The horrors of water privatisation are largely imaginary hysterics in the heads of leftwing politicians

What has been the biggest farce of the attempt to entrench an anti-privatisation clause in Three Waters legislation? 

The attempt by the Greens to entrench their policies in Parliament is not necessarily surprising for a party that regards private property, enterprise and individuals with scepticism, but state property, state enterprise and public servants with benign intent.  Eugenie Sage is hardly the sharpest knife in the kitchen from the Green caucus either.

Jacinda Ardern's claim to be ignorant of the proposal is also farcical. On the one hand is seems difficult to believe that one of the country's most centralising governments doesn't have a handle on the detail of policy of one of its most controversial proposals. On the other hand, if she doesn't then why not?

What virtually NO-one in the media has asked (certainly not RNZ), is why the fear of privatising water? 

You see it is precisely because of hysteria about water privatisation that New Zealand's fresh and waste water infrastructure was not substantively reformed (outside Auckland with Watercare Services) in the 1990s, and that hysteria was largely fuelled by the likes of the Greens in the form of the Alliance. The Alliance, along with the then "Water Pressure Group" (led by the completely loopy, and now late, Penny Bright) that painted a picture of doom and gloom from supplying water with user fees, in a commercial structure, that saw Auckland being the beginning and end of water reform.

It is thanks to muddled-headed Marxists like Eugenie Sage that water remained the most unreformed infrastructure sector, leaving it in the idealised world of "local democracy", "local empowerment" and of course largely staying far away from people paying for what they use, but rather taxing everyone so the biggest users of water (typically businesses) get subsidised by the smallest users (typically people living on their own). That's socialism for you.

Yet what does privatisation of water look like?  DIA's own report called "Transforming the system for delivering three waters services - The case for change and summary of proposals - June 2021" has a handy chart depicting the relative performance of ten English water companies, with government owned water companies in Northern Ireland and Scotland, and New Zealand council owned water providers. 

All of the private water companies outperform the others across a range of measures regarding customer service, and the conclusion of the report is:

• New Zealand has a long way to go, to catch up with the performance of more mature systems overseas

• We are at a starting position similar to Scottish Water, before the Scottish reforms. In the last two decades, Scottish Water has been able to close the performance gap and is now among the top-performing water services providers in the United Kingdom.

In other words, not only are private water companies in England performing better than the New Zealand council owned examples, but they have been outperforming Scottish Water - which has been the pin-up case study for the Ardern Government.

So let's be very clear.

Privatisation of water is not something to be scared of, in fact had it happened 30 years ago (not that it was even on the agenda) then there wouldn't be an infrastructure deficit in the billions for water.  Rates would be lower, yes you'd be paying a bill for water, but if it had followed the English model, there would be a water sector regulator capping the rate at which water prices could be increased, and ensuring that the natural monopoly water and sewerage companies had to meet key service standards.

Even the Government's own report acknowledges that it is PRIVATE water companies that perform well.

So what's actually wrong with private companies providing water infrastructure and services?

Why wont any Opposition MPs say there are benefits from letting the private sector take over?

Why do hysterical leftwing lightweights dominate this narrative and why do journalists never challenge it? (I mean it can't be because two of the major broadcasters are state owned can it?)

Voting age is about power

For all of the posing and posturing, most of the arguments to extend (or not extend) the size of the electorate to include 16 and 17yos come with a big tinge of self-interest around power.  It's been proclaimed that it is "discriminatory" that they don't get a chance to vote, but almost every argument extended to this can be applied to 15, 14 or even some 13 and 12yos.  Paying taxes doesn't give visitors or tourists a vote, and plenty who pay little to no taxes get to vote.

No, it's an exercise in emotionally laden performance from those in politics who get an advantage from having more fungible brains to convince to give them power. It's hardly a surprise that there is strong leftwing support for the idea, because it is widely perceived that most younger people (certainly the more politically active ones) are leftwing, because they are lured by the idea of more government, which can make good stuff compulsory, cheaper or free, and bad stuff banned or more expensive. This is, after all, the predominant philosophical bent pushed through state education and much of the media. 

Plenty on the right oppose it because they fear it threatens their ability to exercise power, because the ways they want to exercise power are not as marketable to young people when the prevalent culture scorns the values of conservatives and libertarians.

For me, it's rather simple. If there were to be an age when an individual is an adult, in terms of powers to contract, to be treated as an adult in the justice system, and to not have age based restrictions on what you can and can't do with your body, then that should be the age of adulthood.  At present it is a mix of 16 and 18, but few on the left think 16yos should face the same judicial treatment as 18yos, and almost none think they should be able to buy alcohol, be prostitutes and even buy tobacco. 

There is a curious cultural disjunction between those who want younger teenagers to vote, and demand they be given "a voice" for their often ill-informed, inconsistent views (and they have no monopoly on that), but also think they need "protection" from the consequences of their actions.  They aren't old enough to handle being intoxicated, to face adult court and prison if they initiate force against others,  and although it is often cited that they can "have sex", it's a serious criminal offence if anyone takes photos of them doing so or even possesses them, even with their consent.  So many who want to give them the vote also deem them vulnerable.  So which is it?

Consider that almost all of the same Parliamentarians who are supportive of letting 16yos vote, think they need protection from advertising of alcohol on TV (that so few of them watch), but also don't think they should be permitted to buy cigarettes (because they aren't deemed fit to make decisions about their own health).  They do think they should be able to apply for a firearms licence and drive though, so work out the philosophical basis for that (clue - there is none). 

So let's not pretend this is about young people having a "stake in their future" because the politicians eager for their votes don't think young people can make competent decisions on what they ingest or what photos are taken of them.  

If politicians want to argue that 16 should be the age of being an adult, then all well and good, let it be and let them accept the consequences for what this means, and they can vote.

Otherwise it's just a call for "more votes for my side, to help me do what I want to you all"

After all, if you don't trust young people to make decisions about themselves, or take the full legal consequences of their actions, why do you trust them to make incremental decisions on who should have power over others (politicians)?

Who cares about one-person one-vote, when you can have one vested interest, one-vote

The so-called "Review into the Future of Local Government"was quite a review.

It didn't review whether local government is needed, and if so, what it should and should not do.  No, you see the philosophy of the Labour Government is that local government is essential, and should be empowered to do whatever "The Community" (Councillors) think it should do.

The review sees the problems in local government not a lack of confidence that local government is competent in providing services (e.g., to not provide a basic service without making the public sick) so that government routinely takes it off them, nor that it has played a major hand in creating the housing crisis (by making it difficult and expensive to build new housing), nor that is has played a major hand in limiting competition in supermarkets (by consulting with incumbents about whether a new one should be built in an area, in competition with it), not even how often local government chases totemic projects that are unnecessary.

No, you see the Ardern Government is concerned about:

• Low levels of voter turnout (which largely reflects that the public thinks local government is boring and their votes make little difference)
• There is limited representation and undervaluing of Hapu/Iwi and Maori as a critical partner (heaven knows why unlimited representation would be a good idea, and how is the undervaluing calculated objectively? Is it just a feeling?

That literally is what the executive summary says is the "problem" (page 08) (PDF) as beyond that is a statement of the solution. 

There are nine (!) sections of recommendations, which is apt for a government keen on bureaucratic bloat.  They are separated into the following sections, which I'll summarise:

• Revitalising citizen-led democracy:  This is mostly about consulting more, with more community engagement.  However, it also includes "chief executives to be required to promote the incorporation of tikanga in organisational systems".  This is cultural reform of local government, it isn't just using tikanga as part of the consultative process, but it is including it in how local government runs. Quite what this is meant to achieve is unclear, but given the problem definition is so narrow, it appears to address the second problem.  What actually matters though is that the problem with local government is NOT consulting with the public, indeed nothing stops homes being built, supermarkets being built, transport infrastructure being built and anything been done in a city more than consultation.

• Tiriti-based partnership between Maori and local government:  This is a fundamental, quasi-constitutional view that sees local government as not simply representing local residents and responding to their needs, demands and issues, but introducing co-governance so Hapu/Iwi get equal say in what happens in local government, compared to mere voters/residents.  It goes beyond consultation and engagement, to include "genuine partnership in the exercise of kāwanatanga and rangatiratanga in a local context and explicitly recognises te ao Māori values and conceptions of wellbeing". Genuine partnership, after all, means sharing power and this in relationship to government and self-determination.  It seems unlikely that local government could go against Hapu/Iwi in any decisions in this context.  It also seems unlikely that this could see local government taking a perspective that values more individual freedom, choice, competition and property rights, rather than one that values the exercise of power of numbers over individuals and their property and businesses.

• Allocating roles and functions in a way that enhances wellbeing:  This is a serious level of waffle, largely because the term "wellbeing" is now the catch-all term from socialists to prioritise people's feelings over property (particularly other people's), freedom, economic efficiency and individual rights.  The main recommendation here is that central and local government review the functions of each level of government based on the concept of subsidiarity (a concept that would support individual freedom and choice if bureaucrats and politicians didn't think they knew best), local government capacity to "influence the conditions for wellbeing" and for te ao Maori values to underpin decision-making.  Frankly, given its record, the less allocated to local government the better.

• Local government as champion and activator of wellbeing:  This is basically a recommendation to grow local government to spend more of your taxes (of which there would have to be more), making you feel better. It is a thoroughly statist view that claims local government can be some sort of innovator and experimenter in enabling "social, economic and cultural and environmental wellbeing".  This is so completely ludicrous that is deserves to be laughed at. Local government ran electricity distribution for decades and hardly innovated at all.  Local government can't even contract bus services to pay by EFTPOS, unlike the entire retail sector has done so for over 20 years, nor can some of them even manage to penalise bus operators for cancelling services.  The greatest innovations have come from technology and processes introduced by the private sector, and the idea that the great fist of local government can slam down on a city and innovate across all aspects of people's lives is the fantasyland of hardened socialists in the local government sector.  The main innovation local government can engage in is to get out of providing much of what it does, and get out of the way of people and businesses to build homes, businesses and voluntary organisations, and grow their communities through their own initiatives.

• A stronger relationship between central and local government: This is code for "give us more money we are not accountable for raising from taxpayers", but the recommendations are basically a need to study more on "building on the current strengths and resources" and to "support genuine partnership" with "opportunities to trial and innovate". Well for over 30 years central government has been taxing motor vehicles using local authority roads and raising enough money to pay on average half the cost of maintaining and improving those roads.  That partnership exists because central government told local government it had to stop running its own works department monopolies and run professional asset management over its road network.  There is no need for a "stronger relationship", as local government doesn't need to do more!

• Replenishing and building on representative democracy:  The one recommendation that may make sense is to make the Electoral Commission run local elections, but the rest is a wishlist of activism around local elections. Introducing STV as a voting system for local government doesn't get me excited one way or the other, but let's note that with low voter turnout, a more complex electoral system doesn't actually deliver much.  Lowering the voting age to 16 is a standard leftwing policy primarily because they know they are more likely to benefit from persuading young minds of the sort of wellbeing nonsense seen in this report, although by no means are there recommendations to give 16yos the legal status of adults across the board (e.g., criminal law, alcohol consumption), and why not 14yos or 12yos? A four year electoral term in the absence of one for central government is simply bizarre.  Why does being able to change local government LESS frequently, BUILD on representative democracy?  No, it's about giving councillors more time to do stuff without being challenged.  

• Equitable funding and finance: As with all terms with an Orwellian element to them, you should always run a mile from the word "equitable", because it always means anything but.  There is some merit here, in that central government should taken into account with all of its decisions, its impact on local government (which should actually be ratepayers and residents). However the rest is just putting the hand out for more money.  It wants "co-investment" by central and local government to meet "community wellbeing priorities" (!).  It wants central government to tax people more to create a slush fund called the "intergenerational fund for climate change" which would no doubt be tapped to waste on pet projects for local government to virtue signal about (given that almost all sectors local government is involved in are already covered by the Emissions Trading System).  The perennial desire for local government to get new means to tax, while retaining rates are there.  This is a manifesto to take more money from you, and isn't remotely "equitable", but reflects desires from local government to do more without being able to convince ratepayers to let them force them to pay more. 

• System design: Central and local government are apparently meant to work together to create a Tiriti-consistent structural design for local government (whatever that means) to give effect to a bunch of design principles.  It wants more "shared services" and a "digital transformation roadmap" for local government, again none of this is based on achieving actual outcomes based on performance.

• System stewardship and support:  The recommendation here is that government decide on the best form of stewardship, being the way by which local government is responsible for what it does and does the best that it can do. However, why is this a problem? Is it because local democracy is a very poor incentive on local politicians to make wise decisions when it is about spending other people's money (especially money borrowed from people who can't vote yet) and about other people's property? Could it be that the best way to manage this is to keep local government to a minimum of "public good" elements that cannot be efficiently or effectively provided by other entities? Isn't this just an admission that local government is bad at making important decisions on long-term issues?

Of course the key issue of this report is that it recommends that mana whenua sit on local councils, with full voting rights.  These representatives would have the same power as elected councillors, except of course, residents/ratepayers would have no power to remove them (except for those few that may be involved in mana whenua processes to select their councillors).

I don't think much of liberal democracy, as it is not very effective at protecting individual rights, but it does have one useful function, in that it provides an effective process to remove politicians if enough people are fed up with them.  This proposal destroys this for mana whenua representative.  It institutes the principle that you can be taxed, regulated and governed by people you have NO say in being selected or being removed.

Sure you probably think you have little say in who is in local government, but you certainly do have a say, even if those you voted for did not get elected.  You will not do so in Ardern's "new democracy" as described by Willie Jackson.

And if this is good enough for local government why is it not good enough for central government? After all, the nationalist MP for Waiariki Rawiri Waititi has already commented on his opposition to liberal democracy.  Now this is a sentiment I have some sympathy for, because majority rule does NOT protect individual rights.  If Waititi and indeed the Labour Party simply wanted to set Maori free to live their lives as they see fit, and largely govern themselves (within a framework of rule of law that protected individual rights including property rights), I would be in favour of that.

However there is no possible way that the New Zealand Labour Party wants to let people live their own lives as they see fit in such a way.  The review of local government is about growing local government, it is the idea that wellbeing comes not from what individuals, families, colleagues, friends, communities, businesses and societies do, but from what government does - and the main tools of government are ones of coercion by taxation (and dishing out financial favours to preferred individuals and groups) and regulation.

The Government should, of course, throw this report in the bin, and hopefully if there is a change in government that is exactly what will happen.

There is a desperate need for a review of local government that will decide what roles and responsibilities it should have and what ones should be taken away from it, and that would do much more to enhance wellbeing, by enabling more housing to be built, more businesses to be developed, more competition in retail and the economy, the environment and society to grow with local government being barely visible.  It may manage some parks, have a fast, efficient planning permitting function, deal with neighbourhood noise and pollution complaints, and ensure rubbish is collected.

In the meantime though, the idea that elected politicians should be replaced by mana whenua representatives with MORE power to increase rates, establish new taxes and pass bylaws (and ban property development) is just a form of petty nationalist authoritarianism eating away at an already flawed system.

Christopher Snowdon: Liz Truss didn't break the economy, it was like that when she found it.

Christopher Snowdon writes how the market response to the Truss/Kwarteng emergency budget showed that the emperor has no clothes, and it is a sign that the era of big borrowing is at an end.

Some choice quotes:

Long before the pandemic began, I was troubled by emergency economic policies - ultra-low interest rates and money printing - being in place for a decade without any emergency to justify them. This led to a great deal of inflation, but since the inflation had mainly affected the housing market and stock exchange and had made the rich richer, it didn’t seem to count. Then, in 2020, we had an actual emergency which seemed likely to push us over the edge.

The so-called "libertarian" budget included massive subsidies to cap the price of energy.  The cut in income tax and reversal of a rise in national insurance were hardly enormous measures, and freezing corporation tax (rather than implementing a rise that was indicated under Boris Johnson) is also hardly libertarian, but the word has stuck. 

Of course there should have been measures to liberalise the economy, and none eventuating except a removal of the ban on fracking - a measure that wouldn't achieve much for some time. 

Some saw the mini-budget as an invitation to the Bank of England to raise interest rates. If so, it was an invitation that was declined. Some thought the mini-budget implied that there would be spending cuts, but Liz Truss insisted that there would be none. Instead, Kwasi Kwarteng took to the airwaves to announce that he intended to make more unfunded tax cuts.

Previous governments had at least paid lip service to balancing the books. The Truss administration didn’t even bother pretending. The bond markets, seeing no plan for growth and no sign of an interest rate rise, naturally demanded a greater return on their investment. 30 year yields nudged toward 5 per cent. The pound fell to a low of $1.07. Pension funds that had been making what the Economist describes as ‘obscure derivatives bets’ found themselves short of liquidity thanks to higher gilt yields - although they insisted that they were not short of capital - and so the Bank of England stepped in to lower yields by buying gilts....

Liz Truss was dealt a bad hand and played it badly, but despite the broadcast media spending a fortnight treating every day as if it were Black Wednesday, she did not ‘crash the economy’, as the Labour Party has claimed. The economy was already in pieces and there is much worse to come. Goldman Sachs has already taken 0.6 per cent off the UK’s GDP forecast for 2023, partly because of the rise in Corporation Tax.

....

Interest rates have existed for thousands of years for good reason. They are, to quote the title of Edward Chancellor’s excellent book, the price of time. Or, if you prefer, the cost of impatience. They should provide an acceptable return to lenders and should certainly be above the rate of inflation. The international experiment with very low interest rates has, unsurprisingly, led to governments, businesses and individuals becoming heavily indebted. As people take on more debt, they become increasingly vulnerable to interest rate rises. This leads to a doom loop in which central bankers are reluctant to tackle inflation because interest rate hikes will make people poorer and so inflation persists, making people poorer.

Even in the absence of inflation, interest rates couldn’t be raised because it would ‘wreck the recovery’. An economic recovery so feeble that it cannot withstand an interest rate of one or two per cent barely deserves the name. The economy had become like an alcoholic. Every drop in interest rates and every bout of money-printing made it feel better in the short-term, but they made the addiction worse and was slowly killing it. It was hair of the dog economics.

The left have already started wailing about ‘Austerity Mark 2’, but they are now going to have start telling us which taxes they want to increase to pay for their spending priorities. They may find that they get a rough reception. It is notable that almost the only thing left from the mini-budget is the scrapping of the Health and Social Care Levy. Even Labour didn’t want to keep it. It’s unpopular. Fine. But if you can’t get the public to support a tax specifically earmarked for the NHS - the one thing that normies say they are happy to pay more tax for! - good luck raising taxes for Net Zero and foreign aid.

The MMT loonies will say that the recession could have been avoided if the Bank hosed us down with one more burst of QE. Everything looks like a ‘political choice’ if you ignore trade-offs and consequences, but the number of practical options available have narrowed considerably. As Janan Ganesh says in the FT today, Labour are not going to enjoy governing without a magic money tree to shake.

Hair of the dog economics has had its day. The era of big borrowing has come to an end. We have run out of road. It would be unfortunate if Liz Truss has given economic growth a bad name because it really is our only way out of the woods....

Does Winston really care about the constitution or is it baubles as usual?

So Winston Peters is doing what he usually does, after spending two years in the political wilderness he times a revival to tap the issue of the season, that the other parties aren't doing well at tapping, so he can ride his way back to Parliament with a bevy of people nobody has ever heard of before.

This time it is to tackle co-governance with Iwi, and the embracing of the Treaty of Waitangi in ALL aspects of central and local government.  Now I have some sympathy for that position, as important as it is to consult with Iwi and for Maori to be adequately represented in Government, New Zealand clearly achieves that, with Maori represented in both Parliament and local government on the basis of one-person, one-vote and a general consensus among the two major parties about the importance of including Iwi in consultation on issues affecting them. Winston is trying to do much more than address overreach of that.

He wants to tackle non-Maori fear of Maori cultural and linguistic growth, and dominance, whether it is seen in Maori phrases inserted into the ever declining audiences for television news (which frankly is a market decision, you can just switch it off), or the inclusion of references to Te Tiriti in more and more laws and government programmes.

Winston can tackle this because he is much more obviously accepted as being Maori (David Seymour is not so seen). He also knows he can guarantee that TVNZ, Newshub, RNZ and Stuff at least will seek to paint  HIM as being divisive, even racist and he can run rings around the fact he's spent his political career saying the media is unfair to him.

Winston has a couple of problems though:

1.  There is little evidence Winston did ANYTHING when in power, the three times he was a Minister, to slow down Maori nationalism. There was little of it to respond to when he supported National from 1996-1998, but from 2005-2008 and 2017-2020 under Labour, what evidence was there that Winston Peters ever did anything to push this back?

2.  He put Jacinda Ardern into power, notwithstanding that National clearly had the plurality of support as the major party in the 2017 election. It is disingenuous for him to be able to credibly claim that he knew NOTHING of the Maori nationalist aspirations of the Labour Maori caucus (or indeed the Greens, who were part of that coalition and are even more adamant of claims of Maori nationalist/statist based self-determination). However it is entirely possible Winston just took his portfolio, advocated for his pork-barrel Provincial Growth Fund, and the let the two parties on the left get on with it all. 

It might be welcoming to some to have Winston talk in a way that so much of the media would deem politically incorrect, but as he was with immigration, most of what he says reflects little about what he does. 

His other problem is that ACT not only polls but has multiple MPs to occupy this space. It might be notable that Winston talks mostly about the artifacts of the Maori cultural renaissance and the media expressions of it, rather than the more disturbing undermining of liberal democracy, such as granting Ngai Tahu a seat on Environment Canterbury, to sit alongside elected members with the same powers, or the efforts of Rotorua District Council to gerrymander Maori local authority seats that would represent a fraction of the number of non-Maori voters.  

There is a profound awkwardness of politicians, especially non-Maori ones, talking about these issues, because of a lack of philosophical conviction around what constitutional arrangements should exist for a free liberal democracy, and a lack of willingness to engage with views that claim that the underlying cause of poor socio-economic outcomes for Maori is not simply a legacy of colonialism and subsequent non-Maori settlement. The willingness of some Maori nationalists (especially now in Te Pati Maori) to go down the path of "it's us vs. them" should frighten most people, and if Winston Peters is more effective in having that debate that David Seymour (which I think he is), then so be it.

But don't expect a vote for NZ First to deliver anything transformational.  From 1996-1998 NZ First was a brake on a National Government continuing with free market liberal reforms, but not a stop. Similarly, from 2005-2008 and from 2017-2020 it was a brake on Labour Governments continuing with growth of the welfare state, but put a foot on the accelerator of economic nationalist interventions.  It was not a brake on Maori nationalism, because the policies now being advanced by the Government had their genesis in 2017-2020 (or earlier in the case of He Puapua).

There are reasons to be sceptical about ACT achieving much in this space, or National, but these pale in comparison to the reasons to be sceptical about Winston Peters.