Behind the spin: Bill English edition

Today Bill English, or more accurately his office, sent out a press release which says,

"After-tax wages continue to rise faster than prices, Finance Minister Bill English says.

The real after-tax average wage increased 2.5 per cent in the year to March 2011, after accounting for all consumer price increases including food prices and the one-off rise in GST last October."

Now if you look at Statistics NZ's information release for the March 2011 Labour cost index,  which details how much wages have grown, it says that for the year to March 2011 the before tax wages grew 1.9%.

I do not have the information to back up English's claim of 2.5% but let's take it as true. The after tax increase to 2.5% will be due to the October tax cuts.

English says that this increase is rising faster than prices. This is false. Let's look at two sets of stats, the food price index and the consumer price index.

The food price index information release says that in the year to March 2011 food prices have risen 5.5%. Shocking, I know. Due to the increase in GST in October there is an extra increase of about 2.3% on top of what it would have been without it.

Now the consumer price index, which is what Bill English is referring to in his press release. This is where the changes in cost to consumer goods is measured. In the year to March 2011 the CPI has risen 4.5%. Hmmmm, what do we have here? A lie from Mr English.

So how can Bill English justify this claim he made? Here's where the spin is, after tax wages have grown 2.5%, this is true. CPI has increased 4.5% in the year to March 2011, however in the quarter to March 2011 the CPI has only increased 0.8%.

That's the spin, he doesn't explicitly state it but from looking at the figures the only way I can see his claims line up is to say that he is comparing the yearly wage growth to the quarterly CPI.

So there you have it, another politician twisting the facts to suit.

The Labour party, the ETS and the dairy farm.

It seems John Key has set about trying to destroy Labour's plan to bring farmers into the ETS in 2013.

Key says " the only impact of that will be to make our biggest exporter uncompetitive on a world scale and ultimately make New Zealanders pay more for milk, butter, cheese, meat and all the staples of a New Zealand diet".

Andrew Ferrier, CEO of Fonterra, says that this is not true as the milk and dairy prices are set by the international market.

I have two points to make on this, the first is that last year the average amount of tax paid by a dairy farmer was $1508, the second point is that this year Dairy farmers are set for a record payout of $8-$8.10. So, dairy farmers do not pay their fair share of tax (it is also important to keep in mind the levels of debt they may have and business expenditures because farms are very expensive).

Now here is where we must make some clarifications, so far I have only talked about dairy farms, whereas sheep and beef farms (or any other farm which produces meat) are very different and if Labour gets the chance to introduce this plan they must keep this distinction in mind.

The money raised from this will go to fund a 12.5% tax break for research and development. In order for this to work and gain public support Labour needs to do two things, firstly as the money is coming from an ETS tax it should go to develop technology that will directly benefit New Zealand environmentally, secondly Labour must make sure to explicitly state that dairy farmers cause a lot of harm to our environment (particularly our waterways) and that the R&D tax cuts will go to help alleviate this.

One particular question pops into my mind when I think about National's objection to this. Why are they really opposing this? Farmers are a big part of National's constituency and if they did support this they would very likely lose a lot of votes. It may very well be true that National does support this but because of their financial backing from the rural sector and the possible loss of votes, they just can't say so.

Is this just another case of the corporate interests driving our politicians?

I call him Gamblor, and it's time to snatch NZ back from his neon claws!!!

So it is budget day eve, tomorrow we will see exactly what it is this Government has in store for our economic future.

By all accounts we are going to see English present us with a budget that has many plans which will n0t take effect until after the election. It looks like John Key has said to Bill, "Hey Bill, do you think New Zealand likes me? I want to know but I'm afraid to ask. I know, you could write New Zealand a note and ask if he/she likes me." If New Zealand votes Key back in, we like the budget, if he doesn't get voted in Labour may reverse the budget.

So, what are we going to see tomorrow? Cuts, cuts, cuts is the short answer. For the first time in a very long time we will see a zero budget (no increase in spending), yet at the same time Key has promised us increases to health, education, justice and infrastructure. In order to keep spending the same over all yet increase it in certain areas they have to make big cuts.

Where are the cuts going to come from? Kiwisaver, student loans, working for families and "government departments" are where Key has said there will be cuts but beyond that we have no specifics.

Within the "Government departments" the chief executives are being left up to their own devices as to how they meet their targets. The most likely outcome is the slashing of backroom staff. What we keep hearing from Key and co. is that our Government departments are too big and inefficient, we must put more emphasis on the front line staff. In some cases this may be true though I have seen little evidence of it. In reality, the place where memorable, emotive five word catch phrases don't work, it is the back room staff who do the necessary work so that the front line staff can do theirs.

This Government is currently borrowing over $300 million per week and they plan to get us back in the black by cutting services and leaving it up to the private sector. Hang on a minute, wasn't it the private sector and de-regulation that got us into this mess?

So with Key and English placing their bets, how will it end? Red or black?

So it has come to this...

So it has come to this, Rodney Hide has resigned as leader of the ACT Party (though he will stay on as a minister) and I am unhappy about it. First off, Rodney Hide is everything I despise in a politician and over the last two and a half years ACT have been the tail that wags the dog. They have passed hard line policy against the wishes of the National Party, but of course National need ACT for the big policy changes that they can't pass alone. Act managed to pass the three strikes law despite the fact that wherever it has been tried around the globe it does not work, they passed the 90-day right to sack law against the research saying it will not work and against the wishes of Labour Minister Kate Wilkinson.

At the time of writing this Rodney has resigned and Don Brash is tipped to be the new leader though it has not yet been formally announced.

So why am I unhappy with this, well ACT have been poling below 2% and with all the strife they have been in over the past two years there was really no chance of them getting anyone but Rodney elected, and I was looking forward to seeing him getting his ass handed to him in the election.

I think what worries me most about Brash taking over is twofold, one: what kind of a prick would come out and state that he wants to be the leader of a party he is not even a member of, performing a coup de grace on that parties current leader within a week.

Secondly, and perhaps what worries me most is that Brash is a hard line, free-market, worshiping at the alter of Milton Friedman type politician, he will make it his job to implement these economic principals of a free for all, low tax corporate orgy when what we need now something else, something more linked to the brilliant Mr John Maynard Keynes (funny how the economist I like the most has a name very similar to one of the politicians I like the least).

Now lets try and figure this whole situation out a bit, Brash announced his interest in running ACT on Saturday, but we have no idea how long he has been in talks with the party.

The party may have even been wooing Brash for a while as Rodney has become a liability.

The quick and decisive nature of the deal puts Brash on the front foot, it makes him look like a strong leader and Rodney like a little bitch who will just roll over when he is told.

How much influence did the National party have on this? Brash is Key's predecessor and they are very likely still good pals.

Rodney seems to have gone along with this very easily, which leads me to believe that this decision has been in the works for some time.

So what does this all mean come election time? Brash is going to look good in theory, a strong man willing to take control and save the sinking ship, but how will he fare with the voters? I think we will see very little change in the poling up to the election, some will like him for getting rid of Rodney and some will resent him for the same reason.

I think because Brash is an old National leader, that National will do whatever they can to get him in, primarily running a weak candidate, a patsy if you will (and probably a list MP anyway), to give Brash the electorate win.

National know there is a slim chance of them governing alone but it is unlikely so they need to set up their coalition partners, and if they have to form a coalition they would prefer to do it with just ACT, so expect to see some compliments coming ACT's way from John Key.

We're seven months out from the election and already it's getting interesting, I can't wait for things to really heat up.

Update: turns out this leadership change had been in the works for a while, here's what the Herald has to say.

The hijacking of climate change

It could be very easily argued that Al Gore's documentary changed the world. It has also hampered the change that is necessary. An Inconvenient Truth labelled this problem as global warming, we now know this was wrong because what was really happening was the colds getting colder, the hots getting hotter, the winds getting windier and so forth. The change in title to climate change has put the movement on the back foot.

I have two major problems with the way the debate has gone thus far, the first is that it is a debate with one side saying "We have to use clean fuels or the climate will deteriorate further," the other side retorts, "The science isn't there to back up climate change, this change to clean energy will put people out of work and will cost too much."

I am on the side of the former, however I have a suggestion as to how the argument should be put forth. We should say, "If we are wrong all that will have happened is we have implemented clean energy, which we will need for when it is no longer viable to use fossil fuels. If you are wrong we are fucked."

My second point is that climate change is only half of the problem, we are not giving enough importance to the fact that what has caused climate change has also poisoned the hell out of the planet. If we implement change we can also begin to clean this place up.

If you are looking for a good book about how we can begin to combat climate change check out Thomas Friedman's Hot, Flat and Crowded.

Free speech requires a bit of common sense

Last weekend Tiki Taane was arrested and has been charged with disorderly behaviour likely to cause violence. He sang Fuck the Police when cops were doing a routine check through the bar he was playing at.

I believe, as I think it is safe to say many of you do, that the right to free speech must be upheld completely and in all likelyhood when this case gets to court on friday it will be dismissed pretty quickly.

Free speech is one of the tenets of our society that make it a great place to live. We have a society in which a painter can paint whatever he or she desires or a writer can say anything (though obviously there are still defamation laws in place which must be observed and upheld).

Tiki claims it was a tongue-in-cheek act and most cops would have seen it as this an laughed it off. This is where the problem comes in, a song such as this sung in the wrong place at the wrong time could well incite violence. By all accounts this was not one of those occasions.

It seems luck just wasn't on Tiki's side and he got the cop that took it the wrong way.

No one was really at fault here, the cop took things too far and Tiki's choice to sing this song was perhaps not a great idea but neither of them can be blamed, they both did what they thought was right.

I have to give the cop credit for coming back later to arrest TIki when the crowds were so as not to antagonize the situation further.

Free speech is essential to our culture but with it comes the need for common sense and the realization that what you say can have consequences.

Tax cuts for the rich will cost us all.

In Bernard Hickey's Herald column he illustrated how the National Government's tax cuts for the rich have not worked and the same problems of over investment in property still prevail.

Some of those tax cuts probably have gone into paying down private debt as was hoped but they have not lead to more investment in industry and infrastructure, just more property speculation even with the depreciation tax loopholes closed.

When will the Nats finally come to see that a capital gains tax is really the only way to fix this problem properly.

One of the things I really like about Bernard Hickey is that he is unafraid to admit that he was wrong, such as in the great column he wrote last year stating the final nails have been driven into the coffin of free-market capitalism.

On the subject of the rich and their greed Radio New Zealand published a story this morning on the issue of the "super rich" not having contributed anything towards the Christchurch recovery.

It 's the same thing that has been happening for the last 30 or so years, you give the rich tax breaks and they just want more without giving anything back when the should be helping out.

Favouring the rich in such a way just furthers the growing plutocracy of New Zealand, when you cut taxes for those who don't need their taxes cut you have to cut spending, and the people who need the Government services the most are certainly not earning enough to qualify for a five percent tax cut given out last year.

Then of course out finance minister comes out this week and says our low wages are good for us, but I think that deserves a post all of its own, so more on that later.

If we are looking for services to cut my first suggestion would be to pull our troops out of Afghanistan and get them into Christchurch.