Fuck off Winston. Paul Reynolds has contributed more to this country in two years than you have in 64. He’ll probably pay more in income tax (including his bonus) than your party stole from taxpayers in 2005. By the way, when are we getting that money back?

$150k of taxpayer’s money inappropriately spent is what makes New Zealand look like a third world country, not a CEO of a major corporation getting a bonus where their business isn’t performing (if anything that makes us like the rest of the world). Also, why the fuck attack Scottish immigrants? Aren’t you half Scottish yourself? Or is it just that his accent makes him an easy target? Typical. Attacking an immigrant because he’s highly paid.

Popularity: unranked [?]

Over at Not PC, a drinking mate told him:

All we need for freedom, said my drinking companion, is to introduce the American Constitution to New Zealand, and we’d be sweet.

He then goes on to list a number of problems with the US Constitution, showing the problems with the unintended consequences of minor phrasing such as “general welfare”. But how do we go about avoiding the pitfalls the Americans now face?

The other problem is that New Zealand has no single, entrenched written constitution. Here’s a few ideas:

• Let’s start with a half elected, half appointed constitutional convention along the times of the Australian constitutional conventions.
• No member of the convention is to be an MP – let’s keep politics out of the constitution.
• Convention to report back to Parliament in three years.
• All recommendations of the convention to be put to a referendum.

What to others think? Is this a robust process?

Popularity: unranked [?]

Paula “Ben­e­fit” Ben­nett has announced that:

The number of people receiving the Unemployment Benefit has dropped by 4,224 over the last month.

Great! However, this may have to do with seasonal work:

Regionally the biggest drop in Unemployment Benefit numbers was in the East Coast (20%), Auckland (16%) and Bay of Plenty (11%).

All regions with strong seasonal variations in labour demand – particularly when it comes to forestry work, fruit and vegetable production, etc.

Good availability of seasonal work in areas like Gisborne, Bay of Plenty, Otago and Hawke’s Bay is expected to remain strong through to April.

Here’s the real challenge Paula – make the decreases last longer. And let’s make sure the people on a sickness benefit actually are sick, and not just transferring off the unemployment benefit. Otherwise keep up the good work.

Popularity: unranked [?]

The Minister of Finance has released his much-anticipated National Infrastructure Plan. Generally I’m averse to plans putting the decisions of consumers and businesses into straight-jackets on the whims of politicians, however, the plan itself appears sound: invest in key infrastructure areas such as fibre to the home, roads of “national significance”, schools, hospitals and prisons. These things that lead to long-term sustained economic growth, not random and hard to administer tax breaks and subsidies.

However, as is a usual theme for this government, it seems like one good idea – Public-Private Partnerships or PPPs, will not be utilised. As FCK has long stressed,  the government is spending beyond New Zealand’s means. This situation cannot last forever – either the economy has to grow much faster than government spending, or government spending has to be cut so economic growth can catch up. This means unless we slash welfare spending or strike oil, a big spend up on infrastructure isn’t feasible.

This is where PPPs come in. While lefties moan that PPPs represent “privatization by stealth” and ensure returns go to private investors, the reality is that they ensure infrastructure is built sooner (thus enabling economic activity to grow faster than before) and reduce the taxpayer’s exposure and expenditure. The government’s cautious approach to PPPs and its desire to spend up large on infrastructure make the task all the more harder, and expensive, for taxpayers.

Meanwhile, Tower Investments want PPPs to be made available to KiwiSaver investors. Now there’s an innovative idea – all the silly nonsense that infrastructure will end up in the hands of foreigners would be quickly forgotten, as only New Zealanders can invest in KiwiSaver. According to KiwiSaver’s own website, $930 million has been deposited in the scheme between 2009 – 2010.

Popularity: unranked [?]

I’ve been thinking a bit recently about the whole MMP referendum and our options for reform. I’m of the view that MMP has delivered greater representation of society and more consultative government. This has been at the expensive of electorate-specific accountability for MPs and the ability of Governments to enact the manifestos they’re elected on; and a lot of tail-wags-the-dog horse trading that ensures bad policy making.

Essentially what we have is a single chamber Parliament with MPs elected in FPP contests in electorate, and behind-closed-doors party lists. The most worrying aspect of MMP is the continued lack of oversight when it comes to legislation, particularly when it’s rammed through under urgency. New Zealand ought to have an upper house, along the lines of the Australian or Irish Senates, offering proper legislative oversight. We’ve already got the facilities for it (a whole chamber in Parliament set aside since the 50s).

To meet these competing requirements, I propose:

• House of Representatives with 99 MPs, elected by STV every 3 years
• Senate (upper house) with 30 members elected every 4 years
• Senators elected nationally by proportional vote and no threshold (in affect, a 3.33% threshold) from open party lists.
• Senate has the ability to reject any Bill of the House of Representatives, except Bills of Money and Supply (that is, Governments are formed and dismissed by the House of Representatives not the Senate)

I think this solution not only balances the need for representation, but also legislative oversight and stable government with the ability to implement its manifesto promises.

Thoughts?

Popularity: unranked [?]

New blog Soap Box has posted a disturbing pamphlet from the New Zealand Prostitute’s Collective, written in Chinese. I’m not a fan of prostitution and would never pay for sex; however I supported the decriminalisation of prostitution because – like cigarettes and alcohol – prohibition could never work (technically we didn’t have prohibition before the Prostitution Law Reform Act was passed – despite what its detractors said, prostitution was legal for the purchaser but not the provider under the old law). The aim of the law to reduce harm to prostitutes was certainly an honourable one.

However, it seems from the NZPC’s pamphlets that they’re actually now promoting prostitution. What is disturbing about the NZPC’s pamphlet is that it is clearly being used to justify to a number of Chinese students in New Zealand working as a prostitute. The pamphlet doesn’t appear to state that international students in New Zealand aren’t able to work as prostitutes, surely the most basic of facts (and yes, I realise that a number of Chinese in New Zealand won’t be students – but those most likely to become prostitutes are students, not recent immigrants).

Sure, NZPC points out that plenty of prostitutes are working illegally. But not to inform Chinese students of its illegality – and the possible consequences – is critical.

Popularity: unranked [?]

So, NZ Bus doesn’t want the atheists money. Fair enough, they’re a private company and able to choose who they do business with. However, one point made by a Catholic Church spokeswoman did annoy me:

…people of faith make up the majority of New Zealanders, who would have been offended by the ad.

Offended? Well then I’m offended at the Catholic Church for their covering for pedophile priests (to be fair, certain parts of the Anglican Church aren’t any better). Of course, these wowsers moaned to the wowsers at the Human Rights Commission because of the potential offense they would’ve had to have endured. Neither the Atheists or Catholics have the right to not be offended by people of other faiths. It’s called religious freedom people.

And just to show I’m being consistent, apparently the UK is about to lift a ban on gay marriage in churches. Nothing wrong with that, however on reading the Bill it actually seems that this isn’t simply about lifting the ban on gay marriage in churches, it’s about forcing churches (and other religious institutions – good luck with that in certain parts of South London) to hold gay marriages. Sure, there might be some members of the clergy who support it. But let’s not confuse the difference between simply lifting a ban, which is good for freedom, with forcing churches to marry everyone. That is bad for freedom.

Popularity: unranked [?]

Epic Win Beer Fridge.

• The NZ Herald thinks government’s being timid. Jesus, even Granny’s started to notice…
• Karori Moriori English can pick up our economic problems but doesn’t seem to want to implement the solutions to them.
• David Cunftliffe should STFU. C’mon David, you know full well that policy settings from ‘84 to ‘98 created the growth that your party squandered, before chocking the economy to near death. Or do you really think that strapping New Zealand business with red tape actually helps them somehow?
• Mainfreight managed to grow during a recession. The moral of the story? Good management often counts for more than economic factors. Which is why managers deserve greater compensation for when things go right.

Popularity: unranked [?]

…well, that used to be the Act Party’s slogan. Not anymore sadly.

After reading through the debate between The Standard, Idiot/Savant and DPF, it looks like the best possible retort – because both DPF and the lefties are arguing at cross-purposes. It doesn’t matter if you’re talking about households, families or individuals. The problem is that progressive tax systems inherently tax the wealthy more; so the wealthy always benefit the most from cuts to any of the rates of tax, whether they’re the lowest or highest rates. That’s the whole point of a progressive tax system.

So as soon as you talk about cutting income tax, those at the bottom always get the least, because they pay the least proportionally. Key’s problem – apart from breaking a promise on paying GST (sure, that’s a free hit for the left – and Key’s reaction should’ve been “yeah I broke a promise – but I’ve spent a lot of taxpayers money looking at fixing the tax system, so it was a promise I’m justified in breaking” not some dopey defence of being quoted out-of-context – but I digress) is that any attempts at reducing tax for the poor will trickle upwards. The only alternative is further tinkering with Welfare Working For Families, or some other kind of tax credit for poorer households.

It would be far smarter to simply scrap WFF and introduce a tax-free threshold for everyone who’s not actually a net contributor to the government’s revenue – in other words, a tax-cut for every worker. The top tax rate could then fall as all households benefited, albeit still with increases in GST. Of course, government spending in other areas would need to be cut (as it has to anyway).

Popularity: unranked [?]

Sir Roger Douglas has a brilliant graph on our now horrendous rates of youth unemployment:

As I’ve previously posted back in November, the reality is that abolishing youth rates has greatly hurt the employment prospects of young New Zealanders. Sir Roger has the stats for Q2 ‘09 which again verify the trend.

It’s not hard to figure out why. If you could employ someone who’s more mature, probably more experienced for $12.50 an hour versus a 15 year old with less experience and less flexible hours because of high school commitments, you’d hire the experienced person. That’s why unemployment amongst 20 – 24 year olds decreased in Q1 2009 while it continued to increase for 15 – 19 year olds.

Popularity: unranked [?]

Whale calls it Lazy Blogging. And it is. I call it Friday Link-O-Rama:

• The Guardian has an article critical of Zuma’s South Africa. Contrasting Zuma’s corrupt and incompetent ANC with the hope South Africans had 20 years ago when Mandela was released. The fact that a left-leaning newspaper could publish such an article tells you how bad things have got for the SAfers.
• Tame Iti in Paris, thanks to a recommendation by Hone Harawira it seems. Both paid for by the taxpayer, of course. Enjoy the culture of those white motherfuckers Tame!
• More theft from the Waiouru War Memorial Museum; this time it was weapons not medals. Police will not confirm rumours that the thefts were probably by the regular army in search of a decent firearm.
• Calamari anyone?

Popularity: unranked [?]

Like I said, don’t get your hopes up. DPF rates Key’s Opening Statement to Parliament with a “B”. I’d give it a “C”, although I’m tempted to give it a D (i.e. fail), because Key has simply disregarded the Tax Working Group and 2025 Taskforce’s recommendations (his reactions to Capital Markets will be out next week).

Key ought to have done something about the tax status of property. That would’ve given the government better leverage to to get income, trust and corporate tax rates down (NB: I’m not totally convinced of the need for a land tax, but think LAQCs should go). Increasing GST to cut income tax was a good move, but there is little mention of cutting spending save for better enforcement of welfare rules. To do it, Key will break a promise on not increasing GST. He should’ve broken his promises on superannuation thresholds and the age of eligibility.

Bernard Hickey is saying I should get a one-way ticket to Australia because of Key’s failure to introduce a land tax. Personally I’d rather do what my parents did in the 70s and go earn the big money in Europe to save. Or join my mates in Hong Kong or Singapore. But I digress…

Popularity: unranked [?]

The Prime Minister will make a big speech tomorrow at the opening of Parliament. Apparently it’s going to set out the government’s tax policies. Be prepared to be disappointed. That way if the package is good, you’ll be elated.But seriously, tomorrow’s speech needs to articulate a way forward – a wishy-washy yes maybe speech won’t cut it. Luckily, I suspect the way it’s been talked up in the media implies JK’s office knows it.

It won’t be Labour that ends John Key’s dream run. No, 2010 will be the year that makes or breaks John Key’s premiership. Showing some testicular fortitude now by moving the country towards significant changes in how much tax we pay, and what we pay it on, will significantly alter our future course as a country. Allan Bollard is right – we won’t catch Australia if we don’t make some bold changes.

Fixing the tax system is not a silver bullet though. The government must also address our long-term spending problem; the fact we are living beyond our means. Because today’s spending problem is tomorrow’s debt problem – and that debt will unnecessarily burden future generations. That’s why I care about these issues – because of our future generations. I don’t want them burdened by some previous government’s inability to control its own spending, as my generation was during the 90s thanks to Muldoon’s spending binge of the late 70s and early 80s. So come on John, show us you’ve got a pair and give us the step change we need.

Popularity: unranked [?]

FCINO – Fiscally Conservative In Name Only – is the campaign of Carly Fiorina, former CEO of HP running for the US Senate:

Hat tip: Whale.

Popularity: unranked [?]

The MoF has put out his pre-budget feelers while setting the date for the Key Government’s second budget at 20 May. I’m pleased to see the above statement, albeit hidden at the end of the press release, especially after seeing this disaster in a Treasury working paper:

Ugly, isn’t it? The red line is what we can afford, the blue line is the trend we’re spending on. So while Mr English might talk about jobs and growth (and don’t get me wrong, these things are important) the real underlying issue he must address is our unsustainable rates of spending.

Popularity: unranked [?]

Unemployment is a complex problem. There are multiple factors for why at any one point in time a worker might become or find themselves unemployed. Hence a basic assertion like “higher minimum wages cause unemployment” isn’t necessarily true – and, of course, vice versa. Sadly the debate over whether increasing the minimum wage will or will not increase unemployment is framed in this simple rhetoric; that those of us on the right are just nasty poor-people-haters.

Take our friends at The Standard for example. Apparently surveys of economists showing increasing numbers do not beleive there is a correleation between unemployment and higher minimum wages is objective proof that their assertion is true. But if they were really going to put their money where their mouths are, why not propose a minimum wage of, say, $47,000 p.a.? That way we could catch up with Australia overnight! No-one would lose their jobs, and we’d all be magically better off. Never mind that the inflation created would erode the gains made (although Labour appears to have forgotten this with their new monetary policy – are they going to index the minimum wage at the higher rates of inflation they’ll create?).

Sarcasm aside, if we accept the Standard’s ridiculous argument then that is the logical conclusion. Never mind that factors like economic growth, labour demand and skills shortages can often soak up the additional costs of higher wages (as the Cato Institute points out, thanks to the handy link from the Standard) – their own graph on the issue appears some (note some, it’s not absolute nor do I claim it to be) correlation between higher minimum wages and unemployment. For example, the leap in unemployment during the early 90s appears to correlate with a jump in the minimum wage during the 80s; as does the recent strong rise in unemployment. Of course, both these peaks in unemployment occur at times when the economy was in the shit anyway – which reflects businesses’  firing the lowest skilled first.

Update: okay, so the correlation is only 0.05 (where 1 = perfect correlation). My bad.

Popularity: unranked [?]

Sometimes I despair at the wowserism of this country. A poll in the Herald today of 1,608 New Zealanders find 49% of us want to ban the sale of cigarettes within 10 years. Apart from the financial and health costs, I think smoking is an awful habit. But does that mean I am justified in calling for a ban of cigarette sales outright? Of course not.

Not only will banning cigarettes deprive the government of tax revenue to help prop up our already ailing public health system, it will create a black market for tobacco (which already exists in Golden Bay), more than likely controlled by the criminal underworld. We will still have the pay the costs associated with health care for smokers while losing the ability to regulate the drug. Then there’s the wider issue about the rights of the individual. Now I don’t have a problem with smoke free workplaces, in fact I think they’re great (it makes it easy to find project managers as well – they’re always having a nervous ciggy in the smoker’s area); but there is the serious issue of individual freedom.

If someone chooses to light up – especially in their own home – what right does the government have to intervene with their choice, particularly since the risks of smoking are so well spelled out? How many precious hours of our already stretched police forces will be wasted chasing illicit tobacco sellers, staking out “rolly” houses?

Simply put, banning smoking won’t stop it. That 49% of New Zealanders think it should be banned is an embarrassment.

Popularity: unranked [?]

Nikki Kaye MP and Prince William

Ok, ok, I know it’s the second one in the last few days… but so worth it. Remember keep it clean, nothing nasty

Popularity: unranked [?]

One thing you can be sure of when it comes to Grey Power is their insistence on re-litigating old arguments – talking about the Tax Working Group they say:

…reeks of shades of former Prime Minister, Jenny Shipley, when she set the amount of national superannuation back to 60% of the Net ordinary after tax weekly wage.

FFS, that was what, eleven years ago!

Grey Power feels that the recommendation is ridiculous that those earning $70,000 per annum receive tax cuts while those below that figure receive nothing.

Erm, no. The TWG recommends reducing both the top tax rate (38% on everything over $70,000) and the middle band 33% over $48,001 rate.

Popularity: unranked [?]

Perhaps the most frustrating aspect of the Tax Working Group report isn’t the report itself, but the course it sets our economic discussions on for the next three years. Our beloved Minister of Finance will make raising GST and reducing income and corporate tax rates as if it’s a ballsy change that will have a deep impact. Certainly, it will help move the burden of Government spending off the top 10% of taxpayers, who pay 76% of all tax, a situation that inherently discourages people to earn higher incomes and increase the nation’s wealth.

FCK takes the view that while raising GST to cut income and corporate tax rates is a good move that will increase the efficiency of our tax system, it’s only a half measure, and only part of the answer. To have any real impact, Mr English must cut wasteful spending and idiotic tax-churning policies, the worst of which is Welfare Working For Families. As Roger Kerr points out:

…taxes will have to rise to reduce prospective budget deficits and levels of public debt if spending is not cut.

All of this shifting the tax burden will be for naught if we don’t reduce our spending. Ironically, the previous Labour Government actually did a reasonable job at reducing the government’s share of spending as a part of GDP from 1999 – 2005. From 2005 – 2008 they greatly increased spending at unsustainable rates. For that I blame Winston Peters, students and WFF.

Popularity: unranked [?]