Monday, 31 October 2011

Leaders Debate: Round 1 to Goff

I was impressed with Phil Goff in the last night's leaders debate. Phil came across as having integrity and was reasonable as evidenced from his being able to learn from his mistakes. Phil admitted that his biggest mistake was in supporting asset sales. John Key said his was in not spinning successfully the purchase of flash BMWs. Phil said at least he learns from his mistakes. A telling point came when Espiner asked, "Is it possible to survive in politics without occasionally bending the truth?" Key responds, "Well, we live in a dynamic environment, so of course things change."

Key looked decidedly slippery over his promise not to raise GST, saying it must be seen in the context of a "dynamic environment", and he made the promise in the sense of not raising GST to bring in extra revenue (that is crap btw if you see his promise on Youtube, he was clear he wouldn't raise GST in his 1st term). After the debate, Goff said Key had introduced a new meaning to the words "dynamic environment. That means you can actually change your story, promise one thing and do the opposite, but that's because the environment is 'dynamic.' Those are weasel words."

Judging by the pro-Key media of the past year Goff was the underdog going into the debate. In reality this is the first time members of the public have really seen Key outside of his minder managed comfort zone, going face to face with his opponent. Goff exceeded expectations he got his policies out, landed some good body blows and properly attacked Key on his integrity. He showed that he can be Prime Ministerial. Key to my mind sounded arrogant and flippant.

To my mind going into the debate, Key had everything to lose, the media have given him a cake walk so far and now the rose-coloured (or should that be blue-coloured?) spectacles should start to come off.

Probably the best question of the night came from Wallace Chapman, who asked each leader,"What is the one thing you’d march for? Key says he’d march for equality of opportunity, and bangs on about being brought up by a solo mother, and tells us he’s become prime minister of New Zealand. What is interesting is that he has promoted policies which make it harder for solo parents to give their kids the same advantages that Key himself enjoyed growing up. To be honest I just couldn't see Key marching for anything.

Goff cites a number of things he has actually marched for: stopping mining of our national parks, stopping early childhood fees rising and to keep ACC fees down. He also says he supports the people marching around the world in the Occupy Movement.

I was left with one nagging question at the end of the debate though. I have no idea why TVNZ had Claire Robinson as an "expert commentator"? She sounded like some kind of pro-National zombie, who couldn't deviate from the pre-recorded script that would play when you pulled the drawstring dangling from her back.

Sunday, 30 October 2011

We're Only Selling 49 Percent - Remember the Kiwishare!

Key says we don't have to panic about his plans to flog off our state assets as he is only going to flog off 49% to his rich mates. Remember “Kiwishare” free local calling protection – put in place when Telecom was privatized.This year the govt repealed the Kiwishare with a Supplementary Order Paper to the Telecommunications (TSO, Broadband, and Other Matters) Amendment Bill. The Kiwishare also meant that Telecom our largest telecommunication company could never be completely foreign owned. Now that the Kiwishare has gone, there is nothing to stop Telecom falling entirely into foreign ownership. This shows you that 49% is no long term protection at all.

John Key - More Ostrich than Kiwi on Retirement

Labour’s policy announcement last week about gradually lifting the retirement age to 67 by 2023 has provoked some interesting comments on my travels around the electorate. Most people realise the sense of the move. As life expectancy grows the entitlement age should move with it. The demographers show us the fiscal time bomb is out there, the sooner action is taken, the smoother the introduction. Most people accept that, as people live longer (life expectancy is rising at the rate of 3 months per year) and the population ages, the retirement age needs to go up. Most of us realise that the limited resources of the welfare system need to be fairly distributed over the whole population. The pension system was never intended to support the average retiree for 25 years as it does now (that average is rising). Nor was it intended to support one pensioner for every three working age people.

It has been recognised for decades that in the long term our national superannuation scheme was going to be unsustainable. Over time the payments became meagre with many superannuitants, whose only income is national superannuation, struggling to survive. Many Kiwis thanks to low wages and no savings scheme had no nest egg available for when they retired. It was Labour under Helen Clark and Michael Cullen that took the bold moves to address this issue with the NZ Superannuation fund (the “Cullen fund”) and the introduction of KiwiSaver in 2007. Now Labour is proposing to make KiwiSaver compulsory, to raise employer contributions from 3% to 7% by 2014, and to restart funding the New Zealand Super Fund, the combined effect of which will bolster and fortify savings.

John Key during the last election campaigned on New Zealand “closing the gap with Australia”. The comparison with Australia is worth reviewing. Australian employers pay about a 9% levy on top of their wage bill to fund their employees' retirement plans. In New Zealand, it is a minimum of 2% and that 2% is only payable if the employee joins an approved scheme. The gap will continue to widen when Australia moves its rate to 12% in 2019 (New Zealand's will rise to 3% in 2013).

People are increasingly healthy and capable as they age. Every dollar spent on supporting 65 and 66 year olds who are capable of supporting themselves (and 40% of them are working) is a dollar that can’t be spent on higher priorities, like health, education, tackling climate change, and investing in the future for us all.

Despite the odd negative comment, most people recognize the need to plan for the expected increase in the population of older people in New Zealand. The cost of providing superannuation, accommodation and healthcare for older New Zealanders will balloon from 2020 as the “baby boomers” start to retire.

Retirement Commissioner Diana Crossan has been beating the drum for ages on the retirement age issue, saying it needs to be planned for now to avoid having to make harsher cuts later on. Labour has now taken two major steps to ensuring the ongoing affordability of NZ Super by broadening the tax base via a capital gains tax, and now the small increase in retirement age.
Labour’s retirement and savings policy is about building savings for the country and for every New Zealander. The goal is to ensure that all Kiwis will have a nest egg of hundreds of thousands of dollars they wouldn’t have had otherwise. If we take the initiative now, a twenty five year old putting in $10 a week will have about $400,000 when they retire. That’s a very comfortable nest egg. Simply put Labour realises that we can’t afford not to save.

One news item that concerned me recently raised the specter of having to accommodate the elderly in care two to a room – this is an appalling idea and must be avoided. Our elderly deserve the right to be treated with dignity and respect in their vulnerable years; the idea that cost cutting in this way is better than biting the bullet on issues like the retirement age is ridiculous.

Winston Peters has commented that a raise in the retirement age can be avoided if we lift our economic performance. The problem with this is that basing vitally important policy on the level of economic growth in the future can only end in tears when things turn out differently than expected (just ask the folks at Treasury about how easy it is to accurately forecast economic growth). Too many factors can affect our small, open economy, so even if we do everything right to lift our productivity and rate of growth, outside factors can overwhelm us. Policy has to be based on simple, logical steps not hopes that we’ll be able to afford the status quo if we crank the handle on the economy.

Kiwis will be assisted if they can’t work past 65 with access to a transition allowance of the same value as the pension. Most of us are pragmatic and realize we must make some sacrifices now to improve things later on.

My visits to local retirement villages and discussions with residents in the electorate have highlighted to me that we have some work to do to ensure that those who need it have access to quality care in their area. I met a woman from Dannevirke who was having to quit her job to look after her elderly father because the nearest available care facility was in Marton. It’s all too easy to romanticise the idea that family should look after their own, but the disruption to this family’s life was severe. We need to plan now to make sure enough elderly care facilities are built in our area.

It is negligent of the current Government to refuse to deal with this looming issue of retirement, aged care and savings. Mr. Key in saying he would rather resign than raise the retirement age is more ostrich than kiwi with this issue, and his lack of vision will only hurt us all downstream.

Only Labour has the bottle to plan for a long-term future that is fair and benefits us all.

Wednesday, 19 October 2011

And Now A Housing Crisis Is Looming ....

Real leadership involves more than just turning up for photo opportunities. When times are hard you can actually see true character coming out. We saw it in Mr Key’s treatment of Ohorere School and now over this past fortnight we have again seen the real character of this Government.
For the first time in 13 years we have just had a double credit rating downgrade.
This was doubly damaging for National given Mr Key’s measuring of the success of the 2009 budget by the fact that an alleged possible downgrade was apparently avoided. Evidently credit rating agencies do not think highly of Mr Key’s performance.
Then Mr Key was caught out being slippery when he claimed that Standard & Poors said a downgrade would be more likely under Labour. His defence was weak in the extreme and consisted of providing an anonymous email that did not back up what he alleged.
The Government was also caught out on the emergency video surveillance legislation with its claim that the legislation must have retrospective effect otherwise compelling evidence would be lost. This was untrue. Section 30 of the Evidence Act allows courts the discretion to admit improperly obtained evidence in any event.
And then the Rena shipwreck happened.
The Government has been hamfisted and slow in its response. Four days of good weather were wasted as the Rena slowly oozed oil so that now an environmental tragedy is inevitable. Where was Mr Key?
The day after the wreck, there was a picture of our smiling PM in the Herald, pretending to put up a campaign billboard for his Hamilton candidate.
When real pressure is applied this Government is not up to scratch.
When the Government raised the GST tax to 15 per cent, accompanied by a major tax cut for the wealthy and small change for everyone else, it was obvious that the move was grossly unfair.
The Treasury report confirms that the gap between the lower paid and the highly paid widened as expected. Further, we now have the admission that the GST didn’t pay for the tax cuts to the rich, as Mr Key claimed and, in fact, cost us more than $1.1 billion – this makes Mr Key’s competence and management suspect.
In essence, this move of the Government’s was one that New Zealand couldn’t afford. It has seriously depleted the Government’s coffers and led to cuts in services and jobs and added to Government debt. Labour warned about this at the time and we now see that these concerns were justified. The Treasury report has revealed that the tax switch has pushed up the cost of living, dramatically increased income inequality, and failed to stimulate the economy, not to mention the gaping hole it has created in Government accounts.
The Government has had to face many challenges such as the global financial crisis and the Canterbury earthquakes. But they have also made some poor policy choices that have made it even harder to cope with the crisis and the earthquake.
And the irony is that although many of their policy choices have been on the basis that we must not lose our international credit rating or the cost of borrowing on the international market would rise steeply, our rating has just been downgraded. That will send interest rates up and will dramatically increase the cost of mortgages. Add the proposed trebling of house insurance costs, and we have a looming housing crisis to add to the mix.
Labour is going into these elections with a tax policy that will help correct that basic inequality which is now crippling the country; tackling youth unemployment, reducing cost of living pressures, taxing capital gains, retaining our national assets as a vital income source – no tax on the first $5000 of income and a tax increase for those who earn more than $150,000.
Under National’s watch, the gap between the rich and poor continues to grow. Unemployment has increased and the cuts will continue.
Time and time again my encounters with the people of the Wairarapa while out doorknocking, brings home to me that many people are struggling to make ends meet. Some of the stories I have heard on the doorstep have left me appalled. Those stories come from almost every area within each of those towns, in an electorate that has been neglected by the Government.
National has a commitment to ‘‘Building a Brighter Future’’,the slogan they used three years ago!
Labour has a carefully costed plan for fixing the underlying problems that are holding us back. Forget the slogans – go for the detail. As a gentleman’s tailor would say ‘‘Never mind the width, feel the quality’’.

Published in the Wairarapa News, 19 October 2011

Friday, 7 October 2011

You Can’t Run the Economy on BMW’s

“You can’t run the economy on BMW’s alone” according to respected US investor Jeremy Grantham. “If the average person is in a pickle, how do you have a healthy economy?” he asks.
Time and time again my encounters with the people of the Wairarapa while out door-knocking brings home to me that many, many of you are struggling to make ends meet. I’m not ashamed to admit that some of the stories I have heard on the door-step have left me appalled.
Take the story of Victoria and Troy of Dannevirke. Troy has been unemployed for three years, and has applied for a massive 200 jobs, without success. This winter they couldn’t even afford to buy firewood. It wrenches at my heart to think that as a society we can turn away from these folk, and blindly follow a political leader who has about as much depth as a caravan site. I believe a Government focused on beneficiary bashing and public service cut backs in these difficult times is greedy, arrogant and out of touch.
My deep concern for folks like Victoria and Troy fuels my passion to be selected as your next Member of Parliament. I will devote myself to making the Wairarapa a better place for everyone – from hard working families, young people, to businesses and pensioners alike. I believe Labour’s policies strike a balance between caring for folks like Victoria and Troy, and putting policies in place that will help the economy to prosper.
The US investor’s comments were made in the context of looking at the soaring gap between rich and poor. The top 10% of U.S. workers currently receive about half of the nation’s total income, with half of that going to the top 1%. Grantham is shocked, noting that the last time the US had a wage gap so extreme was just before the 1930’s Depression. He says that income inequality at these levels takes a real toll on ordinary workers and society as a whole, and I totally agree. To narrow the gap and improve the lot of ordinary workers, Grantham suggests investing in education, training, and changing the US tax structure to make it fairer – ring any bells anyone??
Ideas like these are at the heart of Labour’s policy. The trouble we face under a National government is that they have put extra money in the hands of the people at the top of the heap, but they are either saving it or, as Grantham says, “buying BMW’s”, which does nothing for the economy. I firmly believe that we would all be much better off by putting more cash in the hands of those who will spend it – and this would benefit the whole economy, promoting economic growth instead of choking it off.
We are constantly reassured by National that the economy is doing well – this may be true compared to the basket case countries of Europe, but NZ’s rate of economic growth nose-dived to 0.1% in the June quarter – it’s great to have the Rugby World Cup to enjoy at the moment, but the news that the economy has choked got buried.
Fortunately the gap between the incomes of the rich and poor in New Zealand is not as extreme as the US, in no small part due to schemes Labour introduced like Working For Families. This was brought in after the gap between incomes blew out during the 1990’s.

The amount of our wealth held by the top 10% in NZ is very similar to the US, at around 50%. Grantham is appalled that in the US the top 1% hold 25% of the wealth. In NZ the Department of Statistics puts the figure held by the top 1% at 16%, not so very far behind. The NZ data available is very old though, (from a survey done in 2003/4) – heaven knows what it would be now. I can say however that the richest people in NZ increased their wealth by 20% over the past year, to $45.2 billion. That translates to an amazing 35% of NZ’s yearly GDP owned by 150 people. But we didn’t have 20% economic growth in 2010. We didn’t even have 2% growth. So where did all their extra wealth come from?

With 8 weeks to go until the election on 26 November, I am determined to put in the hard yards on the campaign trail. I am burning up the shoe leather in my determination to meet as many of you as I can. You can look me in the eye and see my resolve to work tirelessly on your behalf to make the Wairarapa a better place for everybody.