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Economy : How can we convince voters Labour’s economic policy will work? Labour Leadership Q&A #9

Posted by on September 12th, 2013

14 Questions for 2014

Virtual Hustings Meeting – Question 9

Economy : How will you convince voters Labour’s economic policy will work?

Question : How can we get the voting public to believe that the present economic thinking has failed? And that Labour’s ideas will work for them?

Submitted by : Angie Croft, Christchurch

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Explanatory Note: From September 10th to 14th 2013 as part of the official selection process for a new leader the New Zealand Labour Party is holding a “Virtual Hustings Meeting” hosted by Red Alert and organised by Scoop Amplifier. Over 7 days questions were solicited from eligible voters in the election. The questions and answers are now being posted as a set of 14 posts at the Red Alert Labour Party Blog. This started Tuesday 10th September, and continues till Friday 13th September. At Red Alert all-comers are welcome to discuss the answers in the comment section of the blog. The candidates are expected to participate in these discussions at times over the five days till Saturday 14th September.

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LABOUR LEADERSHIP CANDIDATES’ ANSWERS

Answer from Grant Robertson

We have to relate our economic vision to the reality of everyday lives.

This means an economy where people come before money. Where the centerpiece is full employment- decent jobs paying decent wages.

We need to talk about Labour using the power of government to help create a productive economy, not one like National’s that is based on speculation and selling off assets.

To create this economy we cannot tinker at the edges. We have to leave behind the neo liberal agenda and create a Labour way. This means changing the settings of monetary policy, giving Kiwi firms a fair go at government contracts, lifting wages, reducing power prices, building affordable homes and investing in industry and regional development.

The message from Labour must be, the economy will work for all New Zealanders not just John Key’s mates.

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Answer from David Cunliffe

We need to be clear that the Global Financial Crisis (GFC) blew the lid off the myth that trickle-down economics will create a fairer, more prosperous New Zealand.

Free markets left to their own devices are ultimately destructive of human well-being. Unregulated markets tend towards monopolies and often concentrate vast wealth in the hands of a few. Neither outcome is sustainable or morally right.

When National says they are going to cut people’s legs off, Kiwis don’t want to hear that Labour will too, just nearer the ankles and with more anaesthetic. The post-GFC modern social democratic alternative must include:

• using the power of the state to intervene when markets fail;

• guaranteeing fair workplaces and decent wages through employment laws, including industry standard agreements;

• lifting the minimum wage to $15 and rolling out a living wage as fast as can be afforded;

• building new partnerships between communities, regions, industries and an empowering and investing State; and

• revised marco-economic settings that do not solely focus on inflation but include growth, employment, and our external balance.

New Zealand desperately needs change.

The next Labour Government mustn’t be more of the same.

I am offering Labour a bold economic agenda and leadership with the vision and economic credibility to see it through.

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Answer from Shane Jones

Our ideas are exciting. We will use both the market and the State.

I am convinced that our tax system can be refined to incentivise and expedite fresh investment.

Industry will be actively supported, regional development will be promoted and in special cases underwritten.

Our mix of economic stewardship and equity is desperately needed throughout NZ.

I have the experience and the communication skills to sell this narrative.

ENDS


A Rocky Road To Asset Sales

Posted by on November 27th, 2012

National has failed to reach its target of selling of shares in State Owned Energy Companies prior to Christmas 2012. They underestimated the broad public consensus opposing the move and they overplayed the level of ‘support’ from iwi leaders that did not equate to real votes on the ground for the Mixed Ownership Model (MOM) being promulgated.
Today the New Zealand Maori Council (NZMC) will present their case in the High Court. There are several strands to the arguments being debated about water, the rationale builds on the firm belief that;

➢ The Crown has a moral obligation to recognise the tino rangatiratanga that Maori assert over their Taonga and a fiduciary obligation to protect those rights and interests

It seems to me that this argument was the initial premise that built the case for the New Zealand Maori Council who sought to object to the Sale of Shares in SOE’s and the Mom model being promoted by the Government. That the Tribunal went a step further and suggested a ‘shares plus’ model to resolve the disputed action was, in my view, a pragmatic step to try and reconcile a way forward.

It was unhelpful and has become a red herring to the real issue that is that Maori do have proprietary rights and interests in water albeit undefined.

➢ That the common interest that all New Zealanders have in water is not prejudiced by Maori seeking greater protection of their proprietary rights and interests in water

Insofar as water is concerned, Maori accept that there is a common interest in water and that the Crown must take steps to preserve and protect those bundles of rights. The assertion that’ no-one owns water’ is offensive to Maori who see the hypocrisy of a water management framework that ascribes rights and interests through resource consents and allocation models.

This is why iwi have sought greater input into the RMA framework and the current management regime to accommodate the generic interests of Maori as kaitiaki and the co-existing rights of iwi insofar as localised Treaty Settlement outcomes.

The moment the Crown seeks to privatize rights in water through exclusive shareholding interests in water companies, transferability of water permits or the like, then the game changes and iwi/Maori are forced to ensure that their collective interests will not be disenfranchised.

In many respects, if New Zealanders who believe that Energy Companies should be operated for the benefit of all New Zealanders, they would support the actions of the NZMC to stop the sale of SOE’s and seek greater clarity over the nature and extent of proprietary rights and interests in water.

➢ That s.9 of the SOE Act was a mechanism used by Maori to protect their interests vis-à-vis Crown actions and the new clause inserted in the Public Finance Bill does not ascribe the same level of protection

This legal mechanism was intended to be Nationals solution to soften the Maori sentiment towards a share sell-down of 49% in SOE’s. But the Government failed to consider whether its actions fundamentally breached the Treaty of Waitangi and the fiduciary obligation to protect the ‘rangatiratanga’ of Maori in relation to water.

The Maori Party a close ally and coalition partner tried to dance on a pinhead by saying that they supported consultation with ‘the people’. They hid behind a small group of iwi leaders who showed some interest in the MOM model and transferring the s.9 clause of the SOE Act into a similar provision of the Public Finance Act. Yet they opposed Assets Sales. This is a confused position and reeked of political maneuvering rather than principles and should the NZMC be successful it will be despite the action of the Maori Party.

Once again, the take home point is that while the Government believes it may have a political mandate, 3 Maori electorate members of the Maori Party does not constitute a broad consensus or mandate from iwi or Maori on the issue and the Government should be concerned if the Court pursues the fiduciary obligation that the Crown has to protect the interests of Maori insofar as Article 2 of the Treaty of Waitangi.

➢ That the Treaty Settlement process does not adequately provide for Maori proprietary rights and interests in water that may be specific and localised to whanau and hapuu
The Waikato River Settlement is a case in point. It is a historical settlement that has affirmed co-governance and co-management mechanisms in the ongoing management of New Zealand’s most utilised waterway. That settlement does not, however, ascribe proprietary rights and interests to hapuu or whanau who may have a puna, aquifer, lake, waterfall or stream in many parts of the rohe.

The NZMC court action may assist those hapuu and whanau whose interests may not be captured in the Treaty Settlement but have an important bundle of rights that need to be protected.

➢ That the final determination of the extent of Maori rights and interests in water will need to be accommodated in Resource Management legislation alongside Treaty Settlements
Whatever the outcome of the NZMC case, change is inevitable insofar as the Resource Management Act, water catchment management, co-existing rights vis-à-vis efficient allocation models. The Land and water Forum has been a constructive process to focus many minds on the challenge of sustaining more efficient water management regimes to enable productive enterprise, be cognisant of Maori rights and interests, protect the ongoing quality of waterways and sustain community utilization.

A post Land and Water Forum should lead to more sophisticated water-management tools and frameworks that bring together ‘competing interests’ with greater coherence around the sustainable use and allocation of water.

➢ That the Crown does not have the moral mandate of Maori to sell 49% of shares in State Owned Energy Companies because it prejudices the ability for Maori to assert their tino rangatiratanga over a significant Taonga that is managed in the common interest of ALL New Zealanders
Last but not least the political point to be made time and time again in relation to the Governments Asset Sale Agenda and the rights and interests being asserted by Iwi and Maori alike is that the Crown must assure itself and the Court that their actions do not prejudice the Article 2 interests of hapuu and iwi.
If they cannot demonstrate this high threshold based on proper consultation or a significant and broad-based mandate from hapuu and iwi then it would be safer to retain that common interest that all New Zealanders have in water by holding onto New Zealand’s Energy Companies for the ‘Public Good’.

I remember a kaumatua once saying that:
“…the trick to walking on water is knowing where the rocks are…”

Now is a very good time for the Government to rethink its SOE Asset Sales Agenda….


By The Numbers

Posted by on July 22nd, 2012

An appetising, nutritious, numeric snack that boils down the week’s news, by David Clark

1,100,000 – Bill English’s latest botched estimation of the cost of selling Kiwi’s assets. He’s had the numbers in front of him in black and white for a month. The true cost so far is $7 million this year. The forecast for next year is $66 million, and $17 million for the year after that.

1,000,000 - Kiwis will be over 65 by the late 2020s.              

80,000 – Young people not in education, training or work will be missed by Paula Bennett’s welfare reforms.

53 – Days after the Budget Foreign Affairs Minister Murray McCully gets out of his own way and reveals his department’s budget background documents.

1.5 – Hours are spent by parliamentary Hansard staff transcribing and proofreading every 10 minutes of parliamentary debate.

1 – Conference at SkyCity that you can bet the Maori Party weren’t invited too.


Keeping our assets

Posted by on June 11th, 2012

Controversial Asset Sales legislation will face its second reading in Parliament this week. 

It is still possible to keep our assets.  In a piece recently published in the Otago Daily Times, I explain why and how.  

As my colleague Clayton Cosgrove has already pointed out, the normal process has been abused.  Just 0.6% of submissions supported the idea at Select Committee – for good reason – and there are holes in the proposal that future generations will have to deal with. 

The proposal is a dog.

Unfortunately it looks like National members of the committee had cotton wool in their ears. The Government seems determined to plough ahead with its plan to sell off our best revenue generating assets.  They have seemingly no regard for what expert submitters and the general voting public thinks.

In the face of such arrogance, some are tempted to despair.  Not so Grey Power, and other community members of the citizen led campaign to keep our assets.

People are already out collecting signatures for a citizens’ initiated referendum.  The Government could choose to ignore the referendum, but it would be foolish to do so. 

Labour has set up a website in support of the campaign to save our assets. It outlines how you can get involved. There are plenty of campaign resources and you can download petition forms.


Economic development ideas

Posted by on April 29th, 2012

During the recess I have been working to fill out some ideas around economic development.

These personal views build on caucus discussions and our 2011 manifesto, and take on board feedback from party and business circles as I have been listening and engaging over the last few months.

This oped, published in the Herald on Friday, argues for lifting sustainable economic growth through a more ‘can do’, positive partnership with between government and business. It argues for a clear and credible strategy that integrates economy-wide, sector-driven and regional initiaitives. It warns of the dangers of the kind of one-off ‘deals’ with indvidual corporates now so typical of National.

This speech, delivered today to a meeting hosted by the New Lynn Women’s Branch of the NZLP, goes back to first principles. It argues that, post GFC, the “invisible hand” of neoliberal economics has failed, that New Zealand cannot cut or sell our way out of a hole, and that Labour must therefore present a clear alternative economic approach to the current government based on our own enduring values.

Hope you enjoy them.


Then and now: Key on all sorts

Posted by on March 14th, 2012

Over the weekend I posted some of John Key’s earlier statements on asset sales and public sector restructuring, pointing out how much his current views and approach differ from what he promised people before he became Prime Minister.

Tonight TV3 have gone one better and unearthed video footage of him speaking to the PSA Conference back in September 2008. Not only does John Key rule out asset sales, he makes a compelling case against them.

“There’ll be no asset sales in the first term of a National government, and there may never be asset sales in the years ahead… Nor am I hell-bent on selling assets actually. I personally think it’s not the issue that the current economy faces. In the world of making the boat go faster, actually I don’t think selling off state assets is going to make the boat go faster.

Labour has been arguing all along that asset sales will not make us a richer country. We’ve been consistent. John Key and the National government have done a complete u-turn and have now placed asset sales at the centre of their economic strategy.

“The Crown’s dividend streams from the Meridians, the Mighty Rivers of the world is large, so on both motivations we don’t have a debt problem, they’re acting, I think, highly effectively as companies, and they’re making money. There is no motivation to sell assets.

Once again, Key is borrowing the line that Labour has been consistently arguing for over a decade. The SOEs are highly profitable. They make more money than we would save in debt repayment costs if we sold them. Also note Key arguing we don’t have a debt problem (Bill English also made similar comments both before and after the 08 election). Interesting how after 3 years of a National government debt seems to be the biggest issue we face…

“So there’s no agenda to sell assets.

This is perhaps the most damning quote. Although Key was careful before the 2008 election to qualify his no asset sales pledge with “during the first term” he gave New Zealanders the very clear impression that he wouldn’t be selling assets long-term either.

“What we are saying is we’re not going to cut jobs, we’re simply capping at 36,000.

That commitment didn’t even last a term. Now he’s promising even more job losses during National’s second term. Nothing about that in their manifesto for 2011.

“The second point is, no we’re not borrowing for tax cuts.

So if they’re not borrowing for tax cuts, and New Zealand didn’t have a debt problem when they took office, why are they now arguing we have a major debt problem and need to sell assets to fix it?

John Key has built his political career on telling people what they want to hear. Eventually that strategy always catches up with people, and it’s catching up with Key big-time.


NZ is not for sale

Posted by on March 11th, 2012

Today David Shearer released a new Member’s Bill to prevent foreign investors from buying rural land unless they can prove it will bring substantial benefits to New Zealand that would otherwise not occur.

National has botched the handling of the Crafar farms issue. They’ve got it wrong. John Key has tried to brush away criticism by arguing land was sold to overseas investors under Labour too and if we were serious about our opposition we’d change the law. Today David made it very clear we will be doing just that.

Unlike National, Labour is out there listening to New Zealanders, who are increasingly concerned about our country being sold out from under us. John Key was right when he said New Zealanders don’t want to end up tenants in their own land. It’s a shame his actions aren’t living up to that sentiment.

David spells out the case for the Overseas Investment (Owning Our Own Rural Land) Amendment Bill pretty clearly:

“We cannot afford to lose control of our best income-producing assets and become tenants in our own land. Selling our farmland to foreign buyers does not improve our economy. Instead the profits simply flow offshore. We also do not want to see New Zealand farms priced out of the reach of Kiwi farmers who are the best in the world at what they do.

National just doesn’t seem to get that we can’t sell our way to a brighter future. Four years ago John Key was ambitious for New Zealand. Today he seems content to manage our economic decline. There are alternatives, and Labour is going to be at the forefront of promoting them.

Click here to download a copy of David’s Bill, along with the detailed explanatory note.


Then and now: Key on SOE sales

Posted by on March 9th, 2012

John Key really doesn’t enjoy being reminded of the promises he made to New Zealanders before the election. It doesn’t matter whether it was the 2008 election or the 2011 election, he clearly doesn’t seem to think he should be held to his word. So here are a few of the commitments Key made about asset sales last year. You can be the judge.

“We’ve given the public a commitment: 85 to 90 per cent of these companies owned by New Zealanders” (John Key, TVNZ Leaders Debate, 23 Nov 2011).

The Mixed Ownership Model Bill introduced into parliament on Thursday contains no provisions that guarantee this. Under the legislation as tabled, there is nothing to stop 5-6 foreign investors scooping up all the listed shares.

“That was one of the tests I set out for the mixed-ownership model: that “New Zealand investors would have to be at the front of the queue for shareholdings”, and that we would have to be confident of widespread and substantial New Zealand share ownership.” (John Key, Question Time, 7 June 2011)

Once again, there is nothing in the Bill that gives New Zealander’s priority over foreign investors. There is also nothing to stop any NZers who do buy shares then on-selling them within a short space of time to a foreign buyer (remember how the local energy retailers were snapped up by overseas investors so quickly…)

“Kiwi mums and dads will be at the front of the queue…” (John Key, Question Time, 6 July 2011)

Leaving aside the obvious question of where these mums and dads are going to find several thousands of dollars to invest on the stockmarket at a time when many are struggling to pay thier own power bills, there is nothing in the legislation that puts mums and dads at the front of the queue at all.

“We’re giving people a commitment: no more than one shareholder can have 10 per cent, majority controlled owned by New Zealanders, 85 to 90 per cent of the entire company owned by New Zealanders. That is my commitment to them tonight as Prime Minister” (John Key, TVNZ Leaders Debate, 23 Nov 2011).

There is nothing in the Bill that ensures Key’s last promise will be honoured. Five foreign investors buying 10% each could scoop up the 49% that is publicly listed.

Guyon: “Can you guarantee that no more than 10 to 15 per cent of these shares will end up in foreign hands?” John Key: “Yes. I spent my life starting in investment banking. I know how these things work.” (John Key, TVNZ Leaders Debate, 23 Nov 2011).

Not sure this one needs any further comment really. It speaks for itself…

If you want to check out the full debate, the whole thing is up on Youtube: TVNZ Leaders Debate


Everyone’s talking about asset sales, including National

Posted by on October 30th, 2011

Is anyone else surprised that National devoted their launch to talking about asset sales, a policy that the Sunday Star Times tell us this morning only 14% of the population support? And to top that off, they tried to dress up a previously announced money-go-round as some kind of new fund. We have been saying asset sales is the defining issue of the election, good to see National making sure it is.


State Assets- Bargains Flying out the Door

Posted by on August 28th, 2011

A window to the future if a National led- government is elected….


Kiwis want to own our future

Posted by on August 23rd, 2011

Tonight TV3 revealed the results of a poll that asked New Zealanders about substantive issues and the results were revealing. New Zealanders overwhelmingly prefer the introduction of a capital gains tax over the sale of state assets.

53 percent opted for a capital gains tax while only 31 percent of respondents wanted to see state assets sold. Even amongst National’s own supporters, one in three prefer the policies that Labour is promoting.

National’s sales pitch for asset sales hasn’t convinced anyone. Kiwis know that once the assets are sold, they’re gone forever. They also know that the shares will probably end up being owned overseas, and we’ll be waving goodbye to more and more of the profits.

John Key’s assertion that it will be “different this time” rings a little hollow when even his own Finance Minister publicly admits there is no way they can stop the shares ending up in foreign ownership.

This election is a clear choice between owning our own future or selling off whatever is left to the highest bidder and becoming tenants in our own country. Labour’s got a lot of work to do over the next three months, but I’ll be proud to be out there campaigning under the banner of a party that’s willing to make the bold calls and do what’s right for the future of our country.


Meanwhile at the National Party Conference

Posted by on August 15th, 2011

While there has been a lot of coverage of the cynical welfare policy announcement from the National Party Conference, there has been a bit less attention on the fact that even National Party members have major concerns about the selling of our public assets.

On the Saturday of the conference, which by the sounds of things Captain Panic Pants and friends wanted to be a total non event, Bill English was taken on about whether assets would actually stay in Kiwi hands. Just how he would ensure this has been the subject of numerous questions in Parliament, but Bill revealed his hand to the delegates.

His answers are incredibly waffly and weak, and the second questioner in the video even says he is not convinced by English’s answer to the first question. Basically he said he could not guarantee that assets will stay in New Zealand hands, does not know how so-called Mums and Dads will be at the front of the queue and even said that they will not finalise how this will happen until after the election.

The problem with that is the “keeping assets in NZ” pledge is a critical part of the policy. The reality is it will not happen, and English has now acknowledged this. New Zealanders don’t like asset sales because they know just how much value has been lost from them over the years, and we want to keep key infrastructure in New Zealand hands. The Nats sale plans are bad economics and bad politics, and even their members know it!

With Labour, we will own our future, and keep public assets in the ownership of all New Zealanders.


What others are saying

Posted by on July 16th, 2011

It’s been a good week for Labour. We’ve put forward a bold policy agenda that will protect our valuable state assets whilst also setting us on the path towards a brighter future. It’s ambitious and highlights the contrast between Labour’s visionary approach and National’s total lack of a plan.

John Armstrong’s column in the NZ Herald notes that Labour’s policy is driven by a desire to do the right thing and get the economy moving again, unlike National’s approach of trying not to scare the horses by doing nothing:

National concedes that Labour’s promotion of the tax was always going to get the tick of approval from some economists, think tanks and academics. National did not count on that endorsement being so strong. The endorsement has come from across the political spectrum, thereby making Goff’s push for the tax look less political and motivated more by what might be in the national interest.

Over on Stuff, Andrea Vance argues that Labour has taken the lead:

…Labour has seized the moment. There comes a tide in the affairs of politics and this time Goff, Cunliffe et al have caught it…pitched against an asset selloff, a CGT looks to many like the lesser of two evils…

On TV3′s The Nation Colin James says that Key and National have “miscued”:

They’ve attacked things that aren’t in it, and attacked things that are in it that they said aren’t in it, and John Key talked about it being a ‘dagger through the heart of the economy’ and I thought Russell Norman in Parliament was able to skewer him on that, he quoted the OECD, he quoted the Treasury, he quoted Australia, and I think National just miscued, it didn’t handle it nearly as well…

Earlier in the week, Rob Salmond posted an interesting piece on Pundit correcting some of Key’s mythical claims:

If John Key is determined to measure a person’s welcome in New Zealand only through tax rates, then the conclusion is clear. High income earners are more “welcome” here than in any of the country Mr Key aspires us to be like… The CGT discussion so far has been a bit surreal. Labour starts a debate about tax policy, traditionally a strong area for National and ACT. In response, National becomes a fact-free zone and ACT retreats into an internecine war over the appropriate degree of their race-baiting.

Blogger Idiot/Savant at No Right Turn, often critical of Labour for not being bold enough, nails it:

The numbers stack up. This is not a spendthrift plan to just keep on borrowing. Instead, its a cautious, sensible, fiscally conservative plan to balance the government’s books by closing a serious tax loophole. And we don’t have to sell anything to do it. Labour is now presenting a clear alternative to the government’s policies: either we can sell the family silver and see the profits go offshore, while trying to cut our way out of recession – or we can pay off our debts and support our government services by making the wealthy pay their fair share. Put like that, its really a no-brainer.

Meanwhile Fran O’Sullivan questions whether John Key has the gravitas to deal with the challenges we face:

All New Zealanders know Key has fulfilled his childhood dream by becoming Prime Minister of our small nation. But does he really have serious aspirations for his prime ministership? Or even New Zealand?

One gets the feeling that Key and his Ministers quite like their ministerial BMWs and have forgotten why they’re allowed to ride around in them. We certainly don’t hear them talking about being “ambitious for New Zealand” very much these days.


On a lighter note: Fry and Laurie

Posted by on May 16th, 2011

A friend posted this on my Facebook wall, thought given some of the discussion over the past week it might lighten the mood a little.


Selling power companies will put prices up

Posted by on April 2nd, 2011

Went to the local supermarket yesterday morning – took even longer than normal probably because the clientele were double the normal average age, moving slowly and keen to chat.

Quite an animated discussion ( not argument because not one took a contrary point of view ) developed with a small group who were very concerned at the effect of putting power companies into the hands of foreign bankers.

Very strong views were expressed that the government held shares on behalf of all Kiwis, that the dams had been built by the old Electricity Department using taxpayers money, that we had paid for them several times over as power prices went up, and they weren’t John Key’s to sell.

Unanimous that foreign owners would try and milk every last cent out of them and that would mean higher prices and fewer people employed to do maintenance.


Business leader opposes asset sales

Posted by on January 28th, 2011

Great column from Selwyn Pellett, a business leader who is involved in the high tech area.

Firstly, the justification for the plan is invalid or at least greatly exaggerated. New Zealand doesn’t have anything like the same Crown (government) debt as Portugal, Spain, Iceland or Greece. The combination of private sector debt — via our foreign banks — and Crown debt is unacceptably high at around 90% of GDP. However the difference in New Zealand’s case is that a greater proportion of our debt is private sector debt. A default on this debt impacts on the balance sheets of foreign banks not the New Zealand government.

Our Crown debt is, by global standards, still low. Lumping these two types of debts together, as the Prime Minster is doing to attempt to justify this policy, is at best mischievous and at worst dishonest.

and

The dividend stream that flowed out of Telecom – and indeed out of the country – would have been enough to see our broadband infrastructure in place a decade ago, with all the positive effects on GDP growth. Telecom’s ability to extract monopolistic pricing effectively became a foreign tax on all New Zealanders and a handbrake on our economic development.

>


Sell the Donkey

Posted by on January 27th, 2011

For those who have not seen the Herald today, Emmerson’s take on asset sales.

Herald Cartoon


Mums, Dads and other spin

Posted by on January 27th, 2011

Its always interesting the morning after a big announcement to look at the spin and lines that get trotted out. National pay a lot of attention to this stuff, and Crosby Textor and Mr Joyce have been working hard to get their lines and their “independent” commentators out there. Let’s just look at a few examples:

“Selling assets will give Mum and Dad investors a chance to get a stake”. Well, to start with Kiwi Mums and Dads already have a stake in them, since along with the rest of us Kiwis they already own them. For a large number of Mums and Dads they are worried about paying the power bill, not owning the company.

As an aside I find the omnipresence of Mark Weldon talking about how good this will be is hilarious. Mark is the CE of the NZ Stock Exchange, I kind of expect he might like the idea. Its in the same vein as bank economists being put up as the commentators on interest rates. Just a slight vested interested there.

“This will not increase power prices” So, what exactly will the new investors in these companies be looking for? A warm feeling of social responsibility? No, presumably a profit, which won’t exactly be helped by lowering power prices. There is a discussion to be had about how we best leverage our collective ownership of these assets, and whether the dividend policy needs to change to help address power prices, but I am damn sure that wont happen by selling them off.

“We have to sell assets and further slash government expenditure because we have a huge debt problem” Where to start? Perhaps where John Key said “we don’t have a debt problem, we have a growth problem.” Of course any government needs to be a prudent manager of the economy, but the truth is that our debt is quite different from the PIGS. Their problem is soaring government debt. In New Zealand the National Party inherited zero net government debt. It has increased under National’s watch, but even still not to the point of being anything like the PIGS.

If we are in such a parlous state, perhaps its time for John Key to look in the mirror, Two Budgets with tax cuts targeted at the wealthy and no economic recovery plan. Time for National to take some responsibility.

“Which schools and hospitals would you not build if we did not do this” Utter nonsense. This is pure spin developed to meet the polling results that New Zealanders want to see better investment in education and health. Investing in schools and hospitals is a priority totally seperate from the ownership of SOEs.

But my favourite piece of spin comes directly from the PMs speech

I am convinced that Air New Zealand would not be run as well, nor provide as good a service to customers if it was owned 100% by the government

Let’s remember Air New Zealand was bailed out by the 5th Labour Government after it was driven into the ground by its private owners. A bailout incidentally opposed by National at the time. For New Zealand a functioning airline is essential, and it was highly at risk without government involvement. As it happens I think one of the reasons Air New Zealand has been innovative is that it has had the security of government ownership.

There is more, and feel free to contribute any other myths and spin in the comments.


A clear dividing line

Posted by on January 26th, 2011

From time to time someone will ask me if there is any real difference between Labour and National. For me the answer has been, and is, obvious. But the last two days should leave no one in any doubt.

From Phil, on behalf of Labour we saw yesterday a vision for an economy where we all pay our fair share, combined with a plan to actually grow the economy through a focus on R and D, skills, savings and protecting our assets and where government works as a partner with businesses.

Today from John Key we have seen a retro 90s style recipe of asset sales and slashing government spending. As my colleague Moana Mackey said if a definition of madness is doing the same thing over again but expecting different results, then John Key and National are positively bonkers. As another colleague Charles Chauvel said this morning, there is no plan for increasing Kiwi wealth, just for selling off what we already own.

It was interesting today another leader gave his State of the Union Address. There were lots of interesting lines in the Obama speech. His call to respect the teaching profession being one. But I was also struck by this

Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may feel like you’re flying high at first, but it won’t take long before you’ll feel the impact.

To extend the metaphor further than it probably should be, John Key’s plan is to remove the engine and sell off a wing and half the seats and hope that the plane keeps going, ours is to fix the engine, make the plane fly higher and faster and make sure there are seats on it for everyone. That’s the difference.

The test is how the public will view these different visions. Interesting to see that as at early this afternoon the (obviously highly unscientific) Herald and Stuff on-line polls which do not tend to favour Labour were 2/3rds against asset sales and 2/3 for first $5000 being tax free respectively. It’s sure going to be an interesting year.


Owning our own stuff

Posted by on June 21st, 2010

Classic quote from John Key tonight on TV3 commenting on the poll which resoundingly rejected the sale of Kiwibank and other state assets.

“There’s been a long history of demonising asset sales in New Zealand,” said John.

So JK, does that mean you think asset sales are good? And that the view that we should own our own stuff is demonic?

I know which side I’m on mate. And I don’t feel like a demon.

But I’m interested to know (if you’ve been stymied on selling off our assets)  how you’re going to continue to pay for tax cuts, while refusing to invest in kiwi jobs.