08 March 2008

Moral equivalency again?

Israel withdraws from Gaza - leaving it to the Palestinians to govern and manage.

Palestinians choose a government committed to engaging in aggression against Israel and destroying it - Hamas

Palestinians engage in a small scale civil conflict splitting the government between Gaza and the West Bank, leaving Hamas in Gaza.

Hamas decides to make Gaza not a haven for peace, development, economic growth and freedom, but a base to wage war against Israel - indiscriminately firing rockets into Israel proper (you know the country that is internationally recognised, not occupied territories) killing and injuring Israeli civilians.

Israel puts up a blockade against Gaza to stop entry/exit of citizens across the land border, and stops selling electricity to Gaza as retaliation. Gaza still has an open land border with Egypt.

Israel is accused of being unreasonable, against those who wish to destroy it and attack it.

Hamas continues its bombardment, Israel responds by attacking bases in Gaza from where rocket attacks continue, killing 120.

Hamas sends a gunman in to shoot children at a school in Jerusalem.

So who wants to defend those who execute children for political purposes again?

07 March 2008

So where IS rail viable?



Now despite all the doom and gloom about the rail network, the truth is that SOME of it is commercially viable. To show this I wanted to link to a map of the network on Ontrack's website - Ontrack being the state owned enterprise responsible for the railway network, but it doesn't have one.

Wikipedia does though here >>>>

Now of that network, you can split rail into five main businesses: Coal, logs/wood products, containers, milk and commuter passenger rail. The long distance passenger rail services by themselves could never sustain any of the lines. There is other freight, but it also is of a far smaller scale than any of the others, worthwhile on a marginal basis but not on its own in most cases.

Coal is predominantly West Coast to Lyttelton, but also some from Southland to Timaru and within Waikato (Rotowaro to Mission Bush). The West Coast line is viable for coal and that's it. The other services rely on other freight to bear the cost of the lines.

Logs/timber traffic is carried predominantly Murupara-Kawerau-Mt Maunganui or Auckland. Also Kinleith to Auckland/Mt Maunganui. There is some activity in Northland and Wairarapa to Wellington. However, it is the Bay of Plenty timber traffic that matters. Despite popular misconceptions, logs are not important freight on the Gisborne line (nothing really is, despite some forecasts in recent years). There is certainly insufficient log traffic for any of the Northland lines to be viable, with only the Murupara-Kawerau-Mt Maunganui/Auckland, and Kinleith lines really retaining enough traffic to be viable.

Container traffic is essentially movements between main centres and ports. The viable routes here are the North Island Main Trunk line, and the main southern line from Picton to Christchurch/Lyttelton and down to Dunedin/Bluff, with worthwhile flows between Waikato and Mt Maunganui. Beyond that, there really isn't enough freight to Taranaki or Napier to sustain those lines for this traffic.

Milk traffic forms the last major freight traffic on the lines. These movements are mainly southern Hawke's Bay - Manawatu - South Taranaki, Southland-South Canterbury. Again, these largely use routes carrying other freight, but do help sustain them.

As far as commuter rail is concerned, in Wellington it has a future, although the Johnsonville and Melling lines are not at all viable, money is being poured into it all so is really a sunk cost. In Auckland it is a major waste of money, but again partly a sunk cost.

So what is left? Well surprisingly quite a lot of the network is probably commercially viable, but frankly there are quite a lot of lines that have no economically viable future, unless some major freight customer wants them:
- All lines north of Waitakere in Auckland (expensive to maintain, low capacity)
- Rotorua and Taneatua branches (simply no viable freight)
- Napier-Gisborne (with big questions to be asked about Napier south to Oringi).
- All lines in Taranaki except south of Hawera (some expensive to maintain)
- Masterton to Woodville (mainly useful as a diversion for the main trunk line!)

The reason others are worthwhile comes down to either a single major customer, or having enough general freight. The latter is really just the north-south main trunks in both islands. Now if the government could only swallow those closures (or simply opening lines Toll doesn't want to operate to others if they wish), then there might be a viable railway for the trunks and the few bulk commodities that rail can handle well.

What does THAT network look like? Well this:

Not so bad really, with dotted lines where lines probably should close in the next few years (Napier, Southland and New Plymouth). Beyond that if Solid Energy, Fonterra and the forestry sector want rail, they should buy it - since all of the lines outside the main trunk are almost entirely about them. There is no reasons for the state to subsidise their freight movements.

Certainly the track is not worth the nonsense "replacement value" capital worth on the Crown's books of NZ$10.648 billion as listed in Ontrack's annual report. Now this DOES include some prime real estate, like Wellington railway station. That is where there certainly is some value, but $5.4 billion book value for railway infrastructure is simple accounting sorcery. No one would pay that for it, not in scrap and certainly not to charge someone to use it. If the government offered it for sale, that is not what it would go for, nothing close. The $4.9 billion for the land is similarly so, given that most of the land is a sliver of a corridor.

Oh yes I did forget one thing, the ferries. They ARE worth a good bit of money - the only consistently profitable part of the railway system for decades.

Not the UN's approach to drugs

Camilla Cavendish in The Times today writes that instead of tightening up on drugs, they should be legalised and available through pharmacies like Boots and Superdrug.
Why?
She points out that part of the glamour of drugs is not with users, suggesting that those who go overboard like Amy Winehouse may put as many off it than otherwise, but with dealers. Those who can afford flash clothes, jewellery, cars and a relatively easy get rich quick lifestyle. That is the new ambition for all too many young people living in poorer British neighbourhoods.
Teenagers are being attacked and killed as the drug culture flows through much of British youth culture. She suggests that legalisation will achieve three goals at once, with only the one side effect to deal with.
Firstly, it gets rid of the drug dealer. No longer is a fortune to be made selling drugs at street corners or outside schools, but by being behind the counter in pharmacies. The link between crime and drugs ends - not only significantly reducing the violence involved, reducing pressure on prisons, but also recognising that drugs are no longer "special".
Secondly, those who are addicted could more easily and readily seek treatment without fear of persecution by the law. Many drug users are occasional recreational users, for relatively short periods of their lives - the true problem addicts are a minority, but they are the ones who need to feel free to access help.
Thirdly, as pharmacies would be responsible for what they sell, incidences of drugs diluted by other substances, anything from talcum powder to cleaner to ground glass, would end. People would get pure drugs, which would be less toxic than the black market offerings.
Yes there would be the issue of it being cheaper, increasing the opportunity to use it. However now, the price isn't a tremendous barrier. For starters, dealers are known to employ cunning techniques offering freebies and discounts, and they market heavily and directly. This would all end under legalisation. Those who want to take drugs find ways to do so, but once it is no longer forbidden or glamorous, without the criminal profits being made from it, the remaining problem could be far more manageable.
Alcohol for all of the problems arising from overuse, and use by those too young, is far more manageable than drugs. Laws can focus on supply to children, which should remain illegal.
However there is one huge barrier to any of this - it is the UN.
The UN, led by the US on this one, is adamantly opposed to legalisation. It is fighting a losing battle, but the war on drugs is lost. It is about time to switch the tables on dealers, and make life easier for those who want to use safely.
Sadly New Zealand is going in the other direction, despite the evidence, thanks to the efforts of the one man party, Jim Anderton.
Besides as I have said before, it is my body thank you.

Is "racism" the cry of the scoundrel?

Sadly, it appears to be the case in respect of Ken Livingstone's former chief race advisor - Lee Jasper. The litany of evidence building up about alleged conflicts of interest is serious damning, damning against him and Mayor Livingstone. While it is only one factor, it has certainly contributed to the narrowing of the London mayoralty race into what appears to be a dead heat between Livingstone and Conservative candidate Boris Johnson. The Financial Times now reports a recent poll showing a 5% lead by Johnson over Livingstone. So what has Jasper been up to?
Firstly, there have been allegations of Lee Jasper's improper involvement in approving funding for organisations that involve friends or associates of him, that include companies that are dormant or have gone out of business, or in one case funding a group that largely appears to put out press releases supporting Ken Livingstone.
Following that Ken Livingstone claimed the Evening Standard was embarking on a "campaign targeting black and ethnic minority organisations" - the race card to defend a scoundrel.
Now emails have emerged whereby Jasper (a married man) appears to be engaging in a very friendly relationship (sexually charged) with Karen Chouhan, a woman who runs community projects that Jasper has been responsible for approving Greater London Authority funding for. At the least this is failure to declare a profound conflict of interest. According to The Times the email informed Karen Chouhan "of his unbridled passion for her “feet, ankles, legs, thighs, bum and belly, arms, head and brain”. His feelings were particularly strong during “the first gentle dew on a golden summer morn”". He was involved in approving a £100,000 funding grant to the trust she is secretary for.
This is why he resigned, but he has also pleaded "it's a racist campaign". Apparently Lee Jasper thinks it is his race, not his behaviour that is at question - as if his race excuses what is an allegedly corrupt practice.
The Times also reported on how Lee Jasper, on £120,000 a year, lives in "state subsidised social housing at £90 a week for a four bedroom house in Clapham". This is utterly outrageous for a city and most importantly a Mayor that has spent so much attention and time on supposedly caring for the poor - when taxpayers are paying for highly paid officials to have bargain rentals. quick look at Find A Property shows weekly rents for a 4 bedroom house in Clapham start at £236.
Sorry Mr Jasper, taxpayers' money is not for you to dish out to your friends, associates or those who support Ken Livingstone. It is not racist to want transparency, no real or apparent conflicts of interest or accountability in how funds are spent. In fact, when you defend yourself by throwing such words at it, it is no defence at all. It's not YOUR money, it is Londoners money you got through force.
When Robert Mugabe is criticised for decimating Zimbabwe's economy, rigging elections, killing, destroying property, confiscating land and oppressing opponents, he calls it racism.
It's about time that such allegations were clearly seen for what they are - worthless cries in the dark by scoundrels.

Greens worship at the altar of rail with your money

Worshipping at the altar of a railway line. The Greens are advocating forcing taxpayers to pay to bail out a foreign company that owns the provision of railway services - Toll. A party that tends to be at best sceptical of capitalism and loathes foreign companies is seeking to give it a free ticket out of New Zealand with a big hand out of taxpayers' money. What an incredible sell out all to worship the altar of the railway.

The Greens love railways more than any other mode of transport. So even in an age when oil prices are at a record high, when rail cannot compete for most freight efficiently, there are major problems with rail freight being competitive for most freight in New Zealand. This puts paid to notions that "we need" railways in an age of expensive oil - it seems that it STILL isn't cheaper to send most freight by rail for all sorts of reasons (e.g. double handling, speed, inefficiency of compiling trainloads of wagon or less than wagon load lots).

Sadly the Greens are woefully ill informed about the railways at all. Jeanette Fitzsimons claims there isn't the revenue to pay for upgrades and “Nowhere is this more apparent to the public than in the state of Wellington’s commuter rail services". What rubbish. For starters, the Wellington commuter rail services get around half their revenue from taxes - whether road taxes through Land Transport NZ, or rates from the Wellington Regional Council. Secondly, with comparatively new trains recently introduced on the Wairarapa line, and all of the older electric units recently refurbished (and a major upgrade of the track, signal and electrics infrastructure underway), the Wellington system is hardly in a poor state. Toll Rail's revenues are about freight, not passenger services. So she is either poorly informed or lying to get the public's sympathy.

She claims Toll "cannot afford to pay the track access fees that were always part of the deal with Government". Really? Does she have access to Toll's accounts? Could it just be gameplaying with a government that is soft on rail?

The government is already spending hundreds of millions of taxpayers' dollars on upgrading the rail network, but even that isn't enough. Why?

Well that is the question the Greens should answer. It isn't because trucks are underpaying to cover road maintenance costs, generally they aren't. It isn't because trucks have far higher environmental costs per tonne km than rail, because the government's own study points out that it varies considerably by route (in some cases rail is lower in some cases road is lower).

I suspect it quite simply is because - notwithstanding the low cost of RUNNING a train to carry a lot of freight, the handling of freight to load and unload a train, the time/cost of warehousing freight (effectively) in assembling/disassembling a train, the high capital cost of railway equipment, the limitations on the NZ railway network placed by many low tunnels (and almost always a slower alignment than roads), rail can't compete for most freight. It can compete for hauling bulk commodities, such as coal and milk, and to a lesser extent logs. It can compete for long hauled containers, but that's about it. Rail is a very heavy, capital intensive mode with its own corridors that, by and large, get little use compared to roads. For example, the Napier-Gisborne railway on average has one train each way every day. Imagine the road having one truck (or even the dozen or so that would replace the train). That one train would have to carry the full cost of maintaining and operating the line, whereas the road has many vehicles to spread the cost over.

Passengers are a peripheral activity, unlike the UK, in NZ long distance passenger rail is about scenic tourist trips by and large.

So the Greens might have to look beyond the altar of rail and dispassionately ask why it isn't working to do what they want. Given the very high cost of diesel, the notion that rail can "save the day" when it clearly is failing to do so, seems spurious. Similarly, as the environmental costs of road and rail freight are not that dissimilar, the alleged "green" benefits of rail freight seem equally spurious.

so when will the Greens stop worshipping rail, and start supporting evidence?

Bill English says Nats might sell railways, again..

Remarkably, after reports that Dr Cullen is looking to spend some of your money on making you buy a railway, National's Finance Spokesman Bill English shows that he has some principles and courage as he has been reported by the NBR as saying that "If the purchase was completed then a National government would get out of the business as quickly as possible."

First he says "We certainly wouldn't be buying Toll. The worst thing for our railway network would be for the Government to take it over using the OnTrack company". Ok...

then seeking to get out of the business as quickly as possible, although then he flip flops a little "We would go out and look for an operator and then you would have to decide whether they come in to operate it and the Government retained ownership or you sell it to them".

Why would the government retain ownership? How does that do anything for the taxpayer?

Of course Winston Peters wants to buy it back, it's not his money after all. He thinks it is a "buyers' market" - well go on Winston, make a bid with your money and those you can convince. Ask the Greens to help. Although the test of most nationalisers is that they will never risk their own money to do it. Funny that.

06 March 2008

Abolishing income tax?

No Minister has posted about how the UK Libertarian Party has proposed abolishing income tax, by simply cutting government spending to where it was 5 years ago, given how high VAT is (17.5%).

He asked in relation to New Zealand "How much scope is there for a radical overhaul of our tax structure? Perhaps this is a task for Peter Cresswell and others to consider. How detailed are the NZ Libz with their policy prescriptions? Or is abolishing income tax 'pie in the sky' here too? Does ACT offer anything here?"

Well the Libertarianz (NZ) DOES have detailed policy on tax, on the party website here. It actually proposes the OPPOSITE tax reform, with all OTHER taxes being abolished other than income tax, which would be set at a flat rate of 15% with a $10,000 tax free threshold. This would be a transitional measure which itself would be phased down.

Why leave income tax and abolish others? Well it is a matter of two things.

Firstly, other taxes are largely invisible to the general public. GST, residents' withholding tax and various duties are paid, and the public treats these as part of the cost of goods or earning interest at the bank. It would be far preferable to notice that the cost of government is transparent and you pay that, rather than it hidden in multiple other taxes.

Secondly, abolishing all of the other taxes will lower compliance costs for businesses, end the "black economy" nonsense about paying under the counter for goods and services, and dramatically simplify tax arrangements overall.

How would this be paid for? Well by dramatically shrinking the state. Libertarianz has proposed alternative budgets for some years.

Now I remember Sir Roger Douglas proposed abolishing income tax in his book Unfinished Business, and it was originally ACT policy (he replaced income tax with compulsory health insurance, superannuation and education). ACT policy has been flat tax and more recently two step income tax. I'd be interested to see if ACT revives flat tax for 2008, but for now Libertarianz is the low flat tax party.

Don't want to buy a railway?

Tough - Dr Cullen is going to make you, if he can get away with it.

Not satisfied with spending $81 million for the Auckland rail network, when Treasury valued it at best at $20 million, not satisfied with spending $1 for the rest of the national network.

Not satisfied with spending from general taxation:

- At least $450 million to upgrade the Auckland rail network (track, signals and platforms) from 2005;
- $100 million per year for six years from 2007 to upgrade Auckland and Wellington rail networks;
- $25 million in 2008/09 and again in 2009/10 to upgrade the national rail network;
- $100 million upfront in upgrading the national network from 2003, and $25 million annually from 2004 to 2007.

Noting than absolutely none of that spending will boost the net financial value of the rail network at all (it is unlikely to be able to be sold for the amount being spent on it), now he wants to spend $500 million buying the whole lot according to Stuff. Toll wants $700 million, but presumably Dr Cullen will threaten "the state is sovereign" to force a compulsory nationalisation.

Toll is already paying the government $9 million per annum less than Ontrack (the Crown company which owns the rail network) is charging for its use. You might think Ontrack could simply tell Toll to stop trespassing, or to tell Toll that it will invoke the rail access agreement which means other companies can provide rail services on the network if they drop below a certain level. Yes, in case you didn't know, the "ownership" the Crown has of the track also gives Toll a monopoly on the use of the track, as long as it maintains a minimal level of service on the track.

Now a business minded government would take Toll to court to pay what is owed, or start confiscating rolling stock for part payment of the track access charges. After all, if a trucking firm doesn't pay road user charges to use the government's state highways, it faces being fined and the unpaid charges recovered, likewise airlines using airport.

No, after pledging to spend over $1 billion on its OWN assets, it wants to spend over $500 million buying the company that uses them which doesn't even pay what the government charges.

What this will mean is we will be back to the days before privatisation, when the railways lost money - and either were subsidised heavily (1982-1988) or getting bailed out regularly (1982, 1988, 1990).

Maybe the truth just hurts too much, maybe the government needs to give Toll the rail network back and say - make a go of it, and if you can't, then sell it to whoever wants it. While it's at it, it could sell the state highways as well, now that WOULD be worth a fair bit.

but what would John Key do?

05 March 2008

How bad is it to get infrastructure built in Britain?

One post on an aviation message board says this about how quickly this writer thinks Heathrow Terminal 2 will be replaced (this isn't serious, but has a few elements of truth):

This is Britain we are talking about.

My predicted timeframe:

Oct 2008 - stop using T2.

June 2009 - Submit public tenders for various designs for its replacement.

July 2009 - All designs rejected by local residents.

August 2009 - A rare and previously thought to be extinct breed of dust mite is discovered in T2.

Late-August 2009 - A charity single entitled "Save the Mites = Save our future (and our Children's future)" is released by two ex-Pop Idol nobodies. It goes straight in at number one.

September 2009 - Local residents set up an action group called T.W.A.T.S - (Team Worried and Against Terminal Success) which pickets Parliament to demand that the area is left for animals to graze on, as anything other than this course of action represents what basically amounts to Planetary Homicide. They lodge their formal complaints to the planning commission, which rules that in light of the new complaints against the massive expansion of Heathrow airport and the obvious and irrefutable damage replacing the terminal building will do to London’s green belt, that all previous planning permissions and tenders are null and void. A new planning process is started.

October 2009 – T.W.A.T.S chain themselves to a chainlink fence on the airport perimeter and are forcibly removed by police.

November 2009 – T.W.A.T.S climb in the roof of T5 and splash red paint all over the place to illustrate the murder of the green belt. One tries to break a window and falls to his death. “Stinky” as he is known, of no fixed address, is immediately Martyred. The local Government releases a statement expressing their sincere sorrow at his death. His wife/partner “Crusty” also of no fixed address, sues BAA for having lax enough security to let them in in the first place, and is awarded three million quid in damages. She cuts her hair, has a bath, moves to Kensington, sets up an advertising firm and buys a Range Rover.

December 2009 – Local residents not affiliated to T.W.A.T.S pre-emptively sue the Government for millions because of the emotional hardship so brutally inflicted on their lives by the grim edifice of the new terminal, in whatever form it may take. A Government investigation board is appointed to appoint a committee to do a study of the plans.

June 2010 – Committee appointed.

October 2010 – Committee convened for half an hour.

April 2011 - Committee convened for an hour and ten mins.

November 2011 - Committee convened for a seventeen minutes.

December 2011 – Preliminary findings are released. They say – “It is the opinion of this Committee that a public enquiry should be convened to assess the lawsuit brought by local residents. Once this is complete planning process may begin on the new terminal”

June 2012 – New committee convened which meets for three mins in a bar in Whitehall before taking a treasury credit card to Spearmint Rhino. Signs are put up all round the now derelict and crumbling T2 site that say that BAA is ‘Caring for your future’

November 2012 – T2 blows down in a moderately strong wind. A national day of mourning is held for the dust mites which it is presumed all perished. A charity single rework of Elton John’s ‘Candle in the Wind’ is released, sung by Jason Donovan and a class of primary school kids from Bromsgrove, entitled “You weren’t just a dust mite to me (Give peace a chance)” – its rockets straight to number one.

December 2012 – Work begins on clearing the site. Local residents complain about the noise of the drills and diggers (over the noise of the planes) which are causing emotional problems and successfully get an injunction to prevent the contractors from using any mechanical tools at all. The rubble is moved by hand. Local residents win more millions in compensation, because BAA should never have allowed the building to collapse in the first place.

December 2013 – the site is cleared. The fourth appeal of the planning permission is in the process of being dealt with in the High Courts.

April 2014 – The local residents take their case to the European Court of Human Rights in The Hague.

June 2014 – Final design, an award winning masterpiece of modern design and technical genius from Sir Norman Foster is dismissed on costs grounds. A rival bid from Botchitt & Scarper Ltd is accepted. The commission expresses ‘concerns’ that the design does not have any gates, and that the water feature and timber decking in and around the hard stands are unnecessary.

November 2015 – Work begins.

December 2016 – Work finishes. BAA make a massive glitzy launch and much is made of the fact that it came in with no work overruns and actually early. Rather less is made of the fact that the work is 395% over budget.

March 2017 – Structural engineers state that the building is unsafe. It transpires that the contractors had just poured tar over the ground and stuck beams into the tar. The site foreman, a Paddy O’Murphy, went on record as stating that “It was fine mate, its fine for people’s drives, and its fine for de terminal tingy dat we’re doing for ya’s. Do ya like Dags?”

April 2017 – Botchitt & Scarper Ltd is found to be a fake company. Nobody at the planning commission bothered to do any due diligence because they all had their drives done as a bonus. The new T2 falls down in a light breeze. An Al-Qaida carbomb is blamed.


May 2017 – Local residents sue again for emotional distress caused by the length of the planning process.

July 2021 – A new terminal design is approved.

May 2027 – The new T2 is opened. It was fifteen years late and cost more than nine-billion pounds all told, or 30% more than an entire brand new airport in the Thames Estuary.

(btw, the truth is that Heathrow Terminal 2 is to close within the next year or so, to make way for the new Heathrow East terminal. All the airlines using Terminal 2 are being relocated to Terminals 1, 3 and 4 after BA is relocated out of Terminals 1 and 4 and into Terminal 5 next month)

Bill English says "Like Labour, National...."

That's right, the Greens set the agenda, Labour follows and National? It just nods.
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Well why should I be surprised? After Sue Kedgley’s rant, Michael Cullen listens and what does the Opposition spokesman on Finance do? Bill English basically agrees there is a problem with foreigners (shock horror) owning a majority of shares in Auckland airport (and undefined “strategic assets”), the only difference is he doesn’t think the facts are the way Cullen says.

His criticism is NOT that it is ok to interfere with private property rights, no. He happily cheerleads on the Overseas Investment Commission and its pointlessness. His criticism is that there is no evidence that the Canadian Pension Fund wanted control of the airport (presumably if they did, well it would be a different story wouldn’t it?). Which of course means that we “shouldn’t be afraid”. As if there is anything to be afraid of, except for the paranoid delusional conspiracy theorists who usually reside at NZ First, the Alliance and the Greens.

English’s first press release said “National believes that local control of taxpayer-owned strategic assets is important”. A bizarre tautology if ever there was one. How the hell would it not be locally controlled if it was taxpayer owned?

Then his second press release said "Like Labour, National believes retaining the control of strategic assets is important”. Who retaining control Bill? What are strategic assets? Most importantly, why?

What the hell was going to happen? The entire Wellington city bus fleet was foreign owned for over a decade, along with the major Auckland bus fleet. One of the two major cellphone networks is entirely foreign owned, as is the second major telecommunications company, and the second and third airlines. The second and third major television companies are predominantly foreign owned, as is the dominant pay TV operator, and the majority of commercial radio stations. New Zealand is entirely dependent upon foreign owned motor vehicle manufacturers. Almost all sugar and oil comes from foreigners too, as do pharmaceuticals.

So when the election comes, and you are tempted to tick National for your party vote remember Bill English saying “Like Labour”. Ask yourself if you want National to govern alone when it picks up its political philosophy from the Greens, and tick a party that doesn’t.
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UPDATE: Stuff says National wont block the airport sale - but well, that is only if it is on a minority shareholding basis. It reports John Key saying "If it's a majority ownership it's a very different situation". So in other words John Key agrees with Sue Kedgley - simple as that. If you want Green party policy on foreign investment, vote National!

Obama the protectionist or the opportunist?

Barack Obama has, disturbingly, made a lot of noise about NAFTA – the North American Free Trade Agreement – which opened up free trade in most goods and services between the USA, Canada and Mexico. Obama, seeking votes from protectionist oriented businesses and trade unions, has called for NAFTA to be renegotiated, essentially to force US environmental and labour regulatory standards upon Mexico. Apparently that sort of imperialism is ok by the left.

However, CNN reports a memo by a Canadian consul official in Chicago, about a meeting with Obama’s economic advisor – Austan Goolsbee – suggests differently. According to the Daily Telegraph , it says “the primary campaign has been necessarily domestically focused, particularly in the Midwest, and that much of the rhetoric that may be perceived to be protectionist is more reflective of political manoeuvring than policy”

Which is positive of course for those of us who aren’t Marxists or nationalists, but doesn’t paint Mr Obama all that well from an integrity point of view.

According to the Daily Telegraph, Mr Goolsbee denies it of course “This thing about 'it's more about political positioning than a clear articulation of policy', that's this guy's language. He's not quoting me." The Canadian Embassy, to be fair, is embarrassed that a document from one of its officials is being used for political purposes saying "There was no intention to convey, in any way, that Sen. Obama and his campaign team were taking a different position in public from views expressed in private, including about NAFTA." Though I am sure the Canadians will be relieved if he will!

Hillary Clinton is making hay of it of course. NAFTA has been highly positive both for US consumers (as it has reduced costs for goods and services) and US producers (sourcing cheaper inputs and the rapidly growing market of Mexico) as well as Mexico. A stable growing Mexico will not only reduce poverty there (which apparently Mr Obama doesn't give a damn about), but also provide a wealthier market for US made goods AND reduce incidents of illegal emigration to the US - because there are jobs in Mexico.
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US leftwing imperialism to disallow Mexico from competing on the basis of what it largely can offer - lower cost unskilled and semi skilled labour - would impoverish both Mexico and the US. Mexicans without jobs can hardly fight for higher wages and working conditions can they now?

Canadian Pension Plan boxes on

It appears it isn't prepared to give ground, no doubt encouraged by the plummet in the sharemarket price of Auckland airport shares. Given that Canadian Pension Plan only is seeking a minority shareholding anyway, you'd have to wonder how it would meet any of the xenophobic tests of "control". If the purchase does go through, then Dr Cullen will have only succeeded in one thing - decimating the price that Auckland airport shareholders could OTHERWISE get for their property. Canadian Pension Plan could always just offer less, given how Dr Cullen has just destroyed wealth.
Something governments are awfully good at.

04 March 2008

Winston Cullen's populist xenophobia

So according to Stuff Michael Cullen is as hysterical as Sue Kedgley. Who would have thought! Like some squawking bird he has thrown up his hands in leftwing xenophobic horror at the "gateway to the world" falling into foreign hands. You can see the talons of foreigners, eagerly trying to pillage what is "ours". Of course it seems to be ok for the Christchurch gateway to be held by a loony leftwing council and the Wellington one by a New Zealand investment firm.

What absolute nonsense.

The hurried legislation is Labour making a marriage with "don't trust the wogs" NZ First, pandering to the xenophobic fears of some on the conservative right as well as the anti-globalisation left - with no objective basis for it whatsoever.

The government will now have the right to interfere in ANY private land transaction, as "ministers will be able to block the sale overseas of any land or assets if it runs counter to the need to maintain New Zealand control of strategically important infrastructure on sensitive land."

What is this "strategically important infrastructure" or "sensitive land"? Better hope it's not yours, or those of a company you own shares in - because Ministers can now pillage part of the asset value -purely due to xenophobic hysteria.

The arguments Sue Kedgley rattled off in her press release are all too ludicrous, and I pulled them apart a few days ago. I said the Greens are Canadaphobic only partly in jest, because they are xenophobic when it comes to ANYONE from another country making an investment in New Zealand.

The impression is that somehow Canada Pension Plan would blow up the airport, or treble landing charges, in other words do anything OTHER than run it to maximise a rate of return.

Of course this isn't the first time. Dr Cullen deliberately delayed allowing Singapore Airlines to raise its shareholding in Air New Zealand to 49% because of a preference to consider the Qantas offer, which had already been rejected by the Air New Zealand board. It is speculation to claim that this dithering was because of a preference for an ANZAC Air NZ over a more "foreign" one. This dithering saw Air New Zealand collapse, until Dr Cullen forced taxpayers to bail out and nationalise the airline.

So I want three questions to be answered by those on the left who will cheerlead this on flying the red flag as they do...

1. What evidence is there and what incentives are there for a foreign owner of a New Zealand company to treat the assets and the business in a manner differently from a New Zealand one? Give verifiable examples, not simply tired rhetoric.

2. What is the financial value of land being "strategic"? Will you compensate the owners for this over and above the previous market value now reduced because of this legislation?

3. If the land is so "strategic" to you, why don't YOU and those who agree with you come together and buy it? Clearly the value is so high that you are willing to use force to ride roughshod over private property rights and contracts. Can you explain why you are unwilling to use your OWN money to demonstrate how strategic this land is?

Finally, I expect the shrieking Greens and xenophobic NZ First to support this, along with xenophobic Anderton. That will be enough, but will Peter Dunne, National and ACT stand on some principle? (The Maori Party is inherently racist so I expect nothing from it).

By the way, this isn't about privatisation - this is about already privately owned shares not being allowed to be sold to a willing buyer. Just think about it, and think about your own xenophobia.

It is racism, just a kind the left champions.
UPDATE: Not PC rightfully points out that "Too many New Zealanders don't like foreigners, however (or investment, for that matter). We think we might catch nasty diseases from them -- things like hard work and being enterprising".
Sue Kedgley is taking the credit for this nonsense, repeating her absolute doggerell that "New Zealand could not afford the economic, environmental, biosecurity or security risks of allowing control of our main aviation gateway to pass into foreign hands".
Go on Sue, explain yourself will you? Why do foreigners pose risks that locals don't?
Meanwhile Winston is cheering it on, like the Muldoonist he is.
UPDATE 2: No Right Turn makes the ultra nationalist/socialist assertion that privately owned shares comprise “our” strategic assets. If HE finds it strategic, why does he not buy them from those who don’t see it as being strategic? At the very least he argues this is about the balance of payments deficit - without explaining that this deficit is privately funded. The owners of Auckland airport shares are not responsible if some New Zealanders spend more overseas than they receive from overseas. It is not THEIR responsibility to make money to pay someone else’s deficit. Sadly he panders to the xenophobic populist nationalism of Winston Peters that is more about prejudice than it is about economics.

Healthcare - the elephant in the policy room

In both NZ and the UK, rational debate about public health care is just about impossible. This is because, as an issue, it is too complicated for the average journalist and average member of the public to understand.

Few would argue that there are not major problems with both the NZ health system or the British NHS. Waiting lists continue to grow and get worse. In short, the demands people place upon both systems often are not met by the supply - whether it being waiting lists for surgery, waiting times at accident and emergency, lack of coverage for necessary drugs, failure to accurately diagnose or supply international best practice treatment consistently, or even simply problems of hygiene in some hospitals.

So the response of both Labour governments in the UK and NZ has been simple- pour more money into healthcare. In the UK it is not far short of a 50% increase in the proportionof GDP being spent on state funded healthcare. The worst example of this extravagance has been the £2.3 billion NHS National Programme for IT, well £2.3 billion was the budget originally - it now is over £20 billion. However, taxpayers are easy pickings. In NZ it has gone up by around a third - yes a third, in GDP and in real terms - $2 billion more per annum, since Labour was elected. $2 billion is $500 per man, woman and child per annum.

So what have you gained from that? Seriously? You see, for example, Southern Cross could offer you the mid range private medical insurance for around $350.

Yes, that's how good health spending is.

The truth is that more money is not going to make a huge difference. Why? Because there are fundamental problems with state funded state provided healthcare:

1. Demand is endless: With no controls on price, and no sense that there should be limits, the public will demand the latest, best and most sophisticated healthcare concerning drugs, equipment, techniques and treatments. Rationing is not done by cost, but by politics.

2. State providers have little cost control: As seen in the 1990s, badly run, in debt hospitals in New Zealand get bailed out, are not allowed to go bankrupt, and so pressures to perform efficiently are poor. Costs increase because administrators simply ask the government for more money, and when it isn't offered, there are claims that it will hurt people's healthcare.

3. State providers have little competitive incentive to perform: As most users have little alternative, queues, poor service and failures to perform aren't subject to much sanction. Money still flows.

4. Increases in funding are largely captured by well organised health workers: Nurses, doctors and all others claim increases in funding, because they can. They public loves them, so they play up to that, they threaten strike action, and almost always win.

5. State healthcare provides little incentive to live healthier: Be a drug addict, smoker, heavy drinker, obese, don't exercise - you'll get treated the same as if you looked after yourself. Not only that, you pay the same and get the same treatment, well unless the bureaucracy starts discriminating against you.

6. Bureaucratic decision making is glacial and unresponsive: By its very nature, government agencies are slow decision makers, and tend to have to make tradeoffs between who is interested in the decision politically and bureaucratically. Multiple objectives and a lack of accountability for delayed investments and approvals means things move slowly.

You see the current model have no relationship at all between those who pay, those who use and those who supply. The incentives to limit demand, to look after yourself, are personal - not financial, and so the budgets grow, performance barely improves and nobody seeks to change this at the fundamental level.

Nobody.

Will you hear John Key this year seeking to radically change health care? No. You wont see it from David Cameron in the UK either. The reason being this- nobody on the right of the political spectrum has the courage or the articulation necessary to win the argument with the public.

The left is absolutely scandalous on healthcare. Dr. Cullen knows only too well that the current health system can't get better with more money thrown at it, but he wont reform it - he can't. The Labour Party writ large can't swallow the truth that the current system is broken - it cannot be made to work better. Its supporters will treat ANY steps to allow private sector participation or some sort of insurance model as being "Americanisation". US health care is the great bogeyman, and whenever it is mentioned there are images of people dying because they can't afford it. Few point out those dying because of failures of state health care. Yes, some in the US undoubtedly die because they don't have health care - but then so do some under socialised health care.

Unfortunately, the nature of mainstream politics is such that the left knows it can push the right emotional triggers on this issue in the media. It simply says "our way" or "American way". The solution to "our way" is always more money. Anything about a more businesslike approach is going the other direction, and the left can command a majority of those in the healthcare profession and hoards of hangers on to protest at will, making a lot of noise, but with precious little debate about how to do it better. Helen Clark can't wait to see if John Key says ANYTHING interesting about health.

The left wont point out how healthcare in many countries with socialised models is insurance based, and how this helps to control costs, demand, and incentivise healthier living. It ignores failures to achieve gains under high levels of additional funding, but will point fingers at those seeking to cut funding.

The call to end "endless restructuring" ignores that such restructuring is, at best, half hearted. What is needed is a fundamental change to how health care is seen, and it means starting to move towards individual responsibility.

There are many ways this could happen, probably the most palatable would be an insurance based approach. Such an approach would have several advantages:
1. Insurance premiums can reflect risk and behaviour, and encourage good behaviour (regular checkups and healthy living) but penalise bad behaviour (smoking etc). This would be far more effective than many public health promotion campaigns.
2. Insurance can invest the proceeds of premiums to get a return and manage risk more prudently than the state in collecting taxes.
3. Insurance creates a direct customer/supplier relationship, as people expect more when they actually seek medical services.
4. Insurance can allow more competition in delivery of health care. People can choose different suppliers, and insurance companies.

Now how could the state move towards this? It could simply offer you back the proportion of taxes you pay that goes towards healthcare, and you could buy health insurance with that money. The state COULD develop its own health insurance company that operates by default as a portion of your income, and you might opt out of it buying private care instead. That was ACT policy, not libertarian but arguably a significant step forward. Which is what I am looking for.

Will John Key propose anything that WILL address the fundamental problems of public health policy? Highly unlikely. You will elect him though, and the problems will persist - again, and Labour will say more money is needed. The best National's health discussion paper says is "The judicious use of public-private partnerships can increase the availability of elective surgery and reduce waiting lists." A toe in the water wont stop someone from continuing to overheat.

and if you think it's hard in New Zealand, in the UK the NHS is sacred - shame so much that is sacred is not subject to close scrutiny!

The anti-Obama strategy that will fail

Giving a damn about his middle name being Hussein
Giving a damn about him being an Arab or African-American or whatever.

At the most this will pander to conservatives who are bigoted xenophobes, with little substance behind why Obama should be opposed. It will shore up the leftwing liberals who respond badly to such doggerell, so it is NOT manna for Republicans.

What DOES matter is that he is leftwing, his economic policies are blatantly anti-free trade and pro-big government. His talk is mostly rhetoric and little substance.

Obama as a President is most likely to be a disaster for New Zealand, as he will have little interest in promoting a liberalisation agenda at the WTO that persuades global abolition of agricultural export subsidies, removal of non-tariff barriers to agricultural imports and moving towards free trade of agricultural commodities.

That is why New Zealanders should, grit their teeth, and hope Hillary wins in Ohio and Texas tomorrow.

03 March 2008

Herald nearly a month late on this one

First A380 services to New Zealand

yes I reported that on 8 February Grant Bradley.

By the way, Singapore Airlines is ending its Boeing 747 service to Auckland on 11 May 2008. They get replaced with smaller Boeing 777-300ERs. That isn't a bad thing. The new 777-300ERs have the same new business and economy class of the A380s, and still have first class.


Browningrad?

The swing to the left under Gordon Brown has been modest, but every week or so something new comes along to remind me that the UK is governed by the LABOUR party. A party that thrives on envy, and is willing to slip back into the bad old ways if it is about being popular.

Today two examples of this:

First, according to the Sunday Times, Gordon Brown preparing to put "drastic curbs" on second home ownership, largely to stop people buying weekend pads in rather nice rural villages. This appeals directly to the anti tall poppy "eh uup" constituency that wouldn't think it is "fair" that someone is successful enough to buy a second home. You know, the people who Labour would have trapped in council houses, on the bottom tax rate and forever being reminded that if it weren't for Labour, they would be starving, without health care and the like - the ones Labour LIKES having dependent on the state.

Brown is apparently going to recommend that local authorities - the bastion of petty fascism - prevent "outsiders" (in German it would be "auslanders"!) from buying houses that they wouldn't make their permanent residence. I mean, the audacity of such people, and those selling them to such people! Councils could refuse permission to buy! Interfering directly in a voluntary exchange between buyer and seller.

Liberal Democrat MP Matthew Taylor, showing how illiberal and fascist he really is said “In some communities, 30%, 40% or 50% of the village is dark most of the year. It raises huge issues for the sustainability of the community.” Does it Matthew? Huge issues for who? I guess those who sold the houses don't count, or the people who bought them. Maybe you'd like to buy them instead with your money?

All of this ignores the economics. Doing this will reduce property prices and returns for those CURRENTLY owning properties, it wont encourage more construction and will hardly ensure "communities are sustainable" whatever that means.

Secondly, the Sunday Times reports on the inevitable envy ridden backlash against energy companies, which have been ordered to hand over part of their profits or face a windfall tax by Gordon Brown. Apparently those who invest in energy companies, wisely at a time of increasing demand, don't deserve the proceeds more than the grim, slow moving, inefficient, wasteful behemoth of a state. They should, of course, tell the government to go away, nicely. They are being asked to subsidise the gas and electricity of the poorest. They might ask the government a few points:
- Why does the government continue to levy VAT at over 17.5% on many goods and services for everyone, why can't it cut taxes to help those it cares about?
- If energy companies don't make large returns at times of high demand and short supply, how will they afford to invest in sourcing new energy supplies?
- How does subsidising the price of energy encourage people to use it more efficiently?
- Why doesn't the government reduce regulatory restrictions and compliance costs on competition between energy companies and figure out how, if there are windfall profits, why companies don't compete so much on price?

29 February 2008

Thanks Big Sister, we really need you

Big Sister Cindy "Kim Jong" Kiro has spent your money urging you to spend time with the family.

However it isn't YOUR family or YOUR kids, she notably never says that. She does say "our children" in the context of "she's a parent so she's one of us".

It shouldn't fool you. Cindy Kiro wants to nationalise the raising of children, by having a Stalinist style monitoring of every child, and a plan for every child authorised by the state from cradle till whenever. This warm and otherwise benign press release is unnecessary, but paints a picture of the Childrens' Commissioner have a useful role - when she has none. She undoubtedly cares a lot for children and abhors child abuse - hardly controversial. However, she thinks we are ALL responsible for this. This justifies her call for Orwellian monitoring of children including:

Planned assessment at key life stages, including early childhood, primary and secondary school entry, and moving to tertiary education or employment and training opportunities, is a key component of the framework. The assessment will take into account the whole child; their physical, social, educational, emotional, and psychological development.

She is either ignorant of the evils of totalitarianism, or an advocate of it! Simply, how fucking dare she call for children of responsible, loving, non-abusive parents have their kids monitored by the state?

She dilutes the blame by being unable to confront the truth - the problem is abusive families, no others. There are thousands of children barely being parented at all. Their teachers know this, and no doubt also do neighbours, distant family members and the like. THAT is where the state effort should be, as part of the criminal justice system. It is about intervening when there IS abuse, not watching everyone else. Yes, it will mean intervening in a higher proportion of Maori households than others, because it is disproportionately a problem with families of Maori background.

So no Cindy Kiro. Parents will decide what they want to do childrens' day, some will be working to pay taxes to fund your well about average income and the big nanny state you warmly embrace - think how much more time the parents might spend with their kids if they didn't need to work so hard to pay taxes (for you and the state) as well as earn a living. The children living in New Zealand are not "ours", they are not a shared responsibility. They are the responsibility of their parents and guardians, and they should be accountable when they abuse or neglect their children. If you were to do ANY justice to your job you'd stop making blanket statement about everyone, and focus on CYPFS and support efforts to intervene when there is demonstrable abuse and neglect. You would also work to deny custody of children from those who are convicted of abusing kids, permanently. Instead of monitoring all families, how about breaking up the ones that are destructive and stopping those who are from being near kids.

To be fair, Dr. Kiro is not an apologist for child bashing unlike one blogger who wants says "the structural issues which leave people so broken that they torture a three year-old", in other words "capitalism makes people torture a toddler".

Greens Canadaphobic


Sue Kedgley is at it again, hysterically trying to ban something. This time the sale of private shares in Auckland airport to a (wait for it, it is horrifying and disgusting) FOREIGN company. Those wogs (well they are Canadian, but they are foreign, so they must be inferior) can't be allowed to have "our" airport (well actually it is owned by the shareholders, but Sue doesn't understand property rights), I mean after all, think what they could do. They might want it to run efficiently, at a profit, encouraging people to use it and that would NEVER do.

Sue's press release on this says "The Green Party sees no reason why a Canadian pension fund should be allowed to gain control of the gateway to New Zealand"

Well I see no reason why it shouldn't? Why is a Canadian pension fund less of a good owner than a New Zealand pension fund, or local government, or central government (remember Wellington airport when it was majority government owned?)? Sue doesn't say, just apparently as long as the Green Party doesn't see a reason to allow something, it should be banned.

Then she goes on a little to suggest that "New Zealand cannot afford the economic, environmental, biosecurity and security risks of letting control of our main aviation gateway pass into foreign hands"

What are these Sue? Economic risks. Hmmm that it will be efficiently run, will seek to encourage passengers and airlines to operate there. Are you concerned about monopoly pricing? Well apparently not since the Green Party opposes outright Whenuapai being developed as a second airport.

Environmental risks? What are the Canadians going to do Sue? Use the airport as a toxic waste dump? Encourage less fuel efficient planes to fly in? I mean those Canadians are such environmental vandals.

Biosecurity risks? Oh yes, apparently they will take over the MAF role too will they Sue? Or the Canadians will just let it rip on foreign plagues of insects and plants to ravish our countryside.

Security risks? Yes they'll let those Canadian terrorists in to hijack planes, or Canadian thieves to steal luggage.

Not a single rational reason to stop the sale, other than xenophobic hysteria.

Blame Canada, with their evil little eyes and their heads that flap with lies.

Bloody hell Sue, take some pills and get some therapy, it's not nice to discriminate against those from other countries.

The OTHER deniers

Holocaust deniers are well publicised and hassled for their vile beliefs, albeit that they SHOULD have the legal right to hold them and express them.

However there is another group of deniers, the Stalinist deniers. These are the small group of fanatics for totalitarianism that live in the free world, but deny the evidence of the thousands of Russians who suffered terrible ordeals under Stalinism and CONTINUE to deny the evidence of the North Koreans who escape. They claim Alexander Solzhenitsyn was a neo Nazi, they excuse labour camps, executions and political oppression. They treat Saddam Hussein as a hero

They are so radical that even Arthur Scargill, mate of the former USSR, expelled them from his own Marxist party.

It is called the Stalin Society, led by an Indian migrant to the UK called Harpal Brar. He chairs the Communist Party of Great Britain Marxist-Leninist.

That party supports Robert Mugabe and Kim Jong Il.

What bloodthirsty warped scum. Are they deranged, stupid or just plain evil?