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.

Why bother with PPPs?

You see I have friends who can't wait for this - they would make a fortune screwing public servants of money to do something none of them really understand. The key to getting the best value out of them is simply letting the private sector build something and charge people for using it, and bear the risks of overspending, poor customer service and lack of demand for the service - like the Melbourne Citylink toll motorway - a great success, because the private consortium that designed it, chose the route, bought the properties, built it and now operate it - were allowed to do so, albeit with enormous contracts and a legal framework to keep (excessive) oversight. In that case the road exists because the owners borrowed to pay for it, and use tolls to pay back the debt. You wont find too many PPPs quite that elegant.

PPPs make sense when governments want to hide borrowing they make. PPPs probably make sense in developing countries when they want to build infrastructure and don't have legal frameworks to readily allow private investment to be securely made. However, I am not convinced they are better than privatisation OR the state sector contracting out activities it isn't any good at.

Bill English is keen on public-private partnerships, the privatisation you have when you want to privatise profits and socialise the risks.

He waxes lyrically about how much it is done in Australia. Music to the ears of management consultants, lawyers and the big 4 accountancy firms all keen to have a slice of the expensive pies involved in setting them up. You see, precious few public servants have a clue about what to do, so a lot of your money would be expended on consultants to help them out. Given I know some of the people who would do this, it is pretty clear to me that the you better have a good reason to spend such horrendous amounts of money trying to match clever people in the private sector out to milk profits and minimise risks.

English lists sectors he clearly approves of being involved in PPPs. Lets go through them:
- Roads: Well quite simply there aren’t enough road projects in New Zealand big enough to be worthy of the transaction costs involved in a PPP. Far better would be to allow private companies to design, build, own, operate and toll roads with little government involvement at all, except interconnecting with existing roads. For example, the Auckland Harbour Bridge and the approaches from the Central Motorway Junction to as far north as Constellation Drive, could be sold – lock stock and barrel, it could have included the Victoria Park Tunnel project and the right to toll (and either refund road taxes spent using the road or pro-rata the payments to the company). THAT would have made a lot of sense and be a model for the rest of the country.
- Rail: Look it isn’t profitable. Unless you’re going to sell the freight business off, then this is just paying the private sector to manage a black hole. A PPP would be worse than the status quo.
- Water: Why not privatise? It has been successful in England, and has addressed serious deficits of core infrastructure. Besides, this is a local authority function. Private providers would encourage water conservation, because they would seek to maximise returns by charging what the market could bear.
- Energy: Given it is partially privately owned, why even think of a PPP? Contact Energy works, so lets just privatise the other three SOEs and Transpower.
- Defence: A core role of the state. Why would you allow anyone to profit from supplying property and managing national security? What happens if that PPP provider is sold to a foreign owner with hostile intent? Certainly you may contract the private sector to manage property or assist in advice, but supplying infrastructure?
- Hospitals: Again, why not just let private companies supply hospital capacity that you buy services from? Why sign up to a monopoly provider to guarantee its returns?
- Schools: As with hospitals.
- Prisons: As with defence. Management contracts and advice are all very well, but having the private sector responsible for incarceration has always worried me.
- Radio networks: Why own these at all? Radio New Zealand can hardly be privately run as a PPP given it makes little revenue, so why not just privatise it and let people pay for it voluntarily?

With that, and his ever bright and political popular ideas of a capital gains tax and reintroducing the land tax that Ruth Richardson abolished, is it any wonder that Bill English is starting to look like the Finance Minister we might have got had Labour been re-elected?

2 degrees wants more government help

Remember I posted that 2 degrees started with an advantage over Telecom and Vodafone? Well it’s becoming more clear that 2 degrees isn’t interested in competing on a level playing field. No. It wants the government to make life easier for it by forcing its competitors to charge less than they are willing to access their networks. According to NZPA it has a "Drop the Rate, Mate" campaign, which isn't as friendly as it sounds - it wants the government to use force to help its business out.

It wants mobile termination rates (which Vodafone never had regulated in the 17 years it has competed with Telecom) to be regulated because it thinks the cost is too high. Not that it would know since it isn’t interested in building much of a parallel network to the two major players, it never has been. 2 degrees, like Vodafone (when it was owned by BellSouth in the beginning) has few customers, so as a result it pays other mobile phone operators more than it receives in kind.

In fact I recall not long after BellSouth entered the New Zealand market, the CEO of Bellsouth (USA) visited New Zealand, and demanded from the then Minister of Communications (Maurice Williamson) that he regulate Telecom so BellSouth could get a fair share of the market. Williamson told him politely that New Zealand is not the United States, you can’t get politicians to do your bidding in New Zealand as easily as he thought, that BellSouth knew the regulatory environment when it invested and so should actually get out there and compete on its merits. Within a couple of years BellSouth, having underinvested in the network, and done little to attract new customers sold the business to Vodafone, which has been a roaring success.

However, after nearly 9 years of Labour intervening and regulating in the telecommunications sector, 2 degrees isn’t interested in competing on merit, but using the state to give it a hand up – again.

It has former blogger and centre-left (well he is now) journalist Matthew Hooton to do its PR. Moreso it has an interesting ragtag mob of supporters. Consumer New Zealand has always supported regulating producers, so no surprise there. TUANZ is pretty much the same, always using never producing. NZUSA has long been a platform for socialism and the Federation of Maori Authorities has a corporate interest, as it owns the frequencies (thanks to the last Labour government) that 2 degrees uses. However, Federated Farmers is an odd one. I am sure in the interests of fairness, Federated Farmers might agree to the prices of all of its commodities to be reduced so that consumers can pay less for food and woollen items.

Steven Joyce should tell them the same as Maurice Williamson. Go away and compete. 2 degrees already has an advantage in that it didn’t pay a market price for its frequencies, it already doesn’t need to build the infrastructure of Vodafone and Telecom because it is reselling their capacity (by voluntary agreement). Grow up and move on. The last Labour government agreed, it should be a swift dismissal by Joyce.

"Mr Hooton said the new minister would face "ferocious corporate lobbying"." with apparently a large campaign, which wont be cheap, spent on lobbying - money presumably that could be used to build more of a network so less termination charges could be paid.

So, it is pretty clear 2 degrees is NOT a normal private enterprise, but one that seeks to make money through government favours. It would rather waste money engaging in currying favour with government than to build a network so it would need to pay less to its competitors (or indeed to negotiate with its competitors for better rates).

It's a company that believes in using force to get its own way, a company that I don't believe is moral to support.

Ross Munro - hero of the week

It is sad that clothing firm Line 7 is going into receivership.

What was more sad was the wearisome offer by John Key that he was "prepared to look at offering assistance if an approach was made", although he preferred a commercial solution. In other words, your money might be used to bail out any business that curried sufficient favour with the government. It's what you expected with Helen Clark, and Barack Obama has shown he is quite willing to prop up failed companies, but John Key? Why is he listening to the philosophy of Jim Anderton, or is it just to grab the middle New Zealand pablum approach that "guv'mint" should always be there to help.

However, Line 7 Chief Executive Ross Munro has shown himself to be a businessman, entrepreneur and indeed a man of principle above any MP (not that hard really) by refusing government help.

On Radio NZ I heard him say "it is not the role of the Government or the taxpayer to prop up the company after its own mistakes. Mr Munro says the company, which was founded in 1963, has made its own bed and needs to lie in it."

Kudos to him, of course he does already get some support indirectly, through tariffs on imported clothing, low though they are, but still it is a welcoming statement that he is saying a flat no to your money.

Meanwhile, the Labour Party is saying not enough is being done (borrowing from your children's taxes and spending more of your money) to fight the recession. It might have been more productive had Labour not frittered money away on flights of fancy like Kiwirail, which has cost hundreds of millions of dollars. $690 million for a business that is worth $388 million (which is actually worth far less because it needs subsidies every year worth nearly $100 million to just operate) - that's how the Labour Party creates wealth, by subsidising foreign owners of businesses it wants to play with.

So today go out and buy something from Line 7 - you'll know you're supporting a brand and company that doesn't put its unwanted hands in your wallet.