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Posts Tagged ‘privatisation’

Nats promise wholesale ACC privatisation

Posted by Chris Hipkins on October 13th, 2011

Yesterday Nick Smith announced ACC levies were going to be cut. That’s good news. They never should have been hiked up massively in the first place, and Smith’s own press statement highlights just how cynically the National government have manipulated the situation.

There was never a crisis in ACC. It was hit by the global financial downturn and revaluation of existing claims liabilities, leading to deficits. But the problem was not a structural one, and ACC would have returned to surplus even without the levy hike. ACC was already back to a $2.5 billion surplus in 2009/10 before Smith’s levy hike had taken effect.

But don’t get too excited about the levies falling just yet. If National are re-elected, all Kiwis will end up paying more to get less from ACC. Smith has effectively announced the wholesale privatisation of ACC if National gets half a chance. That means money that should go into providing cover for injury victims will go into the profit lines of Aussie insurance companies.

Smith has confirmed that if a National-led government is re-elected, their ACC privatisation agenda will be expanded from only covering workplace injuries to also include injuries sustained in car accidents, around the home, or even on the sports field.

National’s privatisation plans will effectively bring an end to what has been our world-leading system of universal, no-fault, 24/7 cover for accidental injury. Under National, if someone sustains an injury, they can look forward to spending weeks or even months arguing with different insurance providers about who should cover it.

It’s still not clear what problem National are trying to fix here. Independent studies have clearly shown that ACC is among the cheapest providers of accidental injury cover in the world. New Zealand employers already pay on average half of what Australian employers pay, yet National wants to replicate the Australian model.

The choice for New Zealanders is now crystal clear. If they want to keep our system of universal, no-fault, 24/7 cover for accidental injury, then they will need to vote for a change of government.

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Filed under: ACC, privatisation
26 Comments

Kiwis want to own our future

Posted by Chris Hipkins 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.

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Filed under: #ownourfuture, polling, privatisation
51 Comments

Nats plan more radical ACC reforms?

Posted by Chris Hipkins on June 5th, 2011

Nick Smith’s argument in favour of privatising the ACC Work account has already been blown out of the water by the private insurance industry themselves, who openly admit that they can’t offer cover as cheaply as ACC can. This from the Dom Post story:

Vero’s executive general manager of new ventures Nigel Edmiston said his company – which is owned by the Australian SunCorp Group – had done some planning on entering the workplace insurance market but that the Government’s proposal “wasn’t particularly attractive”…

Edmiston said that private insurers would not be able to compete with ACC’s pricing and would prefer it was excised completely from the market.

“[ACC] have a huge market share, they have all the infrastructure and systems, they’ve got no set up costs, they don’t pay tax and they don’t pay dividends and they don’t need capital.”

He said at the outset private insurers would need to provide 80 cents in capital expenses for every dollar gained in premiums on such a product.

In other words, Edmiston is confirming what we’ve said all along. ACC is incredibly efficient and cheap, and it ensures that all of the money collected actually goes into helping those with injuries, rather than into the profit lines of the Aussie insurance industry.

The only way the private insurance industry could compete would be if ACC was excluded, in other words, the cheapest provider was arbitarily shut out of the market. How exactly would that be competition?

This all begs the question, however, of just how enduring Nick Smith’s commitment to his current proposal is. If National win the next election, don’t be surprised to see a more radical proposal for ACC reform suddenly emerge as National claims it has won a ‘mandate’ to do whatever it likes in dismantling our world-leading ACC scheme.

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Filed under: ACC, privatisation, public services
18 Comments

Smith to announce ACC privatisation

Posted by Chris Hipkins on May 29th, 2011

On Wednesday this week, Nick Smith is going to announce what amounts to the effective privatisation of a large part of ACC. You won’t hear the word privatisation uttered from his lips, he’ll use all sorts of other words like ‘competition’ and ‘market discipline’, but the effect will be the same. Accident cover for those injured at work will now be provided by the private, for-profit insurance industry. That’s privatisation.

What concerns me about this most is that the National government haven’t even attempted to produce a robust case to show that it’s a good idea. This is a purely ideological decision, based on National’s blinkered belief that the market will always deliver the most efficient outcome. But consider these facts:

  • An independent review by Pricewaterhouse (Australia) found that our ACC scheme has the lowest administration costs of any comparable scheme anywhere in the world.
  • Information provided to the Transport and Industrial Relations Select Committee showed that the cost per-worker of work-related accident cover in New Zealand is, on average, about half what it costs in Australia (is this what National meant by catching the Aussies?).
  • Under the current system, if someone is injured at work and has to stay home, the first week of income compensation has to be provided by the employer. Following the Christchurch earthquake, the government waived that requirement and ACC covered the lot. They couldn’t have done that if work-related injury cover had been provided by private insurers.
  • If a private insurer offering ACC cover collapses, it’s the taxpayer who will have to pick up the tab for any outstanding claims liabilities. So the private insurance companies have an effective fail-safe guarantee. We’ve already seen one ‘accredited employer’ collapse resulting in ACC having to pick up the bill, that will only get worse under Nick Smith’s privatisation plan.
  • When HIH, a private Australian accident insurance company collapsed in the early 2000s, the Aussie govt had to pick up a $500 million tab. HIH had been offering accident cover under National’s previous attempt to privatise ACC, which was reversed by the incoming Labour government following the 1999 general election.

There are only two ways that private insurance companies will be able to turn a profit from offering work-related accident cover in New Zealand. Either they will have to reduce entitlements, or they will have to increase the cost of that cover. In other words, we’ll all end up paying more to get less.

Since National became the government, Nick Smith has gone to some lengths to manufacture a crisis in ACC in order to justify his privatisation plans. As I outline a last week, ACC is in pretty good shape and Smith’s scaremongering is pretty transparent. His moves to massively hike up levies in 2009 were designed to erode public support. If ever we needed proof of how cynical a move that was, we got it a few weeks ago when he started talking about levy cuts just six months out from a general election.

ACC isn’t perfect, but the comprehensive, no-fault, 24/7, universal cover it currently offers is the right approach for us to take. We should be focused on how we can improve what we have now, not how we can create more profit-making opportunities for National’s mates in the private insurance industry.

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Filed under: ACC, privatisation
23 Comments

Improving ACC #1

Posted by Chris Hipkins on May 23rd, 2011

Over the weekend I blogged about Nick Smith’s manufactured crisis in ACC. National’s agenda is pretty transparent. They’re trying to soften up public support for our excellent accident prevention, compensation and rehabilitation scheme as they prepare to privatise it. Labour will strongly oppose National’s plan to carve up ACC and hand it over to the private insurance industry.

But we’ll also be looking at how we can improve the scheme that we have now, because although we think the system overall is a sound one, we agree that it could be even better. Over the past few months I’ve been meeting with a wide range of ACC stakeholders, from claimants and their advocates through to medical providers and medical assessors.

One of the issues that I’ve become increasingly concerned about is the lack of independence in the specialist medical assessor process. It’s pretty clear to me that ACC have some “tame” medical assessors who are giving them the result that ACC wants, rather than the one that is in the claimant’s best interests.

In some cases, these assessors are working almost exclusively for ACC, making them reluctant to bite the hand that feeds. I’ve also met with specialists who have been all but ‘black listed’ by ACC because they haven’t been willing to give them the assessment results that they want.

So the question I’ve been contemplating is whether we need a bit more independence in the ACC medical assessment process. Should specialist assessors be required to be ‘current practitioners’ in the field they are assessing? Should there be a limit on the proportion of a specialist’s work that can be ACC assessments? Should claimants be given more ‘choice’ over who they go to for specialist assessments?

I’m interested in your views and your stories. Like I said above, I think ACC is a very good system and I’d hate to see it carved up as National want to, but that doesn’t mean I’m not willing to debate how it can be constructively improved.

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Filed under: ACC, health
9 Comments

Quake will cost ACC $200 million

Posted by Chris Hipkins on April 24th, 2011

The Sunday Star Times has reported today that ACC expects the cost of compensation and treatment for those injured in the Christchurch Earthquake to be about $200 million. So far ACC has received 7666 claims, making the February quake the biggest single mass injury event in ACC’s 37-year history.

ACC’s head of injury prevention and insurance products, Peter Wood, said that although the long-term costs to the corporation would be high, they were manageable.

“Obviously additional claims from the Christchurch earthquake will increase costs and ACC funding requirements,” he said.

“However, the overall size of ACC allows for these increased costs to be absorbed with the current levies or funding structure without significant increases being required.”

The costs had to be seen in the context of ACC’s $16 billion in reserves and claims costs each year of more than $3b.

“It is therefore unlikely that the long-term cost of these claims will have an impact on ACC levy rates in the future.”

This highlights once again how crazy the National Party are to try and privatise parts of ACC. As a single, nationalised scheme, ACC is able to absorb the impact of a big event like the Christchurch earthquake without too many problems.

I blogged a couple of weeks ago about the impending collapse of AMI Insurance and how National’s ACC privatisation plans could lead to a similar outcome. I’m not at all surprised that Nick Smith is delaying announcing their preferred options. Carving off a big chunk of ACC and handing it to the private insurance industry right at the time you’re having to bail out one of the big players isn’t a good look in anyone’s book.

Then there is the issue of Nick Smith’s (sensible) move to ensure that victims of the earthquake received cover for the first week of injury if they weren’t able to work. Normally that cost would either have to be met by the employer for a work-related injury, or the individual themselves. Had the government already privatised the ACC work account, they wouldn’t have been able to do this as they would have effectively been instructing a private insurance company to provide cover over and above what the victim was entitled to.

ACC is a good scheme. Sure there are some areas that we’d all like to see improved, but National’s plan to farm it out to the private insurance industry is just nuts. They should go back to the drawing board and leave ACC alone.

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Filed under: ACC, privatisation
42 Comments

Would National bail out private ACC companies too?

Posted by Chris Hipkins on April 8th, 2011

It looks increasingly likely that the Kiwi taxpayer is going to have to bail out AMI Insurance in some way or another following the Christchurch earthquake. I think it’s important that those who have insurance with AMI are given certainty, so I support the government’s decision.

But it highlights the risks involved in another National government policy – the privatisation of ACC. Under National’s privatised model of accident cover (they try to dress it up by calling it ‘competition’ but it’s privatisation by any other name) a private accident insurance company, faced with an unforeseen influx of claims due to a disaster such as an earthquake, could find themselves in the same boat as AMI does now.

I asked Nick Smith in Parliament a few weeks ago whether or not the government would guarantee Kiwis that if their private ACC insurance provider collapsed they would still be covered. Naturally he evaded the issue. He had no choice really. If he’d said no, he’d basically be saying that privatisation would mean thousands of New Zealanders could find themselves without cover. If he’s said yes, he’d basically be writing a blank cheque to the insurance industry.

I think there are a lot of Kiwis who are getting pretty fed up with the government having to constantly bail out private companies who rack up massive profits when the going is good and then turn to the taxpayer for assistance when things get a bit tough. Why would we want to replicate the problem in ACC?

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Filed under: ACC, privatisation
9 Comments

Another blow for productive Kiwis

Posted by Chris Hipkins on April 1st, 2011

Today isn’t a good day for ordinary working Kiwis who put in a hard days toil to earn a living for themselves and their families and contribute to our economy. Darien has already posted on the expansion of the 90 day fire-at-will law, but there has been little comment in the mainstream media on another big change that comes into force today – the introduction of ACC Experience Rating.

It might sound on the surface like a good idea, basically charging employers lower ACC levies if they have a low level of accident claims. But when you think it through, the pitfalls are obvious. Experience Rating will lead to a culture of non-reporting. The accidents will still happen, but the victims will be discouraged from seeking the support they are entitled to.

Experience rating is another example of how National are moving away from a comprehensive, no-fault, 24/7 ACC scheme based on a social contract (remember we have all given up certain legal rights under ACC) to something based on a narrow, commercial insurance model. ACC should be a world-leader. National seems hellbent on undermining it.

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Filed under: ACC
27 Comments

Nats predetermined ACC privatisation agenda

Posted by Chris Hipkins on February 18th, 2011

NewstalkZB revealed this morning that Nick Smith had asked his officials to begin work on privatising the ACC Work Account before his own ACC stocktake report was even finished. It’s pretty clear that the Nats cooked up a deal to privatise ACC with the private insurance industry before the last election and everything they’ve been doing since then has been leading towards that inevitable outcome.

The documents released clearly show that their blind rush to privatisation could shift even more costs onto other parts of the health system while benefits and entitlements are reduced. In other words, ordinary working Kiwis will pay more to get less. National has already been forced to provide an additional $10 million per year to the health sector to cover the cost of ACC refusing increased numbers of people treatment.

This has nothing to do with getting better outcomes for those who have accidents and everything to do with National’s obsession with creating profit-making opportunities for their mates. Who is going to end up paying? You and me. And if the private insurance companies collapse, the taxpayer will probably end up footing the bill for that too (when HIH insurance collapsed in Australia, the govt picked up a $500 million liability. HIH were one of the companies offering cover under the previous National government’s privatised ACC scheme, which was thankfully stopped by the incoming Labour government in 1999).

New Zealand’s ACC scheme is a world leader. Rather than trying to run it down in order to justify privatisation, the National Government should be looking for ways to improve what we already have. Nobody has been able to find a single alternative system anywhere in the world that offers better outcomes at a cheaper cost.

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Filed under: ACC, privatisation
17 Comments

Twas the week before Christmas….

Posted by Grant Robertson on December 21st, 2010

At the risk of being told that all governments do it, National has really out done itself for the week before Christmas dump of stories you don’t like. Not content with the OIA release that shows that a large chunk of the Hobbit debacle was totally unnecessary and opportunistic, and that Gerry Brownlee called Helen Kelly a liar when he knew that was not fair, we now have confirmation of the privatisation of ACC. Bear in mind Ministers have had this report for six months and have refused OIA requests for it. This is political cynicism at its worst.

Of course there is no chance of getting comment from John Key or Gerry Brownlee because they have already left on their holiday. Mr Key has been unavailable to explain whether he or Murray McCully misled Parliament about the Dalai Lama. Apparently they don’t have phones in Hawaii.

The ACC decision will most definitely be a major political issue. I am more than happy to see the focus go on privatisation and asset sales next year, as it seems that is where National is going. We have rehearsed the arguments around privatisation of ACC before- ordinary New Zealanders will pay more and get less as insurance companies seek to maximise their profits. Our globally well regarded scheme, with lower overheads than private schemes is compromised and we go back to the 90s for no good reason.

Anyway, at least we all know one question for the first question time of next year.

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Filed under: ACC, democracy, labour, union
63 Comments

MartyG on PPPs

Posted by David Cunliffe on December 2nd, 2010

I guess it’s all in a day’s work, but MartyG on The Standard misintrepeted my position on PPPs in this recent post.

1.  His opposition to PPPs appears to be as blindly ideologically based as National’s blind ideological support for them.  Labour’s policy before and since the last election has been based on providing the best value for New Zealand taxpayers, regardless of ideology. 

2.  The vital point of difference between National and Labour on this issue is that National is committed to the private sector first and foremost, while Labour is committed to providing infrastructure in the way that works best for New Zealanders.

3.  That is why Annette King, when she was Transport Minister, set up a working group to look at the effectiveness of PPPs, particularly in relation to large projects like Waterview. 

4.  Labour has yet to be convinced of the value of PPPs for any particular project, but we are willing to weigh up the evidence. When considering the (de)merits of a potential PPP project we would take a range of critical factors into account.  I mentioned two in my recent speech:

“The project scale must be right and the PPP benefits must outweigh any increase in cost of capital”

5  Marty G and I should agree that this sets a high hurdle, because the Crown can always borrow at lower (sovereign) interest rates.  The offsetting benefits would have to be very clear, large enough in net terms (after deducting overheads like the cost of tolling), and not available by other means (e.g. non-PPP contracting) to clearly outweigh this cost of capital disadvantage.  

6.  It is also obviously necessary that whoever is evaluating a potential PPP for the state has to have the expertise and resources to really test the proposal and establish rigorous accountability.  I have not changed my view that setting a $25 million threshold for compulsory consideration of PPPs by all government departments, as Bill English has done, is ridiculous and bound to lead to bad decisions.

7.  Labour also has a longstanding policy that there needs to be a non-toll alternative before any toll-based transport projects could be approved.   That was reinforced recently in our tighter rules around foreign direct investment in monopoly strategic infrastructure.

8. Labour is not soft on privatisation. Our opposition to private prisons and SOE sales underlines that.  My recent speech explicitly ruled out any dilution of any Crown equity in any state asset or existing subsidiary.  That bright line test restates our strong “no sale’” policy that provides ongoing strong differentiation form National.

Labour is committed to an active and strong state sector.  It takes seriously its responsibility to adopt policies and projects that deliver sustainable value to Kiws.  Clear thinking and evidence-based policy are even more important when funds are tight, if we are going to get this economy going again.

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Filed under: Investment, blogs, economic, economy, finance, infrastructure, roads
150 Comments

Electricity Industry Bill

Posted by Chris Hipkins 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?

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Filed under: Cost of Living, Energy
18 Comments

The Treasury Board and the agenda for public services

Posted by Grant Robertson on September 2nd, 2010

Sometimes its hard to get across why some of the more seemingly mundane announcements made by government are important.  The idea that the Treasury has decided to create a Board to help run it might sound good. Get a bit of outside help in to make sure it is doing the right thing. Nothing wrong with that?

But when the Treasury Secretary John Whitehead slipped into a speech ten days ago that he was going to establish a “governance” Board with representatives of the “private sector” alarm bells rang for me.

Firstly, in the context of purchase advisors, politically appointed working groups on everything from tax to regulation, welfare to housing, a review of policy advice  led by Graham Scott, the role of Murray Horn leading the National Health Board, this Board, and Tony Ryall’s enthusiasm that it could be used by the rest of the public sector this is clearly part of  an agenda to fundamentally change our public sector.  That change amounts to a privatisation of advice.

Why does this matter?  It matters because our system of government is based on the idea that the public service will provide free and frank advice to Ministers. They are in effect the taxpayers representatives in making and implementing policy and ensuring the governments get the best advice possible. Privatising advice undermines that assumption of neutrality.  Those Ministers are then responsible to Parliament and the public. Handpicked policy and governance groups can lead to governments hearing what they want to hear and to reducing accountability.  And that will be bad for all of us in the long run.

If people think I am over dramatising this- take a look at the media release from Treasury yesterday.  The role of the Board is described as “setting the strategic direction” for Treasury.  John Whitehead has said he will only veto the group in ‘extremely rare’ circumstances.

Chris Eichbaum has a great article in the Dom Post today on this issue (not on-line as far as I can tell). As he says

We need responsive and responsible public servants. Injecting a new third element into our existing governance arrangements may well be a step too far. It is most certainly the kind of proposal that should be the subject of public scruitiny and debate- not just announced.

As Chris is alluding to, the process for establishing the Board is not good. There are no terms of reference, and we only have the vaguest idea of how they will work.  Again John Whitehead said after his speech ten days ago that  the Board will have “community and private sector” expertise.  No sign of the community sector in the Board members announced yesterday.  No sign of a voice for the vulnerable people who are most effected by Treasury’s policies.

I am certainly not against government agencies getting advice from the community and stakeholders.  In fact I strongly support a closer connection between agencies and the people who use services.  But not when it undermines the neutrality of public services and not when it is used to reinforce the agenda of one political party.

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Filed under: democracy, public services
10 Comments

BUDGET 2010: feedback so far

Posted by David Cunliffe on June 22nd, 2010

Hi RA readers – I’ve been off air a bit lately due to running around the country on the post- Budget speaking tour, and because my laptop died!

Today parliament shifted into a new stage of the Budget debate – the Appropriations Bill that legitimises the Supplmentary Estimates (amended spending lines) between Budgets 2009 and 2010.   It was remarkable for what it does not say – nothing about a plan for protecting  jobs or lifting incomes during the worst of the Great Recession.   No new ideas over there.

Quick feedback from the Budget tour: spoke to about 20 groups, a mixture of Labour-organised public meetings, community sector groups and businesses.  Hard to tote up exactly but would have seen close to 800 people face to face: groups of 160 down to about 25, plus individual business site visits.

The feedback was clear:  most Kiwis understand that by the time inflation of 5.9% next year eats away the tax swindle, and wage growth is held down, they will be worse off.   That includes increased govt charges like ACC and ECE, plus power bills, rent and higher mortgages.  The Government made the classic mistake of overpromising and under-delivering.   Kiwis hate the rise in GST.   They know the tax cuts aimed primarily at the wealthy are unjust and inefficient. 

Was it a coincidence the govt’s polling fell 5% in the week after the Budget?   

Second, businesses and commentators understand that the Budget lacks a real plan for jobs, incomes and growth.  Fiscal prudence matters, but it is no substitute for a strategy to address the yawning triple deficit around the savings gap, current account deficit and innovation deficit.  Gutting Kiwisaver, the R and D tax credits and NZSF prefunding made these worse.  The Govt’s innovation package, which represents only 39% of the value earlier striped out, has been almost universally panned.     

Third, the added debt from the unaffordable tax cuts has opended up $1.1 bn fiscal hole over 4 years, $9.2bn over 12 years, and that makes the job of turning the boat around ever harder.  National will seek to fill this “strategic deficit”  through asset sales and service cuts.  Don’t let them!

Future posts are going to broaden out somewhat to the rlated issues of monetary and fiscal settings that surround the needed economic strategy.

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Filed under: Budget, GST, Tax, blogs, business, economic, economy, finance, inequality, polling, science, wages
122 Comments

Honest John

Posted by Chris Hipkins on June 4th, 2010

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Filed under: privatisation, public services
46 Comments

BUDGET 2010: Jigsaw Pieces Click

Posted by David Cunliffe on June 1st, 2010

The jigsaw pireces of the Budget are starting to click in the public mind if recent polls are any indication.  In the last week :

  • The IMF described NZ’s savings gap and net international indebtedness as “among the largest of any advanced nation”
  • Analysis shows a $9.2bn additional fiscal hole in the Budget by 2023 arising from the tax changes
  • Budget documents show expenditure as a % of GDP falling from 33% to 28%
  • Bill English floats Kiwibank sale as one example of a number of SOEs ripe for partial privatisation.

In other words: give away taxes up front (very largely to their mates); run an out year deficit (deliberately); compress spending (as ‘prudence ” then demands); and flog off what is left of the family silver to fill the remaining gap (dressed up as mum and dad savings products, of course).

What does all this mean for the average Kiwi?

  • despite the govt spin, they are worse off for the next four years at least due to the toxic cocktail of GST, inflation, other govt charges and taxes, and slow wage growth;
  • public services like Heatlh and Early Childhood Education will be slashed as new spending lags inflation ($300m short in Health) or deliberate policy changes bite;
  • the outlook for public services gets dramatically worse as the National Party tries to resize the state to 28% of GDP – although they won’t want to talk much about that before the election;
  • the underlying economic problems reamin unresolved and get more intractable over time.   There is no credible plan for growth and jobs.

Moral of story: do NOT let National get a second term   Stop the malign juggernaut before it does irrepairable damage.

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Filed under: Budget, GST, Household income, Tax, business, economic, economy, education, finance, poverty, privatisation, productivity, public services
52 Comments

Will the Minister explain?

Posted by Phil Twyford on April 7th, 2010

Marty G at The Standard helpfully points out a $2295 -a-head conference on “Local Government Asset Management” where Local Government Minister Rodney Hide is the keynote speaker.  Later in the morning after Mr Hide’s speech is a session for which the blurb reads:

Privatisation is a contentious issue due to amendments in the Local Government Act 2002. Water will be the first area of local government which will move towards privatisation but what about the rest of local government controlled functions? What will the impacts be on asset management if more functions become commercialised in the future?

Hang on, I thought there was no privatisation agenda for local government?

That’s right, I remember.

The Government’s third super city bill repeals the requirement for a majority in a binding referendum before the Ports of Auckland can be sold.

The move to transfer 75% of the super city assets into council owned companies will exempt them from the Local Government Act requirement for public consultation before strategic assets can be sold.  So after the two year moratorium designed to ensure no asset sales before the 2011 election, a future Auckland Council could flog off the airport and ports shares without consulting the public.

The Government’s announced plans to free up the safeguards against privatisation of water will allow private ownership of water infrastructure for up to 35 years.

Maybe the Minister will use his conference speech to explain whether these moves amount to a privatisation agenda?

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Filed under: Auckland, democracy, local government, privatisation
15 Comments

The future of our ports

Posted by Phil Twyford on March 1st, 2010

Today at the select committee hearing public submissions on the third super city bill, we had the mayors and ARC chairman Mike Lee in. There were some great submissions and useful debate. In amongst it all I took the opportunity to ask several of them their view of the provision in the bill which repeals the requirement for a binding ballot of Aucklanders before the Ports of Auckland can be sold off.

Mike Lee, Bob Harvey, Andrew Williams and Len Brown all gave unambiguous answers that the binding ballot requirement should stay.

I didn’t however get a straight answer out of John Banks after three attempts. In reply to my first two attempts he said how opposed he was to asset sales but steadfastly avoided my specific question. On my third attempt he just looked away.

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Filed under: Auckland, democracy, local government, select committee
10 Comments

Rich Patient, Poor Patient

Posted by Iain Lees-Galloway on January 22nd, 2010

Health Minister Tony Ryall says a proposal to introduce a two-tier system allowing private medical care in public hospitals is “worth a look.”

He should rule this insanity out right now. The idea that our hospitals have the capacity to deliver private health care on top of their current workload is so far removed from reality it’s staggering that Ryall would even countenance the idea.

Just this morning in my own electorate, Mid-Central DHB informed staff that it would be closing surgical beds due to a drop in acute surgery needs. I understand that when asked why the beds couldn’t be used to boost elective surgery numbers, management replied that surgeons were unavailable due to their private sector commitments.

If there isn’t the capacity to meet current needs, where will it come from to meet the additional requirements of fee-paying patients?

That aside, the point of having public hospitals is that everyone gets access to medical care based on need, not wealth. The kind of queue-jumping this would encourage is totally unacceptable.

Just where is Tony Ryall taking our health system?

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Filed under: health, privatisation
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What privatisation agenda? (Ports of Auckland)

Posted by Phil Twyford on December 9th, 2009

So there is no privatisation agenda?

The latest piece of evidence for the “non-privatisation agenda”  is the Government’s decision to repeal the law that would prevent the privatisation of the Ports of Auckland unless a majority of Aucklanders voted to approve the sale. This was confirmed by Local Government Minister Rodney Hide in question time today.

(Strange that Hide didn’t announce this last Friday when he unveiled the content of the third super city bill.)

Add that to the decision to allow our water dams, pipelines and treatment stations to be owned by the private sector for 35 years. And to the decision to repeal the requirement that councils consult the community before contracting out public services to the private sector.

It is starting to walk and quack like a duck privatisation agenda as far as I can tell.

Aucklanders don’t want the ports flogged off. We fought off privatisation in the 1990s and we’ll fight it again now under this National-ACT Government. The most recent poll showed 78% oppose privatisation of the ports. That is why Hide wants to clear the decks of any requirement to give Aucklanders a say in a referendum.

It is also why they are bringing in a three year moratorium on the sale of Auckland Council assets.  But let’s be clear, this moratorium is cynically designed to pave the way for privatisation after the 2011 general election.

Hide has been busy advocating mandatory referenda for rate capping, but can’t stomach the idea of a referendum on asset sales.

Essentially he has been lying to Aucklanders all year. He has consistently rubbished the idea that there is a privatisation agenda for Auckland’s assets. Meanwhile he is setting about dismantling the legal protections that give Aucklanders a say before their precious assets are sold off, and opening up water infrastructure to private ownership.

Rodney Hide is not fit to be Local Government Minister.  But at least he is honest about his intentions. His gutless coalition colleagues on the National benches are too timid to campaign on a privatisation platform, but they vote for the same odious policies.

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Filed under: Auckland, act party, local government, privatisation
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