$100 billion nationalisation but where is the business media?

If the Government gets its way, around $100 billion of community owned three waters assets, will be effectively nationalised. They will be placed in the hands of the most convoluted monopoly structure I have seen, with iwi leaders substantially in the drivers’ seat.

One might have thought a transaction of this scale would have attracted the attention of our business journalists, capable of going beyond the so called co-governance aspect.

Are property rights too boring for business journalists these days to matter?

I read the serious media including the NZ Herald and Business Desk, but as yet have not seen any articles, which dealt with the relevant elements.

I have read articles by political journalists looking at it all from a political angle, and swiping anyone who might question governance arrangements as racist or dog whistling.

I may have missed it, but I have not seen anything in mainstream or business media that thoroughly dissects the case for nationalisation and whether the extraordinarily complex arrangements embodied in the proposal, will deliver the benefits claimed.

This is seriously important for everyone, so why have mainstream media not allocated a significant journalistic resource to it?

After living in a few other countries, I came back to NZ, in part because I thought it was a quality democracy, and also because it had a free media, albeit one not as sophisticated or as well resourced as that in Australia, the UK, Canada and the US.

While our Governments can swing from left to right and the media rolls with it, I never predicted our mainstream media would turn a blind eye to assaults on the quality of our democracy, including the conflict of interest issues around the Mahuta family.

There are some who think journalists have been bought off by government money. That will be true for some cases but I suspect it’s more likely they are either happy to ride along with the proposals, or are simply too scared of the critics, to engage in this important issue.

Either way it reflects very badly on our business media and leader writers. When I compare the risks take by war journalists and those who live in authoritarian countries such as Russia and Hungary, I know where courageous journalists live. It is not New Zealand.

It’s not too late guys. Just read the Bill and look at what some non mainstream media is publishing.

These are key questions to ask:

  1. Are the three waters operations across the country so uniformly bad, wholesale state control is justified?
  2. How should local authorities be compensated for their loss of property rights?
  3. If there is to be forced aggregation is four entities the right number, or should it be more like ten to allow some natural groupings to form?
  4. Why are they not based regional council boundaries and why is Gisborne lumped in with Wellington and Nelson?
  5. How can captive customers ensure the new entities are not typical flabby monopolies that gold plate their systems?
  6. Why should iwi have a dominant governance position of assets created by communities since 1840?
  7. Could the new system lead to the entities paying iwi royalties for water which originally comes from the skies?

Mode Shift DomPost

If you live in Wellington, hate cars and are happy to see them driven off the City’s so called Golden Mile (GM), which runs from the Cenotaph near Parliament right through to the Embassy Theatre in Courtenay Place, you will love the DomPost’s Mode Shift campaign.

Every issue it seems has at least one article about the joy that comes from living in a car free city. Examples are drawn from all around the world about how to live without the car. Sounds like Utopia is it not?

However there is just a few problems which include retailers who believe if their customers cannot drive and park in the City somewhere close to the GM, then the customers will go elsewhere and they will go broke.

Many restauranteurs in Courtenay Place are convinced they will be damaged by the radical proposal, which will see most side streets on the GM closed off at their ends.

You might think the DomPost would let these people publicise their views in the intersts of balance. Clearly when it comes to Mode Shift, the DomPost thinks balance is yesterday’s thinking, and not required.

Even correcting facts seems to be a struggle such as whether Wellingtonian’s “overwhelmingly” support the radical “transformation” option presented a couple of years ago, which they don’t. In a consultation process the misnamed Lets get Wellington Moving (LGWM) got fewer than 2000 responses from a total population of 217,000. Of this minuscule percentage responding a majority favoured the radical option.

All credit to the cycling enthusiasts and Greens for lodging their submissions but let’s not pretend they represent Wellingtonians. I have a special interest in the whole LGWM project, but that vast majority seem unaware of the detail far less the implications.

When the DomPost used a mediaeval city in North West Spain to prove their point about cars, I wrote a letter below. And for those who don’t know, NZ does not have any medieval cities which were all built hundreds off years before the car.

Dear Editor

Kate Green (June 18) said in her article about traffic in the Spanish city Pontevedra, that “Wellingtonians overwhelmingly backed the plan” to “transform” the Golden Mile, which would see most side streets blocked off from Lambton Quay, private cars removed and commercial vehicles access limited.

There are about 217,000 people in Wellington, so a majority of 2000 who responded, says zip about what Wellingtonians truly think of this radical proposal. 

I expect the majority of respondents were cycling advocates and Green supporters, who are fully entitled to have their say. But it’s dishonest to claim they represent the overall views of Wellingtonians, most of whom in my experience understand very little about what’s proposed. 

I know from real engagement, the business community is overwhelmingly opposed to the changes. If the writer wants to meet some I will happily organise because I have facilitated three intensive sessions with business people Andy Foster and LGWM staff.

Barrie Saunders

Tennyson Street, Te Aro, Wellington

Not yet published and I am not holding my breath it will because it doesn’t fit the editors’ narrative.

Damaging a wounded Wellington

Like most cities Wellington has been damaged by Covid and some flow on effects from more people working at home. But unlike most, Wellington is now subject to radical changes to its centre, which will likely inflict enormous damage on its so called Golden Mile (GM), which runs from the Cenotaph near Parliament to the Embassy Theatre at the end of Courtenay place – a distance of 2.6 kilometres.

Needless to say this has been subject to supportive analysis by consultants brought in from Auckland and overseas – Denmark.

In essence the radical plans will ban private cars from the entire length of the GM as well as taxis and the likes of Uber, who bring customers into the city and help make it a viable shopping, cafe and restaurant precinct. Whether trucks will be able to deliver product when they wish, courier vehicles and tradies is yet to be determined in detail but will be seriously constrained.

In addition the small streets that connect to the GM, from Stout Street to Blair Street in Courtenay Place, will be blocked at their ends so any cars entering them will have turn around at the end and leave via their entrance. Trucks longer than say 8 metres will be exempted from this absurdity for parts of the day.

Bizarre as this might seem this project was one of the outcomes of the failed bid to approve a flyover at the Basin Reserve, so vehicles could get the airport and Eastern Suburbs more efficiently through an additional tunnel.

The Wellington City Council is joined up with the Greater Wellington Regional Council and the NZTA in whats known as Let’s Get Wellington Moving (LGWM) to work on a full range of projects. So far LGWM has come up with policies to slow the traffic with lower speed limits and a new pedestrian crossing on Cobham Drive which is route one on the way to the airport.

The radical proposals for the GM include widening footpaths and cycle lanes. Buses in Lambton Quay will be confined to about half the street width they currently have and will generally not be able to pass each other. The current speed limit is 30kph and only a tiny number of cyclists ride the GM.

If this was all fixing a publicly recognised problem I would be supportive but it is not. It’s an expensive solution to a basically non existent problem, driven by ideologues and now consultants who have vested interest in it proceeding full speed, unlike Wellington’s traffic.

First, there is no real problem for vehicles on the GM and nor do the pedestrians need wider footpaths. Second, the construction phase will take months if not years doing enormous damage to business, as Aucklanders have discovered. Compensation for affected businesses will need to be considered and very soon.

There are some real problems the Council could deal with. First deep clean the streets, particularly in Courtenay Place which is dirty, fix rubbish bins with doors hanging open, plant the median strip in Courtenay Place and paint lamp posts. In addition provide sleeping facilities for the street people on the GM and better manage those unsociable people in the Te Aro area and preventing more crime.

Broadcasting merger – why and what will it mean?

TVNZ and RNZ are to be merged but absent is a credible rationale or even the end point.   All that is being left to the yet to be appointed establishment board.   

First, a bouquet to those journalists who have analysed the announcement and pointed out the information gaps.   Pretty amazing when you think this is all about communication entities.   

In summary, what we know is they will come under one company umbrella, the budget for which has yet to be announced.  And yes, it will have a charter full of worthy objectives and will be required to cater better for minorities.      

What will happen over the next year?

  • Massive lobbying by many to be on the new board, including current members of the RNZ and TVNZ boards.
  • Massive lobbying from the supporters of “public broadcasting”, some of who are dismayed at the thought the commercial TVNZ culture will permeate their beloved RNZ.
  • Massive of time spent inside parts of RNZ and TVNZ as staff lobby for key roles and speculate on what may happen.  A general loss of productivity.   
  • Current CEOs of TVNZ and RNZ, Simon Power and Paul Thompson respectively, expected to be pre-occupied with the merger and how they might head it, all at the expense of their day jobs.  
  • Other media heads, including Discovery, to engage in the process to ensure they are advantaged or at least not disadvantaged.
  • Lots of media speculation about what’s going on.
  • General public confusion.

There were two logical ways the government could have gone and it chose neither.

The first was to refine the existing model which I have argued for in an earlier post. (“TVNZ-RNZ merger another broadcasting train wreck?” February 13, 2020.)  

First, change the Broadcasting Act 1989 by adding TVNZ to RNZ, which is funded directly by NZ On Air, subject to broad parameters about programming.  In addition take TVNZ out of the contestable funding for other media.  TVNZ to continue running advertising on all channels and On Demand.    

Done well this would likely require some more funding, generously $50 million.  It would have stabilised TVNZ’s funding base and allowed it to further develop its successful TVNZ on Demand.  The great advantage would have been zero disruption and greater policy stability for all media, with a modest extra cost to the taxpayer.  

The second, and much more radical option, would be to create a zero advertising integrated video and radio entity along the lines of the ABC in Australia, for which I once worked.   That would require something in the vicinity of $350 million pa.  

By failing to address the inherent contradictions in its proposals, the government has passed the buck to the establishment board, and we won’t know until the May budget how much money it will get.  

The problem with all mergers whether they be in the private or public sectors, is that the benefits are typically overstated and the transitional disruption and costs underestimated. They should be avoided, if at all possible, which is the case with TVNZ and RNZ.    

Apart from moving to FM from AM, radio in NZ, has in the last few years been stable.   Commercial radio revenues have held up better than most media.  RNZ like other public radio has expanded its reach with podcasts.  

Commercial TV on the other hand has been assaulted on many fronts including the digital media, the online operations like Netflix and YouTube etc.   There is a traditional audience for linear TV but it is slowly dying off.  There is massive audience fragmentation and many young people do not watch TV at all.  

Some commentators, mostly of my vintage, still think about TV channels, and forget that content is King, and channels like online, are just delivery mechanisms.  The future is online but linear has a while to run yet.  This means talk of selling say TV One or Two is rather absurd.  Those channels, plus Duke and TVNZ on Demand, are an integrated operation.  Taking some out will reduce organisation coherence and the whole value proposition to advertisers.       

One key issue, is will this hybrid entity have an integrated news room.   RNZ CEO Paul Thompson sees this as likely.  The old NZBC, for which I once worked, did have an integrated news room but with not everyone working on TV.  In those days TV was commercial four days a week and non-commercial the other three, while the NZBC included commercial and non-commercial radio.  Will that come back?  

If there is to be newsroom integration, why does the Government not worry about a reduction in media plurality – the very issue that stymied the merger between the NZ Herald and Stuff, by the Commerce Commission.  Rather curious for the Government to mandate something the Commerce Commission might not approve.   

Finally, I wonder what is public service media in the 2020s.  Given the distaste the literati and other elites have for audience maximising media, can we expect the new entity will continue to meet their expectations, instead of the masses who may prefer reality TV and other popular programmes including shallow current affairs programmes, instead of news, worthy current affairs, documentaries and drama?   

Then there is the issue of minorities.  We have Maori TV, Asian TV, ethnic radio stations, and other media catering for minorities.  Will they be drawn to the new entity running specialist programmes of interest to them, or will they access it on demand?  Would it not be better for NZ On Air or Mangai Paho, to increase their fund instead of expecting the new monolith to deliver for them? 

I am all for minorities been taken care of, but should not that include economic rationalists and strong supporters of democracy, who don’t seem to get a look in on RNZ?  I find RNZ is rather mono-cultural, unlike the BBC’s Radio 4.   

The next couple of years will be interesting and challenging for RNZ and TVNZ staff but I fear the diversion of the merger will not enhance delivery to their audiences.

Disclosure:  A retired government relations consultant (Saunders Unsworth), Barrie Saunders was a journalist for seven years a very long time ago, and a director of TVNZ, 2011-2017.  

Three Waters – a totally unnecessary battle

The Three Waters proposal driven by Local Government Minister Nanaia Mahuta is a totally unnecessary, very divisive battle with local government and the people of New Zealand.  

The focus has been on whether there should be co-governance with iwi leaders, and also, whether it adequately prevents privatisation, which I see as a red herring maybe designed to divert attention from the real issues.  

The critical question is whether the failings of local government are such, that their Three Waters assets should be confiscated by the state, reformulated into four entities, and then handed back into a convoluted governance regime involving iwi and local government nominees.   

Having looked at the papers behind the proposals I do not believe they meet the necessary threshold.  Yes, there are problems, as Local Government NZ has recognised for many years, but they do not in my view justify central government overriding local government in this heavy-handed manner.  

The first real issue is water quality, which the government has dealt to by establishing the water quality agency Taumata Arowai.  It has only just started operating but will have a real role in ensuring New Zealanders have access to quality water across the whole country.   Anyone who says the Three Waters proposal is necessary to ensure quality supplies is either seriously ignorant or just telling lies.  

The Three Waters advertising last year was dishonest in that it implied the nationalisation was required to ensure quality water, when the Taumata Arowai had already been established in law.  That was a shocker for which heads should roll in the public service.    

The second real question is how to finance and manage the three waters systems throughout the country.  Clearly over the next 30 years the capex requirements will be high, maybe $180 billion, but I note many in the sector considered it to be grossly inflated.   Some local authorities may lack the expertise to manage the upgrades required, or have the ability to finance them with their current limits on borrowing.  

Short of local government imposing excessive burdens on their ratepayers or central government underwriting local authority debts, there are a range of options which can be found on the website of the now 31 local authorities opposing the governments’ plans.  Three of these councils are taking legal action.  For more information see: https://www.communities4localdemocracy.co.nz  

If after exhausting all options with local government, which it has not yet done, the Government then decided decisive action was required it would require a careful plan.  The logical course would be to collaboratively work through the issues with local government and come up with an agreed formula.  I suspect instead of just four entities there would be more like 10, with Auckland City left entirely alone.

Some of the boundaries defy the common-sense test.  Gisborne to Nelson including Wellington is Entity C, which is not rational, particularly when it’s remembered that Horizons in Manawatu is actually split with Entity B.  The logic of Entity C is to accommodate Ngai Tahu, which in the 19th century controlled the South Island outside of the Nelson area.        

At that point the Government might well decide to underwrite the new entities to reduce their borrowing costs.  The alternative, which the Government has decided on, provides the proposed entities with such a level of independence from local government, it can borrow freely.  The massive risk to ratepayers is that insulated from local government politicians the entities will be able to gold-plate their systems, and charge the 100pc captive customers.  No wonder Standard and Poors likes it!!

I see the Government may establish a regulatory agency to ensure this doesn’t happen but I remain sceptical it will be effective.   Monopolists always have good explanations for their cost structure.   I remember been told by the head of NZ Railways, when they employed 23,000, they were about as efficient as they could get.   Now KiwiRail employs fewer than 5000.  Mahuta’s claim Three Waters will create, presumably an additional 6000-9000 jobs, reinforces my scepticism.  

The co-governance concept comes from iwi leaders who rejected the Key Governments’ declaration, fresh water belongs to everyone and as representative of the people, it was the Government’s job to regulate usage, in conjunction with local government.  

Fresh water is not the same as dams, pipes and sewage processing, assets built up by local governments since 1840.   The water ownership issue should be dealt with directly by the Government and not conflated with Three Waters.  Mahuta has further deepened suspicion about Three Waters by refusing to declare iwi will not be able to demand water royalties.

The net result is, like Putin’s war on Ukraine, we have a very unnecessary battle within this country to deal with some real but not insurmountable problems.  I hope the National Party commits itself to pressing the reset button, assuming the current Government is too pig headed to do that itself.       

In the meantime, it would be nice if the missing in action media, could really drill down into the issues, rigorously analyse the problem, weigh the alternatives and provide some real clarity.   That might regain it some credibility presently lacking on Three Waters.  And while doing that remember, just because people oppose co-governance, doesn’t mean they must be racist as asserted by one writer.

We have a high-quality democracy which is in serious danger of being degraded by a radical interpretation of the Treaty partnership concept.   No one should be surprised when its defended.  I would have thought this would be of some interest to the media, or is that too much to expect?

Richard Randerson – yes there is a better way

Former Wellington Bishop and social worker Richard Randerson, was given the editorial page in The Listener, to argue that He Puapua would not lead to apartheid, as argued by some conservative people. (Listener February 26-March 4)

He is a good guy, and I agree that apartheid Kiwi style, does not follow from implementing suggestions in the He Puapua report. Apartheid was more than a separate system – it involved oppression by the minority group.

But under some He Puapua suggestions and current Government policies, there would be a massive accretion of power to iwi leaders, who may or may not represent the aspirations of Maori, and also separate Maori electoral powers. That is the key issue, not whether we have Maori schools or health services.

What we are seeing is the conflation of three key issues, and decisions are effectively been made in secret by the Government and iwi/Maori leaders, and slipped out one by one. Anyone who disagrees is called racist, and as a result few enter the debate. But some extreme views do surface in various online media.

Mainstream media has disgracefully failed to unpick the issues in a professional manner, thereby further reducing its credibility in the eyes of far more people than some extremists at Parliament. It is truly astonishing to me.

The three issues being conflated are: The Treaty, the UN declaration on the rights of Indigenous people and social justice and equity. While related they are quite separate and should not be confused.

By way of example nearly everyone knows that on average Maori and Pacific islanders have poorer economic and social statistics than the rest of the population. A bundle of reasons explain the differences with historical Treaty breaches being part of the explanation for Maori. But that does not explain Pacific Island Islanders. Nor does it explain the fact that the large group called Asian, which comprises many ethnicities, does rather well despite many arriving here with little English or any special Government assistance.

We can all agree that poor public policies over 40 years have created an appalling housing affordability situation, which requires strong, intelligent government initiatives. It is ironic that the rapid worsening occurred under this Labour Government, which declared housing a crisis in 2017, and has made several policy changes without success so far. Current Reserve Bank policy changes including increasing interest rates will likely lead to house price reductions but may not improve affordability.

The Covid vaccination rollout, which started well behind the pace and then caught up rapidly, showed the folly of thinking it would work well for all groups. Clearly many, but by no means all Maori and Pacific Islanders, required different approaches, as did some other groups as well. It’s absurd to simply see Maori, Asians, Pacific Islanders and those of European descent, as discrete groups with unique characteristics.

By granting the UN declaration and He Puapua elevated status, I believe Richard Randerson encourages New Zealand to go down a pathway that will create social divisiveness that damages us all.

There is a better way which is to accept we have an incredibly blended population which mostly shares common values. Let’s build on that. As a pro-choice person I am happy with different policies and institutions to provide services including Maori, Pacific Island or Asian schools, or health entities.

But these decisions should be made everyone having an equal say. Richard is wrong to say that under democracy the majority will always let its interests prevail over others. Particularly under MMP, power lies at the margin and Maori MPs happen at present to comprise the Government’s majority, and will always be influential, whether it’s Labour or National. Labour takes some notice of farmers even though typically not many vote for them. Ditto with National Governments and workers.

Don’t abandon democracy by stealth, as we are currently doing. The democratic model, plus a well managed market economy, has proven itself over the last 500 years to out perform all the alternatives, including tribalism, communism, theocracies and monarchies. It can always be improved.

Democracy or partnership revisited

Last year I posted “democracy or partnership” and asked what do we want.  Since then, the partnership and co-governance concepts, have gained legs with the Three Waters proposals and the twin health authorities.  In addition, at local government level in the same vein, we have seen non-elected appointees given voting rights on council committees.   

PM Ardern uses the partnership term frequently, and in a TVNZ interview with Jack Tame, National Leader Christopher also equated the Treaty with partnership. 

When starting a journey, it is useful to know where it will end, otherwise one can end up in an uncomfortable zone, where retreat is difficult.  Somehow, I suspect few political leaders, other than the Maori Party and ACT, have really thought through the partnership concept, and we are heading for a rough time, unless there is a course correction.

Since writing last year’s post I have read the famous 1987 Lands case where the Court of Appeal, then headed by Sir Robin Cooke, opined the Treaty created an enduring relationship between the Crown and iwi that was “akin to a partnership”.  This followed legislative changes prior to 1987, to move from the Treaty texts, to the “principles” of the Treaty.  The principles were not defined in statute, but given to the Waitangi Tribunal to define.     

What does the Treaty partnership mean?

When writing last year, I assumed the term meant the two parties – Crown and iwi – were equals and should be governing the country together.  In other words, that the Crown itself was a partnership.  However, after reading the Court decision and further reflection, I believe what the Court had in mind was something much less expansive, that did not radically undermine democracy, and would be less divisive than what we have today. 

I don’t believe it decreed, or even had the view that the Crown-iwi itself, was a partnership, as two lawyers might form.  I think what the Court meant was the Crown had an on-going obligation to iwi, to honour the Treaty as best it could, having regard for current realities.  One such reality is that Maori do not live under tribal leaders, and all are tribally and ethnically mixed, including with “ngati-pakeha”.  

I am comfortable with this interpretation, which is liberal but not radical.   I recognise some Maori leaders and others prefer the expanded version, which is clearly not consistent with a credible democracy.

Legal definition of Maori – some practical issues

As most know the legal definition of a “Maori”, is any descendant of a Maori, which means over time the proportion of Maori in the community with a whakapapa connection will increase, without necessarily a concomitant connection to Maori community or culture.   I accept the legal definition, even though for some, it fails the common-sense test.  To me those with predominantly non-Maori ancestors are New Zealanders or kiwis, just as I am not English or European, even though my ancestors back several generations, came from the Northern Hemisphere.  Another way of putting it is that over time Maori and Pakeha have become different ends of the same biological and cultural spectrum.     

Treaty principles

The texts of the Treaty are precise, but because of translation issues, are not entirely consistent with each other, and so we now have the “Treaty principles” courtesy of the Waitangi Tribunal. However, the problem is they are infinitely elastic . In the eyes of many they provide the scope to relate all sorts of public policies to the “principles”. This road is a guaranteed formula for endless inward looking, often unpleasant and very unproductive debates. A country pre-occupied with looking at itself, is not heading to a good place.  There are many world-wide experiences we can draw from, showing the dangers of separatist policies.     

The good news is that within our democratic system there is ample scope to tailor services for Maori, other ethnicities and social groups.   The vaccine roll-out showed the limitations of one system working for all.  The same goes for education and social services etc.  Pacific Islanders are outside the Treaty coverage but they too sometimes require tailored services.  Curiously the large Asian grouping, with several ethnicities, seems to adapt well to mainstream policies.  

Of course, in 1840 when the Treaty was signed, few if any could have thought about state provision of education, health and social welfare services, to say nothing of the allocation of spectrum frequencies, which is why these matters should be treated on a social equity basis and not some tenuous link back to the Treaty.          

We have monumental challenges with school attendance levels and slipping education standards, housing affordability, obesity, productivity, and now inflation.  This Government is over reaching itself on several fronts.  It needs to take a breather and deal in a practical manner with the real problems it can solve, instead of creating new ones around an expanded version of the Treaty.  It would be a real tragedy if Labours’ major legacy was a diminution of our quality democracy.  

All political leaders should set out clearly how they see the partnership concepts fits with democracy.  The same goes for the media, which has been astonishingly silent on the single most important issue facing the country.  ACT and the Maori Party are clear, but for the rest their collective silence is deafening.     

Luxon and the media

My good friend journalist Karl du Fresne, took the media to task last week for its aggressive attacks on Christopher Luxon regarding his Christian faith, the abortion issue and his property ownership. (karldufresne.blogspot.com)

You might have thought that media would have wanted to know more about Luxon’s views on how to deal with Covid, poverty and the related housing crisis, crime, education standards and current levels of school attendance, to say nothing of how to create a cohesive caucus, given the recent fractious history of the National Party and leadership changes.

I doubt Luxon was optimistic this would be the case and he didn’t get it. The sad reality is many in the Parliamentary Press Gallery are left-wing and not committed to balanced journalism. Not surprising really. The Wellington Central electorate got more Green Party votes in the last election than any other electorate. We know also from political research that younger women are disproportionally supportive of the The Green Party. That’s no crime but tells you a lot about TVNZ and TV3s lead political reporters who are all female and young and live somewhere in Wellington.

Interestingly the NZ Herald’s Claire Trevett (Press Gallery) and Herald columnist Fran O’Sullivan, took a much more balanced approach as did Pattrick Smellie’s “Business Desk”. There are other very good journalists in New Zealand including Hamish Rutherford at the Herald and Luke Malpass at Stuff.

Stuff (December 4) had a sensible editorial on Luxon which implicitly criticised RNZ’s Morning Report interviewer Susie Ferguson, for her “unusually tactless line of inquiry” on the subject of “faith”. However it ended saying saying Luxon’s response to a Newshub interview re abortion was not “smart politics….”There is a way of expressing a pro-life position, as English has done, without falling into Newshub’s trap”. So I take it from that comment, Luxon and other politicians must expect to be entrapped and thus should be slippery in their answers. Somehow I don’t think this is what voters want.

To me it looked like the rabid attacks on Luxon were driven by a desire to see him stumble, as did Todd Muller last year. These same journalists have given the Government a fairly soft ride on many issues, including been less than frank about requiring those who contracted Covid to home detention, instead of quarantining in hotels, as mandated by the state for most overseas arrivals.

Another area where the media has generally been pathetic is “Three Waters”. There are very good reasons for the state to encourage aggregation of Three Waters operations around the country, because many, not all existing ones, have failed to deliver adequately. (See kiwiblog)

However whether the state should effectively take them over against the wishes of local government, and then have 50% of the boards to iwi, is a completely different matter. I expect media to dissect the issues in a balanced manner including, why four and why does one include Gisborne, Wellington and across the water, Nelson? But no – Andrea Vance of Stuff did a recent long article which pretty much said anyone who opposed iwi having 50% control is racist. The paper then refused an op ed offered by the Taxpayers Union (of which I was chair) and also a paid advertisement by the Taxpayers Union, with similar content.

I respect their right to reject any advertisement but even now in this Woke age, was surprised they rejected publishing an advertisement which took a somewhat different line from them. Maybe it was because their text included a par drawing attention to how much money Stuff, and other media gets from the Government.

Clearly Luxon will have to assemble a team that can deal with the media realities. Listening to Kathryn Ryan’s interview with Luxon this week gave me an idea. Kathryn is very well informed and works hard at getting her views across, particularly with guests that have different approaches.

She wanted Luxon to respond to her assessments of the Key government’s achievements whereas he wanted to talk about where we are at present the future. One tactic he might consider is saying to Kathryn, “I know you have much to say so why don’t I sit back for ten minutes so you can, and I will come back when you have a question about policy for the future.”

Today politicians are media trained to get their message across and avoid answering questions directly. They need to go further. There is no reason why any needs to accept an invitation to be interviewed or accept the framing of that discussion. The scope of interviews should be negotiated carefully at the outset.

In the case of Luxon they will also have to build up their capacity to communicate directly to the population because expecting a fair go out of many political journalists is simply unrealistic.

While I despise Trump I had to admire the way he cut through much media by going direct to the public with his Twitter tweets. Thankfully New Zealanders are not so polarised a leader like Luxon has to go this way, but there are lessons to be learned.

Declaration: I am an old white, male who is an atheist and pro choice, and long time resident of Wellington.

Draft NZ History Curriculum submission

Dear Ministry 


By way of background I studied “NZ History” at Victoria University of Wellington in the 1960s and have read other historians since including; James Belich, Michael King, Claudia Orange and specialised books by Ron Crosby and Vincent O’Malley.

History is about facts and context.   If we think about the last 1000 years, much history is about war, slavery, domination of the masses by elites, food production and survival.  

In the last six hundred years events were influenced by technology and industrial development.  This allowed European countries to become colonisers of South America, Africa, Asia, Australia and New Zealand, and no doubt also contributed to their sense of cultural superiority.    

History is also contestable as the Ministry is finding with the reaction to the draft.   
Having failed to teach NZ history properly in the last 50 years, it is important that the curriculum presents the most relevant facts and context, in order that our children can reach a balanced and informed view.   It appears however those involved in drafting the curriculum, have decided to skip that stage and go straight to themes.  This is a terrible mistake.

Key elements of a draft curriculum should include:

1.  The polynesian migration to NZ about year 1200.   
2.  How the Maori lived and interacted with each other up to the arrival of Captain Cook in 1769.
3.  How Maori and British people lived and interacted with each other up until 1840.  This would have to include the Musket wars which were resulted in tens of thousands of Maori deaths and was a factor in the signing of the Treaty.  
4.  The arrival of mainly British people (also some Chinese) in the period up to 1900, and the pressure from them to acquire land, by one means or the other, including the land wars and unjustified confiscations.  
5.  The development of infrastructure (roads, ports and rail) and pastoral farming.   
6.  The improvements in life expectancy of all citizens up until 1900.     
7.  Constitutional developments and how NZ moved away from colonial status until it adopted the Statute of Westminister, and became a high quality democracy.
8.  From the 1960s how Maori became more assertive and demanded and honouring of the Treaty.   Explain the Treaty process.    

 
If our children had a good grasp of the big picture, they would be better equipped to understand any post colonial themes developed by academics or others.   

A fairer tax system

Amended September 22, 2021

We have a serious and growing problem of wealth inequality and too many families lack the ability to adequately provide for their daily needs.  

This is all exacerbated by insanely high house prices, the growth of single parent families, drug consumption and obesity.  It’s bad for race relations, undermines social cohesion and will ultimately result in more crime and social costs, much of which will be borne by taxpayers.        

Tax is neither “love” nor “theft”.  Governments require a proportion of GDP to protect its citizens, provide essential services, create a prosperous society and help ensure all have the opportunity to succeed.  Some incomes are way overtaxed and there are also gaps in the tax system.

It’s a sad reality of life that new taxes are extraordinarily hard to introduce politically.  Successive governments have relied on bracket creep to increasing the state’s share of national wealth, in order it can look like Father Christmas, either with more spending or so-called tax reductions.  We need to have a mature discussion about tax policy, sans the histrionics that typically accompany any suggested changes or new taxes.    

Unlike many on the right, I don’t believe the most important issue is whether the central and local government spend 25% or 35% of GDP.  The real issue is the quality of spending.  Unfortunately, many of those in charge of spending the taxpayers’ money are rarely driven by the need for frugality and cost effectiveness.  I exclude most ministers of finance over the past 30 years or so who have generally done their best to be prudent, fending off big spending colleagues.  

There is a vast array of interest groups who argue for more spending and claim that most Government departments and agencies are underfunded.   Departments themselves rarely if ever say they are over funded and offer money back to the Crown.  The NZ Taxpayers Union is one of very few organisations that actually wants to trim Government expenditure.     

Tax policy can help, but not solve by itself, some major problems such as absurdly high house prices, income inadequacy and wealth inequality.  In the case of house prices, even if the land was free, houses still cost too much to build.  I suspect the Accommodation Supplement actually supports rental rises in the private sector.  (See my post about housing, which is mostly a supply issue) 

The complex “Working for Families”, effectively allows employers to pay less than would otherwise be the case.  Worse, it creates effective high marginal tax rates for hundreds of thousands of people.  It cannot be abolished in one step but its negative effects could be reduced.  

The median income in NZ is around $55,000.  No one on that income should be paying 30% of their marginal income in tax, as they currently do.  Nor should anyone earning a modest $70,000, face a marginal tax rate of 33%.   Income from labour is way over taxed, capital gains are undertaxed and asset transfer from parents to children, or other recipients, are not taxed at all.  

Taxing term deposits now earning around 1%, when inflation is about the same, is simply not fair and partially drives the push into rental housing, by those with savings.             

The last real reform of the tax system came from Roger Douglas’s 1984-7 budgets which slashed the top rate from 66% to 33%, introduced GST at 10% and eliminated a collection of wholesale taxes.  Since then the system has become very complex and thus difficult to change without disadvantaging someone.  

Labour’s decision to re-introduce a top rate of 39% on income over $180,000 is lazy thinking, but politically understandable.  Certainly not transformative.  National’s proposal to index tax brackets was a good, if belated, attempt at fairness.  While defeated they should hold onto that concept.          

Transfers between generations and gifting, are windfall gains for recipients and should be taxed.  Why exempt them while taxing people earning the median wage at 30% with higher effective marginal tax rates for those who receive Working for Families Assistance?  

Capital gains should be taxed in a way that is simple to administer, fair and consistent with rapid economic growth.  Not easy.  

I propose major changes to each category 

Income tax:

There be three tax brackets: 0%, 22% and 33%. The tax brackets should be indexed to median incomes.  

Income levels

$0-27,500 0%

$27,500-110,000                    22%

$110,000 and above               33%

This would create a massive $8 billion plus reduction in Government tax revenue which would have to be offset by other taxes and expenditure reduction.

Capital gains

Currently, contrary to popular belief, not everyone can avoid being taxed on their capital gains.  Property developers and share traders (as deemed by IRD) pay income tax on their profits, while those holding some offshore shares pay a deemed rate of return of 5% on their shares.  Second home owners can pay income tax on properties sold within 10 years.  

All taxes, particularly capital gains, have technical and political problems.   Taxes on unrealised gains often create cash flow problems, if little or no income is produced, while waiting until the assets are sold can distort investment decision making.  

The Michael Cullen report went over the top by ignoring inflation and created too many compliance costs to be viable operationally and politically.  Rather than bring all assets under one tax regime I propose it be tailored for each asset class.    

This area requires real tax expertise.  The Government should seek advice from the experts about the best way of bringing more capital gains into the income tax net, in way that is consistent with an economic growth strategy.   

Inheritance or asset transfer taxes

All transfers of cash and other assets, other than between life partners, would be subject to tax at the flat rate of 22%.  This would apply to all transfers per annum of $5000 or more.  

It would be paid by the donor, whether living or not.

Taxes for “bad goods”

At present we tax alcohol and tobacco at high rates on the basis they discourage consumption of goods because they are bad for health.  There is a case for extending these taxes, but no change should be made without the most rigorous analysis of the facts including the record of them in other countries.

Environmental taxes:   

Any extension of these taxes (including carbon taxes) should again be subject to the most rigorous analysis.

Expenditure reductions

NZ Super:  The age qualification should be increased from the current 65, to 70, starting in 2022, reaching 70 in 2032.  The increase from 60 to 65 happened without too much fuss.  Now Winston Peters has gone its time leading politicians got real.  People under the age of 70 who cannot work at their normal jobs for physical reasons, could access a benefit along with other beneficiaries.  

Kiwisaver subsidies:  End all KiwiSaver subsidies and make it compulsory at the 3 plus 3% level.  

Corporate welfare:  End any subsidies that could be deemed corporate welfare.  Potential to save at least $1B.    

Conclusion

The proposals would improve the lot of those of average and below income and or wealth, at the expense of the rest.  While the wealthier sections of the population would initially be worse off, they also benefit from living in a less fractured society.  

Declaration:  These are my personal views which have been informed by real life experience including: Press Secretary to the Labour Party leader Bill Rowling, PR Manager NZ Manufacturers Federation, consultant to the NZBR, 25 years as a Government Relations consultant and as chair of the NZTU, which ended earlier this year.      

Democracy or Partnership – what do we want?

Updated April 24, 2021

The departure of Donald Trump from the White House was a victory for the US democratic system, which only just succeeded.   If then Vice President Mike Pence had wavered under enormous pressure from President Trump and his cult-like supporters, Joe Biden might not be in the White House and there would have been serious civil disorder.  The Republicans haven’t given up, they are now trying to make voting more difficult in several states.  Democracy is a model under threat from many quarters, and losing around the world.

It is easy to forget how recently democracy has become mainstream.  In Britain women over the age of 21 only got the vote in 1928 and in the US, universal suffrage only became accessible to all Afro-Americans in the last 55 years, because, prior to the 1960s voting reforms, there was serious voter suppression in parts of the country.  Some former East European countries like Hungary have retreated from the democratic model and others like Greece and Italy have struggled to deal with major economic challenges. 

At present New Zealand has a quality democracy.   We have fairly-drawn electorates, an easy voting system, and a reasonable level of political literacy.  Money struggles to buy Government policy, which is all as it should be.  

However, we have no reason to be smug, because this democracy is under threat. Governments since 1987 and the Courts have been entrenching a modern view that the Treaty of Waitangi means there is an ongoing “partnership between the Government and Iwi”.  Some Maori leaders want a form of co-governance between Parliament, elected by all New Zealanders, with one which has to negotiate policy with iwi leaders.  

The partnership concept has been advanced in small steps, without the Government first holding an honest conversation with all New Zealanders.  Apart from concerns about the costs in the early stages of the treaty settlement process, New Zealanders have basically remained silent while governments negotiated settlements and wrote the subsequent legislation.  

I have voted in general elections for decades, and for referenda on liquor laws, the parliamentary term, MMP, marijuana and end of life choice, but never on whether we should have a partnership model of government with anyone else.    

For the record, while I prefer they don’t exist, separate Maori seats or even Maori wards, do not undermine our democracy, provided each is based on the same electoral numbers as general electorates and wards.  Nor do I think a requirement for central and local Government to have regard for the views of Maori, destroys democratic integrity, provided the consultation process is genuine, and also that it doesn’t necessarily mean agreement must be reached.  

These provisions help create social cohesion that is critical to successful democracies.  However, we could soon reach a point when the word “democracy” will not accurately describe our form of government.         

For anyone who thinks I may be exaggerating the threat to our democratic model, I strongly recommend they read the 2010 iwi-sponsored 129 page “The report of Matike Mai Aotearoa – the independent working group on constitutional transformation”.  It is all laid out with a plan to achieve the transformation by 2040.  The recommendations are not about making the Treaty fit within the current constitutional arrangements; rather it creates a whole new form of Government based around a minority view of what the Treaty means.

The recently released Government commissioned “He Puapua”, report of the working group on a plan to realise the UN declaration on the rights of indigenous peoples of Aotearoa/New Zealand, takes the iwi report a step further. It’s not clear exactly where this report sits with Government thinking, but looks like an indication of a pathway to radical change. 

New Zealanders need to wake up and get real about the Treaty, and the history of this country since Maori arrived around 1200 AD.  The three article Treaty was a well-intentioned effort on the part of the non-democratic British Government, to deal with what it saw as a very untidy situation in New Zealand, where 100,000 odd tribally divided Maori lived alongside a couple of thousand British settlers, some of whom were seriously disorderly.  

A key part of the backdrop to the Treaty were the inter-tribal musket wars in the decades up to 1840.  In his comprehensive book (“The New Zealand Musket Wars”) historian lawyer Ron Crosby, has written about the devastating impact on Maori in respect of the tens of thousands killed, enslaved or cannibalised.  Prior to the arrival of Europeans Maori tribes fought regularly but lives lost were modest compared to the Musket Wars for obvious reasons.  

Captain Hobson was asked to negotiate a Treaty which ceded sovereignty to the British Crown, protected Maori property rights and treated them all as British subjects.  At the time there were around 500 tribes, no secure property rights, no border controls and no central government, notwithstanding the 1835 tribal confederation declaration that New Zealand was a country.  

In the English version, Article 1 unambiguously had the Maori ceding sovereignty to the Crown.  Unfortunately, this was imperfectly translated into the Maori version, which most of the 500 Maori chiefs signed.   A few did sign the English version and some did not sign it at all.  The Treaty itself was written a few days before Hobson met with the Chiefs and the Maori version was translated by Henry Williams over a couple of days.  Inadequate effort was made to ensure both versions said precisely the same thing.   (See Claudia Orange “The Treaty of Waitangi”)

This must have been one of the most sloppily negotiated Treaties between any two countries (in our case Tribes) of the Nineteenth Century.  That it is seriously regarded today is a testament to the patience and long game played by Maori leaders, who have used the Courts and lobbied with great skill to claw back what they now see as lost ground.  It also attests to the reasonableness of the Crown in recent decades, to at least partially remedy the errors of the past.     

Regardless of the flaws in the Treaty process and subsequent events, New Zealand has slowly morphed into a fully independent democratic country, where everyone, including Maori, has a reasonable chance of a quality life.  Government legitimacy today derives from the quality of our current democratic institutions, not from what happened in 1840.      

It is a remarkable contrast with Australia where the aboriginals had been for roughly 60,000 years, yet were deemed to own no land – Terra Nullius it was declared to be.  The Maori had been in New Zealand for just 600 years prior to the arrival of the Europeans and were by the Treaty considered to own all the land, notwithstanding the reality there was only about 100,000, over a space now occupied by five million people.

Over the past few centuries, the democratic model combined with a well-regulated market economy, has proven to be far superior to: unconstitutional monarchies, theocracies, military dictatorships, anarchy and tribalism.  It has delivered freedom, higher living standards and increased life expectancy, for people of all races, even though within countries there are commonly divergences between ethnicities.  We should maintain and improve our institutions to meet the varying requirements of our largely successful multicultural society.      

Since 1840 we have seen the breakdown of the old tribal management and lifestyle, which has been replaced by Maori living in a similar way to the rest of the population.  At the same time, they have intermarried to considerable extent, and some like my successful middle-class second cousins, are as pale as myself.  Regardless of blood, all descendants of Maori are legally deemed to be Maori, regardless of skin colour.     

Iwi, newly enriched through the treaty settlement process, are now akin to large managed funds, with some statutory powers, not available to others.   That power can be used to commercial advantage.  It will inevitably lead to opaque public policy decisions which will undermine confidence in the integrity of Government.   

The media and others too frequently stigmatize Maori as impoverished and on the fringes of society.  That was some truth in that 100 years ago, but not today.   Most poor people are not Maori and not all Maori are poor, even though proportionally they are less well off than those of European descent, and have worse statistics in crime etc.  Like thousands of renting Kiwis, they face major hurdles becoming home owners and the same challenges providing for their families.  We have major equity issues with the bottom quartile, which requires urgent solutions.     

There are ways of meeting the different needs of Maori and other cultures within one democratic governmental system.  As a strong supporter of the market economy, I recognise that “one size does not fit all”.  There will be ways in say education and health services and possibly even prisons, that different systems can be developed for those Maori who want them.  It has to be handled in a practical manner – separate heart or cancer units in hospitals would for instance be absurd, because we barely have critical mass at present.  

All Kiwis should accept there is still some negative flow on from the previous colonial era.  None of these challenges should be beyond the wit of governments.  However, they should stop naively entrenching iwi powers in statutes, because that will end badly one way or the other, and New Zealand will lose its credibility as a quality democracy, with the same rights for all.  

Its democracy or partnership – we cannot have both.

Authorities: Keith Sinclair “A History of New Zealand”, Michael King, “Penguin History of New Zealand”; Claudia Orange, “The Treaty of Waitangi”; Vincent O’Malley; The New Zealand Wars”; Ron Crosby; “The Musket Wars” – see also Ron’s “The Forgotten Wars”; Elizabeth Rata, “Marching through the Institutions: “The Neoliberal Elite and the Treaty of Waitangi”; Brian Easton’s, “Not in Narrow Seas: The Economic History of Aotearoa New Zealand”; The report of iwi sponsored “Matike Mai Aotearoa – The Independent Working Group on Constitutional Transformation”. 

You can follow my posts at www.barriesaunders.wordpress.com