Editorial 28 June 2010

The Herald talks whaling:

The collapse of international whaling negotiations at Morocco is a chilling moment for the future of controlled whaling, let alone the prospect of a complete ban. The collapse is no less disturbing for the fact that it has always been as likely as not.

The International Whaling Commission proposal to the three nations that permit commercial whaling, Japan, Norway and Iceland, never satisfied either side. …

With all hope of a compromise now gone, the New Zealand Government will probably join Australia in its case against Japan at the International Court of Justice.

It is not a course that promises effective policing of the Southern Ocean even if the court can be persuaded the Antarctic is a whale sanctuary in international law. Even if a favourable ruling can be obtained, the case is likely to take years and leave the ocean open to unrestricted whaling in the interim.

Not even Greenpeace and other environmental lobbies at Agidir favoured court action over a negotiated compromise. Mr McCully went out of his way to praise their helpful approach to the negotiations, an approach that helps keep non-whaling governments and most of the public firmly behind the effort to end all whaling.

I suspect we will join the court case now.

The Dom Post looks at Allan Hubbard and the SFO:

The good people of Timaru seem stunned by news that highly regarded local businessman Allan Hubbard, and wife Jean, might have fallen foul of the law. Last Sunday, Commerce Minister Simon Power took the rare step of putting the couple themselves, Aorangi Securities and seven charitable trusts into what is known as statutory management. He said the objective was to “prevent fraud and reckless company management [and] to protect investors …”

The city’s newspaper, the Timaru Herald, said in an editorial last Monday that the Hubbards’ sin, in official eyes, seemed to be the unconventional way they did business. It went on: “If the allegations are unfounded, the officials involved will have humiliated one of the country’s most successful and generous businessmen for nothing. They will also have wasted a good deal of taxpayers’ money at a time when there is no shortage of directors of failed companies to chase.”

It is that latter point that so upsets Mr Hubbard’s supporters.

All those who broke the law should face consequences for that.

Little wonder that Mr Power, aside from rejigging the justice system, is upending securities law, too. He plans to have a new and independent Financial Markets Authority, consolidating the powers and functions of the Securities Commission, some of those of the Registrar of Companies and Government Actuary, and some of the NZX’s regulatory role, operating early next year.

He has also completely restructured the financial advisory industry, and now wants submissions on how to replace the Securities Act and Securities Markets Act, in a bid to strengthen the financial markets, and restore investor confidence. “The Government cannot and will not legislate for risk,” he said this week, “but we can build a regime that makes those risks more transparent.”

A unified regulator makes sense.

The Press farewells Kevin Rudd:

Even by Australia’s brutal political standards, the dumping of Kevin Rudd was spectacular. Sudden, decisive and risky, it cast out the man who had brought his party into power and governed until recently with substantial voter support.

That Rudd at the beginning of the week seemed secure in his job but by the end of the week had so little party support that he could not contest the challenge is testament to a ruthlessness in Labor. The party has shown not a shred of loyalty to the man who won it a landslide election after years in the wilderness, who had done little wrong in government, and who had shaky polls but no worse than John Howard at the same part of the election cycle.

Loyalty is two ways. If you run Government through a inner circle of just four people, you alienate your colleagues.

The ODT focuses on debt:

The economy, it is fair to say, is very gradually improving after the short-lived recession, although the position so far as internal and external debt is concerned remains grave.

New Zealand, fortunately, is nowhere near in as bad a way as Britain, whose economy is practically in ruins, and where after last week’s budget, every household will be worse off as the new government tries to rebuild.

A vast range of cuts has been imposed to try to reduce government spending and pay off the colossal debt load.

New Zealand has dealt with similar problems in budgets of the past two years, but beyond the immediate future the economy faces what may turn out to be a difficulty of very serious proportions: a lack of capital. …

The kind of public service job creation the Clark government indulged in has also proved to be a serious drag on the economy: since 2004 more than half of all new jobs were in public administration, health, and education.

Over the same period 40,000 jobs disappeared from agriculture, horticulture, forestry, manufacturing, and transport – what some have described as the “earning side ” of the economy, the tradeable sector.

The tradeable sector went into recession in 2005 and only came out of it in 2009.

Treasury forecasts show steady economic growth of about 3% a year and that is an extremely modest number.

Clearly, though, there will be no new “value-added” jobs unless and until the confidence of businesses to invest and to employ is restored and investors are willing to risk their money.

Our collective failure to do that will inevitably mean all taxpayers will face what the British and other European disaster economies are now confronting.

We need investment and business confidence.