Just Left

Flat tax ruled out

I'm pleased to see (Stuff) that John Key has ruled out the adoption of a flat income tax in New Zealand.

Flat taxes are a nirvana of the fringe right. They increase the income of high income earners and decrease that of low income earners compared with a progressive income tax system - in other words, they make life harder for people on struggle street and easier for people who already have it easy.

The supposed economic benefits may be there in theory, but in practice the progress of an economy is about much more than the structure of its income tax system. New Zealand's economy has been held back by being treated as a branch economy by foreign investors, by low wages that have come in part from weak unions and a de-regulated labour market, by a lack of public and private investment in science and innovation, by a lack of market penetration by our largest firms in foreign countries, and by a monetary policy regime that just doesn't deliver a reasonable real exchange rate position for export growth.

Anybody who thinks that a regressive change to the tax system will fix those problems needs their heads read. It's reassuring that the Prime Minister is not one of those people.

Jordan

Houses of ill repute

Can we PLEASE, please, please, please, PLEASE [after this post] give the housing allowance thing a rest now?!? I’m banging my head against the wall so hard here that the ensuing dent is reducing the pecuniary interest I have in my property. But that is not the biggest problem. The worst thing is this never ending tale of dross is also seriously depleting my will to mock Bill English. It’s that grave.

I mean come on, I can enjoy a good attack on Mr 21% until the cows come home. But the location of his primary residence and the money he claims for it are so far from the biggest problem this country faces right now you need a TARDIS to travel between them.

Every time it seems like we’re moving on with our lives, the inevitable new revelation that drags this crappy story out another couple of weeks emerges. We learn it’s not just National MPs that own property they then rent out to Parliamentary Services for various uses. Surprise, surprise – everyone does it.

And why not?

Imagine an MP rents an Electorate Office from a private landlord, only to be told a while later that it is going to be sold. The MP must face the prospect of moving. It is a great office. It has all the space they need and is in a location that everyone in the electorate identifies with as where the MP is. The MP purchases the property so as to stay put. Is there anything wrong with that? Can someone explain to me what the earth shattering problem is that’s so scandalous it knocks the recession back to the travel section?

Likewise, if an MP is renting a property in Wellington. A spot that they like. Walking distance to Parliament, perhaps. Or just somewhere they feel comfortable. Why can’t they buy the place and be happy in the knowledge they can stay as long as they want without it being sold from under them? It might be an investment. But if an MP can invest that money anywhere, Dipton say, and get a private tenant (unlikely, I know but bear with me) who pays the rent. That same MP then rents a house in Wellington off a private landlord with the rent covered by their allowance – What’s the difference? The taxpayer pays the same money either way. The MP has their mortgage paid just the same.

With the exception of Premier House, I really don’t care one jot where on earth Boll lives most of the time. To be honest, I think slightly more of him if he wants to spend as little time in Dipton as humanly possible. The real question is: If he was not in Parliament, would he live in Wellington? Possible, but I assume it unlikely. So the taxpayer assists him to live in the city where, as a Minister, we need him to be. He also needs to retain a place to crash near his constituents. What other job requires you to live in two places at once?

I know this is not the most popular opinion in the room – but MPs and ministers are not actually that well paid. Their salaries are not huge when you consider the hours they work and their lack of privacy. They have 24/7 jobs. When you compare their remuneration with comparable roles in the corporate world they only earn a fraction of the going rate. Part of the reason they have a whole raft of allowances and perks is because it has been politically impossible in the past to increase their salaries. So we find other ways of compensating them. It’s actually unfair to take that money back now. If it happened to one of my union members I’d be outraged.\

But all that is nothing, NOTHING compared to the massive distraction this has caused. Every single second the media spend on this is time they could be spending asking what the government is doing to tackle the recession, to tackle unemployment and to fix the problems in health and education that National promised they would fix. But it’s not just the media. I urge all political parties to stop trying to score cheap points on this and use the time to attack the government on issues that matter – there are a lot of them.

- Dolan.

I am a Social Democrat: Reflections on the NZLP Conference

I joined the Labour Party in 1997 because I am a social democrat. I believe that a more human society, one that is better for everyone, is a more equal one: more equal in incomes, more equal in wealth, more equal in power and opportunity and self-respect. Equality is the distinguishing characteristic of social democracy.

Liberalism is not social democracy, but the social democratic project of necessity includes much of the liberal project. A key component of liberalism is the abolition of social inequalities, whether these are racially based, gender based, religiously based, or on one's sexuality, or intelligence, or weight, or whatever.

We believe people are equal as moral beings, and so they deserve not to be discriminated against because of characteristics they have.

And we believe we build a more equal - and a more moral - society when we stand for social and economic equality.

Why do I start a post about the Labour Party's 93rd Annual Conference with that? It's simple, really. The public formed the view in Labour's third term that Labour didn't care about the essence of the social democratic project. The public thought that we had become a mix of social libertarian extremists on the one hand, and bossy boots know-it-alls on the other.

That perception combined with (and partly heightened by) errors of political management and a slowing economy are key components of why Labour lost the last election.

What the first Conference with Phil Goff as leader had to do was reset expectations. It had to break through that public perception and give the party space to be potentially seen as something else.  Given the way the media works and the limited attention that Labour is getting, the message could not be a subtle one.

So, we said sorry. Personally, I am sorry. I am sorry that people thought we had our eye off the ball. I am sorry that our economic agenda didn't end up being bold enough and visible enough to captivate people. I am sorry that we as a party didn't manage ourselves in a way that people thought was good enough. I am sorry that the way we did electoral law reform was not inclusive and was more concerned with a parliamentary majority than it was with building a community consensus about the need for change. I was and remain sorry about what we did with the Foreshore and Seabed stuff a few years ago.

I'm proud that Phil and the other speakers grabbed this issue by the horns.

I'm also proud that all of us stand for a liberal and social democratic party. One that does want to open up more freedom and less discrimination for people. One that wants to make society more prosperous and more caring. Labour isn't backing away from a liberal agenda, though it will no doubt never be as ready to impose things on people (which are two very different things that got conflated in "nanny state"). But Labour's focus is and will be more visibly on the traditional concerns of our party and movement.

I think that's as it should be. I hope that as we keep working on those issues, putting our focus on those that matter most to people, any lingering perceptions of us as being obsessed with other issues will fade.

Readers need to understand that our own perception of what we were doing, at least from my standpoint, was not the picture that I painted and for which we've said we apologise. We thought we were focusing on people's concerns. The liberal agenda was not the core of what I spent most time thinking about and working for. 

But as Phil and others have said - the voters are right. Our perception of what we're doing does not matter, because we are not millions of Kiwis who decide the kind of society we want. We're only a tiny subset. 

Apologies are not fun. But this one had to be made and it was right to do it. Just as we were right at Conference to celebrate the achievements of a brilliant government, with far-sighted leaders in Helen Clark and Michael Cullen who took our country to a richer, fairer and frankly better place than it would have been without our Fifth Labour Government. 

Just as we were right at Conference to focus on the future and the challenges Labour will face in shaping a fairer and more equal society next time we take office, which I hope will be in late 2011. 

It is hard to say how it feels to both acknowledge and agree with needing to say sorry, and on the other hand being pleased with the vast majority of what we did in office. But that's how I feel and I know there are many others in the Party who share that feeling.

The pledge we gave, through Phil's speech and in the conversations and the issues we had and debated at Conference, is to make sure we don't make the same mistakes again. We won't, and that's good for Labour and good for New Zealand.

Jordan

Blue Cossacks at the Door

National's 1975 election campaign infamously used the image of the Dancing Cossack to suggest a Labour plot to engineer a communist takeover through compulsory superannuation. More generally it positioned Labour as the command and control party that wanted to have everything run from a centralised politburo.

As we all know Labour lost that election (to the hands-off economic liberal Muldoon), so commie-takeover-crisis averted. However in certain sectors of community governance we are seeing a new kind of cossak emerge - the blue cossack. Across Auckland governance, the health sector, and the polytechnic sector, the Fifth National government is advancing the firm hand of the state across institutions that have previously operated within a statutory framework, but have been governed largely by their constituent communities.

This post focusses on the Polytechnic sector, which I have some knowlege of as a CTU representative on the Council of Manukau Institute of Technology (MIT). These comments represent my own views, and are not necessarily those of MIT.

The independence of Polytechnic governing Councils are facing an extraordinary attack through the Education (Polytechnics) Amendment Bill. The Bill has some useful features (including provision for a Tertiary High School at MIT and beefed up intervention powers for institutions in trouble), but through its changes to the composition of governing councils it will cut polytechnics off from the communities that they are supposed to serve and give Ministerial control of Polytechnic governance. Of great concern is that these proposed changes apply exclusively to Polytechnics and not other Tertiary Institutions, and that they run counter to the government’s stated principles for the sector.

There is a broad acceptance that New Zealand’s tertiary institutions need to have strong links with the communities they serve. In the case of Polytechnics, this is particularly important. As the main providers of vocational training and entry level tertiary qualifications, Polytechnics need to have a high level of engagement with employers, the workforce, and other groups within their constituent communities. This isn’t just about warm fuzzies, it’s about Institutions actually being linked in enough to meet the educational needs of their communities to respond to opportunities and challenges as they arise.

For these reasons the governing Councils of tertiary institutions have, to date, been given the ability to constitute themselves in a way that is reflective of their communities. At Manukau Institute of Technology for example, the governing Council contains, in addition to the statutory positions of a Business NZ Rep, a CTU Rep, and Ministerial Representatives, positions representing local secondary school principals, the City Council, staff, Maori, and the University of Auckland. MIT has chosen a Council with this composition to meet its strategic goals, and the needs of the community. For instance, we have a significant strategic relationships with Manukau City that is coming to fruition through a new City Centre campus - so having a direct governance link with the City on the Council has made a lot of sense. At other Institutions the mix is different to align with their communities and objectives.

The government’s proposed changes will remove the ability for Polytechnics to be governed by Councils that are representative of their communities and will instead give the Minister of Tertiary Education effective control of governing Councils. Council size will be reduced from between twelve and twenty, down to just eight. Four of the eight will be appointed directly by the Minister, who will also be given the power to appoint and sack Council Chairs and Deputy Chairs (these positions are currently elected directly by Councils). The other four will be the CEO, a student rep, an academic board rep, and one community rep. While most Ministerial appointments to Councils will no doubt be dutiful and capable people, these changes decisively shift the balance on governing Councils from community representatives to political appointees.

This change to the composition of Councils means that they do start to resemble corporate boards rather than the governing bodies of public educational institutions. A number of other proposed changes underscore this point. The absence of any staff representatives removes an important voice from strategic decision making, while the removal of the restriction from serving on more than one Council, and a new ability to indefinitely re-appoint Ministerial representatives suggests the establishment of a class of semi-professional government appointees who can carry out the Ministers bidding across a range of Institutions. While this possibility remains unproven, the shift in focus from community representation to Ministerial control is clear.

These specific concerns to one side, an obvious question to arise out of the proposed reforms is why just polytechnics? The government’s policy statement declares that the changes are designed to “improve the governance capability and effectiveness of Polytechnic Councils”. One has to question why the government does not want to “improve the capability and effectiveness” of other tertiary institutions such as Universities and Wananga. Could it possibly be that they fear the strong political influence of these entities and that the Polytechnics are an easier first up target?

Finally, it is appropriate to question the mandate that the government has for pursuing these changes. While the Minister claims that “The sector has told me that governance is unwieldy at the moment”, there has been no formal consultation with Councils prior to the Bill making its appearance. Nor did the government signal any intention to review governance arrangements in its pre-election manifesto. Indeed, National’s Tertiary Education policy makes the following statement: “We favour a high-trust funding environment, with tertiary education institutions that work to clear, simple rules with minimal but effective oversight from government”, while lambasting the previous government for “heavy-handed centrally driven control”.

In introducing this Bill, the Minister has strayed from the government’s own stated principles and is seeking to control Polytechnics from the Beehive in an unprecedented and dangerous way. Polytechnic Councils need to represent the communities they serve, rather than aping a corporate model that is inappropriate for public educational institutions.

Submissions on the Bill close at the end of September - if you have an interest in our tertiary education system I urge you to get writing!

Michael Wood

"Dear Generations X and Y: leave ASAP"

A great blog post by Bernard Hickey worth reading: "Dear Generations X and Y: leave ASAP". Do have a read!

He's critiquing two major things in the Budget - the lack of will to implement a capital gains tax, and the ceasing of payments into the NZ Super Fund.

What they mean in the long run is far higher taxes for people my age, to pay for the boomers. Hickey has a great sarcastic and scary list of the things that that generation has had a free ride on, paid for first by their parents, second by selling the family silver, and in the future by their kids paying high taxes.

Hickey's solution is to leave 

My solution is to urge you to join the Labour Party and to get rid of this visionless, backward looking Government whose first major policy act in this year's Budget was to start to steal New Zealand's future.

LoLNATZ

When you have friends like this...

I'm glad that when we were in government, our coalition partners didn't put out press releases like this. More confusingly, I agree with Douglas. Hattip: Red Alert.

Another Symbolic Victory

Thursday, 18 June 2009

ACT New Zealand Finance Spokesman Sir Roger Douglas today congratulated Prime Minister John Key for another symbolic victory over Finance Minister Bill English and economic rationalism, with the announcement that the Guardians of the New Zealand Superannuation fund have been directed to invest 40 percent of their fund in New Zealand.

"Madness reigns supreme - by directing the Guardians to invest more in New Zealand, the fund will have lower returns and will be less able to reduce the burden of funding superannuation in the future," Douglas said.

"This only enforces the emerging trend we have seen between Mr Key and Mr English. Mr Key announces a stupid idea - be it a cycleway or forced investment in New Zealand - Mr English realises the idea is stupid, and distances himself from it.

"The Prime Minister then becomes hell-bent on scoring another symbolic victory over the Finance Minister - who backs down and Mr Key gets his way. But these battles are only resulting in pyrrhic victories - neither the cycleway nor forced investment will make New Zealand better long term.

"The trend is towards an obsession with massaging Mr Key's political image, at the expense of New Zealand's long term prospects.

"Who will this help? It won't help future taxpayers, who will be forced to pay more in taxes for others' retirement. It won't help the Guardians with their decisions, since they now have to balance two competing goals. Everyday New Zealander's will be the losers with the only winner being the NZX," Douglas said.

$35M for private schools, $2.5M cut for physically disabled kids

I missed this exchange in Parliament yesterday but I'm pleased I spotted it on scoop today. 

Goff does a very good job at exposing the National Government's priorities.  It is these small things that remind people that while National campaigned on being moderate (Labour-lite) and focusing on the "issues that matter" they are really cutting funding to the polices that matter.

Hon Phil Goff: Why, then, did the Budget cut $2.5 million in funding for the most vulnerable people in our community, the children in the physically disabled units in schools, with a consequence that those schools and those pupils will now suffer a loss of physiotherapy, speech therapy, and occupational therapy, to the serious detriment of those pupils?

Hon Phil Goff: What does the Minister say to the parents and the teachers of those children, who tell me that those children’s safety and well-being will be damaged by the Government’s cuts; and will he front up to schools like the Mount Roskill primary, intermediate, and grammar schools and tell the families who are affected why he has picked on them in order to disadvantage their already disadvantaged children?

Hon Phil Goff: Why did the Minister deem it to be more important to provide an extra $35 million to private schools, when most of the children at private schools come from advantaged backgrounds, than to take $2.5 million off severely disabled children, who are the least advantaged in our school system and in our community?

Credit Where Credit's Due

It was heartening to hear the Prime Minister yesterday talk about the repeal of Section 59 as a success:

"There's only been the one now documented case and I'm satisfied that the law is working."

John Key could have just as easily jumped on the far-right bandwagon and claim to be taking a stand against the 'nanny state',* but instead chose to look at the facts - that there are no examples of 'good parents' being criminalised for disciplining their children. This stance is entirely consistent with the statement which Key made when the bill passed.

With both the Labour and the National Party supporting the current legislation, a return to a legal defence of child abuse is supported only by the ACT Party and a few far right fringe groups.**

The Family First-led referendum is a complete waste of money, and not only because 96% of our MPs belong to parties which oppose it, but because the question being asked is loaded and confusing, and doesn't address the legislation in question at all.

It was music to my ears to hear the referendum organiser, Larry Baldock get mauled by Sean Plunket this morning. Plunket was at his attack dog best and didn't give Baldock an inch. Interestingly, Baldock was unable to give an example of a parent being criminalised for smacking their children, until he was pushed, when he resorted to James Mason's case - Mason was convicted of punching his four-year-old son in the side of the head, but according to Baldock was either entitled to punch his four-year-old in the head or was let down by the justice system.

Vote Yes for a Law that's Working.

* National's Wellington Central candidate, Steven Franks used the 'anti-smacking bill' as an example of the 'nanny state' multiple times on the campaign trail last year, despite the entire National Party caucus voting for the third reading. Scary that the former ACT MP is only two heart-beats away from being a National list MP.

** I would tell you who those groups are (other than Family First), but the Vote No website is returning a '401 Authorization Required' at the moment. Incidentally, it's very difficult to separate Family First from the Vote No crowd - their tweets seem to go up at almost exactly the same time. The Vote Yes website is up and running though.

Website FAIL

I noted something strange on the National Party website this afternoon. Look closely, and see if you see it too. Two screen shots follow to help you. 

and then this: