Two taxation issues have been getting some publicity of late. They are about fringe benefit tax on company car parks and taxation on long-stay accommodation.

As I have said many times the best tax system is low rate, broad base and as few loopholes as possible.

At this stage, I find the the proposed tax treatment of car parks quite reasonable, but the new tax rules on long-stay accommodation quite troubling. Let’s look at both in turn.

3 News reports:

Finance Minister Bill English is backing a controversial move to make company carparks subject to fringe benefit tax. That’s despite strong opposition from an unlikely coalition of trade unionists and employers.

It’s an unusual union of convenience. New Zealand’s most left-leaning trade union is working with the country’s biggest business association to topple a Government tax bill, with bumper stickers.

“Sometimes we have common causes,” says Unite Union secretary Matt McCarten. “To fight an obnoxious tax like that is one of them. We are united in hating the Government on this one, I’m very pleased to say!”

The Government wants to tax company carparks. Revenue Minister Peter Dunne is proposing a 50 percent hike on the perk, but only in central Wellington and Auckland. He’s got support from the top. 

“It’s going to not raise any money,” says Employers and Manufacturers assistant chief executive Kim Campbell. “It’s picking on Auckland and Wellington. It’s picking on CBD workers, not everybody.”

The proposed law change was announced by the Government on 11 December 2012.

He said public submissions on the proposed salary trade-off changes resulted in adjusted proposals to focus mainly on employer-provided car parks.

A wider set of car parks provided to employees (predominantly in Auckland and Wellington CBDs) will be taxed, through the fringe benefit tax (FBT) rules.

“These changes enhance the integrity of the tax and social assistance systems by providing a fairer, more equal, way of treating those who receive non-cash benefits as part of their remuneration and those who receive only cash remuneration,” Mr Dunne said.

The SOP is here.

Fringe Benefit Tax is designed to remove the incentive for employees to reduce their taxable income by having part of their remuneration in non cash terms.

Rather than (for example) pay someone a $100,000 salary on which they pay $33,000 tax, the employer used to be able to say we’ll give you $90,000 salary and $10,000 of fringe benefits (say medical insurance, superannuation contribution etc). That reduces the tax bill to $30,000 and advantages that employee over someone who is just on $100,000 with no fringe benefits.

Hence without an FBT, you’d get a huge number of employers and employees agreeing on as many fringe benefits as possible to reduce their tax liability. Which is why FBT was introduced in (off memory) the early 1990s.

So now the issue is whether car parks are a fringe benefit. It seems hard to me to argue they’re not. Not all employees travel to work by car, but those who do need to park it of course. There are dozens of private car parks available for hire, but they of course save money if the employer provides one.

The biggest argument against FBT on car parks is that the value is so low, that the administrative cost of doing so is greater than the revenue. But the value of car parking in the two main CBDs (the Christchurch CBD is now basically one big carpark!) is now quite significant, say $3,000 a year. This is why the FBT will only apply to the two big cities – because elsewhere the value of car parking is not great enough to bother.

But $3,000 a year is enough for employers to say we’ll either pay you $100,000 a year and no car park or $97,000 a year and a car park.

So I don’t have a huge issue with the principle of FBT on car parks. I want lower taxes, but you get those by lowering rates – not by having loopholes.

However it may be that the cost of extending FBT is not worth the revenue. Those against would be better focusing on that issue, rather than trying to argue in favour of tax loopholes which are in their self-interest.

The issue of taxing long-stay accommodation I find much more troubling. It is worth noting that this doesn’t come from a law change initiated by the Government, but from the IRD changing its position on what the lawful treatment is.

On 6 December 2012 the IRD Commissioner said:

Under section CE 1(1B), the market value of accommodation provided by an employer to an employee is income of the employee. Equally, the market value of an accommodation allowance paid by an employer to an employee is income of the employee. The employer must account for PAYE.

Issues arise most often in the situation of relocation or temporary accommodation arrangements.

Taxpayers have argued that where the employee is still maintaining a home in another location, employer-provided accommodation or accommodation allowances are not taxable. Taxpayers argue this is because there is no net benefit provided to the employee; the value of any accommodation or allowance received by the employee is nil as the employee continues to pay the cost of their own house.

This is a view I agree with. If you live in Wellington and maintain a house there and your employer says we need you to go to Christchurch for three months, then it is their responsibility to provide accommodation for you and it should not be regarded as taxable income as you are not receiving a benefit from it. It is no different (in my view) from having your employer pay for a hotel room when you stay overnight somewhere on their business. But the Commissioner says:

The Commissioner does not agree with this view. The law does not support a net-benefit approach.

If that is the case, then I think the law needs changing.

The Commissioner acknowledges there has been some uncertainty and inconsistent practice, by both Inland Revenue and taxpayers, regarding the taxation of employer-provided accommodation and accommodation allowances. The Inland Revenue Technical Rulings Manual paragraph 57.11 reflected a net- benefit approach to determining the value of employer-provided accommodation and accommodation allowances. However, taxpayers were advised in September 1998¹ that the Technical Rulings Manual was being discontinued and that Technical Rulings should not be relied upon as representing Inland Revenue’s views or practice. In addition, the legislation has changed considerably since the relevant Technical Rulings chapter was written.

This is a polite way of saying we’ve changed our mind.

This ruling has been much criticised. David Cunliffe has said:

The Government’s plan to tax accommodation for earthquake rebuild workers is more akin to the actions of a vulture picking over a carcass for every last morsel than it is to sensible fiscal management,  Labour’s Revenue spokesperson David Cunliffe says.

“The Commissioner of Inland Revenue has ruled that employers who send workers away from their usual homes must pay tax on provided accommodation. The ruling seemingly ignores how little remuneration benefit there is to the worker, who must still maintain their family home even though they can’t use it.

I agree with the criticism of the ruling, but would point out the Government (in the sense of Ministers) have no say on this issue. Once a law is passed, the IRD Commissioner decides how IRD will interpret it – not Ministers (thank God). An issue can be litigated in court of course – or Parliament can change the law.

The decision was criticised at the time:

The rule change requiring employers to pay PAYE on any accommodation provision an employee gets when working in another location – particularly the decision to make it retrospective – has taken the tax fraternity by surprise.

Hooft said the move was in contrast to recommendations made by the IRD’s own policy advice division last month.

The Institute of Chartered Accountants (NZICA) said it was “deeply concerned” about the new tax.

It would have a significant impact on industries which relied on itinerant workers, such as agriculture, the film industry, and the Christchurch rebuild effort, the accounting industry body said.

Acting general manager tax, Jolayne Trim, said it was a retrospective law change “of the worst kind”. 

The Herald editorial has been critical:

Auckland firms that send engineers and construction staff to Christchurch for the rebuild have just learned their projects are going to be much more expensive. The Commissioner of Inland Revenue has ruled that employers who send people to work away from their usual home for a period must pay tax on the value of accommodation provided for them.

The decision, which is not confined to the earthquake recovery operation, of course, has astonished tax advisers and no wonder. It defies reason and common sense.

Accommodation provided by an employer is quite properly treated as taxable income when it is a benefit to the employee. But a worker who is provided with free or subsidised accommo-dation away from home is not getting a benefit; he or she still faces the normal costs of maintaining a home without the benefit of being able to live in it.

The commissioner in her ruling last week readily acknowledged that reasoning but “the law,” she said, “does not support a net-benefit approach”. She has not explained why the law does not support it. This appears to be another of those arbitrary decisions that is based on a literal and unreasonable reading of tax law.

Also NBR reported:

However, KPMG tax partner Murray Sarelius accused IRD of rewriting the rules in order to deal with what appeared to be “a few extreme cases on audit”.

The new position was contrary to common practice and “is stretching to justify its position in a way that applies much too broadly. The result penalises the majority of situations where there should not be an issue”.

Now IRD does appear to be backing down somewhat. Last week they said:

“Generally, accommodation payments made by an employer, or the value of accommodation provided by an employer are taxable. However, when an employee temporarily shifts to a new location for work, the payments or the value of the accommodation provided is not taxable.”

Mr Tubb said that this approach will not apply if the person has relocated to take up a new job with a new employer.

“There are a number of factors that the Commissioner will consider in determining the tax treatment of accommodation and whether a person has made a temporary shift.”

“This includes whether they have retained their substantive employment position in the original location or have relocated to take up new employment, for the duration of the transfer, and if their original location has remained the centre of their domestic life.”

What they seem to be saying is that if (for example) your family still live back in (say) Wellington, and that is still your primary home, then providing you accomodation in (say) Christchurch is not taxable. But if you have actually taken up a long-term position in (say) Christchurch and that is now effectively where you live, that may be taxable.

That sounds like an improvement over their original position in December, but is still very uncertain (and tax law should be clear). I think the best solution is for the Government to amend the tax law to say that the “net-benefit” approach should apply.

A terrifying op ed in the NY Daily News by a Marion Nestle:

Barring any late legal surprises, Mayor Bloomberg’s 16-ounce cap on sugary sodas goes into effect on Tuesday, March 12. After that, restaurants, movie theaters, sports venues and food carts will not be permitted to sell extra-large portions of sugar-packed drinks.

Stay calm. This does not signal the end of democracy in America. This is not the nanny state gone out of control.

Actually is is the precise definition of nanny state out of control.

If we want Americans to be healthy, we are going to have to take actions like this – and many more – and do so soon. It’s long past time to tax sugar soda, crack down further on what gets sold in our schools, tackle abusive marketing practices, demand a redesign of labels – and extend the soda cap, no matter how controversial it may seem. This must be the beginning, not the end, of efforts toward a healthier America.

Be scared, be very scared

I’m amazed she doesn’t just advocate making soda drinks illegal.

The soda size cap is a nudge in that direction. You will still be able to drink all the soda, and down all the sugar, that you want. The cap on soda size makes it just a tiny bit harder for you to do so.

That “tiny bit harder” is its point. If you have to order two sodas instead of one, maybe you won’t. If you have to add sugar to your coffee drink yourself, maybe you will only add one or two teaspoons instead of the 10 or more someone else put in there for you.

Oh, so she also wants it to be illegal to sell coffee with sugar in it?

So-called “nanny-state” measures – like bans on driving while drunk, smoking in public places and, now, selling absurdly large sugary drinks – help to level the playing field. Such measures are about giving everyone an equal opportunity to live a safer and healthier life.

Again, she can’t see any difference between measures about preventing harm to others (killing people while drink driving, passive smoking effects) and measures to control how people live their own lives.

Fix the price differential. A 7.5-ounce can of soda costs twice as much per ounce as a two-liter bottle, and you can’t buy just one; it comes in an 8-pack. Price determines sales. If a 16-ounce soda costs a dollar, a 32-ounce soda should cost two dollars.

They should also abolish large chocolate bars being not the same price per kg as small chocolate bars. In fact let’s just regulate all food pricing. No volume discounts for any food except broccoli.

Actions like these will evoke ferocious opposition from the soda industry, and it will spare no expense to make sure such things never happen. We would surely hear more and more howls of “nanny-state” from those who insist Bloomberg has led us to the brink of a public health police state. Polls say that many New Yorkers oppose the 16-ounce cap and would oppose measures like this, too.

But I can’t tell whether the opposition comes from genuine concern about limits on personal choice or because soda companies have spent millions of dollars to protect their interests and gin up histrionic, misinformed opposition.

That’s easy. Its is genuine concern about personal choice – something that the author seems to regard as having no weight at all.

Hat Tip: Eric Crampton

UPDATE: Great news. A Judge has invalidated the ban on large soda drinks. The NY Post reports:

“[The city] is enjoined and permanently restrained from implementing or enforcing the new regulations,” New York Supreme Court Judge Milton Tingling ruled.

The judge said Bloomberg and the Board of Health overstepped their bounds, to enforce rules that should be established by the legislative bodies.

“The rule would not only violate the separation of powers doctrine, it would eviscerate it,” Tingling wrote. “Such an evisceration has the potential to be more troubling than sugar sweetened drinks.”

“It is arbitrary and capricious because it applies to some but not all food establishments in the city, it excludes other beverages that have significantly higher concentrations of sugar sweeteners and/or calories on suspect grounds, and the loopholes inherent in the rule, including but not limited to no limitations on refills, defeat and/or serve to gut the purpose of the rule,” Tingling wrote.

The regulations are “fraught with arbitrary and capricious consequences,” the judge wrote.

A defeat for the nanny statists. But they will try again and again.

The House of Representatives will tomorrow vote on the second reading of Louisa Wall’s bill which will allow same sex couples to marry. I’ve blogged previously on the issues involved, and want to focus on the quite remarkable change in opinions on this issue around the world.

Consider that just over 25 years ago, consensual adult sex between two men was illegal. And today Parliaments all around the world are saying that same sex couples should be able to marry.

Micah Cohen of 538 looks at the latest poll in California. In 2003 support for same sex marriage was just 42%. A decade later it is 61%. Just four years ago California voted in favour of banning same sex marriage. A vote today would inevitably see that reversed.

Polling Report has an archive of all US polls on this issue. The CBS poll has support nationally go from 46% to 54% in just one year.

Looking at other countries:

• Canada voted 175-123 in 2006 to maintain same-sex marriage, A 2012 poll showed 66% support
• Opinion in the US Gallup poll has gone from 25% in 1996 to 53%
• Maine voted 53%, Maryland 52% and Washington 54% in 2012 referenda to allow same sex marriage
• Recent polls in Australia show support for same sex marriage at around 65%
• The French lower house last month voted to allow same-sex marriage by 329 to 229. The most recent polls show 65% in support.
• Support in Germany for same sex marriage was 66% in a poll two months ago
• Support in Ireland for same sex marriage is at 73%
• The UK House of Commons voted 400 to 175 in favour of same sex marriage. Public support is 55% in favour to 36% against
• Her Majesty the Queen signalling her support for non-discrimination against gay men and women

So what does this all mean in my view?

1. Within a few years same sex marriage will be legal in pretty much every English-speaking country and most European countries.
2. Support for allowing same sex marriage will continue to rise at the incredibly fast rate it has been. This is because there is a huge age differential on this issue. Support amongst those aged under 30 is often well over 3:1 and the only age group opposed (if any) tends to be over 60s
3. I predict there will not be a single MP who votes for same sex marriage will will regret that vote.
4. The fact that so many MPs who voted against homosexual law reform in the 1980s and civil unions more recently have later said they regret their vote, suggests that the same will apply with the vote on same sex marriage.

On that last point, it is worth reflecting that just a few weeks ago the former Speaker, Lockwood Smith, said how much he regretted voting against homosexual law reform. In fact I doubt you can find a single MP who voted against it, who still thinks they were right to do so.

We saw the same with Civil Unions. Don Brash has said how much he regrets swapping his vote to vote against civil unions. Even the PM, John Key, has indirectly indicated he regrets voting against civil unions (he says he was following his electorate, not his own views). And I know many others who voted against, and now say they agree they were a good thing. It is ironic that the existence of civil unions is used as a justification by some to vote against same sex marriage, because of course they were against civil unions also.

There is no real question that Louisa Wall’s bill will pass second reading. The only real issue will be by how much, and who voted which way. So my concern is not the bill passing into law. My concern is that a number of MPs may come to sincerely regret how they voted, as so many others before them have on similar issues. We should learn the lessons of history, not repeat them.

Look if an MP genuinely truly believes that same sex marriage will be very bad for New Zealand, then of course they should vote against. I believe MPs should vote with their conscience and with their true beliefs. I disagree with those beliefs and think they are wrong on this issue, but I can respect people who stand by what they believe (within reason).

But some MPs don’t have strong views on the issue. They are focused on economic issues, education, health etc. They don’t see the the issue of same sex marriage as a burning issue for them.

And to some degree I agree – as much as I support same sex marriage – I far from think it is the biggest priority for the Government and Parliament. I regard the economy, education, welfare reform etc as more critical issues.

But regardless it is now up for the second reading vote. This is automatic under standing orders, and MPs now have to vote on it.

If you’re an MP who doesn’t have a strong view on the issue, my advice is simply to think about whether in 10 years time you want to be explaining to the many married same sex couples (and their friends) why you voted to ban them from being able to marry?

As an issue, it may not be as important as the economy, jobs, welfare reform etc but for many people it is a deeply personal issue. Effectively telling 6% of the country that they should remain unable to marry is something that does matter to them. And it does matter to their friends also.

We saw yesterday all eight youth wings advocate in favour of same sex couples being able to marry. That is an extraordinary thing. But it reflects the world they live in, which is the world of the future – as we see around the globe.

Almost all younger New Zealanders have some gay friends. They had gay friends at school, had gay friends at university, work with gay colleagues. They, for the most part, can’t understand why some of their friends should be able to marry, but not all of them. They don’t think that having more of their friends able to marry, will undermine their own future marriages.

As I said, there is a global and frankly irreversible trend in the “Western” world on this issue. Future generations will be just as bemused by the fact that once upon a time same sex couples couldn’t marry, as today’s generation are bemused by the fact that once women couldn’t vote.

I just wonder in the end, why would you want to be on the wrong side of history?

The NZ Herald reports:

Geoff Braybrooke, former long-serving Labour MP for Napier, died on Saturday.

Mr Braybrooke had been in a Palmerston North hospice following a lengthy illness.

That’s sad news. Geoff was a very likeable MP, who served his constituents well. He was MP for Napier for 21 years.

Mathew Dearnaley at NZ Herald reports:

A senior Grey Power official has complained about the planned increase in immigrants in Auckland – prompting claims from his national president that his submission is racist.

Auckland zone director Bill Rayner wrote in a submission to Auckland Council that the community and lifestyle of the region’s older residents “is under serious threat from the rapid and huge changes in size and ethnic mix projections included in the Auckland Plan”.

His submission also calls on Auckland Council to hold a forum to make decisions about the Super City’s “optimum size and ethnicity”.

It is not at all racist to say the pace of immigration is too high. It is racist though to say we only want people from certain ethnicities.

One size should not fit all when it comes to hairdressing licence fees in a multi-cultural Auckland, says Grey Power regional director Bill Rayner.

Arguing against a standardised fee of $207 across the region, Mr Rayner has referred Auckland Council to the varied hair types .

“It is clear that in South Auckland with a large Pasifika population, [with] big people with good heads of hair, the hairdresser needs are quite different from Remuera where perms and pin curls are probably still a key feature of the hairdressers’ professional skill,” he wrote.

Members of the Asian population have very straight hair, and “due recognition should be given to the greater productivity that results from cutting thinning hair in areas of a high population of seniors”.

Oh dear. I think his comments speak for themselves.

Lee Suckling at Stuff has an in-depth article on trolling and bullying on-line. I’m one of those quoted in the story.

Trolling and cyber-bullying are related phenomena, although not interchangeable terms, argues David Farrar of the Wellington-based Kiwiblog.

“The intention of the troll is to disrupt, be provocative and get a reaction,” he says. “Trolling can be mixed with bullying, but cyber-bullying requires very personal, very vindictive behaviour; either of someone the bully has met in person, or someone in the public eye where there’s lots of personal information out there about them.”

Cyber-bullying often involves a sustained campaign against an individual, while trolling has no rhyme or reason, says Netsafe’s chief technology officer, Sean Lyons.

Trolls are just painful, while bullies are nasty.

A troll, conversely, deliberately goes against the grain of the other posts, with a goal of creating outrage among other commenters, Farrar adds. “Trolls say inflammatory things in lots of places: on popular blogs like Kiwiblog, in sections that allow comments on Trade Me, on Facebook and Twitter.

“They’re persistent for one or two reasons. Either they do it simply for the reaction or they use it as a weapon because they’re ideologically against whatever that blog or page is about.”

And a typical troll:

Farrar says his posts about religion always elicit trolls. “I have one troll, who goes by many fake identities, who I call a ‘Christian baiter’. He’ll jump into a post and say something like, ‘All Catholics are paedophiles’, then sit back and revel in the chaos caused.”

And Greer Berry on troll profiles:

Typecasting the typical troll is difficult. “The presumed profile of the troll is a single, unemployed, overweight white male with two cats,” says Greer Berry, former social media editor of stuff.co.nz.

“But in reality, trolls are working people, and they’re just as likely to be women – though they often go by male usernames online.”

I’ve noticed a lot of women use male usernames.

Vic Debsoc have their great comedy debate tonight at 6.30 pm in the Hunter Lounge. Details are:

Come and watch some great debaters and comedians debating the topic “The rent is too damn high!”

This year we are delighted to announce an absolutely fantastic line-up of comedians and debaters for this event. Including former Billy T nominee and NZ Comedian Jerome Chandrahasen, amateur comedian and former Weir House member John Heslop, renowned beer critic and free lance writer Neil Miller, amateur comedian and former desoc member Nik Bruce Smith and finally our own debating extraordinaires Josh Cameron and Richard D’Ath. 

We will be selling tickets at our stall at clubs week or on the door for $10.

d

Stuff reports:

When he was hired last May, Television New Zealand chief executive Kevin Kenrick rebuffed putative interviewers with the words “not until I know more about it”. …

“Most people think of TVNZ as being a TV business,” he begins. “Not surprisingly, I guess; we’ve got it in our name.” He goes on to explain they are now delivering 2.5 million online video streams a month and the number is growing at 30 per cent a year. “It has gone beyond a toe in the water to a really significant part of what we do every day.” …

He says people in the business don’t think of themselves as working in television any more – I suspect that would surprise some of them – but as being “in the video content business”. Would he change their name, then? He ponders this – “what would you call yourself?” – and settles for saying they will change people’s perceptions. He talks about giving people content when and where they want it. So one day, then, there might be no TV1 or TV2? He doesn’t know, doesn’t care much.

As an involuntary shareholder in TVNZ, I’m pleased to see this statement from Kenrick because I agree that the future is not necessarily in channels.

Traditionally there are three segments in broadcasting. Producing the content, playing it on a channel and distributing the content.

The future is more and more about the first and third segments. There will be money in producing content and money in distributing content. But not a lot of money in channels per se.

I watch very little live TV. I set My Sky to record programmes that interest me over around 20 different channels. I hardly even notice what channel they were originally on, and don’t really care. I care about content, not about channels.

Some viewers are different, especially older ones. But the world is changing and channels will become less valuable – especially as on demand content also increases in popularity.

Brian Carney at the WSJ reports:

Seventeen years ago, Bernard Connolly foretold the misery that awaited the European Union. Given that he was an instrumental figure in the EU bureaucracy and publicly expressed his doubts in a book called “The Rotten Heart of Europe,” he was promptly fired. Mr. Connolly takes no pleasure now in having seen his prediction come true.

The solutions:

Two immediate solutions present themselves, Mr. Connolly says, neither appetizing. Either Germany pays “something like 10% of German GDP a year, every year, forever” to the crisis-hit countries to keep them in the euro. Or the economy gets so bad in Greece or Spain or elsewhere that voters finally say, ” ‘Well, we’ll chuck the whole lot of you out.’ Now, that’s not a very pleasant prospect.” He’s thinking specifically, in the chuck-’em-out scenario, about the rise of neo-fascists like the Golden Dawn faction in Greece.

The other “solution” is they leave the Eurozone.

Yet unemployment is close to 27% in Spain and Greece. The euro-zone economy shrank ever-faster throughout 2012. And—most important in Mr. Connolly’s view—the economic fundamentals in France are getting worse. This week France announced it would miss its deficit-reduction target for the year because of dimming growth prospects.

It’s one thing to bail out Greece or Ireland, Mr. Connolly says, but “if the Germans at some point think, ‘We’re going to have to bail out France, and on an ongoing, perpetual basis,’ will they do it? I don’t know. But that’s the question that has to be answered.”

Italy isn’t too flash either.

Which brings us back to the politics of the euro crisis. At some point, the people in the affected countries presumably will call a halt to the pain and sweep in a government willing to think the impossible—leaving the euro, for example.

To avoid that, Germany could well agree to pay for a transfer union, either believing that the transfers needn’t be permanent, or hoping they’d be less expensive than a euro break up. But, Mr. Connolly warns, once a mechanism is in place to transfer money from Germany to the current-account deficit countries, it’s only a matter of time before Germany is faced with the question of adding France to its list of dependents—something even Berlin may not be willing or able to afford.

I suspect Germany’s limit may come before even that.

Parliamentary youth reps unanimously back marriage equality

 In an unprecedented joint initiative youth reps from all eight parties in Parliament have combined together to demonstrate the overwhelming support amongst young New Zealanders for same sex couples to be able to marry.

Young Nats Vice President Shaun Wallis said that Young Nats were delighted the majority of National MPs voted in favour of marriage equality at first reading and hope they will continue to do at the second reading this week “Our members overwhelmingly supports marriage equality as we believe in freedom and equal opportunity for all Kiwis.”

Young Labour spokesperson Sam Thompson said that marriage equality and adoption reform are the number one policy priority for Young Labour. “We believe our representatives in Wellington really value equality and a fair go and will continue to support expanding the right to marry to everyone who has a partner they love and want to spend their life with.”

Young Greens spokesperson Izzy Lomax said that the Young Greens were delighted that all 14 Green MPs voted in favour of marriage equality as we believe in a society without discrimination, and look forward to an end to all discrimination against rainbow communities, starting with allowing loving same sex couples to marry”.

“NZ First Youth leader Curwen Rolinson said that NZ First Youth is united in supporting a referendum on this issue. While there is a large and vocal proportion of NZ First Youth who would vote in favour, it is by no means unanimous. We feel that the important thing is for progressive changes in legislation to come with the direct backing and support of the people – not filtered through layers of temporarily empowered politicians and political parties. A referendum is the fairest, most inclusive and democratic method of achieving this. It is our hope that MPs of other parties will realize this and join our call for a referendum.”

Maori Party kaikorero rangatahi Teaonui Mckenzie said that he is proud that all three Maori Party MPs support the right of same sex couples to marry and form a whanau. “This generation will not tolerate any form of discrimination, whether by race, gender or sexual orientation.”

MANA Rangatahi spokesperson Ian Anderson says that “MANA are fully behind the Bill and will work to reduce societal inequality wherever possible, in this case bringing New Zealand law into line to provide the opportunity for same-sex couples to enter marriage.”

Act on Campus President Taylor Warwood said that “Act on Campus have been long-time supporters of marriage equality, and were delighted that ACT MP John Banks voted for Louisa Wall’s bill at its first reading and believe its passage will be entirely consistent with ACT policy of one law for all.”

United Future spokesman Damian Light said that “allowing couples who love each other to marry is just common sense and we’re proud that Hon Peter Dunne, our Party Leader, has been a vocal supporter of this bill. Our support of this bill is consistent with our liberal belief in equality for all.”

“This show of support for marriage equality by every party’s youth wing sends a powerful message. Marriage equality is no longer a question of if, but of when. We can’t wait for Parliament to vote in favour of the Bill.” said Campaign for Marriage Equality Spokesperson Conrad Reyners.

The eight youth reps, representing youth members of parties comprising 120 of the 121 MPs in Parliament believe their combined show of support reflects the over-whelming support for marriage equality amongst younger New Zealanders (76% in favour in Colmar Brunton May 2012 poll).

ENDS

Lewis Holden, Chair of the Republican Movement has a guest post responding to the guest post by Nikki Pender:

Nikki Pender argues “we” (New Zealanders) “enjoy a meritocratic constitutional monarchy”, on the basis that no-one forces New Zealand to keep the Queen as head of State. This is a unique way of putting the monarchy, but also a concession that its head is not in anyway chosen on merit. She correctly argues that change from the status quo to a New Zealand head of State “could be effected relatively swiftly” and makes a number of other claims that deserve scrutiny.

The only reason New Zealand keeps the Queen, Nikki says, is because there is “no popular support” for a New Zealander as head of State, and the majority of Kiwis consider the Queen deserves her position. In fact, Nikki’s own comments contain one piece of why “popular support” appears to be with the monarchy. From her comments, it appears that Nikki believes that an independent head of State of New Zealand would mean we have to leave the Commonwealth. Nothing could be further from the truth. The majority of members of the Commonwealth today are republics. Only a handful still have the Queen as their head of State – and of those a number are taking steps to creating their own heads of State. This is sadly not a very well known fact.

The comments on Nikki’s article are also instructive. More often than not the arguments were not for the monarchy in anyway, they were simply against a New Zealand head of State. Claims such as a New Zealand head of State would be all-powerful like the US president, that it means an end to the Treaty of Waitangi are objectively not true, yet often repeated myths.

While we can’t bring about a New Zealand head of State without popular support – and we’d be hypocritical not to as believers in the consent of the governed – the campaign for a New Zealand head of State focuses primarily on refuting these myths. By doing so we get to the heart of the issue – who will be the best head of State for New Zealand, and what is the best way to choose the holder of that office. While Nikki may be right to claim the Queen has been “trained for life” for her role, that misses the point. The fact is the Queen is first and foremost the UK’s head of State, and not ours.

I’d also point out that Prince Charles has been trained for life for his role, but that doesn’t mean he’ll be a good King of New Zealand!

Matthew Hooton writes in NBR:

What Mr Peters may recognise, but Labour does not, is that, before Mr Key suggested the share issues, most voters had never heard of Mighty River Power, Meridian Energy, Genesis or Solid Energy, much less worried about their ownership structure.

Compared with disposable incomes, the local school competently teaching maths, grandma getting her hip replacement, the cops tracking down the local crims or even keeping Asian immigrants out, whether a Waikato River dam is owned 100% or 51% by the state simply doesn’t rate.

The actual policies of those who claim to oppose share issues prove it.

Through nine years of the Helen Clark regime, when a global economic boom fuelled massive fiscal surpluses, the government bought back not a single share in Contact Energy.

Nor did Phil Goff promise to buy back shares in Contact.  Nor does Mr Shearer promise to buy back shares in the companies Mr Key plans to list.

If it is OK for national symbols such as the Clyde Dam and the Wairakei geothermal network to be 100% privately owned – and majority foreign owned – how could it possibly matter that Waikato River dams will be only 51% government owned and perhaps 20% foreign owned?

Matthew gets it right on. The opposition is symbolic bluster.

While averse to nationalisation, Labour also argues that not a single share in any of the Crown’s $50 billion of commercial companies should ever be sold – in effect freezing more than $30,000 per New Zealand household in a portfolio that is a mere legacy of the tumult of the 1980s and 90s.

This is the perverse logic of Labour’s stance. They are basically arguing that the exact right number of power companies for the Government to own is three out of five. Not two, not four – exactly three.

The ideological opposition to the private sector means that we don’t have an intelligent conversation over what assets should be state owned and which should not. Instead we just have a die in the ditch defence of the status quo no matter how illogical it might be.

Arguments that the state must own 100% of “strategic assets” – a meaningless phrase, never defined – would suggest the government should nationalise all food production and distribution, something Labour is yet to propose.

In fact, an immovable asset producing a commodity involving no proprietary intellectual property would seem to be exactly the sort of thing where ownership is irrelevant.

Absolutely. There is a far stronger case for the Government to own Fonterra than a power company.

The Greens are happy that their anti-asset-sale petition has won them tens of thousands of new email addresses to spam in election year.

And they used taxpayer money to collect them! I bet you everyone who signed that petition will get an e-mail from them if they gave an e-mail address.

A reader sent in this interesting infographic. From this site.

I’ve lived in Thorndon for around 20 years, and in the area of Thorndon that is within 100 metres of so of the Katherine Mansfield birthplace. Despite that I only visited her birthplace for the first time a few weeks ago.

I never studied Mansfield at school, and don’t actually know her story and her works as well as many New Zealanders. So the Circa show Talking of Katherine Mansfield seemed a good opportunity to get to know her better.

The 80 minute show is by Catherine Downes, who is a Mansfield expert. She’s been playing her for over 30 years. The play is a mixture of Catherine talking about Mansfield’s life and reading out some of her writings.

I found it a bit slow to engage initially, but perked up with the recital of Leves Amores and the references to The Thistle Hotel in Thorndon. And from there we learnt of her outraged father who was happy to have her go back to London after she published such scandalous (for the times) prose.

You learn about her relationships and influence on so many other leading literary figures such as D H Lawrence, Virginia Woolf and of course John Middleton Murry. Murry is not the most sympathetic of figures as you heard about how he would write to Mansfield complaining how hard her dying was on him!

This isn’t a play for everyone, but if you are a fan of Mansfield or just wanting to know about her, it’s a pleasant introduction to her work. Downes has a real passion for Mansfield’s work and she doesn’t just act off a script but engaged the audience in her recital of Mansfield’s life and works. I suspect every night the show is slightly different.

The lighting in the show is worth a mention. The final scene where Katherine dies is done beautifully and to powerful effect as her face fades from view.

The “Climate Realists” have published a schedule of speaking engagements for prominent climate change sceptic Lord Monckton.

My position on climate change is that greenhouse gas emissions beyond doubt cause warming. There is a legitimate debate about how much warming will occur, as we do not know for sure how the rest of the very complex climatic system will respond.

But personally I don’t find Monckton a particularly useful contributor to the debate. He has a history of over-egging his claims and this rebuttal by John Abraham shows that he has quoted people out of context.

I think the biggest challenge with climate change is getting the major emitters to agree. An agreement without China, India and the US is basically worthless in environmental terms. China’s daily increase in emissions is greater than NZ’s total emissions.

John Armstrong writes:

What on Earth does the management at Mighty River Power think it was doing with its blanket refusal to answer questions posed by the very parliamentary committee to which those running the power generator are supposedly accountable?

Although it might seem relatively trivial in the grand scheme of things, such obstructive behaviour must technically come close to contempt of Parliament. It was certainly an affront, if not an outright insult, to the commerce select committee and thus to Parliament as a whole.

Mighty River Power’s unwillingness to respond to nearly 100 of the 133 written questions submitted by the committee was rationalised on the flimsiest, most ridiculous but ultimately the most dishonest of grounds – a pedantic and childish interpretation of what are standard annual queries.

It is a terrible precedent, which other Crown entities will be tempted to follow.

I think John is over-stating the case here.

I do think Mighty River Power was unwise to antagonize MPs by not answer the questions supplied in writing to them, but it is worth pointing out that the Opposition MP who wrote the questions allowed them to do so by just cutting and pasting them from those used for departments without using the correct terms.

A typical question was:

Did the Department/ Ministry and its associated agencies undertake any restructuring in the last year; if so, what? How much was spent on restructuring costs and what are the estimated savings as a result of restructuring in 2012/ 13?

MRP’s response was

Not applicable to Mighty River Power as Mighty River Power is not a Department, Ministry or associated agency.

And another was:

What new services, functions or outputs did the Department/ Ministry and its associated agencies introduce in the last financial year? Describe these and estimate their cost.

And the response again was:

Not applicable to Mighty River Power as Mighty River Power is not a Department, Ministry or associated agency.

Now I agree MRP could and should have been more forthcoming and could have answered the question on restructuring costs rather than be pedantic over the term used to refer to them.

However on the latter question, the question is not one suitable for an SOE. SOEs do not have outputs. Government Departments do.

The Oppositon MP who asked these questions should have taken half an hour to customise the questions so they are appropriate for an SOE. A diligent MP would have done so.

TVNZ report:

Fijian Prime Minister Voreqe Bainimarama says he will “stick by his men” if they are found to have been involved in the savage beating and torture of an escaped prisoner.

A nine minute video posted online this week shows two men being repeatedly beaten with poles, as they lie huddled on the ground handcuffed, screaming in agony. …

Sources have told ONE News the men carrying out the beating are army, police and prison officers.

Speaking to fijivillage.com , Bainimarama said if that is shown to be the case, he would support their actions.

“At the end of the day, I will stick by my men, by the police officers or anyone else that might be named in this investigation,” he said.

“We cannot discard them just because they’ve done their duty in looking after the security of this nation and making sure we sleep peacefully at night.”

I wasn’t aware their duties included torture?

Hopefully those responsible will still be arrested and charged, despite the views of the Commodore. It would show that no one is above the law.

The Commodore is due to announce in the near future if he will contest next year’s elections. I expect he will. He may find that his support for torturers doesn’t go down that well with the voters.

Vernon Small profiles David Clark:

Clark, a Presbyterian minister, returned the favour, officiating at Robertson’s civil union. (The Wellington Central MP’s partner, Alf, joked at the ceremony that given the keen interest from singles of both sexes he was sorry to report Clark was neither gay nor single.) Clark and wife Katrina have two children, the youngest just 3 months old. Katrina is on maternity leave from the Ministry of Economic Development, overseen by his new political duelling partner, Joyce.

Clark concedes: “We will have to face how we handle that” but says she is an exemplary civil servant and a “fanatical observer” of the public service code of conduct.

I’m sure she is, as was Madeleine Setchell whom got effectively sacked and blacklisted from public service jobs because her boyfriend worked for John Key. It’s fortunate National actually believes in public sector neutrality – unlike Labour which talks the talk but didn’t walk the walk.

So far his biggest impact in the House has been his bill to ensure a statutory holiday on the next Monday if Waitangi Day or Anzac Day fall on a weekend. It should have the numbers to pass – a rare victory for a non-Government measure.

It will conclude its second reading on Wednesday 13 March, and should pass into law on 17 April. I support the bill.

Clark says the free market is a good servant if properly regulated.

A statement few can disagree with, but what is critical is the details. Most people accept a degree of regulation in the economy such as the Fair Trading Act, the Commerce Act. But the fact that some regulation is desirable doesn’t mean all regulation is desirable. I’d like to see examples from Clark as to what further regulation he proposes.

Normally Oppositions gain seats and Governments lose seats in elections. Not so in yesterday’s Western Australia election.

Of 59 seats, the 2008 election resulted in the Liberals had 24 seats, their partners in the Nationals had 4 seats, Labor had 28 seats and there were three Independents. The Liberals won the two-party preferred vote by 51.8% to 48.2%. So it was a Liberal minority government.

The Liberals have had an 8.8% increase in their primary vote and are projected to go from 24 seats to 33, making them a majority Government. The Nationals picked up one seat also so combined they will have 40 out of 59 seats – a two thirds majority. Labor have been slaughtered going from 28 to 19 seats. Such a slaughter is not unheard of for an incumbent Government (like in Queensland) but is even rarer for an opposition.

Vernon Small writes:

Perhaps we should thank former Ministry of Education head Lesley Longstone for only stinging taxpayers $425,000 as a severance package.

Yes it is a lot of money, especially to onlookers on the minimum wage, the average wage or even anyone outside the top echelons of pay packets.

Given the circumstances of her departure – just over a year into a five-year term and as a result of a clash of personalities with her minister – she could have asked for more. …

So given that, and the public revulsion at such pay-outs, it is time to look again at how those contracts are written.

Setting aside for now the fact it would have been cheaper all round (and arguably fairer) to have shifted Parata, rather than Longstone, it’s time to dispense with the fiction that state sector chief executives are not on grace and favour contracts – essentially at the behest of their minister.

The Longstone example makes it as clear as day that a CEO cannot stay on if they fall out badly with their minister. But the fiction forces the SSC to dance on the head of a pin over the reason why they go, and the payouts that follow are eye-watering to most people.

It is true that if a Minister loses confidence in a CEO, then one of them has to go. And in a democracy it is the civil servant, not the Minister.

There are strong arguments that can be advanced about the quality of chief executives that might be recruited, and state sector purists will choke into their lattes at any move away from the notional independent public servant.

But there are precedents. Press secretaries and political advisers in politicians’ offices are on the public payroll but are on so-called “events-based contracts”. The “events” are essentially the continuation of the MP or minister in that office but they also include a clear parting of the ways between a minister and a press secretary. Payouts are modest. …

Acknowledging – and embracing – the reality that senior public servants are to all intents and purposes there at the will of their minister is an argument that has some resonance among some MPs too, but from a different perspective.

As they see it, politicians are elected and they should expect their decisions to be implemented. Something akin to an “events-based” chief executive could eliminate deliberate attempts to frustrate the will of their minister or the Cabinet.

I can see the attraction of an events based contract for CEOs, but there is a reason I think they would do more harm than good.

They would make it too easy for a Minister to dispense with a CEO. You only want the CEO to go if absolutely necessary. And as part of that, you actually want the departure of a CEO to cause political pain for a Government – which a payout causes.

If you had a clause that just allows a CEO to be sacked with three months notice, then I think you’d see a far higher turnover of CEOs – and I don’t think that is necessarily a good thing.

I don’t like paying $425,000 out for premature termination of a contract. But education is a $10 billion budget. If we have to pay out 0.05% of the budget to get a Ministerial-CEO relationship that works, then it is worth it. Of course some will argue the wrong person went – but Ministers are accountable through elections, and National will be judged in 2014 on how it has done overall.

So what is the happy compromise that would cut back on payouts by establishing events-based contracts; acknowledge the “political” nature of some public service roles – and the need to have someone driving hard to implement government policy; but maintain a flow of contestable advice?

One option would be to insist on a competence-based (not purely political) selection process where the nominee is examined by a select committee, much as the United States does with its Senate confirmation hearings.

That would allow the government to win the day, but in the process unearth incompetence and expose any skeletons to the public eye.

I’m not sure select committee hearings would un-earth any incompetence.

If we were to have select committee hearings for government CEOs then we should go the whole hog of the US model where the Government of the day appoints the entire senior management of the government departments. Of course that has some drawbacks also!

James Henderson at The Standard blogs:

Some analysts are talking about risks of investing in Mighty River Power in the media today. Weather, electricity demand, overseas expansion. I’ll tell you what would make me think twice if I was contemplating buying shares (like most Kiwis I couldn’t afford to even if I wanted to).

Everyone acknowledges the power companies over charge because of the way National set up the system with the Bradford reforms. Right now, the government has 400m reasons a year not to do anything about it. After the sales, that will be $200m in dividends.

Any reforms to lower power prices will fall mainly* on a relatively small number of (often overseas) private shareholders and much less on the government books. That rather reduces the government’s incentive to protect the over-charging status quo, doesn’t it? Lots of votes in being the government to bring down power prices, especially when a lot of the profits are otherwise going to foreign corporates.

James is saying that when the Government wholly owns the power companies, it is less likely to regulate them if in the consumer interest. The massive profits and dividends under Labour suggest he is correct.

As James says, when the state isn’t conflicted by being sole owner and regulator, it is more likely to act in the public interest and stop over-charging. That’s an excellent reason to support the asset sales. It’s outrageous to think that people may have to continue to pay more for their power than they have to, just because the Government is the sole owner.