National's hypocritical bunkle over housing allowances

A number of National party ministers are renting out their own Wellington apartments at a profit while they claim allowances from the taxpayer to live more expensive homes. Murray McCully, Tim Groser and Phil Heatley essentially have Wellington property investments indirectly subsidised by the taxpayer by the fact they don't have to live in them. Additionally, Bill English claims around $50,000 a year of allowances to pay the mortgage on his $1.2 million dollar Wellington home.

When the story concerning Bill English's home first broke I was prepared to consider he may have a special case given it would be difficult to house his large family in a typical ministerial house. That said I expect that one could be found if required.

Yet as I thought about it more, two things made me less sympathetic. The first was the revelation of the rort being played by other ministers who already have Wellington apartments. More seriously, as my mind cast back to 2001 it became very clear that many of the Ministers in question are being simple hypocrites.

In 2001 National attempted to make a big issue out of Labour Minister Marian Hobbs and Alliance Minister Phillida Bunkle claiming out-of-town allowances to subsidise Wellington accommodation, worth up to $16,000 a year, while they were on the Wellington Central electoral roll. Both were eventually cleared of wrongdoing, but Bunkle did not get her job back.

In 2001 now local Government Minister Rodney Hide expressed disappointment* that an Auditor General's review of out-of-town accommodation allowanaces paid to Wellington based MPs was only going to look at the rules rather than the two MPs concerned, Hobbs and Bunkle. I very much doubt Rodney will be consistent and now say Prime Minister John Key's review should concentrate on the behaviour of certain individuals instead of just looking at the rules.

So what were Bill English, and Murray McCully saying in 2001 about this issue? Indeed it could be said McCully invited such comparisons in a speech to the house on 14 February 2001.
"I take the opportunity today to remind two members of this House of some words they have used on previous occasions, and to invite them to inspect their conduct of recent weeks against the yardsticks that I believe they have created for themselves."

Quite. Your turn Mr McCully. It is also interesting that in your attack on Bunkle you suggested the court of public opinion is a better guide as to what is right - so you can hardly claim to hide behind the rules now can you?
"To most members of the public, that looks like a person who lives in Wellington inquiring of the Parliamentary Service Commission, before she had even become a member, what she would have to do to collect the allowances, then contriving her circumstances so as to be able to complete the assertions that she did complete, and thus collect the Wellington allowance. That is how it looks to ordinary New Zealanders."

To most ordinary New Zealanders collecting rent on a Wellington apartment you own while you live in another taxpayer funded house looks like a taxpayer funded money making scam. Yet McCully's own words would also seem to doom his own deputy leader.

Bill English moved his family to Wellington some years ago - its where his wife works, and where his kids go to school. On these grounds most members of the public would regard him as a Wellington based MP. Claiming you live apart from your family in Clutha Southland seems like contriving your circumstances to collect allowances, which is rather similar to how the public regarded Phillida's claims she lived in Waikane.

With Heatley and English claiming between $48,000 and $52,000 its worth noting this is over three times the value of the allowances claimed by Hobbs and Bunkle.

On 14 February 2001 Bill English made this contribution to the debate on the Prime Ministers Statement
"Today's Evening Post headline sets the tone for the Government for the year: ``Ministers face legal probe''. When have we ever seen a headline like that in a newspaper? Two Ministers face a legal probe for a couple of simple reasons. One reason is that Marian Hobbs told Wellington Central people that she was a Wellington Central resident, while she was claiming an allowance for being an out-of-town MP. Ms Bunkle had any number of houses, one of which appears not to have existed while she was claiming an allowance for living in it. There will be more to be disclosed about that. But that is the tone that has been set. "

Has Bill 'any number of houses' English set the tone for his own Government this year? If you were to take his own words at face value it would appear so.

* Source: TVNZ, 25/1/01 'Another inquiry into MP allowances'

Free market electricity ripoff

This week the Commerce Commission released a damming report on the so called 'electricity market' in New Zealand. Electricity companies have overcharged New Zealanders over $4.3 billion dollars in six years.

While the report found no breach of the Commerce Act - its conclusions were far more devastating for those who would argue for further privatisation and the maintenance of a 'lightly regulated' framework. The Commerce Commission concluded the electricity companies used their market power to maximise profits in a legitimate way within the current market structure and rules. These being rules created by free market minded politicians.

The Otago Daily Times editorial puts the blame right where it ought to be - the National Government of the late 1990s and the Labour-led Government between 1999 and 2008. While Labour introduced the Electricity Commission, and appointed an old Rogernome to run it, their actions effectively embedded the infamous reforms of Max Bradford. I don't think I will be revealing any state secrets when I say the Alliance at the time was very uncomfortable in being asked to support the Electricity Amendment Act in 2001 - an Alliance Parliamentary adviser working on these issues told me it was so bad we should not have supported it at all. But Labour had light-handed regulation as a religion - and lack of regulation is one of the key problems identified by the Commission this week.

If Labour really had the will to fix things up they could have bought back Contact in 2004 when its parent company Edison Mission Energy was in need of cash. With the main four in Government control, Labour could have made the significant changes to the sector that are required, without the interference of the rent seeking privateers.

Our regulatory regime is so pathetic it doesn't even mandate the provision and collection of the data required for the calculation of competitive benchmark prices. Most other countries do. Professor Wolak, who crunched some of the numbers for the Commission said it took him more time to compile and clean the datasets on the New Zealand electricity supply industry than it did for all his previous projects put together - this includes an analysis of market outcome data from California, England, Wales, Columbia, Australia and Spain (p. 25).

It sounds very much like National and Labour have effectively allowed the electricity industry to design the system to suit themselves. Electricity companies do not even have to participate in the collation of meaningful data. Gee, in whose interests might that be?

A couple of comments from the Commission are worth highlighting. "The experience of countries that have liberalised wholesale electricity markets has shown that the assumption that markets will naturally produce a competitive result is not always justified....[T]he economics of electricity has specific attributes, which makes competition in this sector significantly different from that for most other products." These include very high market entry costs and the fact that demand is largely unaffected by changes in the wholesale price, as consumers do not immediately face price increases as scarcity increases. This companies gain substantial market power.

And before some clown points to the fact three of the major electricity companies are State Owned Enterprises (SOEs) and attempts to argue that government ownership is somehow the problem - I would remind them that the primary goal of SOEs is to make money*. So on this basis I would argue New Zealand already has an effectively privatised electricity system - it just so happens one of the robber barons is the government.

Sadly no SOE has ever gone Kiwibank and aimed to lower costs for consumers. Another model would see power companies run like non-profit trusts with the aim to produce power in the most socially responsible and environmentally sustainable way.

Dunedin blogger Chris Ford calls on the Government to order the electricity companies to pay back their ill gotten gains to consumers. While there is some justice in this proposal, this would effectively require the Government to pay out dividend money that now lives in the Crown accounts. I would sooner use a $4.3 billion pot to fix up the industry once and for all, and if nationalisation is the most effective means of achieving effective policy change, so be it.

The report by the Commerce Commission this week is a damming incitement on the current electricity system. Yet it also dams the agenda of those who want to further privatise the SOEs and maintain a lightly regulated market.

It is simply opportune nonsense for Energy Minister Gerry Brownlee to blame it all on the Electricity Commission - the problems go a lot deeper than that. The Commerce Commission have effectively demonstrated the difficulties in creating a functioning electricity market in a small place like New Zealand. Perhaps it would be better not to try.
--
Cartoon credit: The cartoons in the above post are the work of a couple of creative Dunedin Alliance members (E. & H.). Thanks for giving me the ok to post them here.

* It could be argued the SOEs are failing to live up to a requirement in the State Owned Enterprises Act to exhibit a sense of social responsibility - unfortunately many other SOEs seem to ignore this too.

The Winniebox and the Serious Fraud Office

GWith the announcement by the Serious Fraud Office of an investigation into donations made to his NZ First party the position of Winston Peters as Foreign Affairs minister is fast becoming untenable.

The smartest thing for Peters to do now would be to stand down. He could use the opportunity to claim he is doing it for all sorts of important sounding reasons other than saving his own skin, such as maintaining confidence in the government, a sacrifice for the good of the nation. Peters gets an opportunity to grandstand, an opportunity to clearly state his belief in his own innocence, and his expectation of coming back as a minister as soon as this nonsense is cleared up.

Peters would also be free of any sort of collective cabinet responsibility for the election campaign, which being Winston could bring some advantages.

Sadly, it appears that Winston Peters is simply too arrogant to take the most pragmatic political course of action.

But if Peter's won't go, Helen Clark must suspend him. She has suspended her own ministers for less, in fact David Parker stood down over a whole lot less. If Peters remains a minister while the SFO investigate, it will be difficult to avoid the perception that ministerial standards have dropped to levels not seen since the end of the Shipley administration. That perception has the potential to cause problems not only with the public, but inside the Labour caucus, as any MPs disciplined by Clark will wonder why Peters is being treated so leniently. Many may start to question Clark's judgement, and perhaps even Clark herself.

This Labour-led government is not in free fall - yet. I still rate their chances of remaining on the Treasury benches around 50/50. Despite the National party leading in the polls, they can not lead the Government unless their vote plus their allies adds up to 50% - and that has been a struggle for National all year.

In the case that Peters remains a minister and Labour lose the election, perhaps some people will cast their mind back to the post election negotiations in 2005 when Labour cast off the Greens in favour of NZ First and United Future. In doing so, did Clark write her own political death warrant three years later?

The more hopeful scenario is that Labour scrape home in 2008, and the numbers force the Labour leadership to form a government with the Greens as the primary support partner. In the same way that some people credited the Alliance with rejuvenating the Labour party in 1999, perhaps the Greens can do the same thing for Labour in 2008. One hopes Labour and their supporters can be grateful.

Labour vote with National to pass Terrorism Suppression Bill

Today sees the Committee stages of the Terrorism Suppression Amendment Bill.

This amendment bill has an uncanny resemblance to the first reading of the Terrorism Suppression Act* as introduced by Phil Goff in May 2001.

In response to public concerns the Foreign Affairs and Defence Committee put some safeguards on the use of the legislation. This included putting in place a High Court review of terrorist designations every three years. It also put in an additional clause to the terrorist financing provisions, ensuring that it was not a crime to collect funds "for the purpose of advocating democratic government or the protection of human rights".

I understand Green MP Keith Locke and Alliance MP Matt Robson played a key role in advocating for these changes.

These and other safeguards are being removed under the new amendment bill. When the government puts up legislation to remove provisions that were put in place following public submissions, its a pretty clear signal they have little interest in hearing what the public have to say about the issue.

While Parliament does have the right to amend legislation, its significant that it was a Labour dominated government who passed the original legislation. Could it be a coincidence that in 2002 Labour were in a government dependent on the Alliance and the Greens for their majority. They now are paired up with NZ First and United Future.

Now Labour are joining with their right wing mates and the National party to pass the Terrorism Suppression Bill in a form remarkably similar to as originally proposed by Phil Goff in 2001.

Keith Locke has suggested some progressive amendments in a supplementary order paper, but Labour are likely to vote these all down (hat tip NoRightTurn).

For those who wish to maintain a government with a progressive agenda, this is a good example of why Labour are only fair weather friends. Reliable progress towards a progressive agenda is more likely to happen by supporting minor parties to Labour's left - not Labour itself. And as an added bonus, Labour might be a little less arrogant.

* At the time the bill was known as the Terrorism (Bombings and Financing Bill)

Role of the Alliance in the early 1990s: A response to Jordan

I thought I would repost a comment I made in response to Jordan on his blog.

Jordan said
"Imagine, if you will, a situation where the Labour Party and the Alliance re-united in 1994, rather than not, and that as a result the Labour Party of today was a much more left wing creature than it is. (Practically this was never going to happen for a huge range of reasons, but bear with me). Imagine that this more left wing Labour party, with a wider activist base and a more radical policy and caucus, had taken power in 1999, aided by the Greens as a coalition partner."

Jordan then lists a reasonably moderate left wing programme with uncanny similarity to the programme the Alliance would have liked to have implemented in 1999, if we had not faced so much opposition to such a programme from within the parliamentary Labour Party.

Such a programme would have had more chance in 1999 if Labour party activists had not stuck slashes on electoral billboards with the poe faced lie 'Only a party vote for Labour can change the Government', costing the Alliance 2-3% of our party vote.

In any case, this is my response to Jordan's rather hopeful little scenario.
"I think it is pretty well established that Labour have drifted right again over the three terms they have been in government. Perhaps you should not be so ready to blame others for the Labour party lacking vision.

The direction of the programme you outlined would have been more likely if the Alliance had replaced the Labour party as the major party of the left in 1994. It nearly happened. If a few more people had based their party membership on policy and what they actually believed in, rather than party branding, we may have got there.

Without the existence of the Alliance in the first half of the 1990s the time the Labour party would be even more right wing than it is now (the Act people may have stayed and Goff might be the leader). Without the Alliance Labour would have had no reason to change. You can see this by comparing the policy of the Labour party in 1993 and 1996.

Not that I am saying Labour has changed enough to even contemplate the programe you outlined - it hasn't. It may have lost the neo-liberal crusading zeal in some areas (it retains it in trade policy), but this didn't equate to a desire to undo anything the forth Labour Governemnt did. While Labour reversed some of National's policies - they hardly touched their own.

Nor I do not believe it is fair for you to blame the left for failing to advocate an alternative. The Labour party need to take some responsibility for this too - since 1984* Labour have attempted to sell NZ a very limited version of social democracy - if you could even call it that. Labour party ministers regularly defend the neoliberal economy.

The fact that Government spending as a percentage of GDP is now lower than it was under National is not a record any self described social democratic government should be proud of. Perhaps if people had seen more significant increases into health eduction and housing people now would not be so ready to ask for tax cuts."

* On second thoughts can I change this date to 1981.

Update on SuperSizeMyPay Christchurch public meeting

Venue Change!

The Christchurch public meeting on the SuperSizeMyPay campaign and Sue Bradford's bill to abolish youth rates is now being held at the WEA, 59 Gloucester Street.

Over at Span, there is some discussion about whether Labour will vote against the Minimum Wage (Abolition of Age Discrimination) Amendment Bill. I would not be surprised, as I remember Labour being hostile to the idea when Laila Harre advocated the removal of all youth rates, but the Alliance was able to push Labour into removing youth rates for 18 and 19 year olds (the so called 'adult' minimum wage used to kick in at 20).

If Labour votes down the Bradford bill and delays or abandons the introduction of a $12 minimum wage it will be increasingly difficult so called 'Labour lefties' to maintain their party is still a part of the centre-left, let alone the 'left'.

IMHO Labour have not been a party of the left in my lifetime.

A friendly warning to the Greens from a former Alliance parliamentary researcher

With the prospect of the Greens going into formal coalition with Labour after the election, Frogblog has been reassuring David Farrar the pressures of government will not lead to the Greens splitting like NZ First or the Alliance.

"“The point is: yes, there are differences in positions on particular policy areas, but there are processes available, which have been built up over the past three years, that allow our two parties to come to a compromise position and, if that's not possible, to respectfully agree to disagree and allow Labour to look elsewhere in the House for support."

The real issue here is not that such a mechanism exists in the cabinet manual, but how often it should be used.

On going into Government in 1999 most Alliance activists thought the agree to disagree clause meant that the Alliance would vote with the Labour party on any measure that moved towards Alliance policy, and vote against things that went against our policy.

While this might have been a touch idealistic, it is how most Alliance activists understood the 'agree to disagree' clause. When I look back, this issue was actually at the heart of most of the disagreements between the activists and the party leadership.

While the inclusion of the 'agree to disagree' clause in 1999 may have made it look like Labour appreciated the need for each party to maintain its own identity, in reality Labour comes from a first past the post culture where 'cabinet collective responsibility'’ is to be strictly maintained. In retrospect, this should not have been a surprise, as it was entirely in Labour'’s political interests to do so.

This can be seen from the wording of the 1999 Coalition Agreement.

"The coalition government will operate within the convention of collective cabinet responsibility, subject to the provisions of this agreement, and the expectation is that cabinet decisions will be taken by consensus."

"“There may be public differentiation between the parties in speech and vote which will not be regarded as being in breach of the convention. Such issues are expected to be infrequent and the parties recognise that dealing with them openly and responsibly is critical to the credibility of the coalition. Differentiation on such issues will not detract from the overall acceptance that the two parties are taking joint responsibility for the actions of the government."

Unfortunately, it appears the Green Co-leader Jeanette Fitzsimons has also swallowed the line that party differentiation is to be "infrequent", a line I strongly suspect comes directly from a pre-election chit chat with Aunty Helen herself.

"Well the Cabinet Manual now has a clause that allows partners to agree to disagree and even to vote separately. I think that's got to be used with great caution and very sparingly, but I think it is a good safeguard for those rare cases where it's too important just to compromise."

Given my experience working in Parliament while the Alliance unravelled, Jeanette'’s words filled me with both alarm and sadness. Green activists need to ask their leadership how often they expect the 'agree to disagree provisions' to be used. I can't stress this enough. That said, Frogblog does provide some examples of how these provisions might apply to some obvious policy difference between Labour and the Greens.

Rod has made clear that Green MPs would argue against a free-trade deal in Cabinet and if they lost that argument, they would say so in public using the agree to disagree provision in the Cabinet manual. This would be neither anything new or particularly surprising. The Alliance did this over the Singapore free-trade deal, and Labour would easily be able to get support from across the other side of the House.

I think most observers of the 1999-2002 Government were surprised the Alliance did not officially differentiate more often than it did. Jim was the key problem here, but that is a post in itself. What I do think the Alliance proved was that differentiation could occur between coalition partners and this was not a threat to government stability or cohesion. In fact, when the Alliance did vote a different way to Labour it wasn't much of a big deal.

And that my friends, is the second part of the problem. Writing press releases for Alliance MPs in Government was an eternal balancing act. Generally what would happen is that I would draft something a bit too critical of Labour, and it would get toned down by the MPs! But when the differences between parties are put in a way that is too "“respectful"” (to use FrogBlog'’s word) often the media simply do not want to know.

While the need of the media for apparent "conflict" is most at fault here, I do think the Greens do deserve a "respectful" bollocking for a media strategy that I believe aimed to minimise the prominence of Labour's junior coalition partner. There seemed to be a consistent pattern - every time the Greens approved of something they would "congratulate the Labour-led Government" or simply the "Government" (though they do recognise Laila on PPL), whereas if it was something to be criticised often their press release would refer to the "Labour/Alliance Government". While I appreciate the Greens are entitled to act as a separate party, with their own interests, it would have been nice to see some greater understanding of the position of the Alliance in Government, even if it was soley inspired by 'there for the grace of God go I'. I'm sorry, but the press releases and speeches from the Greens continually stating that the Labour/Alliance government had signed up to the Singapore Free Trade Agreement, without any qualifications regarding the Alliance position, pissed me off. (some examples)

Now I am not blaming the Greens for what happened to the Alliance - only pointing out some of the difficulties we had attempting to preserve an independent message. Perhaps when some group claims the Labour/Green government is a sellout on GE they will understand...

I agree with Jeanette that it was not always clear to supporters of the Alliance when Alliance MPs had put up a fight on an issue in cabinet and lost. But Aunty Helen's ideas about collective responsibility put our MPs in a real bind. Jeanette goes on to say that she believes there is "“nothing in Cabinet solidarity or the Cabinet Manual that prevents you from going to the public when an issue's being debated and saying, look this is our view, we argued it all the way through in Cabinet, we didn't have the numbers, we lost."

But according to my reading of the cabinet manual, ministers in a coalition government are required to show "“careful judgment when referring to party policy that differs from government policy". It states that "“a Minister'’s support and responsibility for the collective government position must always be clear". There is only one single exception to this - the "“agree to disagree" clause in the cabinet manual.

3.23 Coalition governments may decide to establish "agree to disagree" processes, which may allow Ministers to maintain, in public, different party positions on particular issues or policies. Once the final outcome of any "agree to disagree" issue or policy has been determined (either at the Cabinet level or through some other agreed process), Ministers must implement the resulting decision or legislation, regardless of their position throughout the decision making process.
3.24 "Agree to disagree" processes may only be used in relation to different party positions. Any public dissociation from Cabinet decisions by individual Ministers outside the agreed processes is unacceptable.

Interestingly, the cabinet manual contains no assumption the "“agree to disagree"” processes ought to be used "“sparingly" or "“infrequently"”. I believe this indicates the way forward. If the Greens go into government I hope they push Labour on this issue, as this would represent a real gain for the progressive movement for the future, as well as increasing the Greens own chances of survival.

Helen may make a big thing of how rare it is for a Westminster Parliament to have an "agree to disagree"” clause, but this is really a red herring. The old conventions of a 'Westminster Parliament' ought to have been chucked out with First Past the Post. We should redesign our conventions using more relevant comparisons, such as European countries with long histories of stable coalition governments elected under proportional representation.

MMP may not survive if New Zealand'’s third attempt at a coalition government once again leads to the rapid and near fatal decline of the smaller coalition partner. This greatly worries me. If MMP does survive, coalition governments may become very rare indeed. New Zealand's cabinet processes need to be reviewed once again, to ensure they fit with the new parliamentary system. We did not vote for proportional representation in 1993 only to have a first past the post style government installed through outdated cabinet conventions.

I hope the Greens do take this as a friendly and well meant warning - I am happy to share my thoughts before the election after all :)

Time to go Jim!

Garth Lomax has a wonderful letter in today's Christchurch Press (25/7/05).

Time to go

Jim Anderton has been in the Labour Party (until 1989), the NewLabour party (1989 to 1993), the Alliance (1993-2002), the Progressive Coalition (2002), Jim Anderton's Progressive Coalition (2002-2004), the Progressive Party (2004-2005) and now Jim Anderton's Progressive Party (2005).

Thats a lot of parties for an old bloke.

No wonder Pam Corkery once predicted they would have to wheel him out onto the balconies. His ego must weigh a tonne.

Time to go, Jim!

Garth Lomax

Despite Anderton's best destructive efforts the Alliance is standing in the upcoming elections. As a party the Progressives have no future. Anderton's ego driven antics have ensured the party will not survive his retirement. Eventually I predict a new party of the left will emerge, and will include many of the younger activists who are standing for the Alliance in this election.

New blog - Chris Ford - Alliance Dunedin South Candidate

Alliance disability spokesperson and Dunedin South candidate Chris Ford, now has a blog.

http://www.chrisfordalliancedunedinsouth.blogspot.com/

Add it to your links, and you won't have to retype the long url! :)

Labour and National join forces to sell off New Zealand

Labour and National join forces to sell off New Zealand

Alliance Press Release 17 June 2005

The ramming through of the Overseas Investment Bill under urgency late last night will allow multinational corporations and international financial instituions to buy up significant New Zealand assets with far too few effective controls on their behaviour, says the Alliance.

"The new law fails to protect New Zealand's sensitive business and land assets, as it loosens the current rules in most areas." says Alliance Trade spokesperson Joe Hendren.

"It should not be blindly assumed that all overseas investments are in New Zealand's best interests. With the new Overseas Investment Act, Michael Cullen continues the 'no hands' free market mantra of the Fourth Labour Government. Even Don Brash supported this bill."

The Alliance believes New Zealand needs to take a more strategic approach to overseas investment, an approach that values quality over quantity and safeguards the economic, social and environmental interests of the country.

"New Zealand needs the ability to pick and choose 'greenfield' type investments offering new jobs and growth, and reject proposals that are really just simple takeovers offering us little economic benefit," says Joe Hendren.

"In the same week the Government concedes more money will need to be spent to fix up the rail track, a legacy of its privatisation and sale to irresponsible overseas owners, the same Government passes a bill through Parliament that will do nothing to stop such disasters happening again."

The Alliance believes adherence to a corporate code of conduct should be made a condition of consent for foreign purchases. All purchases, not just those involving land, should be subject to a strengthened national interest test.

"In 2001 Government members of the Finance and Expenditure Select Committee made remarkably similar recommendations, but Dr Cullen ignored this advice when drafting the new bill."

"The Alliance fears the new rules will lead to further privatisation of state owned assets, as there will be fewer safeguards to protect the national interest when such sales are proposed. More New Zealand companies will be bought up by the multinationals, as many significant enterprises will fall below the new $100m threshold, meaning that huge chunks of our economy will be sold off with no scrutiny.”

“I expect many of Labour’s grassroots supporters will be very concerned to see National joining Labour to support this bill. A party like the Alliance is urgently needed back in Parliament to stop the Labour party abandoning its history and adopting National's destructive right wing policies," says Joe Hendren.

Earlier this year the Alliance presented a substantial written submission to the Select Committee considering the Overseas Investment Bill. The submission can be read on our website at www.alliance.org.nz. Joe Hendren is a Christchurch based list candidate for the Alliance.

Will the Alliance take votes off the Greens?

In case people are wondering, yes that is me at number 15 on the Alliance Party List.

I can understand some on the left being concerned that about the danger of the Alliance taking votes off the Greens, who have a greater chance of being in the next parliament. Many, including the media, appear to assume the Alliance and the Greens share a similar constituency because of a similar policy direction. I did a little research to find out if this was the case. In particular I looked at where the Alliance vote went between 1999 and 2002.

This data is included in "What happened in the 2002 Election" (Peter Aimer and Jack Vowles) a chapter in "Voters Veto: The 2002 Election in New Zealand" (2003). The book comes from the NZ Election Study, a research programme a friend tells me has been running for 30 years. It is based on over 5000 voters picked at random.

A staggering 42.9% of people who voted for the Alliance in 1999 voted for Labour in 2002. Only 7.1% of the Alliance vote transferred to the Greens, incidentally the same percentage of voters who transferred to United Future. 11.4% of those who voted for the Alliance in 1999 did not cast a vote at all in 2002.

Alliance voters abandoned Jim, as the Progressive Coalition only gained 15.7% of 1999 Alliance voters.

According to Aimer and Vowles "Labour benefited handsomely from the collapse of the Alliance, while National and Act exchanged almost equal numbers of voters. Significant exchanges took place between Labour and the Greens, with the Greens doing marginally better in 2002." (p. 23)

If there was ever going to be an election where the Greens should have picked up the Alliance vote, it should have been in 2002. Yet the Greens gained less than 10% (9.3%) of their support from former Alliance voters. This is not to be disparaging about the Greens - quite the opposite. Differences in the socio-economic makeup of supporters, as well as differences in policy (eg. toll roads) and priorities creates two distinct constituencies. This is encouraging, as this will improve the chances of a wider red/green vision actually being implemented.

For example, I doubt there will be significant action on student debt in the next parliament if Labour commands 40% of the vote and the Greens join the government. But say in the future a party like the Alliance, the Greens and (perhaps) the Maori party collect 15-20% of the vote together (say A=5%, G=8%, M=6%) they could combine forces on common policies and encourage Labour to be more reasonable. This scenario is conservative - long term I believe there is potential to lift the left-of-labour vote higher than this.

Interestingly, nearly 20% of the people who voted Labour in 1999 did not vote in 2002 (19.7%). This may indicate Labour were abandoned by their traditional class base. A measure designed by Peter Aimer and Jack Vowles (Afford Index of Class Voting) shows the manual-household vote reached an all time low in 1990, generally rose up until 1999 and then fell back to 1990 levels in 2002. Thankfully for democracy, Blairism has its costs.

For these reasons I believe it is in the long term interests of the left for the Alliance to stand in this election and use the chance to rebuild. By targeting Labour and non-voters we will be able to highlight important issues in the upcoming campaign and remind people we are still around. In my humble opinion the long term benefits of such a strategy far outweigh the possible small cost to the Green vote.

If you support the general direction of Alliance policy, and want to see another party to the left of labour back in parliament, get involved and help us make it happen.

Blair's re-election under FPP and some NZ comparisions

On Friday I watched BBC World for almost 7 hours straight. Home from work with a flu, I wasn't capable of doing much else. Luckily there was an election to watch. Overall I thought the BBC coverage of the UK election was excellent, my only gripe being the almost complete lack of coverage for the smaller parties (listing number of seats won as 'others' does not tell you much)

With thousands of the British left deserting Tony Blair for the Liberal Democrats over issues such as the Iraq war and 'top-up' fees, there was a danger the perverse electoral system known as First Past the Post (FPP) would split the anti-tory vote.

Through 7 hours there were many panellists commenting on the results as they came in. I found one recurring theme very interesting - the faults of the UK FPP electoral system. Both the presenters and 'commentators' felt the need to explain the vacancies of FPP to 'international viewers', remarking on how unusual it was for a European country like the UK not to have a form of proportional representation, where parties like the Liberal Democrats would gain a share of seats that reflected their level of popular support. I felt a great sense of deja vu - it reminded me of similar discussions in New Zealand on election night 1993, our last FPP election.

One BBC commentator pointed out that while many of the British people did not regard George Bush as a legitimate president in 2000 on the basis he did not win the popular vote, they did not seem to realise a similarly undemocratic result could also occur in their own backyard. This is exactly what happened in FPP elections in New Zealand in 1978 and 1981, where a National government was re-elected with a majority of seats, despite the fact the Labour party actually gained more votes.

Tony Blair has been re-elected with the lowest popular support (35.2%) of any government in UK history, yet Labour has gained 55.1% of the total seats. Over 64% of British voters wanted somebody else, with 32.3% supporting the Conservatives, 22% the Lib Dems and 10.4% supporting other parties.

In 1993 National kept the NZ government benches despite only gaining the support of 35.1% of New Zealand voters (gained 50 seats), a record low for NZ. The left vote was split between Labour (34.7%, 45 seats) and the Alliance (18.2%, two seats), a legacy of the forth Labour government's far right economic policy, including large scale privatisation and introduction of tuition fees. In 1993 NZ Labour was still led by a right winger (Mike Moore) and included right-wing MPs in its caucus (Prebble). Likewise, the split of the UK left vote in 2005 can be squarely blamed on the Blairites. Invading Iraq, removing civil liberties, allowing universities to set tuition fees and privatisation of public services ought to have undermined UK Labour's traditional support. Thankfully for democracy, it did.

Hopefully for democracy the emergence of genuine three party politics in the UK will demonstrate the need for electoral reform, as greater support for 'third' parties did in NZ from 1978 onwards. Once FPP may have looked like an innovation in democracy, now it's just a dinosaur.

Anderton shots himself in the foot with call for corporate tax cuts

Jim Anderton's recent advocacy of a lower corporate tax rate has all the hallmarks of a cheap political stunt. He has attempted similar things before.

In the run-up to the 1999 election Jim Anderton stunned the Alliance Council by advocating that the Alliance should campaign for a top personal tax rate of 39c in the dollar, to cut in at $80,000. This was $20,000 higher than Labour's proposal, which became the top tax rate. I believe it was the same council meeting that Jim also tried to take the knife to many key Alliance policies, such as $20 extra a week for beneficiaries. Not surprisingly, the Alliance Council completely rejected Jim's proposal that the Alliance become a lower tax party than Labour.

While Jim's advocacy of a 30 per cent corporate tax rate may have given the hapless Progressive party some short term profile, for a party that supposedly advocates for greater social and education spending it was a dumb move. Jim now needs new shoes, as he has shot himself in the foot.

In the same week the Progressives announced a policy of write offs of student loans for students that stay in New Zealand for three years after they graduate. They say it will cost $100 million. No Right Turn thinks its similar to a 1998 National party education policy, and from memory I think he is right.

Hmm, $100 million. What is going to happen when the Progressive* attempts to advocate this policy? Cullen will simply make a crocodile smile and say "now Jim didn't you advocate for lower corporate tax, how do you expect to pay for both?", and Cullen will have a good point. The end result will be that the so called progressives will be even more lame duck in this parliament than they have been in this one. They will be unable to credibly advocate for anything that involves extra cash. And for a party that advocates greater social spending, that’s terminal.

On the 9th of October 2001 Jim issued a press statement challenging then new National leader Bill English to say how he planned to fund corporate tax cuts. “National needs to spell out how it can pay $300 million to cut the company tax rate...". Well Jim, now you have to spell out.

Advocating for corporate tax cuts is also likely to drain the funding of Jim's pet project, economic and regional development. At the time Jim Anderton was setting up the Ministry of Economic Development and Industry New Zealand, National and Act were making scathing noises about 'picking winners'. They told Jim to lower the corporate tax rate instead of providing active Government support to business. To his credit, Jim successfully rejected these calls and instead advocated how active government assistance to help to businesses to grow. The estimated $500m tax cut could buy a lot of economic and regional development Jim. Corporate tax cuts are just a return to the flat, scorched earth business policies of Ruth and Roger.

It now appears Andrew Little of the EMPU now regrets rushing to Jim Anderton's aid following his defection from the Alliance in 2002. Giving the $20,000 to the Alliance and endorsing Laila Harre in Waitakere in 2002 would have been a safer bet, and now Laila could be providing Labour with an extra seat buffer, a seat that could save the Government majority in the event John Tamihere resigns from Parliament. Eventually, that decision was always going to bite Labour on the bum.

In another ironic twist, Cullen and Anderton were at odds on this issue in May 2000, but on opposite sides of the argument. On the 12th of April 2000, Cullen made a speech to the Asia Society in Hong Kong where he suggested reducing the company tax rate "when fiscal conditions permit", although he made it clear it was not a priority. In response Anderton said Cullen had not discussed corporate tax cuts with him, replying that "People might like to do without taxes altogether when fiscal conditions allow. Anything might happen when fiscal conditions allow. I'd like free education and free health when fiscal conditions allow" (Dominion, 13th April 2000).

To make matters worse, he is now making a direct comparision with the 30 per cent corporate tax rate in Australia, despite the fact that he previously argued (correctly) that his was not a good comparision because Austrialian companies pay additional taxes that NZ companies do not, such as captial gains taxes.

The large colour advertisements that appeared in this weeks papers were apparently paid for by "Progressive party supporters". There was no Parliamentary Crest so no public money could legally be used to pay for the ads. Is it just a chance thing that the same week Jim is advocating corporate tax cuts he suddenly finds the money for several 3 x 1/4 colour advertisements in major newspapers? Did some corporate come up with the cash so Jim could instigate a tacky little coup from inside the Government? If it was a donation over $10,000 we will know by April next year when the electoral commission releases the return of party donations....

*as it is likely there will only be Jim

Demise of the NZ Northerner Rail Service

I wrote an article for the Alliance Standard on the demise of the Northerner passenger rail service - its now been uploaded to the site.

Northerner Rail Service Axed: More Cuts Likely to Take Their Toll

This week saw yet another cutback to passenger rail services with the announcement that the Northerner, the night service between Auckland and Wellington, would cease operation on the 12th of November. When one considers this annoucement alongside specific clauses in the agreement the Government signed with Toll in July 2004 it becomes obvious that the Northerner will be first of many closures within the first three years of this 'public private partnership'.

Read the rest of the article