Saturday, October 29, 2011

Saving Special Seats

ACT has stood for abolishing reserved seats in Parliament for a while now. I personally think it's a bit dopey for Dr Brash to make this a core election policy, when we have an economy to fix! As much as I would like to see them gone too, it's a pretty controversial topic, and a mere formality we can get rid of once the economy is fixed! The reason I bring up this topic now, is because the Waikato Māori want to see Māori seats on the Waikato Regional Council. 

"Maori are 20 per cent of the population of the Waikato region, and since the council was set up in 1989 there have been no Maori representatives elected.
The Bay of Plenty Regional Council has three Maori seats and Mr Buckley said he had received positive feedback on the system."

One or Two Laws?

I attended a debate at the University of Auckland law school a few weeks ago, where the moot was "This house supports one law for all" with David Seymour (ACT-5, Auckland Central) and two students on the affirming, and Dr Pita Sharples (Māori-1, Tāmaki Makaurau), Shane Jones (Labour-16, Tāmaki Makaurau), and a law teacher on the negating. Believe it or not, the affirming team won, since the adjudicator - retired Supreme Court Justice Sir Ted Thomas - jokingly gave Dr Sharples a negative score for going into a coalition with National. The affirming team won, largely because I noticed that the negating team, who claimed to support Māori rights, spent the whole debate describing the bleak moments of New Zealand history, and failed to recognize that we haven't properly tried a true 'one law for all' system. 

If Māori representation is low, that's probably because Māori have not stood candidates, and if 20% of the population is Māori, that can easily make the difference between a winner and loser candidate. Or, Māori themselves have been apathetic to the democratic process, and not bothered to vote. Either way, the push for special Māori seats undermines the democratic process in itself, it is trying to bypass a process everyone else has to go though. Trying to bypass democracy with a racial motive also looks bad in itself, why would the council consider this?

Then again, we do have Māori seats in parliament, a Māori advisory board on the new Auckland Council, the Bay of Plenty does it - and they said it works great. On the other hand, this bit sounded really good:
"Te Arawa River Iwi Trust co-chairman Roger Pikia hoped that introducing Maori seats would encourage Maori to vote and would enhance rather than replace consultation with tangata whenua."
Get Māori involved in the democratic process? Remove the need to consult with tangata-whenua? This sounds fantastic, it brings Māori to participate in the democratic process and removes the costly and hindering consultation with Māori that developers and planners loathe. But the cost would be the skewed democratic process and the racial segregation that it implies.

Special Seats For Everyone?

Anyway, it got me thinking - why don't we have special seats for white people! It'd be like South Africa without the bizarre accent! Or add some Malaysian influence and have separate politics for Chinese and Indian people here, apart from Melissa Lee (Nat-34, Mt Albert) and Raymond Huo (Labour-21) there aren't really many Asians represented. How about separate seats for rich people? Since they have so much sway over the economy and are good with money, only fair they get a seat at the table, right? What about reserved seats for the ACT party, the VRWC and VRWNLLC would love to see ACT get some permanent seats. 

All of this undermines the purpose of representative democracy, which is that all of these people will get seats if they win the hearts and minds of the people. Doesn't need to be said really, if Māori want representation at the table, they gotta stand a candidate and get votes like everyone else. 20% is a large group of people and could easily mean a seat or two.

Friday, October 28, 2011

What's Worse Than Auckland's Public Transport? Auckland Traffic

Where I live is entangled by motorways leading South and to the port. To add to that, I live near the intersection of two busy roads between Mt Eden and Parnell, and between Newmarket and the city, which is also one of the busiest bus routes in New Zealand. I see, hear, and often smell the constant traffic from all of these transport routes, and the worst time for all of them seems to be a Friday afternoon.


Traffic clogs up well before 5, usually at 3, and continues until 7 or 8 in the evening. Regardless of the weather, they'll be clogged and crawling. Clever people who take the bus are caught up in the chaos too, as bus services using the motorway are slowed behind all the cars. Pathetic measures like a 250 meter truck lane that bypasses two lanes on an on-ramp only to be whittled down to one lane before joining the motorway. As a planning student, of course I ask myself "who designs this shit?!" At the end of the 2011 Rugby World Cup, we were still left with a crap transport system. 

News of the Victoria Park Tunnel project nearing completion says that we have the capacity to build impressive transport infrastructure quickly, but still have the stupidity to only alleviate problems rather than fix them. Another symptom of Kiwi short-term thinking and inability to take risks. Transport in Auckland needs some decent investment; while everyone blames the lack of capital, the real issues lie in the tangle of red tape and political ignorance. Fixing Auckland is permanently in the 'too hard' basket. The National government's favoring of roads is simply short sighted. More roads might seem like a quick fix and a popular one, but so is giving out the benefit like a cashed-up Father Christmas - the real costs come later, and they'll be big and hard to undo. 

Roads - Worse Than Trains

That topic headline is an overstatement. Roads aren't all bad, and trains are far from rosy. From some observation as to how motorways work over time, traffic congestion is simply another case of a Tragedy of the Commons. Roads are a public good, and the users are private individuals and companies, who only benefit themselves when they add more vehicles to the road. The more cars that are added to the road impact everyone else driving, whether they be other private cars and trucks, or passengers in a bus. Either way, road capacity is scarce, and people treat motorways like they'll work no matter what. Not only does adding more cars to the road create more congestion, but other costs this incurs are large and numerous. Clogged roads are more dangerous, road rage and dangerous driving is more prevalent, deterioration of resources as cars still burn fuel while idle, lost productivity as people and goods do not reach their destinations soon enough, air pollution skyrockets, noise and dirt affects the surrounding houses and environment, and essential services such as ambulances are rendered useless.

Traffic is a massive problem for Auckland's social and economic wellbeing, one of the huge hindrances to the local economy is the pain in the neck moving goods around creates. While the left wants more public transport because they're attracted to anything with the word 'public' in it, or they're physically attracted to railways and railway paraphernalia. Either way, their arguments are often weak and unconvincing to the general public and the powers that be. Auckland Transport Blog has mentioned that road users should be subsidizing railway users, since road users will benefit from the fewer cars on the road. This argument makes some, but not a lot of economic sense, since roads and railways currently compete as transport options. For railways to work, they need to outcompete roads, starting with what railways can do better than roads when given the chance. Other uses and expansion can be added later, but the road system wasn't built in a day either.

Public-Private Partnership Transport

Railways and buses obviously take up far less space than cars, making them more efficient and sharply reduces traffic congestion. In my interest of devolved power, private management of public transport makes more sense, since services can compete with each other, and we do not leave all our eggs in one basket, should one service fail for any reason. The problem with Auckland's public transport fans is an avoidance of 'duplication' of services, where two lines or modes serve the same route or direction, such as trains between Britomart (Auckland Central) to Newmarket, when there is already (more than one) bus service between the two points. These modes can compete, and often where there is a fault with the railways, passengers are thankful that they could take either a Metrolink, Waka Pacific, or Howick & Eastern bus to the same destination. Private companies working in the same model can work too. Private companies have the interest of providing the best (most reliable) service to their customers to gain market share. They too have an interest in transport efficiency.

From previously living in North London and many visits to Los Angeles, Hongkong, Sinagpore, Brisbane, Vancouver, and others - public transport can work well, and it doesn't even need to have the word 'public' in it. The MTR in Hongkong is a public-private partnership where the system is managed by a private company, much of the revenue coming from the operation of train stations rather than the railways themselves. Auckland's public transport makes for a small market at present, but that's only because we have a shit public transport system. Many more Aucklanders would use public transport if it ran on time, had frequent services, the buses/trains were kept clean and tidy, and the stations were very near to where they want to get on and get off. These are all possible with the right economic environment for these demands to be met, not that I don't trust Len Brown or the Auckland council, but that private companies work like special interest groups in that they deal with these more specific demands. 

Auckland traffic is notorious all over the country, since the rest of the country sniggers at the poor planning, decision making, investment, infrastructure, and motivation that goes on. Wellington sits nice and smug on its more efficient transport system and nearly congestion-free motorways. Why Auckland sucks at these sort of things is the fault of Aucklanders. Of course I'd like to see a CBD rail link and systemwide electrification, as much as I'd like to see it all privatized when  it's done! Roads being clogged up in Auckland is a serious problem, and another attributed to a Tragedy of Commons, another that can be solved with more privatization.

Thursday, October 27, 2011

Labour Wants Old People Working

"There are three types of lies - lies, damned lies, and statistics" - Old English proverb

I'll start by saying that I don't necessarily support this, I appreciate the merits of doing so, but I also know of the human cost that may be involved, knowing of people around this age that actually can't work. But Labour wants Kiwisaver to be compulsory, and wait for it - raise the pension age to 67 from 65.

That aside, Labour is going to make really good opposition against National next term! I've already blogged on the idea that Labour needs to prove themselves now as a worthy opposition in order to get support, now they're just showing how weak they are as an opposition and how terrible that would make them as government.

When the nation is in a hole, apparently you don't sell your ladder - Phil Goff's actions have said keep digging! Not only has Labour cancelled their campaign launch to prevent Goff getting any more exposure (all news is bad news for that guy), but they've taken this bizarre approach in copying ACT and National's ideology. ACT strongly supports raising the age, National would do it even though John Key has said he wouldn't, and with the current financial picture, it seems that this could become a likely move in the next term. Nice to see Labour will defend its core constituents by letting National walk all over them. David Farrar has mentioned this will be opposed by unions, Māori, laborers, and other disadvantaged people. Lifelong Labour supporters should turn their back on Labour for turning their back on them! 

The constructive thing for Labour to do, is to show that this is part of being good economic managers, that they can be fiscally responsible. This may be a ton of shit since Farrar has also mentioned that Labour's policies since they will need an extra $9bn of borrowing to fund their expensive taste in policy.  If Labour is only going to purport the same policies as National and ACT, you might as well vote for the parties that thought of them first, plus you don't get a goofy leader and incompetent cronies.

Back to the Future union policy, plagiarism of ACT and National policy, communist asset-retention policy, anti-investment policy, anti-jobs policy. Where does it end? Like the saying goes,"If you can't beat 'em, join 'em." Any more economic conservative policies and they'll make a sizable coalition partner.

The Good People of Epsom

There's a lot of talk about the campaign for my electorate, Epsom. Both Cameron Slater (WhaleOil) and David Farrar (Kiwiblog) have covered this extensively, so I have little to add, other than a local perspective.

As I've mentioned to a certain Curwen Rolinson (leader of New Zealand First on Campus and self-proclaimed candidate for Epsom, as NZF hasn't verified this), I am already a pretty typical Epsom voter; supporting ACT and National, white and middle class, totally disinterested in NZF. The point is, like most people here, I don't want Phil Goff to be PM either.

The dirty tactics of Labour making a scandalous lie out of a donation to the ACT party from the Sensible Sentencing Trust, a Young Labour (probably Princes Street) executive adding their own illegal tactics, and a failing attempt to undermine the ACT party is starting to look like crap. Where I live, there are defaced billboards everywhere. 

Such as this one of Labour's David Parker - "Vote Banks and get both dopes" - Which reads "Authorized by David Parker, Parliament Buildings, Wellington" underneath.

And even what's-his-name from the Conservative party have showed up.

Epsom is well known as the white well-to-do seat, covering Auckland's prestigious suburbs including Parnell, Grafton, Remuera, and Newmarket. The people here are supposed to be too smart to be subject to gerrymandering and party politics. However, national did make agreements about allowing Rodney Hide to take the right wing vote and carry ACT list MPs to provide National with a coalition partner. The question of course, is that National may no longer need a coalition partner, meaning the leniency towards ACT is no longer necessary.

But do Epsom voters really get manipulated? This time it seems they see Paul Goldsmith (Nat-39 Epsom) as their man for the job, even though he doesn't want the job! Goldsmith is campaigning for party votes!

Epsom could well be the most manipulated and most played electorate from both sides, with the National-ACT deal and the ineffective lefty tactics that allow Keith Locke to run directly against Rodney Hide, or David Parker taking the whole left vote. But the people themselves aren't manipulated, they're not stupid! Credit where credit is due, and the people of Epsom are not half-wits that will do as they are told. They understand party politics and vote strategically, they have their own ideas, but the the powers that be like to take away a lot of their choice. 

The election results according to iPredict have shown New Zealand First getting 6 seats, with ACT getting 5. Good news for ACT, bad news for everyone as a whole if we get Winston First and his cronies in the House. We also have suspicions the (insert derogatory statement here) Curwen Rolinson has invested his own money in the website to manipulate stocks, seeing how cheap they were before. The stocks have returned to normal, so nothing to fear folks!

More party politics, more gerrymandering, more manipulation. With 40% or more still undecided, it will come down to the day. At least John Banks is campaigning on his own honesty and integrity, regardless of the silly games. 

Wednesday, October 19, 2011

Occupy, and the 99%

This is a topic covered by every blogger at the moment, no need to depilate opinions or steal others' ideas.

My thoughts:
  • No, banks and insurance companies should not have been bailed out. Corporate welfare is the worst kind of welfare and saving failing businesses is the most timid, anti-capitalist, waste of money and discriminating cop-out. The whole concept is wrong. Left up to me; I would enjoy watching big inefficient businesses fail while listening to 'Ha Ha You're Dead' by Green Day.
  • Protestors have no idea what power they actually have in a market. While they hate big corporations, guarantee they're all there with the latest smartphones, cameras, computers, luxury clothing, processed food, and the like. Especially the spoilt brats with iPhones, Abercrombie & Fitch, and MacBook Air notebooks. If they hate big companies so much, stop buying from them - that simple. If all 20 000 protestors didn't buy McDonald's for lunch for one day, they could have spent their collective $100 000 at various smaller, better, more honest businesses. 
  • Lefties just love to protest. I laugh every time they do as they can finally organize collectives, make placards, shout abuse, and get media attention. Any excuse will do for most of these people, as I have already covered.
  • Wall Street, Queen Street, Threadneedle Street - wherever these protestors are rallying, the people they are targeting are not going to listen. I highly doubt a stocks trader or investment banker is going to do anything about whatever the Occupy protestors want.
  • Which brings me to the other point - they need clear objectives. Without any goals, there is no option to engage in dialogue, the protest loses validity, and it just looks like a bunch of overeducated or uneducated socialists hanging out in the city center. A group of BA graduates are about as boring and useless as sheep in a paddock, and deserve to be left alone in the same way.
  • The richest 1% may be the target of their anger, but they'll achieve nothing without going to government, who has more power to redistribute that wealth. Otherwise essentially all the protestors are doing is begging outside the stock exchange, knowing there's rich people inside.
  • They all think it's capitalism that's put them where they are, when really they are poor and broke largely on their own achievement; with the flaws in government and economy they cite as failures with large companies, not the capitalist system. As a staunch capitalist, I couldn't give a poo about Google or DuPont or Bank of America falling apart; the hole they leave in the market can only be filled by better companies. Holding on to companies and favoring some over others ruins the capitalist system, and is the fault of government more than anything.
  • I do have to say, I laugh that they think government is the answer. Little do they know of Nineteen Eighty-Four, the Soviet Union, the Great Leap Forward, Juche, or Karl Marx. Government is more than likely the fault behind all the economic problems they cite, yet they want more of it. Go figure…
  • The economic right has retaliated with its own idea: Occupy A Job!

At the Occupy Auckland in Aotea Square (a large public space next to mid Queen Street, just in the city center), the hippies have set up rosters for communal responsibilities, created a drug and alcohol free zone, made a swathe of signs and banners, and allowed Penny Bright to take part. 

I took some photos on Sunday when my friend and I went to have a look...

So inspiring, so meaningful... (NOT)

Nope, he caused a shipwreck to get oil for that, remember?


Sums up most of the protest really

I've seen this one before - It's Dr Brash morphing into Mr Burns from The Simpsons, and John Key morphing into a pig

Monday, October 17, 2011

Labour: Time For Plan B

"If you can't be good, be good at it." - Old English proverb 

What on Earth is going on with Labour? Not meaning any disrespect to the party, even though they'll never get my vote; but the closer they get to the election, the worse they seem to look. Unlike ACT on Campus, Young Labour is directly controlled by the party, and testament to centralized control - they got the poor kids to do a 'Stop Asset Sales' dance in the middle of Wellington Central. Are they desperate or trying really hard to look desperate?
Every poll, every survey, and every commentator on the upcoming election says this will be a piece of wees for National, not only will they be the most represented party in Parliament, but they could potentially govern alone. With this, Labour seems to want to fight this to the end and try to win the election. While I admire their determination, this close to the election - they are fighting a losing battle, and my recommendation to Labour would be to change their campaign strategy completely. At this time, the best offense is a good defense. 

Losing the Left

Unlike National, who do well to encourage voters to vote strategically, Labour doesn't do this so well: if you can't be good, be subtle. National has backed Rodney Hide in Epsom and United Future seems to hang on to Ōhariu quite nicely. Labour has nothing to gain from not standing candidates in electorates, but it needs to change its strategy from "Vote for Goff and get a Labour government" to "Vote for Labour and get a serious opposition to National."

Not everyone supports National's policy, but clearly even less support Goff. If Labour wants votes, taking Goff out of the picture and pitching themselves as the team to oppose National's policies may work better. People can keep the smiley John Key in government, but not completely unchallenged. Labour appears incompetent as an opposition and a weak challenge to National because they keep fronting Goff for Prime Minister. Labour and Greens votes will be turned off by the idea of voting for the loser, and the current Labour government is going to lose the election, but that doesn't meant they have to lose the war. Chances are people will simply not vote if it appears their side will lose the election and drop their nuts while in opposition. 

Let's be honest, they've made a bad impression on voters while in opposition so far, with the ridiculous filibustering of the VSM bill and few credible contributions to parliament. No one will trust a party that makes poor opposition to be in government. They might lose this election, but proving themselves as worthy opposition will mean they can win the next election.

Splitting the Left

The reason why Greens are polling at an all time high - in my opinion - is because Labour appears incompetent. Not only losing the election, but having no credibility or authority in parliament just means wasted votes. With the way the results look, Labour will have 31% of the seats (iPredict) but will probably have 13% of the voice. The Greens will get 11% of the seats but will continue to have a bigger and louder voice. With the Greens appearing more credible and centrist than they used to, it almost renders Labour irrelevant. Apart from where the Greens have been caught with their pants down astroturfing and media manipulating, they appear to represent a stronger and more determined opposition to the government, even when they could go into coalition with National! With no disrespect to the man, the Phil Goff brand had never worked with the public, and Labour is going to have to remove his image from the campaign if they want to purport their policies.

The Anti-National Agenda

Rather than campaign for expensive $15/hour minimum wages, bullying National's homosexual MPs, mandatory exercise for kids, censoring media and sending money overseas;  things like 'Worried about National? Vote for us' and 'Don't like a National policy? We'll stop them' will be received better. Technically, 'stop asset sales' is one such idea, but surely they can push this better than dancing around Lambton Quay with sandwich boards. Why not 'we'll stop asset sales, let's own our future' as a slogan? It's a bit longer, but the key words added imply the actions, rather than a bizarre chant that conjures up the image of Phil Goff's face.

New policies like capital gains tax and $15/hour minimum wages are not engaging voters or switching them over to Labour. Their strategy needs to be to prove that they'll make a formidable opposition, especially in a way that switches voters back from the Greens.

Why am I writing this? I'm a libertarian free-market supporter that feels best represented by ACT!! I'm not the sort for 'I told you so's or having a whinge on people, I prefer constructive criticism. I doubt Labour will take it though, and all of this does hang on the information brought forward that says their policy alone makes them more popular than National. Clearly if their policy is more popular, than it should be that which they'll sell to voters, not a certain Phil Goff that appears weak and incompetent. As much as I support a National government over a Labour one, National shouldn't really go completely unopposed. Labour has a duty to its supporters and especially former supporters to step up to that role.

Friday, October 14, 2011

Selling the Family Silver

"You just want to sell off the family silver!!"

I am sick of that line, matched with a red and angry face as it's leaned over and yelled into my confused face. It tends to be an older crowd that does it too, the ones from a cradle-to-grave care system that have benefited from a government that provides all and owns all. At the advent of Rogernomics, the government set out on an ambitious plan to free the market right up, selling many state assets like an imported rug clearance sale. Since then, we as a people have seen dramatic improvements in accountability, efficiency, and productivity of both the public and private sector activities. At another time of economic downturn and public fiscal deficit, state asset sales are on the cards again.

Emotion Not Enough

This gets the older generation understandably upset; they are the ones who've worked hard to pay taxes to buy and maintain the assets, they are the ones who voted for governments that promised to buy them the assets, they are the ones who've been served by government-run airlines and power companies most of their lives. This we can understand, it's more than fair that many people are upset that today's government want to sell off the state assets that they have paid for and are accustomed to. To add to this, younger generations get a feeling of 'inheritance' to the assets we've built up, that it has indeed been passed down to them. The emotive tone of 'selling off the family silver' comes from that attachment and fear of change. The emotive tone behind this resentment is not enough to retain state assets.

The New Zealand economy, like many, isn't in a flash state and our public fiscal situation is horrible! Our government debt is huge, and growing by millions of dollars per week, while we spend on liabilities and unproductive sectors! The rate of borrowing and spending is both unsustainable and irresponsible, and everyone with half a brain at least know John Key is not doing nearly enough. News of our sovereign credit downgrade is just the bomb ticking faster than it was before. National is proposing though partial asset sales, not whole ones like ACT would, but just selling minority stakes in some of these assets. Pretty centrist, pretty agreeable, but not everyone's happy…

Privatization Gone Wrong

While I do think this is a good idea, I acknowledge those that say that privatization hasn't worked. Back in the good ol' days of Rogernomics, we basically did do a flog-off of state assets. While necessary, the ends didn't justify the means so well. We did it too hard, too much, too fast; and it's left everyone with bad memories of the frantic deregulation of the 80's. Much of the argument against it points out the failures of the Rogernomics privatization, however the idea is not inherently bad.

However, I do criticize the same defense of socialism, that it was just 'done wrong, but still a good idea.' The fact that privatization did work in the end shows that, well, it does work! The trick to doing it a second time round is learning from our mistakes in the 80's and taking it slow and easy, something the Key government does rather well.

Partial Sales?

Even if it is only a part, this is a good thing. It is a step in the right direction, and taking a 'steady as she does' approach would probably start like this anyway. Partial asset sales put the market forces back to work, give investors and people with real interest to advance the companies a chance to make their magic work. Besides, this could easily be the first step to entire asset sales. With half the stake of each asset already sold, it would be easy to sell off the other half. We can take a steady-as-she-goes approach and gauge the results of the asset sales, if Labour (unlikely) proves true, we can reverse it much easier than the shoddy buy-back of the railways. Releasing the stakes slowly also allows for the price to rise as the stakes themselves will be in hot demand but limited supply, ensuring we get a good market price.

The Real Investment

One of the common criticisms of asset sales is that it's a short term benefit that's easily "nibbled away, for expedients, and by parts" (partial quote by Voltaire). The money raised from asset sales is a contentious issue, and right wing governments would often use it to pay for tax cuts. The point is that it is indeed a short term benefit, but it is up to a responsible government to make the money last. Lefty governments love to raise revenue and spend with no long term benefit, so the trick is to give the money raised by asset sales back to the people, and make the money last in the long term at the same time.

While tax cuts are a great way to give the money back to the people, they are a short to medium term answer, as they can only pay for tax cuts for a certain time until the money runs out. We know that the best way to make money last or even become productive is to invest it, save it, collect interest or dividends from it. The money raised by asset sales can be put to good use by investing it in something that needs investing in, maybe new schools, hospitals, for example. The money raised from selling half of the railways (valued at approximately $800m) would pay for building a hospital more than the value of Middlemore Hospital in South Auckland (sourced from Auckland Council GIS viewer). It's only fair to give back the money people have paid into the system, the fact that they charge us for services anyway means we're not paying for the services already. Investing in education, healthcare, infrastructure, defense, the environment, and other valuable services of the government improves them and improves our quality of life overall. We might as well put money into the things the government is supposed to do and that do well, then hold on to liabilities such as the railways.

No Change of Heart

One of the frustrating parts of arguing for asset sales is trying to show that taxpayers really have no ownership of state assets. Labour wants to hold on to power companies, Air New Zealand, TVNZ, railways, and other companies that we still pay for! Why is there state ownership of Air New Zealand - a company that competes well in the international market, stands on its own two feet, but has no benefit for taxpayers. Despite being one of the lucrative (not always profitable) assets we own, the benefit for everyday Kiwis is next to nothing. When was the last time we had free or discounted flights? When was the last time the government forced an unprofitable, but locally useful, airline route to stay open? For something that we all pay money into, there's not a lot of return for everyday New Zealanders. The government's stake of Air New Zealand is over $3.4 billion, which would pay for 20 million adult one-way trips from Auckland to Napier, enough for everyone to fly four or five times each. 

The other issue is transparency. A good company would appease its shareholders by providing information on the company's progress, take input into how the company should be run, and consult with its shareholders on big decisions it wants to make. None of the state owned enterprises have ever asked me for any input, except for TVNZ with its ads asking me if anyone said 'fuck' on TV and if I was upset by it. For owning so many assets and having such large stakes in them, we have no power over what these companies are doing. We own them less than we do our schools, which invite parents to teacher conferences on how they think the child can improve their learning. I know that if TVNZ ever asked for my input, we'd have much better stuff on TV! We have no real connection to the companies and we've only had to pay to them twice. Not bad for our own assets...

While on the topic of shareholders, there's no dividends paid back to the owners. In fact KiwiRail is making terrible losses, prompting Steven Joyce (Nat-14) to unveil a $750mil plan to keep the company. He has mentioned that he wants rail freight to take over and eventually pay it's way, and partial asset sales would be a fantastic step to allow companies to buy shares and invest in the company. 

Stop Asset Sales!!!!

ACT on Campus have retaliated to the 'Stop Asset Sales' campaign the Lefty Labourites have with yellow 'More Liability Sales' signs. As for Labour's crusade against sales, there's a YouTube video on the party website ( where David Cunliffe thinks that we can use the money to pay back the colossal debt the National government has added to from the last Labour government. The problem is, the profit of $300 million per year is not going to pay it off, with a $76bn billion debt and a $300 million income, no wonder our credit rating got downgraded! They have estimated the gains to be $6-7 billion, which can wipe off a tenth of the debt in one hit, showing our commitment to financial stability and not having to wait 253 years for the capital gains tax to pay the debt back assuming no interest is added. They even estimate the cost of selling off the assets to be $300 million, surely we can find someone cheaper than that!

They did mention that the profits will likely go overseas, to foreign owners in places like Australia. Kiwibank in particular was set up by the government to oppose this, as our largest banks are owned by Australians (such as ASB owned by Commonwealth Bank). With the record that Australian banks have, it was precisely this that spared us a lot of hurt from the GFC (global financial crisis), since many of the safest banks in the world were Australian. Not to say that foreign ownership of everything is amazing, but the interest they have here is usually benign. This question was asked at an ACT meeting in Takapuna where Dr Don Brash was speaking. He cited Auckland International Airport as an example of two foreign bids for the stakes in the airport were rejected, despite the first being a 'passive' investment, where the Canadian Pension Board would have put money into the company but let New Zealanders run it having no interest in modifying it. While the second by a syndicate related to Emirates Airlines of the UAE, that wanted to turn Auckland International Airport into a major regional hub, to compete with Sydney's Kingsford Smith International Airport and the like, which would have created a lot of jobs and income for New Zealand. It's not as if the owners can pick up our power plants and move them overseas, everything will stay here.

New Zealand is troubled in that we don't have the capital to expand businesses and invest like the Hong Kongers or Americans do. While we're trying to grow our economy, there is hardly any savings or investment to try and grow. Selling to companies overseas may bring benefits such as the capital to expand and develop, employing more Kiwis, paying better incomes, and improving the goods and services for New Zealand consumers. Companies like Air New Zealand and TVNZ are capable of standing on their own two feet, encouraging mum and dad investors to get in on the shares in the company will help more New Zealanders invest and make money, as well as retain ownership, except real ownership where we can really get a say in the company. As for Labour's buzzkill campaign, their alternative is a capital gains tax. Lesser of two evils anyone? Their report supporting a capital gains tax, prepared by Dr Ganesh Nana, shows that individuals will be paying the most in that system, largely through farmers trading their own land and individuals trading property. Ouch.

The Right Argument

Where Labour have done a song and dance about 'Own Our Future,' the right-wing has retaliated with 'Own Our Furniture' (Dr Brash Twitter parody) and 'Labour - Pwn Your Future' (Whale Oil). No one on the economic right believes retention of spiraling costs, state liabilities, and competently competitive companies are the answer to our economic situation. While the Canterbury Earthquakes have contributed to the cost, National is continuing to hold on to expensive and unsustainable policies created by the last Labour government, and opposed while in opposition. Asset sales and spending cuts are our only real way of being serious about recovery, as much as we'd also like to spend money on fiscal black holes, we simply can't afford it!!

I got the idea to write this post on a bus service between Hastings and Auckland and admiring the impressive country of New Zealand. The afternoon sun beaming down on Hawkes Bay and Waikato forests, farms, mountains, lakes and bushland. The magic lakeside town of Taupō, the friendly bus driver that waits for you when you're running late, the roadside café or dairy when you're on a long journey, and all the future Burger King beef patties (cows) chilling in the paddocks. These are all examples of our real family silver, the beautiful friendly country that we've inherited from our ancestors who've worked to give us this gorgeous land. These are what we feel real ownership of, what we really benefit from, and what give us our sense of identity and belonging. They don't need government ownership, and most of the time we're not even aware if there's foreign investment or input toward them. 

None of us feel any pride or connection with Air New Zealand, the power companies or the railways. If anything, we usually feel pissed off that they charge us a limb or two for flights (Napier to Auckland is usually well over $200, hence the bus) and electricity. Sentimental values over companies and investments is immensely shallow and a nostalgia not worth keeping. The arguments, the dances, and the logic is useless. The idea is not selling the family silver, we never owned it, this is about selling back to the market what is not meant to be government property, and being serious about a more stable and prosperous economic future.

Further Reading

David Farrar (from Kiwiblog) has an article in the New Zealand Herald website
Phil Goff's role in selling state assets back in the Rogernomics heyday

Thursday, October 13, 2011

Privatize the Air!

The ACT party would like to scrap the emissions trading scheme (ETS) that was implemented by the National government. This is one of our few disagreements.

For a party that believes in a market solution for everything, the fact that an ETS is a market solution is being ignored. Libertarian thinkers such as Milton Friedman have advocated for a sort of ETS, with pollution controls being an effective market solution and an inefficient government solution. The ACT party is full of climate change skeptics, and while I don't believe in climate change 100%, what does concern me is the amount of air pollution there is. People forget that the same emissions causing global warming is also causing acid rain, environmental degradation, breathing problems for people, and dirty brown skies. 

Auckland and Wellington far from the dirty brown skies famous in New York City or the blood red sunsets of Los Angeles, and definitely nowhere near the pea-soup smog now prevalent in Beijing; but this does not mean we shouldn't uphold our 'clean green' aspiration, the unique selling point giving us a competitive edge for our exports, now highly desired by markets such as Britain and the PRC. We all got scared when a botched report said that Auckland's air quality is comparable to the heaving megalopolis of Tokyo, to which the WHO has later apologized and said we're not doing so bad after all. Len Brown's vision of making Auckland the most livable city in the world and our export economy which sells the country as clean and green; will not survive if our air pollution gets any worse.

Tragedy of the Commons

I have a lot of respect for David Syemour (ACT-5, candidate for Auckland Central) who spoke at a University of Auckland Economics Club meeting, where one of the concepts he raised was 'tragedy of the commons.' The idea that things left in public ownership always fare badly because it will inevitably lead to someone abusing it for their own gain, summed up by a Milton Friedman quote "no one treats someone else's property as well as their own." In this talk, Seymour explained that most environmental issues were the result of a 'tragedy of the commons' scenario, as they are usually seen as either government or no-one's property, and so they are left to abuse by private activities.

The solution to most 'tragedy of the commons' issues is to privatize the commons. Simple. To solve air pollution problems, it's as simple as privatizing the air, as scary as that sounds. Obviously, this does not mean paying someone to breathe, or being denied the use of air for breathing. What it does mean though, is setting up a not-for-profit organization that sells the right to pollute the air to those that can afford to do so, as they can justify polluting the air by gaining the most utility from doing so. The revenue made from this can then go to negative pollution emitters, such as forestry. This encourages replanting and forest retention, while pricing air polluters out of doing so. 

The most common argument against this is that it will hurt industry and farming. This is only true if they're slow or reluctant to adapt. Farmers can pay for air pollution and then be aid for keeping trees on their property. A few trees on a paddock than collect revenue to bring down costs, and can even become cost neutral if they can plant enough trees. Forestry as an industry can gain from this significantly, encouraging less productive farmland to be reforested to earn money. As for industry and transport, who create most of the air pollution in urban areas, switching to less emitting technologies, and only using dirtier technology where it is economically necessary. Environmentally friendly technology will become more prevalent, adding to our image and competitive edge. Public transport and more environmentally friendly transport will improve air quality and bring Auckland closer to Len Brown's vision of the world's most livable city.

Fast Followers of the Biggest Polluters

Don Brash has this idea that we should not be 'world leaders' in this sort of thing, but 'fast followers,' mentioning that our biggest trading partners are yet to implement this sort of thing. Our biggest trading partners include Australia, the PRC and the United States; all of which are ridiculed on the world stage for having terrible environmental records, this is not something we want to follow fast, especially when our reputation and quality of life depend on the opposite of this. A poll on the ALP (Australian Labour Party) Facebook page showed that 57% of Australians supported a carbon tax, meaning Julia Gillard is not unpopular because she is bringing in this policy, but because she's an outright liar. The fact Australia is bringing in a carbon tax shows that our neighbor across the ditch, who we want to follow fast, is doing exactly what we're trying to do.

The part that gets me though is obviously that Don Brash doesn't want us to be world leaders. I think this an awful gaffe, when we should be celebrating the talent, intellect, creativity, and ingenuity of this country, that prides itself on being the inventors of No 8 wire and other contraptions. World leaders are market leaders too, it's only obvious that if we lead the world in something, we have a competitive edge over the entire world. 

I'm all for privatizing things, which includes the air. I differ from much of the ACT party in that I have a more environmental focus, and I know there are many market and economical solutions to environmental issues. This is one of them. The ETS could of course be better implemented, refined, redesigned, and modified in all sorts of ways. Not going to happen if we don't rise up to the challenge and become a world leader in this field, otherwise we'll just have to wait until someone else does it.

Wednesday, October 12, 2011

Getting Railways On the Ground

As an urban planning student, I take great interest in transport systems and the like, boring as people think it is. To broaden my knowledge and get information, I often go to lectures and debates that take place at the university about transport and planning. As you would expect, it's usually full of lefties, with Jacinda Ardern and Keith Locke making appearances regularly. Auckland is a critical topic, with piss poor planning almost ruining the city for the last 80 years and a transport system on the brink of gridlock. Lefties want more public transport (I think they're just attracted by the word 'public') and especially more railways. The problem is, lefties hate business and have never mentioned any commercial use of railways - except for one MP.

Gareth Hughes (Green-7, candidate for Ōhariu) has said "Rail freight and coastal shipping are more sustainable, safe, and energy efficient modes for moving freight." ACT hasn't been too impressed with this, and the shipping part is bad timing with the oil spill, but finally there is a case for railways.

Public transport (especially for Auckland) has always been a contentious issue, ever since planning policy back in the 1950s advocated a sprawling car-dependent city, it has been difficult to implement public transport where necessary. People live too far from where they work now, too far apart, and Auckland's geography with all the hills and estuaries makes it sprawl even further. Industrial and commercial areas are actually well situated for railways though, since many industrial areas grew up around them (think the mass of railway tracks around the old slaughterhouses in Otahuhu). The problem is, railways have been neglected for goods transport, and this has happened before, during, and after the privatization of them, so it's not a case of private railways. In fact the biggest interest in railways has been shown by Fonterra and Mainfreight, so there is interest in their commercial use.

Problem is, it's extremely hard to justify railways on public transport alone, Len Brown is working extremely hard to push for the CBD rail link, and the opposition is coming from those who say it is not economically justifiable. Giving commercial use of railways does help though, the amount of goods that can be moved, the efficiency of goods being moved, and the added capacity this has to our total transport network - can provide huge benefits. Doubling the use of the tracks for commercial use is not a big deal in practice, but the economic potential is huge.

  • India: The British originally built the railway tracks to move goods around the country, so they could be exported to Britain and other markets. Now they're famous for their use as public transport.
  • Europe: What is often the model for other railway networks, France and Britain are well known for their railway pioneering and high public transport usage. From living in the UK near the trunk line between London and Birmingham, they sure as hell get used for moving goods around.
  • Auckland's Onehunga line: There are plans to get this extended to Mangere and Auckland International Airport. A railway line that started out serving the industrial areas of Penrose and Te Papapa is now looking at a new role as a major commuter line as well.

The problem with the railways in this country is that they've been neglected, allowing air, road, and sea transport to beat them in competition, furthering their neglect. Investment in railways is contentious, as it currently is state-owned and is not seen as efficient. But in the long term, they can make site rewarding investments, especially if successful businesses such as Fonterra reckon they could make good use of them. Lefties will never get railways off the ground without acknowledging that business, their arch-enemy, can use them too. 

National to ACT: Wake Up

Recently, polls form various sources have said that ACT is polling below 5% and that Paul Goldsmith (Nat-39, candidate for Epsom) could probably take the prestigious inner-East Auckland seat of Epsom, where I live.

This is strong ACT territory, the party does not get a huge number of party votes, but it does get the electorate votes for the ACT candidate. National encourages this to get a coalition partner in government. Granted, but with National polling so high it could govern alone, wouldn't it be fine if National left ACT to disappear? Whale Oil has already covered this, and he's concerned about what National is thinking for coalition partners in 2014 when their polling will be (in my opinion) inevitably lower than what it is now. My sources tell me that National leaked the poll to shock the ACT party, a warning that it could slip into oblivion if it does not get it's act together and shape up before election day. It shows National's apathy towards the ACT party, saying that they'll push for Goldsmith if Brash doesn't pull finger, leaving John Banks (ACT-4, candidate for Epsom) in second place and the party out of parliament. With a majority looking likely, it doesn't matter to them whether ACT gets in or not, and with the press the party's had it may be a good look not to go in coalition with them anyway. 

While I understand their position, this is still irresponsible, even from a National party perspective.
  1. Whale Oil brought up 2014. If ACT doesn't get in this election, then they will be dead for 2014. My guess is that National won't be polling so high by then, maybe enough to make a coalition, but not enough to govern alone. For this, they'll need an ally, so now is not a good time to kill one off. The Māori Party probably won't do it again, and the Greens would be reluctant to do it. They'll need ACT in the long run.
  2. Yes they can govern alone, but why not seal the deal? ACT almost always vote the same way, thus strengthening the majority. Every seat that ACT gets from its combined Epsom and party votes, takes seats away from National's opposition (and enemies, last time it took everything out of New Zealand First, thankfully). Not just strengthening a majority, but weakening an opposition.
  3. MMP is supposed to guarantee a variety of opinions. With every other party looking to get seats quite firmly left of National, it may only benefit National to have a legitimate center-right voice to balance them out, and prevent National from looking crazy as the only right-wing voice.
  4. Also under MMP, the small parties tend to get the blame in place of the big ones. National will be far more accountable governing alone and will cop a lot of negativity when things go wrong, having no scapegoat to take the fall. ACT has taken a lot of the bad publicity for National on the right, especially for things like the Auckland Council amalgamation, and still been in parliament since the party began. Same can't be said for Winston First…
  5. Does National really want to risk splitting the right wing vote?!
ACT does have the potential to do it, but they do have to focus. Mishaps like Don Brash (ACT-1) not telling the party controversial issues like cannabis reform are too costly now. It's not like Banks even had to agree, it's just polite to give him a heads up beforehand.  Don Brash needs to speak more on the economy, John Banks has to really campaign in Epsom. The poll could easily be skewed, plus it is hard to get a truly accurate figure while people are distracted with all the rugby. But accurate or not (even iPredict says ACT will get 4 seats), it is a wake up call to ACT, especially if they want endorsement from the National party.