Red Alert

Archive for September, 2010

more, More, MORE

Posted by on September 30th, 2010

While Red Alerters have been debating tax and GST this week, Carol Beaumont and I have been wading through the submissions to the Select Committee on the Employment Relations Amendment Bill and Holidays Bill.

Yesterday and today were long days with submissions from a mix of employers, unions and individual workers.  What’s disappointing is how employers seem to go onto autopilot – not only supporting National Party legislation, but wanting more still.

After weeks of the Minister of Labour claiming that the 90 day trial period is “voluntary” and that “employees don’t need to have a trial period if they don’t want one” her business supporters are saying that’s not enough.

Business New Zealand, EMA, the Hospitality Association, Air NZ, the Meat Industry Association, Ports of Auckland and a whole raft of other employers are saying the 90 day trial period should be the default provision for every worker in New Zealand.

What that means is your job will be subject to the 90 day trial automatically.

Depressing.  I often wonder if employers actually think, because if they did, they would know that this is not the way to productive workplaces and closing the wage gap with Australia.

However, there’s been some lighter moments.  Our Chair, David Bennett is struggling with the notion of unions and their role, even although the whole basis of the Employment Relations Act is around building productive employment relationships through good faith, trust and confidence and the promotion of collective bargaining.

His boss, John Key is quite happy to recognise unions as “social partners,” to engage with them to tap into the ideas of workers to get the economy through a recession.  The Government (along with Business NZ) confidently fronts up to the ILO every year and boast about NZ’s tripartite relationships – yet Mr Bennett thinks that unions are like lawyers – offering a service – and as such, should have no “special” rights.

Clearly, such old thinking is still alive and well in the National Party.

The consequence of the radical change in the early 1990s and the low levels of unionisation and collective bargaining is that New Zealand now has a thriving employment law industry with literally thousands of lawyers – all of them making good money out of employment relations.

We’ve heard from some of them on the select committee and while I have respect for their profession, quite frankly, few of them have a clue about the day to day relationships that are needed in the workplace to make it operate productively.

The Employment Relations Amendment Bill (No 2) and the Holidays Amendment Bill are a lawyer’s gold chest. I predict we’re going to see quite a few more of them in the Employment Authority and Employment Court in the coming years if these bills go ahead.

Even the right say National’s economic policy is stuffed

Posted by on September 30th, 2010

Bernard Hickey has joined a growing consensus that the Key/English economic model is stuffed.

He says:-

I think the Global Financial Crisis and the preceding decade of debt-driven instability in global capital markets and trade flows have demonstrated the failure of the economic model most New Zealand policymakers have adhered to for nearly 3 decades.

I think we need to rethink the way we run monetary policy, the way we allow foreign ownership of assets, the way we encourage savings, the way our financial institutions are regulated and change the things we are aiming for.

He might be right, but he is right.

Filed under: economic

How many times can a Phoenix rise from the ashes?

Posted by on September 30th, 2010

Lots of stories recently about the financial woes of the Phoenix and Terry Serepisos.

Serepisos seems to have given the team priority over paying trade and local authority bills.  Don’t know anyone who thinks he is a kindly Alan Hubbard type character.

The team has been great for Wellington and NZ Football needs to ensure they continue when the the  owner fails to front.

Filed under: sport

“Kickstarting” the biofuels industry

Posted by on September 29th, 2010

Yesterday Pansy Wong put out a press statement lauding the National government’s move to “kickstart New Zealand’s fledgling biodiesel industry”. Coincidentally, I’ve been visiting biofuel companies over the past few weeks and they’ve been telling me that the policies of the current National government are doing the opposite – they feel like the rug is being pulled from under them.

Before the last election the Labour government put in place a biofuels sales obligation. It would have required fuel retailers to mix a small amount of biofuels into their blends, thus guaranteeing a market for biofuel producers and ensuring the development of the fledgling industry, whilst at the same time also reducing our carbon emissions from transport.

For reasons known only to them, National repealed the sales obligation as soon as it took office and replaced it with a subsidy scheme for biodiesel. It was an odd move for a government that claims it wants to cut government spending – the sales obligation wouldn’t have cost the government anything, it would have put the cost back onto the oil industry, unlike their subsidy.

Biofuel producers I’ve spoken to have all said the same thing, as soon as the sales obligation was removed the oil companies walked away.Their slick marketing may try to convince us they care about sustainability and the environment, but in reality the mighty dollar rules.

The biofuel sales obligation wasn’t perfect, and I think companion legislation ensuring the sustainability of the feedstock (the material the biofuels are made from) was also needed. But recent history has shown that left to its own devices without any sort of government regulation, the oil industry has no intention of supporting biofuels. Gerry Brownlee’s biodiesel grants scheme has been a flop. It’s time to go back to the drawing board.

A new path for UK Labour

Posted by on September 29th, 2010

It’s been quite something watching the UK Labour leadership contest. Ed Miliband is the new leader. Below is his speech to the party conference, which breaks with some but not all of New Labour‘s legacy, and sets a new path for British Labour. (Skip to about 5 min in to get to the substance.)

OpenLabourNZ: Vote for the policy ideas you like

Posted by on September 28th, 2010

Open Labour Logo

Thanks for all of your contributions to OpenLabourNZ so far.

The policy principles and the discussions under each theme have been put on the wiki here, and will be incorporated into the final report.

Through the process many different suggested actions have been received. We’d like you now to vote for those, so we can see which ones you consider are the most important for Labour to have in our policy. As previously noted, this does not necessarily mean they will end up in the policy, but we are taking your input seriously.

To vote, please go here

For each suggestion you can ‘vote it up’ (if you agree with it) and ‘vote it down’ (if you disagree). You can also leave comments on each suggestion. If you have a suggestion that isn’t there, you can add that too (please read through the existing suggestions so we don’t get double ups).

There are currently 63 suggested actions in total. You don’t have to vote for all of them, if you don’t have time, just choose the ones that are most important to you. The suggested actions are listed under each of their themes, so you might want to focus just on the themes that matter to you the most.

If you were at one of the discussion tables for a particular theme at the OpenLabourNZ event, it’d be particularly good to have your input, and any additional comments you’d like to add. Here are the links to suggested actions grouped under each them on the IdeaScale site:

These suggested actions will be listed in the final report, with the number of votes each received, so this is a chance to have your say. Voting doesn’t require a log in, and can be done in one click.

National’s Tax cuts – is it fair?

Posted by on September 27th, 2010

Is it fair that the top 10% of wage and salary earners get 42% of the tax cuts and the bottom 20% get 2%?

Is it fair that someone on $1,000,000 gets $1,000 a week extra in the hand per week, and someone on the median income of $28,053 gets $4.64 in the hand per week after GST?

Is it fair that a regressive tax is increased to make a progressive tax less so?

Is it fair that the Minister of Revenue gets a tax cut of around $140 per week in the hand whereas someone on the median wage in his electorate gets about $5?

Nope didn’t think so – and neither do the vast majority of New Zealanders.

Filed under: GST, Tax

GST off fresh fruit and veg

Posted by on September 27th, 2010

Apple GST Poster distro

Today in Mana in front of a packed audience, Phil Goff announced the Labour policy of zero-rating GST on fresh fruit and veges once we become government next year.  The reasons for this policy are two-fold:

  1. at 15%, GST is no longer a ‘low rate’ consumption tax.  This regressive tax will now be at a level where it influences behaviour to the point where many people will be forced to make very difficult economic choices that have the potential to impact upon their health and well-being.  We recognise this and want to ensure that fresh fruit and vegetables are affordable to all New Zealanders. 
  2. NZ is now the 3rd fattest country in the world (behind US and Mexico).  The cost to the tax payer and the health system of obesity-related disease is around $500m per year.  It is time to do something about this.

In New Zealand, 75% of the people earn below the average income, and the cost of living is about to rise for everyone as a result of the increase in GST to 15%.  With inflation forecast to be around 4.5% next year, the ability of many kiwis to survive the resulting increases in the cost of living is hugely concerning for us.

GST at 15% will increase the cost of all food, and I do not think it is acceptable that in our country fresh fruit and vegetables start to become luxury items as the increases in the cost of living forces people to make choices that are not in the best interests of the health of themselves and their family.  

New Zealanders have to be able to afford to make choices around the type of food they fill their supermarket shopping trolley with.  And fresh fruit and vege needs to be at the top of the shopping list, and therefore affordable.  A University of Auckland medical school study shows that the price elasticity of healthy food is around 0.85 (i.e. for every 1% drop in price there is almost a 1% increase in purchase).  So price mechanisms do work in influencing behaviour – both ways (its the main reason why the govt increased excise tax on tobacco earlier this year).   

Let me give you a Napier example of how this policy will help many New Zealanders: the median income in Napier is $23,000.  According to the government’s tax calculator, this will deliver an after GST benefit of $3.17 per week in the hand.  If a family were to spend only $25 on fresh fruit and veges a week, the 15% GST on this mount is around $3.26.  So the cost of the fruit and veges is $21.74 – and the rest is tax.  We will put this tax back into the pockets of hard working Kiwis who will really struggle under the weight of increased GST.

If you are wealthy – really wealthy – and earn $1,000,000 per year, you will get about $1,000 in the hand per week extra under the Nat tax cuts on 1st October.  In Napier, if you are on the median wage you get $3.17 in the hand per week extra after GST.  That’s simply not fair.  Labour removing GST from fresh fruit and vegetables is fair.  And that is why we are doing it.

Filed under: GST, Tax

Back Benches this week – Wellington Mayoral Debate

Posted by on September 27th, 2010

TRANSPORTATION: What is the state of Wellington’s transport? Do we need better roads? Is it time for the Basin Reserve Flyover or a second Mt. Victoria tunnel? What about Transmission Gully? Do we need, as Celia Wade-Brown proposes, light rail? And can people get in from the Hutt by train without them breaking down on a regular basis? Are our buses in good shape?

ABSOLUTELY, POSITIVELY, WELLINGTON: Tourism is the focus of the next two panels—Should Wellington be the permanent home of the NZI Sevens tournament? Are we prepared for the Rugby World Cup? Is Wellington the arts capitol of New Zealand or are we at risk for losing that title to Auckland? What about Wellywood? How do we keep shows like the World of Wearable Arts coming to Wellington?

LIVE pub politics from the Backbencher Pub: Wednesday, 29th of September. The Panel: Wellington Mayoral Candidate Al Mansell, Wellington Mayoral Candidate Bernard O’Shaughnessy, Wellington City Councillor and Mayoral Candidate Bryan Pepperell, Wellington Mayor Kerry Prendergast, Wellington City Councillor and Mayoral Candidate Celia Wade-Brown, and Wellington Mayoral Candidate Jack Yan.

So whose names does Ted write down first

Posted by on September 27th, 2010

I’ve been musing over the weekend as to who the first five names are that Ted Henry puts on paper when he is picking his team, and the order. Is’t that easy but here is my list:-

  1. McCaw simply the best player in the world at the moment – and a good leader with it.
  2. Carter – this guy gets better the more important the games are.
  3. Thorn – probably the hardest worker in the tight – and his speed over 10m is great for a relatively old player.
  4. Jane – has the ability to make something from nothing and brilliant hands
  5. Reid -Read wondered why he was in the team a year ago but his positional nous and strength shows that Henry knew talent when he saw it.

And yes four Crusaders and that hurts.

Filed under: sport

Bowling for Avonside

Posted by on September 26th, 2010

Beaut spring weather and the start of the bowling season – I attended two clubs yesterday. A welcome signal of life becoming increasingly normal for most Cantabrians.

Not so though for some. Around 200 people turned out Friday night to a meeting I called for Avonside residents.

I acknowledge that five council officers, including engineers, were a welcome presence. albeit that even getting one of them there was uncertain  until two hours earlier. One key assurance was to get some signage up to discourage rubberneckers and get traffic to slow down – vehicles passing at any speed throw up dust and can cause more shakes inside homes which have suffered severe quake damage.

Big thanks to EQC’s Reid Stiven who’s been on the go for three weeks fronting multiple meetings across Canterbury and providing much-needed information directly to stressed residents. I trust he’s now enjoying a well-earned break.

As we emerge from response to recovery, the key issue coming through is the importance of providing information to residents. Yes, there are adverts in the Press and brochures available but they are not always reaching those most in need.  The allied need is for engagement with communities. People facing major questions about whether their homes can be repaired or not, or if there sections can be remediated, deserve to have more than a formal announcement communicated to them.  Improving that is a key task from here on.

Taste of Japan in New Zealand

Posted by on September 26th, 2010
Opening the Taste of Japan 2010 festival in Auckland, we had the opportunity to firstly taste the pure and fresh Japanese sake (??). Photo credit: Paul Stevenson

Opening the Taste of Japan 2010 festival in Auckland, we had the opportunity to firstly taste the pure and fresh Japanese sake (??). Photo credit: Paul Stevenson

Congratulations to the New Zealand Japan Society of Auckland on its 50th anniversary!

Thousands of Aucklanders enjoyed the Logan Campbell Centre event on Saturday, where the organisers “walk you through a unique time” from Oshougatsu (New Year) through to Oomisoka (End of Year).

I conveyed Labour Leader Phil Goff’s regards in my speech by starting with “Go sh?tai itadaki arigat? gozaimasu!”

My efforts to try to deliver a short speech in Japanese seemed to have met the approval of both the Consul General Ishida and the Society’s President Stephen Duxfield.

Special features of the one-day event included visiting musicians, dancers and calligraphy artists from our sister city in Japan, Haiku (poetry) competition, Japanese art exhibition and Tatami workshop to make our own miniature tatami mat.

The Society was established in March 1960 in Auckland by the former Ambassador of Japan S. Ishiguro and A.G. Hardy Hon. Consul of Japan. Mr Hardy was known as Captain Hardy a member of the Northern Steamship Co, which was an agent of Nitto Line (later Nippon Line). Mr Hardy was Hon. Consul for Japan for a long time until the appointment of the first Consul of Japan, Mr Isaburo Mukumoto in 1968. The first President of the society was Mr Owen Rainger (see

As Mr Duxfield said that “the society stood the test of time and gained credibility as we adhere to our core aims to serve the broader community.”


The Tax Switch/Swindle

Posted by on September 26th, 2010

The last few days in the electorate have been marked by an increasing number of people, of all political persuasions working out that the tax switch is going to see them no better off, and in many cases worse off. The GST increase, and the associated price increases are top of mind. In Wellington 6% increases in power bills and the increasing costs of bus travel will wipe out the meagre tax cut benefits for those on low to middle incomes. Everything from the increased cost of rates, rents, stamps and food have also been raised with me.

The NZ Herald had a feature story on this yesterday as well, and the experience of the family who have had the benefit of tax cuts wiped out by the government’s funding cut to early childhood education is another commonly raised issue.

The Sunday Star Times story today, though, makes clear the real problem with the tax switch

The real winners from the cuts are people earning more than $70,000 a year. Anyone earning $100,000, for instance, can expect nearly $70 more in their pay, making them $42 better off after paying that extra GST. For low income earners, the impact is marginal. Someone on $20,000 will be nearly $3 better off, while someone on $30,000 will be $6 richer.

No wonder John Key has instructed his MPs to try to sell the tax switch. The problem is people know their own budgets and costs, and no amount of spin will change that.

Ed Miliband New UK Labour Leader

Posted by on September 26th, 2010

The UK Labour Party have made a bold call and elected Ed Miliband as their new Leader. The front runner for most of the race was Ed’s older brother David, who many saw as the natural successor to Tony Blair. Ed’s election suggests the party wants to move away from the ‘New Labour’ approach and resort to a more traditional brand of Labour politics.

UK Labour uses a preferential voting system for their Leader and according to the BBC, David was ahead for the first three rounds. After four rounds of voting Ed Miliband won with 175,519 votes, while David Miliband received 147,220 votes.

John Key and MMP

Posted by on September 26th, 2010

An interesting story in the Sunday Star Times today

THE PRIME Minister’s chief of staff told anti-MMP campaigner Peter Shirtcliffe last year that John Key supported moving to a Supplementary Member system, and that there were no “impediments to progress” in caucus, minutes leaked to the Sunday Star-Times show.

This is interesting in light of John Key’s comments last week that he thought the ACT party’s meltdown was likely to see people vote MMP out. This was of course a classic tactic to divert the debate away from the actual issue (the fact he is supporting Rodney Hide who covered up David Garrett’s actions) to try to make it about MMP.

In what we now know as business as usual for Key he has played every side of the argument with MMP, and we have heard lots of platitudes about him not taking a strong stance. Many people have had suspicions for some time what he really thinks. Its time for him to front up to the public about where he stands.

(For the record I support MMP, though I would like to see a couple of changes, in particular the electorate lifeboat, that, for example saw ACT get 5 MPs despite failing to get to the 5% threshold because Rodney won Epsom).

David Clark for Dunedin North

Posted by on September 26th, 2010


Delighted to say that David Clark has been selected as the Labour candidate for Dunedin North.  David will be an excellent candidate to take over from Pete Hodgson.  He has a varied background, originally training and serving as a Presbyterian Minister, getting a PhD and then working as a Treasury analyst, advisor  for Climate Change Minister David Parker, and currently working as the Warden of one of the oldest university residential colleges (we used to call them Halls of Residence) Selwyn College, and serving on a variety of community bodies, including the Otago Community Trust.

If David wins Dunedin North, he will be a significant addition to the Labour caucus.  He has a heart of gold and a very sharp mind to back it up. Congrats David!

Gimme a break

Posted by on September 25th, 2010

The Rest and Meal breaks amendment bill was reported back to Parliament yesterday from the Transport & Industrial Relations Select Committee.

What a joke.

The NACTs might as well have just repealed Labour’s 2008 Act, because their Bill all but guts it.

Why is having a break enshrined in law such a big deal for the government?  Surely the right to rest and meal breaks is pretty basic?

I was on the select committee that heard evidence in Labour’s 2008 Act and then National’s 2010 bill.  Having decent and safe work in New Zealand is something a first world country like ours shouldn’t be afraid of, but apparently that’s just too hard.

So, the Government is ploughing ahead with a Bill that means employers can refuse breaks. There can be ‘compensatory measures’,  but goodness knows what that means, because the Bill remains murky about that. I see another bonanza coming for lawyers.

I can’t understand why any government would want to promote a law that could require workers to work for nothing. I thought slavery had been abolished.

Gimme a break.

Thank you Labour

Posted by on September 24th, 2010


The $36 million transport interchange at New Lynn was officially opened today.

Cudos to Waitakere Mayor Bob Harvey and his Councillors, along with ARTA and Mike Lee from the ARC who all worked hard to achieve what Bob describes it as the new heart and soul of New Lynn.

The joint Waitakere City Council, Auckland Regional Transport Authority Council and Central government development has been more than five years in the making and includes an underground train station and a revamped bus interchange.  New Lynn looks like a town that’s going places with the redevelopment of the town centre to follow.

New Lynn Labour MP David Cunliffe was instrumental in convincing the then finance minister Michael Cullen and Prime Minister Helen Clark to back the council’s plans. Dr Cullen signed off $140m for the project despite objections from Treasury.

While the Governor General and Transport Minister Joyce did the official business today, I thought it was great that the locals recognised the Labour government’s contribution and particularly that of Michael Cullen, with this banner.

Thank you Labour.

ACT tail wags National dog

Posted by on September 24th, 2010

Heather Roy’s voluntary student association membership bill has been reported back from the Education and Science Select Committee.  It recommends, with a few minor changes, that the bill proceed.  This is bad. 

In the Select Committee we heard from individual students whose ability to stay at university or polytechnic was the result of advocacy and representation from student associations.  Like the guy in Hamilton whose flat burned down and was about to be left with nothing because his insurance company gave him the run around, until the student association stepped in.

We also heard from tertiary institutions who do not support the Bill.  They appreciate the representation role played by student associations, and they know that they can not provide services in a cost effective way that associations with large amounts of voluntary labour can.

We heard from Australia how their version of voluntary membership destroyed the vast majority of the services and programmes that student associations ran.

The bizarre thing about this Bill is it actually takes away a choice for students.  The current law, which National put in place, allows students to decide by referenda if they will have a voluntary or universal association.  That is gone.

One curious thing, is Heather Roy’s media statement on this Bill focuses on calling for National to support her bill. She says

“I call on the National Party – indeed, all Parties of this House – to support my Bill and the right to freedom of association for students throughout New Zealand,” Mrs Roy said.

Why ever would she be worried about National’s support? Didn’t they just vote it through the Select Committee? How curious.

Electricity Industry Bill

Posted by on September 24th, 2010

Yesterday the National/ACT government pushed through the Electricity Industry Bill. It will do nothing to deal with rising power prices, fails to address issues around sustainability, and despite the rhetoric, doesn’t increase the security of supply. The evidential base for many of the changes the Bill imposes simply isn’t there.

The Treasury, the Ministry for Economic Development, and the Institute of Professional Engineers all raised concerns about the SOE ‘asset swap’ that will see the Tekapo A and B generators switched for Meridian to Genesis, thus breaking up the Waitaki hydro system. Treasury argued that the government hadn’t put together a business case to justify the swap, yet they went ahead and did it anyway. Given these are multi-million dollar state assets we’re talking about, that’s pretty concerning.

The Institute of Professional Engineers argued that splitting up the Waitaki hydro system could lead to water being used less efficiently given the competing generators would be encouraged to maximise their market position. They argued that no evidence had been presented to demonstrate that the benefits of the (small) increase in competition the swap is designed to create will outweigh the risks.

The government has also dodged some of the real issues. National claims to be committed to the goal of having 90 percent of our electricity generated from renewable sources by 2025, but they’re doing nothing to achieve that. It’s just more hollow rhetoric. In fact, Gerry Brownlee’s obsession with mining and mineral prospecting suggests they actually want to see less of a focus on renewables.

Then of course we come back to the biggie – power prices. Brownlee’s advice to those concerned about the increased cost of electricity is to switch companies. Does he really expect everyone to jot down their meter reading everyday and work out which company they should switch to? Perhaps if they set a common standard for smart electricity meters that might help consumers keep track of their electricity use and make it easier to switch, but they’re not even willing to do that.

The Electricity Industry Bill fails to address the big issues. It’s another case of National reverting to their 1990s ‘the market knows best’ mantra. Not surprising, therefore, that the loudest interjector in the House during the Third Reading of the Bill was Maurice Williamson. It was Williamson and Max Bradford who hacked up and partially privatised the electricity network in the first place, promising us that competition would lead to lower power prices – how did that work out in the end?