Crack down on exploitation of migrant workers needed

In 2016 I wrote an article about the the need to stop the exploitation of migrants to New Zealand. It came at a time when the then Prime Minister of New Zealand John Key was in India to talk free trade. I lamented the loss of the opportunity Mr Key had to talk to his Indian counterpart Narendra Modi about the exploitation of Indian workers here.

In 2018, I wrote another. This time it was about Filipino workers being exploited. In their case the agency that handled their visa had taken the money they paid – in the thousands of dollars – and disappeared.

This supposedly fair New Zealand is – to put it politely – pussy footing around the issue of exploitation of migrant workers. Surprisingly, despite the potential harm it will cause New Zealand when exploited workers go home with tales of abuse and how they were poorly treated by the authorities, neither of the major political parties seem to be dreadfully interested in reform.

The Labour Inspectorate is a toothless tiger in the instance of Ravi Arora, an Indian businessman who owns a several liquor stores around New Zealand, a $3.6 million house and has $36 million assets including two motels. Mr Arora has also racked up an extensive list of complaints from workers who allege exploitation under New Zealand labour laws. Despite 19 investigations, he continues to run businesses

I have no doubt that unless Mr Arora is either arrested or deported he will continue to set up, or acquire, liquor businesses so that he can continue to engage in exploitative practices. The fact that Mr Arora has offloaded business interests to avoid being linked to further exploitation claims, that he is using his wife as a contact tells me he has no qualms about the illegal nature of what he is engaging in.

Mr Arora is not the the only person who has been found wanting in their treatment of migrant workers in New Zealand. Mohan Reddy who owns liquor stores in Auckland was found wanting in 2019 over the treatment of seven migrant workers.

However not all is lost. The Government is working on law changes that will assist exploited workers in leaving their jobs with repercussions, clamp down on rogues and disqualify those convicted of exploitation from being directors or managers of a company.

It remains to be seen whether the coming law changes will have any real impact on the offenders as they are largely related to helping the victims of the exploitation. This is obviously fair enough, except that a strong clear message needs to be sent to those in a position to employ people that New Zealand expects better from its business owners than what the likes of Mr Reddy and Mr Arora have been prepared to offer their exploited staff.

It is not okay to exploit people in New Zealand. People who move here thinking that because they could get away with improper practices in their country of origin need to understand that New Zealand authorities are for the most part not corrupt. And New Zealanders as a general rule, have an expectation that this will be understood and respected.


Rio Tinto being selfish in announcing closure of Tiwai Point smelter

For sometime now, Rio have been threatening to walk away from the Tiwai Point smelter. Past attempts have involved the Government agreeing to lower the price of electricity. But now Rio say that the circumstances simply do not permit them to hang on to the Tiwai Point smelter any longer. The plant will close in late 2021.

This is the same Rio that has had significant I believe that Rio Tinto are being quite selfish, and are showing they are not good corporate citizens. After all, Rio have been given N.Z.$30 million of taxpayer money to keep their employees paid for the duration of the COVID19 emergency. It is also the same Rio Tinto that has been subsidised in an effort to keep costs down and keep jobs in New Zealand.

Although the Government has announced plans for a list of “shovel ready” projects to help Southland through these tough times, the devastation that losing so many jobs will have, is difficult to overstate. 2,260 jobs are expected to go, of which nearly 1,000 will be at the smelter itself and the rest in related industries.

Rio Tinto also owe Mataura, where a significant tonnage of dross has been dumped, an apology. Gore District Council has a fairly small rate payer base and cannot be expected to pick up the tab for a problem that was not of its making. The problem came about when 10,000 tonnes of dross was dumped in an old paper mill on the banks of the Mataura River. It then became an emergency when the Mataura River threatened to flood the mill after days of prolonged heavy rain. Days earlier there was a handshake agreement between G.D.C., New Zealand Aluminium Smelter to address the issue, which was vetoed by Rio without explanation.

Research from Hokkaido University however, suggests it is possible to convert dross to hydrogen using a process involving dross and distilled water. In the process the aluminium powder and distilled water is placed in a pressure resistant reactor, with a desired constant water flow using a liquid pump. The liquid temperature in the reactor increased due to the exothermic reaction given by Al + OH + 3H2O = 1.5H2 + Al(OH)4 + 415.6 kJ.

In the case of Gore, even if a hydrogen plant was a shovel ready project, and there was demand for the hydrogen created, due to the proximity of the dross to the Mataura River only an industrial scale clean up can adequately dispose of that much material. It is possible that the Government may be left with no choice but to foot the bill itself, in which case Rio Tinto should be taken court with a warning it will be excluded from the New Zealand mining scene if it does not come clean.


Taxation in 2020: my thoughts on a socially taxing matter

Tax. A three letter word of a thing whose collection was the job of someone Jesus apparently had sympathy for when nobody would. A thing loathed by libertarian and right wing parties, but seen as essential by many on the left. So, about this interestingly controversial thing called tax, that gets peoples hackles up for different reasons without fail at every election. I believe New Zealand needs to revisit that Tax Working Group report and make some serious decisions.

But before then, we have an election campaign approaching and I think in light of the Green Party tax announcement on Sunday, it is time to state my thoughts.

Goods and Services Tax (G.S.T.) is one tax that people from all parts of the political spectrum seem to agree is a hindrance. For the low income earner the few extra dollars that is paid as a result of G.S.T. is possibly the difference between being able to afford an essential item and having to scrounge around for a couple of extra dollars. Lower income earners also as a result find it much more difficult to invest and/or save. I personally believe G.S.T. should be cut to 10%. I will explain later where I believe the other components of the tax system can make up for the subsequent loss of revenue.

Every election, National and A.C.T. have campaigned on doing something about lowering income tax. One can be fairly confident that the 2020 election will be no different. Not surprisingly they will target the upper income tax brackets – shown below – and say that the tax cuts will benefit all New Zealanders. The current brackets are:

  • $70,001+ = 33%
  • $48,000-$70,000 = 30%
  • $14,001-$48,000 = 17.5%
  • <$14,000 = 10.5%

Instead of further cutting the top tax bracket and giving higher income earners an even bigger slice of their incomes, I propose broadening the income range across which the tax brackets are applied. I would support something similar to the brackets below:

  • $150,000+ = 37.5%
  • $67,001-$150,000 = 30%
  • $33,001-$67,000 = 20%
  • <$33,000 = 10%

But simply fiddling around with the income and goods and services taxes is not imaginative and ignores other potential tax instruments that may assist this country. At this point, I give New Zealanders four options from which one needs to be chosen:

  • A Capital Gains Tax. Prime Minister Jacinda Ardern has already ruled it out under her watch, but would she have second thoughts if Labour found themselves reliant on the Green Party for support or in the improbable position of governing alone? And this is certainly not to say there are no supporters for a C.G.T. The New Zealand Herald explored some of the arguments they were putting forward.
  • A Wealth Tax. Graeme McCormack of the Human Rights Commission wrote an article for Noted last year in which he explored how a wealth tax might work in New Zealand – his suggestion was for a 1% tax on citizens net assets (excess of assets over liabilities), exceeding say N.Z.$10 million
  • A Land Tax. Bernard Hickey wrote a column for Newsroom which looked at how a land tax could work in New Zealand. He envisaged a low level broad-based one as being the fairest method. Mr Hickey thought that it would cause an immediate 10-20% drop in land prices. Thus if a section were worth $200,000 land only before applying a land tax it might now be worth $160,000-$180,000.
  • A Luxury Goods Tax. I would assume luxury goods to include vehicles worth over say $150,000; boats worth more than $100,000; any privately owned helicopter, aircraft that is used for non-work related; jewellery worth more than $100,000.

I acknowledge a C.G.T. is a double-edged sword and even if one did get introduced, if it was poorly planned then the wrong parts of the tax payer spectrum might be unfairly targeted. Having a politician no encumbered by coalition partners might be a prerequisite as well. Whilst for reasons of levelling the playing field enough that low income players enter drive a C.G.T., its complexity may be its undoing. The McCormack article article examines a wealth tax, which could be set on net citizen assets exceeding $10 million. This along with the potential land tax explored by the Bernard Hickey article seem to me like the most promising ways in which tax reform could contribute to a fairer society. A luxury goods tax is perhaps the most vulnerable tax to critics who claim it is about envy since the chattels involved will be specifically items that the lower and middle class can only dream about, never mind trying to save enough for one.


N.Z. free of COVID19: Where to from here for Aotearoa?

So there you have it. On 08 June 2020 New Zealand became the first developed nation to successfully rid itself of COVID19. We join just a handful of other nations, notably small Pacific Island nations whose borders were closed as soon as they realized the danger it posed, in being COVID19 free. The rest of the world including the rest of the O.E.C.D. nations are still fighting.

Level 1 will be nine hours old when this publishes.

So, where to from here?

Just because we are free of it does not mean we should automatically let our guard down. Nor does it mean that we will immediately reopen the borders. The very vast majority of nations around the world will probably keep their borders firmly shut until the end of 2020 at least, including – with the possible exception of Australia – all of our most important global partners.

In some respect, not having the border open for a short while is a good thing:

  • New Zealand’s many and great tourist attractions now have a golden opportunity to reconcile with the exiled locals who no longer felt welcome at many of them, or were physically priced out of the market in favour of big spending foreigners. They would be fools not to introduce “local rates” – say 25% discounts and those operators who own multiple attractions could offer year passes. The drop in prices would be offset by a hopeful surge in locals coming.
  • It is an opportunity to tighten up border controls, work out any new measures deemed necessary in the wake of COVID19 and implement them, as well as notifying appropriate authorities – Customs; Police; Immigration and give overseas diplomatic posts a chance to digest and act on them (embassies, consulates, and so forth).
  • Get more New Zealanders into occupations that have a lot of positions taken up by non-Kiwi’s, such as farming, horticulture and so forth

It is also a REALLY good time to think about a long term vision for New Zealand. What kind of country do we want to be in 20, 50, 100 years from now?

  • The same old country we have always been – one that is a bit too carefree and slightly ignorant about the world around it?
  • Do we want one that throws environmental common sense to the wind as some currently in Parliament would have us do?
  • Do we want a country that reassesses where it is going and enacts certain reforms, such as the cannabis laws coming, but nothing comprehensive?
  • Do we want a country that after a period of review, begins comprehensive reform that addresses the systemic and racial inequality; sees infrastructure reform as key to the economy; ends the drug wars and embraces our Pasifika neighbours and countries like Germany, Canada, Taiwan and South Korea?

What country, do you want New Zealand to be and why? With COVID19 gone, I believe we would be fools not to have a look at ourselves and our way of live and see what we can do better.


New Zealand Fiscal Budget 2020

New Zealand Treasurer Grant Robertson must have been a tangle of emotions on the night before the 2020 Fiscal Budget which was delivered on 14 May at 1400 hours. So much riding on probably the single most important budget in a generation: the one that gets New Zealand out of the COVID19 mud pit.

New Zealand’s economy has taken a battering. Of that, there is no doubt. Unemployment may reach nearly double digit percentage figures, with Air New Zealand shedding 3750 jobs; 150+ at the Hermitage Hotel in Mount Cook Village; 300 at Ngai Tahu; and another 240 when Bauer collapsed the New Zealand magazine industry. Thousands more are going in the hospitality sector where the forced closure as a result of COVID19 has sent many restaurants, bars and cafes to the wall.

On one hand he had an unprecedented licence to spend on measures to get the economy going again. On the other Mr Robertson would have been nervous about whether he got the balance right between a big spend up and having enough in the bank for 2021, in case COVID19 did not clear out as fast as hoped for and to cover unforeseen emergency expenditure. And then some how dancing between the two hands, the knowledge that no matter which way he sliced and diced the pie, someone would not get enough support and might have valid reasons to be grumpy.

So, what did Mr Robertson’s Fiscal Budget 2020 do:

  • For people like me finding out that the Government has thrown another $3.2 billion in wage subsidies to businesses was very welcome news – most budgets do little for me, but this one honestly has
  • Kainga Ora has been allocated funding to build another 8,000 houses
  • 11,000 additional jobs will be created with a $1.1 billion fund to support environmental projects’
  • $1.6 billion for vocational training for those out of work and school leavers

Notably the Government had $50 billion it could have spent on New Zealand yesterday. It appears to have allocated around $30 billion of that money, leaving $20 billion in reserve. If I had to guess, Mr Robertson is wanting to make sure that there is enough in the Treasury in case COVID19 is not as finished as we think and a second wave – God forbid! – hits, in which case that is very sensible thinking.

Whilst no Fiscal Budget ever pleases EVERYONE, that was more so the case today. So many people and industrial sectors needing significant help and simply not enough money to help them all, whilst still having enough in the Treasury for a rainy day situation in 2021. Also New Zealand is very vulnerable at the moment. We are busy trying to deal with a damaging economic hit caused by a pandemic that has already taken nearly 5% off the economy, so should we have a major disaster like an earthquake or large volcanic eruption, it would be catastrophic.

Whilst not on the Government’s agenda, there are other ways we could help grow the fiscal pie, which the Government needs to consider in the near future:

  • Increase investment in research, science and technology to 2% of G.D.P. – with money being prioritized for medicine, renewable energy, alternatives to finite resources
  • Bringing back a permanent nation wide apprenticeship scheme
  • Legalize cannabis and establish the industry in poorer regions such as Gisborne, Northland and the West Coast
  • Redefine infrastructure as energy, railways, merchant marine, and invest accordingly instead of just building roads

So whilst the Government has played a largely welcome Budget in 2020, as always there are things that it could have improved on or been willing to give a try. Many New Zealanders want to see meaningful socio-economic change and are sick of the neoliberal model that only supports the very wealthy, and those with greater means than others. This cannot happen if the Government is not prepared to make changes.