Looking for innovation? Try a bureaucracy

Innovators, creators, producers, inventors.   Think of the greatest leaps forward in modern history that have changed economies and how people lived.  Think how many were spearheaded by a government bureaucracy.  Think how many benefited from being in a high tax economy.  Then read this from Wayne Mapp, a man who knows about innovation with his extensive entrepreneurial and  military and political background:

The Government is backing innovation to drive New Zealand’s economy forward and raise New Zealanders’ standard of living... Prime Minister John Key today launched the new Ministry of Science and Innovation (MSI)

Think of every single technological innovation in the last 30 years, do you really think there would be more if there had been the MSI?  

What else could government do?

How about get out of the way?  How about cutting company tax to 10%, so that businesses that do want to engage in research, development and be cutting edge about technology have an environment when they don't see the state taking a third of the "winnings"?

How about opening up the education sector so schools and universities are not dominated by a centrally planned bureaucratically specified curriculum, but that parents can withdraw their children from state schools and take their taxpayer funding with them to free private schools?  In other words, let innovators get involved in educating future innovators, not schools dominated by sclerotic unionists whose main philosophy is a burning envy of distrust of business and a politically driven view of the environment and humanity's relationship with it.

How about saying openly and loudly that you don't know what's best and you can't hire bureaucratics who can pick winners either?  You would be telling the truth, you'd be confronting the myth perpetuated by the left and most other parties that they can magically rescue the economy and advance it by spending other people's money on bureaucratically assessed beneficiaries.

However, it is clear National is of the left, given it's interest in growing the state.  So why vote for more of the same this year?

ACC - Another reason to hate Nick Smith's politics

The NZ Herald reports:

"he poured cold water on speculation that workplace accident insurance might be opened up to full competition from private insurers after an ACC "stocktake" completed in June by a group led by former Labour Party Finance Minister David Caygill. Its report has not been made public.

Dr Smith said opening the business to competition would be "a very major decision and, consistent with the John Key pragmatism and cautiousness, we are not in any hurry".

Could you be more of a spineless hypocrite if you tried?

You VOTED FOR opening the workplace accident insurance market up to competition when National was last in government.  You VOTED AGAINST returning it to a statutory monopoly, and now you are in charge of it you have the testicular fortitude of a mouse.

What has changed Nick? The rest of the developed world has open markets for accident insurance, for both workplace and motor vehicles.  New Zealand once led the world in reform, deregulation and opening state monopolies up to competition.   

You've shown you're little better than the Jim Andertons, Jeanette Fitzsimons and the Winston Peters, scared that without nanny state running everything, people will make the wrong decisions.

Just join Labour and be done with it, you'd be happier there.

Want growth? Get a spatial plan

Yes that's what the Green/ACT government thinks.

The headline is "Spatial Plan will ensure economic growth for Auckland".

The main space I can find is between the ears of the press secretaries of Nick Smith and Rodney Hide that have let such empty nonsense escape their offices.  It plunges new shallows of vapidity, reaches new epic heights of failure and demonstrates once again that this government is devoid of philosophical challenge to the leftwing, planning obsessed arrogance of the past.

The press release is so empty that you could drive a train through it, and it shows once and for all that Nick Smith, the Green Party member in Cabinet, is driving policy.

There is more substance between an electron and the nucleus of an atom than this piece of pontificating waffle

"One of the most important roles of the Auckland Council will be to articulate the 20-30 year vision for Auckland through the spatial plan"

Really?  What happens if it doesn't happen? Will there not be economic growth?  Indeed when has ANY local government successfully forecast economic activity by sector, location and the like ever?  Did the local government plans of 20 years ago talk about the internet and online economy?  Of course not.  Did the local government plans of 40 years ago talk about an economy driven by services and tourism from China and India?  Hardly.  So why is it important?  

Take this piece of Sir Humphreyism.. "Cabinet agreed the spatial plan is the key vehicle for developing an integrated approach to managing Auckland’s urban growth."

Why manage it?  Why must there be an integrated approach? Who told you this (the Ministry for the Environment Smart Growth control freaks no doubt)?  

Oh the faith... "The spatial plan will illustrate how Auckland will develop in the future. It will show where and when growth will occur in transport, housing, energy, water, recreation, education and health infrastructure and services"

Will it Nick? Will it, bollocks!  Unless you live in an authoritarian nanny state where you stifle the private sector growing anything that is not in zee plan.  How do you know Auckland will develop like that, and most of all, how do you know it is right?

Oh and he knows what Aucklanders like "Aucklanders will be looking to see that the spatial plan sets out their aspirations for their city – all those that are affordable and feasible – and which supports efficient and effective resource allocation"

No they wont, they will be looking to see how best to live their own lives peacefully, with their family and friends, minding their own business.  Most of them are not busybodies who want to tell other people where to live, how to move and what businesses they should run and where. 

Imagine Auckland without a spatial plan.  It isn't hard. 

Auckland hasn't had one up till now.  However, you voted for National or ACT to make sure there was one didn't you?

National-ACT fails Auckland

Clap - clap - clap.

Margaret Thatcher once commented about how horrified she was in the 1970s when a senior Conservative MP expressed the view that socialism was "inevitable" and the Conservatives existed to slow it down and moderate it. In other words, when the Tories would get elected, it was to tinker, but by and large whatever Labour did in government would not be overturned.

One wonders if the current National minority government in New Zealand has the same profound inspiration - to preserve the legacy of Helengrad and tinker.

When I now see the results of the local government policy of that government then all i can say is well done. Because it passes the test of the Tories before Thatcher - maintain and continue with the policies of your opponents.

Auckland, all of Auckland, now has a Mayor - more empowered than ever before, to lead a council with the wide ranging powers granted to it by Sandra Lee and Judith Tizard in the height of the Labour-Alliance government that was Helen Clark's first term.

Why? Because Rodney Hide and ACT, cheered on and fully supported by John Key and the Nats, facilitated it.

In 2008 when Labour was kicked out, there was hope from some that it would mean that the local government policy of Labour, that National and ACT opposed, would be rejected.  The hope being that local government would no longer have a "power of general competence" - which Labour and the Alliance (supported by the Greens) gave councils, allowing them to enter into ANY activity they wish, which of course means they can grow (what councils will shrink?).  Even with a change of government, local authorities could subsidise anything, enter into any business activity, enter into any form of social activity (schools, healthcare, housing and welfare even) and government could not stop them, without a change in the law.

With Rodney Hide appointed as Minister of Local Government, there was some hope that this would be wound back - that rates might not be increased unhindered, and councils could not engage in ever more new activities, crowding out private business, private non-commercial activities, and ever imposing higher financial and regulatory demands on the people they claim to serve.

To be fair he briefly tried in 2009 to change the powers of local government, but failed because National decided to keep the Local Government Act 2002.  

However more importantly he failed to answer the question "What should be the role of local government"?  

The answer implicitly given is the same as Sandra Lee, except she answered with conviction:

"Whatever elected local politicians want to do".

In parallel he inherited the Royal Commission on Auckland Governance commissioned by the Clark, Peters, Dunne regime.   He could have, rightly, decided to treat it as curious but out of step with the objectives of the new government.

No.  He embraced it.  With the exception of the blatantly racist pandering of the proposed Maori only seats (as New Zealand remains increasingly alone in ascribing credibility to the patronising fiction of democracy being racist), it was as if the government had not changed at all.  Same policies, different people implementing them.

So the "super city council" (let's not pretend Auckland as a city changes because the petty control freaks who seek to govern it have only one place to rule it from) was created.  Not only was one council created out of eight, but the role of Mayor shifted from being cheerleader and chairman of the council, to having power over money and private property.   

So the biggest local authority in Australasia has been formed, by parties ostensibly committed to free enterprise.

Some ACT supporters thought it was a cunning plan, believing that a bigger council would be dominated by the "centre-right" (which you should be glad for. "Better than the socialists" right?).  

The victory of Len Brown does not exactly demonstrate that.   He has already stated his priority is joining the railevangelists in making ratepayers (and the government) pay for three rail lines.  Projects that are not economically viable in their own right, none of which will generate enough in fare revenue to pay for their operating costs let alone the capital that will be destroyed in building them.

So John Key and Rodney Hide have created a powerful local government entity and Mayoral position that is unfettered, and now a cargo cult loving, "think big" socialist has been elected as Mayor.   Not only that, but this Mayor is talking about a referendum on having apartheid Maori seats. 

Well done.  I don't know quite what Labour can say to this - as I can't imagine it would have been substantively different if it was still in power.

Hide says it is "good for Auckland".   Well given he let it all happen, and endorsed letting voters choose a council that can do what it wants to Aucklanders, he can hardly complain.

It's politics not values after all.

So, if you're unhappy about all of this, will you be voting National and ACT next year?

UPDATE:  It is telling that Idiot Savant thinks this is an epic fail for Rodney Hide.  He's right you know.

So what now kiwi lovers of less government?

Some voted for National in 2008 to get rid of the big government "the state is sovereign" leadership of Helen Clark. Labour openly preached what it saw as the benefits of government spending more on health, education, welfare, housing and subsidising business. It also created new bureaucracies, gave local government almost unlimited powers to do what it wished with ratepayers' money and sought to tell people how they should live, for their own good.

Labour unashamedly embraced big government, a partnership where the iron fist of state regulation, tax and subsidy would direct the economy, and all major areas of social policy.

National was thought, by many, to offer something different, a change in direction, suspicion of the state, belief in less taxes, less state intervention in the economy, and being more open about choice in education, health care and superannuation.

After all, National offered part of this in 2005, and to a limited extent went in that direction (haphazardly and inconsistently) between 1990 and 1999. Isn't it fair to assume a change in government is a change in direction?

Well no. You see this National government runs deficits, doesn't reduce the size of government, spends more on state health and education, maintains the national superannuation ponzi scheme and has continued to subsidise and interfere with the economy. Property rights are no better off. National is being what it is used to being - a conservative party that keeps what Labour did before and tinkers.

To be fair to National, John Key didn't offer too much more than that in the first place. So some thought it was right to vote ACT.

Bringing Sir Roger Douglas back into the fold gave some hope that a Nat-Act coalition could see one of NZ's two bravest former Finance Ministers having a key role in Cabinet. After all, if Labour scaremongered over Douglas, it wouldn't be hard to ask why Clark, Cullen, Goff and King would complain about a man being in Cabinet who THEY all shared Cabinet with. However, John Key (and the National Party) are political invertebrates.

So ACT got Rodney Hide as Minister of Local Government. Well that was something. Time to reverse the Labour/Alliance "powers of general competence" granted to local government, time to at least cap rates to inflation, time to have local government protect rather than abuse property rights.

No. Not only did it mean none of that, but the Nats took Labour's Royal Commission of Inquiry into Auckland Governance, and implemented almost all of its recommendations. A new big Auckland council, with almost unlimited powers to do as it wishes.

Is that what ACT voters wanted? Bigger, stronger local government?

No. Same with the dabbling with the "hang 'em high" crowd represented by David Garrett.

ACT had potential, it did believe in less government once, it did have senior leaders who would talk the good talk. As flawed as Rodney Hide is, and Sir Roger Douglas, there were more than a few occasions when one could say "bravo".

However, ACT's first real chance at power (it wasn't part of the 1996-1999 National led governments) hasn't just been disappointing, it has even seemed counter-productive.

So what now?

The obvious answer I would give is to offer Libertarianz, although some may say it is still a small party, and many have harbour hesitation whether those within it have the capability or the interest in stepping up to be a serious electoral option for the next election.

So I might suggest this, from afar. It is time for those within ACT and National, who do want less government, less tax, the shrinking of the state consistently, to contact Libertarianz. To attend at least one meeting, and talk about how to move forward.

You don't need to agree with all of the policies, but to believe in the principle of much less government.

No one else is going to do it.

Hone Harawira is right

Yep I don't say that too often.

According to Stuff "He was having difficulty supporting a tax increase that made things easier for the wealthy "at the expense of those in need".

"GST hits poor people the hardest because nearly all of their money is spent on things that you pay GST on – food, petrol, electricity – so any increase is going to really hurt them.""

Yes, and you don't need to be a socialist like Hone to realise that consumption taxes do this because those on low incomes spend more than they save.

There can, of course, be income tax cuts. In fact simply winding back government spending in real terms to what it was in 1999 would enable the deficit to be abolished and for the top rate to be scrapped and the 33% rate to be cut without raising GST.

Imagine the change in economic activity and international perceptions of NZ if government did scrap the spending outlined by Roger Douglas, wound back spending to 1999 levels, scrap middle class welfare such as "working for families", put serious caps on welfare and see the top rate drop to 21% for income and company tax, and make the first $14000 tax free.

Hone Harawira would be arguing about spending cuts (yes you wont get subsidised broadband, your university fees would go up with inflation and welfare would be far tougher), but he'd not be arguing about tax because those he is interested in would be paying less. Everyone would be.

However, I forgot, many of you elected a Labour Lite government led by Helen John Clark Key with Michael Bill Cullen English as Finance Minister.

After all Labour only increased income tax once (the 39% rate) and then reduced income tax once, and did not ever increase GST.

UPDATE: Oh NOW I know why you voted for Labour National, David Farrar makes it clear it is about staying in power for three terms. Quite why you'd choose the blue team over the red team to keep implementing the red team's policies is beyond me

Fifth bailout in twenty years

The announcement by the New Labour National government that it is spending NZ$750 million of your money, to strengthen a company that the Old Labour government bought for NZ$690 million ought to provoke outrage on behalf of those supporting the current government, and should condemn Labour and its cheerleaders the Greens to history for being the most egregious destroyers of taxpayer wealth since Sir Robert Muldoon.

It should be so obvious to a child that buying something that is worth NZ$690 million and having to spend $750 million to save it is lunacy. Labour receives the blame for the former, and now New Labour National does for the latter.

What to know why you're not getting a real tax cut? Ask both of those gangs of reckless spendthrifts. Why their parents didn't spend a couple of hundred bucks to buy them train sets when they were kids so they could indulge in this pastime is beyond me? (mine did by the way).

Will Kiwirail make a profit that will even approach to recovering this (and the other money poured into it in the past year or so)? No. Indeed, the goal is to be "self-sustaining", which presumably means make an operating profit, not recover the long run cost of capital in this very capital intensive business.

The problem is we've been there before. Government is regularly using your money to rescue railways in New Zealand. The first time was understandable, the second time could even be partly excused as due to the legacy of Think Big, but ever since then it has worn a little thin.

The simple truth railway enthusiasts (and I count myself as one of those) have to accept is that the economically viable future for railways in New Zealand is to operate a severely curtailed network carrying moderately high volumes of containers and bulk commodities.

Two years ago I wrote this post, still valid today, where I outlined what looked to be viable and what did not. Railways north of Auckland have little future, as does the line north of Masterton and between Stratford and the main trunk. The Napier-Gisborne line has had a fortune poured into it, so may be best to keep mothballed in the event of traffic.

David Heatley from the NZ Institute for the Study of Competition and Regulation has an excellent presentation called "The Future of Rail in New Zealand". I wrote about it as well.

You see the railways were bailed out in 1982 when transformed from a government department to a commercially oriented corporation (the first "SOE" before the term SOE was coined).

The railways were bailed out again in 1990, in part to pay the full cost of the main trunk electrification approved before corporatisation (and which was found to be a loss making capital investment even if the electricity was supplied for free), and in part to pay for the restructuring following the removal of the monopoly on long haul freight.

Then it was privatised in 1993.

It was bailed out once more when Dr Cullen bought the track from Toll Rail (having earlier paid over the nose for the Auckland rail network), and then refused to enforce the cost recovery track access charges needed to pay to maintain the network.

The fourth time was the renationalisation, by paying well over the market price for the "business" it kept it open, except that it is unprofitable.

Now you're paying more, this time to make it "viable".

Darren Hughes has said the $750 million isn't enough, because $11 billion is being spent on roads. Yes well done Darren, noticed a railway to every business and home? Noticed how many people use roads compared to railways (most lines you can wait hours for a train of any kind to appear)? Might you be better asking why YOU voted for taxpayers to pay over the odds for this dog of an asset? What is he trying to achieve besides looking like he's addicted to spending bad money after bad? Does he want to spend $11 billion on railways??? He says "I think we need to be looking at how we move freight from, say Gisborne on the east coast, to Napier port". Who is this "we"? Because almost all of it goes by road, as it is substantially cheaper. This was looked at when you were in government Mr. Hughes the simple answer is that there is damn all freight from Gisborne to Napier, because Gisborne has a port. The distance is far too short for a viable rail freight operation.

This example shows all too obviously how inane the Greens are on railways (believe in them, believe in them), how blatantly wasteful the Labour was in renationalising it and how the Nats are too damned scared to do what actually needs to be done - get Kiwirail to borrow the money for its renewal itself.

If there are people willing to buy trains and run them on the network paying to use it, then let them. If there aren't then mothball parts of the network and offer to sell it to whoever wants it.

The arguments that the railways save money are clearly ludicrous.

If there is a desire to ensure rail and road are on an equal footing then set up the highways as a profit oriented corporation that borrows and invests in its network paid for by user fees.

Then both networks can be self sustaining, and be privatised. Hopefully then the ongoing political fetish of saving a network that, by and large, has had its day and is now only viable for a few core freight tasks, will be over.

NZ home insulation foolishness tells a lot about attitudes

Following on from the Australian catastrophe in subsidising home owners who can't be bothered paying for their own energy bill savings, there is now the consequences of the New Zealand scheme. However, what it says about the general public speaks volumes about the trust they have in the state, trust that anyone who has spent time working with the bureaucracy knows is misplaced.

The New Zealand Herald reports that many insulation installers are upset that:

"the government subsidies are allowing competitors to hike their prices and still undercut them using taxpayers' money.

They say customers are avoiding them because they see government approval to offer subsidies of up to $1300 for insulation and $500 for energy-efficient heating as a "badge of quality".

Of 249 companies wanting to join the $347 million scheme for the next four years, 60 were chosen based on factors including geographical coverage, financial stability and their ability to carry out self-audits."

So in other words, 60 firms are suckling off the state tit, whereas the rest are out in the cold, helping to PAY for their competition to undercut them.

It speaks volumes that the EECA subsidy is seen to be a guarantee of quality, the same stupid mistake Australians made thinking government approved installers were somehow a higher standard. Seriously, do people think bureaucrats exist that check the quality and standards of insulation installers? Do people think that if a state approved installer does work for them that they have a greater degree of sanction if it turns out to be poor quality?

The notion of this is ridiculous. I've known literally hundreds of bureaucrats, most of whom know the limits of their competence. There simply are NOT people out there able to check this sort of thing. Yet people believe the state is somehow benevolent and offers some sort of reassurance.

Now I oppose the fundamentals of the scheme. Yes it might save energy bills, but that is a private good. Those with insulation shouldn't pay for those without to save money. Yes it might improve health of some, but when are people meant to take responsibility for the cold and damp in their homes?

The political reaction to this is predictable. Energy Minister Gerry Brownlie effectively endorsed the idea that the scheme ensures a "tight control" on quality of work, although it isn't clear quite how that quality is being ensured. This contradicts EECA claims that just because some aren't part of the subsidy scheme does not mean their work is poor quality. So is Brownlee just knifing those who don't get taxpayers money to run their business?

Labour spokesman Chris Hipkins thinks the subsidy should be offered to everyone, doing a Peter Garrett.

You see a better response is this:

- Stop the subsidy scheme;
- Tell homeowners that if they want to make energy savings, they should buy their own insulation and use recommendations, word of mouth and other means to explore the market to find good installers and suppliers;
- Tell homeowners who already have insulation that it is unfair to tax those who already have insulated their homes to subsidise those who haven't;
- Used the savings to cut the budget deficit, working towards tax cuts WITHOUT countervailing new taxes. Hiking GST wont help people pay for insulation.

After all, if people paid less taxes they would have more money to spend on discretionary expenditure, and if would rather pay higher heating bills than insulation, why should nanny state save them?

UPDATE: Not PC also has a recommendation of a GOOD installer. A recommendation I'd trust over any government "endorsement" that apparently isn't one.

The triumph of mediocrity over aspiration

Although I did not vote for National, or any of the parties keeping the National led government in power, I did have some optimism that there would be a positive change. I knew it would barely be a fraction of what I wanted, and that it would be overlaid with the sort of folksy platitudes that patronise the vast majority of the population, most of whom are too uninterested to seriously challenge it.

However, there were, at least, two reasons to smile after the 2008 election. Firstly, Helen Clark and her government of control freaks was ousted. Nine years of government that believed it almost always had a role, to spend other people's money on things, to regulate, to set up strategies and inquiries, was finally at an end. Secondly, John Key is, at least, a self-made man. He at least in part represents the dream of many, so at least there would be some belief that the incoming administration would be in support of business, and would be sceptical about government providing solutions. Enough rhetoric had been thrown about by some in the National Party that there could be some hope of less spending, less government and less taxes, albeit at a fairly glacial pace.

This has proven to be, by and large, a delusion. Even the low expectations of optimism I had, are being frittered away.

The recent proposals to engage in the Roger Douglas style tax reform of the 1980s, again, by hiking GST and dropping some income tax, smack of the triumph of mediocrity over aspiration. National apparently believes that all of the bureaucracies that current exist have merit. It believes that the current levels of welfare dependency and the structures of both individual and corporate welfare set up by Labour, should largely remain intact. Indeed, the belief in the role of the state is such that National is embarking on road building plans that under the evaluation criteria it once stood by, are not worth it.

The arguments in favour of consumption taxes over income taxes may be quite solid, but the impact of this sort of reshuffling will be minor. It wont make a smidgen of difference to get New Zealand to be more productive, dynamic and innovative. It still smacks of the low value commodity based economy terrified its exchange rate would actually be worth enough to import high value goods from the rest of the world.

Why? Because National has demonstrated, once again, that it is not a party of serious change, a party that will shrink the role of the state and grant tax cuts as a result. It is a party to reshuffle the deck, a party too terrified to contemplate the sort of education policies even the British Conservative Party is gleefully waltzing into an election with. It is terrified of saying the word privatisation, as much as it did when it should have been confronting the economic retards of Winston Peters and Jim Anderton, though who really thinks that the state owning three competing power generation and retail companies is a serious long term strategy for the energy sector?

It is true to form, and sadly ACT is not making anything of this when it could and should. It could, positively, be arguing for things to go further, and National could give it free rein to make the sort of arguments it knows Labour never could - whilst remaining aloof from them (the implication being obvious - Labour would never advocate less government).

What will punish National the most is the simple fact that the increase in GST will fall most hard on those on lowest incomes. If you wanted to hand some rhetoric and a rallying cry for the left on a plate, increasing GST does it. For it not only hurts those who spend most of their earnings, but it also encourages the growth in a black market, a growth in trading via TradeMe to help avoid GST (and other taxes). The most recent TVNZ Colmar Brunton poll should, if Key was doing a Helen Clark, give room to pause. National was never elected to INCREASE ANY taxes, and the sleight of hand that it demonstrates is not fooling many.

Of course, given this is partly the brainchild of Bill English - the man who delivered National its most crushing defeat in 2002, because he couldn't confront Helen Clark's forceful (and believable) commitment to her principles, despite that government having legislated over private contracts with ACC and forcing Air NZ into a crisis because of its own dithering and nationalism.

However, maybe I'm wrong. Maybe New Zealanders just like governments that look like they are "doing something".

So would ACT bring down the government?

With the Nats now backing away from previous statements that a rise in GST is "not on the agenda" and is "not our policy", it appears the two parties the Nats need to govern need to make clear what their policies are.

According to Stuff:

National ally the Maori Party is nervous, however. MP Rahui Katene said the party was retaining the option of walking away from its confidence and supply agreement with National over a GST rise.

Good for the Maori Party. It knows only too well that a rise in GST will hit everyone, not just those who might get an income tax cut. Being seen to support an increase in the price of everything to offset tax cuts that may be seen to be for those on higher incomes could cost the Maori Party dearly.

However what about ACT?

Jane Clifton reports Rodney Hide saying:

"The new fiscal programme had only been made possible because of ACT, he said, and he would therefore like to thank all ACT's supporters, his fellow MPs and the members of other caucuses with whom ACT had worked so tirelessly to bring about much-needed reform."

Roger Douglas has rightly said "The spending cuts must come first. Once we have cut spending, then we can cut taxes. If we want to make the tax system more efficient, we need constitutional restraints against excessive levels of Government expenditure. It is only when we have stopped the Government from exploiting the taxpayer that we can aim for efficiency"

So it's view is clear then...?!?!

ACT either makes it clear it votes against this, and tells the Nats a flat no, or the government is brought down.

Or ACT votes for it, and risks splitting asunder.

The test is simple - is ACT a party that people voted for so that government could cut one tax but increase another?

John Key is being a National PM

The message is rather simple.

If you largely supported what Helen Clark and Labour did in government from 1999-2008, but just want a "cup of tea" for three years, and a few tweaks in the other direction, then National is your party. That's what this government is doing - little different.

If you largely opposed what Helen Clark and Labour did in government from 1999-2008, and want a net reduction in taxation, reduction in the size of the state, then National is NOT your party (and frankly neither are any of the others in Parliament). Only Libertarianz has done that and would do that.

If you want to grow the size of the state, so that it takes more money to spend on "public sector employment" you can choose Labour, "Maori" you can choose Maori Party and "all you can think of" you can choose the Greens.

In fact if you want the state to grow in the areas of telecommunications and roads, you can choose National.

National is a conservative party. It almost never reverses what Labour does.

The Labour Party has set the political, economic and social agenda of New Zealand since 1935.

The National Party, with the exception of trade union membership, has adopted that agenda and sat tight with very few exceptions.

So why would anyone voting National expect any significant change?

Land tax - short memories

If you ever had doubts of the degree to which the National Party could be a political whore (which the shift from Muldoonism to free market economics and the recent return to elements of Muldoonism ought to show), take this issue.

When it was previously in government, the Bolger government abolished Land Tax.

For the current government to even contemplate it, or to not hit it on the head absolutely and finally, speaks volumes about how easily swayed the National Party is to the winds.

More importantly, the idea that a party that sold itself in part on the basis of lower taxes is contemplating new taxes to offset tax cuts, tells you even more about how a vote for National is not, and (with the exception perhaps of 1990, 1993 and 2005) has never been about reducing the size of government.

Principles for tax reform

Following on from Not PC's excellent post, here's a simple guide to where the government should start from in what it calls tax reform:

Step One: Stop increasing spending. You don't have the money. You're borrowing money from future generations to pay for current consumption.

Step Two: Determine what the role of government is. The core functions. Be open about it, and be open about what government shouldn't be doing.

Step Three: End funding for anything inconsistent with what you determine in step two.

Step Four: Look again at the role of government, look at what incentives and impacts your involvement in any portfolio creates. End funding for anything negative.

Step Five: Change local government legislation to require it to do the same.

Step Six: Remember that when some areas of the economy are taxed less than others (e.g. property) that means that you should cut taxes in other areas. The lower, the flatter the taxes, the less distortions.

Step Seven: When you run out of ideas to cut spending, look at Hansard from 1999 to 2008. You voted against just about every spending increase Labour introduced, why don't you show some damned backbone and convictions, and reverse the lot. By simply doing that you'd eliminate the budget deficit and have enough surplus to cut taxes.

Step Eight: When you run out of backbone, remember this....

TAXES ARE NOT THE GOVERNMENT'S MONEY, THEY ARE LEGALISED THEFT

Say this every single night 100 times

It might just help you realise who your employers.

How can John Key cut income tax?

According to the NZ Herald, the Prime Minister said "The Government would like to lower personal taxes"

Great stuff.

The solution involves two words.

CUT SPENDING.

Don't increase GST - that simply increases the viability of a free (black) market in secondhand goods, and adds to compliance costs for business.

Don't create new taxes, because it will create new ways of evading and avoiding them.

Don't even start to believe taxation on real property will address speculative bubbles in the housing market, look at how the RMA, the absurd obsession of councils with the discredited "smart growth" philosophy, the central banking system and most of all, taxes on other investment, create distortions.

So think about this John.

If income and company tax were reduced to a simple 20% with the first $10k tax free (hardly radical and not Libertarianz policy), then how much MORE would that encourage a shift of investment from land to business? Do you really think you and your crew know better how to spend more than that proportion of New Zealanders' income than they do?

If the RMA and tinpot planners in local authorities (especially the new uber council for Auckland) stopped restricting how people can build housing on land, without threatening the property rights of their neighbours, how much supply would be unlocked to ease pressure on prices?

How about a bottom up review of the central banking system, inflation targets and prospects for reform of that?

2009: the year to devalue awards

After Barack Obama being granted the Nobel Peace Prize for absolutely nothing, the New Zealand Government has now granted Helen Clark the Order of New Zealand.

However, given the list of those who already hold it includes:

- Ken Douglas, who spent a good part of his career cozying up to the brutal murderous dictatorship of the Soviet Union, before softening up;
- Jonathan Hunt, a man whose Parliamentary career includes NZ$29,000 of taxi expenses, a man whose greatest achievement was being part of the reforms of the 1980s, like well just over half of the Labour caucus then (who aren't there); and
- Whetu Tirikatene-Sullivan, whose greatest achievement was winning a Ballroom and Latin American Dancing contest, otherwise she has been thought of by more than one as one of the laziest Cabinet Ministers in recent history;

then you already know it's barely worth using such an award to help hold a door open.

The Key government in granting this to its political enemy speaks volumes of how nothing much has really changed. Clark's record at the UNDP is at best disappointing, at worst appalling. As Prime Minister she was notable for being a control freak, notable for increasing taxes, dramatically increasing the size of the state, widening the role of the state and using personal attacks instead of arguing politics on philosophy, economics and merit. She presided over increasing the range of people dependent on the state on income, she demanded the bureaucracy not give free and frank advice when she didn't like hearing it, but most of all she made no great particularly historic contribution. Jim Bolger at least led a government which for three years, did implement some significant reforms (not all being steps forward, the RMA being the worst).

So that's 2009 ending, with a major international award being rendered meaningless, and New Zealand's highest domestic honour proving that mediocrity remains the standard of achievement lauded by New Zealand politicians. Most of all showing that after one year, the majority might have voted out Helen Clark in 2008, but enough of you voted in her philosophical and spiritual kin at the same time, with a blue tinge. Which is, of course, what National has really always been, except for a three year period when Ruth Richardson gave the Nats a bit of testicular fortitude.

Transmission Gully subsidy to Wellington

$3 each for a $20 a user road.

Yep, that's what the Transmission Gully boondoggle will cost. Each user will pay no more than $3, you could argue probably another 65c in fuel tax/RUC for driving 22km along the road.

So that's $3.60 per user.

How much of Transmission Gully will the toll recover? $200 million out of $1.2 billion. The extra 65c will only recover proportionately another 22% more (generously rounding up) so that means $244 million of Transmission Gully will be paid for by users.

The rest? Comes from motorists using other roads, across the country and indirectly, taxpayers who wont be charged interest on the capital put into this expensive road.

So go on, thank the government for pouring over $950 million in subsidies to road users for Transmission Gully. Then again, given the $500 million being poured in subsidies to rail commuters in Auckland, it just shows you how much interest there is in economic efficiency and user pays by this Labour government.

Yes I know the report says $2, but really we're just arguing about how bad it is aren't we?

How many of those who damned Labour for wasting money are now hopping on their new cargo cult?

Think Big hits Wellington

It seems Rob Muldoon and Bill Birch are back with big road building plans for Wellington's State Highway 1.

The list is enormous, and it is justified based on agglomeration benefits. The same benefits the UK government has long used to justify a whole range of highly borderline rail projects. Quite how agglomeration benefits the economy when it is about a city primarily set up for the state sector is beyond me.

After all it is $2.4 billion we are talking about, around $7000 per Wellingtonian. My back of the envelope estimate is that the net benefits from these projects will be less than $2 billion. So National is going to destroy wealth on a scale akin to the purchase of Kiwirail.

The project are listed in three phases.

Phase 1

Aotea Quay-Ngauranga extra lane: In other words, a subsidy to peak car commuters. After all this section of motorway flows freely the rest of the time. Price it properly and you wouldn't build it. Any chance this lane will be tolled? No. What will be the result on the local Wellington streets that don't quite have the capacity to cope now? Blank out.

Four laning SH1 Peka Peka to Otaki: Four laning of the current highway will make a big difference to safety. Not probably the highest priority though, as the Ngaruawahia Bypass on SH1 north of Hamilton ought to be more important. Still not a bad project, just wonder whether it is worth doing now.

Kapiti bypass: Essentially a four lane expressway between the current highway and the coast bypassing Paraparaumu and Waikanae. The Kapiti Coast District Council, now dominated by environmental radicals, is against it. However, it is desperately needed. Undoubtedly the best project in the package, will greatly relieve congestion in the whole District. The only reason this hasn't happened before is because previous governments left the problem to the council!

Basin Reserve flyover: A stunted portion of the Inner City Bypass Wellington should have done. Basically gets rid of the conflict between airport/eastern to region traffic and southern to city traffic. Opposition is driven partly by lies around it "destroying" the Basin Reserve, when there have long been plans to build this, as part of a proper motorway to connect at the Terrace Tunnel. On it's own, it's not really worth it, it should be part of a proper bypass of Wellington, but there is little real vision to take through traffic out of the city, to reduce the width of the waterfront route and enable Wellington to properly connect to its harbour. So what's more important?

Phase 2

Transmission Gully: Half the total cost of this package of roads is in this one road, bypassing Porirua, Mana, Plimmerton, Pukerua Bay, Paekakariki on a road just as long as the current one, with hills as steep as Ngauranga Gorge. Why? It's called politics over economics

Phase 3

Mt Victoria Tunnel duplication with 4 laning to Wellington Road: Finally, Wellington's long standing bottleneck between the airport and the city will be removed. Again though, the traffic will be dumped on an el cheapo one way system that the Greens opposed that opened only a few years ago. Again, this project is probably not worth it until a proper bypass of the city is built.

Otaki bypass and four lanes to Levin: An Otaki Bypass is no doubt good for Otaki, to some extent, and four laning is good for safety, but again this should hardly be a major priority.

Terrace Tunnel duplication: Perhaps Wellington's last bottleneck after everything else? So will all of Wellington's traffic problems be fixed? No. Ask yourself whether two or three lanes of traffic dumped from a motorway onto Vivian Street to make its way to the Basin Reserve is really going to work. Yes, it is probably worth building - with a bypass.

Given all this being funded, I can hardly imagine a big road project NOT being approved. The engineers suggest it, the Nats will fund it. A crying damning waste of money. Whilst Labour pissed money down a hole on railways (which the Nats are only slowing rather than stopping), National now pisses money down the hole of roads.

Yes there are parts of the road network that could be improved, but with a system where everyone pays the same regardless of location or time, you will get congestion. With a system that means that those who pay have no relationship with those who build the roads or run the roads, consumers will not always be happy, and the producers will waste because they don't get signals from consumers about what they are prepared to pay for.

Roads are just an economic good, like any other piece of infrastructure. You let politicians and bureaucrats make decisions about how to spend the money taken from you for using them, and now, the money taken from you for NOT using them.

The Greens will be furious, and notwithstanding their irrational hatred of motorised road transport (and hypocrisy over railways), there will be a point. Roads shouldn't be subsidised by non road users.

However, no believer in free markets, private enterprise or capitalism should applaud what is an enormous transfer of money from taxpayers across the country to road users in the capital. It is at best the grand visions of central planners gone mad, with the irrational "Roads of National Significance" moniker used to justify gold plating State Highway 1. At worst it is cynical vote buying, securing the support of the unprincipled political minnow of Peter Dunne, ensuring Labour can't promise any more, and giving National MPs some big projects to open, Stalinist style, to applause - whilst those who paid for it don't notice just a few dollars each week less in their pockets.

UPDATE: David Farrar shows his own economic illiteracy by wanting Transmission Gully to have been built two DECADES ago, when the business case would have been far far worse, with far less traffic.

The state owns your shop at Easter

That's what opposing Easter trading is saying. Quite simply, it isn't your shop during Easter, and unproductive petty fascist goons will go around, at your expense, to catch you committing the dastardly deed of opening for business, paying employees and selling to willing customers.

It is disgusting, but telling of what MPs believe small businesses deserve the freedom to choose, and which ones think that this religious based public holiday is special enough that people should be prosecuted for trying to make a living.

So shame on Labour and the Greens for showing themselves up for being the petty fascist little anti-capitalists that they are.

Kudos to ACT and surprisingly Peter Dunne and Jim Anderton for actually wanting to let businesses choose. Surprised given Dunne and Anderton's previous Christian and unionist tendencies.

Kudos to Tariana Turia, Pita Sharples and Te Ururoa Flavell for supporting freedom, brickbats for Rahui Katene and the absent Hone Harawira.

However, brickbats to John Key for not making this National Party policy. For had it been so, this ridiculous victimless crime would be about to be consigned to history. Particular brickbats to busybodies Shane Ardern, Bill English, Phil Heatley, Sam Lotu-Liga, Tim Macindoe, Eric Roy, Katrina Shanks and Jonathan Young. How dare any of you claim to be "pro-business".

If you don't think a shop should be open on ANY particular day then you can do three things:
1. Don't shop there. Ever.
2. Use freedom of speech to ask others to boycott the shop.
3. Buy the shop.

Instead you choose to use force. For shame.

Tough on crime, tough on rights

Not PC posts on the government's package of measures to get "tough on crime" and notes that Idiot Savant rightfully is worried about Judith Collins apparently being gleeful about the end of the burden of proof, obviously in relation to certain laws.

This all harks back to the political populism behind seeking to be tough on crime, something I happily support. What should this mean? Well it means you need to look at the whole process of resolving crime and dealing with criminals.

The first is to ensure the Police are focusing on crime according to its seriousness and crime that involves victims. This means crimes against the person are prioritised over property crimes, which are prioritised over crimes that are against no one.

The second is to ensure the Police have the tools available to do the job effectively but fairly. That does mean having access to records of all those convicted, it means having access to fingerprint records of convicts and DNA of convicts as well. It means being able to be issued with a search warrant or interception warrant if there are, on balance of probabilities, grounds to assume a serious crime is being carried out or planned by suspects. However, it also means disposing of evidence that proves nothing, and that includes the samples of those not convicted unless they wish to have it retained. The innocent should retain that status, rather than some murky halfway house of being "known to the Police".

Thirdly, the courts should have objective law behind them and fact finding processes so that juries and judges can make appropriate decisions based on legally obtained evidence. That means courts are not occupied by victimless crimes

Finally, sentencing should do what it is meant to do, protect the public and send a punitive message. Imprisonment exists to protect people from the perpetrator committing further crime, but must also be proportionate to the offence and the harm to the victim. Fines may be appropriate if the purpose is to punish someone who is unlikely to reoffend. Young offenders might be expected to be rehabilitated for a first time offence that is not a serious violent or sexual offence.

Debate around how best to manage the criminal justice system IS the primary area of public policy that would remain under a Libertarianz government.

Sadly, this government is seeking to use a sledgehammer to deal to crime, and it is doing so on the basis the Police like to do policy in this area - "let's get those bastards and give us the tools to do it, and you'll be right, you'll have nothing to fear if you've done nothing wrong".

Let's be clear what we are talking about in the government proposals:
- Seizure of assets if you can't prove you obtained them legally. Imagine right now the effort you'd need to go to in proving how you afforded your last major purchase? Imagine now how the most sophisticated gangs would establish shell companies and manufacture invoices, receipts and the likes to ensure that they could prove enough. Most of all, ask yourself why anyone should have to prove innocence?
- Wide ranging powers to enter properties, without warrant, if the Police suspect a person who has committed an imprisonable offence is on the premises;
- Wide ranging powers to stop a vehicle, without warrant, if the Police suspect a person in the vehicle has committed an imprisonable offence;
- Wide ranging powers to enter properties, without warrant, if the Police suspect a person is about to commit a drug offence;
- Wide ranging powers to stop and search people in public, without warrant, if the Police suspect a person is carrying a weapon, including knife or a "disabling substance" (yes women, that means you carrying mace or similar);
- Wide ranging powers to search any vehicle, without warrant, if there are reasonable grounds to believe stolen property is within it;
- Powers for the Police to enter your property lawfully (i.e. unchallenged) and snoop using their eyes, ears and recording what was seen and heard;
- Powers for the Police to require you to provide passwords to access your computer and any data you store.. and so on.

More here

What needs to be asked is why this is justified, and what are the specific problems that mean obtaining search warrants is proving too problematic for the Police?

Judith Collins thinks you are protected because of judicial review, but frankly this has little credibility. Parliament is sovereign, when it takes away your rights, the courts are not likely to overturn this. The Bill of Rights Act is only useful for challenging interpretation of general provisions, but the specificity of statute can override this. Beyond that she thinks the media and democracy save your rights, but frankly the NZ mainstream media is not up to the job, as you'll see below. Besides, when the Police Minister cheers the end of the presumption of innocence, then you should be afraid.

Bear in mind of course, guilt till proven innocent is what the tax system is about (and Idiot Savant probably isn't going to campaign to change that is he?)

Following on, it is highly ironic that the president of the Police union Greg O'Connor says this:

"New Zealanders have got to wake up. P has done for this country what the Prohibition did in the US – it's entrenched organised crime."

History delivered an answer to that. Perhaps Mr. O'Connor might be asked to comment on this?

Oh and while we're at it, notice how the Dominion Post article above looks essentially like a government press release with nothing but comment from those supportive of it? Notice how Britton Broun (who was graduating three years ago) did not approach any opposition parties, defence lawyers or anyone else who might be able to comment differently on his little piece of agitprop?

Is this the free media Judith Collins relies upon for robust and vigorous debate and defence of our rights?

More language misrepresentation

Except this time it is the NZ Herald, simply getting things wrong.

The government is removing a restriction on councils that will allow them to freely choose to privatise water or to contract out the construction, operation, financing and management of water supplies to the private sector.

So why have a headline "Should water and wastewater services be opened up to private competition?"

You see there are no statutory restrictions on providing competing water or wastewater services, although councils would no doubt use the RMA to make it difficult. So this isn't about competition, it is about allowing councils to choose privatisation.

So like the ACC issue, privatisation and competition are being mixed up.

To be fair, it is unlikely that there would be competition in reticulated water supplies or waste water. That's not to mean there aren't potential alternatives.

People can, of course, buy bottled water, establish rain water collection systems, or could establish businesses to buy water in tanks. Waste water need not be carried away in pipe, but could be collected in sumps that can be emptied. Indeed, many people in rural areas and small towns do just that.

However, again, this is besides the point. All that is happening is councils will be able to use their "power of general competence" to privatise to a greater or lesser extent.

The very same people who wanted councils to be empowered, don't trust them to decide what to do with water and waste water services - funny that.