Bill English

Vernon Small interviews his keyboard

Vernon Small is supposed to be clever, he is rather pink coloured and enbedded deep within Labour and so when you read articles like his one this morning you really wonder if he is so embedded in the left he has no idea what actually goes on outside his state funded cubicle in the Press Gallery.

Especially when he makes silly statements like this:

The really tricky one is how to deal with Judith Collins, a senior minister at the heart of his government who has clearly taken her friendship with Slater too far.

How can a friendship go too far? What sort of friendships does Vernon have? You know attending concerts with Labour MPs and staffers in Martinborough? (Yes Vernon you were, I was sitting two rows behind you and the Labour “friends”)

Key has opted for the lesser of two evils by keeping her on with only a mild rebuke. (‘‘Unwise’’, in the glossary of political discipline, is somewhere near the bottom of the rising crescendo that passes through inappropriate and ends up at inexcusable and unacceptable for a minister.)

The alternative was to sack her or issue a much stronger rebuke, but on that he was boxed in by the final warning he gave her for not being full and frank with him during the Oravida controversy.

Also, a tougher response would have given credence to Hager’s book, which Key has been at pains from the day it was published to avoid doing.

That begs the question what he will do with Collins if he is prime minister after September 20.

She could be offered up as a sacrifice on the altar of a deal with Winston Peters – he is no fan of National’s hard Right – with a Cabinet demotion. That was unlikely before the events of last week.

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Bill English is a pious hypocrite

Photo: RNZ / Diego Opatowski

Photo: RNZ / Diego Opatowski

Some days ago Bill English was piously claiming that he would never do anything dirty like talk to a blogger.

This came as a huge surprise as anyone that has been around the National Party for as long as I have knows all sorts of exceptionally dodgy stuff Bill English has done in the past to get his own way. The stories are endless and probably should come out.   Read more »

Trotter on politics, no surprises we are all nasty

Chris Trotter is once again the sensible and reasoned commentator of the left.

He reckons there are two kinds of politics, foul and fouler.

The sanctimony of many on the left is astonishing to watch…and Chris Trotter in his usual manner softly points this out.

Nor is the dark anti-hero of Hager’s Dirty Politics, Cameron Slater, without precedent when it comes to the New Zealand Right’s long history of doing damage to its political enemies.

As Listener journalist (and now Bill English’s press secretary) Joanne Black wrote in her review of Redmer Yska’s study of the newspaper Truth (of which, ironically, Slater was the last editor): “For nearly 40 years [James] Dunn, as Truth’s in-house censor, read almost every word of every edition before it was printed. But his influence was not only on what not to publish for fear of defamation suits. He also played a backroom editor-in-chief role and was himself the source of many stories, including those that satisfied his virulent anti- Communist beliefs, which were shared by editor Russell Gault.”

The great Prussian military theoretician, Carl von Clausewitz, famously described war as “the continuation of politics by other means.”

I would argue strongly that the reverse of that famous formulation is equally true. That politics is the continuation of war by other means.    Read more »

Economy is going fine, “says” Prefu

The Treasury today released the pre-election economic and fiscal update (Prefu), giving an update on the state of the Government’s books just a month out from the election.

Crucially, Finance Minister Bill English’s long-promised surplus for 2014/15 is said to be on track by Treasury, the Crown’s official bean counter.

The surplus is, in fiscal terms, wafer-thin at $297 million, down from $372m in the last forecast, and equivalent to just 0.2 per cent of total economic output.

But the outlook for surpluses in the following years is markedly weaker than it was in May’s Budget, delivered just three months ago.

Treasury has cut the projected surplus by $500m in each of the next three years, meaning the combined surplus between now and mid-2018 is $6 billion, some $1.5b below what it had in autumn been expected to be.

Well, need some money to give away during the election I guess.   And what is $500M compared to the billions and billions promised by the Green and Labour Parties?

 the economy in general was “growing strongly”, Treasury Secretary Gabriel Makhlouf said.

Forecast to grow at an average of 2.8 per cent over the next four years, Makhlouf said this was “above its sustainable long-term capacity to grow”, meaning inflationary pressure on the economy was building with a strong residential housing market in Auckland and Christchurch.

“It underlines, among other things, the importance of fiscal restraint in a growing economy,” Makhlouf said.

“Prudent careful management of the Crown’s finances remains a priority as the Crown looks to maintain annual surpluses and remain on track to pay down debt.”

English said the Government would seek to keep on top of its books in a bid to give certainty to households.

“There is no room for significant loosening of the purse strings,” English told reporters at a press conference in the Treasury this morning.

While National wanted to reduce taxes “when there is room to do so”, English warned that any cuts, when they came, were likely to be modest. He flatly ruled out an announcement on a possible tax-cut package ahead of the election.

English said National had maintained room to alter its spending plans, while Labour had committed all of its spending allowances for the next four Budgets.

Desperation is a stinky cologne.

Economy is the number one election issue across the spectrum.

Looks like National are going to go into the election with all the big boxes ticked.


The highlights:

- Treasury says the economy is “growing strongly” and expected to continue to do so, with recent falls in dairy prices not outside forecasts.

- This year the books are forecast to return to surplus; wafer-thin at $297 million. It nevertheless fulfils a major political promise which if missed could have hurt Finance Minister Bill English’s credibility.

- Beyond 2014/15 the surpluses will not grow at nearly the rate that Treasury had forecast, owing to a cut in the level of expected revenue from tax, especially GST.

- This means debt will be higher for longer, now peaking higher and later at $67.9b in 2017/18.

- Unemployment is forecast to drop to 4.5 per cent by 2018, down from 5.6 per cent at the end of June.


- Skillfully hacked from Hamish Rutherford at Stuff

Being Bill English

Last week Bill English opened up his gob proving why New Zealand needs a low flat tax political party.

This weeks election brain fade is in relation to farm sales to foreigners, specifically Shanghai Pengxin.  He doesn’t think they are up to much and started explaining which over years of reading Whaleoil’s blog, you will know by now that’s losing.

On Friday Mr English told a gathering in Hamilton his personal view is that corporate farming entities, whether local or overseas-owned, don’t tend to survive in the long term.

That’s because of the “low return on assets” that farming delivers – just 1-2%, not including capital gains.

“Prices peak,” he said. “When they start falling, the syndicates and the shareholders want to sell out. And if I was them I would, too, because if you don’t live it and love it, you’ll end up asset-rich and cash-poor.”

So why do he and his New Zealand farming mates buy farms?

They would be better putting their money in the bank.

That’s right, the capital gain.  Well and banks don’t loan against anything other than property these days.

Some genius from Landcorp came out with this clanger

And although he didn’t want to get into a debate with Mr English, his shareholding minister, Landcorp CEO Steve Carden said he backed the long-term prospects for corporate farming.

“We’ve been around for 27 years,” Mr Carden said, “and we’ve only ever lost money in one of those years.”

In 2013 Landcorp paid a $5 million dividend on assets of $1.69 billion. A whopping .3% on assets.

Bottom line is that New Zealand  remains a country where the banks lend $51.9 billion to not the smartest kids in the class like the engineers, scientists or tech entrepreneurs to start businesses but to those in the middle to lower end of the intellectual scale many of whom have nothing going for them other than coming from rural families.  It is a rather incestuous little club with few outsiders actually earning their way in themselves from scratch.  Currently half of the $32 billion in dairy debt is held by just 10% of farmers.  A country that encourages  lending of that money to farmers to buy farms off other farmers for a return of just 1-2% on assets.

Despite all this lending so farmers can get rich selling farms to other farmers, Agriculture still only contributes just around 5% to New Zealand’s GDP.

The Chinese do not necessarily care about the land as much as they do about securing a food supply for their people back home.  They are unlikely to be disappearing anytime soon.

It is not actually important who owns land in New Zealand when the owners of that land can only manage 1-2% returns.  Farming apparently is classed in New Zealand as a “productive industry”.

What then in New Zealand is an unproductive industry?  One that returns losses to 1%?

English has just accepted that farming is tits. Forget a 15% capital gains tax, assets that make that little sense to invest in should surely be taxed at a much higher rate if Labour’s policy goals are consistent.

Why We Need A Low Flat Tax Political Party

I don’t care about any other policy when I vote than the comparative taxation rates.  The rest of the election issues are woolly woofter nonsense to me.  The lower the tax rate the better, which is counter-intuitive for someone in my industry as the size of my wallet depends entirely on people wanting to find solutions to paying these higher taxes.   Lower tax makes us redundant.

Bill English loves tax.  He must do as in his time as Finance Minister he has not once looked like making the slightest amount of tax reform that New Zealand needs to make it more internationally competitive.

So when ACT released their company rate policy to slash company tax from 28% to 12.5% it was immediately poo-pooed by the farmer from Dipton.

“You can’t open up too big a gap between the company tax rate and the personal tax rate. You just invite people to dodge taxes by setting up structures that make them look like companies instead of people.”


So the top tax rate on individuals is 33% and the company tax rate in New Zealand now is 28%.  The trust rate is 33%.  There currently is a 5% differential between a company rate and the top individual rate.

Thing is, all his farming mates (including himself) actually can and have paid less taxes by setting up structures that make them look like companies instead of people.  You know, the married couple on a small farm who operate it themselves.  Everyone knows what they are doing when they set up a structure in this way.  It is to pay less tax.

But Bill of course doesn’t want anyone else to be able to do this.

Well I have news for him.  Everyone who can do this already is.  And the salary and wage earners in New Zealand cannot actually tell their bosses they want to be contractors and set up companies so they never will be able to take advantage of it.

ACT of course needs to now come out and say that they have taken the Finance Minister’s fabulous advice and propose that company and individual tax rates should be the same – 12.5%.  That’s what their policy at the last election was and it was a damn good one.  A growing proportion of New Zealanders are not even net taxpayers at all.  Why should the already beaten up middle classes take the brunt of excessive government spending. No matter if it is packaged in Bill English blue or David Parker red?

Phil Quin on fixing Labour

Phil Quin writes sensible stuff in the Herald yesterday.

Last week, I broke a cardinal rule and spent some time wading through left-wing blogs, as well as comment sections on more mainstream sites.

It is clear the small number of Labour, Green and Internet-Mana Party activists who populate these dusty corners of cyberspace have convinced themselves the media are systematically rallying behind John Key’s re-election and conspiring against the left.

I was unable to glean a coherent explanation as to why this might be, but my guess is that it has something to do with corporate interests and right-wing politicians uniting with a fierce determination to defend the prevailing political and socioeconomic orthodoxy that shapes New Zealand’s capitalist system and delivers its beneficiaries ever-expanding wealth, power and privilege.

This kind of reaction is neither strange nor unexpected, because Labour is losing by 30 points and performing as badly as any major New Zealand political party since Bill English’s hapless Nats of 2002.

Supporters and activists find it much easier to blame straw-men, presumably along with a mandatory 50 per cent of straw-women, than confront the painful truth that the political operation surrounding David Cunliffe is strategically misguided and tactically inept.

Proof points abound: the disastrous “manpology” to the Women’s Refuge gathering, the poorly managed Donghua Liu debacle, an ill-conceived skiing trip (which was less about its effect on public opinion than the message it sent candidates and volunteers), as well as any number of bungled policy introductions and unforced errors – from dead trees to slow trucks to resurrecting moa.

To my mind, the Cunliffe apology for being a man was by far the most damaging of these. According to a Herald poll, only 9 per cent of respondents thought the manpology was a smart move, and yet the overwhelming preponderance of leftist commentary insisted either that Cunliffe was right to say sorry for possessing external genitalia, or that the apology wasn’t a big deal.

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Matt should show this graph to David Cunliffe

David Cunliffe apparently had no idea about polls over the weekend and had he known about it he said he wouldn’t have had a holiday.

This is of course a lie, because all media go to the leaders prior to running polls for comments.

But he should really look at this chart from Danyl McLauchlan:

Updated the tracking poll. For variety’s sake this one goes all the way back to the start of 2005. It doesn’t correct for bias and the large circles intersecting the vertical lines are election results:

nzpolls20140721nobiascorr Read more »

Good moves by National on local body politics

National has announced some good initiatives around local body politics today, while Labour is splurging even more money at a sector that can and does does the citizens hard already.

The Government will “crowdsource” for new ideas on how to get rid of “dumb” local and central government regulations, Prime Minister John Key says.

He told the Local Government New Zealand conference in Nelson today that a Rules Reduction Task Force would be established in response to the latest Productivity Commission report. The task force would look at local and central government regulation.

Some rules homeowners faced were “dumb” and “needless bureaucratic hurdles”, Key said.

“Some things on the face of it don’t make much sense, like making it compulsory for a homeowner to install windows in a room that already lets in a lot of light through the ranch-slider doors,” Key told delegates.

The task force would be comprised of officials and tradespeople to “root out local regulation that could be improved”.

“We already know there are property owners up and down the country who are frustrated with the regulatory requirements they must meet, and the time and money it takes to complete transactions,” Key said.

“The decisions that councils make on regulation affect the whole country.”

Finance Minister Bill English has said that local government rules added to construction costs.

Key said the task force would develop ideas with the public.

“It is my intention that we invite ratepayers and homeowners around the country to contribute their thoughts on removing unnecessary rules and regulations via email and social media,” Key said.

“If you like, we’ll be crowdsourcing ways to reduce the rules and regulations that stop people doing sensible things with their own properties.”

“There are some things that homeowners go through because councils are required to implement regulations and rules which are completely outdated, that were written for a particular reason but which no longer work,” Key said after his speech.

“Essentially what we’re going to say to New Zealanders is ‘look, if you can see crazy rules and regulations that you have to comply with, that make no sense, email them to us’.

“We think we’ll be able to do a rewrite of a lot of those regulations, particularly for property owners.”

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Could convergence become an issue

Labour continues to be mired in the 20s, the Greens are slowly climbing towards the 20s…hoovering up the disaffected hard left of Labour as The Cunliffe continues to disappoint.

Could convergence become an issue, where the Greens supplant Labour as the largest opposition party.

Matthew Hooton discussed that in his column at the NBR:

Don’t rule out convergence.

Labour’s disastrous decision to replace David Shearer with David Cunliffe and spend nearly a year swinging to the far left has inevitably crashed its poll numbers.

The recent ploy to swing back to the centreappears to have come too late. The days are long gone when Mr Shearer had Labour polling around the mid-30s and, with the Greens in the low teens, well on track to become prime minister. In both the major polls released this week, Roy Morgan and Fairfax-Ipsos, Mr Cunliffe’s Labour was languishing under 25%.

Both polls were taken mainly after Mr Cunliffe’s apology for being a man, but also after his major education announcements. Despite Labour strategists privately claiming their internal polling responded favourably, the public polls suggest that the promises of cheap laptops and slightly smaller classes have failed to capture the imagination of middle-class parents.

Worse for Labour, while there may be good evidence the polls tend to overestimate National’s support by around 5% at the expense of smaller parties, the trend line for Labour in at least the last two elections has almost exactly predicted its actual party vote.

In 2011, Phil Goff led Labour to its worst result since 1925. If Mr Cunliffe’s tilt to the centre continues to fail, he risks taking New Zealand’s oldest political party below the 24% it won in the first two elections following the World War I.

Poll numbers also have an element of self-fulfilling prophecy. People don’t like voting for losers. As the election nears, Labour risks losing a crucial few further points to the Greens, Internet-Mana and NZ First.

Bill English currently wears the electoral dunce cap in the New Zealand parliament, having led National to its 21% debacle in 2002. The finance minister may dare to hope he might finally get to pass it on to Mr Cunliffe after September 20.

For all this, the risk of a change of government remains high.   Read more »