The ex.monopoly moaning about the competition

Imagine if you had a statutory monopoly on your business since your sector came into existence, in other words for a total of 29 years. Imagine if your first competitor was required to tell you, four years in advance, all of its products and the timing of their release, so you'd know when it started exactly what to do to ruin its chances. Imagine then that when the market was opened up, you bought extra capacity to compete with your new competitors and allied yourself with one of the emerging players.

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Now some 17 years after the market being fully open, it's all a bit hard and you're moaning to the government that one of the new players is so successful, it's unfair.

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Of course I forgot to say that the company in question is 100% state owned, that the government since 1999 has had no interest in privatising it and stymied a plan to directly take on its competitor shortly after it won office.

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I am talking about the arrogant self styled guardian of "kiwi kulture" TVNZ. TVNZ, of course, gets some money from the taxpayer to pay for programmes that viewers wouldn't otherwise pay for. Sky gets nothing. TVNZ inherits its rights to broadcast, Sky had to bid commercially for its UHF frequencies and now pays commercially for satellite broadcast frequencies. Sky's customers CHOOSE to pay to have its channels available, and Sky offers around 60 channels plus radio. TVNZ offers 4. Sky started from nothing in 1991, with 3 pay TV channels and lost money for around the first decade of its operations. TVNZ was government funded and enjoyed milking NZ TV advertising monopoly until 1989.

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Do I smell the whiff of loser? Now TVNZ could have performed better had it been privatised as it could have invested in pay TV, more channels, and spent money on programming people wanted rather than being the Prime Minister's plaything (it is rumoured than when TVNZ dropped BBC World from TV1 overnight because of the high price the BBC charged, the PM rang the TVNZ CEO and demanded it be reinstated - of course Sky offers BBC World 24/7).

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TVNZ wants the government to ban Sky from bidding for the broadcast rights for certain sports events, presumably so TVNZ can pay the sports event operators less so it can attract customers to watch it for nothing (even though hundreds of thousands are willing to pay). It can't seem to convince advertisers to pay enough for the programming compared to how much Sky can convince subscribers. Too bad TVNZ. It calls Sky subscriptions a "sports tax". No! It's not a tax because it is voluntary, but then the socialists at TVNZ maybe don't quite get that, having been friendly to statism for many years.

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However it goes further. No doubt buoyed by Labour's decimation of Telecom's property rights, TVNZ wants Sky forcibly split into two businesses; one to buy and manage programming, another to operate satellite transmissions and set top boxes. What?

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This is the same TVNZ that once owned BCL (now Kordia). This is the same TVNZ that holds the two highest rating commercial TV channels, and for years dominated the free to air broadcast market because it advertised its own programmes for free on its own channels. I guess the inherited monopoly benefits have been eroded by the market.

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Sky was one of three pay TV businesses that have had a reasonable presence in the market. Telstra Clear is second with its cable TV operations in Wellington and Christchurch, and Telecom was a third with the long defunct First Media cable TV operation in parts of Auckland and Wellington. Ihug also briefly ran a pay TV operation. TVNZ could have done so too, but government has prevented it from doing so.

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TVNZ wants a "level playing field". What, you mean having a 31 year head start wasn't enough? It wants "media diversity", when it spent several years in court in the 1980s fighting a third TV channel, and itself bought one of the seven nationwide UHF TV frequencies when they were first sold (and had a 25% interest in SKY which bought four others).

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You see 720,000 households subscribe to Sky - that's people choosing to pay for TV. Unlike the hated TV licence fee which people DIDN'T choose to pay, but which predominantly benefited TVNZ.

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Quite simply TVNZ are moaning losers, it has milked TV advertisers for decades, milked taxpayers and the TV licence fee paying them by force for what people wouldn't otherwise choose to buy. Sky comes along, offers programming people want to pay for, and TVNZ thinks it is unfair.

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It should be privatised, in full - it is an arrogant broadcaster that specialises in vapid oversimplification of issues, "to make them relevant for the viewer" by treating news like a sports match "good vs bad". It has overpaid so called "stars" that it creates, and almost never challenges the statist status quo, and warmly embraces those who want more government or government to fix problems.

So go on TVNZ, charge subscribers for your content, and see how well you go or maybe just ask your masters to sell you to someone prepared to invest in developing your business. Don't get upset because the relatively new boy on the block is outdoing you right left and centre.

Libertarianz announce mammoth tax cut

Well, following on from ACT taking the Libertarianz tax policy from the last election of making the first $10,000 of income tax free, Libertarianz have announced a new tax policy with its alternative budget. All the details are here on Pacific Empire, but the key points are:

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- First $50,000 of income tax free;

- Abolish GST;

- Public expected to buy healthcare, education, superannuation and insurance against misfortune if they so wish;

- Privatise hospitals and schools by giving away shares in them to the public;

- Privatise other state assets not essential for law and order and defence;

- Proceeds of privatisation to fund residual national superannuation, ACC and invalids benefit obligations, and a three year phase out of the DPB;

- Significantly increase defence spending to rebuild blue water navy and strike capabilities.

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So there you go, if you want to send a message to politicians that you want your money back, vote Libertarianz. Although I'd like to know the rate of income tax about $50,000 (it was 15% in the previous policy I believe). Now I'd fiddle a bit with some of these policies, but they represent a bold message of cutting back the state to its core functions.

New blog rankings

Tim Selwyn has kindly published his latest NZ blogosphere rankings, for March/April. No point in going through the results, but I am glad to say that my ranking is up to 34 (from 51) and Not PC from 6th to 4th place, knocking back Frogblog and No Right Turn (two of the leading leftwing blogs).

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The rankings are interesting for listing some blogs I never new existed. Others than have significantly gone up OR down (by at last 14 places) in the top 50 are as follows, with the previous ranking followed by where they are today according to Tim. Inastrangeland (gone from 41 up to 26), Silent Running (16 to 30), Craig Foss MP (81 to 31), Hot Topic (68 to 35), Maia (23 to 38), Big News (29 to 47), Aotearoa a wider perspective (69 to 48).

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I know I'll be looking at the blogs I've never seen before to check if they should go on my blogroll or my regular feed, just to see what is interesting.

A different 20 point pledge card

Ok, having reviewed ACT's effort and marked it as being, at the very best, barely a pass, here's my go at it. This is NOT Libertarianz policy, consider it maybe a halfway house between it and National, in other words what I think a bold ACT could say.


1. Government waste. Cut all government spending to the lowest of the OECD: These means cutting local government as well as national government, and being bold about waste. A smaller government than New Zealand's competitors is more ambitious than matching Australia, which is bloated by mineral wealth.

2. Cut and flatten tax rates: OK, time to repeat the already announced policies of having the first $10,000 tax free, abolishing the 39% top tax rate AND abolish the 33% tax rate. Drop company tax to 19.5%. That means flat tax at 19.5% for all.

3. Limit local government to core activities: Abolish power of general competence and cap rates, permanently (no inflation indexation). Councils would need to find new ways to raise funds (no new tax powers), and cut spending. Councils would be prohibited from entering into new activities, from subsidising businesses and the arts.

4. Reform the public service: I don't care about limiting Parliament or Cabinet, but let's require all departmental CEOs to give a report within one month of office explaining what would happen if the department was abolished. All must give two options. Those that aren't convincing would be abolished. CEO's of Ministry of Womens' Affairs, Youth Affairs, Families Commission and numerous others would be better resigning and using the time to find a real job.

5. Red tape: Require remaining government departments to report on options to eliminate costs to business, and rely upon contract, tort and private property rights instead of licensing and regulation.

6. Reform the Resource Management Act: Amend the RMA, to make private property rights pre-eminent, and make its primary purpose the extension of private property rights onto rivers, foreshore, seabed, airspace, sight lines, air quality and the like. In other words, create private property rights to enable owners to do as they wish with their OWN environment. Of course it wouldn't look much like the RMA any more.

7. Create a competitive market in education: Yes to education vouchers, extend it to university, but they should only cover half the cost of tuition. Abolish state involvement in early childhood education. Give schools full autonomy on pay and curriculum, make each school into an independent corporate entity.

8. Same in healthcare: Offer insurance model in exchange for tax cut, payment of premiums. Public can opt out of state healthcare and switch insurance providers, or can choose state healthcare which receives budget based on hypothecated tax revenue from those paying for it. Make all government healthcare facilities into businesses again.

9. Reintroduce competition to accident compensation: Competition for employer, motor vehicle and personal accounts. Compulsory cover with review to consider merits of returning right to sue for personal injury by accident.

10. Welfare: Support ACT's announced policy of shifting welfare to unemployment, sickness and invalid insurance, extend to DPB and transfer Kiwisaver to individuals to ultimately replace national superannuation.

11. Immigration: Open door with the following limits. No right to claim welfare or social assistance of any kind. No admission for those convicted of crimes that have NZ equivalents. Must have financial means (or sponsorship) for at least 3 months and airfare to return.

12. Labour reform: Shift employment law to contract law, abolish minimum wage.

13. Privatisation: Sell and give away shares for all SOEs, give away shares in hospitals, schools to the public.

14. Infrastructure: Abolish electricity and telecommunications commissioners. Return Telecom's property rights in its infrastructure, and abolish laws requiring cellphone operators to resell competitors' services. Convert Transit NZ into an SOE and privatise Auckland Harbour Bridge and its approaches, allow road users to contract directly for road use and opt out of fuel tax. Require local authorities to transfer roads into SOE equivalents. Privatisation of water/sewage.

15. Cut the remaining tariffs on imports: Perfect.

16. Free up more land for housing: Abolish urban growth limits, privatise state housing by offering Thatcher style "buy your state house" scheme, use RMA reform to reintroduce private property rights.

17. Strengthen law and order policies: Yes private prisons and get the private sector to do Police work that ISN'T about arrest (e.g. assistance, traffic control) and speed up the courts. However, introduce "points" scheme for crimes. If a criminal gets 100 points, it is permanent detention. Good behaviour inside allows for a 10% discount on sentence and points. Full review of all criminal laws to eliminate victimless crime, legalise medical use of cannabis and review laws on drugs consistent with changes to health and ACC policy (to ensure individuals are accountable for their actions).
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18. Climate change: Declare climate change policy to be abolition of subsidies for activities likely to be contributing to climate change (in fact all activities), and reducing taxes on low emission activities (and all activities). Abolishing transport subsidies and price controls on energy will help too. Quite simply, taking pro-freedom steps that are consistent with trying to reduce the theoretical impact of climate change, but nothing else.

19. Strengthen our constitutional framework: Yes to a Taxpayers' Bill of Rights, but also abolish the Maori seats, include private property rights and right to control one's body in the Bill of Rights, and eliminate references to the Treaty of Waitangi in all legislation.

20. Appoint mentors to families at risk: All very well and good, but to help this along, abolish additional welfare for children born to families or individuals already in welfare. Also deny convicted serious violent or sexual criminals the right to custody or cohabitate with anyone under 16, or the right to welfare. The stick as well as the carrot.

So there you go, it felt rather unambitious not scrapping the RMA, not introducing a libertarian constitution, not fully privatising schools and hospitals or the roads, or legalising drugs, but well this isn't for Libertarianz, it's for ACT. What do you think?

An idea for Dr Cullen

Given he is buying not only Toll Rail's business and trains, but also the monopoly of track usage that the government let Toll keep when it bought the tracks, the report in the Dominion Post of a private company (Manning Group) willing (apparently) to invest in running new trains on the Wellington-Auckland line is promising.

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It shows that, perhaps, the right approach would be to sell track access to whoever is willing to pay to run trains, it may be on an exclusive franchise arrangement. In other words, private companies paying to use the otherwise worthless tracks. It does mean Dr. Cullen sharing his train set with others though. Now I don't think the Manning Group's idea makes good business sense at all, I can think of better ways to invest money that in a transport mode that takes 9 hours, when three companies fly you in an hour, but if it is their money and their track access isn't subsidised AND it stops Dr. Cullen paying for new trains to replace the Overlander, bring it on! I'm convinced that entrepreneurs can do better than the state.