Lois Cairns at The Press reported:

Simmering tensions between some Christchurch City councillors and senior staff are hindering the city’s ability to make progress on key issues, insiders say. …

Cr Barry Corbett, who is not seeking re-election in October, said some councillors engaged in political point scoring which was destroying relationships within the council and hindering progress on key issues.

“Some councillors, when they wake up in the morning, all they think about is how they can stick it to the council, how can they embarrass Bob [Parker], and how they can make sure that National doesn’t get elected next year,” Corbett said.

If they had issues with staff, they tended to raise them in a public forum rather than approach them directly.

Naturally, that created tension because staff felt they were being “hung out to dry”.

Asked if he felt the tensions between staff and councillors hampered the council’s ability to make progress on key issues, Corbett responded: “Heck, yeah.”

This is one of the weaknesses of the Council model. It works pretty well in smaller areas where there are not party politics. But party politics has infested the larger city councils and you get Councillors who are more interested in bad publicity for others than making the Council work well.

We solve this issue at national level by having the Government separate to and accountable to Parliament. Not all MPs are Ministers. We have an Opposition who don’t actually have to work with Government staff until they are in Government themselves. Their job is to oppose and scrutinise and propose alternatives – but not to govern.

At the Council level, all Councillors are Governors. They all sit on committees that make decisions and all have an equal vote at the Council. There is no Cabinet or Ministers. So when some Councillors have an agenda of trying to screw over others, of course you get dysfunctional.

As I said, I think the Council model works well for smaller authorities. It works less well when you have party politics. So one solution there may be to recognise the reality and move Councils to more of a parliamentary model. This means more executive powers to the Mayor and Councillors picked by the Mayor to chair committees. The other Councillors can then focus on scrutinising the executive Councillors, holding them to account, approving bylaws and budgets. And at electon time they can campaign as a team for a change to their team.

I prefer the model where there is no party politics, and Councillors focus more of the wellbeing of the Council, not their political interests. But the bigger you get the more inevitable it is you get the “necessary evil” of party politics. And party politics allows voters a clear choice. But if you have party politics then you need an executive and an opposition as we have in Parliament.

Tom Pullar-Strecker at Stuff reports:

Retailers are stepping up efforts to close a “loophole” that allows GST-free purchases of overseas goods costing less than $400.

They should give up their silly campaign to tax minor online purchases. It would cost the Government far more in administration than it would bring in, in revenue.

Retailers Association chief executive John Albertson said the import threshold was costing the Crown $300 million a year in lost revenue, far more than the $17m the Government had sought to raise through its ill-fated plan to tax employee car parking.

Well first of all I doubt that figure. They’re saying that $2 billion of sales are being made online from overseas retailers, which sounds way too high too me. But the compliance costs would be huge. Customs would have to intercept every single letter coming into NZ, open it, hold it, calculate GST, send an invoice for say $5 and then get it paid and then dispatch it on. A bureaucratic nightmare.

Labour revenue spokesman David Cunliffe said a low threshold for charging GST on overseas purchases would stop the Government “subsidising foreign commerce” and was a “no-brainer”.

Oh wonderful. Make sure everyone knows this. Labour Party policy is to tax your online purchases more. Buy a book from Amazon, and Labour will hold it up at the border until you pay the Government an extra 15% of the price.

Will Labour also block itunes? We can’t have people downloading music and not paying GST on it. So to implement their policy they’ll have to block itunes in NZ, and only allow people to purchase from a NZ located online retailer.

Labour grandstanded on the carpark tax (yet never had a clear policy on it), but have now trumped that with their e-tax. I look forward to detailed Labour policy on what they would reduce the threshold to so we know how many of our online purchases they plan to stop at the border.

Michael Field at Stuff reported:

The United States and New Zealand have announced they are planning to create the world’s largest marine protected area.

The 4.9 million square kilometre Ross Sea MPA in Antarctica would be nine times the size of New Zealand.

The plan has been announced in Washington by new US Secretary of State John Kerry and the New Zealand ambassador to Washington, Mike Moore.

They were speaking at the screening the National Geographic Museum of The Last Ocean by New Zealand film-maker Peter Young. …

The US, the European Union and 23 other countries including New Zealand will decide in July whether to approve permanent protections for the Ross Sea and for a second area in East Antarctica, or to allow large-scale industrial fishing to continue.

An attempt last November to create the MPA at a meeting of the Commission for the Conservation of Antarctic Marine Living Resources, failed. …

Key areas to protect include a full range of marine habitats; from the ice edge to deep oceanic basins. The proposal protects the ecologically important features and habitats, including winter ice-free areas, the entire Victoria Coast from McMurdo Sound to Cape Adare, the Balleny Islands, and almost the entire Ross Sea continental shelf.

The large bulk of the MPA, the general protection zone, will be a no-take area.

Under the proposal the toothfish fishery would continue in areas outside the MPA.

It is good to have the US and NZ in agreement, as previously there were different proposals.

And it is good they are proposing a vast marine reserve for most of the Ross Sea.

But there is still an issue of whether the marine reserve should include the entire Ross Sea – just as all of Antarctica is protected for scientific research, not just some of it.

I don’t think there is a shortage of other areas to fish. Some ecosystems should be left undisturbed, and Antarctica is one of them.

Some useful analysis by Chalkie at Business Day:

Meanwhile, in April 2009, Finance Minister Bill English and then SOE minister Simon Power summoned SOE bosses to a meeting and told them to sharpen up.

“We’ve got a recession and we’ve got a government that wants value for the taxpayers’ dollar,” English told reporters after the meeting. “They need to get better returns than they’ve got.”

Solid Energy was not singled out for dividend extraction and a dose of debt, but you can see why it might have felt the rebuke more keenly than others.

Chalkie has run the numbers on debt and dividend levels for a bunch of SOEs going back to 2005 and it’s clear that Solid Energy was slacking a bit. From 2005 to 2008 its annual dividends were zero, $20 million, zero and zero.

Such paltry returns are not what you want from a business deploying shareholders’ funds of $400m or so. No wonder English and Power wanted more.

If the state has to own commercial trading companies, it is not unreasonable to expect them to pay a dividend. Otherwise we’d be far better off selling them, and investing the money elsewhere.

We’ll come back to what Solid Energy did with its money in a mo, but it’s worth noting that the Government’s rev-up didn’t make a difference to all SOEs.

Comparing the four years from 2009 to 2012 with the previous four years, average dividends actually declined at Meridian and TVNZ, stayed roughly the same at Genesis Energy, while big dividend lifts were apparent at Mighty River Power and Landcorp.

Debt levels were also not universally increased after English and Power’s crackdown. Landcorp’s borrowing stayed in the same ballpark while TVNZ’s fell considerably.

The point here is not that debt and dividends at those companies should have been different, only that the outcomes support the view that decisions on these matters were ultimately made by individual SOE boards.

Of course. In fact it is a decision not just for the boards collectively, but individual directors. A Director has to sign a certificate or resolution they they are personally satisfied that the company can pay the dividend – and there are serious legal implications for a Director who gets it wrong.

Chalkie reckons the Government’s position in 2009 was only what you’d expect from a shareholder and how boards responded to that pressure, rightly or wrongly, was down to their judgment of what was best for the business.

Solid Energy’s judgment was that debt could be substantially increased, from $33m in 2008, to $62m in 2009, to $212m in 2010.

By June 2012 debt was $295m, which sounds like a lot but on a crude measure of gearing – debt/total assets – at 25 per cent it was well within the bounds of normal, around 50 per cent.

A better measure may be interest payments, which were also no obvious grounds for alarm. In the year to June 2012, Solid Energy had operating cashflow of $142m – a measure of basic business profitability – representing considerable headroom for its interest bill that year of $14.8m.

So the interest was around 10% of the operating cashflow surplus – reasonably conservative. The problem is that the surplus disappeared as the coal price dropped.

With 90 per cent of the world just starting up the prosperity ladder, the company said, there was only one way oil prices – and therefore coal prices, which are strongly correlated – would go.

In its best-case scenario Solid Energy saw coking coal prices at US$400 a tonne by 2020 and US$600 by 2030.

So what should an energy business do if it sees soaring demand and high prices into the future?

If you believed prices were going sky high, you might invest in more coal production, you might invest in coal seam gas and underground coal gasification.

If you believed in world energy hunger, you might invest in alternative energy sources such as wood pellets, biodiesel and lignite briquettes.

If you believed in ever-tighter oil markets and you were an ambitious, patriotic Kiwi energy company, you might want to secure big chunks of oil exploration real estate.

So in a sense, Solid Energy’s strategy in pouring so many millions into these projects had a sort of logic to it.

But only if you believed the price projection.

The current coal price is US$101 a tonne.

The Treasury’s assessment of the NRC scheme advised: “It is not clear why the Crown would wish to take such an exposure in commodity price movements based on price path analysis not shared by other experts.” The NRC idea got the brush-off from the Government, quite rightly.

But Solid Energy isn’t struggling today because it thought about getting into oil exploration. It is in trouble because a lot of the money it did invest turned out to be wasted when energy prices didn’t behave as it thought they would.

The Government was smart enough to see the implausibility of Solid Energy’s forecasts when it came to the NRC, but not when it came to wood pellets, underground coal gasification, lignite, Spring Creek, biodiesel and all the other things soaking up the company’s resources.

While all that was going on, the Government shareholder was busy getting Solid Energy to fill in its boiler-plate questionnaires seeking answers about how many credit cards it gives employees, how many staff have mobile devices and what it spent on office refurbishments.

If we wondered why state-owned businesses tend to under-deliver, just think about committees of MPs and bureaucrats poring earnestly over executive mobile phone bills. For all the good it does they might as well flag it and and go to the pub.

Chalkie reckons the Government is well aware its lack of oversight helped Solid Energy get out of hand and is doing its best to make Elder the fall guy.

There is a degree of truth to this, but this is part of the problems of the SOE model. The select committee is focused on how many credit cards a company has and shareholding Ministers are responsible for scores of companies – as well as all their portfolio responsibilities.

Of course you also have Treasury staff, and they did warn against some of the plans, but with no disrespect to Treasury, a 25 year old analyst can’t compare to the role played by professional company analysts.

If Solid Energy was listed on the stock exchange, then there would be a number of commercial funds that would have invested in it. And those funds would have an analyst whose job it would be to know everything possible about that company. They would live, breathe and eat that company. They would read every report, every statement, attend every AGM, and be constantly analysing the company’s strategy, worth and risks. The reason for this is because their job depends on it. If they get it wrong, their employer (and them) stands to lose millions or tens of millions of dollars. When it is your money at risk, you take much more of an interest in a company’s performance.

And you would have a share price that would deliver real-time daily feedback on how investors thought the company was doing.

That’s not to say Elder shouldn’t have gone – he should. But to Chalkie the main responsibility lies with Solid Energy’s board, which reviewed and endorsed the company’s strategy year after year.

I agree – the board sets and agrees to the strategy.

The Government, meanwhile, was well aware of Solid Energy’s approach but didn’t pay it much attention – complaining about it now is just hypocritical.

I think it is unrealistic to expect the Government to be second guessing the board.

Overall, Chalkie see this as another example of why SOEs are a bad business model. It’s just a shame the debacle means Solid Energy will remain 100 per cent state-owned for even longer.

I agree – the model is flawed, to say the least.

The Herald editorial agrees:

In 2010, when the Government was still forming the mixed ownership model it took to the 2011 election, this was too much to contemplate. It rejected the notion of the national resources company, encouraged Solid Energy to develop its existing resources, including lignite and “unconventional” gas extraction, but offered no additional investment.

Within two years, China’s steel production had slowed, coal prices slumped, Solid Energy’s investments were not paying off and a share float is no longer in prospect. The board’s plans might have been “off the bullish end of the charts” but private investors ought to be invited to make that judgment.

When global energy demand recovers, the Government should sell whatever stake it takes to make the most of the country’s untapped wealth.

It is indeed a pity that private shareholders were unable to invest in Solid Energy earlier.  They should be the ones making the judgement on whether the bullish plans to become a global resources company were worth investing in.

This graph from The Atlantic tells a powerful story.

Print advertising is dying (but more slowly than a few years ago) but it is not being replaced by online advertising.

This is partly I think because of online alternatives to advertising such as auction sites, social media pages and free sites such as Craig’s List.

Andrea O’Neil at Stuff reports:

Wellington Mayor Celia Wade-Brown has been a dysfunctional embarrassment during super-city talks, and her council is selfishly crippling the rest of the region, claims Porirua City councillor Ken Douglas. …

Ms Wade-Brown all but derailed this summer’s super-city working party, Mr Douglas said at a Porirua City Council meeting on Wednesday.

”The mayor is dysfunctional. I tell you she’s something to be marvelled at. It is a total embarrassment to me to work in a party where she continually changes her mind and throws up other options.”

Since January Mr Douglas has been chairman of an amalgamation working party comprising mayors and councillors from Wellington, Porirua, Kapiti and Greater Wellington councils.

Wellington City Council at first refused to engage in the working party, but since joining, Ms Wade-Brown has done little but frustrate the group’s progress, Mr Douglas said.

”As soon as she sat down she threw sand and sawdust all over the process.”

The mayor further enraged working party members by criticising its findings the day they were released, on March 8.

This is not a right vs left thing. Ken Douglas is the former head of the NZ Council of Trade Unions.

What will be interesting to see this year is who stands against Celia. Will Labour put up a candidate??

Peter Cresswell responds to my earlier blog on patent trolls:

He says:

Thomas Edison was a “patent troll.”

So was Nikola Tesla.

So was almost every great inventor in the last 200 years*.

So is any inventor who licenses their invention rather than produce it themselves.  Unlike the ignoramuses who attack them, these people aren’t trolls. They’re benefactors:

Not every person who patents something they don’t produce is a patent troll. But patent trolls don’t actually come up with inventive ideas. Their inventive idea is to just file a patent over anything they can think of, even if it is not a true invention. Once they get the patent, they’ll find victims who will pay them a fee rather than go to court to get the patent over-turned.

PC quotes a Judge:

Judge Michel,  former head of the CAFC, the US court that hears all patent appeals, points out that the number of patent suits filed each year has remained constant at less than three thousand.  Only about 100 of these suits ever go to trial.  In a technology based economy with over 300 million people and 1 million active patents this is trivial.

Of course they don’t go to trial. If you want to try and fight a patent claim you need US$1 to US$2.5 million generally. What small business can afford that?

The proposed law change mooted in the US doesn’t ban patent trolls. It just changes the economic incentives so that the trolls have to post a bond to cover the defendant’s costs in case they lose. So you can’t just set up a $500 shell company and threaten patent lawsuits. The problem for the defendent is that even if they win, they will never recover the cost of defending the lawsuit. So of course they settle.

Questions for Oral Answer.

Questions to Ministers.

1. DAVID SHEARER to the Minister for State Owned Enterprises: Has the Government met the five criteria the Prime Minister laid out for proceeding with asset sales?
2. Dr RUSSEL NORMAN to the Minister of Finance: Will New Zealanders have money taken from their bank accounts to fund a bank bailout under his proposed Open Bank Resolution scheme?
3. TODD McCLAY to the Minister of Finance: What reports has he received on New Zealand’s balance of payments?
4. Hon ANNETTE KING to the Minister of Health: Does he stand by all his statements regarding “Better, Sooner, More Convenient” health care; if not, why not?
5. MARK MITCHELL to the Minister of Police: What reports has she received from Police on the success of pre-charge warnings?
6. PHIL TWYFORD to the Minister of Housing: Why did he tell the House that, even if the Auckland plan took effect in September, new subdivisions would not be available until 2016-17, when the advice he tabled from Roger Blakely of Auckland Council shows that if the unitary plan takes effect in September new land would be available two years earlier?
7. ALFRED NGARO to the Minister for Social Development: How will the Social Security (Benefit Categories and Work Focus) Amendment Bill back people off welfare and into work?
8. GRANT ROBERTSON to the Prime Minister: Does he stand by all his statements on the actions and involvement of the Department of the Prime Minister and Cabinet and the Government Communications and Security Bureau in Operation Debut?
9. SCOTT SIMPSON to the Minister of Health: What is the Government doing to extend access to free flu vaccines?
10. METIRIA TUREI to the Minister for Social Development: Does she have an obligation, as Social Development Minister, to ensure all policy she is responsible for will be good for children and their families?
11. Hon KATE WILKINSON to the Minister for Primary Industries: What announcement has he made on the drought in New Zealand?
12. Rt Hon WINSTON PETERS to the Minister for Canterbury Earthquake Recovery: Have allegations of fraud and corruption involving Canterbury earthquake recovery and rebuild contracts been raised with him as Minister; if so, what specific steps has he taken to address them?

Today Labour are asking four questions, The Greens two questions and NZ First one question. Labour are asking about asset sales, healthcare, housing subdivisions in Auckland,  and the GCSB. The Greens are asking about bank bailouts and social policy for children. NZ First is asking about fraud in the Canterbury earthquake recovery contracts.

Patsy question of the day goes to Scott Simpson for Question 9: What is the Government doing to extend access to free flu vaccines?

General Debate 3.00 PM -4.00 PM.

12 Speeches of no more than 5 minutes in length.

Government Bills 4.oo PM- 6.oo PM and 7.30 PM – 10.00 PM.

1. Social Security (Benefit Categories and Work Focus) Amendment Bill – Second Reading.

2. Marine Legislation Bill – Second Reading.

3. Local Electoral Amendment Bill (No 2) – Second Reading.

The Social Security (Benefit Categories and Work Focus) Amendment Bill is being guided through the house by Paula Bennett. This bill amends the Social Security Act 1964. It is part of a package of reforms to shift the focus of the benefit system towards encouraging and supporting beneficiaries to move into paid work.

The Marine Legislation Bill is being guided through the house by Gerry Brownlee. This bill proposes amendments to the Maritime Transport Act 1994 and the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012.

The Local Electoral Amendment Bill (No 2) is being guided through the house by Chris Tremain. This bill seeks to amend the Local Electoral Act 2001 and the Local Electoral Regulations 2001 with regard to provisions for the conduct of local elections; transparency and accountability around electoral donations; and the integrity and efficiency of the electoral system.

Summer evening fishing on the jetty at Lake Rotoma. New Zealand landscape photography by Todd Sisson.

A change of scene from all of last week’s mountainous drama-filled glory.  I made this image while taking my little guy, Jack, out for a spot of fishing in January – if you look hard  you can see his camo-clad figure at the end of the wharf.  We caught nothing, but we made a significant blood donation to the local sandfly population.

Free Wallpaper Download

You may download the large version of today’s image from this link:  Please note the new, shorter, Password = wwp

This image is up as a canvas print here and available for licencing here.

See you next week – and thanks for all the great comments last week!

Cheers – Todd [www.sisson.co.nz] 

Regan at Throng blogs:

Last Thursday, Seven Sharp ran a story about domestic violence in a staged enactment in an Auckland street.  This morning (five days later), the New Zealand Herald has a story that claimed“Women’s Refuge has criticised a Seven Sharp story on bystander reaction to violence against women which used the song Smack My Bitch Up as a backing track”.

The New Zealand Herald has a history of inciting anger when there is none and this latest escapade is no different.

We spoke to Women’s Refuge this morning and a spokesperson told us that they had been completely unaware of Seven Sharp’s story until the NZ Herald had contacted them for comment.  Colour me surprised. 

Getting upset over a backing track that features no lyrics on an issue that is increasingly problematic in New Zealand is incredibly petty and completely misses the point.  The fact that the issue is getting raised at all is something that should be congratulated, not lambasted for such trivial and inconsequential points.

If the track had included lyrics, then lots of people would be upset. But the reality is that no one watching the show was in any way offended. It was only five days later the “rage” was manufactured.

Colin Espiner blogs:

I don’t know about you, but I’m forever forgetting about my offshore bank accounts with large amounts of cash in them. It’s a job to remember to tell the IRD about it, let alone to declare them where I might have a conflict of interest. 

But then, I’m not an MP. More particularly, I’m not the leader of the opposition, nor the head of a party that has made something of a habit of calling for the heads of other MPs whose memory has been somewhat imperfect. 

David Shearer claims he “forgot” about his account with Chase Manhattan Bank in New York City when he came to declare his financial interests to Parliament, as is required under the MPs’ Register of Pecuniary Interests.

Well, we all make mistakes, and none of us are getting any younger except policemen. But Shearer didn’t just forget the one time. He forgot four times in a row – 2009, 2010, 2011, and 2012.

To compound matters, though he forgot to disclose the account to Parliament and therefore to the public, he did remember to tell the IRD about it. He also remembered to tell Parliament about his other bank account with Westpac.

Given that only accounts with more than $50,000 in them must be publicly disclosed, it’s highly surprising that this slipped Shearer’s mind. Either the Labour leader is extremely forgetful, or he has a lot more money stashed away than any of us thought.

We don’t know the actual amount, since Shearer hasn’t disclosed that, because he doesn’t have to, but it could be considerably more than $50,000.

I was on NewstalkZB yesterday with Colin, and this issue came up. While $50,000 is a lot of money to overlook, it looks even worse if it is even more than that.  So how much could be in the account? Well it was used to collect his UN pay.

According to the UN, the salary of a senior manager in a Middle East post would be around US$190,000 a year. Now consider that this is tax free, and that when you are on assignment basically all your living and travel costs are work expenses. So the vast majority of your salary can be saved.

Shearer worked for the UN from 1989 to 2000 and 2002 to 2009, which is a total of 18 years. The total UN salary over that period could have been a bit over US$3 million tax free and expense free. To have an account balance of only US$60,000 means you saved only 2% of it. If you saved 20%, then the account might have over US$500,000 in it.

Note I’ve got absolutely no issue with how much David Shearer earnt at the UN – he did good work there. And good on him for saving a lot of it. That’s prudent.

But if you forgot to disclose an account for four years in a row, then there is a credibility issue around how you forgot that is linked to how much was in it.

On the lighter side, enjoy this satire from The Civilian:

The revelation is the latest in a string of surprising admissions from David Shearer that began yesterday after he was suddenly reminded of an overseas bank account he’d forgotten to disclose on the Parliamentary Register of Pecuniary Interests. Since then, Shearer has also remembered that he hasn’t paid taxes in four years, and last week burgled a small dairy in central Wellington.

When asked what he stole, Mr. Shearer replied “Snickers.”

A number of Labour MPs stood alongside their leader at today’s press conference to offer him their support. Not amongst them was backbench MP David Cunliffe, who had volunteered to phone constituents on Shearer’s behalf to let them know of the affair first-hand.

Heh.

Stuff reports:

Improvements to the merging of SH1 and SH2 traffic at the Ngauranga Interchange north of Wellington, completed in August 2011, had shaved an average of two minutes off people’s journeys, he said.

The opening of a third lane through the Victoria Park Tunnel in Auckland last year had reduced travel times by between 5 and 17 minutes, while upgrades to the Te Rapa section of the Waikato Expressway were saving motorists an average of 3.5 minutes.

“These travel time savings are just the beginning, with much of the roads of national significance programme still to come, but already these roads are delivering huge benefits to productivity and the environment,” Mr Brownlee said.

Green Party transport spokeswoman Julie Anne Genter said her party never opposed sensible, cost-effective roading projects like the Ngauranga upgrade.

Really?

Can anyone name a roading project the Greens have supported?

For Ngauranga, their 2005 policy was:

Wellington: Inner-city ‘bypass’ and the Western Corridor from Ngauranga to Otaki

The Western Corridor is a narrow stretch of land ideally suited to public transport. Major roading projects are extremely expensive and send the wrong signals in terms of climate change, peak oil and urban sprawl. The Green Party will Work to ensure a comprehensive upgrade of public transport occurs before further consideration is given to significant roading upgrades.

Doesn’t sound like support to me.

They also opposed for over a decade the inner city bypass which has made a massive difference to traffic flows onto and off the motorway.

But I’m serious with my challenge. If you can find a press release from the Green Party unequivocally supporting a specific roading project then post the link in the comments.

Kate Chapman at Stuff reports:

The Maori Party is considering three leaders after a failed leadership bid by party whip Te Ururoa Flavell.

Co-leader Tariana Turia has described it as akin to having no leader at all. …

Professor Winiata’s suggestion was that the co-leader model be scrapped and each of the party’s three MPs be given responsibilities.

It would likely see Dr Sharples taking over within Parliament, Mr Flavell with the party’s grassroots and Mrs Turia sticking with Whanau Ora. Dr Sharples and Mrs Turia would retain their ministerial portfolios.

The best tweet on this idea came from Marcus Cook:

Breaking; Maori Party to trial having no leader. Cites Labour Party as example

Heh.

Dr Sharples has repeatedly refused to step aside. “The bottom line is I’m prepared to lead us until I’m dead; I mean forever,” he said yesterday.

Not a useful statement. The best leaders are those who aim to achieve a few things during their time at the top, and help train up and mentor their successors.

Audrey Young in the NZ Herald wrote:

The temperature in Parliament is sure to rocket when the law “reinstating” youth rates is debated this week.

It happens every time the emotive issue is debated, as it did last week when the bill to bring them back passed its second reading. …

The new youth rates will be called the Starting Out Wage.

Labour says youth rates will be reinstated, suggesting that they were previously abolished.

But Labour did not support the bill of former Green MP Sue Bradford to abolish youth rates. It opted instead for a dilution of her bill but which limited the amount of time that a new young worker could remain on youth rates to 200 hours or three months.

National went to the last election campaigning for a change to that regime, saying the move had contributed to a significant rise in youth unemployment.

The change is in fact quite modest. It is not full youth rates. The starting out rate will only apply:

• To a 16 or 17 year old with a new employer, for the first six months
• To an 18 or 19 year old who has been on a benefit for more than six months

The $13.50 minimum wage will be raised to $13.75 on April 1. From May 1 the Starting Out Wage would be 80 per cent of that, or $11.

Act leader John Banks said his party believed 80 per cent was too high as a minimum. In Britain the rate was 60 per cent for 16-year-olds and in Australia it was 48 per cent for 16-year-olds.

He compared the Starting Out Wage to the dole, paid to 40,000 young people every fortnight between 15 and 19 – equivalent to $4.50 an hour. He said they desperately needed the “dignity of work and a job opportunity”.

I believe getting a young person their first job is incredibly important and making it illegal for a 16 year old to work for less than $13.75 an hour is incredibly stupid.

We see the impact of this stupidity by the fact that the unemployment rate is currently 30.9% for under 20s.

Labour MP Darien Fenton compared the move to discrimination against women and Maori who at one time were paid less because some people said they were worth less. No one would tolerate that type of discrimination today.

You are remain female or Maori for ever. You do not remain 16 for ever. Also minimum wages are not maximum wages.

It would then also be acceptable, she said, to discriminate against older workers.

We don’t allow a 16 year old to vote, yet allow 70 year olds to vote so the comparison is invalid.

“It perpetuates its stereotype of young workers being unreliable and incapable, and it ignores the fact that many young workers have already had considerable work experience at the age of 16.”

if they have had work experience at 16, it can only be because they were employed under the age of 16 – when there is no minimum wage.

One of the strongest submissions against the bill came from the Human Rights Commission. It said unequivocally that the discrimination could not be justified.

“In New Zealand, the age at which children and young people are deemed to be adult is considerably younger than 20 in many critical areas of life.

“The minimum age of criminal prosecution is 14 for most offences, 12 for serious offences and 10 for murder and manslaughter.

“Children in New Zealand are legally able to marry at 16 (with parental consent if either party is 16 or 17) and drive at 16.

“Children can enlist in the military at 17 and be deployed at 18.

“Yet they are not considered to be sufficiently adult enough to be protected by the minimum wage.”

I agree you gain you rights of adulthood at before 20. I actually support 18 and 19 year olds getting the adult minimum wage.

But I think there is no justification for having the minimum wage start at 16 instead of 15 or 17 or 14. 16 is arbitrary and capacious.

18 is when you are generally deemed an adult who can vote, marry without permission etc. It is also when most people finish school and leave home.

So what I would do is simple.

• No minimum wage at all for 16 and 17 year olds (like it is for 14 and 15 year olds). Getting a job is far more important than what it pays, especially when almost everyone at that age is still living at home. 
• Full minimum wage at age 18

I’ve blogged on the leaked comments showing that Labour, Greens and the unions spent probably around $400,000 (mainly taxpayer funded) on gaining enough signatures for their referendum petition.

I thought it would be useful to contrast that with the previous successful petition, on the smacking issue.

I e-mailed the organiser, Larry Baldock, on how they got enough signatures and they did it the old fashioned way. They didn’t use taxpayer money to hire people to collect signatures. Larry says:

My wife and I spent almost 16 months travelling around NZ almost 4 times, some of the time in a sign written camper van collecting signatures in towns and cities, at AMP shows, field days and any events like V8’s, home shows etc.  Many days on the beach at Mt Maunganui. Some elderly supporters, spent many days each week right through winter sitting at a table outside a Post shop and collected thousands of signatures.  There are many stories! 

Such a contrast to having 10 paid staff work on co-ordinating the petition and using taxpayer funding to pay people to collect signatures. What Larry and others did is what CIRs are meant to be about – the public petitioning Parliament. Not the losing parties in an election trying to over-ride the election result.

Now the smacking petition got their signatures and a referendum was held. The result was beyond over-whelming. In response to the question:

“Should a smack as part of good parental correction be a criminal offence in New Zealand?”

87% voted no. Now one can quibble that the use of the term “good” is a bit loaded, but anyone who seriously thinks the result would have been vastly different with deletion of that word is deluded.

The referendum was held at the end of a two year high profile debate on the anti-smacking law. It is silly to suggest that NZers did not know exactly what they were voting for.  Maybe a slightly differently worded question would have got say 80% in favour instead of 87%. But that result was a massive landslide, You just can not credibly suggest that there was not a majority against the ban on correctional smacking.

Also polls every year since the referendum has shown a vast majority think that the law should allow correctional smacking that is reasonable (the old law allowed reasonable force). Family First have released the 2013 one which Curia did for them. I think the question is quite fair. In full it says:

In 2007 Parliament passed a law that removes a defence of reasonable force for parents who smack a child to correct their  behaviour, but states the Police have discretion not to prosecute if they consider the offence was inconsequential. 

Do you think the anti-smacking law should be changed to state explicitly that parents who give their children a smack that is reasonable and for the purpose of correction are not breaking the law?

So the question include what the law change was, specifically mentions the inclusion of the Police discretion and asks if they think correctional smacking should be legal, if reasonable. Now I am sure some can and will quibble over exact wording but considering the results were 77% said yes and only 18% no I am utterly confident that any alternate wording would produce much the same result, so long as it wasn’t totally slanted (such as should parents be able to assault their children).

There can be no doubt that the majority of New Zealanders want correctional smacking to be legal, and there was a referendum that said so by a massive 7:1 margin.

Now one can have the view that a party’s policy should triumph over a non binding referendum. I certainly hold that view.

But what is absolute hypocrisy is to be a party that ignored the results of this 2009 referendum, and then two years later to then demand that the Government should break its election policy on the basis of the asset sales referendum.

What many do not know is that a bill was selected for first reading in Parliament in 2010, just a couple of weeks after the referendum result. The bill would have implemented the referendum result by amending the law so that:

it is no longer a criminal offence for parents, and those in the place of parents, to use reasonable force for the purpose of correcting their children’s behaviour and there are clear statutory limits on what constitutes reasonable force

The law was basically identical to what the referendum called for. Now how did Labour and Greens vote on this bill, just three weeks after the referendum? The voted it down (along with every other party except ACT) at first reading.

Now I think National should have voted for the bill, but at least National is consistent that their party’s policy over-rides a referendum result. They have never ever said that referenda should trump elections.

But the actions of Labour and Greens in 2010 show that they are happy to ignore referendum results – unless it is a result they personally agree with.

Their asset sales referendum is nothing to do with democracy. It is mainly a device for them to use taxpayers money to get people onto their e-mail and direct mail lists.

So every time Russell Norman or David Shearer demands that the Government should not proceed with asset sales due to the proposed referendum, someone should ask them when will they be voting to amend the Crimes Act to allow correctional smacking. There is no response they can give which isn’t hypocritical.

And we should change the law to stop parliamentary parties from spending their parliamentary resources on promoting a referendum petition. CIRs are meant to be initiated by citizens, not by the losing parties in an election campaign.

An interesting 12 questions with Katherine Rich:

3. Was there, and is there still, sexism in the House?
Yes, but you’d strike that anywhere. Just think about the way politics is reported. I’ve never seen a “Battle of the Babes” sort of headline for any electoral battle between male candidates or seen them described with words like feisty, perky or shrill.

Very true.

4. How did you cope with that?
I can’t think of any recent example, but years ago I’d deal with issues with either a sense of humour or by choosing battles. Sometimes I’d be less patient or polite. Although I would, of course, never resort to violence, I did tell one colleague who patted my pregnant tummy too many times that if he did it again I would punch him on the nose. I said it with a smile, but with sufficient firmness that he didn’t do it again.

Heh, I wonder who it was?

8. Your role at the Food and Grocery Council can be a controversial one, especially when you are opposing food campaigners on issues such as food labelling and salt. Are you doing God’s work?
I don’t see it as controversial. I see it more as providing the other side to a lot of grocery industry discussions. You’d be surprised but many shock/horror stories about the food and grocery industry aren’t true. I don’t doubt the sincerity of those who call for fat taxes, bans, salt regulation or all sorts of different warning labels, but many ideas are completely unworkable. A fat tax in New Zealand would raise the price of cheese and butter, so support for these ideas falls away when Kiwis understand the implications. There’s only so much salt, fat and sugar that can be removed from a product before [it] tastes like cardboard. Eating a healthy diet and moderation in all things is something I talk about a lot.

I love that quote I have bolded.

12. Will you always be a Tory?
I’m a centre-right thinker and I did vote Labour in ’87 – my first vote – when they were the more centre-right party.

I voted Labour in 1987 also.

Claire Trevett at NZ Herald reports:

Labour leader David Shearer says his failure to declare a US-based bank account with more than $50,000 in it on the MPs’ Register of Pecuniary Interests was simply an oversight. …

Mr Shearer would not reveal how much was in the account, but MPs are required to include accounts with more than $50,000 in them.

He had included his UN pension scheme in the register since becoming an MP, but Mr Shearer said he realised, while he was doing his tax paperwork recently, he had not included the bank account in the register. Inland Revenue had known about the account, for tax purposes.

This is the puzzling part. You are filing a tax return every year where you include the bank account and interest earned, but it never twigs that you should also include that is your Register of Pecuniary Interests.

I am sure it is a genuine mistake, but it is very sloppy.

Prime Minister John Key yesterday would not comment on Mr Shearer’s omission, saying it was up to Mr Shearer.

Could you have imagined what would have happened if the situation is reversed.

We already have the precedent that Trevor Mallard called for Chris Finlayson to be stood down over a non-substantive omission.

If John Key had forgotten to include a foreign bank account, I have no doubt that Labour MPs would be calling him corrupt and a liar. They would be demanding an inquiry into what other bank accounts he hasn’t disclosed, and they would have filed contempt of Parliament charges with the Speaker to refer to the Privileges Committee.

Rather than be a minor story in the Herald (and it seems no mention at all at Stuff), it would be the lead item for at least a week.

Personally I’m glad National MPs are acting like decent human beings and not accusing Shearer of anything. I believe it was a genuine sloppy mistake. But I have no doubt at all that if the situation was reversed there would be hysterical language used against Key by Labour MPs.

Scott Yorke adds a typically humourous touch to the issue:

Labour Party leader David Shearer has moved quickly to discipline one of his MPs for failing to declare a pecuniary interest.

“I expect high standards from my MPs” said Shearer, as he announced that MP David Shearer would be stood down from all duties. …

Labour’s leader said he hoped the move would be a “wake-up call” to members of Labour’s caucus.

“These rules exist for a reason, and we have to take them seriously” Shearer said.

Shearer agreed that the failure by one of his MPs to follow the rules was a “bad look” that “let the side down”.

But he refused to be drawn on whether he would reinstate the MP for Mt Albert after a spell on the backbenches. …

The demoted MP last night refused to comment on the decision by his leader. But he confirmed that he still fully supported David Shearer as leader of the Labour Party.

Heh.

John Banks has also pointed out Labour’s double standard:

Labour Leader David Shearer should apply his own ethical standards to himself and stand down, ACT Leader John Banks said today. 

“Shearer is on record as saying those who suffer from a memory lapse aren’t fit to hold office,” Mr Banks said.

“But yesterday, Shearer admitted he ‘forgot’ to declare more than $50,000 he has stashed away in an overseas bank account.  

“Worse, he didn’t forget once, he forgot four years in a row.   Shearer’s hypocrisy is staggering.    

The Local Electoral Act amendment bill will be debated soon. It was going to be open season on John Banks, but now when Labour point out his failure to disclose, they’ll have their own leader’s failure thrown back at them.

An updated story has John Key saying:

“In the end it’s a matter for him,” Mr Key said today.

“People make mistakes. I make mistakes and when I do, I try and tell people I’ve made them. It’s just that you don’t get cut any slack from the Labour Party when you say you’ve made a mistake, but when they make one they don’t want anyone to have a look at it.”

Again, incredibly mild.

You can vote in my sidebar poll on What are you least likely to forget?

The options are:

• A 5 second mention of Kim Dotcom in a powerpoint briefing
  
• The existence of a foreign bank account with at least $50,000 in it, for three years

Steven Joyce has announced assistance for schools:

The $6 million package will be allocated as a one-off payment across the sector, calculated on a formula of $105 per Full-time Teaching Equivalents (FTTEs) plus $500 per school. For example:

• A small school of 5 FTTEs will receive $1,025
• A medium school of 20 FTTEs will receive $2,600
• A large school of 120 FTTEs will receive $13,100.

If there is eventually a court battle between the Government and Talent 2, then this will be added to the disputed bill!

Joyce also updated on the system:

“In the last three fortnightly pay periods, the percentage of complaints and notifications received dropped from 2.2 per cent to 1.9 per cent to 1 per cent while at the same time the total number of people being paid increased from 74,373 to 84,822.

“Following Pay Period 26 this week, the next big challenge will be Pay Period 1, in which significant changes occur for the start of the new financial year, including adjustments to KiwiSaver and student loan repayment rates. These changes may introduce new issues. The Ministry is working closely with Talent2 to minimise any increases in error rate.

So it has got better, but may get worse with the new financial year.

Out of interest does anyone know what the error rate with Datacom was?

“In regards to bug fixes, 87 defects have been resolved as part of the remediation plan to date, with 143 scheduled for resolution in a release on 23 March and a further 46 currently scheduled for 20 April. 228 defects are being managed through business as usual processes and we are looking at a fourth release to deal with remaining defects and usability issues.

The total number of current defects is 526. These include 49 Category Two defects (very serious), 320 Category Three defects (serious), 115 Category Four defects (moderate), and 42 Category Five defects (cosmetic). It is planned that the number of Category Two defects will be reduced to 12 on completion of the second release this coming weekend.

I guess a category one defect is the system is offline!

The Press editorial:

On the face of it, the attack last week by the Minister for Earthquake Recovery, Gerry Brownlee, appears to be amply justified.

While there may be room for quibbling about the exact numbers, the pace with which the Christchurch City Council has repaired and replaced the social housing damaged by the earthquakes has been slow.

Quoting from the council’s own latest report, the council has closed 327 social housing units but has managed, in a programme that is supposed to be urgent, to repair and relet only six of them.

Astonishing.

Brownlee is quite right to draw attention to it and to try to set a fire under councillors to get something done about it.

His singling out of Cr Yani Johanson for criticism was, however, misdirected. It is possible to understand the minister’s temptation to target Johanson. In the political spectrum of the council, Johanson sits on the gadfly Left wing.

After some years in office, he still has the slightly bumptious and irritating air of the student politician about him. He is also not slow to criticise the performance of others.

Indeed.

So when the council fails in a serious responsibility he appears to be in charge of, one can see how taking a swipe at him would be hard to resist.

It is, nonetheless, unfair.

For one thing, while Johanson is chairman of the committee that is in charge of the social housing stock, he is only one councillor among the others. He is not like a minister of the Crown. Any failure with repairs to social housing lies not with Johanson alone but with the other councillors on his committee and with the whole council.

I agree, Johanson is not solely responsible. However his share of responsibility must be greater than other Councillors as he chairs the committee in charge.

Taking the opportunity provided by Brownlee’s broadside to have a dig of his own at Johanson, Cr Aaron Keown suggested there were tensions between Johanson’s committee and council staff that were impeding progress on repair work.

If that is correct, the remedy is not, as Keown suggested, to transfer the work to the committee on which Keown sits, but for any difficulties to be identified and fixed. Council staff must provide councillors with prompt, accurate, complete information, and councillors must provide staff with clear and precise directions.

It is hard to say what the solution is, until we know what the problem is. The Council needs to clarify why it has only been able to fix six houses in two years and what changes are necessary to speed this up.

It was almost exactly a year ago that Brownlee lit a rocket under the Housing Corporation for its apparent lethargy on getting state houses repaired and replaced. More action quickly followed.

Beleaguered city council tenants will be hoping his latest blast will be as effective.

That would be good.

Personally this reinforces my belief that Councils should not be landlords. They tend to be very bad at it, and providing community housing is better done by Housing NZ and community groups. If the Council was not the owner, I suspect many more of those houses or apartments would be repaired by now.

Jordan Weissmann writes at The Atlantic:

It’s hard to think of any business more inherently obnoxious than a patent troll. These are the tech-world parasites that buy up troves of intellectual property, not so that they can make a product, but so that they can turn around and sue successful companies for patent infringement with the aim of nabbing a quick and profitable settlement. They’ve infested the courts over the last decade, and by one count are now responsible for more than half of all U.S. patent cases, potentially costing American businesses some $29 billion a year.

So kudos to Oregon congressman Peter DeFazio, who Thursday morning introduced a bill aimed squarely at putting the trolls out of commission. His smart and simple legislation, called the SHIELD Act, would force trolls that lose in court to reimburse the companies they sue for their legal fees, which can amount to millions of dollars. That might not sound particularly bold. But it’s a carefully calibrated step that could go a long way to containing the the troll problem by driving up the cost — and risk — of bringing flimsy patent cases. 

I like it.

Trolls have flourished over the last few years largely because it’s now easier and cheaper to bring a patent case than it is to defend against one. Much like personal injury lawyers who advertise on TV, the attorneys who represent trolls often work on contingency, meaning they only take a cut of what they win. Defense lawyers, on the other hand, ask for their pay up front, and usually bill by the hour. As a result, a single troll can file a barrage of lawsuits without putting much skin in the game, while the small companies they tend to target — about 55 percent of the businesses sued make less than $10 million a year — are forced to mount a costly defense that saps their finances with each passing day. 

We’re lucky that generally we’re too small to target, but we have had a few.

There’s also a more subtle way DeFazio’s bill throws a kink into the troll business model. At the start of each patent suit, the plaintiffs will have to show that they are either a university, the original inventor of the patent, or a company sincerely trying to turn it into a commercial product. If they can’t, they will be officially deemed a troll, and be required to post a bond to cover the defendant’s costs, should they lose a case. That will tie up their money, which in turn will make it more cost-intensive to bring lots of suits while simultaneously cutting their return on investment. 

Hopefully he can get it past Congress.

Oral Questions 2.00 pm – 3.00 pm

Questions to Ministers

1. MAGGIE BARRY (National) to the Minister of Finance: What reports has he received on the economy?
2. BRENDAN HORAN (Independent) to the Minister of Education: Is accountability within our education system paramount?
3. DAVID SHEARER (Labour) to the Prime Minister: Does he stand by all his statements?
4. Dr RUSSEL NORMAN (Greens) to the Minister of Finance: Does he stand by his response that human-induced climate change “may well be” real?
5. NICKY WAGNER (National) to the Minister of Health: What progress can he report on the Christchurch Hospital redevelopment project?
6. DARIEN FENTON (Labour) to the Minister of Transport: Does he have confidence in KiwiRail’s health and safety standards; if not, why not?
7. PAUL GOLDSMITH (National) to the Minister of Transport: What progress has the Government made on improving roading infrastructure?
8. Rt Hon WINSTON PETERS (NZ First) to the Prime Minister: Does he stand by his reported statement in relation to the film Argo that “I think it’s disappointing, but I don’t think we want to go too far on these things”?
9. METIRIA TUREI (Greens) to the Prime Minister: Does he stand by his statement that “our plan will allow Auckland’s civic leaders to think regionally, plan strategically and act decisively in a way that has not happened for the past six decades”?
10. Hon DAVID CUNLIFFE (Labour) to the Minister of Revenue: Why has the Government decided not to change the fringe benefit taxation of employer-provided car parks in Auckland and Wellington, but to leave in place proposals to tax cell phones and laptops?
11. MELISSA LEE (National) to the Minister for Social Development: How is the Government’s Social Workers in Hospitals initiative making a difference for vulnerable children?
12. CHRIS HIPKINS (Labour) to the Minister responsible for Novopay: Is he confident that teachers will now be receiving the correct pay in future pay rounds; if not, why not?

Labour and National are asking four questions apiece, the Greens two, NZ First one, and Brendan Horan one. Patsy of the day goes to Melissa Lee for question 10: How is the Government’s Social Workers in Hospitals initiative making a difference for vulnerable children?

Labour is asking on KiwiRail’s health and safety standards, the car park tax, Novopay, and a gotcha to the PM. The Greens are asking on climate change and regional planning in Auckland, NZ First is asking on the film Argo and Brendan Horan is asking about education.

Government Bills 3.00 pm – 6.00 pm and 7.30 pm – 10.00 pm

1. Appropriation (2011/12 Financial Review) Bill – committee stage (cont.)
2. Minimum Wage (Starting-out Wage) Amendment Bill – committee stage
3. Student Loan Scheme Amendment Bill (No 2) – committee stage

The Appropriation (2011/12 Financial Review) Bill is under the guidance of Bill English and confirms the financial matters relating to the financial year ended 30 June 2012. Four hours are allocated to it and all financial reviews are available for debate.

The Minimum Wage (Starting-out Wage) Amendment Bill is under the guidance of Simon Bridges and amends the Minimum Wage Act 1983 through changes to the Order-in-Council provisions. These include introducing the ability to set 1 or more starting-out rates of wages (payable at not less than 80% of the minimum adult rate of wages) for eligible young people aged 16, 17, 18, or 19 years who are not supervising or training other workers, repealing the ability to set the current new entrant rate, and changing the criteria for setting the current training rate.

The Student Loan Scheme Amendment Bill (No 2) was introduced by Peter Dunne in August 2012, in his role as Minister of Revenue. The Bill introduces data-matching with the New Zealand Customs Service to locate borrowers in serious default when they enter or leave New Zealand. It will also change the definition of income, bringing it into line with the definition used for Working For Families tax credits and student allowances, from April 2014. At second reading only the Greens and Mana voted against.

Antony Green has launched his 2013 election calculator. Antony is the premier election analyst in Australia.

It makes predictions for all 150 seats on the basis of either the swing or two party preferred vote. But it has some additional nifty features.

• Can select the results from a recent poll
• Can set individual swings for each state (and swings do not tend to be uniform across the country)
• Can factor in retiring MPs
• Can over-ride the projected result in a few marginal seats

On the latest (Neilsen) poll Labor is projected to lose 25 seats and win 47 while the Coalition is projected to gain 25 seats and win 98.

On the best poll to date for the Coalition, they would win 110 seats to 35 for Labor.

One can see why some of the Labor MP are thinking the unthinkable and Rudd may challenge again.