Prog Blog

The abusive supporters of the government

2010-04-20T15:09:00.000+12:00

Amazing: the capacity of the government's cheerleaders to wallow in smear and filth.

What is is about the National party's fans that they are so full of hate, mud-slinging and personal abuse?

The damage done

2010-04-07T17:29:00.001+12:00

Paying for the damage caused would seem to be a just outcome for the Waihopai three.

Breathtaking hypocrisy

2010-03-31T14:33:00.001+13:00

So here's Cameron Slater calling Andrew Williams 'foul beyond belief' for comparing Rodney Hide to Hitler.

Indeed, one should not call ones opponents fascists, when they are simply wrong.

But how interesting this case is levelled by Slater, considering this video up on YouTube, in which Helen Clark is compared to Hitler. Posted by someone called Whale Oil.

Foul beyond belief. Yes.

Argument from analogy

2010-03-26T12:08:00.000+13:00

So let me get this straight:

If I tell you not to pee in the living room, you point out that I pee in the bathroom and say "your credibility is shredded because you pee in the house too."

National is going ballistic on mining, keeping the story rolling on and on. Either they're on a winner, or they're worried they're on a very bad loser and they're trying to…dig their way out.

Mining

2010-03-24T12:09:00.001+13:00

Prog Blog is not anti-mining - if you like using stuff made from minerals, then you have dig them up.

But that is not the same as saying we should mine just anywhere.

The Standard has a pretty good case that the govenrment has been throwing around some wild figures. Thoroughly recommend reading that post. Although the mining industry earned $6.8 billion in royalties in 2008 (including from oil and gas drilled from way out to sea), "it paid just $500 million in wages and subsidies and only $70 million in royalties."

All the revenue from ruining our national parks and heritage land would just go off shore anyway.

Mining is the sort of short-term option a government comes up with when it doesn't have any meaningful long-term vision for how to create jobs and increase New Zealanders' incomes.

The Waihopai jury decision is wrong, wrong wrong.

2010-03-18T20:14:00.001+13:00

Having just praised the Standard, Prog Blog disagrees strongly with this defence of the Waihopai attackers.

People who use violence to further their views are not lefties of peaceniks, no matter how they couch their justification. They are reactionaries.

And anyone who defends the Waihopai attackers is in no position to condemn the idiots who firebomb abortion clinics.

You're either for the rule of law, or you're for people taking the law into their own hands to defend what they genuinely perceive to be immensely important human values.

And anyone who is on the side of the firebombers is dead wrong.

If bloggers at the Standard or other people who think of themselves as progressive think the left in New Zealand is ever going to get elected by advocating firebombing, civil disobedience and attacks on anyone you disagree with, they are helping to destroy the left's chance of returning to power.

At last! Something funny on the The Standard!

2010-03-18T19:53:00.001+13:00

This is really good: The Standard takes apart John Armstrong's latest apology for John Key.

Armstrong has been a huge fan of Key - but then, so is much of the public, and that's not only because gallery reporters write lickspittle nice things about him.

Now, both Armstrong and Garth George have noticed the emperor is lightly clad. They are experiencing cognitive dissonance.

National is out of ideas

2010-03-16T12:31:00.000+13:00

Whatever happened in this trivial incident, what the enormous outrage on the right shows is that National is so short of ideas, so lacking vision for New Zealand, they have nothing important to worry about.

Auckland's anti-democratic revolution

2010-03-15T16:15:00.000+13:00

The Greens' post on developments in the Super City is interesting.

Both National and Act campaigned against cost increases imposed by local government, even though those local authorities were democratically elected and accountable.

Their response is not to have better ideas, and win by persuading local electors, but to take away the local accountability altogether.

There aren't any governments that have been made better by being less democratic.

Where's all this money coming from?

2010-03-15T15:45:00.001+13:00

Right wing bloggers are excited about some figures that might have been kited to the Sunday Star by the government

The claim is that everyone, yes everyone, gets a net tax cut under the government's plans.

Golly, that's wonderful!

It's also a fairy tale.

If the government suddenly has a whole heap of cash to unload, I guess we won't be hearing much more about how we're borrowing $250 million a week.

But the government doesn't have huge surpluses. So where is the money coming from? Pixies at the bottom of the garden?

Even on the figures the Nats are excited about, someone on $150,000 gets five times as much as someone on the average wage.

Not only is that unfair, it's bad economics. Someone on $48,000 can spend the money more efficiently than someone on $150,000: they are more likely to spend the money on things the economy needs more of, like better health care for their kids, whereas someone on $150,000 is more likely to spend the money on things we don't need so much, like new BMWs.

Prog Blog believes no government would be irresponsible enough to cancel NZ Super and increase tax on our most innovative businesses in order to fund a tax package like this; but even if they were that irresponsible, it would still be poorly designed and hopelessly unfair.

BTW, that argument that the rich get bigger tax cuts because they pay more tax - isn't that just another way of saying an inordinate amount of wealth is locked up by an inordinately small number of people?

Flawed logic

2010-03-11T11:18:00.001+13:00

The Labour party introduced the welfare state. Therefore they should want everyone in the country to be on a benefit all the time.

The National Party recently increased sentences and non-parole periods for some crimes. Therefore they should support locking up all criminals for ever.

The Green Party worry about the sustainability of our lifestyle. Therefore they want us all to live in mud huts.

Labour opposes increasing GST to 15 per cent. Therefore Labour should support removing GST from food, and Labour is hypocritical because they brought the tax in in the first place.

TV guy wrong on GST

2010-03-09T20:35:00.000+13:00

So here's a blog by Guyon Espiner about Labour's campaign against the increase in GST.

Here's what his argument boils down to:

- Even though National hasn't confirmed its tax policy - and it's the Government - Labour has to confirm its policy for an election two years away.

- Labour can't critique anything without defending the status quo.

- Even though Labour is strongly opposed to the policy, and has the majority of public opinion on its side, it should just shut up and go away.

That is clumsily stupid analysis.

Of course Labour should oppose the GST increase. On fairness grounds alone, but also because it betrays National's promise to introduce policies that would grow the economy.

The money go round

2010-03-09T12:41:00.000+13:00

About this GST thing.

If the Government increases GST from 12.5 per cent to 15 per cent, it will raise about an extra two billion in tax revenue.

But then you have to deduct the cost of compensating for the increase. That must, by definition, cost about the same as the increase, or else everyone is not being compensated.

(There is some extra revenue raised, because some people such as tourists would pay the extra tax, but won't be compensated. On the other hand, we would expect a decline in tourism spending because of the increased cost of goods and services in New Zealand.)

So overall, it is a money-go-round, taking with one hand and giving with the other.

What's the point?

The government seems to be agreeing with commentators who claim GST is a more efficient tax than personal income taxes. Their thinking goes that GST raises more revenue even after compensating because it is more efficient, and therefore the extra revenue can be used to reduce income tax.

That must be untrue - if it raises more money, then some people aren't being compensated.

But this is the line ministers are peddling - don't just look at the GST rate increase; consider the income tax cuts as well.

So let's look at them.

Income tax cuts for most people will be all about 'compensating' most people. So the gains from any tax efficiencies won't go to the vast bulk of New Zealanders.

Instead, the gains are going to pay for a decrease in the top marginal tax rate.

If you are among the highest earners, you get thumping income tax cuts and relatively small GST increases.

Since GST is a money-go-round, the real action is the cut in the top rate of tax. That is a cut that National would not for a minute be able to get away with if they didn't confuse the issue with the GST money-go-round.

Prog Blog could wax lyrical about the fairness of that, but let's cut to two more interesting points:

First, there is nothing efficient about giving tax cuts to top income earners unless top income earners spend it more efficiently than others could. To put this point another way - who could spend the next dollar of income more 'efficiently': A school principal wondering whether to buy an extra computer for a classroom? A wage worker wondering whether to buy the kids a new pair of shoes? A manager wondering whether to buy a faster machine? A superannuitant wondering whether she can afford to turn on the heater? The Telecom ceo wondering whether to purchase a new BMW? Many of us might answer this question differently - but it takes a special definition of efficiency to say that the person who can use the dollar most efficiently is the person who already has the most dollars.

Second, there is a policy choice to give tax cuts to earners on the top rate instead of using that money for something else.

It costs about $1.5 billion to drop the top tax rate from 38 cents to 33 cents, rising to $3.7 billion in 2017 (as income rise and more people pay the top rate.)

For the same money, the government could:

- Restore its contributions to the Super Fund, and therefore reduces taxes on today's children when they are taxpayers, to keep super payments up.

- Cut the top tax rate to 35c and introduce a tax free threshold of $2000.

- Increase the income threshold where the bottom 12.5% rate applies from $14,000 currently, to about the minimum full time wage, which would give everyone around $15 a week.

- Fully fund dental care for New Zealand, and have enough left over to provide a decent R&D tax credit, and fully fund the Fast Forward innovation every year.

So the GST increase is a money-go-round that covers up a truly unfair tax shuffle that ends up sending money to much lower priorities than the government is choosing.

Gone

2009-07-15T21:33:00.003+12:00

A brief list, not. But also not a full list of all that has gone since National took office.

Research and Development Tax Credits, presenting the biggest tax increase ever to NZ business
Fast Forward Innovation Fund
Emissions Trading Scheme
Billion dollar retrofitting of houses
Proposal for huge state house building project
Funding to Community Housing Aotearoa,
A billion dollars every year. (This amount to be borrowed every year and given to the most wealthy, described as tax cuts)
Employer contributions to Kiwi Saver
Employment rights for employees in firms of 20 or fewer staff during first 90 days
Plans for urgent upgrading of Kiwi Rail
Options for only healthy food in school canteens
Biofuel percentage in petrol
Legislation to ensure coal and gas generators are not built
Research for equal pay for female Social Workers
Security of the Commerce Commission
Parts of Resource Management Act
Security of the Cullen Fund
High level elected public officials
Plans for early intervention
Film fund
Funding for Dyslexia
Funding for special needs
Community Education
Mayoral Task Force for jobs
Enterprising Community funding for jobs
Jobs in Ministry of Social Development
Unit for sexually abused children
Jobs in Ministry of Ag and fish-biosecurity
Tertiary Ed Commission jobs
National Library jobs
NZ Post jobs
Regional Fuel Tax
Enviroschools jobs
Legal Aid Funding
Training Incentive Allowance
Misson On (Now Misson gone)
$37M from health promotion services
$2.3M cancer control
$4.8m Lets get checked diabetes programme
$3M Heart budget
Ability to resit NCEA more than once gone
Apprenticeship funding
ACC Physiotherapy Funding
Signalled $50M cut to teacher staffing budgets for state schools from 2010-equivalent to 700 teachers
Funding to Auckland's combined Beneficiaries Union
Slashing of tertiary funds used for service delivery being salaries
Slashing of tertiary Tripartite Funding
Professional Development for teaches $35.779M removed
School Support Programmes $6.005M removed
Curriculum Support Programmes $11.701M removed
Pathways to Partnership Funding slashed.
Funding reduction to Environmental groups

and at least 1000 people losing their jobs every week.

Prog Blog's comment on the budget

2009-05-30T22:55:00.001+12:00

Check out this:

Tax cuts are not tax cuts unless they are accompanied by matching spending cuts -- otherwise they are merely tax deferrals, taxes are just pushed into the future with interest added.

...

Spending increases financed with debt instead of current tax increases are tax increases, with the taxes to arrive at a future date.

John Key and Bill Engish are tax raisers! oh the irony.

If they are going to raise taxes - couldn't they spend the money on something, uh, worthwhile? Something that would maybe create some jobs?

Great choice for Labour in Mt Albert

2009-05-03T16:31:00.001+12:00

The Labour party has apparently selected David Shearer as its candidate in Mt Albert.

This is a spectacularly good choice.

He has a good cv. An excelent cv. He is currently second in charge at the UN in Iraq. The world knows he is qualified. He is part of a rejuvenation on the left. The other parties - National, Greens and Act - are all recycling MPs. Why would you vote for someone who is already an MP?

There were some very high quality candidates there - and three or four of them are headed for parliament, Prog Blog thinks. Shearer is great for nation-wide profile in a by-election.

The right have been panicked about him. They know he is a strong choice,. On that: It is nonsense to say he supports privatising the army. You know someone has a weak argument when they have to lie to make their point. National has been lying about Shearer and privatisation. Shearer said, in a think piece for a policy discussion organisation, that in a catastrophe like Srebinica where the Dutch government knew it couldn't prevent an impending genocide, why wouldn't you put anyone in who could stop the rape and murder of civilians? If you have to pay them so what? It's better than genocide and it avoids brining international assistance into disrepute - as happened when the West stood by and watched the murders in Srebinica of 8000 people. Innocent people.

Matt McCarten, who never misses a chance to distort something the Labour Party says, opposes Shearer's view. No surprise there. He also supported the genocide and ethnic cleansing in Srebinica - he blamed the Moslems and said at the time the world should be supporting the socialist-in-name murderers. What does he think the world should have done - send in our own army? Nope, he strongly opposed that. Or support Shearer's alternative? Nope. That only leaves supporting the genocide. The other weak evasions were all tried in Europe at the time, and didn't work.

Shearer has first hand experience of these horrifying events - and of weak international attempts top intervene. That is part of what makes him an excellent choice.

Shearer's ideas were written for a think tank. An organisation that exists to promote ideas. The right, and the stupid parts of the left, hate that, because they are opposed to ideas.

ANZACS FORGOTTEN

2009-04-23T09:17:00.002+12:00

Anzac day this weekend, when we will remember those young people who fought for our freedom in theatres of conflict far away. Those who returned set about with determinantion to create a Nation State with opportunity for all, in charge of its own destiny, without poverty, with free education and health care, healthy housing, effective transport, and an egalitarian heart. A heart to look after the vulverable and give support and encouragement to all citizens.
It is with great shame that I look at the current minority National Party in government with its support parties proposing to sell our military land, cut up parts of the conservation estate, lay off public service staff, destroy democratic representation in our largest city, remove protections from unhealthy food especially in schools, borrow billions of dollars to give tax cuts to the well off and all the rest of it.
The sale of military land will further increase the government debt as we will have to rent what we owned thus increasing expediture as well as the military's duty to the New Zealand public being placed at risk from interference. Laying people off will increase the cost to health as well as being less service for the public. Ecosystems will be lost and the climate suffer as trees are felled and carbon released from coal.
This is a very sad weekend to remember the ANZAC spirit and the determination to create a Nation that stood out from others for its strength to care for people, economy and environment

Mt Albert: There's only one issue

2009-04-14T12:00:00.001+12:00

It is almost impossible to believe that a government would rip a
gigantic tear smack through the middle of Auckland by building an
enormous, six or eight lane motorway straight through the middle of a
settled residential area to complete the Waterview Connection.

Not when there is already a finished plan for a bloody tunnel to avoid
the fuss.

A tunnel: You don't have to demolish hundreds of homes if you build a
tunnel. You don't have to demolish parks where children play. You
don't have to divide settled, colourful communities in two.

And most of all: The Tunnel Is Ready To Go NOW. The motorway isn't.
The motorway holds things up for years and years. The planning
consents could take twenty years. While the consents hold things up,
the costs will blow out, and more right wing politicians will sit on
their thumbs in a panic about the cost.

Auckland is spewing traffic onto Mt Albert roads because of the work
the previous government did to get a decent connected motorway system
in Auckland. That system needs to be completed urgently. The Waterview
Connection is absolutely vital. And it is sorely needed as quickly as
possible.

National is against a quick completion. It put the tunnel on hold.

There is only one big issue at this election: the motorway on the
surface or the tunnel underneath.

National is reverting to form, holding up the tunnel: It is
truculently holding up development because the tunnel wasn't its own
idea.

National is wasting money by mistakenly thinking that delay saves
money. It doesn't. Costs go up while we wait, and the obstacles to
efficiently moving traffic round Auckland cost hundreds of millions of
dollars a year - plus there's the environmental cost of all the
exhaust spewing into the air from waiting cars.

National is arrogantly thinking of riding roughshod over what locals
want - they want a tunnel, by a 90% majority.

National is out of touch with the wishes and needs of the local
Auckland community.

ACT, Maori and Greens holding support

2009-04-09T21:52:00.001+12:00

It is quite interesting how the ACT, Maori and Green parties are holding their support levels five months after the general election.

If this trend continues it could be a real sign that MMP is maturing and we are settling down to a pretty permanent five-party political system.

The Roy Morgan poll released today has ACT at 4 percent support (fractionally above its election result), the Maori Party at 4 percent (near double its election result) and the Greens on 9 percent (up from 6.7).

ProgBlog is not a particular fan of some of the policies of UnitedFuture or NZ First.

But the historical record is that NZ First's then five MPs played a critical role in enabling the establishment of the NZ Superannuation Fund in the 1999-2002 Parliament. In the 1996-1999 Parliament, NZ First forced the abolition of the anti-savings Super Surtax and it forced New Zealanders to confront the issue of our nation's weak personal savings culture (a prelude to KiwiSaver a decade later).

And UnitedFuture's then eight MPs saved MMP in the 2002-2005 Parliament

by offering critical confidence and supply to the Labour-Progressive coalition which was eight seats short of a majority.

Because of the way that "the daily news cycle" operates, with the emphasis on entertainment and therefore "conflict," there is no question that 99 per cent of voters in 1999 and in 2002 and in 2005 had no inkling of the positive roles played by either NZ First or UnitedFuture in promoting political stability and progressive policies. The Progressives suffered the same fate.

But it could be that in 2009, after five MMP elections, enough of the public have now cottoned on to the way proportional electoral systems work. If so, that suggests ACT, the Maori Party and the Greens can hope not to be penalised for being responsible positive governing parties.

Prime Minister John Key's MMP masterstroke of securing a policy cooperation deal with the Greens this week, meanwhile, helps explain why his party continues to sit at around 50 per cent support in the polls.

http://www.roymorgan.com/news/polls/2009/4371/

Wasting taxpayers' money on meaningless law-making

2009-04-07T09:27:00.001+12:00

According to a New Zealand Herald story today not even one of the 423 prisoners currently serving life sentences would have been caught earlier had the National/Maori/ACT coalition's Sentencing and Parole Reform ("3-Strike") legislation already been enacted in this country.

Department of Corrections' data indicates that none of the prisoners would have been "struck out" before the offence that earned them their life sentence. http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10565592

National and its allies should concentrate on serious policies to raise our economic development instead of wasting taxpayers' money - and wasting Parliament's limited time - with expensive, meaninless stunts like the Sentencing and Parole non-reform.

Exporters and tourism earners are again being hit as the NZ Dollar continues on its roller coaster ride that makes business planning near to impossible - the Reserve Bank is stuck between a rock and a hard place as the flying Kiwi acts to tigthen aggregate monetary conditions even as we enter the sixth consecutive quarter of recession.

If the governing parties have nothing meaningful to say or do to try and secure that export-led recovery that we must eventually have and really want to respond to the public's desire for much tougher terms and conditions for prisoners - why don't they do something simple like make life mean life?

Make a life term mean the natural life of the prisoner, or set it at 100 years. So instead of the 15 years or so that you get inside for a double murder, make it 200 years. Instead of the 17 years or so that you get for the murder of a family of five - make it 500 years.

That would be tough, it would be popular, most people would think it fairer than the current system and, importantly, it would be simple to enact so allowing Parliament to get back to addressing what to do get the unemployed into work, to get those in work into acquiring new skills and to get our export performance up.

America the free

2009-04-06T11:18:00.001+12:00

July 14 will be the 25th anniversary of the election of the 4th Labour Government, a government that had tense relations with the big nuclear military powers of America, the UK and France.

The main problem was New Zealand's decision to legally ban nuclear weapons and nuclear-armed military craft from entering New Zealand territory. A secondary problem was our opposition to nuclear testing in the South Pacific. A third problem, unstated, was that New Zealand had set a bad precedent - what if other democratic countries followed us and declared themselves nuclear-free?

So a quarter of a century ago New Zealand under a Labour government was suspended from the ANZUS military pact because of our bad behaviour.

The good news is that on Sunday it became clear that the U.S. is coming around to our way of thinking. The future of mankind is at stake, President Barack Obama said, "all nations must strive to rid the world of nuclear arms".

It has been many years since the substance of the 1968 Non-Proliferation Treaty has been on the international agenda. The commitment of its signatories is to reduce toward zero stockpiles of these weapons of mass destruction. Disarmament is a key pillar of the Treaty which only four States have so far refused to sign (India, Israel, Pakistan and North Korea).

As for the Comprehensive Test Ban Treaty, there are 44 states that possess nuclear technology that need to both sign and ratify it before it can take effect and only 35 have done so. The hold up, until now, is due to these nine: the United States, China, Egypt, India, Indonesia, Iran, Israel, North Korea, and Pakistan. http://www.nytimes.com/aponline/2009/04/05/world/AP-EU-Obama.html?ref=global-home

After a long break, we are in 2009 getting real leadership from the United States on a fundamental global human rights issue.

NZ Crown accounts strongest in the West

2009-04-03T16:04:00.000+13:00

With the exception of Norway, New Zealand's Crown accounts continue to come in as the strongest in the Western World which is very good news because it acts to protect all New Zealanders in these incredibly stressed-out global economic times.

Treasury reports today that the government's operating balance before gains and losses was a surplus of $49 million in the eight months to the end of February 2009 and the Crown's net financial asset position was positive $7.7 billion - equivalent to +4.3 per cent of NZ's GDP.

http://www.treasury.govt.nz/government/financialstatements/monthend/pdfs/fsgnz-8mths-feb09.pdf

In the USA, government net debt stands at over 50 per cent of US GDP, whereas NZ's government has no net debt - at 28 February our government's financial assets were valued at more than its financial liabilities to the tune of the equivalent of +4.3 per cent of NZ GDP.

http://www.oecd.org/document/61/0,3343,en_2649_34573_2483901_1_1_1_1,00.html

NZ's current position is not only exceptionally strong compared with the U.S., the UK or the Eurozone countries, but it is the strongest set of Crown books in NZ since records began in 1972 (when net Crown debt was around -5 per cent of GDP and compared with -52.6 per cent of GDP in 1992).

http://www.treasury.govt.nz/government/data

The National Government has inherited the best possible position to respond to the very challenging international economic conditions - their responsibility is to keep the Crown accounts strong and to ensure that every cent of new expenditure adds to the economy's strength while assisting those hurt by unemployment to find new employment - hopefully in export-orientated businesses ready to make the most of the next international upturn.

And if the Democrats' complex, non-transparent and expensive spending plans turn to custard...

2009-04-01T22:56:00.001+13:00

The new United States Administration's economic policies are the source of a great deal of heated debate in America.

Joseph Stiglitz, the Nobel Prize in Economics holder who was in New Zealand last year outlining the high risks of the former Administration's massive borrowing programme to fund the ill-fated Iraq invasion, describes President Obama's latest programme to salvage America's ailing banking system as clever, complex and nontransparent - a win-win-lose proposal: the banks win, investors win and taxpayers lose. Joseph Stiglitz: Ersatz Capitalism

Adam Posen of the Peterson Institute for International Economics who is without doubt one of the world's most informed people about Japan's "lost decade" when its banking system over-borrowed and got over-exposed to over-rated assets before siezing up in the 1990s, outlines a number of parallels between the U.S. today and Japan in the 1990s, as wonders whether there will be a need for a "Plan B" in a year or two. http://www.thedailybeast.com/blogs-and-stories/2009-03-29/does-obama-have-a-plan-b/full/

Salman Khan tries to explain in very simple terms how the U.S. Federal Government's toxic debt management plan amounts to a massive gift to the banks - but his presentation leaves you wondering if the massive taxpayer generosity will deliver economic benefits to the wider economy or will in fact just delay, and exaggerate, the large underying economic and social adjustment Americans face. http://www.youtube.com/watch?v=n-arbfLTCtI&eurl=http%3A%2F%2Fwww.irvinehousingblog.com%2Fblog%2Fcomments%2Ffear-is-gripping-the-market%2F&feature=player_embedded

Hopefully the sceptics are wrong.

But there was a strange statement issued today by Reserve Bank Governor Bollard. He noted retail banks are raising their longer term mortgage lending rates Long-term interest rates out of line with RBNZ expectations Rising retail mortage rates are, Dr Bollard said, "inconsistent with the monetary policy outlook," - a strange statement because it only highlights how little influence our central bank has on long term interest rates in New Zealand and how dependent on off-shore lenders our retail banks are to be able to offer fixed term mortgages in the first place.

Maybe the rise in longer term retail mortgage rates is a sign of underlying investor confidence that America's plans are working and the global economy will recover. Perhaps, on the other hand, rising long term interest rates is just a sign of on-going stress in international debt markets, a sign of market scepticism in U.S. policies which manifests itself in higher charges by lenders to borrowers (which is bad news for the highly indebted of this world, like us Kiwis).

Only time will tell, but in the meantime the National Government's borrowing to fund today's $1 billion personal tax cut package looks like an unnecessary risk in these very troubled times. Finance Minister Bill English's statement doesn't mention where the funding for the package comes from http://beehive.govt.nz/release/government+delivers+april+1+tax+cuts+sme+changes and the decision to cut back on employer contributions to KiwiSaver (exactly what this indebted country needs more than ever), meanwhile, merely gets a footnote.

Govt clearly serious about avoiding forecasts for large, growing deficits

2009-03-31T13:52:00.000+13:00

While the governments of the U.S. and the U.K. carry on their massive borrowing acts as if there is no tomorrow, it seems that the government in New Zealand has given a strong commitment to international ratings agencies that we will not be following suit.

Treasury's forecasts in December for the Crown's deficits to grow alarmingly in the years ahead had been weighing down on potential investors in NZ-dollar denominated debt - meaning that getting access to long-term financing offshore had become very hard to get.

The government's re-assurances to international investors that it won't allow the Crown's balance sheet to get out of control (triggering a Sovereign Credit Downgrade) - is good good news for employers looking to grow or maintain their business with bank funding.

The government's re-assurances have apparently assisted ANZ National Bank to raise US$1 billion through an issue of government guaranteed three year bonds to US investors last Friday - its first long dated fund raising exercise since July of last year.

That will assist to counter the upward pressure on longer-term interest rates seen lately, but it also must mean that government departments are under enormous pressure to ensure that the re-assurances that the Government has clearly given to financial markets are fully met in Budget 2009.

The worst thing that could happen now is if the government disappoints foreign investors after it has given clear messages that the New Zealand Government is serious about maintaining strong Crown accounts and that the New Zealand Government is taking action to avoid any downgrade by international ratings agencies.

http://www.interest.co.nz/ratesblog/index.php/2009/03/31/analysis-how-john-key-secured-a-us1-bln-loan-for-new-zealand-with-a-newspaper-interview/

The Nasty National Party once again

2009-03-29T09:41:00.001+13:00

The graceless, boorish comments Paul Henry made on tv are the sort of thing that, if he made them somewhere else, would simply leave you thinking, 'that guy's a dick.' You would leave it there. After all, is there really anyone who cares what Paul Henry thinks about how people should look?

But what is especially objectionable is that TVNZ has allowed itself to be used to bully and humiliate someone. This is not a conversation in someone's living room: it is a national platform from which someone belittled and abused a person who had done nothing wrong.

The misuse of power is awful. In front of tens of thousands of people, a television anchor has used his camera time and his audience, to administer an intentional humiliation. A schoolyard taunting. On their own, the comments are just impolite and ugly. It is the misuse of power, the thuggish, ganging up and picking on someone he thinks is different, that is unacceptable.

Henry, of course, is a National Party candidate. The National Party blogs are all praising him of course. Because National has never met a bully it didn't like.

Under National, TVNZ is a vehicle for abusing anyone different.

IMF advises NZ Government to raise taxes

2009-03-26T20:10:00.001+13:00

The Stuff website is carrying an NZPA story entitled 'Govt told to curb spending' http://www.stuff.co.nz/national/politics/2294570/Govt-told-to-curb-spending

"Low priority spending should be cut, but the required adjustment (to save the Crown accounts from deteriorating significantly) is so large that the Government would have to consider raising revenue - taxes to bring debt levels down," the IMF is quoted as saying.

The reason why the Crown is required to run structual surpluses in New Zealand was highlighted yet again today when Statistics NZ issued the balance of payments for the last three months of last year (this tells us NZ's current account balance with the world by aggregating the balances of merchandise trade, services trade and international investment income between NZ and the world).

NZ Inc. (driven by the household and business sectors) lived on the credit card to the equivalent of just under 9 percent of GDP in the year to December 31.http://www.stats.govt.nz/products-and-services/media-releases/balance-of-payments-intl-investment-position/balance-of-payments-and-iip-dec08qtr-mr.htm

International investors require the Government to keep its own books in surplus to offset the risk associated with lending to New Zealanders arising from the open credit card practices of our households and businesses.

We've been living on the credit card, running annual current account deficits in each and every year since 1973. The running deficits are cumulative - adding to our total net overseas financial liabilities as a nation - so that by 31 December 2008 New Zealand's overseas liabilities exceeded its overseas assets by $167.7 billion (92.9 percent of GDP) versus 87.1 percent of GDP a year earlier.

The last time international ratings agencies downgraded our Sovereign Credit rating was in 1998 when the last National government was cutting income taxes and facing the Asian financial market crisis.

What is very clear is that everything has changed in the global economy and financial system since October of last year.

Kiwis will forgive the National-led government if it decides to can the 2010 and 2011 round of income tax cuts. In fact, Kiwis will support the Government's moves to cut low-priority government spending, and they'll even support tax rises, if they are kept in the loop and spoken to honestly by the Prime Minister who enjoys high popularity and leads a government enjoying a prolonged "honeymoon".

With expensive population ageing and global climate change challenges facing our small trading nation in the decades ahead, real strong leadership is what the country needs and which, hopefully, National will deliver.

Rare praise

2009-03-26T09:30:00.000+13:00

This blog is not always complimentary to the National Party. But when they do something they should do, we should have the integrity to recognise it.

This is a good thing to do, in principle: reviewing spending on low priority programmes and axing a few.

Progressives cede this ground to the right far too easily - because the right always claim to have a war on the size of government in the name of lower taxes. But Progressives shouldn;t cede this ground. There is nothing wrong with making spending as efficient and powerful as possible.

The real right agenda is to cut services that are effectively redistributed - for example, to reduce health care provision, and free education, so that the taxes of the wealthy are not used to pay for the social services accessed by the rest of us. They don't really care about the efficiency of spending - it is redistribution and social equality they are worried about. The right wants to use government to stop social mobility and to keep working families from rising above their station - progressives want to maximise mobility and equality.

Therefore Progressives should resist the right wing agenda to slash essential social services, but strongly support efforts to keep the public sector as lean and light weight as possible in the pursuit of better outcomes. The more bloat that gets stripped away, the more there is left to be spent where it is most needed - and the more we can expose the right wing agenda to cut essential services, which they disguise under their criticism of bloat.

Every government should have a programme of permanently reviewing lowest priority spending. Ministers should be required to offer up the lowest value thing they do every year. Otherwise, programmes that are set up with good intentions can lumber on without delivering results.

So, praise for John Key over this. But one reservation: The Nats have already shown nastiness runs in their blood. You just know they are going to cut programmes not because they are low priority, but because they have a vindictive agenda. They will cut anything that doesn't appeal to their bigotry. They will cut any programme they can that helps poor people.

And if they really wanted to get rid of waste in the public sector, they would get rid of ridiculous, old fashioned and insulting colonial titles like 'sir' and 'dame'.

Nasty Nats

2009-03-25T12:16:00.000+13:00

If you ever need to see how provincial, nasty and ugly some of the national Party can be, just read the nasty comments here. And notice how they vote each other up and down.

Kiwiblog is really just a vigilante group. An angry mob of neverdowells, raving at each other. It is sad that New Zealand harbours so many ugly people.

What is it about National party philosophy that attracts such ugly people - the culture of selfishness and greed? the bigotry beneath the surface? The bitterness of personal failure transformed into blustering, bullying political ideas? Or maybe the whole lot combined.

Erosion of 4 Weeks Annual Leave is an attack on families

2009-03-25T12:12:00.001+13:00

The National Party, together with its mates like United Future, voted against Matt Robson's Four Weeks' Paid Annual Leave Bill when the Progressive Party Bill was voted on in Parliament in 2003.

It wasn't a surprising stance as the National Party quarter of a century earlier had voted against the Third Labour Government's decision to introduce a third week of paid annual leave.

It is unclear what the National Party truly believes the number of paid holidays employees should be entitled to (five days, or ten days as it was in the 1960s, or none at all?), because National isn't an honest party that tells citizens what its actual agenda is before people vote. It doesn't outline the intellectual and moral basis for its agenda, and then seek an open mandate to deliver.

Instead it aggressively opposes all progressive gains by Labour governments but, because it has no mandate to bluntly reverse the gains when it does get into power, once it is in Government its goes about its regressive programme in sneaky, piecemeal ways.

National will undermine working people's four week holidays piece by piece.

One of the arguments used against extending an extra week when the Progressive Party Bill was first introduced to Parliament in late 2002 was outlined by National's sister organisation, Business New Zealand:

It said at the time that: "Proposals to increase holiday entitlements to four weeks a year would harm New Zealand's growth prospects. MP Matt Robson's Holidays (Four Weeks' Annual Leave) Amendment Bill is likely to get its first reading in Parliament this week, and Labour Ministers are apparently being lobbied hard to support it...Mandating another week's holiday for everyone sounds appealing of course, but it would reduce the nation's productivity. None of that would help growth or prosperity in the longer term."

The argument of the Regressives was, of course, very dishonest - it deliberately mixed up three different concepts into one - productivity, growth and prosperity - as if they were all exactly the same thing. http://www.businessnz.org.nz/doc/433/Extraweeksholidaywouldharmproductivitygrowth

The United States enjoyed strong productivity, economic and employment growth over the period 2001-2007, for example, but when it comes to the question of prosperity the honest thing to address is to answer for whom?

Most U.S. working people's inflation-adjusted or real wages have been stagnant in the 2000s, especially since 2003.

In American under right-wing administration since the start of the New Century, the productivity/wage gap grew strongly. The gap between productivity growth and workers' wages, especially those of middle- and low-wage workers, is at a historically high level. What that means is that wage growth has been very unequal.

The practical effects of the right wing agenda, whether in the U.S., New Zealand or any other country, is not greater prosperity for a majority of citizens, but just a minority. http://www.epi.org/publications/entry/bp195/

But there is another aspect of the Right's programme.

The effect of eroding working families taking four weeks annual holidays a year, in a society where two incomes are a financial necessity for the majority, is also an act which puts additional pressure on families themselves and the cohesion of families.

That's right, the freemarket ideology which relishes inequality and opposes annual paid leave on principle, is a backhanded attack on family values and the interests of a majority of families.

Failed finance companies

2009-03-22T17:47:00.001+13:00

Neville Harris, Registrar of Companies, has done the public a service with his report to the Commerce Select Committee into the factors that contributed to the destruction of so many households' savings in the debris of so-called 'finance companies' over the past two and a half years (pg 8-14)

http://www.parliament.nz/NR/rdonlyres/16F22058-8DD8-4541-B9A9-064848076239/100892/DBSCH_SCR_4272_6521.pdf

The report covers 20 or so companies now in receivership and the nine companies where investors have approved a restructure and/or moratorium on maturing loan repayments for periods of up to five years.

The report is vital reading for anyone ever thinking of putting money into a finance house in New Zealand.

We have been told for two decades that the basis of New Zealand regulation of finance houses rests on the honesty, competence, adherence to the law and "good governance practices" by boards of directors - with critial supplementary roles by independent auditors, trustees and financial advisors.

Well it is not possible to to read this report and feel any sense of confidence in the roles of Trustees or Auditors in the regulatory framework of the non-bank financial sector in New Zealand.

There is no rational basis for any investor or potential investor to have confidence that there are these independent directors, these trustees and these auditors out there looking out for the interests of small time investors.

The Registrar of Companies' findings contrast with any positive impression that anyone might have got from the Securities Commission which in August 2006 issued a statement telling us that:

"Finance companies' disclosure of information for investors has markedly improved since the Securities Commission published a Report on Disclosure by Finance Companies in April 2005. This is the finding of a Commission review of offer documents of 20 companies prepared since the Commission's Report."

http://seccom.govt.nz/new/releases/2006/240806-2.shtml

So in August of 2006, the Securities Commission was happy to issue a statement explaining to investors that it is the Commission's job "to intervene when finance companies do not provide the information required to enable investors to make informed investment decisions" and explaining also how it had been tough on no less than 12 companies - requiring them to rectify their disclosure deficiencies.

If you had read that in 2006 you might have taken comfort from knowing that "the standard of disclosure in the finance company sector has improved significantly as a result of the Commission's work" (particularly since an initial 2004 Finance Company Discussion Paper http://seccom.govt.nz/publications/documents/disclosure/index.shtml ) and that "most finance companies had taken the (Securities Commission's) report seriously and have been able to apply the guidance in it."

Neville Harris, Registrar of Companies, has done the public a service in clearing up any confusion.

Strategic implications of America's massive government debt policy

2009-03-21T14:51:00.000+13:00

U.S. Federal debt, thanks mainly to the big tax-cutting and Iraqi war policies of the eight-year Bush Republican Administration, now stands at about US$11 trillion (NZ$21,000,000,000,000).

The operationally-independent Congressional Budget Office today estimates that, due to both the ongoing costs of the Iraq War and the need to clean up the mess created by the financial market intermediary gurus that have wrecked the U.S. banking system, the U.S. central government will be running huge annual deficits in each and every year for the next decade - adding perhaps another US$9.3 trillion on to that outstanding level of Federal debt over the next ten years.

Is it OK for the American government's gross debt levels to rise to toward 150 per cent of GDP, its net debt levels towardr 100 per cent of American GDP?

This is not a moral question, but a political and financial one.

If China, Saudi Arabia, the UAE, Switzerland and Qatar et al are major holders of U.S. government debt, does this have implications for United States foreign policy in, let's say, the South China Sea (where there are disagreements over national sea boundaries and over the status of Taiwan) or in Afghanistan and Iraq (where militants fighting the U.S. get a lot of their funding from conservative Sunni supporters in the Arabian Gulf)?

One of the oddest things about the Bush Administration and its right-wing supporters is how they always ignored the medium term strategic and political implications of the high government indebtedness policies.

http://www.nytimes.com/2009/03/21/washington/21deficit.html?_r=1&hp

UK Tories call halt to tax cuts; Irish conservatives eye personal tax hikes

2009-03-20T14:16:00.001+13:00

The Leader of the Opposition David Cameron says that if the Conservatives win next year's UK election then they will give priority to reducing government debt over and above tax cuts.

The Tory leader has thereby abandoned his party's previous commitment to "sharing the proceeds of growth" (i.e. he is abandoning the high- risk idea of deficit-financed personal income tax cuts) and signalling instead that a Conservative administration would stop adding to public debt.

http://www.guardian.co.uk/politics/2009/mar/20/david-cameron-conseratives-economic-policy

It is clear than the British right wingers don't want to get into the mess than the Irish conservatives find themselves in.

Charlie McCreevy, Eire's finance minister between 1997 and 2004, used to scorn the old fashion notion that fiscal policy should lean against the business cycle.

While the Labour-Progressive government in New Zealand was running large government surpluses in the face of persistently strong global growth that economists could never adequately explain at the time, Mr McCreevy was in government on the other side of the world implementing what National in New Zealand was demanding for our own country.

"When I have the money, I spend it. When I don't, I don't," McGreevy would say as Ireland cut income taxes and ran "balanced budgets" during the good times which left public finances too dependent on windfall revenues from VAT on new homes, capital-gains tax and stamp duty.

These days those revenues have all dried up as house prices and sales slumped.

The Irish budget is massively in debt today. The Irish Government is about to introduce its fourth fiscal package in a year - the unemployment rate is over 10 per cent and a public wages have been cut 7.5 per cent - but the government is still scrambling with its debt problem created by its own poor, risky fiscal policies.

Next on the agenda for the Irish Conservative Government?

Higher income taxes, wouldn't you know it!

http://www.economist.com/world/europe/displayStory.cfm?story_id=13331143&source=hptextfeature

Nasty Nats get even the tiny ideas wrong

2009-03-16T13:59:00.000+13:00

Gordon Campbell makes a very good point about the Nasty Nats' cynicism over the '9-day fortnight.'

The more successful it is in reducing average ordinary time after tax earnings, the less it costs the government, because the level of superannuation is set by a constant ratio to average ordinary time after tax earnings.

(They're taxing the government's contribution too, by the way. The mean buggers.)

It is strange to be mean with the response to the recession. The problem New Zealand faces is a precipitous decline in consumer demand relative to our earnings. Encouraging people to reduce their incomes will only depress demand even further.

This National Government with not many ideas can't even get straight the tiny little ideas it has about how to cope with global financial crisis.

National's war on science continues

2009-03-16T13:51:00.001+13:00

National's assault on science continues.

First they axed the largest ever investment in science in New Zealand's history - Fast Forward, that would have invested two billion dollars, half of it private sector investment, into applied research in our highest priority industry. They won't replace that private sector funding.

Now National is getting rid of the Bioethics Council. The Council might not help itself with its dreary language and excessive attempts to be culturally inoffensive. (But it's farewell note is pretty funny.) But any comment about the content of the work the Council did is separate from the need to have an ethical body. (Prog Blog thinks it was actually quite thoughtful, despite its earnest approach.)

When National gets rid of the Bioethics Council, it's not just getting rid of 'spiritual and ethical' debate around science. It is getting rid of the science as well.

You are not going to have serious research into topics like human embryos or stem cells in this country without a clear ethical framework.

You need a consultative body to lead the research, or the scientists and doctors involved won't get ethical approval from their own supervisory institutions; they won't get funding, especially from organisations that need strong ethical statements to secure public donations; and they will find scientists shy away from ethical minefields, because that is easier.

Scientists are good at navigating rules around the sorts of constraints that should be put on research (such as requiring consent to use people in experiments.)

Scientists are not good at leading debate themselves - influencing public opinion and consulting widely is not necessarily a science skill set, there will always be skepticism that scientists are focused on furthering their own areas of research interest; and they are constrained by the need to please funders.

So, if you get rid of an ethical advisory body, you effectively shut down some science.

Jim Anderton noted last week that support for science is becoming extremely political.

Never, in all New Zealand history, has any government made so many anti-science decisions in so short a time.

Interest rates to rise quickly once global economies pick up?

2009-03-13T23:21:00.001+13:00

In the past couple of decades, the political divide between Republicans and Democrats in America has mirrored the divide between National and Labour in New Zealand on one important issue: Government debt.

Gross U.S. government debt skyrocketed as a ratio to U.S. GDP under Presidents Ronald Regan and George W Bush (Republican), while debt fell under Bill Clinton (Democrat) - who was, like Labour in NZ, forever attacked by conservatives by his large annual surpluses (which of course are needed to pay down inherited debt levels).

http://209.85.173.132/search?q=cache:http://www.cedarcomm.com/~stevelm1/usdebt.htm

But it could be that the current Democratic President is going to put an end to the Democrats' historic aversion to piling on the debt (for future generations to pay-off).

According to the O.E.C.D.'s measure of general gross U.S. public debt, it stood at an eye-popping 73.2 per cent of U.S. GDP in 2008, and was on track to rise to 82.5 per cent of U.S. GDP next year (that was calculated prior to the latest expansionary budget moves in America).

http://www.oecd.org/document/61/0,3343,en_2649_34573_2483901_1_1_1_1,00.html

The OECD estimates Net Public Debt in the U.S., meanwhile, stood at (MINUS) 46.2 per cent in 2008

(The NZ Government, in contrast, had no net Crown debt in 2008, its net financial asset position by this OECD measure was positive to the tune of (PLUS) 15 per cent of NZ GDP meaning the NZ Crown's financial assets were greater than its financial liabilities).

The OECD's currently published forecast for U.S. Government Net Debt is that it will rise to (MINUS) 57.8 per cent of U.S. GDP in 2010, but that is a calculation that does not take into account the latest budget and financial market support moves by the U.S. Federal Government which mean that American Net Public Debt will in fact most likely be greater than the OECD's currently published estimate.

What this all means is that the United States Government is carrying debt levels that are very high by historic standards. It must mean that upon the first signs of global economic recovery, interest rates around the world - particularly on long-dated debt securities) may surprise us by how quickly they rise from their current very low levels.

All this government borrowing (in the U.S., the U.K., Japan and elsewhere) is going to have a negative impact on the cost of working capital for the small businesses of this world that create over 90 per cent of the employment in this world. It is becoming clearer by the day that the damage done by the irresponsible fiscal policies of former U.S. president G W Bush are going to negatively impact on all of us for a very long time to come.

NZ Cash Rate Now Below Australia's

2009-03-12T11:54:00.001+13:00

After the 9/11 terrorist attacks in the United States in 2001, the Reserve Bank of New Zealand cut short-term interest rates by 50 basis points (half of a percentage point)

in anticipation of a hit to global growth (and weaker inflation). At the time, the move was considered a very dramatic move, even bold.

But times have changed. What was once considered remarkable is now considered run of the mill, or even conservative.

So when the RBNZ today cut the Official Cash Rate by 50 basis points, and said it expects perhaps a couple of 25-basis-point-cuts over the next few months, taking the OCR to maybe 2.5 per cent, we didn't see FX traders dump the Kiwi dollar, but the reverse: Active NZD-buying as financial markets which pushed the NZD up by well over half a U.S. cent to US 0.5130.

http://www.bloomberg.com/apps/news?pid=20601081&sid=as.6UMNtNS6k&refer=australia

It is real indicator of how seriously weak the RBNZ judges the global economy to be (including our big trading partners in Japan, China and the rest of Asia) and how stressed international credit markets are in the wake of the meltdown in the U.S. and European banking systems.

The RB's Monetary Policy Statement has also seen the kiwi rise on the cross rate against the Australian dollar, up by as much as 1 percent, the highest for the NZD/AUD currency pair since March 2. http://www.bloomberg.com/apps/news?pid=20601081&sid=aUWDuip1D8TA&refer=australia

Exporters will be hoping for the market to reverse the rise in the NZD/AUD in coming days and weeks.

After all, the New Zealand economy has been weaker than Australia's for over a year now. Japanese, European and North American investors looking for safe and relatively high interest rates (real or inflation-adjusted deposit interest rates are very negative in America, Britain and Japan) should be buying up Australian currency over and above Kiwi currency and FX traders should note that Dr Bollard today did an unusual thing today.

Dr Bollard lowered NZ's Official Cash Rate (3%) to be below Australia's (3.25%).

http://www.rba.gov.au/Statistics/cashrate_target.html

When the OCR was introduced to N.Z. in March 1999 it was set at 4.50% (below Australia's 4.75% at the time). Both countries' rates sat at 5% by the end of 1999, but for almost all of the time since the start of the new century N.Z. short term interest rates have been higher than Australia's, sometimes considerably so (e.g. in July 2007 the OCR was 8.25% in NZ and 6.25% in Australia. NZ rates stayed at 8.25% right through until 23 July 2008, whereas Australia's rates were much lower over the period, having peaked a full percentage point lower, at 7.25%).

Hopefully for our exporters, we'll see the NZD fall against the AUD in the weeks ahead on these interst rate differentials - that would give exporters a boost on their returns for exporting to the Lucky Country. Its our exporters' turn to enjoy the unusal situation of NZ having lower short-term interest rates than across the ditch!

http://www.rbnz.govt.nz/monpol/statements/mar09.pdf

National is backward looking and out of touch

2009-03-12T11:12:00.001+13:00

Prog Blog winced at the Prime Minister's response to Jim Anderton's questions about knighthoods. John Key doesn't understand the difference between honouring success in a New Zealand way, and honouring it with outdated royal honours as he wants to do.

Mr Key said Jim had previously tried to get recognition for Colonel William Malone with a Bill that would confer an honour that had the 'status of a knighthood.'

Precisely. The status of a knighthood. Very few people are opposed to having high honours for great New Zealanders. Colonel Malone was one of our greatest.

But it was not a knighthood. Colonel Malone couldn't be conferred a knighthood because it was posthumous. The British wouldn't let an honour be conferred more than five years after his death, when the facts about his heroism emerged.

Because we had an outdated British system, Colonel Malone couldn't be honoured. That's why Jim wanted to give him a New Zealand honour. And National voted against the Bill.

So let's see - Jim Anderton tried to introduce a New Zeaalnd award that had as much value as knighthood. The prime minister says therefore he is in favour of knighthoods? The prime minister is backward looking and out of touch.

Here is what is really disgusting about National - they are opposed to honouring genuine heroes like Colonel Malone. But they are in favour of handing out rewards to their donors. They are against New Zealand, and in favour of fuddy duddy old fashioned British awards

Sea levels may be rising twice as fast as earlier projected

2009-03-11T23:34:00.001+13:00

Sea levels may be rising twice as fast as was projected by the United Nations as recently as 2007, according to a report in the UK's Independent about global climate change. http://www.independent.co.uk/environment/climate-change/sea-levels-rising-twice-as-fast-as-predicted-1642087.html

Melting ice sheets in Greenland and Antarctica are now expected to push up sea levels by a metre or more by 2100, a process that would literally swamp coastal cities and obliterate the living space currently inhabited by 600 million people who live in deltas, low-lying areas and small island states, the report says quoting a U.N. panel of scientists meeting in Denmark.

Rising sea levels are caused by the thermal expansion of the ocean where water increases in volume as it warms - and by the accelerated melting of the vast, land-based ice sheets in Greenland and Antarctica, caused by rapidly rising temperatures at high latitudes. The Greenland ice sheet, in particular, is melting "dynamically" that is to say it is collapsing in parts as meltwater seeps down through crevices and speeds up its disintegration. This process, the U.N. says, was not taken into account in their earlier 2007 report on rising sea levels.

The question of whether or not the Government can "afford" to take action on global climate change is irrelevant to overseas consumers of New Zealand goods and services.

National doesn't understand the benefits to local productivity that can arise from well managed climate change policies.

http://www.treasury.gov.au/lowpollutionfuture/

So far it has shown that all it understands is petty politics. National has been good at the petty fun stuff: cutting staff at the Ministry for the Environment, delaying impementation of an Emissions Trading Scheme, abandoning policies that would encourage more energy-efficient practices etc - it is fun cancelling a previous government's programmes.

But if the National Government wants to protect New Zealand's interests it needs to very quickly start introducing strong policies to show overseas consumers that New Zealand is going to contribute to international efforts aimed at slowing down the rate of global climate change - otherwise it won't be long before consumer watchdogs in Europe, North America and elsewhere start targeting Kiwi exports.

Well that didn't take long

2009-03-10T08:45:00.001+13:00

After a brief break, during which the National Party pretended to be
more sensible than their predecessors, the Nasty Nats are back.

It's as if the Trojan Horse has opened its bottom and the intruders
have tumbled out:
- Privatising prisons.
- Privatising ACC.
- Slashing ACC benefits.
- Knighthoods for the big donors and Saint John.
- The bared teeth, big mouth and incompetence of Judith Collins.
- Getting rid of our independent best-practice aid programme.

Backward, backward, backward. This mediocre government, like so many
Nasty Nat governments before it, is focused on going backwards. It
wants to wind the clock back, undo progresssive forward steps, show
its toughnesss by being nasty.

Ks

2009-03-09T09:18:00.002+13:00

Prog Blog has thought back long and hard, and can't think of anything
down by any government in the last twenty five years as provincial,
dreary and backward as the reinstatement of knighthoods.

What disgrace any New Zealander will bring on themselves if they take
this discredited title. Who could possibly have respect for the
integrity of any New Zealander who could be so weak of mind, so weak
of character, so needful of ego-boosting, that they needed to decorate
themselves with a title? What cringe it must take to insist others
call you "Sir" or "Dame".

It just shows to show that deep in their hearts, the National Party
are not real New Zealanders at all. They are ashamed of New Zealand.
They are frustrated English Tory wannabes.

And they never will be.

Update: These are the other incredibly unimportant countries that have knighthoods:

Antigua and Barbuda, Bahamas, Belize, Grenada, Papua New Guinea, St Lucia, St Vincent and Grenadines, Soloman Islands and Tuvalu.

So there is a proud comparison of the sort of country John Key wants us to emulate.

What's going on with the Minister of Foreign Affairs?

2009-03-08T20:02:00.000+13:00

Prime Minister John Key got wide media coverage today for bringing us back Dames and Knights.

The story remains the NZ Herald's TOP NEWS STORY as late as 8 p.m. on Sunday http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10560600 which is a pretty good PR success story given some of the other news today!

While the Government was over recent days and weeks working really hard to get everything ready and prepared for its big annoucement, its big PR success for the day, New Zealand itself was apparently getting dealt a massive kick in the guts on the economic front according to the www.stuff.co.nz website.

Stuff is reporting that the United States has halted the talks with New Zealand started by the previous government aimed at lowering America's unfair barriers on our exports to the U.S.

If this Stuff news story is correct, and there has been a suspension of the Trans Pacific Partnership talks, then that raises some very serious questions about what is going in the offices of the Minister of Foreign Affairs.

If Stuff is correct, then that is a blow to our aspirations to raise our living standards in the years ahead. If Stuff is correct, that that raises the question of What on earth is going on with the Minister?

The Minister's his main public statements in recent weeks have been about the foreign aid budget and NZAid - a pet hobby of his.

But why wasn't he in America on the public offensive - appealing to American people's hearts and minds, via TV if necessary, defending the lowering of unfair trade barriers - particularly at a time of global economic recession or depression? It doesn't make any sense. Perhaps the Stuff story is wrong, and perhaps that's why NZ Herald isn't reporting it, let's hope so.

http://www.stuff.co.nz/business/2120288/Obama-cans-FTA-Key-deeply-disappointed

Herald gets Super Fund issues hopelessly wrong

2009-03-02T18:16:00.001+13:00

It's always a bit sad to be patronised by someone who has no idea what they are talking about, isn't it?

How else would you feel reading the editorial from the Herald about the NZ Super Fund that reads, in part, this:

"It is important to stress that this whole question is about payments into the fund, not payments out. It is highly irresponsible of the Labour Party leader to suggest that the level of pensions might be at risk, now or in the future. This fund, as Phil Goff well knows, will do no more than partially fund future pensions when the bulk of the baby-boom moves into retirement."[Emphasis added]

So the Herald has discovered a new type of investment fund where payments in bear no relation to payments out? Goodness. Can I please have some of that? I can invest whatever I like, and the return is unaffected! Wow! Sounds almost, well too good to be true! because it is too good to be true. The amount you invest obviously critically affects how much you earn. basic, basic basic.

The giveaway that this editorial has been written by someone who doesn't begin to understand is the line about partially funding the future cost of pensions. It's true, it will only partly fund the future cost. But that point is a complete red herring.

The issue is, will the capacity of the Fund to help meet the future cost of superannuation be reduced or not?

Let us pretend I hold a jar with $10 in it to pay your next week's wages. I then reduce the amount in the jar to $5. Now, whether it is $10 or $5 it is only a small proportion of next week's wages. But if it is reduced - then IT IS STILL REDUCED by $5. See?

By the same logic, if John Key reduces the jar holding the fund that will pay some of the future cost of superannuation, then the future ability of the Fund to contribute is reduced if he doesn't put as much money in the jar - regardless of the proportion of the future fund it contributes, it is reduced in absolute terms. Therefore, either a future taxpayer will have to pay more - or the future superanuitant will have their super cut. There is no other option.

The Herald could have made a complex point about the government increasing its future capability to pay the remainder of the cost beyond the Fund's contribution, by not having as much government debt. But it didn't make that dubious point at all.

The Herald really ought to have its head around these basic issues before it begins to patronise others in its editorials.

Super Fund contributions

2009-02-26T17:30:00.004+13:00

There is criticism from David Farrar, over here, of the suggestion that the government should keep making contributions to the Super Fund even when its accounts are in deficit.

As usual, he calls those who disagree 'stupid', while his own arguments are simplistic and misled. (Have you noticed how peurile, abusive and empty Farar's commenters are? They sometimes leave their wicked comments here. Ugly, ugly.)

Why would anyone 'borrow to save'? Turns out, even Treasury thinks you should keep up super contributions now. Anyone who has a mortgage and a superannuation fund is doing exactly the same. Anyone who has a mortgage and owns shares. Anyone who has a mortgage and any form of financial assets at all, including life insurance, a more than necessary balance in your savings accounts, or even bonus bonds. If you have a mortgage and you buy a lotto ticket you are doing the same (although that really is money down the drain!)

Why do it? First, because it spreads risk. There is always someone who pipes up about here and says 'but you should pay off your mortgage first.' That's mainly because it's tax advantaged. The government's accounts aren't tax advantaged so the analogy breaks down. But whenever someone has given Prog Blog that advice, Prog Blog thought - no, I don't want to live in the first house I bought for ever. So I am always going to put aside a proportion of my income so that I have that proportion and its earnings available at retirement. And I am going to meet my living expenses, including house buying, from what's left. This should enable a family to live in increasingly nice houses, and also to build a little retirement saving. Not all consumption should be delayed until retirement. It is true that Prog Blog could wipe out the mortgage overnight and pay off the house - then start saving again, but Prog Blog feels debt makes equity work harder.

There is another reason why Farrar is naive. The government's contributions allocate to the present some claims on the future cost of super. That is a fair thing to do because the cost of super in future, when many more people, proportionately, are retired, will be much greater and so today's generation - who will make those claims - should pay some of the cost. By putting aside something now, the present generation is reducing the burden on the future taxpayer relative to the cost of superannuation.

The trick Farrar - and Key - want to play is to raid the future super fund, then say in the future that there is not enough money to continue to provide the same level of super. By putting aside some of the cost today, and therefore foregoing consumption today, the present generation is staking its claim to its share of future earnings. We will need to do that today if we want to have as much super in the future.

The issue is the debt today. What we should be doing, if we are 'borrowing to save' is not cancelling saving, but cancelling borrowing. That would mean not cutting taxes while spending so much that we are driven into deficit. Cutting future super funding is not a sensible way of cutting spending - it is just a hidden way of cutting superannuation.

But cutting saving today is a hidden way of making cuts. That's why it is cheap and cyncial politics. Calling the alternative 'stupid' reflects doubly back on the accuser and his little vigilante posse.

Jim's comments, by the way, are over here.

National is setting NZ up for a fall

2009-02-07T10:42:00.000+13:00

As feared, the National government is setting New Zealand up for a fall.

It isn't responding to the global depression with flexibility and determination and the problem seems to be that the party is too timid to act because it fears short-term public disapproval for the kind of dynamic leadership that the country actually requires right now.

Statistics New Zealand on Thursday reported that total actual hours worked per week fell by 1.9 percent in the last three months of 2008 and the labour force participation rate increased by 0.6 percentage points as more Kiwis, fearful of the global depression, actively join the labour force in search of paid work to supplement vulnerable household incomes. The number of people unemployed rose by 10.8 percent, to reach 105,000, that is the highest level in over six years and the official unemployment rate has increased to stand at 4.6 percent.

There is a wave of social dislocation coming and National is too afraid to utilise the opportunity that all new governments have in their "honeymoon" period. It is wasting this valuable time of very strong public support by rehashing, again and again, a couple of automatic mantras:

1. It says there will be no change to fiscal parameters over the next three years - yet those parameters were designed by a previous government and signed off one year ago at a time when the global economy looked entirely different to the world that National must now actually govern in.

2. It notes that the "fiscal impulse" is larger than overseas countries' as a ratio to GDP - but we knew that a year ago - the question that is relevant in 2009 is whether the specific policies of the current government within the fiscal impulse remain the very best to promote jobs, social services and security compared with potential alternative policies that could be implemented at this time of global depression.

Up and down NZ we are hearing about key building blocks for growth - transport and roading infrastructure - being put on hold. We are hearing that the rate of growth in the minimum wage over the past nine years cannot continue. We are hearing of the growing pressure on DHB budgets. All of this in a country that National rigidly says can afford to go overseas to borrow for additional personal tax cuts in April, tax cuts that won't build more roads, won't deliver better health services and won't be of any benefit to those newly unemployed.

http://www.stats.govt.nz/products-and-services/media-releases/household-labour-force-survey/household-labour-force-survey-dec08qtr-mr.htm

In 2011 voters will be assessing if National and the Maori Party and ACT have done their honest best during their three years in power. So far they've basked in goodwill that all new administrations get and completely failed to utilise the public's goodwill with anything approaching real leadership. They are setting New Zealand up for a fall.

Why does the NZ Herald report government tax relief for business "over four years"?

2009-02-04T21:51:00.000+13:00

The New Zealand Herald et al are all reporting that Prime Minister John Key has unveiled small business tax changes "worth $480 million over the next four years".

Why do they multiply a dollar figure by four and then announce the sum as funding for the next four years?

Why don't they just say what the Treasury anticipates it will cost the Crown (in reduced revenue) per year, given that each year the Crown goes to Parliament to seek authority for the next 12 months' of expenditure and the next year's debt issuance programme to fund that expenditure?

There is nothing particularly special about "four" - if it is an on-going operational loss of revenue to the Crown, then it goes on forever - it would make as much sense to say the government today announced "$1.2 billion worth of small business tax relief over the next ten years".

Why does the NZ Herald report it this way?

Because that is what Government Press Statements say - regardless of who is the government, that is the way governments in New Zealand describe operational spending decisions.

But it isn't obligatory for the media to report what spin doctors write in press statements.

It would be a lot more meaningful to taxpayers to say that the Treasury anticipates that the Crown will forgo $120 million in tax revenue in the next 12 months in this new initiative.

To get a rough idea of how significant this is for the economy as a whole, which is what taxpayers would also be interested in, well 120 million divided by four million works out at the equivalent of about $30 per New Zealander in business tax relief in the year ahead.

As for the substance of what has been announced, the more substantive elements of John Key's annoucement today is covered in the Labour-Progressive Government's July (2008) Tax Bill, currently before Select Committee - good sensible stuff like reduced compliance costs on administering GST, FBT and PAYE returns.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10555116

Victory for secular parties in Iraqi elections

2009-02-03T22:37:00.001+13:00

In spite of the daily sensationalist and distortionary rubbish published in the media, the reality is that progressives have plenty of good news to celebrate from the Middle East and south Asia generally.

Last month, one of the world's largest Muslim countries, Bangladesh, went to the polls. Its secular politicians trashed the country's right-wing conservative Sunni Islamists.

http://www.dailystar.com.lb/article.asp?edition_id=1&categ_id=5&article_id=98958

In last year's elections in another of the world's big Muslim countries, Pakistan, the Shiia Muslim-led Pakistan Peoples' Party, a centre-left political party affiliated with Socialist International, trashed the right-wing conservative Sunni Islamists.

http://en.wikipedia.org/wiki/Pakistani_general_election,_2008

A country that is overwhelmingly Sunni has a Shiia President, Asif Ali Zardari.

http://en.wikipedia.org/wiki/Pakistan_Peoples_Party

In Pakistan's North Western Territorial Assembly election, which is the centre of Taleban-inspired Sunni fundamentalist terrorism, the secular progressive Awami National Party got by far the largest share of votes and seats in the parliament. The second polling party was the centre-left Pakistan Peoples' Party, while the Sunni fundamentalists got a hiding.

http://en.wikipedia.org/wiki/Awami_National_Party

Elections in other major Muslim-majority socieites, including Indonesia and Malaysia, had the same results. Some silly media, like the BBC, like to claim that the Turkish governing party is "Islamist" (in contrast to the strictly secular party of opposition supported by the military). But in reality the Turkish governing party is a centre-right, moderate conservative party which promotes traditional family values - not that much different to European Christian Democratic sister parties. The governing party says, for example, that if a woman wants to cover her head, well then she should be allowed to. It is the secuarlists in Turkey that thrown totalitarian tantrums - they would deny a PhD in Chemistry's right to cover her head, saying she has no right to choose to do so.

In June, Iran holds elections and there is a good chance a moderate reformist will knock out the fanatical conservative incumbent President. The reformists' chances will be strengthened if President Obama does not make the current Iranian President into a martyr by paying him any undo attention. The best way to defeat him is to ignore him.

But the best news yet came in today from Iraq. According to preliminary results, Iraqi voters chose secular and nationalist parties over their religious rivals in provisional elections held on Saturday.

President Obama's top international political priority should be trade

2009-02-02T22:52:00.000+13:00

The United States Democratic Party-alligned Progressive Policy Institute this week answers very conclusively the question of whether or not it is realistic to hope that we can ever eradicate global poverty: "Judged by facts, yes: the idealist's case is strong and the cynic's weak".

The World Bank defines "absolute poverty" as life on US$1.25 a day or less (in constant 1993 dollars) and has estimated poverty rates on this basis back to 1981. In that year, 52 percent of the world's people were very poor. By 1990, the figure was 42 percent. In 2005, the most recent year available, only 25 percent of the world's people were very poor.

East Asia recorded the most progress, with the absolute-poverty rate falling from 78 percent in 1981, to 55 percent in 1990,
and 16 percent in 2005. In one generation, then, Asian poverty fell from the near-universal experience of life to the sad exception.

East Asia was the beneficiary of relatively open access to exporting to North America after World War II as the Western world sought to protect that region from falling under the influence of either the Soviet Union or China, and the beneficiary also of significant American investment in its infrastructure for the same reason.

But absolute poverty has fallen dramatically everywhere.

Since 1981, Latin America has cut absolute poverty from 13 percent to 8 percent; India and its neighbors from 60 percent to 40 percent; the Middle East from 8 percent to 4 percent; Africa from 54 percent to 51 percent and in eight low-to-middle-income countries without oil -- Chile, Jamaica, Mexico, Uruguay, Egypt, Jordan, Thailand, and Malaysia -- the absolute-poverty rate has fallen below two percent.

Conclusion: if poor countries build up their publicly-funded and accessible education systems, build up their infrastructure, fight anti-corruption, if they are free of internal strife and external war, and if rich countries help through opening up their own consumer markets, through well-targeted aid and easy remittance, then poverty often falls quickly, and, the empirical evidence shows, permanently.

After World War II, the average tariff rates on elaborately-transformed manufacturered goods traded across international borders was aggressively reduced, and barriers on services have in the past ten years been falling.

What the world needs now is for the same dramatic move on agricultural trade and light industry trade - to bring down those economic apartheid walls that continue to be imposed on the developing world's competitive advantage by the United States, the European Union, Japan and Korea.

It is shameful but true that the United States' import taxes are on average about twice as high imports from poor countries than they are on rich countries.

In 2007, for example, Cambodia faced a US$415 million tariff penalty on its US$2.5 billion in clothes - more than the US$405 million penalty on Britain's US$100 billion in medicines, aircraft parts, TV shows, insurance policies, and North Sea crude.

Pakistan, Bangladesh, Lebanon, Sri Lanka, Laos, and other mainly Muslim or African nations get similar exorbitant penalties on their exports into America.

President Obama and the Democratic-controlled Congress say that they want to reduce human suffering and global poverty and that they want to defeat the economic conditions in which tyranny and terrorism thrive.

As the world slides into depression, it is critical that President Obama's top international political priority should be trade and economics - to defeat povery and drain the swamps in which the terrorist networks look for recruits.

http://finance.senate.gov/sitepages/hearing061208.htm

Don Brash admits National was completely wrong in opposing Labour's big surplus policy

2009-02-02T13:33:00.000+13:00

Don Brash, who as leader of the National Party in the 2005 Election campaigned against the Labour-Progressive government's "obscene" Crown surpluses and proposed instead to significantly loosen the Crown's purse strings with multi-billion dollar tax cuts in line with the massive borrowing-for-tax-cuts programme of the Bush Administration at the time, has finally admitted that he and his party were talking a load of ignorant rubbish which would have been very bad for New Zealand if implemented.

http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10554617&pnum=0

Writing in the New Zealand Herald today about the global economic depression that has arisen from the crisis in international debt markets, Dr Brash says that, "in retrospect," both monetary policy and fiscal policy were too loose over the past few years, particularly in the U.S.

Politicians don't set monetary policy - that is done by public servants at the Federal Reserve in America's case and the Reserve Bank in New Zealand's. Our Reserve Bank has ensured that New Zealand has had the highest inflation-adjusted short-term interest rates in the West for nearly two decades. Given that our annual inflation rate profile has been very close to those of other developed countries, that does not suggest that the Reserve Bank was keeping our rates too low - as Brash implies. Were it true then it would have manifest itself in signicantly higher inflation in New Zealand than overseas.

In any case, it is fiscal policy that democratically elected governments have power over and the Labour-led government ran large surpluses in recent years precisely to offset the "irrational exuberance" of the private sector that got us into the almighty mess that we are all now in.

Dr Brash acknowledges that it is the behaviour of the private sector intermediaries between developing countries' with growing capital reserves, and credit card consumers in the Western world, that encouraged household debt profiles in the West unrelated to any basic assessments of ability to service those debts, which is primarily to blame for this whole house of cards coming tumbling down.

"The market" is supposed to measure risk and price risk and therefore avoid the types of massive imbalances that occur in highly regulated systems. The truth is "the market" failed, the private sector's excesses have now caused catastrophe and governments - that is to say taxpayers - are having to step in pick up the gigantic mess.

The key point that matters for New Zealanders is that the most important influence that Governments have is over fiscal parameters - whether they balance the Crown's accounts properly over economic cycles. Because we've kept our Crown accounts in a strong position in the past decade, so our Crown is now in a position to be able to assist whereas the UK and US governments, in contrast, are entering this crisis period already highly in debt.

But what really matters is the future and sadly the new National Government is sticking rigidly to the fiscal framework that Labour outlined in Budget 2008 even though the whole world has changed since that work was finalised in about February 2008.

Instead of writing articles about the past in which he, "in retrospect," admits National's policy in 2005 was completely the wrong one, Dr Brash would be better served to examine the future and the current National government's policy to introduce three rounds of overseas borrowings to structurally lower Crown revenue (tax cuts on April 1, 2009, 2010 and 2011).

That's an almightly large, completely debt-financed and on-going (operational) fiscal loosening that National remains committed to in spite of all the new information that it has had since Christmas about the outlook from Crown debt levels in the years ahead and what that will mean for the cost of working capital to firms.

It is no good Dr Brash in ten years time saying that, "in retrospect," the 2009, 2010 and 2011 tax cuts were excessive.

He needs to talk now about how a useful fiscal stimulus package would be about the Crown spending on infrastructure - that is spending which is one-off, not on-going, and it is spending that leaves you with an asset at the end of the day - not just more consumption on overseas imports funded by overseas debt, as is proposed by the current government which has clearly learnt nothing from National's 2005 Policy Mistakes in spite of its former leader now admitting in retorspect that its 2005 Manifesto was rubbish.

Treasury's advice to in-coming Minister of Finance

2009-01-30T16:03:00.001+13:00

The Treasury has a very mixed record as a policy advisor to the Crown.

When Bill Rowling and Jim Anderton (in 1975-1984) talked about strategic partnerships as key drivers of economic development and emphasized the importance of life-long skills training, infrastructure and R&D, (as opposed to National's then disastrous Overeas Borrowing Binge or "Think Big" Policy, the Treasury was missing in action.

With the ascent of Roger Douglas to power in July 1984, the Treasury slavishly fell into line with the simplistic rhetoric of the "small government will fix everything brigade".

So in the second half the 1980s and the 1990s, the Treasury implemented the "Rogernomic" agenda such as the rushed, ill-thought-out push to privatise Telecom - then a near natural monopoly - with completely inadequate attention to the issue of competition within the telecommunications sector. New Zealand paid the price during the 1990s with retarded competition and services in a critical sector which in turn had adverse effects on every other sector of the economy, so retarding our overall potential growth rate at the time.

Treasury's advice at other times was blinded by its slavish desire to the prevailing "Orthodoxy" of the time - so, for example, we had the firesale of Post Bank - a typical bureacrat's response to the Crown's then debt problem that was against the advice of those in the private sector, particularly in Auckland, that pointed out at the time the benefits of a NZ-owned bank providing competition to the foreign banks, leaveraging off the economies of scale available from NZ Post's existing infrastructure of postal outlets right around New Zealand.

Over the last nine years, the Labour-Progressive government got the appropriate level of attention in the Treasury back on to the real drivers of lifting potential growth over time: market-responsive R&D; a revolution in skills and training and in getting research and academic institutions in touch with the emerging signals from the marketplace; some competition law changes (and better protections for small time investors in situations of hostile takeovers); a massive increase in investment in infrastructure; strengthening households' personal savings culture via KiwiSaver and GSSS; an R&D tax credit to even out the playing field a bit in the global competition for R&D sourcing; cutting the business tax rate etc.

We now know that the Treasury, 30 years after Anderton and Rowling first began pushing this broad agenda, has at least absorbed something.

That is evident in the Treasury's advice to the incoming Minister of Finance report just released which focuses on five key drivers of raising potential growth: Skills; Investment; Enterprise; Innovation and Natural Resources.

http://beehive.govt.nz/sites/all/files/Treasury2_BIM.pdf

National's response since its election is not comforting however.

The party that gave us Think Big in the '70s and the dumb ideology that "small government will fix everything" in the '90s, has in its first two months in office:

1. Axed the R&D tax credit and Fast Forward (because they don't actually understand the critical role of investment, innovation and enterprise in east Asia's and western Europe's superior productivity story nor do they understand that the household incomes have been static for a decade in the US); National is bad for innovation.

2, Shreded KiwiSaver (so guaranteeing us a credit downgrade in the years ahead); National is bad for investment.

3. Re-introduced Muldoonist intervention in investment decision-making at the New Zealand Superannuation Fund (i.e. they will actively ensure that the NZ Super Fund gets a poorer rate of return by consciously being less market-driven and more politically driven). National is bad for investment.

National's main PR achievement since mid November, meanwhile, is that has added in another billion worth of personal tax cuts that the New Zealand Herald, TVNZ, Radio NZ et al all managed to report without alerting New Zealanders that this proposal to fuel imports and consumption is in effect fully funded via offshore borrowing and adds to the chances of the credit downgrades that will hit New Zealand under Bill English's stewardship in the next couple of years.

That is bad for investment, a key driver of growth, because it means the cost of working capital will be relatively higher for NZ based firms that it would have been without National's additional overseas borrowing for these additional import-fueling tax cuts.

In 2011, the Labour-led opposition will somehow have to make this story sexy enough to get TV, radio and NZ Herald coverage - something that the progressive Left must admit we didn't manage to do in nine years of government despite trying. It won't be easy but for New Zealand's sake, and the sake of the living standards of the next generation of Kiwis, we really do need to succeed at crystalising these messages into simple form that TV and Radio news producers can digest and transmit to voting citizens in the next election.

Crown in net positive financial asset position at 30 Nov

2009-01-29T22:04:00.001+13:00

The Treasury today published the Crown's financial statements for the first five months of the financial year - these are the last figures for that cover the period of the Labour-Progressive government.

http://www.treasury.govt.nz/publications/media-speeches/media/29jan09

They show that the Crown had more financial assets than it had financial liabilites at November 30, 2008: in other words when we left office the Government of New Zealand had no net debt, in fact it was in a net positive financial asset position equal to around 4.7 per cent of GDP.

Going into a global recession when governments would need to open the cheque book only a few countries (Norway, Singapore) are better placed than New Zealand, thanks to Labour.

It is absolutely right that he has stuck to the broad fiscal stimulus package for 2008/09 that the previous government had already enacted - it is appropriately large compared to other nations' efforts (as a ratio to GDP) - he changed its composition somewhat with more personal tax cuts, less R&D and business tax cuts.

The key component of national leadership, however, is flexibility.

So far his borrow and hope framework for 2010, but especially 2011, looks very much compromising our long-term interests for his own party's short-term political interests. In spite of credit rating warnings, he is so far sticking rigidly to his plans outlined well before the serious deterioration in the global financial and economic system of late last year and early this year.

Sadly he seems sure oversee a move in a net debt position, and, unforgiveably, he will get us a credit rating downgrade which will cost every business higher working capital charges - so hurting all efforts to lift our sustainable growth rate.

NZ to boost forces in Afghanistan?

2009-01-22T13:38:00.001+13:00

With the new Administration in the United States' focus on widening back its forces from occupied Iraq, but boosting up forces fighting the Taleban in Afghanistan, it is probable that New Zealand may be asked to in turn beef up our current commitments in the Afghan conflict.

But what about other areas of potential conflict in south and west Asia? Will we be sucked into other conflicts?

The good news is that Islamist parties have performed very poorly in recent elections in the leading, largest Muslim countries - Indonesia, Pakistan and, most recently, Bangladesh.

http://www.dailystar.com.lb/article.asp?edition_id=1&categ_id=5&article_id=98958

While the media in the West talks of the Turkish government as "Islamist," that is about as meaningful as labeling the German Christian Democrat government "Christian fundamentalist". The Turkish government is socially conservative and more independent of the U.S. in foreign policy which, while that may be annoying to some in Washington and London, is just democracy.

Iran has a presidential election in June, at the same time as Lebanon's parliamentary elections.

Today, Sayyid Muhammad Khatami, a former president of Iran, announced that he will be contesting the incompetent incumbent Mahmoud Ahmadinejad and his campaign will focus on economic and social development and more mature relations with the West (Iranians have bitter views on the West for the roles of the U.K. and U.S. in the 1950s in overthrowing the then liberal social democrat administration in a coup).

Unfortunately the reformist camp in Iran is divided among a number of factions and one, led by former parliament speaker Mehdi Karoubi, has also declared his bid for the presidency, which still leaves the chance for the fascist Ahmadinejad sqeaking through the middle for another term.

If a reformist candidate wins the Iranian presidential race that should assist the new United States administration to improve the currently near-frozen relations with Iran as both will have an interest in securing an orderly departure of U.S. occupation troops in Iraq - and it may also give impetus to Iran's allies in Lebanon (Hizbullah are headed for gains in Lebanon's elections) and Palestine (Hamas won the January 2006 legislative elections in the West Bank/Gaza, America's ally Fatah came a poor second) to move away from armed resistance toward becoming normal political parties.

It is a transition many national liberation movements made in Asia in the 1960s and 1970s - from resistance, to responsibility; from the gun, to the debating chamber.

A reformist win in Iran would be good for that region and good also good for us as it would diminish the chances of New Zealand soldiers being caught up in any new Middle East conflict.

http://www.juancole.com/

War in Gaza - poll strategy not enough to save Government

2009-01-19T16:12:00.001+13:00

New Zealand's involvement in the lives of Palestinians goes back to 1917 when our army was at the side of the British who liberated Palestine from the then Ottoman Turks.

The campaign was assisted by the Arab Revolt: Arabs, including Palestinian Moslems and Greek Orthodox Christians, agreed to join our war on the Ottoman Empire, Kiwi forces entering Palestine from Egypt into Gaza with Arab intelligence and milita cooperation, in return for Arab independence and allegiance with the British Empire after Turkey was defeated.

Turkey was defeated, but Palestinians didn't get their independence.

Instead, the Palestinians were put under a British Mandate and the now 90-year programme of pushing the Palestinians out of the country began.

A major Palestinian revolt against the British was put down in 1936 and tens of thousands of Palestinians were displaced in the civil disturbance in Palestine in late 1947 and barred from returning when, in 1948, the British handed over authority to their allies, the Jewish National Movement (or Zionist Movement) and by the time of the 1949 ceasefire around 80 per cent of Palestine was declared to be a Jewish State.

But that didn't end the conflict for very long.

The Palestinians, who are mainly Sunni Muslim or Orthodox Christian, set up their first organised militia resistance in the mid 1960s (Muslim-led Fatah had Soviet support, the more radical Christian-led PFLP and DFLP got support from China, Cuba and the IRA).

There was a further major exodus of Palestinians in 1967 when the final 20 per cent of Palestine was captured by the Israel Defence Forces (the so-called "West Bank and Gaza" to the Western media).

The West Bank and the Gaza are an important, but not a key focus, of the upcoming Israeli general election and those territories explain a large part of the timing of the recent war in Gaza.

The key domestic political motivation for the war in Gaza within Israel was the desire by the Kadima-Labor coalition government to improve their parties' weak standing in opinion polls ahead of February 9 election.

Polls in the past week and today indicate that the strategy has failed to deliver what they wanted and that the Opposition remains on track to take control of the Treasury benches in three weeks' time.

In the current Parliament, the Foreign Minister's Kadima Party has 29 seats and the Defence Minister's Labor Party 19 seats. Together with the support of the socially conservative Shas Party (12 seats) and a Labor ally called Meretz (5 seats), it was enough to put together a majority on confidence in the 120-seat Parliament.

There are two Arab parties (Ta'al with 4 seats, and Ba'lad with 3 seats, well 2 seats after its Christian leader Azmi Bishara was charged with treason and pushed into exile to Jordan after the 2006 Lebanon War, but both these parties have been banned from participating in the February elections which means most Israeli Arab Moslems and Christians will not vote).

Opinion polls for many months have shown the ruling parties to be behind the more right-wing religious and ethnic chauvinist parties of the Opposition, and the Shas Party has also moved in behind the Likud Opposition.

While the government's war in Gaza has been very popular among most Israeli voters, polls indicate that it won't be enough to stop the Opposition's momentum.

While the Foreign Minister's Kadima Party will likely drop to between 23 and 26 seats out of 120, the main party of the Right, Likud, looks likely to win between 29 and 31 seats (a spectacular improvement on its current 12 seats).

Likud is on its way to extinguishing Kadima in the years ahead as the party really was just a one-man band in the form of its former leader Ariel Sharon who enjoys pop star status in Israel and is remembered by Palestinians for the massacres of hundreds of unarmed Palestinian refugees in Lebanon in 1982 by Israeli-armed and trained "South Lebanon Army" and Falangist Forces at the Sabra and Shatilla Palestinian ghettos in south Beirut that were at the time under the control of the Israeli army.

And while the Defence Minister's Labor Party has doubled its pre-Gaza War support levels, the polls still show it dropping its current position to hold perhaps around 14 seats - the same level of support for one of the smaller Right wing Opposition parties, Yisrael Beiteinu, (up from Yisrael's current 11 in present Parliament).

In terms of what this means for the Holy Land, the Likud Party's Charter emphasizes "the right of settlement in Judea and Samara" (by Israeli colonisation) - that is the Biblical name for the 20 per cent of the League of Nations' British Mandate of Palestine (1920-1948) that wasn't incoporated into Israel in 1948 but was a generation later, in 1967, and what we know in the Western media as "the West Bank (of the Jordan River) and the Gaza Strip".

Israeli colonisation in the West Bank has accelerated dramatically since in mid 1990s and the elections in Israel look like maintaining the colonisation expansion programme in the remaining Palestinian lands there.

Israeli settlers in the West Bank are entitled to vote in the Israeli elections and have full Israeli citizenship rights.

Their next door neighbour Palestinian Moslem and Christian neighbours, have no right to vote in the Israeli elections and have no citizenship rights in Israel.

But the truth is that all parts of what were once Palestine are now a part of Israel.

Although citizenship, property and other rights are defined by race/religious sectarian background, total de facto control over all of Palestine rests with the Israeli cabinet.

That means that full responsibility for the welfare, safety and security of Palestinian Muslims and Christians rests with the State of Israel under international law.

For progressives, this is a straight forward matter of sticking to basic principles.

While it is true that the possibilty of a Palestinian state has, realistically, been extinguished, it is not true that the

extremely eroded human rights of Palestinians in Gaza, West Bank, Lebanon and elsewhere (such as those currently stuck on the Iraqi-Jordanian border in flight from Iraq) have been extinguished.

They haven't.

They are inalienable human rights worthy of progressives' support.

Because New Zealand is so intimately involved in the Palestinians' history since the day in 1917 when our forces "liberated" it, and because around half of the Palestinians (specifically those in the Holy Land, Lebanon and at the Iraq-Jordan border) remain in extreme physical danger, New Zealand does have a role to defend Palestinian human rights at the United Nations and elsewhere.

Of course we won't get that under a National-led government, but we can look forward to New Zealand standing up for what is just with the election of the next Labour-led administration, hopefully in three years' time.

http://www.hrw.org/en/middle-eastn-africa/israel-and-occupied-territories

National forecasts Crown debt going back to '90s' levels

2008-12-18T16:16:00.001+13:00

Last week, National/Maori/ACT delivered a billion dollars a year of additional tax cuts for those on higher incomes that will be totally funded from additional borrowing, almost all of that from offshore lenders or buyers of NZ Government Bonds.

Today, the National-led government was kind enough to let us, the taxpayers, know the cost of last week's legislative programme.

Its an ugly picture.

It is credit card economics. These guys are burdening our children with much, much higher debt servicing costs - their programme is funded on a pyramid scheme which, they hope, won't come tumbling down until sometime way off in the future after they have safely left Office.

Mr English, the last finance minister to oversee Sovereign credit rating downgrades to New Zealand (in 1998) is taking us right back to the 1990s.

Whereas the Labour-Progressive government got Net Core Crown Debt (Exclusive of NZ Superannuation Fund assets) down to ZERO this year (from over 21 per cent in 1999, under English), the re-appointed Finance Minister English now forecasts net Crown debt getting back to 20.7 per cent by June 2013.

In four and half years, Mr English will have fully undone the gains of the past nine years.

National is in government in 2008 and for at least the next three years. They are responsible for their own projections which come out of their own policies and what they dished out today is a disgrace.

http://www.treasury.govt.nz/budget/forecasts/eff2008/eff08.pdf

All things being equal, Mr English projects net Crown debt reaching 47% by 2023 - but, of course, well before that happens Standard & Poor's and Moody's will have yet again downgraded New Zealand, so reversing the credit upgrades achieved by Dr Cullen in 2001 and 2002.

http://www.nzdmo.govt.nz/sovereigncreditratings

National is overseeing higher costs of capital for our small businesses, the drivers of employment and social progress, because it has no vision. There is no way you can improve national productivity performance with rising costs for a key ingredient of business - the cost of working capital.

On top of National's gutting of our personal savings drive (KiwiSaver), upping the tax on businesses conducting R&D and the end of Fast Forward, in three years' time we will be able to compare New Zealand's per capita GDP growth compared with our main competitors. NZ's economic performance, under Labour, was stronger than that of the OECD average, stronger than the U.K. and stronger than in Australia - that's the benchmark against which National will be measured.

National will of course fail. Everything we get from this National/Maori/ACT coalition is funded on the credit card, it is aimed at a short-term boost to consumption that they hope and think will win them votes in 2011.

But they are banking on a majority of New Zealanders being too stupid to understand what is going on - Labour's job is to prove them wrong, in spite of the media's abject failure to actually report what a shocking set of events that has transpired in our Parliament these past two weeks.

Minister of Maori Affairs, Not

2008-12-11T16:49:00.000+13:00

Parliament has passed a law to borrow more money overseas in order to fund bigger tax relief for those already on higher incomes, with National, ACT and Maori Party support.
The interest on the borrowing will be paid for by all New Zealanders, including those on lower incomes.

As if going cap in hand to Swiss, east Asian and oil-rich Gulf high-interest earning lenders wasn't bad enough, the details of the personal tax changes include an underhand cancellation to the former Labour-Progressive government's previously legislated cuts to the bottom rate - so those on lower incomes get hundreds of millions of dollars of tax extra to pay to IRD.

Hopefully iwi radio are giving lots of coverage to the Minister of Maori Affairs and MP for Tamaki Makaurau so he can explain his vote and that of his Maori Party colleagues.
Had he been a member of Cabinet he could have advocated for his constituents that overwhelmingly get hit with the higher tax bill. He could have asked his new colleagues how come people in Tamaki Makaurau, for example, are going to be saddled with yet more interest-payable overseas financial liabilities - when we haven't yet paid off the debt built up by the Third National Government headed by Rob Muldoon?

No doubt his Tory mates would have said that a fiscal easing is what we need in the global economic slowdown.

But he could have come back to his Cabinet colleagues and asked how come the fiscal stimulus means higher taxes for those families on the lowest incomes?

At the Cabinet table, the Minister could have asked how Aotearoa - whose Crown's net debt forecasts are expected to deteriorate significantly in the years ahead although we don't know yet how much because the Treasury has been delayed publishing its latest forecasts until after these laws have been enacted - can afford to give the Prime Minister an $8,660 a year tax cut and the ministers of Maori Affairs and the Associate Minister of Social Development a $3,886 a year tax cut each?

This Administration is running a strategic deficit, funded by low income earners, and that deficit will down the track be used as an excuse to further cut into social services such as those needed to continue the last nine years' efforts to reduce childhood poverty.

ACT MP Roger Douglas is already talking about what will need to come later.

The Minister of Maori Affairs is worse than a failure. His party managed to get half of the party votes that Labour got in Tamaki Makaurau in 2008, while his new, soon-to-be wealthier mates in the National Party managed to get about one eighth of the party vote of Labour in Tamaki Makaurau.

2011 will, hopefully, be a good honest contest on practical policies and respective records of actually getting good things done for people in electorates like Tamaki Makaurau. There is no doubt that Louisa Wall would have delivered far more for Tamaki Makaurau constituents than the current intellectually lazy, weak and ineffectual Minister of Maori Affairs. Louisa would have protected the people, not hurt them.

Right wing blogs missing on business tax

2008-12-11T10:00:00.003+13:00

Prog Blog doesn't enjoy the soiling experience of reading the National Party blogs, like Kiwiblog and Whale Oil. The latter is a disgusting, bullying and obscene example of the nastiness of the National party. Kiwiblog is not as slimey, but quite capable of Internet bullying, and plainly in close enough contact with National party research unit to be part of the unofficial party publicity machine.

But either of those blogs would have exploded with rage if the previous government had ever increased business tax. It actually cut business tax - because only Labour-led governments have ever cut business tax in New Zealand. You could just imagine the embittered grudging contempt they would spit if business tax had been increased though.

So Prog Blog made an unusual exception and went on a tour of the right wing blogs to see what they had to say about the largest ever increase in New Zealand business tax - being voted into law today by the National govenrment under urgency today. The very first thing National has done has been to vote the largest incrase in the total tax paid by business ever.

And what did they have to say about it over on the right wing blogs? Nothing.

Not a peep. Not a sparrow's song.

If you want a demolition of National's tax on ideas, and its punishment of business and creativity, you will just have to go here.

By the way, this is a good point:

How many times did the speech from the throne use the word "agriculture"?

How many times did it mention "exports"?

How many times did the words "scientific research" get used?

None.

Not even once.

It never mentioned science at all.

It never mentioned the primary sector at all.

It never mentioned agriculture, the backbone of the economy, at all.

Why can’t we bail out poor people in crisis?

2008-12-10T15:34:00.002+13:00

Jim’s speech in the Address in Reply debate is up.

It’s a strong exposition of the government’s impossible promises.

But there is another point in there that caught Prog Blog’s eye - a point that has nothing to do with the National Government:

I have watched around the world with fascination at the speed with which governments have been able to act to bail out huge companies and banks when they have been in desperate need.

They have shown that with goodwill, action is possible to help in an emergency. That governments can act to help when help is needed.

And it leaves a question for all of us in this parliament - if we can do that for big companies and big banks in times of crisis, why can’t we do it for people in crisis?

Why can’t we do it for the hundreds of millions of people who don’t have enough to eat, who don’t have clean water, who can’t hope for basic medicine? Why can’t we bail them out?

New Zealand should be a voice for them internationally, and a voice for the compelling new ideas that are emerging internationally to solve these global problems.

At a time when global crisis threatens to deepen global poverty and darken even further the skies over the lives of the world’s least privileged, we should be saying that if the world can offer crisis help to the strong, then we must also offer emergency bailout for the weakest and poorest.

This is a very good point. It’s right to use the power of government to save large parts of the economy globally from wreckage. But for exactly the same reason -avoiding wreckage - we should be using the power of governments around the world to help the billion or so people whose lives are in crisis because they live in extreme poverty.

Good on Jim Anderton for raising the issue.

This is actually an issue on which there could be cross-party consensus in a country like New Zealand. But you wouldn't expect to see the bitter, angry and bullying right wing blogs find themselves able to say anything decent about it.

2008-12-08T14:06:00.003+13:00

The National Party governs and is responsible for our economic well-being as a nation, now and in the future.

The National government is this week and into next to rush through a swag of legislation without public input at select committee - legislation that will have far-reaching, long-term implications for both the health of the Crown's accounts and, more importantly, the size of people's nest eggs at retirement.

On law and order issues that may be fair enough. National has a clear mandate to make the laws against criminals tougher.

But National and its allies have no mandate to significantly increase the Crown's overseas financial liabilities. Yet that is what these laws do.

When Labour got elected in 1999, it inherited a vulnerable Crown position of net debt equal to over 20 per cent of GDP - by 2008, the Labour-Progressive government had got that down to below zero - a net positive financial asset position.

National is now going to blow it all again, take us back to the fantasy world of the free lunch brigade - but the disgrace is that they won't tell us by how much as they do it.

That is because the Treasury is not due to report its current set of forecasts for Crown debt until after the urgency laws have been passed - in other words, we won't know the financial costs until after the National government has already passed the legislation under secrecy and without public input under urgency.

National has the power and the responsibility to avoid this erosion of New Zealand's wealth and New Zealanders' future wellbeing, but as is traditionally the way under National governments, it is refusing to accept its responsibilities in the here and now and instead kicking for touch - passing the burden to someone in the future to fix up.

And it isn't as if National's rushed laws to increase overseas borrowings are for anything like investment in higher education standards, more Research & Development, the promotion of our exports as a ratio of GDP - or regional job creation.

No, the increased borrowing is to fund additional personal tax cuts that will overwhelmingly benefit those already on higher incomes - http://norightturn.blogspot.com/2008/10/who-benefits-from-nationals-tax-cuts.html - additional tax cuts that the Treasury projections will clearly indicate cannot be afforded, but that will be covered in a new news cycle after the damage is done - or perhaps due to the closeness to Christmas, won't be covered in any news cycle.

National's urgency will also cut by half the size of middle class Kiwis' retirement nest eggs (cutting KiwiSaver employer matching contributions to 2 per cent, from 4 per cent, reduces by many tens of thousands of dollars that middle and low income people will have as a nest egg at age 65), two measures that will contribute less than zero to improving our household savings' performance - the tax cuts will overwhelmingly flow into greater consumption, including greater imported consumption - that which is "invested" will overwhelmingly into propery - that is empirical evidence of the 1980s and 1990s.

It is a disgrace. That Sensible Dunne, the "pro small government" Hide & Co and the "pro Maori" Sharples and Turia are party to this is a genuine shame on them.

The Treasury is doing its job to promote macroeconomic stability when it recommends strengthening our patchy capital gains tax laws - but National has no courage to act on this despite having, with its allies, a very big Parliamentary majority and it being a perfect time to act in the economic cycle.

But National will no doubt adopt some of Treasury's silly ideas - such as cuts to every government department other than itself. If National had style, it would instruct the Treasury to lead by example - increase its own productivity by doing its job with ten per cent less staff.

The National Party was elected to govern this country and to be responsible for our economic well-being as a nation, now and in the future. But in the crucial period when it has the greatest flexibility and authority to show leadership and take the public with it, it is failing abysmally to show anything other than its natural colours of Holyoakism and Muldoonism - weakening both the Crown's position and middle and low income families' future well-being, while boosting the short-term consumption of those already on higher incomes.

They are, sadly for New Zealand, a dull, disappointing lot - the Tories.

How to defeat fascists and their terrorism

2008-11-28T09:09:00.002+13:00

The indiscriminate mass murder and injury caused in India's financial capital is getting worldwide sympathy for the innocent victims.

In due course, political leaders will turn their attention to (1) the objectives of the fascists and (2) the best way to marginalise and ultimately nip this ultra-reactionary force in the bud before it, like a virulent disease, spreads its evil tentacles still further afield.

Early reports suggest that those that organised the mass butchery in Mumbai are motivated by the same ideology of prejudice and hate that produced the Saudi Arabian-origin Al Qaeda, the Afghani and Pakistani Taliban and various off-shoots in west Africa through to south east Asia - sometimes collectively referred to as Salafists.

Like the fascist movements in Europe in the 1920s and 1930s, these groups represent an existential threat to those that do not belong to their definition of orthodoxy.

In the 21st Century version of the fascist threat, the group that carried out the attacks in Mumbai belongs to a movement that represents an existential threat to non-Sunni Muslims (80 per cent of Muslims are Sunni), namely Shiia and other Muslim denominations from the mystical sufi through to pantheistic and esoteric interpretaions of Islam. The fascists represent an existential threat also to Hindus, indigenous Christians and Jews, to agnostics and atheists -to anyone that belongs to either a pre-Islamic or post-Islamic faith.

So in answer to (1), it seems that a primary objective of these facists is to impose a strict, Saudi Arabian-style of law and society in place of the dynamic, democratic, vibrant and multi-ethnic society that exists, for example, in the Republic of India.

The government of Pakistan, which recently had elections which were won by a party led by a member of the minority Shiia sect of Islam (a minority in Pakistan as almost everywhere else in the Muslim world with the notable exceptions of Iran, Iraq, Bahrein, east/ south Lebanon and Azerbaijan), is an anathema to them.

The democracy movements and free political parties in other major Muslim nations (Indonesia, Malaysia, Turkey, Nigeria and Bangladesh) are all anathema to Salafist fascists.

It is a pretty absurd thought: India, on its way to becoming a global economic and cultural powerhouse, is universe away from the tyranny of Saudi Arabia, stuck as it is in a peculiar 10th century bedouin re-interpretation of Islam - an interpretation that would have been laughed out of the mosque by Muslims of the 7th-10th centuries when Islamic civilisation was born and offered the world much.

As ultra-reactionaries, they also represent a malignant threat to women's civil and individual legal rights, to universal education, to trade unions and workers' social rights, to the idea of equality before the law - or indeed, anything that is vaguely defined as "liberal" "secular" or "progressive".

These sort of movements glorify a mythical past and, while they offer no solutions for ordinary people in the present, nevertheless get their recruits among those that feel threatened and insecure, rather than challenged and liberated, by all the opportunities and complexities of modern industrial life in an an increasingly competitive global market place.

In short, they are the scum of the Earth.

But how to defeat them effectively, that is the question for decision makers.

We know from our grandparents about the terrible price paid by Europeans, Middle Easterns and North Africans between 1939 and 1945 by the failure of political leadership after World War I and throughout the 1920s.

We know in 2008 that German culture is not rotten to the core. Our grandparents might not have agreed in 1933, when Hitler's party was gaining popularity in the polls in Germany.

So how is it that during the 1930s Germany, Italy, Spain and other States came to be led by what were, in 1918 and the first half of the 1920s, marginal, tiny organsiations with ambitions for mass destruction and pain but only a small dedicated following?

Was there something that the leaders of France, England, America and Russia could have done beween 1918 and 1925, or by 1932 at the latest, that would have diminished the chances of the rise of the Nazis and their fellow travellers by the mid '30s?

We know that the German and Italian fascist parties prospered as unemployment soared, as inflation destroyed wealth and savings. We know the fascists used the humilitations imposed on Germany and Italy (by France and England primraily) as a rallying call when looking for recruits.

We know they singled out those they deemed not part of the "mainstream" as a convenient excuse to blame for either being party to the cause of thier national humilitation, or the cause itself.

Was there anything France and England, America and the Soviets, could have done better to help nip the bud of rising fascism in Germany, Italy, Spain and elsewhere in central and eastern Europe in the early 1920s?

If the modern fascist movement is getting its largest numbers of recruits in Pakistan, Afghanistan, Somalia and Sudan - then what is needed is a massive investment in the economic development of those territories.

Sudan could be a major agricultural exporter - if the EU, US and Japan would both remove their economic apartheid tariff barriers on Third World farm produce, and if the rich nations would invest properly in the nation's ports, roads, airports and energy generation.

Pakistan has the potential of India. There must be economic development opportunities in Afghanistan and Somalia.

There is no question that had the Four Powers invested a Marshall-type Plan in Germany in 1918, instead of waiting until American taxpayers took up the challenge after 1939, then the chances of fascism taking hold in Germany in the 1930s could have been averted.

But it is clear that massive investment in infrastructure development, and opening markets, won't be enough to eradicate the Salafists in the short-term.

Tragically, the mass murders will continue in spite of the best efforts of States, and the U.N., to fight back with counter-terror operations because the terrorist organisations have grown significantly since first being established (with Saudi funding) to battle the Soviets in Afghanistan in 1979.

The world didn't help with its failure to properly invest in Afghanistan after throwing the Taliban out in late 2001 - Afghanistan should have been very quickly absolutely showered in First World investment.

The U.S. Government didn't help by its conduct in Iraq, that provided free propaganda opportunities for those claiming all Muslims are the victims of a "Western conspiracy".

The U.N. doesn't help by not resolving long-standing injustices - particularly the consequences of the 1947 U.N. General Assembly partition of Palestine.

The fascists utilise every real and imagined injustice for their own purposes.

Their evil plotting will continue - the latest attack perhaps designed to create conflict between India and Pakistan, and between Muslims and Hindus in India - fascists hope to make gains out of social chaos and conflict.

How quickly we empty the reservoir of the potential recruiting grounds where the ignorant young conscripts live, however, will undoubtedly be related to how quickly economic and social development is promoted in the backwater regions of Africa, the Middle East and Asia where the Salafists are strongest.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=3098697

PPPs and the global credit crunch

2008-11-26T08:45:00.001+13:00

Public Private Partnerships - also known as big black holes for taxpayers or a form of taxpayer funded corporatism where risk is shared around and gain is privatised - formed a large part of ACT and National Party pre-election rhetoric.

Given the small size of the N.Z. economy, the actual truth about the opportunities for widspread use of PPPs was always limited to a very few potential projects such as Waterview in Auckland, although in the current global credit market conditions it is hard to envsiage any corporate being able to raise funding more competitively than the Crown.

The N.Z. Herald, two and a half weeks after the election, is now getting on to this "developing story".

But the story did sort of break a little prior to voting day - when National announced that it was prepared to undermine the financial viability of future universal pensions by political interference in the investment allocations of the New Zealand Superannuation Fund.

When National said a month before the election that, if elected, it would risk the future of universal super at 65 at 65 per cent of the after tax wage by raiding the NZ Super Fund for infrastructure investment, the real story then, of course, was that National knew its pre-election PPP rhetoric was a big lie.

Tourism Minister hurt by PM's environmental policies

2008-11-26T08:35:00.001+13:00

John Key is sure using up those travel miles courtesy of us, the taxpayers of New Zealand.

Today we generously sent him all the way to London where, the media tell us, he will meet his half brother for the very first time.

For normal people, family matters are private. Politicians' families should not be the source of media entertainment - it is a breach of privacy. But on this occassion it is hard to be too hard on the NZ media for covering this family meeting as it is clear that the media would not have known about this meeting without Key's office conspiring in the trivialisation of the sacred family into something of a public relations exercise around a "long lost half brother".

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10545073&pnum=2

That's the brother, don't forget, that Mr Key apparently did not get round to meeting when he actually lived in England when he was a senior employee at Merrill Lynch - the company that made hundreds of millions in derivatives and "complex financial instruments", millions that were shared with its senior bureacrats like Key, before the whole pack of cards came tumbling down on the finance industry and the taxpayers of the world had to come to the rescue of the entire system.

But the substance of Mr Key's London trip relates to tourism matters, not family concerns.

With his Tourism Minister hat on he heard first hand from British PM Brown that the four-tiered UK departure tax, which places the highest levy on those traveling farthest afield such as to N.Z., will rise by more than 100 per cent.

According to the N.Z. Herald a spokesman for the Tourism Minister said that what the British are doing is "a form of protectionism". According to the Morning Report, Mr Key is worried other European nations might emulate this form of British protectionism.

The thing is, of course, Tourism Minister Key has been let down by Prime Minister Key and Key's coalition government.

What strong response was possible, to outline that N.Z. is serious about playing its fair part in the campaign against global climate change?

"But, Mr Brown, N.Z. is going to have a special tax payer funded research effort and enquiry into whether global warming is actually happening" is not the sort of decisive ACTion that overseas consumers, investors and potential tourists to New Zealand demand.

The National-led government's first actions have included putting the Emissions Trading Scheme on hold.

Protectionists the world over will be eyeing our agricultural exports.

Consumer and environmental groups the world over have been handed a blunt weapon by the National-led government with which to beat New Zealand exporters, producers and tourism operators over the head with.

When unemployment is significantly higher in 2011, the Minister of Maori Affairs who represents south Auckland in Parliament, is going to need to explain why he was not represented at the Cabinet table to advocate for pro-innovation and pro-jobs policies, and why he let those most vulnerable in the labour market to pay the price for the short-sighted, backward looking policies of this government.

A government which has time to pass urgent law before Christmas 2008 to borrow yet more money overseas for additional tax cuts and has time to give a big weapon to overseas protectionists to use against NZ tourism and NZ agricultural exports - but which has had no time or wit to create higher paying jobs and greater employment opportunities.

We're better off because of the Labour-Progressive government's management

2008-11-25T08:54:00.001+13:00

If we want to know why it was so important for New Zealand governments to run strong surpluses in recent years, there is no better place to look than at the position of the British Government.

The British government, like governments the world over, are in late 2008 introducing big spending policies to help economies out of recession (in N.Z. the fiscal stimulus in the coming financial year will be equal to around 3 per cent of NZ GDP).

But whereas NZ is doing it in a context where the NZ Crown has ZERO net core Crown debt - (actually, the NZ Crown is in an even stronger position than that once you add in the assets of the NZ Superannuation Fund) - the UK government is in a very weak position because it was busy running too-small-sized surpluses during the past five years when world credit was cheap and everything looked rosy.

The Gordon Brown Government overnight forecast that Net Core Crown Debt will stand at 54.2 per cent of UK GDP in 2013/2014 and public sector net debt will stand at 57.4 per cent at that time!

Mr Brown says he will have to start raising personal marginal income tax rates for those on the very highest incomes from that time - but what he doesn't admit is he has left any future government in the U.K. with the perfect excuse to cut deeply into social services and raise goods and services taxes for everyone - not just those on very high incomes.

British Labour failed in the past decade to be prudent and cautious. By badly handling Crown finances over the past five years, the British Labour Party has ensured that middle and low income families will get whacked in the future.

http://www.hm-treasury.gov.uk/d/pbr08_annexb_262.pdf

Lessons here for the Labour Party leadership team of Phil Goff and David Cunliffe.

National turns its back on the heartland

2008-11-17T17:29:00.001+13:00

The new Cabinet is, as far as Prog Blog can remember, the first time in history a National government has not put agriculture on its front bench.

This shows John Key doesn't have the experience and ideas to cope with the challenges New Zealand will face in the global downturn. Agriculture earns two thirds of our income overseas.

National's entire economic strategy is made up of tax cuts and infrastructure spending. Prog Blog applauds infrastructure, but it is a mistake to think it's enough. We have to sell stuff overseas and there is nothing in the National economic direction to suggest we will do that better than we are doing it now.

They will run into some infrastructure problems: For one thing, the government has already massively increased spending on infrastructure like roads and rail, and even broadband. But then what?

Some infrastructure, like some ports and certain types of energy generation, are going to disappear. So National has to step up infrastructure even more to make up for it. They won't. Not with unemployment rising and tax revenue falling.

They will be thinking they are going to invest heavily in new energy and transmission. Good luck with the planning consents.

They think they will amend the RMA to make consenting easier. Good luck telling Waikato farmers about the pylons running over their properties that they won't be allowed to object to. Good luck with the Kyoto liabilities when you speed up the use of coal. Good luck exporting much of our $20 billion agricultural production if you try to dodge our Kyoto liabilities.

And all of that will make water, the highest priority infrastructure issue, look like a walk in the park.

We could do with much more on water, but that is a ten year project at least. For any government. There are huge problems to sort out, from maori interests, to competing recreational and commercial uses, to the need to allocate water in a rational way. You can't introduce a price because it is politically toxic for good reason - there are a lot of people who can't pay water bills, you have to start allocating who gets the proceeds of a resource rental and its very hard to trade in a natural monopoly.)

So it's a bit like Treaty settlements - anyone who says 'just get on with it' doesn't understand the complexities of getting on with it, and won't deliver. That sounds like John key all over, actually.

National has set up some huge expectations around infrastructure, and it won't deliver.

It also won't deliver on the pledges to close the income gap with Australia, reduce hospital waiting lists or substantially reduce violent crime.

So, basically, a failed one term government that won't be chucked out soon enough.

Labour-Progressive leaves NZ Crown in best position to handle global recession

2008-11-14T12:27:00.000+13:00

Overnight the Organisation for Economic Cooperation and Development, which is
the club of the 30 rich nations, officially predicted recession across the
developed world.

Economic activity is expected to fall by 0.9 percent in the US next year, by
0.5 percent in the Euro area and by 0.1 percent in Japan as OECD countries
enter a protracted slowdown.

What does this means for a country like the U.K., which utilised the recent
years of cheap credit-fueled OECD growth to aggressively cut personal income
taxes in a manner consistent with John Key's press statements here in NZ in
2004, 2005, 2006 and 2007?

Well it means that the British Government now wants to institute a fiscal
stimulus package but is constrained by the fact that the UK Treasury
anticipates that Net Core Crown Debt in the U.K. will balloon out to an
unbelievable 56 per cent of UK GDP.

No wonder Chanellor Darling has said that while the U.K. desperately needs a
fiscal stimulus package for 2009, he has also parroted the Conservative Party
Opposition by saying that there will need to be tax rises in the "medium term"
because you can't actually sustain high net core Crown debts levels for long
before the markets pull the plug on you.

When the Labour-Progressive government was elected in late 1999, we inherited a
terrible legacy from outgoing Finance Minister Bill English. Net Core Crown
Debt was a disgraceful 21 per cent of GDP. Gross debt was over 35 per cent of
GDP!

The Labour-Progressive Government resisted the amateur, short-sighted calls by
John Key and Bill English in 2004, 2005, 2006 and 2007 to drastically cut
personal taxes at a time when the economy was already running above capacity.

We cut corporate taxes and the taxes on innovative firms R&D efforts before we
turned to legislating the locked-in three year personal tax cut package which
took effect in October, just the right time to lend support to domestic demand.

And now all Kiwis reap the benefits as Crown debt is 17 per cent of GDP, and
there is Crown has no net core debt at all (i.e. we are in a net positive
financial asset position to the tune of about 7 per cent of GDP). Good for New
Zealanders, and lucky for the in-coming government that no matter what hits us
over the next four years the Crown accounts won't be nearly as bad as they were
in 1999.

Revenue Minister Dunne needs to ensure KiwiSaver membership continues to grow

2008-11-14T10:32:00.001+13:00

One of the important contributions that the Labour-Progressive government made to strengthening the economy and society over the long haul was, of course, the roll-out of KiwiSaver in July 2007. It is remarkable that in just over a year 827,000 Kiwis had signed into the voluntary work-based savings scheme.

There is no question that international investors - the guys that have since the first oil shock in the early 1970s part-funded our credit-card dependent lifestyles - would be getting a bit nervous about the outlook for their investments in New Zealand in the current international credit market conditions had the Labour-Progressive government not shown real leadership and vision for the long-term.

Setting up KiwiSaver, and its success in promoting something of a revolution in our cultural attitudes to personal savings, is re-assuring to the foreign investors that fund the gap in our current account decicit every day.

Incoming Revenue Minister Peter Dunne, who was also the minister responsible for the administrative side of the KiwiSaver scheme over the past three years, has a real responsibility on his shoulders to play his part in ensuring the new National-led government keeps the personal savings revolution momentum going.

It is critical that he be as successful in the National-led government as he was in the Labour-led government on the issue of KiwiSaver.

We must maintain credibility as an investment destination in the eyes of overseas investors in New Zealand bonds. We must maintain efforts to build up our capital markets by continuing the spectacular growth in KiwiSaver investing.

ProgBlog wishes Peter Dunne well and hopes he does find the courage and strength of purpose to rationally convince his new National allies to drop their plans to scale back KiwiSaver investment - we need it now more than ever.

Mr BMW

2008-11-11T09:01:00.001+13:00

All the time John Key was talking about government spending, he was racking up a quarter of a million dollar limousine bill.

John Key squanders tax payers money on himself.

There's a man of the people: the highest level of limo usage of anyone.

He's out of touch and he's not even PM yet.

Green vote

2008-11-10T15:42:00.000+13:00

A Greens blog is sneering about a comment here. Prog Blog* wrote:

The Greens will be devastated. They would have hoped for 10%. They need to rethink what they are doing - the continual opposition to everything. Their self-marginalisation. They have kept themselves out of government repeatedly. It won't be a surprise if they do a cooperation agreement with the new government. They had one with Labour and still voted against it on confidence and supply.

To which they reply:

Thanks Prog. We'll take that advice firmly on board given your impressive ability to shrink your 1.16 percent of the vote last election to 0.93 percent this time.

Well fair enough. The point was not actually to diss the Green vote - more to say it is less than they hoped, and might have expected. There is a reason for that. They repeatedly choose to put themselves outside the mainstream. There are two ways the Greens can respond to that fact - they can snidely trumpet that they got more votes than the other small parties, which is what the post linked to here does. Or they can change strategy, which is what they should do. They've been in parliament for twelve years. Alone among all the parties in that time, they have never been in government. Alone. And just when they seemed more ready than ever to enter government.

So Prog Blog thinks they should look at the pattern of being opposed to everything, and think about being part of government. In the Progressive's case, that meant a smaller share of the vote. The Greens will never run a better campaign than they ran this year. Their potential partners across the spectrum were saying they would deal with the Greens. So what kept them out of government? What kept them getting that 10%?

But the snide link also raises a question of why the progressives didn't get more.

That would be because (a) the party doesn't appear to do much organising, at least outside Christchurch, (b) it's not very well differentiated from Labour in most voters' minds, (c) it's overly reliant on the appeal of Jim, and (d) it doesn't get much media attention (which is somewhat of a vicious circle - it doesn't get attention because its not very big nor well differentiated, and its not very big and well differentiated partly because it doesn't get attention.)

What will change about any of that? Not much, which is why the same post linked to above says:

There will have to be discussions in the Progressives about where to next. This blogger is not convinced there is enough residual organisation to make much point contesting another election. But Progressive ideas are good for New Zealand.

By the way, those words at the top about this being an unofficial supporters' blog. That's because this is an unofficial blog. It isn't the party blog as the misled Greens blogger thought. OK?

Disappointing, but not surprising

2008-11-09T09:28:00.002+13:00

First of all, congratulations to the new government. They certainly out-campaigned the left parties by miles.

If they keep their word, if they achieve their stated ambitions for New Zealand, and if they govern for all New Zealand, then New Zealand will be ok. It won't be the government progressive people want, but it will be one New Zealand can live with.

It will most likely be a one term government. That majority is not as large as the percentage gap between National and Labour looks. Labour will not campaign as badly next time. There will be new leadership and fresh ideas.

Plus, National is sure to disappoint many of the expectations its supporters have for it. It has been a bit of all things to all people, and some of them are going to be badly let down. But they will have a honeymoon first.

Helen Clark has been a good prime minister. It's hard not to feel she might have been more ambitious for New Zealand in her time. There might have been more imaginative policies here and there. But she can have pride in her government. The last nine years have been the most progressive and successful government of New Zealand since the first Labour government.

There will have to be discussions in the Progressives about where to next. This blogger is not convinced there is enough residual organisation to make much point contesting another election. But Progressive ideas are good for New Zealand. It's amazing how many people did the glassbooth survey at pundit.co.nz and found their policy preferences match the Progressives'. The combination of pc-free progressive ideas, of development and justice, is powerful and attractive.

This blogger wants to keep discussing progressive ideas in here. And hopes that Jim battles hard in government, holding the new government to the fire. He is a formidable opposition politician and a strong challenge to this new government will help keep it to one term.

As for the others, Prog Blog is happy to see NZ First disappear. But those voters will want a new home and it will be interesting to see where they find it. Even though Winston Peters had some objectionable ideas, he can legitimately say he got a very unfair ride from news media this year. He was sabotaged, often with stories that turned out to be baseless. He would have made 5% with just a slightly fairer ride.

The Greens will be devastated. They would have hoped for 10%. They need to rethink what they are doing - the continual opposition to everything. Their self-marginalisation. They have kept themselves out of government repeatedly. It won't be a surprise if they do a cooperation agreement with the new government. They had one with Labour and still voted against it on confidence and supply. The Maori party also will likely make a deal with the new government, which will make for a rich target for Labour.

So there is a lot to rebuild. As Sir Robert Muldoon once said - have today off and the next campaign starts on Monday.

This is convincing

2008-11-07T23:18:00.001+13:00

Here's Jim's last pitch.

He had me at:

It takes real strength to care for others. But if there's one lesson I have learned, it's that extending your hand to another can be the most important thing you do, in politics and in life.

I'm voting for that.

Another good reason

2008-11-07T21:23:00.001+13:00

Prog Blog read this on the NBR (of all places) and thought it made a pretty good reason to keep the government:

Total Government spending as % of GDP:
1999 (National) ….. 32.4%
2008 (Labour-Progressive) ……. 31.8%

Unemployment:
1999 (National) …….. 7.1%
2008 (Labour-Progressive) ……. 3.1%

Number of people on benefits:
1999 (National) ……. 360,000
2008 (Labour-Progressive) ……… 245,000

Spending on Health (adjusted to 2008 dollars)
1999 (National) ……. 8.7 billion
2008 (Labour-Progressive) ……. 12.2 billion

Spending on Education (adjusted to 2008 dollars):
1999 (National) ……. 7.5 billion
2008 (Labour-Progressive) ……. 10.1 billion

Prescription charges:
1999 (National) $15
2008 (Labour-Progressive) $3

Fewer people in poverty, by far. Relative living standards higher by 30%. Higher by more than Australia, UK, US and Japan and the OECD average in the same nine years.

Yep, they're done a good job. We can't take the risk of change.

Thoughtful commentary

2008-11-07T21:12:00.001+13:00

If you're looking for a good reason to re-elect the government - this is one.

Thugs at work

2008-11-07T10:38:00.001+13:00

People have been noticing in here for a while - there is no shortage of thugs out there pumping for National.

Here they go again.

From the party that bleated long and hard about spending limits to stop them buying the election - here they are trying to stop anyone else having a say.

Of course, most National supporters aren't thugs. But you have to ask yourself, what is it about National that attracts so many thugs?

A vote for National is a vote for the ugly, divisive side of New Zealand politics.

What change means

2008-11-06T09:51:00.002+13:00

Obama's win doesn't simply mean out with those other guys and in with
the new.

Do the right wingers here who are saying his win breathes freshness
into their campaign really believe that those tears in Chicago are tears simply for a new
person in the Oval Office?

No. We're happy around the world because it is a change to a better,
more hopeful presidency. It is the triumph of justice. The triumph of
progressive politics (very small p!).

It is the triumph of the politics of hope and peace, over cynicism and
war.

National in New Zealand is a pro-war party. These are people who say
we should follow the US into a war anywhere, over anything.

National in New Zealand is a party of cynicism, a party of taking as
much as you can for yourself and damning the consequences.

National in New Zealand is the party of thuggish ugly haters - the
people whose comments on kiwiblog are recorded here in a post below.
People whose nastiness, whose vindictiveness, whose despicable violent
tones are a pollution in political discourse.

National is therefore the opposite of the hope Obama represents.

Obama's triumph is also a victory for grace and eloquence over the
jumbled syntax and mumbled confusion of the Bush years. And when you
hear John Key burbling like C3PO, you can't help laugh at his efforts
to see himself as a kiwi Barack.

Change is coming

2008-11-05T12:27:00.001+13:00

It would be a bit puzzling that David Farrar has been going on and on
about a stupid made up claim about Matt Robson. At first pass you
would think it is because we caught out his hideous commenters with
the most vile, violent and ugly language. The sort of attitudes a vote
for the National Party aligns you with.

But maybe there's another explanation! Maybe he's raving about Matt
Robson because he's a pollster, and his polls are showing Matt Robson
is headed back to parliament.

Maybe the Progressives will even get 3.

Good job. Affordable dental care for everyone is coming.

CTU's latest vid.

2008-11-04T15:54:00.002+13:00

Not sidesplitting - but worth a watch.

Environment voting

2008-11-03T13:07:00.001+13:00

This environment survey isn't very credible.

It fails to ask hard questions that set the words against the actions.

A good example: The Maori Party comes out in the survey with a great set of words - but how does its record stack up? When they've been given the chance to vote on pro-environment legislation they have often as not voted against the environment. Labour, Green and Progressive have almost always voted pro-environment. Yet the Maori Party come out ahead of two of those parties on a pro-environment survey? No, that can't be right.

The record is very different to the rhetoric. Given the responsibility to make decisions that care for the environment, this blogger thinks Jim has done the right thing.

Horrible Internet behaviour

2008-10-31T21:18:00.003+13:00

Prog Blog is appalled at Kiwiblog's disgusting behaviour here.

Prog Blog watched that episode and felt Matt was referring to the chances that McCain would lose and Anderton would win. The National candidate there twisted his words. It was all forgettable until this unseemly attempt to turn this into something else turned up on Kiwiblog. This is ugly behaviour - it's Internet bullying. It is dishonest. It is an attempt to whip up a mob, and set it on others. It seems to be the default behaviour of the right wing blogs.

Let's think back - Kiwiblog objected to a comment on this site a few weeks back. Thought it was objectionable. Fair enough. We took it down because it offended a few people.

Let's see the standard of comment Kiwblog thinks is OK. Here is the full glory of the New Zealand right wing supporters on display for your consideration and perspective. Here they are for you to judge whether these values are your own (and cover your eyes, stop reading now, if you are sensitive - this isn't pretty stuff):

a lying hypocrite. Only the morons and the brain dead would vote for them.

a nasty piece of knitting

a wanker.

some people just need a good “slap”.

nothing bu fucking arseholes! [sic]

the communist forces that Klark and Robson were helping, resulted in the mass murder of thousands of South Vietnamese,

Lefties/Commies

Another sick and gutless left wing slimeball.

you sad lying fuckwit

these deranged fools....scum

a no-account pinko looser [sic]...an emasculated dishcloth of a human-being, to call him a shadow of a man would be an affront to shade everywhere.

someone whose brain is fucked beyond repair- IOW, a fuckwit....the rancid hate that underpins leftist ideology. I don’t know why you hang around here all day with your incoherent shit and your infantile handle,

leftist pigs

the whole “ban war” brigade play the emotional “loss and suffering” fiddle purely as a means to an end, the end of weakening OUR resolve to fight for OUR culture and freedoms.

Lying commie fuck....guns are the only thing stopping these power mad pricks form kicking in the doors. [Yeah, you might want to report this guy. If he actually has a gun licence, it's time for it to go.]

that asshole

They are dangerous, dishonest and infantile left wing “useful idiots”

if your response to this is to scream abuse, then fuck you. You are an idiot.

hateful little men

So there you have it. The delightful, moderate views of the National Party's supporters on display. Kiwiblog even has a moderation policy that allows for comments it considers unreasonable and unpleasant to be penalised. So we can see that the comments listed here are all part of the standards the National's Party's chief Internet propagandists like to display.

Since Kiwiblog wondered whether Jim Anderton wanted to take credit fior this blog - although this blogger has never met Jim - perhaps John Key would like to take credit for his supporters over at Kiwiblog?

And then we see this video - oh how sideslappingly unfunny. The PM falls over and the National Party thinks that is hilarious. Yes, there is a good reason to vote against the government! the PM fell over! Hideous, hideous bullies.

Kiwiblog should apologise for this ugliness.

Wow

2008-10-29T16:07:00.001+13:00

"John Key faces accusations of misleading the public about his knowledge of one of New Zealand's most notorious white collar crimes."

The story here is that someone can't get his story straight.

Time after time, he can't get his story straight.

How can you be PM if you can't be straight with the public?

A pattern of being less than forthcoming

2008-10-26T14:39:00.001+13:00

The Standard has fascinating details about John Key's ownership of Fletcher Forests shares.

The troubling aspect of this is not any direct conflict of interest - it's the question of judgement it raises. No finance spokesperson of a major party should be buying and selling shares. The conflicts are just too great.

It is also very troubling is that Mr Key has never revealed the full extent of his share ownership.

The pattern here is that we never quite get told the full truth. National, under John Key, takes the same approach to policy issues. There is always something slippery. Statements are never quite definitive.

It's always better when all the facts are out on the table to be debated on the merits.

Keeping it kiwi

2008-10-14T12:15:00.001+13:00

Labour has unveiled a billboard urging voters to 'keep it kiwi'.

Kiwisaver, KiwiRail and Kiwibank.

Wonder what Jim was doing while Labour was thinking up Kiwibank?

Silver threads

2008-10-13T16:50:00.001+13:00

If this financial meltdown has one silver lining it has at least knocked into the dustbin of history for a long time to come the notion that the unregulated unfettered market place is the way to a brighter future while a strong role for the public sector is so... yesterday. National's cuts on Kiwisaver has reminded a number of commentators of how that party abolished the Rowling government's contributory savings scheme and how this country has suffered ever since from a lack of homegrown savings, heavily relying on borrowing overseas. With Kiwisavver and Kiwibank that glaring weakness is at last beginning to be addressed.

The sight of Roger Douglas at the Act party launch (no 3 on their list! A resurrection perhaps not unconnected with Alan Gibbs' $100,000 donation earlier this year) will also be stirring memories. It was the Rogernomes who sold the state-owned BNZ of course. Jim Anderton fought them all the way but in the end had to resign over the issue. But Rogernomics steamed on and the new directors boasted of their prowess in creating wealth over fuddy duddy public servants. Suprise suprise.In a few short years these would be 'Masters of the Universe' had driven the bank into bankruptcy and were calling for Nanny State to save them. But they really needed Big Nurse to give them a more lasting cure for their hubris.

Now that the election campaign proper is upon us, the thought of John Key - one more ex-Master of the Universe looking for a Top Job DownUnder - being put in charge of the country's finances and ultimately of Kiwibank, is focusing a growing number of minds, judging by the latest polls. Not before time.

Life means life

2008-10-06T13:45:00.001+13:00

If you are really against crime, you would support the policies that have helped drive crime rates down in the last nine years: alcohol and drug programmes in prisons, more police, full employment.

Let’s just extract that link:

The crime rate in New Zealand has steadily decreased over the past decade, contrary to media reports.

National voted against everything that has helped bring the crime rate down. Therefore, National is objectively pro-crime.

If you were really against crime, you would be against the prisons the government has built – more than ever built by a single government. National or Act have opposed and voted against every one of them. Matt Robson built more prisons than any minister of prisons in history. National and Act are objectively pro-crime because they have not supported these prisons.

If you were against crime you would be against the harm caused by alcohol and drug abuse. National sneers at everything Jim Anderton does to reduce the harm of alcohol and drug abuse. It calls him the anti-fun minister. Because the crime wave caused by alcohol and drug abuse is so much fun, see. Because it supports more widespread availability of alcohol and drugs, National, like Act, is objectively pro-crime.

If you were against crime, you would be against unemployment. National voted against every single full employment policy of the present government. National’s own economic forecasts predicted mass unemployment under its policies forever. It defended this by saying there was nothing that could be done to bring unemployment below about 6 or 7 percent – nearly double the level today. Because National is pro-unemployment, National is objectively pro-crime.

If you were against crime you would have detailed policy to intervene with young people early, before they start out on a life of crime. National can’t, because it wants to reduce the ability of government to fund programmes, cut the public sector, sneer at big government and burden kids with the costs of repaying all the borrowing New Zealand will have to do to fund National’s tax cuts. Therefore, National is objectively pro-crime.

Not too mad

2008-10-03T09:47:00.003+13:00

An interesting look at the temperament and personalities of the candidates in the US election. (It's hard to imagine such a thoughtful and reflective item being written in New Zealand, isn't it? Informed, literate, careful, not needlessly cyncial. Analytical, readable.)

An interesting observation in the linked story is that angry people don't tend to win elections. And thinking about this year's election in new Zealand, it's hard to think of any party that's running as the angry party this time round.

Certainly a few have done in the past.

Some criticisms this year - especial from the Greens and Act - have been strident. But even they are presenting themselves as reasonably optomistic and upbeat about New Zealand.

The Progresives have always been part of govenrment, since being formed, and the tonal difference between Progressive and its precursor parties is probably the main difference between them.

The Maori Party semed to embody anger politics three eyars ago, but it strikes a softer, more reasoned tone now.

And NZ First has been the definitive angry party. Winston Peters still flashes it for the news media. But his positioning for the last three years has been heavily weighted towards trying to look moderate and stable. Put aside his war with the media, and there is nothing angry about NZF at all these days.

That leaves Labour and National. Labour, as the major party in government for nine years, can't be angry. And National's success in polling recently is probably all about its warm fuzzies.

So what has led to this outbreak of smug satisfaction?

Maybe everyone thinks things are not really all that bad?

In all seriousness, it probably reflects a very high level of broad consensus about New Zealand and a general feeling of something close to fairness. Yes, everyone would change some important policies here and there, but there are no great and irreparable divisions within New Zealand society. There is no real hatred at the poliical level. There are no destructive schisms. That's good, right?

What a National-led government would mean

2008-10-02T14:15:00.003+13:00

What would a National-led government mean? What would change?

Their tax policy has to mean more debt and it has to mean reduced spending on public services.

Over time, increased debt compounds into sharply reduced ability to spend, or to give further tax cuts.

Increased debt also increases the pressure to sell assets, and it also increases inflationary pressure (because more money is in circulation, but the economy is no more productive.)

Since National is promising to keep the same monetary policy, higher interest rates are the inevitable result of this cocktail.

Therefore, our export sector is likely to be less competitive and unemployment is like to rise - both of which further erode the ability of a government in future to increase spending or cut taxes again.

When you combine the economic stresses with John Key's weakness and refusal to make tough decisions, you get a clear picture of a vicious circle. A circle of reinforcing decline.

This does not all amount to melt-down the day after the election, or even sharply reversed living conditions the year after the election.

The economic cycle will even throw in the odd good year.

But we have been through this cycle of slow decline before - in the 90s.

And the result of going back to it would be the same again: anaemic growth, permanently high unemployment, permanent transfer of wealth from people who use capital (such as working people and productive businesses) to those who own capital (such as the overseas lenders who finance the borrowing), social services getting eroded a little more every year as the cuts bite and the squeeze comes on, real wages stuck or even falling (especially for the loqwest paid) as the effects of higher unemplyoment take their toll on workplace bargaining and the economic squeeze reduces business' ability to pay better wages.

There will be little innovation compared to other countrioes because the government will sit on the sidelines, so there isn't much chance of getting lifted out of the rut.

So what does that add up to for ordinary households? Incomes that don't rise much and cuts in working conditions. The minimum wage, which has risen by $200 a week since National was last in government, won't be rising much more. Conditions like four weeks minimum annual leave will be cut.

Unemployment will rise it, and with it the crime rate and the stresses on social services and the numbers on benefits.

We will fall further behind the rest of the developed world, just as we did in the 80s and 90s until the govenrment put a stop to the slide in 2000.

It means Kiwibank will be sold, and Air NZ and Kiwirail, ACC and then the power companies.

It means schools that fail a generation and a health sector that increasingly can't care for the sick and needy.

On the other hand, it means people on a Cabinet ministers' salary will pay less tax.

The rest of NZ pays a lot for their class war.

Consequences what consequences?

2008-10-02T08:20:00.004+13:00

John Key has acknowledged there are consequences for individuals borrowing in the currrent global finance market.

PGG Wrightson is struggling to raise capital for the merger into Silver Fern Farms.

The new diary processing factory in Southland is also struggling to raise funds.

How is John Key going to raise the $5 billion needed every year to fund his proposed $50 per week of tax cuts?

Are there costs and consequences when John Key borrows from global finance markets?

Mmmm, big tax cuts a hollow gesture?

To Be Honest

2008-09-29T15:28:00.002+13:00

The word Honest is defined in the Concise Oxford Dictionary as:

adj. 1.fair and just in character or behaviour, not cheating or stealing

2. free of deceit and untruefulness, sincere.

John Key has disclosed he should have been "more honest" about his porfolio of Toll Rail shares.

If one is honest how can one become "more honest?"

It would then make sense that to become "more honest" one must have been dishonest!

Who would you trust to be strong and caringly honest?

A person and party with a proven record or one who states he should have been "more honest?"

Moving mountains

2008-09-25T16:39:00.001+12:00

Prog Blog just found this.

Worked for me. It's exactly why I'm supporting Jim: No matter how big or small someone's needs are, if it's rights, you gotta move mountains to help them.

Almost hate to admit it...I pushed the donate button.

What big tax cuts mean

2008-09-16T00:00:00.001+12:00

Who wouldn't love an enormous tax cut?

Who couldn't use $50 a week?

If it's such a good idea, it's just amazing that the government doesn't go ahead and cut taxes by the $50 a week National is promising. The reason it won't is that there are costs and consequences. Tax cuts the size National is promising are not a good idea. Anyone who promises a tax cut is obliged to fess up to the costs. Those costs are far too high.

For a start, National has already said, in its leaked science policy, that it will increase tax on research and development. That's worth a lot of money - around $300 million on National's figures. It needs the money to pay for a personal tax cut. So it is cutting private business investment in innovation and higher productivity to pay for personal tax cuts. Hmmm. That doesn't sound like the best designed tax policy if your aim is to increase the overall living standard of New Zealanders.

The sums involved in a r&d tax cut, while huge, are peanuts compared to the cost of a $50 a week tax cut.

The $50 a week won't go to everyone. Lots of people don't pay $50 a week. Superannuitants won't get it. So the tax cut will increase inequality. It will increase the gap between those who get the tax cut and those who don't. That works two ways. The tax cut will be inflationary - prices will rise faster because more people will have disposable income. Those who don't get the tax cut will not only be further behind in their disposable income, prices for them will be higher too.

The tax cut will have to be paid for with debt or cuts to other spending. The government has maxed out its credit card. Anything more that is spent has to be borrowed. Borrowing for tax cuts is very poor policy. It puts a huge strain on tomorrow's taxpayers to pay for today's consumption.

The increase in debt servicing costs alone put a dent in the government's accounts. So that's a bigger hole, and means more cuts.

Your mortgage payments will be higher than they would be without the cut, because it will be inflationary. The Reserve Bank has already warned that faster cuts than the government has announced will be inflationary, and the Bank will be obliged to respond. More on your mortgage, more at the shops. That tax cut isn't going very far.

Then there are the costs to government spending: $50 a week multiplied by 2 million workers would be $100 million a week, or $5 billion a year. Yeah, nope, won't happen. You can't cut taxes by $5 billion a year unless you cut health, education, police and superannuation. Those are the big ticket items. And since unemployment is going up under National (especially once the Reserve Bank starts yanking up interest rates to control the inflationary pressure of the tax cut), welfare costs will actually be higher.

Finally there are the opportunity costs. Let's say you had another two billion a year to spend. Is a tax cut for the most comfortable New Zealanders the highest priority use of the money? What about reducing the cost of dental care for ordinary New Zealanders? What about removing student loans for students who stay in New Zealand. Wouldn't that be a worthwhile investment? What about fully funding sports, so that young kiwis from poor homes can see the All Blacks on tv? So that our Olympic athletes can train with world class facilities?

Can't do any of that if you are going to splurge all the cash on tax cuts for the most affluent.

National's science policy

2008-09-09T17:44:00.000+12:00

Who is John Key, really.

2008-09-04T09:41:00.004+12:00

John Key has said, "as Leader of The Labour Party."

He admires Tony Blair, Bill Clinton and believes he's New Zealand's Barak Obama.

Perhaps he has aspirations to be a left wing leader!

Or perhaps he's still just a second hand money trader and confused!

Fifty dollars a week

2008-08-25T14:54:00.000+12:00

Prog Blog a tad bemused by the most recent comments made by the Nats.

On TV 1's Agenda Maurice Williamson suggests $50 a week in tolls for Aucklanders would be acceptable for those people wanting to avoid traffic congestion.

How convenient that $50 a week we would be taxed for roads is exactly the same as the $50 a week John key promised i tax cuts.

But no, hang on just a minute… according to Bill English, Williamson was just a tad "exuberant" with his numbers, and it was all the interviewer's fault for merely adding the figures up.

Déjà vu anybody? Does this not scream of the same hidden agenda that belied Bill English's comments re Kiwibank? i.e. where the Nats say one thing in public, but really mean another?

Just like Kate Wilkinson and her comments re Kiwisaver.

Of course these spokespeople could be telling the truth as they know it. But I'd trust the Nats about as far as I could throw them (and as a female contributor, that's not very far…)

Medals in Abundance

2008-08-21T11:06:00.002+12:00

As the Olympic games move to completion New Zealand should be very proud of our athletes as at present on a per -capita basis we sit second in the world in medals achieved. Well done to the athletes, coaches and all support personnel.
Favouring the pursuit of excellence, many will wonder if we could reach the number one spot on a capita -basis if we entered a transformational process in support of physical activity and sport in New Zealand.
Having trained physical education specialists in early childhood and primary education, extensive athletic scholarships, extensive sports development programmes and more events over time will drive not only success in sport but health and educational achievement.
Why not put more money into playing the games and engaging our young in this fun instead of leaving children alone to default to mischief to entertain themselves when the guiding and responsible hands of adults fail to act constructively and we then spend time and money cleaning up the mess.

Petrol prices

2008-08-14T19:01:00.001+12:00

Seeing as how National said that the increased price of petrol was all the government's fault, now that the price of petrol is falling, will National also be giving the credit to the government?

Intentions clear, no signature

2008-08-11T09:10:00.003+12:00

Prog Blog read the evidence clearly.

National has not and will not sign the pledge issued on Friday, by Jim Anderton, "I pledge my party will not initiate or support the sale of Kiwi Bank."

The Progressives and Labour signed, as did NZ First, The Greeens and The Maori Party has agreed to sign.

Where is National and Act? But of course Act is but an act!

National wants to repeat it's past experiences. This is what they are programmed to do. No initiative in that camp. They sold The BNZ, that is their experience.

With a weak money trader at the helm with no experience in business, their only focus is on trading- buying and selling. Buy money (borrowing) and sell assets. Perhaps this is balancing the books Key style!

Doing what you should

2008-08-08T15:32:00.001+12:00

Back Track, Dig Hole, Illusions, Deluded.

2008-08-06T23:48:00.004+12:00

John Key has announced that The National Party will not sell Kiwi Bank.

That's their sixth statement on OUR bank.

He is such a fast follower of the progressive Labour-Progressive Government (L-P, long player). One has to wonder if the leader, the L-P, is no longer present whom would he follow?

No doubt, with no leader to copy, it's revert to fall back position. Perhaps a mixture of Muldoonism, Rogernomics and Ruthanasia. A very very deadly concoction.

Key also states he is creating assets:

What are they?

Where are they?

How were they created?

Have you seen them??

Loose lips sink ships

2008-08-06T11:51:00.003+12:00

Bill English's gafe over Kiwi Bank has certainly revealed National's intentions. He has tried to back peddle by saying he did not choose his words very well. Well well inspite of the words, the message is the same!

National has said:

no plan to sell Kiwi Bank
unlikely to sell Kiwi Bank
will not sell Kiwi Bank in first term
never sell Kiwi Bank
eventually will sell Kiwi Bank.

Strange that the most used word in National Party statements is "sell kiwi bank."

I think everyone could adhere to Kiwi Bank's campaign and "join the movement" because "it's ours"

A fiscal Esher picture

2008-08-02T17:35:00.003+12:00

The suggestion that National can borrow to pay for spending, but that
the borrowing isn't for tax cuts at the same time, is possibly the
stupidest thing Prog Blog has ever read in any newspaper, anywhere,
ever.

You have to congratulate National for having the gall to claim that's
what they're doing.

"No, we're not borrowing for tax cuts! We're borrowing for this
spending! Over here! See!"

But what can you say about a newspaper that runs this breathtaking
garbage? Prog Blog would love to read the Herald's explanation of how
you can borrow for spending but isolate that borrowing from the
simultaneous tax cuts.

So you see, we can have more spending, we can have tax cuts, we can
have everything the government is already delivering as well...and we
will pay for it by borrowing madly, so that your children pick up the
bill and eventually things have to be cut deeply, or taxes hiked way
up, to pay for it all. But as long as smiling John Key is saying 'we
are borrowing only for item A, not for item B' then the Herald will
believe it.

This economic Teletubbies. It is fantastically fraudulent. It has the
integrity of a bent fork.

Look, if you want something, someone has to pay for it. Go ahead, have
debates about what we should have and who should pay: More spending,
lower tax cuts. More tax cuts, less spending. Even a bit of both, and
more borrowing. But you cannot plausibly claim you can have tax cuts
beyond what the government is promising now without borrowing. (Truth
is, the government has probably pushed a bit far and has to borrow as
it is.)

You cannot plausibly claim that you can increase spending and cut
taxes without borrowing to fund it. And if that is what you are doing,
the suggestion that the borrowing is for spending, but not for tax
cuts, is a fiscal Esher drawing.

It's really worrying that John Key seems far too weak to tell the
truth about his policies. Is that because he doesn't understand them,
or is it because he doesn't trust the public enough to tell the truth
about what people want and what he is promising?

Either way, he is a startlingly weak man, with the most astonishingly
dishonest bet on tax cuts.

How National abolishes four weeks annual leave

2008-07-24T16:05:00.001+12:00

Picture this.

You're starting a new cleaning job. You employer gives you your
employee pack. You open it up, and inside there's a Kiwisaver
enrolment form. Great. Thee's a copy of your employment contract, too.
In it it says, "the employee requests to be paid cash instead of
taking a fourth week's annual leave." There is a letter for you to
sign requesting cash instead of a week off. "What's this," you ask.
"You don;t have to sign it," the employer says, "but if you don't,
we'll pay you 2 per cent less every week."

"But I'm entitled to fur weeks annual leave! It's the law." "Of course
you are. And you go ahead and take it. I'll just have to dock your
pay. It's up to you."

Nasty nasty Nats.

John Key goes on holiday, and uses his holiday leave to think up the
genius idea of slashing leave.

Is there reincarnation?

2008-07-24T10:31:00.005+12:00

There are similarities between John Key and Robert Muldoon.

Both accountants.
Key says wage increases are an issue.
Housing Spokesperson Phil Heatley will not increase state housing stock instead tenants can purchase. It takes longer to build a house then sell it. A resulting net loss.
The government bureaucracy under National will not be replaced as people leave. A net loss.
Government spending is not to increase. A net loss
ACC to be diminished so that private enterprise can contest for a limited pool of money, then possibly fail as in late 1990s. A net loss in services.
No increase in funding to The Arts, a net loss
Key says The New Zealand Fast Forward Fund is a gimmick, he will scrap it. Net loss to research.
Tax cuts and furious borrowing, could there be some "Thinking Big" here?
Interest rate rises.
Lop sided face and how about the laugh!

Yes looks similar. Could it be a wage and price freeze?

First term for the Nats - back to the 1970's.

Second term -back to 1990s, assets are sold.

Arrest of a monster

2008-07-22T12:32:00.001+12:00

The genocidal criminal Radovan Karadzic has been arrested at last.

This is important news for progressives. In the nineties, much of the left shamefully went soft on the applling behaviour of the Serb nationalists, possibly because the reactionary nationalists outrageously called themselves 'socialists'. A combination of pacifism and anti-imperialism degenerated into a default opposition to intervention in defence of human rights. And so genocide and ethnic cleansing happened in a place where it could have been easily prevented. If the left had been more assertive, especially in Europe, it would have been prevented.

We should have been loudly supporting intervention much earlier. We should have been taking a much stronger stand for human rights.

The arrest of Karadicz also shows the powerful incentive of membership of the EU. Nationalists and isolationists can not offer anything as positive. It's a powerful reminder to the reactionary left of the risks of nationalistic and isolationist policy.