Monthly Archives: Jan 2019

Opposition Leader gives State of the Nation address

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Opposition Leader Simon Bridges gave his State of the Nation address yesterday in Christchurch. After a year of chasing Prime Minister Jacinda Ardern in the polls and watching Judith “Crusher” Collins creeping up in his rear vision mirror as a potential threat to his leadership, it was a chance to try to reset the agenda. But how realistic is it?

Not surprisingly Mr Bridges came out guns blazing against the tax policies of the Labour Party. He claimed that New Zealanders are going to pay another $10,000 more over the next four years than they would have under a National led Government. Mr Bridges also said that the New Zealander on the average wage would be in the top tax bracket by the year 2022 should wage and tax conditions remain unchanged. These criticisms, part of a larger announcement that a National led Government would introduce a three yearly tax cuts regime whereby after each election the Government would be advised how much the brackets need to change by.

However Mr Bridges ignores the significant underfunding of a range of social, health and education services that the National-led Governments of Prime Ministers John Key and Bill English determined were not necessary. In doing so Mr Bridges fails to acknowledge the consequences of the underfunding, which included Middlemore Hospital needing an emergency injection of funding just to do essential building maintenance to address rotting walls and floors.

Mr Bridges crusade against tax also potentially restricts the options available to National without reeking of hypocrisy in an emergency, or period of significant economic downturn. The promises of a three year recalibration ignore the fact that tax policy is a key election announcement in any campaign.

In other areas Mr Bridges promised that National would make the environment a priority. Mr Key said the same thing in a well known speech about the economy, education and environment, which he called the “three E’s” agenda in 2007. Mr Key’s promises on the environment led to an attack on fresh water quality with a substantial decline in both the availability of drinking water per catchment but also a marked decline in its quality. Mr Bridges would be wise to note the high level of concern in a recent poll commissioned by Fish and Game, that suggested an overwhelming portion of New Zealanders now have significant concerns about their fresh water resource.

If Mr Bridges is to be taken seriously about the environment though National will have to adopt a significantly stronger approach than the muddling through method currently in use for dealing with climate change. It will need to develop a comprehensive green business plan if it wants to be seen as a credible alternative to the Greens and Labour campaigning against oil and gas.

Similarly pressing urgency is needed on waste. With China’s refusal to accept paper, glass and plastic waste from 01 January 2018, National would need to develop policy on waste – something it had nothing on in the previous Government, and which successive Governments have muddled their way through on.

The third area of note was law and order, which reminded me that fairly early on in the previous National-led Government accessibility to legal aid was clipped. The excuse at the time that was given was cost cutting. The reality was somewhat different and might help explain the apparent ignorance of some offenders being brought before New Zealand courts. It also reminded me of another cut which was to the Public Trust’s wills service. Whilst both of these were short sighted actions to take, admittedly it probably will not prevent or discourage any offences.

 

Simon Bridges suggestion of a new Green Party laughable

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It has emerged that a man named Vernon Tava believes that there is a component of the Greens who are sick of their party’s social policies, and who would consider a merger with the left wing of the National Party. In reviving an old gimmicky vehicle to gain a few political points – or in this case 5% of the party vote – a former Green turned National Party hopeful named Vernon Tava, along with National Party leader Simon Bridges are hoping to undermine the Green Party of Aotearoa New Zealand.

To suggest that there are people who are sick of the social aspect of Green Party policies, shows how little Simon Bridges understands of the Green Party of Aotearoa New Zealand. Mr Bridges does not seem to realize that they are as integral to being a Green as the environmental policies and associated politics that give the party its name in the first place. It shows a fundamental lack of understanding of what is to even be a supporter of the Green movement, never mind a party member. It is a bit like suggesting National supporters want their incomes, but are not interested in the economic methods that are used to supply those incomes.

These comments are none other than desperate suggestions from a Member of Parliament and Leader of The Opposition who is seriously out of his depth.

And who is Vernon Tava? Here is a guy who to the best of my knowledge has no political profile whatsoever, and now he wants to establish a political party that will somehow reach the lofty 5% threshhold of the party vote. 5% is something Colin Craig and his Conservative Party could not reach. It is something that Gareth Morgan and his The Opportunities Party could not reach in 2017 and something that even New Zealand First failed to reach in 2008. Good luck to him trying, but his profile in New Zealand politics needs some solid work done on it.

The Greens to myself and plenty of others now are as much the party of drug reform, no more wars, more lenience on prisoners as they were the day they entered Parliament. Surely Mr Bridges must have noted the arrival of the Greens in Parliament at the end of 1999 and wondered what a Rastafarian (Nandor Tanczos), a son of Elsie Locke, a beneficiary among others all had in common. Surely he must have understood that there is a section of New Zealand society who do not believe that capitalism is the answer, and that they were as much entitled to exercise their legal rights and views as himself and his well to do mates? Apparently not if you read meaning into these totally baseless comments.

Mr Bridges on one hand appears interested in reviving an old joke wing of the National Party that were never more than a half hearted gimmick. The blue-greens were meant to be a hybrid of the Greens and National with the Greens environmental agenda, coupled with National’s social and economic agenda. That might in itself raise some commentary, but commentary would be about the limit of the reaction – no serious attempt at reconciling either the green wing of politics or the conservative wing with the other’s agenda has ever been seriously attempted. It also ignores some facts that the Greens and the larger left part of the spectrum would consider fundamental:

To have economic growth, people must be in a mental, physical and social state where they can reasonably contribute in the processes. That means having employment policies and protections to stop exploitation and unsafe occupational practices.

Something not everyone in National believe are necessary or even proper.

Early rumblings in 2019 local government elections

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The first rumbles of the 2019 local government elections are starting to reverberate through the political landscape of New Zealand local government. Although the main campaign period is some months away, it has not stopped several notable local politicians from announcing they are standing Mayor.

In Auckland, former Labour Member of Parliament John Tamihere has announced his intention to stand against incumbent Mayor of Auckland and one time Minister of Justice, Phil Goff. Mr Tamihere proposes to open up the council finances to Aucklanders so that they are able to better see where their rate payer dollars are going.

Further south in Christchurch, incumbent Mayor Lianne Dalziel has announced that she will stand for a third term in office. Ms Dalziel secured the mayoralty in 2013 after much of the Christchurch City Council was voted out following a controversy – and disaster ridden – second term by the then Mayor Bob Parker. During her tenure, Councillor Raf Manji has rebalanced the council books which showed serious flaws, including considerably under-estimating the value of Christchurch’s assets when filing a claim with the insurance companies over earthquake damage.

Also possibly standing for Mayor is Councillor Jamie Gough, linked to businessman Anthony Gough who was one of the major private players in the dividing up of C.B.D. land. Mr Gough’s decision to announce a possible stand was in part informed by the growth of council projects that amount to unnecessary expenditure, but also a need to rein in rates.

However, since then, a tendency by the council to embark on projects that do have necessarily have sufficient or appropriate rate payer support, has resulted in much criticism being laid. They include a current plan to redesign Riccarton Road to have a traffic island with green space down the middle, unnecessary arts installations around the city including random steel sculptures set in the middle of the Avon River. Also planned is what I call an arty farty design around the perimeter of Cathedral Square which in my opinion do nothing for it.

Worryingly for some districts where the population base is quite tiny, a person can stand for council and get in simply because in their ward there might not be anyone else standing. Such a situation to me suggests two things:

  1. Local Government politics are simply not worth most peoples time
  2. Perhaps these small districts whose population base in some cases is only a few thousand should be looking at being dissolved into their neighbouring districts

In other councils such as Westland District Council, which has been rocked by scandal, rate payers will be looking forward to enacting a change of guard. The W.D.C., which in 2016 was made to admit that it had hired a company that bakes cakes to do work on a waste treatment plant in Franz Josef, that due hiring processes had not been followed. All of this which resulted in multiple high profile departures

Watch this space as we move further into 2019 and other potential candidates put their hands up to be a on a local board, council or even mayor.

 

A rethink of New Zealand income tax brackets is necessary

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When former Prime Minister Helen Clark was on the campaign trail in 1999, those on an income of more than N.Z.$60,000 were thought to be “rich”.

Under the Helen Clark Government the top tax rate was 39c in the dollar and kick in at $60,000. I always thought that this was unrealistic. The then Treasurer Dr Michael Cullen promised that it would only affect the top 5% of income earners at any given time. But when he was reminded of that towards the end of the Fifth Labour Government, he was not interested.

The other tax brackets then were quite steep as well. The next one was 33c kicking in at $38,000; 21c for income greater than $14,000 and 19.5c for income below that.

Not surprisingly in the least National and A.C.T. both spent much time and effort attacking the “tax and spend” mentality of Ms Clark’s Government. The attacks included adverts aimed at voters in the 2005 election.

Prime Minister John Key took office in 2008. Due to the Global Financial Crisis being in progress he could not immediately introduce tax cuts and promised that these would happen later. Due to the substantial earthquake events of 2010-11 and 2016 Mr Key realized that he could not very well lower taxes, given that significant expenditure as a result of both quakes was required to get the affected locations back on their feet.

It is however time to move on. In the last decade there has been enough movement across all brackets to justify a review.

And so now I find myself in one of those rare moments when I agree with economists like Shamubeel Eaqub. Mr Eaqub and other economists believe correctly that $70,000 is not high income in New Zealand any more and that the brackets need to be adjusted to reflect that. Interestingly, but also concerning given that the purpose higher tax brackets is to target higher incomes, apparently if left unchanged, by 2026 the average worker would find themselves in the highest bracket.

And therein, if for no other reason than that, is the case for a reform of the income tax brackets. I believe that the current ones are out of date. The current range of brackets is much too restrictive both in terms of the rates being charged and the range that the individual brackets cover.

So that we do not find ourselves in such a situation in the future, I recommend that the top rate be a floating one that adjusts per annum as the top 5% of income changes from one year to the next.

I am not sure what the tax working group will say about this, but those who commented on the initial report would have very probably raised concerns or commentary about the state of the tax brackets. I have an expectation that this will be one of the key areas addressed when the working group releases its final report sometime next month. Any failure to do will be seized on by National and A.C.T. at the next election – the latter long being known to support a flat tax where a single tax bracket covers all incomes, which is policy that A.C.T. has not changed since the 1990’s.

N.A.T.O. wants more New Zealand help in Iraq

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The North Atlantic Treaty Organisation has asked New Zealand for more assistance in Operation Inherent Resolve, which is its operation in Iraq. The New Zealand assistance consists of 143 military personnel who are based at Camp Taji and train Iraqi soldiers.

The answer should be a clear and unequivocal “no”.

The reasons why New Zealand should say no to a N.A.T.O. or other request for help in Iraq are numerous:

  1. The whole “War on Terrorism” is the result of an attack on the United States, that whilst totally unjustifiable by any reasonable measure, no one should be surprised was coming – you cannot go on interfering in Middle Eastern nations affairs with the primary agent of interference being ones military, and not expect some sort of violent reaction
  2. Some of the key players in the Middle East are funding terrorism themselves and yet we deal with them
  3. It has no relevance to New Zealand whatsoever – New Zealand should completely withdraw the N.Z. Defence Force from the Middle East and only support United Nations sanctioned operations
  4. We have more urgent problems closer to home with countries like Papua New Guinea being close to becoming a failed state where an intervention might become necessary

The only instances that the New Zealand Defence Force should be deployed for war in are:

  • If Australia is attacked
  • If New Zealand is attacked
  • If the United Nations requests New Zealand deploy military forces
  • An emergency threatening the national security of any one or more of our Pacific Island neighbours

The first two instances are self explanatory. An attack on Australia is an immediately dangerous attack on New Zealand because of the proximity of the two countries to each other, but also the very long, close and deep ties both countries have.

There may arise a time when New Zealand is requested to supply military forces. When this happens, the Prime Minister signs a warrant that permits the Defence Force to use lethal force. New Zealand’s last large scale deployment was to East Timor starting in 1999 following its decision to vote for independence and widespread violence by pro-Jakarta militias as a result.

This fourth scenario is the one with perhaps the most obvious shade of legal grey. An attack or hostile activities in the South Pacific, which is widely viewed as New Zealand’s “back yard”, would have little trouble overwhelming the very small military establishment’s in any one of these countries. In 2003, in an effort to stop the Solomon Islands from becoming a failed state with lawlessness and a potential haven for militants, Australia and New Zealand mounted the Regional Assistance Mission to the Solomon Islands, which wound up in 2017.

My estimate of N.A.T.O., along with its fellow Cold War alliances, is that its usefulness has expired. Its eastward expansion is something that has long antagonised Russia, which to its credit has not tried to establish a 21st Century version of the old Warsaw Pact. Whilst the geopolitical conditions of the Cold War are present in many ways, the U.S.S.R. whose containment N.A.T.O. was established to check no longer exists and many of the old Warsaw Pact countries have been admitted to N.A.T.O.