We still have more public servants than a year ago

The media and the left have reported on the reductions in public service numbers as some form of brutal year zero policy which would have you think the Government has turned the clock back decades.

The reality is that we have 421 more (FTE) public servants than a year ago. Yes the reduction in the first six months of 2024, is less than the increase inn the last six months of 2023 under Labour.

Basically they went up 4% in the last six months of Labour and dropped 3.3% in the first six months of National. Where were all the stories about why public sector agencies were massively increasing their staff numbers during the caretaker period before an election?

US presidential election forecast E-20

A number of forecasts have changed some of their state leads.

RCP now has Trump winning all seven states.

270 to win has Trump now leading in Pennsylvania but dropping behind in Wisconsin.

Nate Silver now has Trump marginally ahead in his projection to win as Harris’ leads are so small in her key states.

All six forecasts have Trump ahead in Arizona, Georgia and North Carolina. That gives him 262 votes. He only needs 8 more to win – Michigan, Pennsylvania or Wisconsin. Wisconsin looks most likely at this stage.

Tana soon to be goneburger

The Herald reported:

In a statement yesterday, Green co-leader Swarbrick confirmed the party had endorsed the “potential use of the Electoral Act to remove Darleen Tana as a Member of Parliament”.

However, she repeated a call to Tana to “finally do the right thing” and resign before being forced out.

In order to trigger the legislation, the Greens need to write to the Speaker saying they believe Tana’s defection from the Greens has distorted the proportionality of Parliament.Swarbrick did this shortly after the meeting concluded.

“We have… written to the Speaker outlining that we believe Darleen’s resignation from the party but not from Parliament has affected the proportionality of the House, triggering the next step of the legislation,” Swarbrick said, adding she had also written to Tana outlining the outcome of the meeting.

Tana will soon be gone.

The Speaker has little discretion here. So long as the notice from Swarbrick complies with the Act, her seat will soon be declared vacant.

The difference six years makes

The latest Crown financial statements have just been published so let’s look at the annual crown financial statements for 2023/24 compared to 2017/18.

  • Crown revenue $110b to $167.3b
  • Crown revenue 38% to 40.5% of GDP
  • Core crown revenue 86.8b to $129.3b
  • Core crown revenue 30.0% to 32.2%
  • Tax revenue $80.2b to $119.9b
  • Tax revenue 27.7% to 29.2%
  • Crown expenditure $104b to $180.1b
  • Crown expenditure 36.0% to 43.6%
  • Core crown expenses $80.6b to $139b
  • Core crown expenses 27.9% to 33.6%
  • OBEGAL surplus $5.5b to -$12.8b
  • OBEGAL surplus 1.9% to -3.1%
  • Residual cash 1.3b to -$19.3b
  • Residual cash 0.5% to -4.7%
  • Operating balance $8.4b to -$8.4b
  • Operating balance 2.9% to -2.0%
  • Core crown gross debt $88.1b to $176b
  • Core crown gross debt 30.4% of GDP to 42.6% of GDP
  • Core crown net debt $57.5b to $175.5b
  • Core crown net debt 19.9% of GDP to 42.5%

So what did Labour achieve in six years

Revenue

  • Crown revenue increased by $57.3 billion (over $1 billion a week) or 52%. As a share of the economy it went up 2.5 percentage points
  • Core crown revenue increased by $42.5 billion or 49%. As a share of the economy it went up 2.2 percentage points
  • Core crown tax revenue increased by $39.7 billion or 50%. As a share of the economy it went up 1.5 percentage points

Expenditure

  • Crown expenses increased by $76.1 billion (around $1.5 billion a week) or 73%. As a share of the economy crown spending went up 7.6 percentage points
  • Core crown expenditure increased by $58.4 billion or 72%. As a share of the economy it went up 7.6 percentage points

Surpluses

  • The OBEGAL surplus went from a surplus of $5.5b to a deficit of $12.8b – an $18.3b deterioration. As a percentage of GDP it went from +1.9% to -3.1% so a 5.0 percentage point change as a share of the economy
  • The operating balance went from a surplus of $8.4b to a deficit of $8.4b – an $16.8b deterioration. As a percentage of GDP it went from +2.9% to -2.0% so a 4.9 percentage point change as a share of the economy
  • The cash surplus went from a surplus of $1.3b to a deficit of $19.3b – an $20.6b deterioration. As a percentage of GDP it went from +0.5% to -4.7% so a 5.2 percentage point change as a share of the economy

Debt

  • Core crown gross debt increased by $87.9 billion or 100%. As a share of the economy it went up 12.2 percentage points
  • Core crown net debt increased by $118b billion or 200%. As a share of the economy it went up 22.6 percentage points

Now defenders of the indefensible will cry “Covid” but that has minimal impact on income, expenditure or the surplus in 2023/24. Any temporary expenditure around Covid should have ended a couple of years ago.

The Government has increased its spending as a share of the economy by a massive 7.6 percentage points. This is arguably the largest expansion of the state since WWII. But it didn’t result in better schools, better hospitals or less poverty – just better waste!

NZers are now paying $800 million a week more in tax than six years ago.

We have gone from a healthy surplus to a structural deficit that will take years of fiscal restraint to undo. The deficit is not because income didn’t rise enough – it is because of an unprecedented increase in untargeted state spending.

And finally debt has gone up $118b or $59,000 per household. Now some of that is due to the temporary Covid spending needed to get us through lockdowns etc, but most of it is not.

Labour’s six years in office can only be seen as fiscal vandalism of the worst kind. The $76b a year extra spending represents $38,000 a household. Is your household getting $38,000 a year of value from Labour’s extra spending?

My first AMA

Have done my first AMA (Ask Me Anything) over on my paywalled Patreon. Lots of interesting questions:

  • Labour’s weak. Despite many controversies, the Greens are closing in. Can they overtake them?
  • How closely are you following the polling data on the US election? If you are (and I suspect you will be) who do you think has the momentum, and who do you think is going to win what swing state, and ultimately get to 270 first?
  • Have you thought about polling NZ’ers opinions on the two candidates for presidency in the US elections ?
  • I’d like to know who you think is the best candidate for the Tory leadership
  • Who would be a good candidate for Wellington Mayor and what are the key issues they should run on?
  • Why do people call you Pinko?
  • Who do you think is most likely to succeed Chris Hipkins as Labour leader, and when might the change happen?
  • How important is religion to how people vote in NZ? Is this changing over time? – in the US it seems to be quite a major factor/cohort.
  • Do you think Luxon will change his mind re treaty principles, if more polls swing that way
  • Why has Luxon not enjoyed the same popularity as Jacinda or Key?

I plan to make this a regular feature.

Good ad from ACT

@actnewzealand

Sorry Chlöe, but Kiwis deserve a prosperous future. That’s why we’re cutting red tape to access the wealth beneath our feet. @greensnz

♬ original sound – ACT Party – ACT Party

This is a nice ad from ACT. They take up Chloe’s challenge, make the case for mining and highlight some hypocrisy. Also you see the area that Chloe saw is a taonga, but in fact it looks like some pretty plain land with no particular beauty or conservation value.

How does a block of apartments cost so much?

The Herald reports:

A new Kāinga Ora complex has opened in Auckland at a cost of $1.2 million per apartment as one of New Zealand’s leading developers calls the state-run agency’s record of running up billions in debt a national scandal and embarrassment. …

The agency yesterday allowed the public to view the newly built Meadowbank complex, saying it spent $11m on the three three-bedroom and six two-bedroom apartments.

That equates to $1.2m per apartment and rises to $1.7m if the about $4m value of the land already owned by Kāinga Ora is added.

This is an astonishing waste of money. A cost to taxpayers of $1.7 million per apartment.

If you assume the two bedroom apartments are 100 square metres each and the three bedroom ones 133 square metres each, then that is a build cost (excluding land) of $11,000 per square metre.

Building websites estimate a cheap build is $3k per sq m, a standard build around $5k per sq m and a bespoke build around $7k per sq m.

How do some apartments cost twice as much standard build and 50% more than a bespoke build?

It is because taxpayers are paying.

A more reasonable build cost could see twice as many apartments built.

The irony

The Daily Mail reports:

Prof Rainsborough’s dispute with King’s College began in late 2018 when he organised ‘Endangered Speeches’, a speakers’ series on the growth of over cancel culture.

He said he was ‘hauled over the coals’ by the dean of his faculty after some students tried to get the first talk banned.

If not so sad, it would be funny. He organises a series about cancel culture and they try to get the series cancelled!

Weeks later, in February 2019, he published an article on a website dedicated to the ongoing Brexit debate.

The piece – ‘The British road to dirty war’ – did not take an explicit position on Brexit as it had already happened, he said.

He explained: ‘It was simply said that if political elites generally start trying to ignore the democratically expressed will of the populace, then over time that’s going to lead to problems and civil unrest.’

But the article upset colleagues who complained to the university authorities.

At a meeting with the dean, he was told ‘people were unhappy’ and that he must step down from his post.

The evil of the man. He wrote that the political elite should respect the results of a democratic referendum. No wonder the elite shunned him.

UK Labour in real trouble

It was only a few months ago UK Labour won in a landslide (helped by FPP). The next election is many years away, but they have a problem that their brand has turned negative so quickly, that it could be hard to change in future.

The latest More in Common poll has the following:

  • Labour tied with Conservatives at 27% each, and Reform at 21%
  • Labour under 15% with over 65s
  • Only 17% think they are doing a good job and 56% a bad job
  • Only 12% of women say good job and 59% bad job
  • Of those who voted Labour a few months ago, only 44% say the Govt is doing a good job and 33% a bad job – so 1 in 3 Labour voters have already turned
  • Keir Starmer has -38% net approval, Rachel Reeves -34%
  • An an A to F rating, 45% give them E or F and only 15% an A or B
  • 29% of Labour voters give the Government a D or worse
  • Their net approval on issues is cost living -59%, Immigration -59%, Ethics -49%

Labour’s legacy

I’ve been looking at various country ranking indexes to see how much things improved under Labour. Here’s some of the movements:

  • Human Development Index – dropped from 9th to 16th
  • Corruption Perceptions: Score dropped from 89 to 85, down from 1st to 3rd
  • Economic Freedom: Score dropped from 83.7 to 78.9, down from 3rd to 5th
  • PISA Maths, Reading, Science dropped from 494 to 479
  • Govt debt: from 33rd highest in OECD to 18th highest
  • Environmental Protection: from 17th to 33rd and score from 75.96 to 57.7
  • Press Freedom: from 13th to 19th, score from 86.02 to 79.72
  • Academic Freedom Index: from 0.88 to 0.79

Imagine what they could have achieved with another three years!

Finally inflation is below 3%

Stats NZ reports:

  • Annual inflation down from 3.3% to 2.2%
  • CPI went up 0.6% in the quarter
  • Non-tradeable inflation still high at 4.9%
  • Tradeable inflation at -1.6%

It is good inflation is down to 2.2%, but this doesn’t mean prices are dropping. It just means that price increases are more modest.

The level of non-tradeable (or domestic) inflation is still high. That signals to me the next OCR cut would be 50 basis points, not the 75 some have called for.

The sovereignity debate

The debate over whether Maori Chiefs intended to cede sovereignty when they signed the Treaty of Waitangi is an academic debate, that doesn’t actually impact whether or not the NZ Government today is sovereign.

The US is a sovereign state because it won a war against the former sovereign. Saudi Arabia became a sovereign state in 1932, not through a treaty etc. Sovereignty applies to geography, not races.

In the UK Scotland is semi-autonomous and the Scottish Government governs the territory of Scotland. But it does not govern Scots living in England (but it does govern English living in Scotland).

In the US some Native American tribes have a degree of sovereignty, but only on their tribal lands.

But it is still good to understand our history, so it is useful to try and understand as well as we can, what the intention of the signers was.

Don Brash summarised the view put forward on a recent Working Group podcast:

The argument which Mr Modlik advanced for why Maori chiefs had not ceded sovereignty in 1840 seemed to be based on the notion that it would have been ridiculous to expect some hundreds of chiefs, representing perhaps 100,000 people, to have surrendered ultimate authority to a couple of British officers and a handful of missionaries.  No, they had agreed to allow the British to have authority over the British settlers but Maori were to be free to continue as before.  At most, there was to be shared authority, a partnership between the chiefs on the one hand and British authorities on the other.  And indeed, that argument, taken in isolation, sounds plausible.

I’m always somewhat wary of an argument based on assumption/logic, than the historical record. But it is useful to look at this argument? Why would 100,000 people surrender sovereignty to a smaller number of people?

Is it plausible that the chiefs who heavily outnumbered the British in 1840 would have been willing to surrender to some distant authority?  Yes, when it is recalled that the previous four decades had seen almost unbelievable inter-tribal warfare, with tens of thousands of men, women and children slaughtered – more dead, it is believed, than all the New Zealand deaths in all the wars since 1840, including the First and Second World Wars.  The chiefs would have seen British authority as a way of ending that inter-tribal slaughter (and perhaps protecting them from French forces which some tribes believed, with some justification, were out for revenge of an earlier massacre of the crew of a French vessel). 

 Many of those who signed would also have been aware of how advanced Britain was at that time, and how powerful its naval vessels.

I didn’t realise more died in the musket wars than in WWI and WWII. Sobering.

It is worth reflecting what would have happened if the Treaty had not been signed? How much longer would the musket wars have continued? Would there be one country or multiple countries? Would there be democracy and the rule of law, and if so how much longer would it have taken to eventuate.

When one of the greatest of the Ngapuhi chiefs who signed the Treaty in 1840 died in 1871, his gravestone carried the words “In memory of Tamati Waka Nene, Chief of Ngapuhi, the first to welcome the Queen’s sovereignty in New Zealand”.

Interesting.

Roche gets the top job

The PM announced:

Prime Minister Christopher Luxon today announced the appointment of Sir Brian Roche as the next Public Service Commissioner. …

This is no surprise, except how long it took. Roche was, to many, the obvious person for the job. He has been a “fixer” for Governments of all stripes. His intensive experience for both private and public sectors has been:

  • CEO of NZ Post
  • Senior partner, PWC
  • Head of successful bid team for 2011 Rugby World Cup
  • Chief Crown negotiator for various Treaty settlements
  • Chair of Hurricanes Rugby
  • Chair of Antartica NZ
  • Chair, Tait Electronics
  • Chair, City Rail Link
  • Inaugural Chair, Auckland Regional Transport Authority
  • Inaugural Chair, NZ Transport Agency
  • Deputy Commission, HB DHB
  • Chair, Wellington Gateway Project (Transmission Gully)

The Government wants a change manager, not a status quo manager., So they didn’t want someone currently in a leadership role in the public service. But putting in an outsider with no public sector experience could be a bad fit. So Roche is ideal – he knows the public sector well but is someone whom the Government can trust to make the service more effective and efficient.

I suspect the reason it took so long to appoint him, is that he was very happy being semi-retired and the PM probably had to be very persuasive to convince him to take it up.

All power to Grant

Never thought I’d by writing this, but Grant Robertson is becoming my favourite Vice-Chancellor.

Critic reports:

The University of Otago’s stance of “institutional neutrality” on Israel’s actions in Palestine has continued to be fiercely criticised by its staff and students. On Wednesday, October 9th, the Otago Students for Justice in Palestine (OSJP) held a peaceful campus protest that spiralled into one student being arrested for wilful damage of a Clocktower reception glass door.

Institutional neutrality means that staff and students can take their own view on highly contested issues, as it should be. All power to Grant Robertson for standing firm on this.

Neave also came for Otago’s stubbornly neutral stance, yelling, “In taking no stance, this university de facto endorses the continuation of the genocide. This should forfeit their claimed role of the conscience and critic of society. If you can’t take a stand against genocide, what the fuck can you take a stand for?” Their words were met with applause and shouts of “shame!” from the crowd.

Genocide is the view of Neave. Disagreeing with him doesn’t;’t mean you support genocide. It means you don;’t agree that what Israel is doing is genocide, or even remotely close to it.

I wonder if Neave thinks you should also take a stand against murder, rape torture and kidnapping of civilians? To quote him, “If you can’t take a stand against murder, rape, torture and kidnapping, what the fuck can you take a stand for?”

Neave wrapped up their speech by calling on protestors to stage a sit-in inside the Clocktower on the stairs. OSJP said this was “a move carefully planned by OSJP harkening back to current Vice-Chancellor Grant Robertson’s very own clocktower [sic] occupation in his university days.” As a group broke off from the crowd to rush inside, Neave warned that doing so would be at their own risk as they “might be trespassed.” 

“The energy changed quickly when students were met with violence,” claimed OSJP. “Campus Watch and Proctor Dave Scott forcefully held the protestors back at the door, shouting and pushing them back through the entrance. A Campus Watch officer grappled a student who had made it past the front doors and was standing in the entranceway. In an attempt to wrestle her backwards, he collided with an interior glass door which shattered.”

“I was appalled to see Campus Watch put guarding the Clocktower above the safety of our students. We are a peaceful group, and that was a totally excessive response,” said an OSJP spokesperson.

The double speak is hilarious. They tried to force their way past security staff, and they claim they are the ones who are peaceful!

EV vs petrol costs

A reader e-mailed the Minister of Transport (and me) the following:

7.6c per kilometre (plus a processing fee) as Road User Charges for electric vehicles was not a clever idea.

Why? Simple answer; an EV now pays a lot more in Road User Charges than a petrol vehicle.

It is not unusual for a petrol vehicle to do 50 miles per gallon, even my 1998 Honda Logo does this on a run.

50 mpg is 17.6 kilometres per litre.

As far as I know petrol tax is 70c per litre. Therefore a reasonably efficient petrol engined car will pay 4c a kilometre in Road User Charges.

In fact, 7.6c per k is the equivalent of 26 miles per gallon, or 9 litres per 100 kilometres. Therefore, any petrol engined vehicle that uses less than 9 litres per 100 kilometres is paying less towards the upkeep of the roads than an EV.

The potential situation for plug in hybrids is even worse.

Looking at it the other way. With petrol at $2.40 per litre, a 50mpg car will pay 13.6c per kilometre for fuel.

If an EV does 6k per kWhr and electricity is 30c per kWhr, an EV will pay 12.6c per kilometre. (Fuel cost plus RUC)

What incentive is there for people to convert to an EV? 

Particularly as on a long run with electricity at 85c per kWhr (rapid charger rate), the overall rate per k is now 21.8c for an EV.

Paying 50% more to use the roads on a long run, for the privilege (in an EV) of it also being slower (charge up time) and colder (a heater uses a lot of power), is hardly much of an incentive.

It is abundantly clear that the Road User Charge rate for an EV is grossly excessive. It should be more like 4c a km.

I did say you were idiots for imposing a 7.6km RUC rate for EVs, I won’t resile from that statement.

As someone who drives an EV and looked at costs before purchasing, this didn’t seem quite right to me. So I calculated the following:

Just so you know the current petrol tax (including ETS) is around 125c a litre. Also 18 kms per litre seems very optimistic. 14 is what NZTA uses.

So a typical car will will do cost $1.25/14 or 8.9 c a litre, which is more than 7.6 for EVs.

At the current price of $2.55 a litre a typical car will pay 18.2c per km for fuel.

The cost of electricity per KWhr (once line charges are excluded) is 21c according to MBIE so an EV will pay 21c/6 or 3.5c/km plus 7.6 RUCs which is 11.1 c per km which is still well under the 18.2 for a petrol car.

So what does a 7.1c a km saving come to on an annual basis? On average we drive 14,000 kms a year so annual savings of $994 a year. Whether an EC makes sense will depend on the price compared to a similar petrol vehicle, available kms travelled and also likely savings from servicing costs due to no internal combustion engine.

A sad demise

Stuff reports:

Wellington Combined Taxis Ltd has gone into voluntary administration.

Sad news. They were the taxi company I always used, before Uber came along.

Sadly they failed to keep up with technology. If they had developed a system where you can order them through your phone with the click of a button, can be notified when they arrive, and don’t have to spend a couple of minutes paying them at the end of the journey, then many more people would use them.

The other factor is pricing. An Uber from my place to the airport is around $55 and a taxi around $110. Unless someone else is paying, you won’t choose the $110 option.

Well done Auckland professors

The FSU released:

University of Auckland Senate rightly rejects flawed academic freedom policy after lengthy four-year development process 
 
After more than four years of development, academic staff at the University of Auckland have overwhelmingly rejected the Freedom of Expression and Academic Freedom Policy that was presented to Senate in September, says Jonathan Ayling, Chief Executive of the Free Speech Union.

 “It is good news that the academics of the University of Auckland pushed back on such a flawed policy. It would have imposed constraints on speech creatinga chilling effect on academic freedom and discourse at the university. 

This is good news. The policy is a trojan horse for censorship. They should simply adopt the excellent Otago University one.