. This blogger is checking the Parliamentary Translation Unit to confirm.

.

.

= fs =

Drug Testing the Unemployed – National’s Epic Fail at Job Creation

29 August 2012 31 comments

.

.

This blogger has three questions for John Key and  the National Party,

1. Is is true that Paula Bennett made a correct statement when she  admitted on TVNZ’s Q+A, on   29 April 2012,

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. ” – Source

2. If National can claim the Global Financial Crisis as the reason for New Zealand’s low economic growth – why does the same rationale not apply to the unemployed, and if it does, why spend an estimated $14 million on drug testing when joblessness is a result of economic circumstances, and not drug-induced laziness?

3. How is National’s pledge to create 170,000 new jobs – made in November last year – working out? Especially when unemployment recently increased from 6.7% to 6.8%?

A day after National announced it’s intentions to drug-test the unemployed, Solid Energy broke the news that it was planning to make up to 263 of it’s miners, contractors, and other staff, redundandant.  Workers from Huntly East Mine and Spring Creek on the West Coast will lose their jobs.

See: Beneficiary drug testing plans unveiled

See: Spring Creek mine work suspended

This follows on from other redundancies announced just this year alone,

How many of the above redundant workers will Bennett insist be drug-tested?

.

.

But more to the point – is this really a problem? Or, as is likely, is this a shameful attempt by National to deflect attention away from rising unemployment; their failure to manage an economy to generate new jobs; and to deflect blame onto the unemployed?

Because any sane, dispassionate analysis of this problem does not indicate that drug taking is the cause of 162,000 people currently out of work.

See: Unemployment rises: 6.8pc

Especially when in 2007, unemployment stood at 3.4%  – or 77,000 people!

See: Household Labour Force Survey December 2007 quarter

What has changed?

As National ministers  like John Key, Bill English, Gerry Brownlee, et al  like to consistently remind us – when their economic track record is held up for scrutiny – it’s called the “Global Financial Crisis”,

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

See: View from the Top

In the midst of a very deep global downturn we expect volatility and low growth, as we are seeing around the world economies.” – Steven Joyce

See: Parliamentary Questions and Answers – August 29

However, the government deferred the increase due to the challenging economic circumstances New Zealand was experiencing as it continued to recover from the global financial crisis and the Canterbury earthquakes.” – Gerry Brownlee

See: Petrol excise, road user charges increases

The global economic situation is like a dark cloud on the horizon and it’s not going to go away possibly for a generation – certainly for 15 or 20 years.” – Bill English

See: English warns of financial crisis lasting a generation

It’s abundantly clear that National has no reservation in blaming the Global Financial Crisis for the sad state of our economy.  They refer to overseas influences time and time again.

So why does the same economic situation not apply to other economic indicators – like unemployment?

Why try to smear unemployed – who up until recently were in full-time, paid, employment – and brand them as drug-taking, lazy, “bludgers”?

Why did Bennett make this statement,

Recreational drug use is simply not an acceptable excuse for avoiding available work. Thousands of working New Zealanders are in jobs requiring they be clean of drugs; it’s reasonable to expect someone looking for work to do the same.”

See: Beneficiary drug testing plans unveiled

Bennett is implying that someone looking for work must be on drugs? Why?

The answer, I submit to the reader, is that National is playing to it’s audience of middle class, low-information voters; right wing extremists; and the plain crazy nutjobs. These are the target demographics for the Nats.

Because any sane person will look at the above list of redundancies from the likes of Brightwater Engineering, Telecom, Ministry of Foreign Affairs, etc,  – and wonder – WTF?! Why is National spending $14 million of my tax dollars on drug-testing redundant engineers, telecommunication workers, diplomats, etc?!

Because it plays to an audience of predominantly middle class (and quite a segment of the working class), who find it all to easy to believe the cliched  stereotypes  that depict  All Welfare Beneficiaries Are There By Choice. Internet fora are full of uninformed, prejudiced, and outright  crazy ‘trolls’ who revel in their distorted view of those on welfare, or low-paying jobs.

Never mind that four years ago we had half the unemployment we do now.

Do those ignorant fools believe that unemployed are out of work by choice, having given up their average wage/salary of $800 to $900 per week, so they could live in luxury on $204.96 (net, weekly unemployed benefit)?

See: WINZ Unemployment Benefit (current)

Drug testing the unemployed has nothing to do with any perceived problem with drug abuse.

This is a carefully constructed, skillfully diseminated, lie.

National is spending $14 million on a problem that does not exist.

National is desperate to turn public attention away from,

  1. Increasing unemployment
  2. Increasing poverty levels
  3. More and more New Zealanders heading overseas
  4. A stagnating economy
  5. National’s lack of traction in creating the 170,000 new jobs they pledged last year

Middle Class voters are being targetted by National’s tax-payer funded spin doctors and political strategists. Their agenda is clear and simple;

  • Brand  the unemployed as “lazy” and “on drugs”.
  • So it can’t be a failure on the part of National to create the 170,000 new jobs they promised us.

See: Budget 2011: Govt predicts 170,000 new jobs

Above all else, National’s nasty little strategy is an admission of failure on their part. They have failed utterly to,

  • grow the economy
  • create jobs
  • raise wages
  • stem the flow of skilled New Zealanders to Australia

Because clearly, if a government was building an economy that was generating more and more jobs, then what would be the need to create a bogeyman of lazy, drugged unemployed?

Especially when Labour presided over a growing economy with low unemployment,

.

.

There was no talk of “lazy/drugged unemployed”  in 2007.

No Global Financial Crisis either.

Truly, National has hit rock bottom with this vile strategy. How long, one wonders, before the middle classes out in Voterland realise that they are being conned by some very cunning politicians and their back-room strategists?

A question for the Middle Classes;

We live in uncertain times. Any one of us are only one step away from being unemployed ourselves. How  would you feel being branded a possible drug-user by the likes of Paula Bennett and John Key?

Not too happy I’d suspect?

And one final question for the Prime Minister,

Where are the jobs?

.

*

.

Previous related blogpost

Jobs, jobs, everywhere – but not a one for me? (Part Toru)

What’s up with the Nats? (Part rua)

Related Information

Employment-Unemployment Fact Sheet #1: Queues for Vacancies

Other blogs

Tumeke: What the real aim of drug testing beneficiaries is

.

.

= fs =