National and Labour wrong about debt limits


When I was growing up I was taught – as was everybody else I know – that if you borrow money, you repay it. A rule that I abide by as best as I can to this day.

Spend within ones limits, unless you borrow money that you acknowledge is not yours and has to be repaid, was another rule that I was taught. For me, borrowing is something I would personally only do in an emergency and only if I could repay in full as soon as the problem has passed.

I will admit now, I did one economics paper at University only because it was suggested that I do one. To this day I do not know why because I knew when I enrolled in it I was not going to pass. I knew I was not interested in it in the least. I was correct on both accounts. I failed, made a conscious decision not to retake it and never looked back. So one might argue that I therefore know nothing about economics and am probably not the best person to judge the apparent bipartisanship in Parliament when it comes to raising debt limits. It might also be argued that running a country’s finances is a lot more complex than a private bank account.

As a student at the University of Canterbury I would sit in the main cafeteria watching the student debt clock that the University of Canterbury Students Association installed before I started, going up by tens of thousands of dollars an hour, hundreds of thousands of dollars a day and millions each week. I did challenge them on occasion as to the accuracy of the clock and was told rather patronizingly that it was. I asked myself and others whose fault it was that student debt was out of control and how it was going to be recovered. We could not completely agree – some thought it was entirely the Government for removing or undermining social assistance such as the postgraduate allowance, and the emergency unemployment benefit. Others thought it was the tertiary institutions, while still more thought it was students spending up large. Whatever the case it currently sits at $15 billion.

Politicians no longer seem interested in addressing how this debt will be repaid. The most recent figures point to 731,000 people having a debt averaging $21,000 to be repaid. Maybe it is a beast that they have put in the “too hard” basket. But that unwillingness to tackle this makes me wonder why I should trust them with handling the debt that would ensue.

I believe in saving borrowing for a rainy day period or for after a natural disaster where you will have unforeseen expenditures that will not be immediately obvious. After the Christchurch earthquakes, suddenly finding N.Z.$35 billion was not something New Zealand could do in a rush so in that instance we had no choice but to borrow. But how are we paying it back? ARE we paying it back? I hope so, because the more we pay back now, the better position we will be in financially for when the next disaster – be it an Alpine Fault earthquake, the Waimakariri River breaks out or one of the volcanoes in the North Island erupts – hits.

National and Labour’s bipartisanship on letting New Zealand’s government debt level increase is therefore something that I find alarming. It also brings me back to my favourite mantra of “growing the pie, instead of slicing and dicing the pie”, which I have described in recent articles.

If we do decide to increase our debt levels, which National’s Finance spokesperson Dr Paul Goldsmith is quite open to doing, we need to know what instruments we are going to use to raise the money. Raising taxes appears to be a no-no on both sides of the house for a change, with possibly only the Green Party interested in doing so. My own position on taxation can be found in other articles.

 

Time to act on political donations


News of an apparent $150,000 donation to the National Party from a Chinese citizen has revived calls for electoral finance law to be amended, ahead of the 2020 General Election.

Whilst there is nothing to say that under current law the donation was an illegal act, it reminds me of the time National Member of Parliament Todd McClay handled a donation from a non-New Zealand business operating here. More recently, former National Member of Parliament Jami-Lee Ross levelled accusations at his former boss Simon Bridges about donations made by businessman Zhang Yikun.

Like Dr Nick Smith, who said in January that donations should be restricted to New Zealanders, I believe that the law should be amended to bar all donations from anyone who is not a New Zealand permanent resident or citizen. Other countries including the United States forbid non-____________ (nationality) from making donations to political parties. Politicians who receive such donations should report to the amount, name of donor and date the donation was offered to the Speaker of the House.

I have no problems with donations of any size being made by New Zealanders to political parties, though perhaps lowering the limit above which they must be formally recorded to something like N.Z.$500 would encourage greater transparency. As a former Electorate Committee Chair and Treasurer I understood that a certain amount of paper work and other administrative activity was inevitably involved, but it is because of this formal record keeping that New Zealand has one of the more transparent political systems in the world. Whilst a New Zealand First member between 2010-2017 I made a regular donation to my Ilam Electorate bank account to enable the electorate to meet its annual fee.

As a warning to anyone considering the act of bribing, or accepting a bribe, Section 102 of the Crimes Act 1961 stipulates that the bribing of a Minister of the Crown is an offence with a jail sentence of not more than 7 year. A Minister accepting such a bribe is liable to a jail sentence of not more than 14 years. Section 103 of the same Act stipulates that a member of Parliament accepting such a bribe is liable to a jail sentence of not more than 7 years, as is anyone who facilitates such an offence.

Going through the Justice Committee in Parliament seems like an apparent waste of time. On to its sixth chair in four months with little in the way of work to show for it, the Committee has been told that Minister of Justice Andrew Little may bypass it. Dr Smith has also indicated that he might be prepared to put partisan politics aside to help Mr Little move necessary changes through the House of Representatives if the Justice Committee does not pick up the pace. Whilst I wonder what – on their past history regarding this subject – National and Labour bipartisanship will achieve, it should be welcomed as an acknowledgement that New Zealand really does need to do something decisive with electoral finance law. And encouraged.

 

Male suicide: The pile under the rug is too big to ignore


685.

That is the number of people who committed suicide in the year to June 2019. That is the number of funerals to devastate family, colleagues and friends alike across New Zealand in those 12 months, no doubt causing any number of searching conversations, sleepless nights wondering what could have been done to help them.

Have you ever had a friend, a family member or close colleague on suicide watch or something approaching it where you and/or others were sufficiently alarmed as to intervene? What was the outcome?

Suicide on the whole is an ugly beast that, despite much chatter about intervention and making sure the vulnerable people in our lives are okay, we are only really starting to get our heads around. We say we care to people who we know are having tough times, but how many of us have actually tried taking the person concerned aside and quietly talking to them one on one; messaging them if you have social media and just randomly checking up on them?

Now, how many of you have had this conversation or similar with suicidal male contacts?

Because of those 685 who committed suicide last year, 112 were young males between age 15 and 24. Of these 685, 169 were Maori and 34 were Pacific Islanders.

One major problem that really bugs me about New Zealand is – although it has improved in recent years – is the idea that the New Zealand male needs keep his personal health to himself. The New Zealand male according to the stereotype that we have inadvertently helped to create is a rugged, rugby loving, stoic “she’ll be right, mate” kind of person.

But also our youth are under immense pressure – pressure to conform to society, struggling with their growth from boys and girls into young men and ladies. They are under pressure from their peers to be like them, try radical – and not always legal – things, get their first dates, driver licences, drink alcohol, establish a social media profile. And in a world where the internet is as much a medium for dishing out abuse as it is for social good. Gender, sexual orientation among other factors of ones identity all come under scrutiny.

Despite the efforts of various prominent New Zealand figures – Sir John Kirwan and his autobiography about his struggle with depression; Mike King and his campaign, among others – I sense that there is still a deep reluctance in many parts of society to talk about the well being of our male family/whanau, friends and colleagues. Prime Minister Jacinda Ardern acknowledges this as do government agencies and community groups.

I think the biggest challenges will actually come from families in our Maori and ethnic communities for whom talking about things like suicide is strictly taboo. How we talk to them about that needs to be addressed because those “are you okay” conversations that people like Sir John and Mike King have raised, although a simple thing to do, might be the only way to get someone thinking about ending their lives to realise that actually, people do care.

 

National swings to the right


Was it Donald Trump? Was it Simon Bridges or was it Boris Johnson?

At least one of these leaders today featured significantly in the economic policy outlined by National leader Simon Bridges. United States President Donald Trump can take the credit for an idea adopted by Mr Bridges as he seeks to swing National towards the 2020 election and the prospect of a one-term Labour led Government.

It is classic blue ribbon politics from National, seeking to woo businesses that might feel like they have been short changed by the Labour-led Government of Prime Minister Jacinda Ardern. Mr Bridges clearly not being of the same centrist cloth that saw Prime Minister John Key survive nearly three terms, has issued what to the conservative wing of New Zealand must seem like a call to arms.

In his outline Mr Bridges has made a number of pledges that point to an embracing of “free market” economics. Commentators have noted a swing towards Trumpian deregulation – an attack on “red tape” simply because they are regulations, and not necessarily because those regulations are bad. Mr Bridges has made a promise identical to one Mr Trump made after taking office whereby he would repeal two laws for every law introduced with the result being a 40% drop in new laws being made.

This willy approach raises as many questions as it does answer. National will claim that they are red tape, but if the past is the key to the future, it will most probably be attacks on occupational safety and health regulations, the Resource Management Act, banking and social laws designed to help the marginalized.

In a more ominous move that is likely to mobilise the Labour and Green Party base membership, Mr Bridges has also announced moves that will be seen as a clear and deliberate attack on the unions. By announcing a plan to stop unions getting Government preference in negotiations, Mr Bridges has attempted to undermine one of the key reasons for joining one in the first place.

National has gone one step further. At the risk of galvanizing the divided New Zealand First membership, they have chosen to raise the age of superannuation eligibility to 67. As a result in the next few days I expect to hear sermons from Winston Peters about the folly of doing so, and in the weeks and months to come as we start to look forward to the 2020 general election there will be clips of Mr Peters addressing his Grey Power constituents.

Instead of growing the economic pie as I have suggested by investing in research/science/technology and diversifying the export sector, they have decided to take an old, used and thus far not very successful knife out of the drawer. They have made it shiny and attempted to sharpen it in the hope that once again New Zealanders might be dazzled by the imagined allure of market economics.

Make what one will of these announcements, but I think we can be sure that the Government reaction will be substantial. It might not elicit new policy, but I expect to see a doubling down on existing policy and warnings to potential voters of what they might be playing with by voting for National. Maybe Mr Bridges is hoping that Labour, the Greens and New Zealand First will have forgotten by 2020 that these policies were announced. Maybe he is hoping to gain better traction and get the party moving again as a cohesive unit.

The 2020 election campaign might not officially start for several months, but the unofficial one is already revving its engine.

Infrastructure boom or bust?


Former National Party M.P., Minister for Economic Development and one time Treasurer in the Government of Prime Minister Bill English, Steven Joyce believes that it is necessary for the Government to spend more to stimulate the economy. The comments from Mr Joyce come amid an increasingly turbulent global outlook and signs that the New Zealand economy may be about to stall.

I find it interesting that Mr Joyce, from a party that is traditionally against government intervention in the economy especially where it comes to significant expenditure, seems keen on this Government spending more to stop the economy from stalling.

It is not that I necessarily disagree either, though my preferences for spending priorities will be rather different to his. Mr Joyce and the National Party had a road building programme called Roads of National Significance that they focussed their transport policy on at the expense of other transport modes. $12 billion was set aside for new motorways and extensions of existing ones, particularly around Auckland, but also with significant projects in Christchurch and Wellington.

Whilst some of the projects were definitely needed like the four laning of State Highway 1 from Belfast to Templeton, there were other motorway projects of questionable need which were constructed north of Auckland. If the money had to be spent on roading, there are three potential alternative projects in the South Island that could have gone ahead would have been:

  1. Either a second one lane bridge over the Hurunui River in north Canterbury on State Highway 1 or the addition of a second lane to the existing one;
  2. Making State Highway 70 better able to take trucks, thereby keeping them off the southern part of the coastal stretch of State Highway 1
  3. Replacing the one lane bridges over most West Coast rivers with two lane structures or building a second single lane one next to the existing structure

However a much more meaningful project would be to upgrade the South Island segment of the Main Trunk Line. This would be a useful alternative for freight that might otherwise end up on trucks that cannot or should not be navigating South Island roads, in particular the Kaikoura coastal stretch and the alpine passes. But how much thought have either party given to this? Probably not much.

The Government and National both say that they are concerned about the cost of petroleum to the consumer, but neither have bothered to explore the possibility of biofuel using waste stream product. I have mentioned potential cooking oil and fat, but there may be other sources in the waste stream as well. Depending on the feasibility this could be a potentially significant revenue and job creation scheme – researching the feasibility; developing a blend; getting it tested and certified; finding potential investors in it. The waste stream will not be disappearing any time soon given our consumption habits and the unwanted refuse it creates.

Another idea that has been subject to criticism of late is developing Waste to Energy plants. One mooted for the West Coast has run into trouble after it was found that the Mayor of Buller District Council had gone behind his council to see if it was possible. Whilst I support the possibility of a waste to energy plant, the N.I.M.B.Y.ist under current starting to appear suggests resistance would be strong and not necessarily founded on fact.

So, yes, there are things the Government could invest in, but they might not be what Mr Joyce was thinking.