Red Alert

Archive for the ‘regulation’ Category

Shane Jones on NZ Power and Labour’s purpose

Posted by on May 9th, 2013


Assets and Elbows

Posted by on March 1st, 2012

Can the Government tell an asset from an elbow?

Had it thought through the fatal flaws in its partial privatization drive, or has it been taken by surprise? Hat tip to Clayton Cosgrove for bringing SOE sale issues to the fore. Here’s a potted summary of some emerging commercial and economic development implications:

– When the SOE’s are partially privatised they become companies with a partial public shareholding, regulated by commercial law and not the SOE Act. They are no longer SOEs. They no longer have the Crown’s good corporate citizen obigations. Elbow #1.

– That is why the s9 Treaty Clause debate is so fundamental. Iwi are 100% right to be outraged that the Crown’s obligations under the Treaty of Waitangi could be sold down the river (literally). If the Crown’s response is to indemnify the private investor and bear 100% of the ongoing Treaty obligation, then the taxpayer is effectively subsidising the private investor. Clayton nailed this last week. Elbow #2.

– Minority shareholders rights include the ability to invest in future profitable expansion plans. Dilemma for Crown: pony up its 51% of those future capital requirements or face equity dilution below 51% and loss of residual control. The Govt’s response has been to hedge how much it wil initially sell. Does 45% leave it enough of a buffer? For how long? How long is a piece of string? How does this affect its sale proceeds? In a rare moment of frankness Bill English fessed up that those proceeds are only a “guess”. You bet they are. Elbow #3.

– Magically the Government’s new-found forecasts of SOE dividend loss are not, apparenty. These were shamefully omitted from the Pre-Election Economic and Fiscal Update (PREFU) because they were apparently too hard to calculate. They have since been found in a bottom drawer and Lo! they show there will be precious few future divvies, so little loss. Ooops Why would a private investor buy them then? Elbow #4.

– Except Air NZ of course, which will be as cheap as chips after its sad losses last year. Crazy, stupid fire sale. Elbow #5.

– Speaking of which, future takeover threats must now be managed. Minority shareholders have rights. If a future merger or takeover provides them a windfall, they have the right to sell, most likely to foreign corporates or hedge funds (subject to the 10% individual cap, if any). What would the Crown do in the face of such temptation? Could it face legal action from minorities if it blocked such a future sale? How is the public protected from future leveraged asset stripping? Elbow #6.

– Potential cross-shareholding complications arise, as confirmed by the Chair of the Commerce Commission at the Commerce Committee hearing this morning. (I can’t comment on the Committee’s views but can on the issues diiscussed in public hearing). Lets say a foreign energy company bought the maximum allowable shareholding in each of the 3 SOE generators – risks of information pooling, coordination and anti-competitive behaviour would need to be policed by the Commission. At best there would be a lag while consumers suffered and prices rose. The Crown itself would have to be subject to Commission oversight in this regard. Sound complicated? Elbow #7.

Back to the original dilemma: did John Key know about all these issues when he started this privatisation crusade? If so, why was the Government not more transparent about them all before the election – with the public and even with its potential coalition partner?

Oh yeah, I momentarily forgot. It’s politics.

That being the case, lets fight this crazy plan to the last comma.

Key forgets about US FTA as he reduces worker protection for Warner Bros.

Posted by on October 31st, 2010

When I was Minister of Labour we signed up to two big trade deals China and P4 (NZ, Chile, Singapore and Brunei.

Both pretty big deals – the associated memoranda were designed to protect us from undercutting – the competitive race to the bottom of the wage/skills spectrum. CTU and Business NZ both played a positive role because they saw our future heading up that spectrum.

Since then both organisations have been supportive of the work both governments have been doing on a NZ/US FTA. The CTU have worked with the AFLCIO whose support will be vital especially but not only for Democrat members of the house who must approve any agreement or at least give the President permission to negotiate with particular conditions. And Democrats and US unions don’t naturally support free trade. Nor for that matter do a significant proportion of Republicans.

The Memorandum of Understanding between China and New Zealand is very clear :-

4. The Parties recognise that it is inappropriate to encourage trade or investment by weakening or reducing the protections afforded in domestic labour laws, regulations, policies and practices.

As is the P4 Memorandum of Understanding

5. The Parties recognise that it is inappropriate to set or use their labour laws, regulations, policies and practices for trade protectionist purposes.

6. The Parties recognise that it is inappropriate to encourage trade or investment by weakening or reducing the protections afforded in domestic labour laws.

The important point for this blog is that it is inappropriate to reduce protections to encourage investment.

Which is exactly what the government did in order to secure the Warners Hobbit investment.

I don’t think it is likely that anyone will take a case against us – but one thing is for certain, any plans we had to work with the AFLCIO towards a US free trade deal died when Key gave Warners the pen on our industrial relations legislation.

Will submissions change the government’s mind?

Posted by on September 15th, 2010

According to the CTU, an estimated 6000 submissions have been forwarded on the government’s antiquated Employment Relations Amendment Bill (No 2) to the Transport & Industrial Relations Select Committee.

This is the bill that :

• Extends the 90 day no rights trial period to all workplaces

• Restricts the right of workers to have access to their unions at work

• Weakens fair processes where workers actually manage to get a grievance hearing

among other things.

Submissions hearings begin tomorrow in Wellington, and are likely to take up a lot of time in the next few weeks.  The Select Committee will travel to other places (to be determined) and also meet during House Sitting time to get through the very tight timeframe of reporting back the bill by 7 November.

I’ve read some of the submissions so far and the arguments are comprehensive and convincing.  With unions planning a national day of action in October, it will be interesting to see if the National Government members, who have the majority on the committee, are prepared to listen – and if necessary convince their Minister to change her mind.

We’ll see – but not holding my breath.

These are public hearings, so come along if you can.

Cyclist learns from springbok

Posted by on July 16th, 2010

Today’s finish in the Tour de France was as rough as I’ve seen on the road. Bit like Act caucus. And after riding at 60kph.

Kiwi Julian Dean (great blog not updated yet) headbutted.

Aussie Mark Renshaw got a tour red card.

The last two hours are replayed from 6am on Sky Sport One.

How equitable access to technology can transform our future

Posted by on May 18th, 2010

New Zealand is at a turning point in its history. We are poised to create a new network. A network that will deliver critical infrastructure for our nation.

What that network can deliver is transformation, social and economic. On many levels.

I don’t think the bigger picture has been properly articulated and therefore isn’t there to be strived for. I gave a speech in Auckland today which attempted to spell out a Labour view on how important access to technology is for our social and economic future.

Ultrafast broadband is not an end in itself. It does not constitute by itself the big picture for New Zealand. It is however, a critical component. Because it’s the means to connectivity. But there’s much more to it.

Imagine how our country could be in a decade. Even less than a decade.

Where pretty much all people are connected. With a fast connection, whether you live in the city or the country. Where poorer communities, both rural and urban have more options to develop and to keep families together.

Where data caps are much less relevant and people can afford to be connected.

Where children bring home laptops from school and teach their parents how to use them. Where at risk adolescents who may have in the past ended up leaving school and hanging out on the streets gather together in groups and make music, games and movies. And end up in jobs.

Where schools teach creative content, ICT is an integral part of teaching and learning across the curriculum, where there are clear pathways from school in further training and a myriad of careers. Well paid jobs that are transforming the New Zealand economy.

Where the ICT industry is seen, and placed at the forefront of NZ’s economic growth. And is delivering.

Equitable access to technology isn’t going to solve all our social problems. It’s not going to stop domestic violence, alcohol and drug abuse. It wont stop kids ending up at school without breakfast and shoes. It wont stop gangs and the drug trade. And it wont stop people get diabetes, obesity and cancer.

But it could help make us more equal and if it boosts the economy, there’s more jobs and less poverty.

Read the rest of my speech here:

Is Equality Dead?

Posted by on April 27th, 2010

Congratulations to the Listener for its extremely thought-provoking cover story this week.

The central idea is that the attitudes of NZers have changed – apparently caring less about a fair go for all, despite the fact that we have become a much more unequal society, particulary since the 1991 Mother of All Budgets.

This attitude shift flies in the face of our history and egalitarian tradition.   Our ancestors, brown and white, came to this place for a better life; one relatively free of the suffocating class structure of the isles (British or Polynesian) that they had left.

The riddle is made stranger by recent evidence that fairer societies are not only nicer places to live – but they do better on  a wide range of economic and social indicators. See Wilkinson and Pickett.

I’d like to venture a couple of clues to the riddle and ask you guys to give it your best shot:

First,  inequality doesn’t feel quite so terrible if those at the bottom are still going forwards, even if others are zooming up the scale past them, so long as they can satisfy the basics.   Until the Global Financial Crisis that was generally true.  Was social democracy its own worst enemy in that respect?  (Marx thought so).   But as governments around the world “back off the fiscal stimulus” and  – as in New Zealand – cut deep into social programmes, my guess is that the mood on the streets will get a lot tougher.

Second, the Right has done a massive con job on “Freedom” , which has arguably become the dominant political value of our age.   But is is a bastardised version of freedom that has been sold on the streets – like some kind of philosophical crack cocaine.  It is NEGATIVE freedom – freedom from constraint or regulation – that has been trumpeted as the solution to our ills.  Problem is, this is at best half the story.

Am I free to dine at the Ritz?  In negative liberty terms yes – there is no law against it.  But in real (positive liberty) terms it all depends on whether I can afford to pay the bill.   For the full story see Dworkin on Liberty:

So the challenge for progressive politics is to reframe this debate in terms that ordinary kiwis get with their heads and feel in their guts.   Real freedom is having a good school in every suburb through which every kid can make the best of their lives.  Real freedom is having high paying jobs to choose right here in Godzone so kids aren’t forced to leave.  Real freedom is being able to live in a caring and inclusive society where you are safe on the streets and don’t need razor wire around your garden fence.

I am prepared to fight for that kind of freedom.  What about you?  Have you still got hope? Passion? Courage?

Or did you buy the fast food version of “freedom” they wanted you to suck up and be happy with, while they amass their millions and move to Sydney or Europe to enjoy them –  leaving you and your mortgage to be farmed by the banking system and the multinationals, like a good serf?

Has Joyce got the bottle?

Posted by on March 20th, 2010

Was going to post this last week. For various reasons didn’t. Still very relevant, especially given Joyce’s interview on the new TV3 The Nation programme this morning. Joyce is smooth, I’ll give him that. But he’s still untested.

This is the first of a few pieces I will write about Joyce and the big decisions facing him.

Interesting piece from Chris Barton in the NZ Herald last week titled Joyce near high noon of communications portfolio. Important piece.  And I agree on a number of things, but not on others.

It is high noon for Joyce. On two fronts; whether he decides to regulate on mobile termination rates and who gets to roll out the big ticket $1.5 billion ultrafast broadband scheme.

Joyce, who seems to be more assertive in his other portfolios, continues to hold his cards close to his chest.

Barton is right that both decisions will take guts, determination and strength. Will be interesting to see Joyce’s mettle.

On the evidence available to date, I think the time is right to regulate on mobile termination rates and said so last week. Circumstances have changed. There’s a serious third player in the market and people want certainty and not to feel they’re being ripped off. A regulatory solution right now is more robust and trusted by the public and the market. Two things to say about Barton’s piece though.

David Cunliffe was a decisive Minister of Communications. He brought lasting change to the industry and faced down Telecom.

Trevor Mallard’s 2007 decision on mobile termination rates was thorough, evidence-based and he certainly isn’t one to walk away from a challenge.

Both of them have more bottle than Joyce appears to have.

But Joyce doesn’t like regulation.  So it will be interesting to see what he does. It appears the Commission may have given him an out via its split decision.

He also has another big decision coming on fibre (not to the home though). It’s about time he made it. Every month that goes by is another month with not one millimetre of government funded fibre being rolled out. Remember this was their big policy! The biggest item actually. He’s taken too long, made it too complicated  and allowed the situation at Telecom to get out of hand.

This is what happens when you’re a hands off Minister.

Joyce should be thinking about consumers (people) first and ensuring that the government’s role is to protect their interests. Not shareholders. It’s not his role to protect them. This is an industry with a future. It’s hugely important to our country, from an infrastructure perspective as well as its capacity for innovation.

I wish I felt more confident that Steven Joyce got that. But then he does have many portfolios to look after and not sure this is a priority.

A final point. Chris Barton suggests that fed-up consumers want a Clint Eastwood figure (a Dirty Harry) to ride into town and pull out his pistol. Well, as much as I’m a Clint Eastwood fan (sorry about that to everyone who is reacting with shock and horror) I adamantly disagree.

There’s way too much cowboy behaviour in the telecommunications industry. That’s why some regulation is required around mobile termination rates. It’s why the XT network debacle happened and has allowed a duopoly to strangle the market.

It’s why we’ve had a monopoly keeping prices inflated across our international internet cable. It’s allowed our biggest telco to continue to exercise its muscle throughout the industry despite not having a real commitment to a national network.

We don’t need a vigilante. We need a Sheriff, bringing a bit of order and civilisation. And we need someone with some bottle to deliver it. Is it Steven Joyce?

How much was Trump paid?

Posted by on March 15th, 2010

Gambling in New Zealand is highly regulated. Casinos and pokie machine venues can’t advertise. The notable exception is Lotto, who can get away with a lot more than other gambling outlets. Can you imagine Sky City getting away with a TV advertising campaign suggesting you could “Trump up your life” by visiting the casino? Me neither.

I think given the extra lattitude that Lotto are given in their advertising it’s important that they’re upfront and transparent in their activities. I’m concerned that they are refusing to reveal how much they paid Donald Trump for their latest promotion. Newstalk ZB has the story.

Which raises the wider issue: should Lotto be treated differently to other forms of gambling like casinos and pokie venues? Are our restrictions on Lotto advertising too light, or are our restrictions on casino and pokie advertising too heavy, or is it a combination of both? Interested in your thoughts…

Hooton’s PR style bites him

Posted by on March 1st, 2010

In my 19 years in the public relations industry I worked out pretty quickly that if you want to be truly effective at making change happen, then tell the truth.

There’s no doubt that public relations has a bad name. Most of the industry is professional, credible and competent. But some give it that bad name by doing what’s called “spin” .  And they get the publicity. Of course there’s always grey areas. Because emotions and passionate beliefs often lie behind a campaign and an issue.

Today Matthew Hooton crossed out of a grey area into fabrication and is attempting to position the Labour Party on the issue of mobile termination rates. For those who don’t know, Matthew is a PR practitioner. He’s a commentator on National radio and he runs a company called Exceltium. He’s also strongly linked to the National Party.

What are mobile termination rates? When you call or text someone on a different network – or call them from your landline – their network charges yours a fee for receiving the call or text. It’s called the mobile termination rate (MTR), and it gets included in the price you pay.

Matthew Hooton is the PR guy behind a campaign to pressure the Government into dropping MTRs.  It’s a consortium of organisations led by 2 Degrees, the new player in the mobile phone marketplace, which is agressively trying to make its mark. It’s a good campaign (note I used their website for a succinct definition of MTRs).

But what got my goat this morning was reading that Labour was somehow supporting their campaign. We’re not. Despite Hooton’s company Exceltium insistently contacting Labour MPs one by one to “explain” their campaign, we have made two public statements (to my knowledge) about the issue.

In this morning issue of Communications Day (telco industry newsletter) Hooton was reported as saying:

Hooton says the campaign is getting good support from Labour, the Greens and sections of the Maori Party. “We’ve spoken to members of the previous Labour government who feel they were bluffed by the ferocious corporate lobbyists working for the big telcos”.

Labour’s position is quite clear. It’s about principles, not about supporting one company against another. In the only media release we’ve issued on this I said:

Labour believes the conditions must be right to create a fair playing field to encourage new entrants into the mobile phone market.

A more competitive environment is healthy, and it’s got to be fair for the consumer and for businesses coming into the market. At the same time it must be fair for the existing operators.

Our comment after the Commerce Commission’s recommendation a week or so ago reflected this position.

I also made a comment on a post I did last week commenting on Steven Joyce’s attitude to regulation.

So just be careful Matthew Hooton with what you claim. I come from your industry and I know your tactics. I don’t think the companies paying your bill on this campaign will be pleased that you’ve overstated Labour’s position.

PS: Just corrected my spelling mistakes

Steven Joyce used the “r” word today

Posted by on February 23rd, 2010

Finally, Steven Joyce seems to have woken up to the fact that he’s a Minister, and there’s a crisis happening in one of his many portfolios. And when there’s a crisis, the public like to think that the government takes charge.

He’s waited way too long to make a move. And that will cost him. I don’t think he’s behaving like a strong Minister, and I think it’s interesting that despite the persona, the Telecom crisis saw him standing back wringing his hands, saying while it was “concerned, the government couldn’t really do anything”.

Suddenly, this afternoon, that changed. He decided the government did have a role after all. I wonder whether it was because John Key told him to say something and he finally asked for some advice.

For a Minister who has seemed almost unnaturally averse to the concept of regulation, it was a surprise to hear Steven Joyce say today that the government may have to regulate. Out of character.

This is some of what he said: 

… ensuring 111 calls made from mobile telephone networks get through is vital.

“The recent spate of outages on the XT network has exposed some shortcomings in this area and officials have been working urgently with Telecom since last evening to address these issues.”

Currently, Telecom is obliged under the Telecommunications Services Obligation (TSO) to provide emergency calling on its fixed network. However, mobile phones are not covered by the TSO.

Mr Joyce says that the government may need to regulate to ensure that operators prioritise 111 calls in situations where networks become unstable.

Well, it’s taken days for him to come to that view and I believe he’s been negligent in not getting involved earlier.

It’s ironic that he’s talking about regulation, the day after it appeared he would lean towards not regulating the termination rates on mobile calls, after two of the main players, Vodafone and Telecom offered to further phase in a reduction of rates.

Maybe he’s realising that customers need to come first. It’s a reality that there must be a charge for terminating a call or text, but it needs to be fair. For the consumer and also for the third player in the marketplace. But he’s acted too late and and he’s shown himself not to be strong and decisive. 

Maybe he’s finally realised that where a significant public interest is at stake, the government does have a role. Watch this space, because the PM has a political nose and he’ll get involved. And if he does, then Steven will be damaged.

This isn’t just about the XT network. It’s about NZ Inc.

Uranium on Key’s breath – trade with Iran increasing?

Posted by on February 15th, 2010

The very idea you can own uranium shares as you open our national parks to mining and believe you can get away with it.

I’m sure it is an indication of an absence of understanding of the basic ethics necessary as a decisionmaker. Trying to make Double Dipton look good?

Makes one wonder what else there is in those see through blind trusts.

And which MFAT reports he has seen without declaring conflicts.

TVNZ story here.

Here’s an idea – bigger fines for richer people

Posted by on January 13th, 2010

Summer is the time when road safety is big on the news, with accidents solemnly reported on the news every day.

The latest this week has been the call for tourists to be better educated in New Zealand road safety before they get behind the wheel. This does of course assume that foreign drivers are not as safe as New Zealanders and I’m not sure that’s true. There have been some awful crashes involving tourists this summer, but in most cases, it was not their driving that caused the accident.

So I was interested to read in the NZ Herald today that European countries are pegging speeding fines to income as a way to punish wealthy offenders who ignore tickets. Apparently, Swiss voters approved a 2007 penal law overhaul that lets judges fine people based on personal income and wealth for moderate offences including excessive speeding and drunk driving.

The latest is a millionaire Ferrari driver in Switzerald, described as a “traffic thug” by the Swiss Court, who was fined F295,000 (NZ $392,000)

Apparently, the court took into account the man’s history of similar offences and his estimated personal wealth of more than US$20 million.

Germany, France, Austria and the Nordic countries all issue fines based on a person’s wealth. In Germany the fines can be as much as US$16 million compared with only US$1 million in Switzerland.

While the average driver is likely to get a more modest fine, Switzerland does seem to have had a real problem with wealthy foreigners hiring cars and conducting races on Swiss roads.

Last year a court fined six men from Hong Kong up to €95,000 after they raced through Switzerland in hired Ferraris, Lamborghinis, Aston Martins and Audis at speeds of up to 230km an hour. A Frenchman was fined 70,000 francs after being caught on a highway doing 243 km/h.

I haven’t noticed a lot of Ferraris, Lamborghinis and other luxury cars speeding dangerously around New Zealand roads, but I am intrigued by the idea of fining people who break the law according to their wealth. Something for Mr Joyce to think about as he prepares his policy announcements on the 2020 Transport Safety Strategy.

Company Registration – the Fastest System in the West

Posted by on January 13th, 2010

On the World Bank Ease of Doing Business Survey New Zealand finds itself in the number one position when it comes to company registration – within hours a company can be registered on-line and a tax number issued by IRD.  It was that last feature that truly made our Companies Office the fastest register in the west.

The question is now being asked whether we want to hold on to that status in the face of an apparent loophole, (a loophole that knows no geographic boundaries I might add and which does not solely reside in New Zealand), which enables multiple layers of shelf companies to disguise the identity of the individuals who lie behind transactions that would otherwise be the subject of a high level of scrutiny from international intelligence and law enforcement agencies. 

There is no question that this requires the attention of the government.  In the paper I was indirectly quoted as saying that I thought our current company laws were lax.  In fact I said they were relaxed, which in my view is appropriate.  My husband had to apply for a new driver licence recently because he had lost his old one and he needed to front with two forms of ID – his passport and an official letter showing his address.  We could not possibly want to require that degree of verification of every director of every company in New Zealand.  That’s why I said we needed to apply balance in assessing what risks the current system posed and what the cost-benefit analysis would look like if we were thinking of changing it.

I also made the point that this must be an international issue, because New Zealand is not the only developed nation with a self-certification requirement for registering as directors. 

Now that the world has responded to the threat of money laundering and the financing of terrorism through imposing reporting requirements on financial institutions, then perhaps it is time that the World Bank turns its attention to the company registration systems that may be the next target to hide such activities.

But there are other reasons why I think our government should place this on its agenda now.  Having heard a number of submitters on the Commerce Committee’s Inquiry into Finance Company Failures I am convinced that there are sufficient issues around directors – including ‘celebrity directors’ offering reassurance to unsophisticated investors, directors with a troubled past not known to unsuspecting investors and examples of the use of the corporate veil to disguise related-party transactions – to warrant some strengthening of our laws. 

At the same time I want us to hold on to that World Bank ranking – because it is important that we don’t impose unjustifiable compliance costs on those who know that limited liability is a privilege not a right and who use it to advance their interests in an ethical manner, because they make up the vast majority of NZ businesses and are the lifeblood of our nation’s economic interests.

A chance for Kate to do something!

Posted by on December 1st, 2009

The languid Minister of Labour, Kate Wilkinson has announced today that employment provisions under Part 6A of the Employment Relations Act are to be reviewed.

Part 6A was passed by Parliament in 2004 and subsequently amended in 2006, with a provision agreed with NZ First that the amendment be reviewed within three years. A review could be good, or it could be horrible. It’s Kate’s chance to do something worthwhile.

I have a special interest in this. I campaigned with my union and in Labour for legislative change to deal with the devastating effects of more than a decade of competitive tendering and the repetitive contracting-out of thousands of low-paid workers. As businesses sought on-going cost reductions, particularly in easily outsourced work, such as cleaning, food services, and orderly and laundry services, the effect on the workers was catastrophic.

Workers lost their jobs, often at short notice, in a process that could be repeated up to four times a year. Contractors sought to win business by reducing hours of employment, pay and conditions, so even where workers continued to be employed by the incoming contractor, they had to do the same (or more) work on less pay and severely reduced hours of work.

Labour implemented Part 6A as a crucial part of improving job security and protection for these low paid, vulnerable workers.  Essentially, it gives workers in particular industries the right to transfer on the same pay and conditions to a new contractor or employer in the event of contracting out or change of employer.

I haven’t sensed any big push by employers to change it – even although when it was first passed in 2004, the hysteria around it was pretty loud. Don Brash promised to dump it in the 2005 election, but by 2008 that had disappeared from National’s manifesto.

Kate says that “the review will consider whether Part 6A has achieved its policy objectives and whether the special protections provided for some workers are relevant within the current business and policy environment, or if there are other ways of achieving the objectives.” It will also look at employee protection provisions that are required to be added to an employment contract when a business is restructuring.

The Minister says that if there is a need for improvement she will be happy to look at suitable amendments.

Here’s two ideas for Kate  :

1.    First and foremost, the provisions in part 6A must not be watered down, but they could be improved.

They could be extended to workers in other industries, where contracting out and restructuring have continued and the workers have been powerless to challenge the inevitable pressure on jobs and pay.

2.    Minimum redundancy notice and pay for all workers should be considered.

Part 6A provides for workers in specific industries who have been transferred to a new employer to bargain redundancy and in the event this cannot be agreed, for the Employment Authority to determine minimum entitlements. But it rules out those workers whose employment agreements expressly exclude redundancy pay. And there are no redundancy protections at all for other workers.

Since Part 6A became law, the recession has seen thousands of workers lose their jobs with little notice and no redundancy pay. The review of Part 6A is a great opportunity to consider implementing minimum redundancy entitlements for all workers.

Will the Minister take the chance?

Finance company inquiry

Posted by on November 22nd, 2009

The Commerce Committee has held its first day of hearings on the Inquiry into Finance Company Failures. I have been criticised for chairing the inquiry as I was Minister of Commerce during the period that the finance company collapses occured – 2005-2008. They ignore that an incoming Labour government inherited what I’ve described as a regulatory wasteland and it took a considerable amount of time to bring our regulation up to international standards – starting from ensuring the Takeovers Panel had a code to enforce – through to providing appropriate regulatory oversight for registered exchanges (including rules around continuous disclosure, and much stricter rules around insider trading and market manipulation) – through to the Taskforce on Financial Intermediaries which I inherited as Minister after the 2005 election and the Review of Financial Products and Providers – which involved the release of 9 discussion documents in 2006 and the passing of 3 major pieces of legislation before the 2008 election. The current government has carried on this work and more regulation will be introduced as they work through the remaining elements of the reform package. The finance company failures have also highlighted deficiencies that were not apparent prior to the last government announcing decisions in 2007 about a fortnight before Bridgecorp collapsed.

This current inquiry is not designed to duplicate the work the previous government has done and the work the current government is doing. However I believe that my role as a former Minister of Commerce has given me some insights into the ‘what’s missing’ from the government’s current workplan. If anyone thinks that I am immune to the suffering of people who had no idea they were exposing their hard-earned money to the level of risk they were, then they don’t know me very well. Lessons must be learned about what attracted people to certain investments in the first place and whether we need tighter rules around what people are told about the nature of the risk they are taking.  We have been accused of being populist by looking at tracing the money post failure and sheeting home responsibility to directors – but tell Mum & Dad investors that these things don’t matter when directors maintain their high life protected by family trusts and limited liability.

The role of the media has been interesting and will continue to be so. Read this story about the first day of hearings. In light of recent comments about the media being afraid to take on high profile individuals for fear of legal action I found it fascinating that not one media outlet reported the high profile politician who was mentioned in Professor Adams’ damning case study; nor the name of the high profile financial adviser the Crone’s referred to – even though such reporting would be covered by Parliamentary Privilege. More to come as the hearings continue!

This is going to be a very interesting inquiry.

The blackberry is handsfree

Posted by on October 11th, 2009

My van has never had a handsfree but Steven Joyce’s nanny state approach has forced me to install one.

Interesting thing for me is that because it is mounted on the dash sort of above the steering wheel  it is really easy to read texts and emails. Couldn’t do that when it sat on the passenger seat or in my pocket between phone calls.

Will have to avoid the temptation but I’m not sure it is a great step for road safety.

Hands free and the nanny

Posted by on August 14th, 2009

I support the decision to make it illegal to use your hand held cellphone to phone or text while driving. Having lived in Australia, where that’s been the law for many years, it seemed like a no brainer to me. Have to admit I’ve done it (in New Zealand) because it’s not illegal. Behaviour change often requires legislation as well as public information campaigns. The carrot and the stick. Look at the wearing of seatbelts, drink driving, smoking in public places and a whole raft of other social issues that have required legislation to ensure (most) people actually change their behaviours.

Which is why it was so interesting to watch TV news last night and see the generally positive coverage that Steven Joyce’s legislative change is provoking. If this change had been enacted under the Labour Government what’s the bet it would have been labelled a nanny state law? (By the current government as well as all the other nanny state de-criers)

I smell a double standard. I believe it is the role of government to take action on obvious safety issues. That’s one of the things governments are for. I think it’s time we outgrew the nanny and had a proper discussion about where governments can and should be most effective.

You be the Brash judge

Posted by on July 30th, 2009

Don Brash has made his first speech today at AUT since he was appointed to his new role as the chair of the National/Act government’s 2025 Taskforce.  Titled “Can we ever catch Australia” it gives an overview of the challenge according to Dr Brash.  For those interested in this debate, have a look at it and let me know your views.   Then I’ll tell you what I think!

Too Much Market ?

Posted by on July 26th, 2009

Every now and again when driving to and from Wainui you catch something really interesting on the radio. I’ve listened to parts of two of the  Reith lectures  on the BBC.

Michael Sandel is delivering this years lectures. His is a political philosopher who specialises in moral questions.

The first lecture on the role of markets is thought provoking.

He points out that while a long time has past since the Reagan/Thatcher (and for NZ Douglas/Richardson) era the Clinton/Blair (read Bolger/Clark) era has not resulted in any substantial changes in economic policy.

He argues that relying on markets in the way we have has exacerbated world economic problems, including, but not only in the current financial market crisis.

He asks some interesting questions about when it is appropriate to use markets.

It does highlight the lack of top quality discussion on these issues on the left. I read a lot of what is around but would welcome the comments section in this post being used to reference quality papers or articles.