Trevor Mallard blogs:

Every now and again infighting gets so bad in the Nats that some gems are delivered to me. In this case it is a set of their Board and Board committee minutes.

Except they were “leaked” to numerous people, not just Trevor.  As I understand it they were posted to numerous journalists, and a few MPs.

And as I understand it, there was no leak. Just a theft. One board member never received his board documents in the mail, and it was his copy that got posted to various people. So it looks like someone took them from his letterbox. This is very plausible as his name was on them, and you would never leak documents with your own name on them. So no, there isn’t someone leaking to Trevor. Just a politically motivated theft.

Trevor is very excited by the negative references to Simon Lusk. This is amusing as just a year ago Trevor was insisting that Simon was actually working for Campaign Chair Steven Joyce, and was a loyal National Party servant. Trevor’s theories never seem to worry about consistency.

One item in the leaked minutes which I found interesting was that the Young Nats signed up 715 members on Auckland tertiary campuses over Orientation weeks. That’s a huge achievement.

 

Tags: National, Simon Lusk, Trevor Mallard

I’ve blogged previously on the outrageously dishonest spin from Labour that tax revenues are down 4% of GDP over four years, and trying to assert it is all due to the one set of changes in 2010. Even some journalists who should know better have repeated such absurdities.

I’m going to blog in two parts on this issue. The first part will be today looking at what the Treasury macro-economic advice was for the impact of the tax and spending changes, and tomorrow (if I have time otherwise later in the week), I’m actually going to analyse the actual changes in tax revenues through the 2008 BEFU, the 2008 PREFU, 2008 DEFU, 2009 BEFU, 2009 HYEFU, 2010 BEFU, 2010 HYEFU, 2011 BEFU, and finally the 2011 PREFU. This looks at the changes in overall tax revenues, individual tax revenues, corporate tax revenues and GST.

It is important to understand you need both the forecasts of what a change will do, and what actually happened. Neither are the total picture, but together they give us a reasonable picture.

You see the reality is that if Treasury says (for example) hiking the top tax rate from 33c to 39c will bring in $900m/year of extra revenue, and a Government does it, and revenue only goes up $700m, then no-one really knows why the revenue gain was less than projected. It might be that it did increase revenue by $900m, but that economic growth was flatter and so taxable income was lower. Or it could be that the increase lead to greater tax avoidance, and the increase did not achieve as much extra revenue as projected.

It is easy to diss Treasury projections – even I have done so. But it is worth noting how massively complicated it is to forecast tax tax over an entire economy. Many individual companies have problems forecasting income just for that company. Now imagine having to forecast income for the aggregate of every company and person in New Zealand, without having the knowledge of what is happening in individual companies.

What we have below is the official net fiscal impact as forecast by Treasury for National’s tax and spending changes. As you will see the total effect of these tax changes is negative during the 2008 – 2010 period, which is when there was a fiscal stimulus policy to help cushion the recession, and in the first two years, providing support to the economy during the recession, and have been net positive from 2010 onwards.

Net fiscal impact of the Government’s tax changes ($million increase (decrease) in the operating balance)

 

	2008/09	2009/10	2010/11	2011/12	2012/13	2013/14
Election tax package1	(133)	(238)	(37)	188	198	198
Budget 2009 cancellation of 2nd and 3rd tranches2		105	553	956	999	999
SME tax package3	(294)	(189)	214	(108)	(108)	(108)
Budget 2010 tax package4			(460)	(90)	(40)	175
Budget 2011 tax changes5				537	783	823
Total	(427)	(322)	270	1,483	1,832	2,087

 1. fiscal impact = revenue (2/3*removal of R&D tax credit + KiwiSaver changes + cancelling remaining tranches of Labour’s tax cuts) minus costs (personal tax + IETC). Source: Cabinet Paper CAB(08)585.

2. cancellation of the 2010 and 2011 tax cuts as announced in the 2009 Budget. Source: Treasury Report T2009/418.

3. SME tax package as announced in February 2009. Source: BEFU 2009, Table 1.7.

4. fiscal impact = revenue (GST increase + depreciation + LAQC + thin cap + WFF + GST base + tobacco + increased audit) minus costs (personal tax + company + PIE and savings vehicles + GST compensation). Source: Budget 2010 Executive Summary, Table 1.

5. savings from changes to KiwiSaver and WFF tax credits. Source: Budget 2011 Executive Summary, Table 2.

It is worth recalling that during this period Labour opposed every single spending cut made by National.

Over the six years of National’s first two terms, the total projected impact of National’s tax changes (and cancellation of spending commitments) has been a net improvement of $4.9b. In other words compared to the policies put in place by Labour in 2008, National’s changes were projected by Treasury to result in $4.9b more revenue over two terms.

It is worth noting these are only the direct tax (and cancelled spending commitments) changes. This is not taking into account National slashing to the contingency for new spending from over $2b a year to $800m and eventually zero. That has also had am impact in the billions.

Now as I said, we will also look tomorrow at what actually happened to tax revenues, but many factors impact tax revenues as well as policy changes. These figures for now show how preposterous Labour’s deception is about how the 2010 tax package is somehow primarily or totally responsible for a decline in tax revenue of 4% of GDP or $7b/year.

Tags: government spending, National, tax cuts

In my column at the NZ Herald I review how tomorrow will be the end of the first three months of 2012 and label it National’s Quartus Horribillis.

Tags: David Farrar on Politics, National, NZ Herald

Adam Bennett at NZ Herald reports:

A former National MP allegedly punched another customer in the face as shocked tellers looked on at an inner-city Wellington bank after an argument over a parking space.

Wellington police yesterday confirmed receiving a complaint from a man alleging he had been assaulted by another man on Monday last week in Courtenay Place. They said the incident was still under investigation.

When I read the story I guessed who was probably the ex MP involved, and I was right

Not naming them, as the media haven’t and it may go to court. Worth noting that it is at this stage an uncontested allegation. There may be a court process to go through. Please do not speculate in the comments on who it is – am sure it will go public at some stage.

Tags: National

The expense return from National tells us quite a bit about what mediums they chose to advertise in, which is interesting to analyse.  I’ve summarised and compiled them in descending order.

Item	Cost
Billboards	$ 422,550
Creative Contractors	$ 335,650
Final fortnight newspaper ads	$ 322,345
TV/Radio Ads production	$ 194,282
Pamphlets	$ 187,900
Direct Mail	$ 157,013
Internet Ads	$ 113,565
Campaign Song	$   79,912
Marchandise	$   51,231
Hoardings	$   43,888
North Shore buses	$   29,037
Staff	$   26,697
Auto phone-calling	$   26,339
Ethnic Newspapers	$   20,255
Woman’s Day	$   14,516
Campaign Bus	$   10,697
Misc	$     6,253
Events	$     5,899
Website/Social Media	$     4,513

So billboards were the largest expense item, which is no surprise as they have been a hallmark of the 2005 and 2008 campaigns also. The contractors were next largest item followed by the final fortnight newspaper ads in all metro and provincial daily newspapers.

The taxpayer may pay for the airing of the TV and radio ads, but National paid almost $200,000 to produce them.  Pamphlets and Direct Mail were then next largest costs.

A fairly significant proportion of the budget was spent on Internet advertising – over $110,000. And the bastards didn’t spend a single cent on advertising on Kiwiblog

Someone did well out of the campaign song at almost $80,000.

Over $25,000 spent on auto phone calls. Personally I hate them and think they piss people off and cause them to not vote for you. But having said that it would be interesting if National measured turnout rate amongst those who got and did not get an auto phone call to see if they had an impact.

When you look at what you get for $2 million, it isn’t a lot. I don’t think anyone can claim our spending limits are too high, when they are less than $1/voter. The majority went on four newspaper ads, 97 billboards, two pamphlets of which one was direct mailed, and some Internet advertising. This is hardly drowning the voters in advertising.

I’ll be doing a similar analysis for other significant parties.

Tags: advertising, Election 2011, National

New National MPs (apart form Mike Sabin who was last week) did their maiden speeches yesterdays. Transcripts are here. Extracts follow.

Mum had me, her only child, when she was 43. Never one to peak too early, she later learned to play golf—hitting a hole in one at the age of 72. Agnes was a remarkable and a determined woman who taught me many things, including the value of a strong ethic, the importance of trying your best if you want to achieve the things that matter, and never ever giving in on what you really believe in. In her later years she taught me how to live in the moment, which was perhaps one of her greatest gifts to me. David, the old man, had a sharp mind and a quick temper. He was very fond of a drink and an argument, and I learned early on to justify my point of view or keep quiet. These are skills I feel will come in very handy in this Chamber. Dad had falsified his age to enlist to fight in World War II . He was keen to serve his country, as his father Edward had before him at Gallipoli. I was raised to believe that in peacetime the highest form of public service is to be a member of Parliament. I know that they would all be very proud of me standing here today in this Chamber as the first politician in my family.

Hearing about the backgrounds and families of new MPs I find very interesting. It is all too easy to think of them as just politicians.

Given my green-fingered background and lifelong love of plants, I hope that my knowledge and skills may be helpful to shape our environmental and conservation goals. Producing and presenting the garden show gave me privileged access to people’s lives. Some of them were overwhelmed and daunted by the sheer scale of the planet’s problems, but personally I never doubted that saving the world starts in your own backyard. I share the views of many, that we are only the custodians of this land and the guardians, the kaitiaki, of our grandchildren’s heritage. We have to be vigilant and face up to our responsibilities and our woeful environmental record. Over many days, over many decades, we have let many too many introduced pests decimate our native plants. We have not treated our oceans and our waterways with the respect they deserve, and I want to be part of the Government that puts that right.

The term blue-green was invented for Maggie.

Ian McKelvie:

The Rangitīkei electorate—for those who need to know—contains 4.5 million sheep, 400,000 beef cattle, 175,000 dairy cows, and 63,000 people, of whom 28 percent are Māori. We are also the home to the North Island ski fields, Tongariro National Park, the home bases of the New Zealand Army at Linton and Waiōuru, the Air Force at Ōhākea, and New Zealand’s largest university in Massey. Our electorate contains the brainy part of Palmerston North, stretches over 300 kilometres north to Taumarunui, and contains some of New Zealand’s most beautiful scenery.

There’s a brainy part of Palmerston North?

I also urge you as a Parliament to give time and thought to our equine industry. We are good at horses. It is international in almost every sphere of equine activity, and it has great potential if nurtured in the correct manner. The horse, particularly through the racing and breeding industry, is a very large employer in this country, and I have yet to see a robot riding one—Mark Todd aside—or a computer mucking out a stable. Encouraging the equine sector to work with each other in a unified manner could boost this sector significantly as an export earner.

Maybe the Minister for Racing should be renamed the Minister for Horses?

Mark Mitchell:

One of the first jobs we attended together put us head to head with an offender armed with a samurai sword, whose intent was to attack medical staff at Rotorua Hospital. During the arrest both Czar and I were stabbed—me through my right arm and Czar in the chest. We both recovered, although I never regained the full use of my arm. I thank the Hon Judith Collins for the leadership she provided in making sure our police officers were given every tactical advantage and option available. Had Tasers been around in my day, I would have had a much better tennis swing. One thing I could see early in my career was the amount of damage gangs and organised crime did to our communities. Whether they be the Mongrel Mob, Hell’s Angels, or Asian triads, they are parasites living off the back of our communities and a bunch of low-life cowards. Hunting in packs, they rob, steal, rape, murder, intimidate, assault, and generally terrorise anyone unlucky enough to get in their way. Many of the social issues we face today are connected either directly or indirectly to the gang culture. Our police service is now being led by leaders rather than managers, with morale the highest it has been for years and with the best police officers in the world, we are on the right side of the ledger in continuing to tackle gangs and organised crime.

I love an MP who tells it straight. And I agree that the Police are now being led by leaders, not managers. It is amazing what happens when the Commissioner requires everyone from Inspector level up to go out on the beat – no matter what job title they hold.

in 2003, I found myself in Iraq as part of a small team establishing a safety and security programme for the newly formed interim Government. It was a tough year for me, because it was the first time in my life I was exposed to the ugliness of corruption and extreme ideologies, in a country where there was very little regard for human life. The first election in Iraq had over 7,000 candidates for 235 parliamentary positions. Opposing candidates would dispose of each other with roadside bombs and hit squads. It helped me to put a little context around the teapot tapes last year.

Don’t go giving Trevor ideas.

I am proud that we led refugees out of Lebanon to safety when they were trapped in a war between Israel and Hezbollah, that we protected and supported scientists from the Hague to open and take evidence from mass graves in their case against Saddam Hussein, that we delivered food and medical supplies to flood-ravaged areas of Pakistan and ensured it got to the people who needed it, and that we were able to open up a supply chain to get food and medical supplies into Darfur and Mogadishu.

Mark has a wealth of interesting stories about his time overseas.

Simon O’Connor:

At the heart of our constitution sits the Crown. It is an ingenious, ever-evolving entity that plays a role in so many aspects of our country. It is a valuable guardian of our democracy, a symbol of our independence, and a sign of our political resourcefulness. I am pleased to acknowledge today the 60 years of service that the Queen of New Zealand has given to all Kiwis. It is my hope that in the years ahead New Zealand may make its own monarchy ever more distinct and an even more uniquely Kiwi institution. 

Well if we want our monarchy to be ever more distinct I say we dump Prince Charles, and offer the throne to Princess Madeleine of Sweden.

I suspect that most here today would agree that New Zealand is the greatest country on earth. But that is not to say it is a perfect nation. Again, I suspect that most here are cognisant of the many problems our society faces. Foremost among them is the scourge of violence in our society. If there is one general area to which I wish to apply my time and experience it is to ending, or at least greatly reducing, violence in our communities. Of course, there is no single solution, no quick fix. It is a perennial issue that has been grappled with by successive parliaments. I believe that this National-led Government is taking great steps in the right direction, but there is much work still to be done. Some is legislative, but the most difficult work is changing attitudes. I fear that New Zealand accepts violence too easily. Aggression is celebrated, verbal and emotional abuse is tolerated in public discourse, and people are willing to turn a blind eye towards those suffering at the hands of bullies. The prevalence of domestic violence, violence against children, the random acts of violence on our streets is a sad indictment of us all. I do not believe that is a simple matter to resolve this tragedy, but neither do I feel that it is hopeless.

Domestic violence and child abuse especially I find abhorent. While all violence is bad, I can at least understand why someone whacks someone they hate. But how people bash and kill those they profess to love is beyond me.

Scott Simpson:

For those interested in such things, the maiden speech of Sir Jack Marshall, delivered in this House 65 years ago is regarded as setting the benchmark in terms of defining what we these days label as “liberal conservatism”. And it is to that subject I now turn. Let me make it clear at the outset that the concept of liberalism does not mean at all anything to do with the touchy-feely , namby-pamby , soft-soap approach so often the political homeland of parties on the left. Rather, liberalism is an acknowledgment that as a citizen I have the right to live my life in my own way provided only that this does not interfere with the rights of others; that I should be free to do as I wish, subject only to the rule of law. The Hon Chris Finlayson teased out these concepts in his own maiden speech. He said, and I agree entirely, that the left may have admitted that the right won the great economic debate of the 20th century and that socialism in its many and varied forms has failed, but the left still wants to regulate and control.

I love it when a National MP speaks about liberalism. Even better when they vote that way also

The principles on which our society is built, in spite of vocal minorities who would work to make it not so, are principles are of liberal democracy. But liberalism and democracy are actually two different things. Democracy is a method for choosing and removing Governments. Liberalism, on the other hand, is a doctrine about what society ought to be, what Governments should or should not do, and above all liberalism is a doctrine that defines limits to Government power. I am convinced there is a common thread of liberalism through our nation whether we choose to recognise it or not. That common thread encompasses freedom of action and of individual rights tempered by a willingness not to interfere with the rights of others whilst pursuing our own. It encompasses a society of racial and religious tolerance, one of equality of opportunity and equality before the law.

Limiting Government power is an issue dear to my heart.

Jian Yang:

When the Communist Party came to power in China in 1949 my grandfather lost all his property, was imprisoned, and lived in poverty for the rest of his life. In the first 30 years of the People’s Republic of China the Chinese Government launched one political movement after another, climaxing with the Great Proletarian Cultural Revolution beginning in 1966. The Revolution left behind millions of political victims, including my parents, who were sent to the countryside to be re-educated by peasants. In 1978, under the rule of Deng Xiaoping, China made the historic decision to reform and open up. Capitalism began to flourish.

And today we have a free trade agreement with China, but not the United States. Ironically should have one with Russia soon also.

 In 1994 I started my postgraduate study in Australia, and in 1999 I completed my PhD and began my work at the University of Auckland. My experiences reiterate the inescapable influence of politics on our lives, and greatly contrast the deep value placed on political rights and freedom that we enjoy in New Zealand. For this reason, I appreciate the National Party’s commitment to democratic principles, and individual freedom, and choice. Politics and economics are two areas difficult to differentiate.

Exactly. There is a reason that almost all communist economies are also dictatorships or one party states.

Many Chinese, including my family, gave up their Chinese citizenship and proudly became New Zealand citizens. We are Kiwis, although made in China. The Chinese immigrants do have a strong desire for recognition and integration, which is why they have been actively involved in philanthropy and politics. They have been generous in their donations to the victims of the Christchurch earthquake. There were also a record number of Chinese candidates in the most recent general election. I feel truly honoured to be a National Party representative of the Chinese community. I hope to see more Chinese in Parliament, as the community is still under-represented. The rise of China has given New Zealand an ideal opportunity. China is now our second-largest trading partner. Our trade with East Asia, especially China, played a crucial role in our effort to deal with the global financial crisis in recent years. In this respect, Chinese residents’ connection with China is a great asset to New Zealand. The connection has generated many economic opportunities, and there is still a great potential. As a Chinese immigrant, I will act as a bridge between the Chinese community and our mainstream society. I will also endeavour to contribute to the strengthening of New Zealand’s relations with China.

Dr Yang is the only National MP I have yet to meet, but am looking forward to doing so.

Tags: maiden speeches, National

There was a glitch in publishing my normal Friday column in the Herald on Friday, but for those interested it is up now. I note:

If National had received around 5,000 fewer party votes, or if National voters in Epsom and Ohariu had failed to vote for the ACT and United Future candidates respectively, then the conflict over treaty clauses in SOEs would be critical. …

Parliament resumes next week, so should have no shortage of things to write about then.

Tags: David Farrar on Politics, Maori Party, National, NZ Herald

Former Labour Party General Secretary Mike Smith blogs:

Donations over $30,000 from the same source must be declared to the Electoral Commission within 10 working days. National overstepped the mark in declaring a total donation of $86,005 from Gallagher Industries outside the limit. I can sympathise as I missed a connection once when I was Labour’s Secretary. These days  the Electoral Commission doesn’t get involved – the penalty is a fine of up to $40,000 on summary conviction.

That’s a very serious accusation. As Mike Smith says, a late return can result in a $40,000 fine. So let’s see if National were late.

The Electoral Commission says that National received $66,705 on 20 December 2001 from the Gallagher Group Ltd. This was on top of an earlier $19,300 so exceeded the $30,000 threshold for reporting within 10 working days.

It was declared on 10 January 2012, 21 days later.

But the Electoral Act refers to working days, as quoted by Mike Smith. S210C(6) says:

A return must be filed under subsection (1) or (2) within 10 working days of the donation being received by the party secretary

Now what is a working day? Well the Electoral Act specifies that in S3:

working day means any day of the week other than—

• (a) Saturday, Sunday, Good Friday, Easter Monday, Anzac Day, Labour Day, the Sovereign’s birthday, and Waitangi Day; and

• (b) a day in the period commencing with 25 December in any year and ending with 15 January in the following year

The 20th of December was a Tuesday. Friday 23rd December was the third working day and Mon Jan 16th the 4th working day. Tuesday 24 January 2012 is in fact the 10th working day after the 20th of December 2011.

So National made the deadline with a fortnight to spare.

Mike may wish to amend his post.

Tags: Electoral Commission, Mike Smith, National, political donations

An interesting look at the election results of National and Labour since the first election they both contested.

Up until the 1990s, the gap between the parties was never that huge. A 10% gap was around as big as it got. Then in 1990 one had the first gap of well over 10% – almost 13%.

Then of course in 2002, there was the blowout to Labour who beat National by 20%, much the same as National beat Labour by in 2011.

There was also an interesting trend of declining support for both parties from the 1950s to 1984. We then saw both increase in support as Social Credit died, and then the volatility of MMP.

National’s growth over the last three elections under Brash and Key is quite remarkable.

Tomorrow we’ll look at the various third parties.

Tags: election results, Labour, National

Danya Levy and Andrea Fox at Stuff report:

Prime Minister John Key says proposed changes in the diary industry may result in cheaper milk and will give consumers confidence they are “not getting ripped off” by Fonterra.

Key this morning rejected claims by farmers that plans to force the dairy giant to provide five per cent of its raw milk to independent producers, up from three per cent, was sending profits offshore by assisting largely foreign-owned New Zealand-based exporters which compete with Fonterra.

Labour’s primary industry spokesman Damien O’Connor has voiced similar concerns. …

Key today said proposed provisions to phase out well-established competitors would alleviate concerns about overseas-owned companies profiting at Fonterra’s expense.

It was in Fonterra’s interest to have competition in the market.

“It’s very important that we have transparency because Fonterra find themselves primarily in a monopoly position, they control about 95 per cent of raw milk production in New Zealand,” he told TV3′s Firstline programme. …

Fonterra chairman Sir Henry van der Heyden has said it is valid for Fonterra to assist domestic market suppliers with milk, but requiring Fonterra to supply overseas-owned competitors “defied logic”.

The extra milk obligation would cost Fonterra $200 million over three years alone, he said. …

Dairy farmer James Houghton, a Fonterra supplier and president of Waikato Federated Farmers, said if Fonterra lost money, farmers’ payouts would be affected.

“I believe it is the Government wanting to control an industry it doesn’t need to control,” he said. “The more rules and regulations, the more control it has.

Hmmn, an interesting situation. On one side you have the Government and on the other side you have Fonterra and Federated Farmers, with some opportunistic backing by Labour. So is the Government doing the right thing or not?

Former Green MP Sue Kedgley, who was a member of the parliamentary select committee looking into milk pricing last year, said the proposals were good steps.

Well that solves it for me. The Government must be wrong!

Tags: Federated Farmers, Fonterra, milk, National

Part III is not that different to Part II – rejuvenation again – but of caucus, not Cabinet.

Labour failed to rejuvenate their caucus in 2005. They did a much better job in 2008, and that strengthened their caucus considerably. They failed in 2011, protecting incumbent MPs with the result being the only new List MP is Andrew Little.

National did not rejuvenate greatly in 2011. There are three new List MPs, and six new electorate MPs, but this is out of a caucus of almost 60.

A caucus needs to have a balance of MPs. Not all MPs are going to be Ministers, and many MPs whom do not become Ministers still provide excellent value to their constituents and to Parliament through work on select committees. However service in Parliament as a backbench MP should not be seen as a life-time work (as it has been for Labour’s Ross Robertson) but something you do for a limited period.

It is essential that for 2014, National clearly indicates to caucus that MPs will not be automatically be given winnable spots, and that new aspiring candidates will be ranked higher than some MPs if their regions back them strongly enough. The Party Board and leadership need to send out unequivocally clear signals in 2013 about the 2014 list, so that MPs can make an informed choice about whether they retire with dignity, or wish to risk putting themselves forward for list ranking, and possibly ending up with an unwinnable ranking.

With electorate MPs it is of course between them and their electorate, if they stand again. The hierarchy get little say in this – especially in the stronger seats. It is worth noting though that incumbent MPs have faced challenges. John Key, Judith Collins and formerly John Carter all became MPs by defeating an incumbent for a nomination.

This might all sound rather negative talking about Ministers and MPs needing to “go” the week after an historic victory. That is deliberate. Winning a third term will be far more challenging than winning a second term.  There should be no complacency that the popularity of the Prime Minister will guarantee a third term. I am pointing out the need for rejuvenation now, so that it is not seemed aimed at any individual Minister or MP. It isn’t. I don’t have a list of whom I think should or should not stay on past 2014. What I’m talking about is the need to recognise early on that winning a third term will require some people to put the overall good of the National Party before their individual desires.

Tags: National

In Part I, I talked about the need for ongoing policy reform, and for the Government not just to aspire to be better administrators than Labour, but also driving a better policy agenda. If you try to compete just on being better administratoes, then eventually people think why not try that other lot.

In Part II I want to talk about Ministerial rejuvenation. After National first got elected in 2008, I pondered what Labour did wrong in their latter years, and what National may need to do to get a third term and maybe even the holy grail of a 4th term.

One of Clark’s mistakes was she left ministerial rejuvenation too late. Halfway through their third term and the Cabinet was still dominated by the same names – Clark, Cullen, Anderton, Goff, Maharey, Mallard, Hodgson, King, Dyson, Dalziel.

I sketched out that with a ministry of around 24 (National) Ministers one should be looking at rejuvenation of around 25% at regular intervals. The first 25% by the beginning of the second term, the second 25% by the end of the second term, and a third 25% around halfway through the third term – and in that third tranche you may even have a leadership succession.

It is important to stress that when one talks about ministerial rejuvenation, this is not saying that incumbent Ministers are performing badly, and their successors will be better than them. In fact new Ministers often do struggle initially compared to more experienced Ministers – one reason why you do rejuvenation gradually. But have no doubt about it – New Zealanders will not generally keep voting for the same line up election after election. The media and your opponents paint you as ired and out of ideas, and labels do stick. Plus it is correct that new Ministers will sometimes bring new ideas and energy to a portfolio.

Now to date, the Key Government is pretty much on schedule, in terms of what I see as the ideal pace of rejuvenation. Seven of the 24 Ministers are new, as in not there at the beginning of the 49th Parliament – they are Hekia Parata, Nathan Guy, Craig Foss, Amy Adams, Chris Tremain, Jo Goodhew and Chester Borrows.

But I do believe to enhance National’s chances of a third term, there will need to be a reshuffle before the 2014 election. Towards the end of 2013 some of those who have been Ministers since 2008 should consider following in the foot stops of Simon Power and Wayne Mapp and getting out while on top. Their party will thank them for it, even though they personally could be quite capable of continuing on. Ideally they should even be prepared to spend their final 12 months in Parliament on the backbenches, so that new Ministers can come in before the election.

It may be tempting to think hey let’s wait until after the election, and then do a reshufffle. The problem is there is no guarantee you will get that third term.

If National can go into the 2014 election with around half its Ministry being new faces (as in not original 2008 Ministers), then its chances of winning are enhanced. Of course you need more than just ministerial rejuvenation, but it is a key component of it.

The reasons I raise the issue early, is because the best rejuvenation is that done voluntarily. The PM needs to be very clear to Ministers that a warrant today does not mean they are automatically going to be Ministers if there is a third term, or even for all of this term.

Five years as a Minister is a lot better than most MPs achieve. Stepping down after five years or so should not be seen as a bad thing, but as Simon Power showed us – getting out on top.

Tags: National

It would be unfair to say that winning a second term was easy for National, because to lift your vote in Government is no easy thing to do. But the history of NZ is most Governments get a second term, coupled with an Opposition Leader who was so associated with the past. So the challenge was not so much to win, but to win with an ability to govern well – which has happened with a narrow 61 majority for National, ACT and United Future.

Winning a third term in 2014 is far harder, and I would regard National as the under dog at this stage. iPredict has Labour winning in 2014 at 53% and National at 47% and that is probably about right.

National needs to lose just 0.2% of the vote and it can only govern with the support of the Maori Party. Who knows what the Maori Party in 2014 might do, but I suggest that David Shearer is not as foolish as Phil Goff, and will not treat them as the enemy. Shearer was never part of that time in Labour that treated them as the last cab off the rank, and chose Winston in preference to them. They could go with Shearer in 2014.

But the Maori Party may not hold the balance of power. If National drops 3% in total, then NZ First would hold the balance of power. That is likely (but not certain) to see a Labour-led Government.Of course NZ First may implode again, as Peters is showing no sign of having changed his ways of bluster and bullshit – even over whether or not he had a fall.

So National are the under-dogs. It means that they will have to work incredibly hard to win a third term, and New Zealanders will have to be convinced they deserve it. This means the Government and Ministers must do far more than be competent administrators – they must push and drive reforms which clearly benefit New Zealanders. The welfare reforms are central to that. But so is trialling charter schools and bedding in national standards.

The economy will be front and centre. Sadly there will be very few votes in just doing what is necessary and getting the books back into surplus. At best National just won’t be punished for not achieving that. National will need to confront some of the harder issues such as housing affordability, and will have to make calls on do we leave mineral wealth in the ground or not. As I am typing this up from South Africa, I suspect locals here would be amused that we even have a debate in New Zealand about whether to mine or not.

National’s first term was about infrastructure. The second term is looking to focus on science and innovation. What will be the focus on a third term, if there is one – that voters will vote for? It has to be something that they feel couldn’t be done until the building blocks of the first two terms were in place.

Finally the left in the second term will talk a lot about poverty and income inequality as if they are the same thing. They are not. To take one example – China arguably has far greater income inequality than 20 years ago. But they also have 300 million less citizens in absolute poverty. National needs to own poverty reduction as an issue, and disentangle it from the socialistic goal of income equality which has failed in pretty much every state which has tried to legislate for it.

David Lange once famously called for a cup of tea for his Government. John Key needs to do the opposite. The pace of reform must increase, not slow. Voters want to see a Government confronting tough issues, and making decisions. They don’t want to just see a Government whose job it is to manage rather than lead.

Tags: National

I like this photo (from Stuff) of the Ministers being sworn in. I like the fact that a third of the front bench are woman (and two are Maori women) and indisputably all there on merit – not on the basis of quota or factional appeasement.

I also likes this response from John Key to David Shearer’s call to be on the Ministerial committee on poverty:

Mr Key wished new Labour leader David Shearer all the best in what was a “thankless” job as leader of the Opposition.

Mr Shearer had been “quite quiet” as an MP so it was difficult to tell how he might perform.

However, he rejected Mr Shearer’s call to widen a ministerial group on poverty to all MPs.

“I’m more than happy for David Shearer to be a part of the ministerial committee if he’s happy to give the Government confidence and supply.”

Heh.

On the serious substantive issue, both John Key and David Shearer would sincerely like to see less poverty in New Zealand. They agree on the aim, but the reality is National and Labour disagree strongly on the solutions. This is not always a bad thing – it means NZers get to choose whose policies etc they prefer.

For example National believes a key way to reduce poverty is to reduce the numbers on welfare. Labour however believes that you reduce poverty by paying those on welfare more.

One could argue shouldn’t we do both. Well, yes you can but the policies are not that compatible. The more you pay people on welfare, the harder it generally is to reduce the numbers on welfare.

Ultimately it is of course a bit of a balancing act. Few advocate abolishing the welfare state and having a Singapore system where families must support those not in work, rather than the state. And likewise few support having a welfare state where work is voluntary and you can just go on a benefit whenever you feel like it.

Tags: National, poverty, welfare

The full list is here. I’ve summarised the changes in the table below.

Min	New Rank	Old Rank	Change	Gain	Lose
Key	1	1
English	2	2			Infrastructure
Brownlee	3	3		Transport, EQC	MED, Energy
Joyce	4	14	+10	MED, Science	Transport, ICT, Ass Inf.
Collins	5	7	+2	Justice, ACC, Ethnic	Police, Correct, Vets
Ryall	6	5	-1	SOEs	State Sector
Parata	7	20	+13	Education, Pacific	Ethnic, Womens
Finlayson	8	9	+1	Ass Maori
Bennett	9	16	+7
Smith	10	6	-4	Local Govt	ACC
Carter	11	10	-1	Primary Industries
McCully	12	11	-1
Tolley	13	8	-5	Police, Corrs, Dep House	Education
Coleman	14	18	+4	Defence, State Servs, Ass Fin	Immigration, Broadcasting
Groser	15	12	-3
Heatley	16	17	+1	Energy	Fisheries
Wilkinson	17	19	+2
Guy	18	22	+4	Immig, Racing, Vets, Ass Primary	Internal Affairs
Foss	19	23	+4	Commerce, Broadcasting	Civil Defence, Senior Cits, Racing
Adams	20			Int Affairs, ICT, Ass Cant
Williamson	21	21			Small Bus, Ass Cant
Tremain	22			Civil Def, Consumer  Affairs
Goodhew	23			Comm & Vol, Women, Senior Cits
Borrows	24			Courts, Ass Justice, Ass Soc Dev
Dunne				Ass Cons
Banks				Reg Reform, Small Bus
Sharples
Turia				Whanua Ora, Ass Housing, Ass Tert Ed	Comm & Vol

The brand new Cabinet Minister is Amy Adams, the third of the 2008 intake to make it after Joyce and Parata. She is joined by Craig Foss and Nathan Guy who were Ministers outside Cabinet.

Three new Ministers outside Cabinet are Chris Tremain, Jo Goodhew and Chester Borrows. They are all from the class of 2005, and I suspect that is a signal from the PM that all future Ministers will now come from the 2008 and 2011 intakes.

The cabinet rankings are more symbolic than a reflection of actual power. For example last term Joyce and McCully were on the second row, but both are very influential. However the symbolism is important to a degree.

Parata moves up 13 places which is a huge vote of confidence in her, and Joyce moves up 10. Paula Bennett also moves up seven spots and Jonathan Coleman up four.

A significant reshuffle in terms of portfolios. Brownlee is freed up to keep working on Christchurch, but gets Transport.

Joyce’s role with Economic Development and Science and Innovation will be at the heart of National’s second term agenda.

Collins gets Justice, so expect to see further reforms.

Tony Ryall gets to be the Minister who sells off minority stakes in SOEs as he did such a good job of it last time. He keeps Health of course.

The move of Parata to Education is inspired – Hekia will champion measures to improve the lot of the 20% who are failing – many of whom are Maori.

Tolley gets Police and Corrections. Her experiences with the NZEI and NZPF will stand her in good stead for these portfolios!

Coleman gets Defence, which is handy as he has Devonport Naval Base in his electorate.

Amy Adams gets Comms/ICT, which will fit in quite well with having Internal Affairs also.

Tremain and Goodhew become Ministers as expected, and they are joined by Chester Borrows who should make a good Courts Minister as a former cop and former lawyer – knows both sides!

Worth noting that 10 portfolios have been disestablished or incorporated into other portfolios.

Tags: John Key, Ministers, National

National and the Maori Party have just announced their confidence and supply agreement, which means the Government can now win such votes 64 – 57. It might not even be that close as Peters suggested he might initially back the largest party on confidence and supply or at least abstain. Personally I think that commitment holds about as much value as a peso, but the initial votes could be 64 – 49 or even 72 – 49.

The key aspects of the agreement are:

• Maori Party will vote for confidence and supply
• Maori Party do not have to vote for the legislation outlined in National’s Post-Election Action Plan (unlike ACT and United Future)
• Whanua Ora to be given a specific appropriation and a stand-alone commissioning agency to be established
• A Ministerial Committee on Poverty to focus on alleviation of poverty. Chaired by Bill English with Turia as Deputy Chair.
• Double funding for rheumatic fever prevention to $24m
• Target 20,000 low income homes for home insulation
• All state houses to be insulated, where possible
• Aim to lift Maori educational and employment outcomes
• Agree to offset pre-1990 forests
• Continue with constitutional review to report by Sep 2013, and status of Maori seats remains unchanged for now (no abolition or entrenchment)
• Refocus TPK on improving outcomes for Maori in education, housing and employment
• Conclude decision making on spectrum by May 2012
• National to support to select committee members bills to reduce gambling harm and a Maori cultural heritage bill
• Partial asset sales legislation not to be part of a confidence or supply motion
• Sharples Minister of Maori Affairs, Associate Education and Corrections
• Turia Minister for Whanua Ora and Disability Issues, Associate Health, Housing, Social Development

Doesn’t appear to be anything there with a huge price tag, which is good as the top priority has to be reducing the deficit, not increasing it. But there is plenty there to keep Ministers busy, and the constitutional review especially could be huge.

Tags: Maori Party, National

In my column at the NZ Herald I write on how National’s second term looks to have plenty of reform:

Many National supporters were frustrated at the lack of reform in National’s first term.

They saw National cancels its planned income tax cuts for 2010 and 2011, rather than cut interest free student loans and Working for Families. They saw a soaring deficit, and the Government’s response was to slow the rate of spending increase only. They saw a ban on asset sales, despite this being common amongst centre-right and centre-left Governments around the world.

National’s second term is looking to be far more pleasing to those who want to see a reform agenda. This doesn’t just mean a more right wing agenda. The Hawke/Keating Governments in Australia were good reformers, as was Tony Blair in the UK and Bill Clinton in the US. Even Julia Gillard is undertaking some quite good reforms.

So what are the areas of reform for John Key’s second term?

Industrial Relations

The current industrial action at Ports of Auckland is a good reminder that we still lose too much money through strikes and lockouts. Many people are staggered that an unskilled job can pay an average of over $90,000 a year and still have people on strike over it.

I also cover asset part-sales, welfare reform, education and spending.

Tags: David Farrar on Politics, National, NZ Herald

NZ Herald reports:

Chinese New Zealand businesses, including one formerly owned by the businessman spearheading Shanghai Pengxin’s bid for the Crafar dairy farms, have boosted the National Party’s coffers by more than $100,000 in recent days.

Recent filings to the Electoral Commission show National received $50,000 on November 22 from Citi Financial Group, a Queen St foreign exchange and financial planning firm owned by Yan Yang and Qiang Wei.

The same day, the party got a $1600 donation from Oravida NZ, which also gave $55,000 on November 30.

Oravida’s directors are Jing Huang, Julia Jiyan Xu and wealthy but reclusive businessman Deyi Shi.

In September last year when it was called Kiwi Dairy, Oravida was bought from Terry Lee, a businessman associated with Shanghai Pengxin, which has applied for Overseas Investment Office approval to buy the Crafar farms.

It is good the disclosure regime is working. Transparency is important and media should report large donations

Turning to the Oravida donation, the key word is former owner. Terry Lee has not owned the company for 14 months, and the new owners have nothing to do with the Crafar farms bid as far as I know. Some people get very excited about former owners, assuming it means they are still in a position of influence with their former company, and/or wanting to advantage them. The prime example of this is how some go on about Steven Joyce being a former owner of the radio stations now owned by Mediaworks. What many do not realise is it was a hostile takeover, and shall we say no love lost there between the former and current owner.

So as far as I know there is no actual link to the Crafar farm bid. Ironically if someone associated with the bid for the Crafar farms did donate a large amount to National, my belief is that it would actually harm their chances as even if the OIO recommended approval, Ministers would be very wary of making a decision that could be perceived as influenced by the donation.

Incidentally what is a Chinese New Zealand business? Both businesses are New Zealand businesses. Oravida has three directors – two of whom live in NZ and one in New York. The ultimate shareholders all appear to be based in New Zealand also. CFG director and shareholders all appear to be New Zealanders also.

There is a difference between a business owned by Chinese living in China and Chinese living in New Zealand. Chinese living in China are foreigners. Chinese living (permanently) in New Zealand are Kiwis.

Tags: National, political donations

No one big item, such as ACT had, but lots of assorted issues in their agreement.

• Pass the Game Animal Council legislation (this is for the outdoor recreation lobby)
• Investigate a free annual health check for over 65s, as fiscal conditions allow
• Introduce a law restricting any asset sold to a maximum 49% sale
• Maintain current budget funding tracks for TVNZ and Radio NZ
• Reform Families Commission so it has only one Commissioner and redirect savings to parenting programmes etc
• A Govt discussion document to be developed on UF’s superannuation policy which allows people to choose any age from 60 to 70 to start receiving superannuation, but the longer you leave it the more you get
• Greater use of private hospitals to reduce elective surgery waiting lists

 

Tags: National, United Future

Based on the National/ACT confidence and supply agreement, John Banks is a more effective ACT Caucus than all the caucuses before him.

• A Regulatory Standards Bill to be enacted into law within 12 months, based on Option 5 in this paper.
• A spending limit law to be introduced within 24 months so that expenditure (excluding benefits, disasters, interest) can not increase by more than the annual rate of population growth and inflation. This is a huge win.
• RMA reform so there is only one unitary plan per district
• Trial charter schools in South Auckland so private and community groups (including Iwi) can establish schools that compete with existing schools, and receive funding on a per child basis

These are very significant policy wins for ACT. The spending limit and trialing of charter schools have the potential to have a major impact into the future – and for the better.

If these can be successfully implemented in the next three years, then I could see ACT gaining many of its former supporters back.

National’s second term is looking to have a lot of really positive and significant reform.

Tags: ACT, John Banks, National

Today will be a series of posts on each party, looking at what happened, how they did, and their challenges ahead.

MPs in

Scott Simpson (Coromandel), Maggie Barry (North Shore), Mike Sabin (Northland), Ian McKelvie (Rangitikei), Mark Mitchell (Rodney), Jian Yang (List), Alfred Ngaro (List).

MPs out

Paul Quinn. Aaron Gilmore is in for now but will be the MP National lose, if they lose a spot on specials.

Result

8/10. National hits its target of 48% and got a clear centre-right majority. To do so despite the economic troubles is a spectacular result. Would have got 9/10 if they could govern alone and 10/10 if they managed to get an MP for every electorate (ie 63 MPs).

Challenges

What portfolios do you give Banks? He was an extremely popular and successful Police Minister, but that may be a bit too much back to the future. He has a strong commercial background, and is thought to be interested in Associate Finance. That could help ACT’s brand (which now will be economic liberalism rather than economic and social liberalism), if he has an economic role. Other possibilities are Customs and/or Corrections.

What policy gains do you give the Maori Party? They will want more than just a repeat of what they got last time. However any further policy concessions could play badly with National’s support base, and be fuel for Winston.

Ministerial portfolios. There is room for three or four new Ministers with the retirements of Mapp, Power and te Heuheu plus ACT having one fewer Minister. Any members of the Class of 2005 who do not make it this time will take it (accurately) as a sign they will never be a Minister, and this can lead to grumpiness. Likely at least one member of the Class of 2008 will be promoted (to join Joyce and Parata already there), maybe two of them.

Select Committee Chairs. National will not have a majority on all select committees and four of its five support partner MPs will be Ministers, so select committees will be important. Normally the Opposition gets to chair two of them. Will Key be generous and offer a chairmanship each to Labour, Greens and NZ First?

NZ First. Key rightfully ruled out a coalition or confidence and supply deal with Peters on the grounds of an inability to trust him as stable. However now he is back in Parliament, there is a need to have a working relationship with NZ First. Not an agreement, but they will be lobbied on bills they might support, will sit on the business committee etc. If Winston manages to avoid getting caught up in scandals, then the position on ruling him out may be different come 2014. Too early to speculate, but it will be interesting to observe.

2014: How the hell do you win in 2014? At this stage, I’d have to say the odds are not great for National, but there are three years to go. Labour also in a weak position. the reality is at this stage most likely 2014 outcome is Winston holds balance of power. But again if a week is a long time in politics, three years is an eternity.

Tags: National

Policies have not had a huge amount of coverage during the campaign, so here’s my list of good policies from National. I’ll do separate posts on the good and bad policies of Labour later today or tomorrow.

1. After having an unprecedented no extra spending budget in an election year, will maintain fiscal discipline to get NZ back into surplus by 2014/15 – four years earlier than projected in the 2008 PREFU under Labour.
2. Welfare reform. 52% of those on the DPB went onto it as teenagers and have stayed there ever since. Work testing will stop the DPB being an income source for life
3. Health. Tony Ryall has done such a great job in health that it hasn’t even featured in any of the debates. Elective surgery waiting lists to be reduced from six months to four months
4. Education. $1b to double the capital budget for schools, and retention of national standards so parents know in plain English how their kids are doing, but as importantly so the Government can identify the schools that are less effective and deliver more resource to them.
5. Science. As massive increase in investment in Science, including transforming IRL into an Advanced Technology Institute.
6. RMA Reform. A six month deadline for consenting medium sized developments
7. Ultra-fast Broadband. National will continue rolling this out without delay. 100 MB/s will be available to 75% of NZ.
8. Law & Order. Tighter bail laws and increased penalties for breaches of protection orders
9. Industrial Relations. New employees will no longer be initially forced to join a union if there is a collective, and can decide for themselves on day one whether to join a union or not.
10. Youth Unemployment. National’s Starter Wage will mean not so many young people are priced out of the labour market.

Tags: Election 2011, National

Phil Goff claimed in the debate that a “reliable source” told him

Radio NZ reveals the true story:

Labour Party leader Phil Goff says senior police have been told recruitment for next year has been deferred and the January intake of recruits has been cancelled.

Mr Goff made the claim in TVNZ’s leaders’ debate on Wednesday night and told Morning Report on Thursday that the reason given for the deferral was the need to make savings in the police budget.

He says his source is reliable and well informed.

However, National’s law and order spokesperson Judith Collins says there are so few people leaving the police at the moment that the January intake of recruits is not needed.

She says the first intake next year will be in March instead.

Ms Collins says there will be no reduction in frontline police numbers under a National Government.

If Goff thought there really was a freeze, he would have done a press release stating so, rather than alleging something in a debate where he knows the PM would not know if it was correct or not (as an operational matter).

Here’s what Goff actually said:

Just been advised that you’re deferring all recruiting next year, but that this announcement must not be made until after the election”

Goff lied. There will be recruiting in March 2012. Labour’s campaign has been based on a series of lies and half-truths – on asset sales, on state houses, on welfare and now on the Police.

The attrition rate for the Police under National has been just 3.2% and under Labour was over 6%. So this is in fact a very good thing, as it is far better to retain experienced police officers than recruit as many new ones.

I wonder what other lies Labour will try in the final two days?

Tags: Labour, National, Police

Labour has just said:

Why no answer on Crafar farms before election?

National is concealing its intention to sell off our farmland to foreign buyers well under the radar before the election, says Labour’s Economic Development and Associate Finance spokesperson David Parker.

“National is not just about selling our power companies, inevitably into foreign ownership,” David Parker said.

“It’s about selling productive farmland overseas as well.”

More hypocrisy in the hope that the media will not do any fact checking. Some facts:

1. Labour approved sales of more than 650,000 hectares of land to foreign owners when in Government. Yes 650,000 hectares – that is the equivalent of 75 Crafar farms. That work out to the Crafar farms every month. Yes, every month.
2. For the first 20 months of National (seeking latest data), the total amount of land sales to foreigners was 31,000 hectares. That is 1/4 the rate Labour approved sales at. Under 25%.
3. The National-led Government has already turned down one offer from foreign interests for the farms
4. The OIO office is independent from the Executive and Ministers can not direct them to delay a recommendation.

So just remember these facts. The last Labour Government (and every member of the current Labour front bench was a Minister in it) approved the sale of the equivalent of the Crafar Farms every single month for nine years. Under National the rate of approvals has fallen to under 25% that of Labour.

Tags: Crafar, foreign investment, Labour, land, National

National has announced:

Under National, there will also be a stronger, more proactive stance against those who abuse and defraud the welfare system. Jobseekers whose recreational drug use affects their ability to apply for or secure a job will also be sanctioned, and through the investment approach those with drug addictions will be supported to overcome their illness. In addition, benefit recipients on the run from the Police will have their benefit cancelled.

I think many will be surprised that this wasn’t already the case in terms of those running from the Police.

And a vast proportion of people on the sickness benefit are drug addicts. The welfare state should not be there to allow someone to remain a non work capable drug addict for years or decades. They should be treated and if they won’t take treatment, be sanctioned.

“This year alone, Work and Income’s data matching found around six to 12 per cent of people were receiving benefit payments they weren’t entitled to.

That’s a huge percentage. Of course not all of this may be due to fraud. Some may be accidental, but I would hope everyone would agree that figure should be around 1% or less.

And from the policy:

There are 25,000 people currently receiving a benefit who have committed benefit fraud in the past, or who have received substantial overpayments they were not entitled to, after abusing the welfare system.

I bet you Labour say it is a miniscule problem, not worth worrying about.

Tags: National, welfare