National's fundamental problem

Now as regular readers to this blog will know, I'm fairly merciless against the National Party. The reasons being fairly clear:
- Most of its policies are at best a limp-wristed one step better than Labour's;
- Most of its policies are more leftwing than what National implemented when it was last in government in the 1990s, even when it was in coalition with NZ First;
- It obfuscates when asked perfectly reasonable questions such as "how can you fund more spending in some areas of government and bigger tax cuts without cutting government spending in others?".

The response of some of my readers is simple. They essentially believe that what matters is that Labour is ousted from power as it is worse, and when National is in power then the more politically difficult issues can be confronted, such as what spending to cut. Some think National MUST be better, and given their loathing of Labour they see National as the only credible alternative government. Within all of this is a more fundamental political and cultural problem in New Zealand, and this needs to be conquered and fought more than the Labour party.

So when National rejects privatisation, why is that? Is it a belt of xenophobia of the kind both Winston Peters and Jim Anderton built their snivelling little envy milking careers on? Well in part. New Zealanders don't reject foreign investment, but it would be fair to say a majority have the feeling (and it is feelings not thoughts) that a foreign company buying what was once a New Zealand operation is somehow "taking something away", that it will "rip you off" or underinvest. It is no more or less true than a NZ company doing so, and more importantly no more or less true than the state doing so. The state has taking over a billion dollars from taxpayers for the railways and you've seen next to nothing for it. It's just taken another NZ$690 million to buy it back, and most New Zealanders don't really mind.

Why do NZers buy the Labour view that Air NZ's renationalisation was due to it being badly run by the private sector, rather than the more honest truth that Labour stopped Singapore Airlines from bailing it out? It's because National finds the argument too complicated, and because the mainstream media prefers simplicity. The argument requires effort and National doesn't want to take the effort.

Let's go further. Why do NZers prefer that the government tax $1.5 billion of their taxes to spend on telecommunications rather than get out of the way of the private sector to roll it out? Why wont the Nats point to how Vodafone transformed BellSouth into being a mobile phone network to easily rival Telecom, without ANY government involvement? Why wont the Nats points to how under their administration, TelstraClear rolled out a new broadband network to virtually all of residential Christchurch and Wellington/Hutt Valley, again without any government involvement? Why wont they point out that a main reason why this didn't happen in Auckland is because Auckland City Council used the RMA to stop extra cables being strung along overhead poles, and subsequently the change of government saw Labour let Telstra Clear use Telecom's network - then complained Telecom wasn't investing enough in its network.

Again, the Nats wont make the "complicated" argument, easier to say "we'll spend your money".

New Zealanders WANT the government to take charge, take money off them and pick winners - even though the evidence of doing this well is pretty appalling. Most of you may have forgotten than Jim Anderton set up an organisation now known as NZ Trade and Enterprise to subsidy businesses - pick winners. Noticed which of them has taken off and been a roaring success thanks to you being forced to pay for them? No.

So the Nats wont argue for capitalism, for private enterprise, they aren't prepared to say - look it worked before, we just need to get out of the way with lower taxes and abolishing the RMA, because Labour will talk of the "failed policies of the 1990s". What about the "failed policies since 1999"? Instead the Nats will argue for government spending, government ownership, government plans. They want to be seen to be doing something, instead of reiterating the simple truth that was learnt (and forgotten) from the 1980s and 1990s, that the government isn't smart enough to do anything well, often enough to risk taxpayers' money being diverted to those risks.

What incentives do the Nats have to get it right? The same Jim Anderton has had. He has had nine years of spending around $100 million a year and nothing much to show for it - why don't the Nats point THAT out?

No, apparently simpler to say spend money instead of giving it back to you. Yes, really.

Let's not even talk about roads. It's become the new pork for government, when at one time New Zealand governments proudly had moved away from picking winners on roads too - when once the Nats led ground breaking policy that essentially said roads should be run like businesses - not as political porkbarrel games.

So what about social policy? Again, the Nats can't even join the political mainstream of UK and US politics that have seen centre-LEFT governments (Labour and Clinton) reform welfare, and be tough on it. They have embraced the middle class welfare of "Working for Families", unwilling to put together a tax cut package that would be as good as or better for most recipients, and argue that government shouldn't be about welfare. However, they wont say welfare will be tougher.

Then health care. Could the Nats ever argue that it would be better to choose an option based on insurance rather like Australia and Germany, that means you pay more if you live an unhealthy lifestyle? No, if they said "insurance" or "private sector", the rabid left would say "Americanisation" and "Profit" and most New Zealanders would ignore the failure of the state run system, and the Nats just wont argue.

I could go on, but it is something endemic to the New Zealand psyche. It was seen in 2002 when Laila Harre was talking on TV with the "worm" and the "worm" rose when she talked about the government spending a lot more on health and education, and dropped when she talked about higher taxes.

You see people expect government to do things well, and can't accept that it can't do many things that well. People go through a state education system and can't think that it is that bad. The vested interests in state health, education and welfare are loud in their protestations that everything is ok, but there isn't enough money. The railways once said the same, as did the post office, and the Ministry of Energy, farmers argued for more subsidies, once. The truth is that those running and providing government services have little incentive to radically change them so they are under more pressure to perform and deliver what consumers want, rather than what they think is good for them.

That's the fundamental point. New Zealanders trust government too much. They trust it to spend their money, to tell them what to do, to buy their health and education, to buy their pensions and protect them in the event of accident. They damn governments when this doesn't meet their expectations, but can't connect that sometimes governments CAN'T meet their expectations, that government can make things worse, government forces people to pay for poor service, and people get paid for poor service.

That, is basically, why the National Party doesn't offer anything new. That, and its inherent lack of courage and conservatism. That is inexcusable that it wont argue for part privatisation of power companies to attract new capital and investment, it wont argue for funding roads on the basis of best quality of spend, not ones of "national importance", it wont argue that competition for the ACC employer account was good when it was in power and is good now, and it wont argue that the top tax rate was bad in 2000 so is bad now. That gutlessness to not even roll back what Labour has done to National policy in 1999 is an abysmal success for mediocrity.

However if the majority of the population didn't like that mediocrity, wasn't happy with a change in people rather than policies, the Nats wouldn't be doing well in the polls now would they? AND do you really believe after three years of government National will have radically improved health and education, cut people on welfare, cut crime and grown the economy beyond the mediocre 2-3% NZ is used to? You'll be happy that your taxes will have been cut down so there is virtually no waste?

National looks to Muldoon and Pork

John Key announced yesterday National's "infrastructure policy" something which, in the past, has never really existed. I'm absolutely appalled. Two statements describe what this policy is a mix of:
- Think Big;
- Porkbarrel spending.

So what's so wrong with it? Well let's see what John Key said:

"This deficit spans from our roading network through to our energy supply. Nor is it a problem limited to central government. Over the next decade, local government will face an infrastructure deficit of some $30 billion."

Well ok, he recognises there is a problem, although he doesn't really explain why (after all Labour's spending record amounts on roads at the moment), and doesn't explain why it is a government problem. This is the start of his error.

"our infrastructure policy will be comprehensive and bold. This will require leadership. National will appoint a Minister of Infrastructure to reshape, co-ordinate and then oversee the Government’s infrastructure objectives. It will be spelt out in our National Infrastructure Plan."

Rob Muldoon will be proud, Bill Birch will wonder if anything has been learnt. OK, so...

"This 20-year plan will be developed in conjunction with local government. It will set a clear direction for vital national infrastructure investment, including top priority projects. The plan will set out the intended local and central government infrastructure investment in roads, public transport, electricity, telecommunications, and water."

20 years!! Now this WILL be fun, predicting what is needed in the next 20 years. Let's give some examples of how THAT has been screwed up in the past:
- Wellington's Overseas Passenger Terminal, for ships, opened in the late 1960s for passenger liner traffic a few years before they all ceased;
- The Post Office rewiring Wellington's northern suburbs telecommunications networks for triple twisted copper wire, non standard, because it was the "new state of the art" idea in the 1970s. However it was completely incompatible with xDSL for high speed internet service, of course nobody knew of the internet in the 1970s;
- The Post Office/Telecom instituting card phones in the late 1980s that proved to be Y2K non-compliant;
- The Railways Department opening large shunting yards in the 1960s and buying new shunting locomotives in the 1980s, when freight trains were moving towards direct point to point services, not shunting individual sets of wagons between trains;
- The Railways Department introducing the Silverstar overnight luxury sleeper trains for the Wellington to Auckland run in 1971, three years after NAC had introduced Boeing 737s, putting the final nail in the coffin for long distance rail as a transport for business travellers;
- The Railways Department electrifying the North Island Main Trunk railway at the same time as the government allowed trucks to haul freight further than 150km, taking away the capacity pressure from the line, and at the same time as US consultants advised that far more would be gained by restructuring the operations of the railway to be more efficient;
- The government subsidising a new Wellington-Lyttelton ferry in the 1970s, as the Railways introduced a fourth Picton Ferry and NAC bought more Boeing 737s;
- Wellington hospital getting a multi-million dollar electricity generation plant in the 1970s with 2.5x the capacity of the requirements of Wellington Hospital which cost more to run and maintain than buying power from the national grid, and more than having backup generators;
- Invercargill City Council paying for international arrival and departure facilities, even though there have been no scheduled services from a foreign country to and from Invercargill, ever.

Let alone, what government department predicted the internet? What government department predicted international air travel would literally "take off"? What government department predicted mobile phones would start supplanting landlines? Don't worry, John Key and the National Party know the future - like they knew it in the late 1970s and early 1980s, when a fortune of "infrastructure investments" had their debt written off.

Anyway...

"Changes like the growing price of oil and the need for public transport and roading networks that reflect that. Changes like growing connectivity between countries and people and the need for telecommunications networks that make the most of this."

Actually John, oil dropped in the last few weeks, so well done. Do tell how you can plan public transport and roads to meet this, in fact one of the biggest "public transport" industries is the airline sector, have you predicted what ones will fail and what will succeed John? Oh and do tell what's wrong with NZ's international telecommunications links, since they have been growing in capacity for ages without government involvement- actually Southern Cross Cable happened when the Nats weren't in power.

"our National Infrastructure Plan will include up to $1.5 billion in Crown investment for an ultra-fast broadband network connecting 75% of New Zealanders. And that’s why we will double the Broadband Challenge Fund and refocus it on rural communities"

Crown = money taken from taxpayers John. Don't hid that. You'll focus on rural communities, because of course, it's not enough they are already required to be cross subsidised by urban telecommunications users. Yes, but I hope urban property owners can get big land plots and their parking free of charge in exchange for this bit of pork. Yes, the pork has begun.

"Our National Infrastructure Plan will also include a new category of state highway. We will call these Roads of National Significance. These Roads of National Significance will be singled out as essential roads that require priority treatment. This would include, for example, State Highway 1, the essential backbone of New Zealand’s roading network."

What an appalling idea. This is pork in the worst possible form. State Highway 1 is an essential backbone apparently. So those segments of SH1 where traffic volumes are a tenth of those of SH16 in Auckland or a quarter of SH2 linking Wellington and the Hutt, or a third of SH29 linking Tauranga and Hamilton, are more important than those roads. Forget efficiency, safety and congestion reduction, name the pork barrel road and goldplate it, right John? So presumably Wellington can get a second Mt Victoria Tunnel because that's the "Road of National Significance", but forget widening Dominion Road in Auckland. Presumably SH1 from Invercargill to Bluff is more important than SH2 east of Auckland which has an appalling accident rate.

Forget rating road spending on the basis of objective criteria and getting value for money, getting quality spending like you harp on about with local government. No, name a road one of "national significance" and the money can be diverted to tart it up in any way you can think of. Meanwhile the roads which actually ARE congested, or actually DO have an appalling accident rate, are neglected, but John Key might have opened the new four-lane section of the Desert Road, or the unnecessarily exhorbitant Huntly Bypass or Transmission gully motorway.

Then he avoids fixing the RMA...

"National’s new Priority Consenting process will streamline consents for major national infrastructure. These will not go through the local council but instead will be called in and determined nationally."

Ah get it? So YOU wont get relief from local authorities and the RMA eroding your private property rights, but the state will in building its big grandiose projects. Rob Muldoon tried the very same thing of course.

He wants to borrow from you too...

"First, we will introduce infrastructure bonds. Secondly, we will make greater use of public-private partnerships. These new financing and asset management techniques will open up infrastructure to a wide range of financial investors. This will include Kiwi mums and dads through their super funds and Kiwisaver accounts."

Or he could just privatise the three remaining power companies, resell the railways, sell Air NZ, require councils to commercialise and privatise water, commercialise and privatise the state highways. None of this is unknown around the world, but no. John Key is scared of privatisation, even though his party did it in electricity with no ill effects, even though it has been a success in addressing infrastructure backlogs in the UK with water. He's gutless, unable to make the argument - but willing to be the 21st century's Rob Muldoon.

John, if you want to go on about financing techniques used elsewhere, all the countries you list have embraced privatisation and haven't turned back. In the USA whole highways have effectively been privatised, with the government leasing the roads to private concerns for 99 year periods.

However National ISN'T embracing the future, it is calling for a fortune of taxpayers' money to be used to subsidise the telecommunications sector. That's socialism. It is calling for 20 year plans for central and local government infrastructure. That's Muldoonism. It is calling for infrastructure bonds, like Michael Cullen. That's Labour "me tooism". It is calling for private public partnerships, that MIGHT work in a handful of cases but best works when government gets almost entirely out of the way. It is calling for politically designating roads as "important" implying money spent on those roads is more important than money on others, even if others have worst congestion or safety problems, even if others return more bang for the buck in investment. That's pork barrel funding.

National's infrastructure policy is looking back, back to the age of Rob Muldoon and central planning, with taxpayers paying for a selection of follies and winners. It looks like the sort of pork barrel promises seen in US politics, when "strategic importance" overrides reason and analysis. Most of all it pushes out the private sector. It tells power, gas and telecommunications companies that they should avoid taking risks, the government will do it for them, and it keeps transport stagnated in the politically driven supply side government planning of the past. What's most disgusting is that when National was in power in the 1990s, it rejected most of this nonsense for good reason - now it's trying to buy your votes with your future taxes, and those of your kids.

Don't be fooled. This is virtually indistinguishable from Labour.

I'd have no difficulties being locked up

Nobody does of course, which makes it unusual that Lesley Caudwell does, which is why after being drunk and killing another woman while driving, she is only getting 12 months home detention and losing her driving licence for four years, according to the NZ Herald.

Yes she plead guilty and yes she is looking after her cancer stricken mother, though another woman is now dead - and Lesley Caudwell appears to be an alcoholic from the story. She was driving at 100 km/h when she went through an urban intersection killing 36-year-old Tara Groenestein.

So that's nice, Lesley Caudwell fears prison, has panic attacks and bipolar disorder. She should at least have a life ban from driving, but no she has a chance, and Tara Groenestein doesn't. She can be rehabilitated, and go do it again, and Tara wont. Lesley gets a year at home, and four years getting driven around by others or catching the bus - life's hard when you recklessly take someone else's life isn't it?

Wanna bet?

NZ Herald reports "National is brushing off suggestions it is not very different from Labour and promises voters that coming policy releases on tax, health, education, energy and law and order will clearly differentiate it from its rival."

So it's going to eliminate the top income tax rate or declare a tax free threshold?
So it's going to announce full tax deductibility for private health insurance?
So it's going to announce all education funding follows the child?
So it's going to announce National will advance new electricity generation by selling up to 49% of the government's three power companies by issuing new capital?
So it's going to announce that recidivist violent and sexual criminals will be denied welfare and custody of children?

Just a few ideas... none of them radical at all.

Then Key has the audacity to say "National believed in greater freedom, smaller government and less interference". Which is seen where John? Nice words but why are your policies involving LESS freedom, MORE government and MORE interference compared with the last time National was in power? In other words, Labour increases the role of the state and National basically rolls over and maybe throws a few crumbs, but doesn't roll things back to at least what they were like when National last governed?

Dr Cullen is more optimistic than me though - well in the sense that National will be a change. he says that National would lead the country down a fundamentally different path with "creeping privatisation of health and education". Well if you consider the path to privatisation to be as long as from here to the Moon and National's creeping at the pace of a snail.

Don't fret about the speed wobbles Michael.

The left and the Greens cheers the end of Doha

Charming isn't it? The left cheers the end of the Doha WTO trade talks, preferring powerful economies negotiating bilateral preferential trade arrangements than a multilateral agreement to open up trade in primary products (primarily in Europe, Japan and the USA), manufactured goods (primarily in the richer developing countries) and services (also developing countries).

The benefits Doha could have brought to the world have been estimated in a range from US$84 billion a year to US$574 billion. It could have helped ease world food prices by freeing up the production and sale of food across the globe, and eliminating distorting subsidies, tariffs and non tariff barriers that hurt farmers in countries from Argentina to Gabon to Thailand to New Zealand.

Idiot Savant cheers on the collapse because, as usual, anyone rich is to blame and the "poor" countries (most with far bigger economies than New Zealand) were the "victims". He supports India and China holding things up, even though what both countries wanted was to restrict imports of agricultural goods whilst demanding the US and Europe open up, and to essentially inflate the price of food for their own people.

He then quotes George Monbiot, as if he is an authority on trade and agriculture, whose article says Mugabe is right in "democratising ownership of agricultural ownership", of course Monbiot didn't say Mugabe did it right because "He has failed to support the new settlements with credit or expertise, with the result that farming in Zimbabwe has collapsed." that's right. So after stealing the land, the fact the expertise went with the former owners who left, and that credit can't be printed is irrelevant to Monbiot the imbecile. He argues that we would all be better off with smaller farmers and that governments should intervene to require this. You see to the left free trade strangely means subsidised agriculture - a distortion Sue Kedgley perversely argues.

Speaking of which, the Greens are quietly cheering the failure of negotiations that could have given the New Zealand economy a boost - because after all, producers of wealth are really beside the point for the Greens. The Greens BLAME NEW ZEALAND, for treating services as being commodities bought and sold (which they are) rather than the "integral public infrastructure", which implies not that the Greens want the services delivered the best means possible, but that it must fit the socialist ideology of nationalised services that are effectively subsidised. The WTO of course doesn't require that anything be privatised.

The Greens give cop-outs for the EU, USA, India and China. You see WE were pushing things too fast, because funnily enough demanding that trade in agriculture be at least as liberalised as trade in manufactured goods (which was substantially liberalised through the 50s-70s) is "lacking credibility". The only good chance New Zealand has at influencing global trade collapses and it is New Zealand's fault.

Well we know where the Greens stand -they wanted it to fail, supported our trade enemies and rivals against agricultural liberalisation. Lied or is just plain stupid about free trade, when New Zealand's position was even shared by the UN Secretary General. The Greens prefer that Europeans, Americans, Asians grow their own food, even with heavy subsidies and can dump their products on foreign markets and shut out imports, and New Zealand can go to hell because, after all, that's "democracy and community".

The Green view of "community" is of course not people choosing what they want to buy at market prices, but the state "protecting" consumers from imports, protecting domestic producers, and taking from taxpayers to support who they think is good for the community. When in fact the best representation of the "community" are people making their own choices, not the state taxing, subsidising, banning or compelling them to do so.

The Greens call for an alternative. However what does that mean? There is only one alternative to a gradual process of liberalising global trade, irreversibly, and that is state intervention. The case for liberalisation is clear, it allows the most efficient producers of products consumers want to buy to thrive, whilst those who are expensive, inefficient (that means wasting resources, something the Greens claim to care about) and produce products that consumers would not otherwise choose to fail or choose to invest in other goods and services. Trade barriers put up prices for consumers, they hinder the growth and prosperity of producers, and often involve taxpayers being forced to pay for goods and services they may not consume - meaning overproduction of that which people don't want.

The Greens are happy New Zealand's GDP will grow by 1-2% less thanks to the failure of the Doha round. At best they are confused on trade, at worst they are traitors to the New Zealand economy who speak approvingly of the French position, which more than any other has undermined the EU dismantling its obscene Common Agricultural Policy. I expect they will cheer the status quo and the creation of more privileged trading agreements that shut out New Zealand - and hope that the mainstream media might actually quiz the Greens as to why they don't want New Zealand goods to have open access to foreign markets.