Update on Hawkins and why a by-election would be good for Labour

In my last post I looked at how Labour leader Phil Goff was handling the fallout from Chris Carter's brain explosion, and the reaction of Labour MP George Hawkins to being mentioned in Carter's missive.

Carter claimed Hawkins was to face a challenge from within the party for the candidacy of Manurewa, the seat Hawkins has held since 1990. I said that Hawkins reaction demonstrated the same 'sense of entitlement' that Goff (justifiably) criticised Carter for in relation to large travel bills.

Hawkins has now announced an intention to stand for a local board in the October Auckland local body elections. He says he will withdraw his nomination for his parliamentary seat if he is elected, meaning that he will not stand at the next election. But if he is not elected to the local board he will stand for parliament again.

The least charitable interpretation of this would be to claim Hawkins is attempting to discourage a potential challenger to his seat, as nominations close on the 1 September. The most charitable interpretation was that standing down from parliament for the local board was always Hawkins intention, and Carter chose to put an uncharitable spin his intention for effect.

Yet in either case Hawkins still gives the impression of wanting to hang on for dear life, which looks like a sense of entitlement to me. I still hope the challenge happens.

The more I think about it, the more I think a by-election in a seat like Manurewa or Te Atatu would be entirely in Labour's interests. Take this for a scenario.

Hawkins resigns from his seat, and challenges Carter to do the same thing. Labour regain the initative, and Hawkins gains a graceful exit in the arms of a grateful party.

Explain to the public that while by-elections are expensive, at the end of the day democracy and the right of the people to have a say is worth more. This would tie in with a strong message about the lack of democracy in the Super City too. Highlight how National Maungakiekie MP Sam Lotu-liga oped to stay on the council after being elected an MP, and avoided a by-election for the political convenience of his CityRat mates.

At the beginning of the by-election campaign/s Labour annouce they will use every public meeting to tell people about the National party's attempts to bring back the Employment Contracts Act in drag, and every pamphlet delivered for the by-election will also be accompanied by a leaflet explaining the negative effects of the proposed employment law changes on 'every wage and salary earner'. Strong soundbites against '90 days' echo through news bulletins for three weeks.

Labour would be bound to win Manurewa with an ok candidate and Te Atatu with a strong candidate, which would help build momentum and exposure and make it more difficult for the Nats to control the news agenda. There is not likely to be any harm in the Greens running good candidates in either seat, for the same reasons.

So Chris Carter is going on two months 'sick leave'? Is this to waste just enough time so the 'election is too close for by-election' excuse can be trotted out? Please Chris, you may not care for Goff, but please resign from parliament immediately for the sake of the party you claim to care about. The public want you gone.

Telling Carter to go while protecting Hawkins is a mistake

Overall Labour leader Phil Goff has handled the impact of his MP Chris Carter's brain explosion reasonably well. Carter's antics, which have included sending an unnamed gossip sheet to the parliamentary press gallery yet addressing the envelopes in his own handwriting, must go down in New Zealand political history as one of the most inept attempted coups ever. It has to take a vain individual to start an whisper campaign against his leader, when the said individual secretly wants everyone to know it was him all along.

Goff has made the best of a bad situation, using last week as an opportunity to demonstrate how he can be a decisive and strong leader. While Goff has done well overall, some weaknesses in Goff's public position have begun to emerge. The suggestions from senior MP Trevor Mallard and Goff that Carter is 'unwell' may be an honest attempt to explain the bizarre behavior of the later, however this may rebound on Labour if Carter and Government MPs accuse Labour of bullying. Better to state the facts of Carter's behaviour and let the public work that one out for themselves.

The second weakness is the apparent differing treatment of Carter and long time Labour MP George Hawkins during this affair. In his gossip sheet to the gallery Carter alleged unionist Jerome Mika was looking to challenge long time Hawkins for his Manurewa seat, and that Hawkins was threatening a byelection if the challenge went ahead. Significantly, Hawkins refused to deny this was the case when he was questioned about this by journalist Rebecca Wright.

Not only did Hawkins chose to comment on an issue that should have been immediately redirected to the press office of his leader, he did so in such a way that confirmed 'all sorts of rumours'. I am not saying that Hawkins conduct is on the same scale as Carter but the underlying issues at stake are similar.

Goff has criticised Carter for having a sense of entitlement. From the looks of things you could say exactly the same thing about Hawkins sense of entitlement to his seat. Hawkins said that it wouldn't be the first time someone with political ambitions has eyed his safe Manurewa electorate as an easy way of getting into Parliament. That goes for staying there too George.

While acknowledging the seat was subject to a party selection process, Goff sent a message of support to Hawkins by saying "I am confident that George is well supported by the people in his electorate and that he would be confident of being elected even if it was contested". At the same time Goff has called on Carter to resign his Te Atatu seat as he no longer represents the Labour party. The danger is that the Te Atatu electorate committee could also demonstrate support for their troubled MP, as they have now done so.

For these reasons, and some potential legal difficulties in expelling Carter from the party, its good to see some Labour figures backing of this threat for now. A plea bargain of sorts may emerge, perhaps along with a lighter punishment like suspension, where Carter promises not to publicly comment on the leadership of the party, not to travel or be involved in any way in the selection of a new candidate for Te Atatu. Carter has already said he will not stand at the next election. Better to state the facts of Carter's behaviour and let the public work that one out for themselves.

It would a great shame if Hawkins held on for another three years on the back of Carter's stupidity. When now Act MP Roger Douglas resigned his Labour seat in 1990 he anointed Hawkins has his successor, and Hawkins has been a member of the right wing faction in Labour ever since. After a single bumbling term as a minister between 1999 and 2002, Hawkins was quietly told to stand aside as a minister before others made the decision for him. Hawkins career isn't going anywhere, and Manurewa stands as one of the most obvious electorates where rejuvenation is required.

I have only briefly met Jerome Mika, so I don't feel I can comment on his suitability as a candidate. I have heard he is not lacking in ambition, and that he is such a natural at 'working a room' that he sometimes does this at work. Recognition among some of South Auckland's large industrial sites, along with support from Labour's Pacific networks could make some interesting numbers. He may not win the nomination, but Jerome would help send a message.

To my mind the worst thing for Labour would be the appearance of an attempt by head office to stop the challenge to Hawkins, as this would only give Carter's outbursts more credibility and highlight the differing treatment of Carter and Hawkins. Either Hawkins should face the challenge with a little more grace than he has demonstrated so far, or he should announce his intention to stand aside at the next election. The later would also allow alternative candidates to emerge - a more open contest can only increase the chances of Manurewa getting the kind of MP its healthy majority deserves.

Silence from Labour on ministerial housing is a mistake

It is most unfortunate the Labour opposition have made the decision to join National's conspiracy of silence over the out-of-town housing allowances issue. Even if Labour had some dirty laundry themselves, it is more important to speak out and differentiate themselves clearly from National, who being in Government would normally take most of the rap.

Instead, Labour look like they are out of touch. When they have reluctantly commented on the issue they have appeared nervous and indecisive.

If Phil Goff was a better opposition leader he would have gained the initiative by immediately demanding an inquiry into the issue, freely admitting there may have been some Labour 'mistakes'. At the same time he could have barraged Key with suggestions on how to do things better. Good use of parliamentary questions and Trevor Mallard may have uncovered information that put ministers under more pressure.

Instead Goff let John Key gain some of the initiative with his soft as Teflon 'review'. Through their actions the right encourage cynicism toward politicians - it just so happens a electorate with less expectations of politicians usually suits their agenda. So in their silence, have Labour helped the right undermine faith in democracy?

Unfortunately, a 'plague on both your houses' has been a common theme this week - in more ways than one.

As for the Greens, IMHO they had nothing to worry about regarding the Green Futures Superannuation Scheme - the fact they have been more open about their arrangements for years should provide enough political cover.

There are reasonable and necessary expenses for being an out-of-Wellington MP. Its only the profit seeking rorts that need to stop.

I was working in Parliament in 2001 when National and Act's campaign against Hobbs and Bunkle was in full swing. It went far beyond just raising issues - it was the right of New Zealand politics at their most nasty, personal and vindictive. I remember thinking at the time there soon must come a point where the public would start feeling sorry for Hobbs and Bunkle - it really was that bad.

Richard Prebble was particularly obnoxious - it might be a small mercy, but the end of his second political career can be traced to his involvement in the Hobbs and Bunkle bashing. Speculation about his replacement as Act leader started soon after the 2002 election.

The memories of that National and Act campaign were a key motivation behind my posts this week.

Not that I am suggesting Labour and the Greens should now run a similar campaign - instead its more important to remind the public how nasty the Nats can be, as well as highlighting their obvious hypocrisy. How easy would it be right now to paint the Nats and Roger Douglas as greedy out of touch bullies? Unfortunately the opposition are failing to be an effective opposition right now.

Many of the National MPs who were frothing at the mouth in 2001 are now claiming, on questionable grounds, higher out-of-town allowances than Bunkle or Hobbs - it just beggars belief.

The legacy of neo-liberalism on family life - some thoughts from Blackball

I wrote most of the following post around three weeks ago, and was always intending to go back and finish it. I thought it might be an opportune time after seeing a related item on the news tonight.

A neonatal paediatrician is warning parents to do all they can to avoid putting their young children in daycare, saying it could permanently harm their developing brains. Dr Simon Rowley advocates for a parent to stay home with children in the early years if they can. He cites research looking at the hormone cortisol that found 80% of children in daycare become more stressed during the day, with toddlers showing the highest levels of stress.

Early Childhood Council chief executive Sarah Farquhar has taken issue with Dr Rowley .
"It's going back to the times of women being barefoot and pregnant in the kitchen. That's not healthy for children and it's not healthy for women . . . making parents feel guilty about their choices is not the way to go."
The Early Childhood Council also happens to be protecting its market - as an organisation representing private childcare centres. Kids are their source of cash.

Now its possible that Dr Rowley is running a socially conservative agenda here, particularly when he blames the social policies of Helen Clark, and many social conservatives demonise Clark. Yet to leave the issue there I think does the left a disservice, as it may leave empty political ground for socially conservative politicians if the left is not seen to be engaging with the issues in a deeper way.

What got me thinking about this was a very interesting discussion during the Blackball May Day celebrations earlier this year. We looked at the legacy of neo-liberalism in New Zealand, with a focus on its affect on family life.

I am greatly thankful to my fellow participants for helping me think about the issues in new ways.
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The Blackball Working Class History Project now has a blog.

This year I attended the May Day celebrations in Blackball. It was an enjoyable and engaging weekend. As 2008 was the 100th anniversary of the famous Blackball miners strike, the numbers were smaller in 2009, but this allowed the issues to be covered in greater depth.

On the Saturday morning a forum was held on The Legacy of Neo-Liberalism. Many people prepared provocations for the forum in order to start the discussion. Rather than focus on economics and the undemocratic nature of how neo-liberalism was forced on the electorate, many people spoke of the legacy of neo-liberalism on families and family life.

It is great to see many of these contributions from the forum now appearing online. Paul Manuder has written a rundown of the weekend. Sandra and others highlighted the punative attitude of many government departments.

"I’ve got a friend in Greymouth who cares for her baby granddaughter, her ten year old son and her suicidal adult son. Can someone tell me why this woman, this mother, grandmother, carer of our most vulnerable, is being badgered by WINZ to get paying employment?"

I believe part of the explanation for this lies with the Social Security Amendment Act passed by the last Labour Government. This Act changed the whole purpose of the Act famously passed by Michael Joseph Savage in 1938. Rather than a focus on the welfare of the community, the focus came on getting a job - any job - as the only legitimate form of social assistance. I suggested Savage would be turning in his grave if he knew about these changes.

To return to the focus on the impact of neo-liberalism on family life, it was interesting that many saw the lack of family time due to financial pressure as a key problem. For example, a local teacher, Te Whaea Ireland saw many children with a desperate need for one on one contact with adults. Sandra summarised Te Whaea's comments like this.

"Parents love their children but the children are stressed. Families are stressed through everyone working long hours to survive economically. Children are arriving at school earlier, then there’s after school care, there’s no adult with the time to help with homework, no time for mooching- that stress-free space which generates self management, relatedness, creativity etc. The family is no longer functioning as a nurturing unit. She saw among her peer group, the stress in terms of a young couple trying to acquire a home and to have a family. She saw the traditional homemaker, once gender equality is accepted, as a valid and vital role in society."

It ought to be stressed that Te Whaea was not advocating a socially conservative agenda, as she assumes the acceptance of gender equity. Freedom and equity should aim to give people greater choices. The issue is that due to financial pressure parents no longer have the choice whether they wish to work OR be a homemaker.

Essentially, over the past 50 years employers have used the rightful work aspirations of women to halve 'real' family incomes - double incomes are now required to raise families in most cases. The Employment Contracts Act made the situation worse. I do not wish to go back to the 1950s here - what I am highlighting is how New Zealand employers and their right wing friends have used this societal change to their own economic advantage.

In terms of policy responses the following might be a useful starting point. The challenge of the left is not only to announce such policies but to demonstrate how they are relevant to the issues currently facing families. I am not sure the left has done so yet, or as effectively as it might.

• A new industrial relations framework which delivers a fairer share of company profits to families (the new Australian legislation might be worth looking at - particularly if we are serious about a real CER that is not limited to just what the business community wants)
• A minimum wage set at two thirds of the average wage (sign the Unite petition)
• Universal Basic Income (which would recognise the currently unpaid work of homemakers)
• A year or more of paid parental leave.
• More research on children's experiences on daycare - are there ways to make it less stressful and more confortable for the kids?
  

I very much welcome comments on this post, as I feel as if I am still working out the issues as I go.

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During the Blackball forum I also suggested that the Clark Labour Government may be seen by future historians as playing a key role in embedding neo-liberalism as it deliberately avoided changing any of the neo-liberal legislation or the aggressive 'free trade' policies of the forth Labour Government. Despite the country voting left in 1999, the Reserve Bank Act, the Public Finance Act, the State Sector Act and a strict orthodoxy of 'balanced budgets' remained. Even after nine years. Indeed it is significant that in his valedictory speech the former Labour Finance Minister Michael Cullen spoke of his pride in pursuing free trade agreements and maintaining a socially progressive but fiscally conservative party.

I respected Cullen's intellect and his wit a great deal, but I always thought his views on the inevitability and the desirability of the WTO version of the global market were simply pollyanna. While he did renationalise the railways, this was only after costing the country millions by entering into a failed public-private partnership with Toll Holdings in 2004. In 2003 he had the opportunity buy the railways on the cheap and to tell Toll to noddy off, but did not do so.

Musing on Mt Albert poll

A poll out tonight shows Labour's David Shearer will win the Mt Albert by-election easily.

The TV One poll had Shearer coasting at 59%. National's disaster of a candidate Melissa Lee could only manage 21% support. She is in real danger of being relegated to third place in the contest, with the Greens Russel Norman at her heels on 15%.

TV One also polled on the party vote in the electorate (even though there is no such thing in a by-election). Jordan Carter finds good news here too - compared to the 2008 election result Labour have gained 6% additional party vote support in the electorate- this essentially puts numbers on the damage Melissa Lee has done to John Key's government.

Now that we can safely assume Labour are going to win. Labour and the left could make this an even sweeter victory if Russel Norman beats Melissa Lee - in this case I really hope some Labour supporters consider voting tactically for the Green.

With a 38% margin - could David shout Russel 8% and then share a drink over a really bad night for the National Government?

Of course the Labour leadership will be pushing for the highest vote possible for Labour. Most of the time this will also be in the interests of party members - but not always. In 2005 many Labour party activists were understandably dismayed when the senior leadership of their party, given the choice, formed a government with Winston Peters and Peter Dunne and excluded the Greens.

Labour and the Greens winning both first and second place in this by-election is in the interests of both parties. Not only will Labour retain the seat, a credible showing by the Greens will help build momentum and credibility for an alternative Government in 2011. The next election may be a while away yet, but Labour would be wise to give the Greens a few lilly pads forward, at little cost to itself, in order that the overall position of the centre-left is strengthened.
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PS: Haven't been posting recently as I have been in Aussie over the past two weeks. Hope to make a couple of roo related posts later in the week.

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.
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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.

Triangle TV Scruitiny blows Paul Holmes out of the water

Tonight's edition of the Triangle TV programme Scrutiny demonstrated why Paul Holmes should not be the host of TVNZ's revamped Agenda - now called Q&A.

Journalist Edward Rooney questioned EPMU National Secretary and new Labour Party President Andrew Little about how he planned to do both jobs. Holmes conducted much the same interview on Q&A on Sunday, and the difference was stark. A small regional TV station blew TVNZ and all its resources out of the water.

Holmes narrowed down with a tabloid like fixation on conflict as a concept -"conflict you might say", "there is a conflicted situation isn't there", yet failed to show whether there was any substance to any of these potential conflicts. Instead Rooney looked to ask questions that would seek out the answer in letting his subject talk, and by so doing found a real issue Holmes simply didn't get to.

Both major political parties in New Zealand are dependent on funding from corporate sources, with party presidents regularly playing a key role in soliciting such donations. Rooney questioned how Little could seek such funding, at the same time he was advocating, potentially in an adversarial sense, with the same corporate bodies on behalf of union members. For example Telecom seeks benefaction through such donations - it is also a significant EPMU site. Little acknowledged the problem and said he could not be involved in that.

Instead, Little said he would focus on gaining smaller regular donations from a larger number of people. This would make the Labour party more democratic, but turning around 25 years of significant corporate wine and cheese is not something that can be done before the next election, and Labour could be left with small pockets in 2012 as a result. So while Little's democratic aims are laudable, this can only be a long term project.

While in the Holmes interview Little said he had committed to the union until 2011, where he expected enter Parliament, in the Rooney interview Little gave an indication he could step down earlier, by mentioning "succession plans" that were underway within the EPMU. Gaining revealing answers from subjects is another way to judge the skill of an interviewer, and who is just a show pony.

Holmes also has a habit of impatiently interrupting people, enforcing a format where interviewees can only give banal cartoonish like answers and simple soundbites. I found Therese Arseneau to be the most interesting commentator on the Q&A panel last Sunday, and wished Holmes would quit constantly interrupting her.

It is a shame TVNZ have consistently thought less of Agenda than it deserved. It might have been a show for political geeks, but then TVNZ only ever showed it early on weekend mornings - so it was never going to be 'mainstream'. Agenda regularly showed its value by breaking stories that were later part of prime time news bulletins - it is surprising how often comments made on Agenda ended up as front page news.

TVNZ have seriously erred by imposing Paul Holmes as the host of Q & A. Particularly as the start of the Holmes show in 1989 is around the point many Agenda fans would see as the death of thorough, issues based political journalism in New Zealand. Anyone else remember what Ian Fraser or Ian Johnstone were like in their prime? After that real journalists like Ian Johnstone went off to make great documentaries like Someone Else's Country and it look TVNZ 8 years before it bothered to screen it.

Paul Holmes as host of Q&A is like having an unscrupulous developer as head of the Historic Places Trust.
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PS: A few weeks before Helen Clark is expected to be appointed to a top UN job, TVNZressurects the career of the same Paul Holmes who made international news after he referred to the head of the UN as a 'cheeky darky' - sigh.

Update: I have since discovered Telecom stopped making political donations in 2006. At the time Chairman Wayne Boyd said the decision was "absolutely not" a reaction to the unbundling of the local loop - I am sure readers will reach their own conclusions on this.

Beneficiaries need cellphones. Nat + Lab rght wng pollys sux

Letters from Work and Income telling debt ridden families to take out more loans and pawn off cellphones is more evidence of a mean and punitive culture within the organisation that neither major political party has done anything significant to change.

Its a little hard for a prospective employer to ring you if your cellphone is at the pawn shop.

While the letter approved an application for a Temporary Additional Benefit it also suggested some rather obnoxious additional steps to be taken.

• Taking out loans to cover arrears (in other words talk to a loan shark)
• Pawning cellphone and children's playstation
• Ringing debtors to reduce payments or refinance debt (in other words talk to a loan shark)
  
• Seeking budgetary advice
  

It was good to see Social Development Minister Paula Bennett quickly dismiss the practice when she was questioned about it in Parliament yesterday. One wonders if some of her National party colleagues may have been less quick to do so.

The issue was raised by former Labour party minister Annette King, yet it was the decision of the former Labour government to abolish the special benefit that largely created this situation. The 'replacement' Temporary Additional Support (TAS), placed more restrictions on emergency support - removing a degree of discretion the special benefit made available to WINZ staff. In essence Labour were telling WINZ staff they had to be tougher on beneficiaries.

In March 2008 Green MP Sue Bradford explained how Labour's April 2006 changes led to more beneficiaries being forced to susist within "an endless cycle of debt".
"Up until that point the special benefit had provided a third-tier level of last ditch discretionary assistance for people in the situation where the gap between their actual income and the necessities of life was too high to bridge by any other means. With benefits remaining low and even some low-wage workers requiring assistance from Work and Income, the special benefit played a key role in allowing case managers a way of topping up people’s benefits to liveable levels."

One will certainly end up in even more of an endless cycle of debt if your case manager is telling you to take on more.

In order to be eligible for TAS "cash assets" held by a person can not exceed a prescribed amount. Cash assets as defined in the 2005 Social Security Regulations includes cash and "other assets of the person that can be converted readily into cash". Motor vehicles, caravans and boats worth less than $2000 are excluded from the calculation, as are 'personal effects', however cellphones are not specifically excluded. Nor are student loans, even thought WINZ have attempted to claim this as "cash" in the past.

Later Social Security Regulations added further exclusions, suggesting the TAS is simply poor policy. Its worth noting that following the election National passed another such regulation to exclude ReStart payments.

A history of the special benefit by Advkit Para Legal Services reveals that in 1994 Labour (including Clark, Cullen and Maharey) strongly criticised the decision of the then National Government to restrict the discretionary nature of the special benefit, yet in Government Labour abolished it completely.

While Labour may have raised the issue in the house, in fact it was nothing more than their own right wing Blairite welfare policies coming back to haunt them. Policies that National also supports I might add.

Election 2008: Labour now led by Goff and King

Phil Goff is now leader of the Labour Party, with Annette King acting as his deputy. Both are from the right wing side of the Labour party, and both were allies of Roger Douglas during the forth Labour Government.

It is likely that Labour will move to the right under this leadership team, despite being in opposition. Goff could argue Labour needs to attempt to reconnect with what he sees as the 'centre' in New Zealand politics. This may lead to situations where Key appears to be on the left of Goff on some policies - this cannot be good for the rejuvenation of the Labour party.

Interesting that Goff describes himself as a "loyal Labour party person" - does this explain why he supported the forth Labour Government when they were enacting Act policies? For many he will also be remembered as the Minister who first introduced student tertiary fees.

Its possible the new National/Act/Dunne Government will attempt to shore itself up by starting the age old debate over who is tougher on crime. Act leader Rodney Hide is pushing an expensive three strikes policy and likely Justice Minister Simon Power is known for beating the crime drum. Goff had a reputation as a more reactionary Justice Minister, and King just finished a stint as Minister of Police. I really hope this does not mean they join the right in the meaningless 'mine is tougher than yours' competition. Instead I hope Labour join the Greens and the Maori party to stand up for policies shown to cut crime rates and lessen the need to build more prisons. Rationality may not swing short term political support, but logic has a greater chance over the longer term.

I also fear a Goff/King Labour party would support reactionary amendments to the Suppression of Terrorism Act and similar legislation.

Helen Clark did a great thing by announcing her resignation on election night. While it may have shocked some supporters, Clark was likely to move on in the next three years anyway. She ensured she left the leadership of the Labour party under her own terms, and while making a gracious speech, she also took some of the focus off John Key on election night. She also allowed the parliamentary party to reorganise itself quickly, in order that it can better prepare to challenge the new Government on day one of the Parliamentary term. It also gives the Labour party more time to tweak the leadership before the next election if need be.

Outgoing deputy leader Michael Cullen is upbeat. "We've got the best and strongest intake we've had since 1984, it's a generation, the base for a very strong performance by us moving forward so our message is to the National Party, being a law and order party, is three years and you're out.". He also promised "I don't want to become one of those old men in the Muppet Show up the back." This is a shame - I always though the old men in the Muppets had some of the funniest lines!

While the leadership of Helen Clark was a strength of the Labour party for a number of years, her dominance of the caucus and the party also limited the opportunities for any successors or an organised succession plan. This created the situation where Goff only need to bide his time and he would become the front runner by default.

While Goff was an effective minister this does not necessarily provide the style and skills required to be an effective opposition leader. As a minister Goff often defended Government policies by talking in a monotone and giving his opponents or journalists few opportunities to interrupt - on some days he sounded like a Borg drone powered by the Energizer bunny. As a ministerial tactic this could be useful, but the role of opposition leader requires the ability to empathise and talk in a way the public can identify with. I am not sure Goff is there yet - but this may improve now he is out from under Clark's shadow.

TV3 debate

I found the TV3 debate fairly dull. I agreed with one of the commentators, I believe it was Jane Clifton, who wondered if both leaders had been trained by their media minders to be just plain dull and avoid talking about policy.

Overall I would call it a minor points victory for Helen Clark, but the debate was so dull is unlikely to have much impact on the wider campaign. I think Clark did well given that the tenor, questions and underlying assumptions behind the debate were framed against her. Like Audrey Young, I think there were occasions where host John Campbell did not give Clark a fair go to respond.

That said, the weakness in Clark's performance tonight was the same issue that has plagued the 08 Labour campaign - being too negative. Campbell gave her plenty of opportunities to talk about new policy initiatives - yet she failed to mention the promise of a universal student allowance once. Clark fluffed the chance for a strong closing statement by closing on Key, although I think Key/Campbell cut her off again here too.

While some Labour activists hope the 'Mary' ad will turn things around - I doubt it. To my mind, Labour would gain more votes if they toned down the frequency of the negative ads and ran the CTU videos on TV instead!

Where is Labour's big idea?

In recent discussions with friends I am often left wondering when Labour will announce their 'big idea' for the election campaign. A big idea is seen as essential to their election chances.

Did Michael Cullen's tax cuts in April leave no money for big ideas? Perhaps, to give Michael some credit, this formed the reason for Cullen's reluctance to give in to tax cuts in the first place. Could tax cuts end up costing Labour the election?

Perhaps an historical example will help illustrate my point. Many have wondered why Winston Churchill was voted out of office so soon after leading Britain through World War Two. Part of the answer lies in the significant policy progress UK Labour made while part of the wartime coalition government. In the eyes of the British people Labour's ideas became more mainstream during this period, leading to the election of the progressive Attlee government in 1945.

Will Labour's tax cuts give encouragement for people to vote for National's irresponsible borrowing for bigger tax cuts? Me-too-ism could have a cost. I actually hope I am wrong here.

What if Labour had announced a plan to significantly improve public heath, education or housing affordability? Would this have quarantined the call for tax cuts to the struggling folk of Remuera? The new BMW would have had to wait.

In terms of big ideas - how about a housing affordability measure on the scale of the State Advances Scheme? While I do not entirely buy the argument that housing affordability measures will necessarily increase prices, perhaps the recent fall in house prices presents an opportune time to help young New Zealanders into their first home. Not only will the working class of South Auckland love such a policy, it could also ease the fears of middle class property owners who fear the paper value of their major asset will decline further.

Does National party strategy come from the CityRats?

Chris Trotter poses an interesting question. Did the success of the Citizens and Ratepayers Campaign in the last Auckland local body elections provide a 'dry run' for the general election campaign of National led by John Key? Is the same strategy at work?

"Like Banksie, Key is promising that he and his followers have changed. That they’re no longer the flinty-faced mob they used to be under Don Brash. Oh dear me no, they have turned over a new leaf, and become kinder, gentler tories: National-Lite. Also, like Banksie and his C&R strategists, the Nats are relying on the voters’ rapidly waning affection for the incumbent left-wing adminstration to carry them into power without having to first undergo too much in the way of intense media scrutiny.

Could this explain the Opposition’s extreme reluctance to talk about too much policy detail? In case somebody ends up disagreeing - i.e. attracting attention and making news? Is Key hoping to take down Helen Clark’s government in the same way that Banksie took down Dick Hubbard’s - by default?"

Trotter believes the Left opened the way for the CityRats to win in an environment where there was little public scrutiny of their ideas or what they stood for. I largely agree with Trotter's analysis here. I would also note that a compliant media was also a factor.

This suggests a Labour party general election campaign based around 'keeping National out' is less likely to succeed than a campaign based on big ideas (like interest free student loans). Announcing progressive policy is more likely to force the Nats to talk about policy in a way they wish to avoid. Act's Roger Douglas may have this effect too. Labour would not need to run the negative message, as National and Act will scare the horses all by themselves, just like Maurice Williamson did with his $50 a week estimate of road tolls.

I posted the following as a comment in response to Chris' post - I thought I might as well note it here too.

Another related issue is the failure of the centre-left/left to come up with a credible electable candidate for the Auckland Mayoralty for as long as I can remember. While Hubbard won in 2004, he ran a dreadful campaign in 2007. Hubbard’s politics are centrist at best - I am sure many voted for him because he was on the left of Banks, which is not saying much. In 2001 there was the fracas created by the Labour wing of City Vision endorsing a failed National party cabinet minister who also ran a dreadful campaign, and lost badly.

Could we please have a centre-left candidate at the next mayoral elections who people of the left actually want to vote for? A candidate who can generate some enthusiasm around local body issues and encourages a greater turnout?

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 is complicit in National's work-for-the-dole madness

The Standard highlights the likely implications of National welfare spokesperson inviting an Australian work-for-dole 'provider' to visit New Zealand. National plans to give them business by introducing work for the dole if it becomes the Government.

While Collins adopts the key approach of 'deny deny deny', Mission Australia's chief executive is keen to cross the Tasman.

Steve Pierson at the Standard is right when he describes work-for-the-dole as a nice sounding slogan that does not work in practice. In adopting such a policy "National is following ideology, rather than doing what makes sense."

But there is a problem with this analysis. The fact is that Labour adopted significant assumptions of the underlying ideology behind work-for-the-dole when they passed the Social Security Amendment Act. I have blogged on similar issues before. As Louise Humpage and Susan St John point out this amendment changed the fundamental purpose of the Social Security Act.

"[T]he Social Security Amendment Bill wipes away any notion that our social security system is about ensuring everyone can participate as citizens. Instead, it makes getting people into a job, any job, the fundamental duty of citizenship. This principle is baldly stated “Work in paid employment offers the best opportunity for people to achieve social and economic well-being”.

Even worse, the new Act allows for pre-benefit activity to be completed before a person can even apply for an Unemployment Benefit. So thanks to Labour, National will not even have to change the law to bring in work-for-the-dole, they can just pass a regulation to require registration for make-work schemes as part of 'pre-benefit' activity.

It is an irony that the right make so much of the 'excess' jobs offered by NZ Rail prior to corporatisation in the 1980s, when these jobs where of far more value to society than the neo-liberal work-for-the dole schemes, of the late 1990s, and of the early 1930s. In his book 'The Slump' historian Tony Simpson described how this philosophy and practice failed to address the demands of the depression.

"By and large it reflected the 19th century viewpoint that anything for nothing would be instantly exploited by the unscrupulous and feckless poor. The circumstances of giving must be unpleasant as possible and it must never amount to more than the lowest wage available otherwise it will encourage sloth."

The 1930 Unemployment Act provided for a sustenance payment of 21 shillings a week to unemployed men, with an additional 17s and 6p for a wife, and 4 shillings per child (even though working women contributed, they were not eligible). This was financed by a poll tax - in effect it was a compulsory insurance scheme.

"These rates were never paid. Instead, the unemployed were referred to local authorities, which were instructed to provide work and granted subsidies from taxation with which to pay the workers involved. A stern instruction accompanied this scheme. No one was to be given payment unless they actually reported for work. This led to ludicrous, even scandalous, situations where local authorities scrambled to create work which was clearly unnecessary or even useless (such as shifting sandhills from place to place)."

If local authorities could not create work payment was withheld. Despite this example being from the 1930s it still demonstrates the weaknesses of a work-for-the-dole policy, and how it can lead to further retrenchment. The work involved is either going to replace genuine jobs or it is not. If not, this can only mean sandhills. If a government (or a private provider) is inclined to cut 'benefit' costs further, restricting the amount of 'work' available becomes a very handy way to do this.

Its not just the Social Security Amendment Act. Consider Sue Braford's analysis of Steve Maharey's 'Jobs Jolt' policy from 2004.

"In this context, for those people who are living in poverty, on wages and benefits which aren’t enough to sustain a remotely decent standard of living, the ‘Jobs Jolt’ means little more than increased harassment by the State in a situation where there are still far from enough jobs to go around....This is why I view the ‘Jobs Jolt’ and the thinking behind it as intrinsically right wing, fundamentally unjust from a social equity perspective, and a clear signal that Labour is far keener on picking up votes from the beneficiary-bashing part of the political spectrum than it is from low income workers, unemployed people and beneficiaries, and those who support their right to jobs and a living wage.... Overall, I sense that the Government’s lurch to the Right on welfare as epitomised by the ‘Jobs Jolt’ is a product of their lack of any cohesive ideology or coherent thinking about solutions to structural unemployment, endemic poverty, a failed, fractured welfare system and an entrenched and increasing gap between rich and poor in Aotearoa New Zealand. "

In other words, the circumstances of giving must be unpleasant. If the Nats introduce work-for-the-dole it will be a logical extension of Labour's own policy, or perhaps lack of one. If Labour had wished to vanquish work-for-the-dole to the historical dustbin it belongs, perhaps it should have made more effort to challenge the neo-Victorian attitudes underlying the ideology of work-for-the-dole.

In 1938 Labour's proposed Social Security Bill was the centrepiece of its election campaign. The National party called it 'applied lunacy', a bribe and a cheat. Labour not only won a majority, it won a majority of the votes cast - a first in New Zealand history.

Note: Made a small edit when I established Mission Australia are technically a charity rather than a private company. That will teach me for blogging too late at night. If National devolves welfare delivery to the charities sector it will like going back to a pre-1930s situation!

Go Go Go Child Povery Action Group, Boo Labour

There was some good news on the box tonight. The Human Rights Review Tribunal has begun to hear the case bought against the Government by the Child Poverty Action Group that the Working for Families programme discriminates against the children of beneficiaries.

The case centres around the the In-Work tax credit, worth around $60 a week. The Labour-led Government excluded beneficiaries from being eligible for this payment. CPAG say this is illegal discrimination because it is Government assistance given only to a select group. 220,000 children from beneficiary families currently miss out.

The Working for Families policy assumes that parents use the money to help with the costs of raising families. How can it be fair that children of beneficiaries are denied $60 a week on the basis of the source of their parents income? Are the Labour party seeking to encourage a new pester power, as in Mummy why don't you get a job? How can it be fair that families lose the $60 a week when a parent has the misfortune to be made redundant?

Prime Minister Helen Clark attempts to defend Labour's policy by claiming Working for Families has lifted 130 thousand families out of poverty. Even though Working for Families has improved the lives of many families, New Zealand's child poverty figures would suggest Clark's claim is somewhat of an exaggeration. Particularly when the Working for Families policy deliberately excluded the very poorest - beneficiary families. Clark also claims "[s]ince the in-work payment came in for the first time we've got the numbers on domestic purposes benefit going down, thats a great thing because it means we have more children seeing their parents going to work everyday to earn a living." Now Helen, can you please tell me how this is the fault of the children?

This and other comments made at the time by of the introduction of Working for Families make it clear that a key policy objective of Working for Families was to increase the difference between the incomes of those on a benefit and those in (low) paid work. The same policy principle underlay Ruth Richardson's 'Mother of All Budgets' in 1991, where Ruth Richardson slashed benefits. Despite making many complaints about these cuts in opposition, Labour have never made any real effort to restore benefit levels in 9 years of Government. Labour ensured beneficiaries did not get any benefit from the tax cuts announced in the Budget, which will only make the situation worse.

The Government's own Ministry of Social Development now say beneficiaries are now worse off now than they were under National in the 1990s. With such a record Labour do not deserve the support of beneficiaries, but neither do National as they have said they are happy with benefit levels as they are now. In contrast, the Greens have given consistent support to beneficiaries in Parliament, despite a great many beneficiaries continuing to support Labour out of habit.

In her recent speech on the 2008 Budget Green MP Sue Bradford said
"..,Dr Cullen certainly has a different understanding of labour history in this country than I do. I had thought that the first Labour Government under Michael Joseph Savage swept to power in 1935 as a result of the mass unemployment and poverty suffered through six years of the Great Depression. It was unemployed workers together with their comrades still in work who helped create and drive the great things Labour did in those early days, including taking the first steps towards getting a decent welfare system into place, and I see this generation of Labour’s approach to beneficiaries as a real betrayal of that proud history."

By excluding beneficiaries, Working for Families becomes an effective subsidy to underpaying employers. While many on the right such as Labour and National promote the virtues of a free market economy, they want to ensure the right of employers to offer underpaid jobs as a forced sale. If workers want higher wages, they should support CPAG's case against the Government, as giving low paid workers the choice to tell underpaying employers to go to hell is one way to ensure wages in New Zealand are lifted for all.

PS: It is an irony that my very first post on this blog, now four years and a few days ago, I criticised Labour for making cynical use of the Bill of Rights Act to justify a cut in student allowances, at the same time they were defending the continued discrimination of parental income tests on the basis of age on the grounds it would cost them too much money to do otherwise.

Leading the tax system in a progressive direction

Vernon Small of the Dominion Post has made a cheeky post where he speculates on how Cullen could stop the very rich from taking the lions share of benefits from tax cuts.

His solution - introduce a new top tax rate of 42c in the dollar on incomes above $150,000, and thus allow greater tax relief to be given to those on lower incomes.

While I don't think its going to happen, I like it. The call for tax cuts could be answered, yet the left could claim a victory in making the tax system more progressive. If there are to be tax cuts, this does not necessitate complete submission to the screaming of the right.

There are many other ways the tax system could be improved. I would be happier about cuts to the top tax rate (39c at 60,000) if Cullen used the opportunity to introduce structurally useful changes such as a capital gains tax on secondary residential properties, and/or a financial transactions tax to discourage short term speculation. While the currency speculators may have means of avoiding the later (eg the EuroKiwi), it may still lead to a lower and more stable currency, which makes the Kiwi a less exiting toy for international currency speculators.

Many other countries have a higher top tax rate than 39c, but they generally apply at a higher threshold. If Cullen dared to introduce a new top tax rate, the National party would scream on behalf of its very rich mates, and Cullen could point this out with some of his trademark glee. Yet in order for this to work Cullen would be best to deliver tax cuts before the election, so voters can't be hoodwinked by the Nats into believing a $150,000 threshold is going to affect them.

As the Nats have called for the New Zealand tax system to be more like Australia, shouldn't we also have higher tax rates at higher thresholds? Kevin Rudd recently increased the threshold of 45c tax rate to $180,000 - why do the right wingers never mention the existence of the 45c rate?

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)

Benson Pope should resign

David Benson-Pope should resign. NoRightTurn has outlined the reasons.

The question is, is Benson-Pope capable of putting the interests of the Government ahead of his personal ambitions? The lack of political nous he has demonstrated over the whole Madeleine Setchell affair suggests that this is beyond his ability.

I am not at all impressed by the attempts of Helen Clark and David Benson-Pope to blame Ministerial staffer Steve Hurring for the events that led to Madeleine Setchell losing her new job at the Ministry for the Environment. Steve Hurring placed a call to Ministry of the Environment CEO Hugh Logan to inquire as to whether it was true that Setchell was the partner of Kevin Taylor, Chief Press Secretary to National leader John Key. Clark and Benson-Pope are commenting with the benefit of retrospect. Hurring's crime, if there was one, was to uncover a stuff up in the hiring practices of the Department.

At the end of the day, the issue is this - two workers - Setchell and Hurring, are getting a raw deal from their bosses.

Ministerial and Parliamentary staff sign away their rights to speak freely and accept constraints on their activities in their lives away from work. In return staff are not held publicly responsible for actions taken while they are working for their political masters. At least they shouldn't be. As Colin James notes "A person in a minister's office speaks for the minister. The minister is responsible for what that person says or does as a member of the minister's office whether or not it is as at the minister's specific bidding or with the minister's knowledge."

David Benson Pope should have offered his immediate resignation to Clark as soon as the Setchell scandal broke. Clark may not have accepted it. I don't think I am entirely commenting with the benefit of retrospect here - this is how I would have expected Clark to deal with the situation in her first term. In fact this is exactly what another Minister, David Parker did in March 2006, and he got his job back. Ironically it was commented on at the time that Parker was essentially acting as a 'fall guy' for earlier mistakes of Benson-Pope.

Ministerial standards do appear to be falling, and such appearances, even if they are only that, are still damaging. Clark needs to leapfrog some wrinkled egos and find some new faces fast.

The left should not weep at the downfall of David Benson-Pope. Despite claims in some quarters that he is on the left of the Labour party, his actions in his Social Development and Employment portfolio suggest the opposite. The Social Security Amendment Act changed the whole purpose of the 1938 Social Security Act that established the welfare state. The new Act "wipes away any notion our social security system is about ensuring everyone can participate as citizens, instead it makes getting a job, any job the fundamental duty of citizenship". As Louise Humpage and Susan St John say - the Government is undermining the original notion of 'well-fare' in a way that would have Michael Joseph Savage turning in his grave. The new Act also will make it very easy for a future government to reintroduce work for the dole. If Benson-Pope is on the left, the Labour party is now even more of a centre-right party than I imagined.

The privatisation of taxation

Given the disgraceful way in which Air New Zealand have treated their workforce this year it was with some surprise I found myself agreeing with their description of the way airports set their charges.

"A privately owned unconstrained monopoly with the statutory right to set fees as they see fit is tantamount to the privatisation of taxation."

I would like to think this is an indictment of how privatisation of strategic state assets is contrary to the long held constitutional principle that taxes should only, and can only, be levied by Parliament, but I don't think so. Sadly, I don't think they understood the full significance of what they said.

While the fuselage of the planes may be round, it is a long bow to make any comparison with a Roundhead.

Privatisation of essential services such as electricity and water are also examples of the privatisation of taxation, whether they be in private ownership or operating as State Owned Enterprises. Why are there no calls for Contact Energy to give tax cuts?

Some would argue the Reserve Bank's so called 'independent' power to raise the Official Cash Rate has a similar function to a tax. Earlier this year, Treasury and the Reserve Bank looked at economic stabilisation (read anti-inflation) measures they could use as alternatives to raising the Official Cash Rate. Interestingly, one of the reasons they cautioned against the introduction of a variable levy on mortgages was the real constitutional issues raised. These issues were also raised with the head of Charles I in 1649. Should a mortgage levy be increased by a Reserve Bank without recourse to Parliament? What say the Finance Minister implemented the levy on advice of the Reserve Bank? But this only shows the distinction between monetary and fiscal policy is a monetarist illusion. For me, the debate over the mortgage levy showed there is no such thing as an 'independent' Reserve Bank - it is an attempting to give over control of our economy to an undemocratic institution.

But back to Air New Zealand.

Some would argue their description of the airport companies could easily apply to Air New Zealand itself may times in its history. There have been many occasions where Air New Zealand and Qantas have tried to merge, only to be told there is too much danger they could become an privately owned unconstrained monopoly (merger plans usually involve privatisation). A recent code sharing arrangement with Qantas failed after concerns were raised by the Australian Competition and Consumer Commission.

If Air New Zealand were really worried about the 'privatisation of taxation' they would be calling for the renationalisation of the airport companies. This would allow airport charges to be treated as an economic development issue concerning the operation of an essential service. This could also assist climate change policy as more fuel efficient planes could be charged less.

Air New Zealand says airlines and airports should have the ability to negotiate on a level playing field, and call in an expert to only arbitrate if they could not reach agreement. I look forward to Air New Zealand applying this same principle when they cannot reach agreement with their workers and their representatives.

The Labour-led government try and pretend they do not own Air New Zealand. But they do - and they fail to take responsibility for the disgraceful industrial tactics of their own airline. Perhaps Michael Cullen thinks this will constrain inflation. Even worse, they allow the board of Air New Zealand to issue more shares - therefore diluting the shareholding of the Government. Air New Zealand's plans to contract out airline services also amount to privatision. So its privatisation by stealth under Labour - if they did not support the actions of Air New Zealand they would have fired the company board by now.

PS: I am flying Qantas to Christchurch tomorrow. While I would normally support a New Zealand owned company I detest the way Air New Zealand have treated their workforce under the leadership of Rob Fife. While their marketing department would like me to be thinking about 'amazing journeys' all I can think of is the chilling call of 'contracting out'.

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.