Remaining tariffs to stay for now

National is replicating Labour's trade policy with this announcement "Import tariffs will remain at their current levels until 2015 at the earliest, Trade Minister Tim Groser and Commerce Minister Simon Power announced today."

Admittedly they are low, a maximum of 10% now (that early agreement to freeze them in the first Labour-Alliance coalition quietly expired with that coalition), and the government has said they are subject to negotiation at a WTO round, or free trade agreements. Apparently 80% of the value of all imports is tariff free (oh the horror say the Greens, I expect), and there is already 100% tariff free trade with Australia and Singapore. Other free trade agreements will see tariff free trade with Thailand, Chile, Brunei, China and the remaining ASEAN countries over the next

This is understandable, it provides a small amount of leverage. After all, without tariffs what does New Zealand have to offer in trade negotiations? Particularly in a world with a US President with precious little interest in trade liberalisation (yes Bush actually was a positive force on free trade compared to Obama).

However, this isn't the point. Much work in the 1980s and 1990s demonstrated that tariffs are a deadweight cost on the economy, by increasing the prices of goods for consumers. There are benefits in abolishing all tariffs on all imports. Tariffs make clothes, carpets, some processed foods, shoes and some other products more expensive than they otherwise would be, to protect a few businesses from real market competition.

While the government may pursue free trade agreements with remaining major trading partners, the likelihood is that the US will go nowhere under Obama, neither will Japan under the new government, whereas the EU and South Korea would shut out agriculture - which frankly is the main point.

Meanwhile, New Zealand could instead be a free trade zone that is an example to the world, rather than retaining a few puny tariffs that simply punish New Zealanders.

It's time to have some courage - and to meet the commitment New Zealand made, as an APEC member economy, to have free and open trade with other APEC nations by 2010.

That would be a start.

60 years of Communist led China

Yet China could hardly be more different today than it was when Mao declared the “People’s Republic”. It is remarkable how the Communist Party of China (CPC) can even begin to claim that the China of today is a natural evolution of Marxism-Leninism, Mao Tse Tung Thought and is progressing towards communism. The truth is that it happens to be the centre of power, with the armed forces, for a burgeoning market economy. Even China's official media now celebrates the 30 years of opening up.

China one day, publicly, will be able to reflect with a bit more balance on the first 30 years of that period. It was a period when Mao directly through oppression and indirectly through shockingly insane economic policies was responsible for the deaths of around 60 million. Mao famously said that he didn’t fear nuclear war, because if half of China’s population were killed, there would still be over 300 million left to fight.

Today he bears the not widely recognised title of being the political leader with the most blood on his hands. Blood because the “People’s Republic” became a place where sacrifice to the common good became the guiding philosophy, the cult of Mao the national religion, the Great Leap Forward that proved to be the exact opposite, and an insane level of mass mobilisation during the Cultural Revolution that saw China stagnate and nearly break down into civil war. It is curious that Western academic and radical interest in China was primarily during that period.

China today is an astonishing contrast. With Mao gone, and the Gang of Four of totalitarian thugs arrested, China got on its feet in the 1970s, opened up to the world and Chinese people were allowed to enter business, and have private lives, again.

The results have been astonishing, China now approaches the economic output of Japan, which it is about to exceed to become the second largest economy. Instead of famine and virtually universal poverty, China has a burgeoning middle class. Instead of regimented socialist realism, Chinese citizens are part of the global community, with now the largest number of internet users of any country.

That isn’t a China under Maoist regimentation any more. For all of the symbols of Marxism-Leninism and statements about communism, the truth about China is that it is an authoritarian capitalist state, which happens to be run by the Communist Party. It is becoming more akin to the authoritarian capitalism of Taiwan in the 1960s and 1970s under the Kuomintang that it is to Mao’s China, although there is undoubtedly less freedom than there was in Taiwan, China is not the totalitarian state it once was.

Media is under tight state control, but debate and discussion and criticism of current events is vigorous, as the sphere for what can be criticised ever inches wider. Education still indoctrinates into a positive history of the last 60 years, but the facts speak for themselves. China changed direction in 1978 and has not looked back.

China’s phenomenal growth has happened in spite of Mao and in spite of the Communist Party. Hopefully it will be less than 60 years before the Chinese people can more openly discuss the rivers of blood of the era (error) of Mao. Until there is a genuine free press and freedom of speech, China cannot fully progress and hold its leaders accountable, and fight corruption.

Meantime, it is no wonder, that despite the brutal mistakes of Tiananmen Square, Chinese people laud Deng Xiaoping, who surveyed years of purges to be the architect of China's transformation for the better. China's celebrations are full of communist imagery, yet celebrating a largely capitalist led transformation. Although, the authoritarianism still remains as the Daily Telegraph notes:

"The people have been told to stay away from the celebration of the People's Republic today; those whose homes overlook the route have been instructed not to hold parties. The government has banned the flying of kites in Beijing, an innocent pastime enjoyed in the city's parks by old men with weary smiles."

Note also the irony of the country that most resembles China's first 30 years, hailing its paymaster now. Many Chinese who visit North Korea today say it reminds them of life before 1976.

My hope for China is that its leaders continue to tell the people less what to do, and trust them more, and to make the grand step to make themselves accountable to the people directly, by allowing free speech, criticism and separating party, state and judiciary. Most think democracy is the key to unlocking it. It may be a consequence, but what matters most for moving China forward is freedom - and most of all, freedom of speech. No politicians should fear criticism so much that they lock people up for it. May it take much less time for the CPC to humble itself to make China really a republic for the people, as individuals, with rights. They are already halfway there.

Rudman shows why politics and transport don't mix

Brian Rudman has a cheek to call the Minister of Transport an ideologue when he is one of the true believers of the Auckland rail religion. Rudman doesn't call into question the "business cases" the ARC puts together on rail, or Mike Lee's strong leftwing political background in being mischievous towards the government before he is put out of a job.

Bear in mind a "business plan" for something that produces ongoing financial losses is a curious thing, and that scepticism from central government officials about the veracity of the ARC's work doesn't motivate Rudman to question his fellow true believers.

He damns the proposal for a Puhoi-Wellsford motorway. A project which may not be worthwhile, but only money to investigate it has been approved. Money paid for by road users of course. The same can never be said about capital expenditure on Auckland's railways. Rudman in a rather arrogant style dismisses the only major link between Northland and the rest of the country as a road to John Key's holiday bach. I guess he thinks nothing exists north of Puhoi.

Auckland's Regional Transport Committee, a hodgepodge of political interests, naturally wouldn't think so. Given it is advocating a billion plus underground rail tunnel in central Auckland, which would also run at a continued loss, it is clear it worships at the same church as Rudman and Lee.

Rudman doesn't understand why central government time and time again has said no to pouring taxpayers' money into Auckland local government's railway flights of fancy, except the last government. Maybe he should check his premises, these being the following key features of the religion he subscribes to:

- Auckland rail projects all result in ratepayers and motoring tax payers losing money year after year, but that's ok. It is for their own good, even if few ratepayers will see their property values increase as a result, and motorists wont notice a jot of difference to congestion.

- Auckland rail projects always fail conventional economic cost-benefit appraisal, compared to other public transport projects or road projects. That's because the wrong things get counted. People don't value saving travel time that much (they speed, use shortcuts and overtake because they are mean spirited), accident reductions aren't that important, and it is just really really special for people to ride by train instead of, bus.

- Just because the majority of Auckland rail users come from buses or wouldn't have taken the trip in the first place, doesn't mean it isn't worthwhile subsidising them at $4 a trip.

- It doesn't matter that 88% of Auckland jobs aren't in the CBD, where the railway is focused, it doesn't matter. Just ignore that. It will change when there is a railway, you'll see. Aucklanders who work elsewhere don't matter anyway, and we'll build more railways to serve them.

- It doesn't matter that 7% of Auckland trips are by public transport (most of those by bus), spending over a billion to get it to 15% (by 2051!) is good for you all (although 17% of trips are currently by foot).

- It doesn't matter that between 33 and 45% of peak trips to Auckland's CBD are by public transport, predominantly by bus as it is. It doesn't matter that this split is high by international standards.

- It doesn't matter how much money is spent on rail in Auckland, it must all be good, it must be good, even though the whole network was only worth $20 million to start with and wont be worth much more after $550 million is spent electrifying it. You couldn't sell it off for what has been spent on it, you couldn't sell it off for a quarter of that. However, in the church of Auckland rail, spending other people's money is a core sacrament.

- It doesn't matter that the impact on traffic congestion of Auckland rail is virtually nil. Traffic congestion is good. Car users are addicts and must be weaned off their addiction. They really don't want to drive, many don't really want to own cars, they just haven't learnt it yet.

Brian wants government to treat Aucklanders as adults. Brian, they would be better treated as adults if you let them spend their own money, respected the fact that most Aucklanders most of the time choose the transport modes that best suit them, respected the fact that most of the money you want spend on railways comes from people using roads, and respected the fact that this religion of yours is completely useless for the trips most Aucklanders do most of the time.

Maybe you should go to Penrose/Mt. Wellington, Auckland's second biggest employment hub, and ask workers there what the electrified railway will do for their trip to work?

Nationalising sports broadcasting rights

That is exactly what has now been done with your taxes, now that the government has approved taking your money so Maori TV can outbid TVNZ, TV3 and Sky (which owns Prime) in buying the free-to-air broadcast rights to the Rugby World Cup.

In short, the government has kneecapped two private companies, and its own company, in order to subsidise an already highly subsidised broadcaster. MTS gets $16.5 million of your money, through the ever accountable Te Puni Kokiri, in this year along just to broadcast. This is clearly a big piece of pork for the Maori Party. Given Maori TV is meant to exist to promote the language, not be a platform to broadcast sports, you do have to wonder about how this is compatible with it.

Of course, the strategy presumably is to get more people to get their TVs tuned into the channel, and more watching it, to boost the ratings, the advertising revenue and for that to have a follow on impact on ratings for other programmes. It's not enough that MTS gets over $300,000 a week in subsidies, no it needs the government to buy the broadcasting rights for it.

The NZ Herald reports the cost is NZ$3 million. It is, of course, worthless to you as you would have been able to see it anyway on whatever channel it is on (notwithstanding coverage issues).

Just another day in the life of a government that happily spends your money, like the last lot did, buying special interests when it feels the need to do so. Maybe Maori would have preferred the money as a tax cut?

Time to abolish NZ On Air

David Farrar has written apparently sympathetically about the idea of extending the state broadcasting subsidy body - NZ On Air - to other media. This was because Fran O'Sullivan proposed it, and Janet Wilson appeared to endorse it.

What nonsense.

As people consume media increasingly online, they are doing so without state subsidy (although Labour poured a little into subsidising infrastructure and National is keen to pour vastly more into it). In the meantime, it has never been cheaper or more accessible to produce video footage or recordings. The excuses of the expense of local production making it difficult to make "Kiwi Kontent" now lie in only one place - the salaries of those working in the sector.

NZ On Air is, in effect, a job subsidy programme. It pays for people to work in the film and television industries (and state radio), from actors to producers, directors, camera crew, editors and the rest. A labour of love for many.

The argument that without NZ On Air, national culture on broadcasting would suffer is only true if you believe that the people whose jobs are supported by this subsidy would do something else. Many wouldn't. The question really is, who should pay for something that those working in the sector say is so valuable?

Should you be forced to pay for programmes you don't watch and didn't ask for? No. Of course not.

Plenty of people provide online content and do not get subsidised. Of course a significant number of households choose to pay for TV they want, through Sky and Telstra Clear cable television. People want what those companies offer, and those who don't aren't forced to pay.

So who SHOULD pay? Those who are such loud advocates for it. The people who say it is good for you. However, most importantly, all those working in the sector should do their bit - and work for free.

How can the humble taxpaying public be expected to embrace culture they are forced to pay for, if so much of what they pay goes into the pockets of those proclaiming how good it is for them?

No. If you work in the NZ On Air subsidised sector and think it is so valuable, then you do it for free and ask people to donate for your time.

Otherwise, isn't it just another form of rent seeking?

NZ On Air should be told that no more money will be available for any future allocations. Existing contracts will be honoured, but that is it. Radio NZ will face a similar fate, but can start to tout for donations, subscriptions and sponsorship.

Suddenly, TVNZ, TV3 and Sky will find it cheaper to make New Zealand content, because a whole host of people, whose jobs were dependent on the taxpayers, have to cut their income expectations in the hope of working in the sector they love. The time has come to stop propping up this vestige of protectionism.