Slamming the Budget Slammers

I really don’t understand why people are getting so worked up over the cut in contributions to the super fund.

I think the hype is largely made by Labour and the left wing factions of the media who will take a contrary position irrespective of common sense. It doesn’t make sense to borrow at an interest cost of over 5% p.a. to invest in the super fund which is made up of more risky investments – which have produced a negative return to date! Furthermore, if we had a credit rating downgrade, this borrowing cost would rise further. No rational person would do this in their own daily life, why do we expect the government to? I believe there is more risk to pensioners if we borrowed to invest now, and the markets carried on going south. Any supposed future “hole” in the super fund could just as easily be funded by debt in the future as it can today. At least we won’t have the interest cost until such a time to contend with. Listening to Labour leader, Phil Geoff, on The Breakfast show last week, I think we can all thank our lucky stars that he is NOT in charge. CLICK ON THE TITLE OF THIS POST TO BE TAKEN TO OUR BLOG, TO POST YOUR COMMENT!

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Water race referendum set for July

ODT: Otekaieke water-race consumers will vote in July on whether the scheme should be transferred into private ownership from the Waitaki District Council.

The race supplies about 75 people with water for irrigation and does not supply drinking water.

A private company of farmers, Otekaieke Water Company Ltd, approached the council earlier this year about buying the 10km water race, its intake and reticulation, to provide more water for irrigation.

The council agreed to the change in ownership, subject to a binding referendum which is being conducted by the council's electoral officer, Joanna Firman.

If a majority of votes supports the proposal, the council will transfer ownership to the water company.

If a majority does not support the proposal or the vote is tied, the council will retain ownership of the water race.

The company wants improvements to the race, but the council has said it is not prepared to allocate resources for that.

The race also does not naturally fit with the council's business or priorities.

The company plans to invest a considerable amount of capital into the scheme to provide a more reliable water supply.

The system has about 10km of open water-race.

The water comes from a weir in the Otekaieke River above the Kenmore Homestead and shares parts of the Upper Waitaki Irrigation Scheme in its lower reaches.

If the proposal is successful, the water company plans to retain the first 2.5km of open race, build a new dam and bypass system, and install a reticulated, piped system for irrigation and stock use to all the existing stakeholders over the remaining 7.5km.

All legal fees and costs involved in the referendum and the transfer of ownership would be paid by the water company, Mrs Firman said.

She said the area for the referendum covers properties at present paying an Otekaieke water-race district rate, class A and B.

All ratepayers and electors enrolled as residing at properties in the poll area would be sent information about the poll in the next few weeks.

Voting documents will be posted out in July.

Anyone living in the poll area who is not enrolled to vote can register by June 12 through the Electoral Enrolment Centre, any Post Shop or www.elections .org.nzdavid.bruce@odt.co.nz

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Wanganui spelling favoured by 77 per cent - referendum

Wanganui mayor Michael Laws is buoyed by the outcome of a referendum on whether an H should be added to the spelling of the city's name.

The question was put to residents as the Geographic Board seeks feedback on a proposal to amend the current spelling.

Mr Laws says the result is decisive, with around 77 per cent of those who voted happy with the way things are.

"There was such a huge turnout, it clearly indicates the will of Wanganui. I think it has now provided a real quandary for the activists and for the New Zealand Geographic Board who are determined to basically subvert democracy."

Mr Laws says politically the results have enormous power.

"It would be an extraordinarily foolish individual or organisation that ignored the will of Wanganui over the spelling of our city."

- NEWSTALK ZB

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New taxation system being promoted

A very interesting article by economist Neville Bennett about a new proposal for taxation. Some refer to it as Geoism if you want to Google it for more information.

The merits of Land Value Tax; lessons from Hong Kong

By Neville Bennett

We need a more efficient and equitable tax system compatible with economic growth and productivity. In our mobile society it seems reasonable, a priori, to move taxation from relatively mobile bases like income and profits to relatively immobile bases like land, rent and consumption. Such a switch rewards the enterprising. A land tax could be a necessary part of a better system.

My space limitation means that the argument will lack convincing data, and I have had to excise counter-arguments. I also recognize that its implementation would be fraught with difficulty. My purpose is to sketch an idea at a time when Government is reviewing tax.

I saw the merits of the tax while working in Hong Kong and seeing the benefit of free-trade, a small state and low taxation. I taught Japanese economic history and became convinced that Japan’s modern economic growth was founded on a vibrant agriculture and a land tax.

Ideologically I respected increasingly the nineteenth century liberal ideology of Mill, Ricardo, Bentham, Cobden, Bright, Smith, and Macaulay. They seem timeless. I give typical quote from Macaulay about “pests to society”….a prying, meddlesome government which intrudes itself into every part of human life, and which thinks it can do everything better than anyone can do for himself” or J. S. Mill warning against “the great evil of adding unnecessarily to the power of the state.”

Mill insisted on a land tax because “the land of every country belongs to the people of that country.” Ideally the state would own all land and lease it out, getting the unearned component of price rises. Hong Kong adopted Mill’s recommendation.

Henry George also advocated a land tax in “Progress and Poverty” (1879). George noticed in California that poverty increased as land prices increased. He advocated a tax on land value but not on improvements, as that would destroy the natural right to the fruit of labour, and, “act as the spoliation of industry and thrift.”

The tax suggested is a land value tax (LVT). It taxes all land, urban and rural (except parks and reserves). It does not tax improvements.

Revenue

LVT is excellent source of government revenue. It can raise substantial sums without damaging the economy. Hong Kong raises about 38% of its revenue from a land tax. It is usually in surplus, and imposes very low taxes in other areas. When I lived there, the threshold on income tax was very high and the maximum was about 12% (by memory). Singapore and Taiwan also operate land taxes.

It broadens the tax base and produces very predictable returns in contrast to more volatile taxes made on profits. The supply of land is very inelastic, and its value does not fluctuate so much if the speculative element is removed. It is also easy to collect.

The authorities need only registers of owners and a valuation of the land. It is hard to evade, because land cannot be hidden, nor transferred into tax havens abroad. The cost of collecting some taxes is very high, but a land tax is a low cost tax. Because LVT is cheap to impose and a reliable revenue raiser, it can reduce the need for other taxes. A LVT mitigates the case for a capital gains tax.

A land tax…

• Reduces speculation because it imposes a holding cost. This should have the effect of returning land to productive use. Wikipedia suggests it reduces urban sprawl because it reduces the number of vacant lots in a city. An example is Harrisburg, Pennsylvania, which has used a land tax since 1975.

• Deters bubbles. The existing structure in New Zealand encourages speculation. Land gets bid up to levels which predicate very low yields. The boom and bust scenario is very damaging to the economy. A land tax is a factor for stability.

• Is easy to collect. The authorities need only registers of owners and a valuation of the land. It is hard to evade, because land cannot be hidden , nor transferred into tax havens abroad. The costs of collecting some taxes is very high, but a land tax is a low cost tax.

• Is so cheap to impose, so reliable in producing the goods, that it can reduce the need for other taxes.

• Diverts investment from unproductive property activities. These are directed in large part to making capital gains or rent. “Rent seeking” is disapproved of by economists because it extracts uncompensated value from others without making contributions to productivity. Rent is not payment for a lease, in this example, but derives from Adam Smith’s division of income into wages, profit and rent.

• Would lower the price of land. An ideal rate forces land to be used productively, and profitably. This will lead to a lower value because the speculative component of the land’s value is removed. The speculators would reduce their land holdings and land would be used only for economic activities. Cheaper land would allow more able farmers to enter the industry. (more later)

• Lower land values should exert downward pressure on urban rents. If tenants are already paying a high proportion of their disposable income on rent, a low rent would, others things being equal, have the effect of increasing their net wages. Higher wages could stimulate both higher saving and consumption.

• Improves the equity in a taxation system. Some people, like children, students and beneficiaries, generally have little wealth and land. A land tax would affect only the better off in those categories.

• Encourages investment and productivity. At present a land owner is taxed only on income (less expenses) arising from land. There is no particular incentive to use land productively. Land- owners, including life-stylers, can merely lightly stock their land and wait for capital gains. Capital gains in the South Island, 1990-2007 averaged 17% a year (NBR May1).

• Induces efficient sized units. New Zealand’s farmers often hold more land than they need for production. A surplus is attractive because increased size increases capital gain. A land tax encourages greater intensity of farming, with more labour and capital per unit. It frees up land for new entrants.

• Encourages improvements in order the maximize returns.

Conclusion

It is inefficient and inequitable to avoid taxing land. Land taxes are avoided, however, by political systems which have a large landed interest. In the UK it was sought by the liberal party, with powerful advocates like Lloyd George and Winston Churchill, but would never have passed through the self-interested House of Lords.

—————

* Neville Bennett was a long-time Senior Lecturer in History at the University of Canterbury, where he taught since 1971. His focus is economic history and markets. He is also a columnist for the NBR where a version of this item first appeared.

neville@bennetteconomics.com
www.bennetteconomics.com

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NZ Dunce of the World

New Zealand was ranked as the worst country in a global study of investor-friendly practices by Morningstar Fund Research. The survey looked at how countries safeguard the rights of fund investors.

New Zealand’s score of D- was the worst of all 16 countries surveyed, behind such countries as China, Taiwan, Italy, Hong Kong and Spain.

This effectively makes New Zealand the world dunce when it comes to protecting investors, echoing what EUFA has been saying for years.

Morningstar’s survey was based on criteria of investor protection, transparency, fees, taxation, and investment choices.

Investor Protection
Morningstar said, “New Zealand’s grade in the area of investor protection is D-minus, and the country has the lowest score among all countries in our study.”

The report was highly critical of New Zealand for having an ineffectual Securities Commission.

Morningstar also noted that New Zealand law requires custodians and fund managers to be different entities, but observed that they can be affiliated firms both owned by the same parent, thus lacking complete independence.

Transparency
New Zealand also scored a D-minus for transparency in prospectus and shareholder reports, the lowest score among all countries in the study.

“Sales contests and favoured compensation of particular funds imply that the fund industry’s sales force lacks independence and is more likely to promote funds for self-interest rather than the best interest of the investor,” Morningstar says.

Morningstar researchers were also critical of New Zealand for not forcing mutual funds to provide a full disclosure of portfolio holdings.

“Australia and New Zealand are the only countries in our study that do not require portfolio holdings disclosure. Where the regulation is lacking, the mutual fund industry does not make up for it with voluntary disclosure,” Morningstar says.

Taxation
Morningstar also handed out a D-minus for taxation, saying New Zealand’s dividend and capital gains taxes are high, and there is no tax incentive for long term investing.

Overall

The USA topped the survey with the only A rating:

United States: A
China: B+
Italy: B
Japan: B
Netherlands: B
Taiwan: B
Canada: B-
France: C+
Switzerland: C+
United Kingdom: C+
Australia: C
Singapore: C
Germany: C-
Hong Kong: C-
Spain: D
New Zealand: D-
If you would like to read Morningstar’s full report, click link text.
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California, Out of Money, Reels as Voters Rebuff Leaders

New York Times article very critical of direct democracy in California.

LOS ANGELES — Direct democracy has once again upended California — enough so that the state may finally consider another way by overhauling its Constitution for the first time in 130 years.

Gov. Arnold Schwarzenegger returned home from a White House visit on Wednesday to find the state dangerously broke, his constituents defiant after a special election on Tuesday and calls for a constitutional convention — six months ago little more than a wonkish whisper — a cacophony.

As the notion of California as ungovernable grows stronger than ever, Mr. Schwarzenegger, a Republican, has expressed support for a convention to address such things as the state’s arcane budget requirements and its process for proliferate ballot initiatives, both of which necessitated Tuesday’s statewide vote on budget matters approved months ago by state lawmakers.

“There could not be more of a tipping point,” said Jim Wunderman, chief executive of the Bay Area Council, a business group that moved forward on Wednesday with plans to push for a constitutional convention. “We think the interest is going to grow by orders of magnitude now.”

More immediately, Mr. Schwarzenegger met with legislative leaders to begin the painful process of slashing state spending after voters rejected five ballot measures intended to balance the budget through a mix of tax increases, borrowing and the reallocation of state money.

The only ballot measure to succeed was one that prevented lawmakers and constitutional officers from getting raises in times of fiscal distress, a sort of chin-out electoral scowl by voters, who will now probably see their health care systems, schools and other services erode. On Friday, the state controller, John Chiang, and the treasurer, Bill Lockyer, are expected to appear before lawmakers and warn them that the state is nearly unable to pay its bills.

With the special-election results in, the California Citizens Compensation Commission moved Wednesday to impose an 18 percent pay cut for all elected officials, while the Bay Area Council began its campaign to rewrite the Constitution to address some of its more crippling rules and give more financial control to localities.

The constitutional effort was immediately embraced by the San Francisco mayor, Gavin Newsom, a Democrat who is a 2010 candidate for governor, and some political experts suggested that the movement might be perfectly timed.

“The majority of Californians say the state is headed in the wrong direction,” said Mark Baldassare, the president of the Public Policy Institute of California, a nonpartisan polling organization. In a March poll of 2,004 residents, two-thirds said the Constitution should be altered, Mr. Baldassare said.

“I think that we could be at a crossroads here, “ Mr. Baldassare said. “People in California don’t feel they have the government we need in the 21st century.”

The last time California held a constitutional convention was in 1878-79 when the state’s founding constitution was rewritten, though a state commission made revisions to the document in the 1960s and 1970s. Such a convention would have to be done, of course, through a ballot initiative.

In the meantime, the unpleasant exercise of renegotiating the state budget — the third time this fiscal year — must be done by June 30 in order to realize the full value of any cuts.

Facing a $21.3 billion budget deficit, Mr. Schwarzenegger is requesting a $6 billion loan from the federal government, and has proposed a variety of politically unpalatable cuts, including commuting prisoners’ sentences, taking away health insurance from some poor children, reducing aid to community colleges and eliminating a large chunk of financing for shelters that serve children and women who have been abused.

The Legislature, controlled by Democrats, will hold public hearings on the governor’s proposals next week and come up with its own suggestions, which would probably affect fewer vulnerable residents and avoid jeopardizing the loss of federal education and health care money that requires a state match.

While California has suffered the same fate as much of the nation — high unemployment, large numbers of foreclosures, general economic sluggishness — its budget woes are greatly exacerbated by its odd and in many ways outmoded way of doing business.

The ballot initiative process — in which legislators or independent groups ask voters to mandate how the state’s money is spent or not spent — has become at times an exercise in fiscal self defeat, with voters moving to earmark money for one special program one year, only to contemplate undoing their own will a few elections later.

The state’s legislative districts are highly gerrymandered, leaving the Legislature influenced by the political fringe of both parties and unable to agree on practical budget matters or much else. State senators represent roughly a million people each, larger than most Congressional districts, leaving them out of touch with local needs. Further, the state is one of only three requiring a two-thirds majority vote in the Legislature on taxes and budgets, which leads to partisan fighting and long delays.

“There was a both-sides-against-the-middle aspect,” said Bruce Cain, a political scientist at the University of California, Berkeley, “reflecting the wide differences between Democrats and Republicans on the budget; a general disgust with the Legislature and the governor; ballot fatigue; and weariness with voting for yet another budgetary patch.”

California passed a budget in February contingent on the ballot measures’ winning approval. Even before Tuesday’s vote, the state was $5.8 billion newly in the hole because revenues had continued to plummet over the spring. Institutions that rely on state money have already begun to adjust in ways large and small.

The Los Angeles Superior Court will now close once a month. Dental care at Feather River Hospital in Paradise, near Sacramento, will cease on July 1. The Santa Clarita fireworks show this Fourth of July will be 10 minutes shorter.

“The state funds 94 domestic violence emergency shelter programs,” said Nicole Shellcroft, a former director of a targeted shelter in the Antelope Valley. “With this cut, the majority of them disappear.”

When he took office six years ago, Mr. Schwarzenegger promised to bring badly needed systemic change to state government. Though he has not delivered on that promise, he has laid more groundwork for it than his predecessors. He persuaded voters to let an independent panel redraw the legislative districts, which may well erode the partisan chokehold many candidates have had on parts of the state.

Also, if his ballot proposal to conduct open primaries in the state prevails at the polls next year, political change in Sacramento could be profound.

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Auckland reorganisation: Removal of Democracy bill

Anderton brands Auckland reorganisation as the “Removal of Democracy” bill

Thursday, 14 May 2009, 4:35 pm
Press Release: Progressive Party

Hon Jim Anderton, Progressive Party leader, MP for Wigram

The Local Government (Auckland Reorganisation) Bill should be renamed the Removal of Democracy Bill, said Progressive leader Jim Anderton in parliament today. He was speaking on the proposal to create an Auckland ‘super city’.

“The Local Government Act would have given Aucklanders a say in one of the most significant changes in local government in their region they will see in their lifetime, but they are not going to have a chance to have that say”, Jim Anderton said.

“In essence it is a great leap backwards to the days when 21 out of twenty two councillors lived east of Queen Street. It was the reason why a ward system had to be introduced so that all Aucklanders could actually be represented on their own Council. The conservative rightwingers have always resented that change and this proposal returns Auckland to the past they have always hankered after.

“In real life terms it means, for example, the end of free swimming pools for the kids of South Auckland and any other future say for most Aucklanders in the way they want their local communities to deliver for them. Does anyone believe that those pools will continue to be free under the government’s proposal? I can already hear the self appointed Mayor of the super city, John Banks, making speeches about why the ratepayers of Auckland City shouldn’t be subsidising the swimming pools of south Auckland”, Jim Anderton said.

“I support a strong regional government for Auckland. There used to be one – the Auckland Regional Authority (ARA) and I know about it because I was elected to it in 1977. We bought all the major regional parks and replaced the entire ancient bus fleet with new Mercedes Benz.

“In 1989, the Labour government replaced the ARA with the Auckland Regional Council (ARC). In 1992, the then National government wanted to sell the Ports of Auckland and the water services, so they diverted ownership of these and other profitable assets into the newly established Auckland Regional Services Trust (ARST) with the plan to sell. What a shambles that would have been if it had been allowed to happen. It took all of the strength of the political group I led at the time to put a stop to that. Auckland has reaped the benefit ever since,” Jim Anderton said.

“Now they’re having another go. This is a privatisers’ dream to sell the community assets of Auckland, and is entirely in line with Rodney Hide and the ACT party’s ideologies. Does anyone believe that this is in the best interests of Aucklanders?

“You can understand in those circumstances why the National ACT government doesn’t want people to have a say as to whether or not they want this outrageous piece of community destruction to go ahead”, Jim Anderton said in the House today.


ENDS

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Downgrade would hit hard

Dominion Post: A credit rating downgrade could hit New Zealand hard, adding $600 million a year to our interest bill, equal to twice

the cost of the new Wellington Hospital in Newtown, officials have warned.

In a background paper obtained by The Dominion Post, Treasury officials, using Ireland as a benchmark, draw a specific link between the country's credit rating which agencies say is threatened unless debt is brought under control and social spending.

The paper cautions that, although extra borrowing is economically attractive in the short term, the cost of continued use of debt would rise exponentially.

Ireland was the first country to offer banks a deposit guarantee similar to that provided by the New Zealand Government. It was also hit by a rapid deterioration in its fiscal outlook and it was downgraded at the end of March.

Ireland's debt now commands a premium of 150 basis points over comparable countries.

Treasury said New Zealand's sovereign debt was $36 billion last July, which cost $1.8 billion in interest costs. "If we had to pay 150 basis points [1.5 per cent] more, then the annual cost would have been around $2.4 billion.

"The $600 million difference in borrowing is approximately the same cost of building two new hospitals equivalent to the new Wellington regional hospital built in Newtown."

Debt is forecast to double over the next five years, pushing debt servicing costs even higher.

Finance Minister Bill English has flagged that debt could blow out from its current 25 per cent of gross domestic product to 70 per cent by 2023 without policy changes.

Treasury said that, as well as increasing the relative cost of borrowing, a rating downgrade would limit the number of investors who can buy our debt, lift the cost and limit the availability of credit to the private sector and increase the risk that banks would not be able to roll over funding. Even a single-notch downgrade could harm confidence.

It said countries' moves to stimulate their economies would flood global markets with debt, making it more expensive and harder to obtain. "As a small, geographically distant country in global markets where capital is increasingly mobile, New Zealand's ongoing competitiveness is reliant on the Government maintaining its strong credit rating," the paper concludes.

New Zealand was placed on negative outlook by Standard & Poor's in January as a result of the worsening fiscal and debt outlook.

Both fiscal and debt forecasts are expected to worsen in the May 28 Budget.

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MP behaviour at Waikato University

My letter to Maori MPs and local newspapers. For those of you who do not know, I am studying Economics & Political Science at Waikato University.

Today Waikato University Political Science students were addressed by Maori Party MP Hone Harawira.

As one of those students I would like to voice my disgust about how Mr Harawira conducted himself during this address. Mr Harawira used obscene language in front of students. The F word was mentioned by him along with other misguided colloquial terms. This behaviour was totally inappropriate in such a place and is hardly a glowing example of what a role model for young people should be.

During the address I attempted to ask a question, but before I could even get the question out, Mr Harawira got very aggressive with me, even though I was not abusive or threatening in anyway what so ever. He shouted me down and even mimicked me, trying to belittle me. Why, I do not know, perhaps he felt threatened in some way by me? He instantly took offence, before I could even finish my question, when I started to say as part of my question, that Maori and Chinese in New Zealand, are a minority. Surely this is simply a mathematical fact and hardly suggesting anything derogatory about Maori or Chinese. I would expect far better behaviour and control from a prominent Member of Parliament.

How this Member of Parliament treated me will have no effect on me personally, given my age, political experience and background. I have had far more intelligent people than him attack me in the past, but if I were another student in the same position, I can see how they could possibly be quite upset or even traumatised by this. Other students showed concern toward me after Mr Harawira's outburst.

If Mr Harawira is going to represent Parliament, the Maori Party and Maoridom, I would suggest he show a little more maturity and control over his manner and his use of language. His comments, manner and attitude came across as that of a racist thug.

I will also be asking the Waikato University not to invite him back on to campus because of his use of language and his aggressive and rude nature.

Steve Baron
Mature Student of Waikato University and Founder of Better Democracy NZ

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Beware those bearing gifts of productivity growth

Infometrics article, initially in the Dominion Post on May the 2nd: In a recent report the OECD praised the government’s aim to “increase productivity” in the New Zealand economy. Ever since National came into power,

the catch phrase productivity has been thrown around with reckless abandon – treated as both our saviour in the current crisis and the destitute child that was abandoned by the previous Labour government.

However, all this talk of productivity is a bit ambiguous. If we don’t try to understand the trade-offs that are involved, and whether New Zealand as a society is willing to pay those costs for greater production, the strict focus on productivity alone will lead to bad policy.

Productivity is a surprisingly vague term given its importance in economics. The essence of productivity is as follows: when an industry or an economy is more “productive”, it can make more output with the same amount of input.

This definition indicates that productivity isn’t a goal in itself. The goal of policy should be to support domestic economic activity (efficiency), while ensuring that the other issues that society values (equality, fairness, justice, etc) are taken into account. The purpose of an elected government is to balance the often competing goals on the basis of what it appears society wants.

An extreme example of how the single-minded focus on productivity is dangerous: As a caring social planner, who believes that society only cares about productivity, I walk into each firm across the country and ask who the least productive employee is. Then I shoot them. From there our nation’s productivity increases. I think we would all agree that such a situation is probably not in the social interest, but it would be supported by a single-mined focus on productivity.

The example does not have to be this extreme for the trade-off to make sense. If we are focused on productivity we can achieve this goal by lowering employment, or forcing individuals to save at a higher level than they really wish to. These aren’t satisfactory policy prescriptions, but they can be logically supported by blind support of productivity targets.

When the current government is discussing increasing national productivity there are three ways this could occur through policy:

There is a free lunch: the previous government made some poor policies that didn’t benefit anyone, and by reversing them we can make everyone better off.
They have found a way to make additional output appear out of thin air.
They believe society is willing to accept less active legal and social policies in order to increase economic output.

The first case does not seem to explain the National governments push for productivity, as they aren’t picking up wasteful policies and throwing them away. Although the push to streamline government activities is laudable and the marginal changes to the Resource Management Act may be worthwhile, neither policy will provide any noticeable boost to activity. And more importantly both these changes will cost us something in return.

As the second potential reason is obviously false, this leaves us with only the final point: that the government believes society is willing to accept a little less “redistribution and equality of outcomes” in order to increase the size of the economic pie.

If the government truly believes that society is willing to accept the potential costs associated with lower social spending, different laws, and a smaller government in order to reap the benefits of greater economic activity then why don’t they just say this directly?

I fear that the government is not directly stating this trade-off because they have talked themselves into believing that it does not exist. In such a situation this is likely to lead to some of the costs of policy being unintentionally underweighted or ignored while the drive for productivity is underway.

Labour got themselves into the same tangle with their unfounded belief that increasing equality did not lead to a reduction in economic activity. We now know that much of the growth they watched over happened in spite of their egalitarian program – not because of it.

Both political parties are unwilling to face that, with respect to government policies, there is a fundamental trade-off between some social values (fairness, justice, etc) and the level of productive activity. This trade-off is one of the primary reasons for the existence of government – and yet neither of the political parties seem willing or able to recognise it.

As a result, next time we hear the government discuss the importance of productivity, or we hear some international body talk about the goal of productivity growth, let’s try not to forget that there is a trade-off – and let's ask exactly what this trade-off is.

Please contact Matthew Nolan for further information.
This article published on May 04, 2009..

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Mt. Albert by-election

It won't be long and there will be an election in this seat. Who do you think will win? Will it make any difference? What do you know about any of the candidates? Have your say here.
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I wish I was an Italian male

A new report out by the OECD shows that Italian males have 80 minutes more leisure than Italian women and New Zealanders sleep more than most other OECD countries.

The French spend more time sleeping than anyone else in OECD countries. They also devote more time to eating than anyone else and nearly double that of Americans, Canadians or Mexicans. The Japanese sleep nearly an hour less every night than the French and also spend longer at work and commuting than they do indulging in leisure activities.

These are some of the insights into the differing ways in which OECD countries use that most fundamental of resources, time, in the latest edition of Society at a Glance.

Society at a Glance gives an overview of social trends and policy developments in OECD countries using indicators taken from OECD studies and other sources. It attempts to help people see how their societies have changed, particularly in comparison with other countries.

A special chapter in the report investigates leisure time in the 18 OECD countries for which up-to-date time-use surveys are available. The time-use surveys included in this report are from 2006 and based on nationally representative samples of between 4000 and 200000 people.

The report reveals big differences in the amount of time men and women have for leisure. Italian men have nearly 80 minutes a day of leisure more than women. Much of the additional work of Italian women is apparently spent cleaning the house. Norway is the most equal society, with men having only a few more minutes of leisure than women.

Norwegians spend just over a quarter of their time on leisure, the highest among OECD countries, while Mexicans spend just 16%, the lowest.

So what are we doing with our leisure time? Watching TV absorbs nearly half of all leisure time in Mexico and Japan and falls to a low of 25% in New Zealand. Turkey is the most sociable nation, spending 35% of leisure time entertaining friends, more than triple the OECD average of 11%. But OECD countries are not very physically active: Spain reports the highest proportion of leisure time spent doing regular physical activities. Even there, exercise accounts for a mere 13% of leisure time.

Other social indicators covered in Society at a Glance include adult height, fertility rates, education spending, income inequality, obesity, healthcare spending and life and work satisfaction.

Country notes are available here for Austria (in German), Canada, France (in English and French), Germany (in german), Italy, Japan, Mexico, New Zealand, Switzerland (in German), United Kingdom and United States.





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Is politics ready for WolframAlpha?

Never heard of the next big Internet breakthrough? Well here it is explained in a 10 minute video by the person who created it, Professor Stephen Wolfram.

Just imagine how useful this new intelligent design search engine will be when you want to find out how members of parliament have voted on certain issues over time. Or even how GDP has performed under this government or that government?


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Will Bill remove Aucklanders right to decide?

The Government must confirm whether the legislation it plans to ram through under urgency will deny Aucklanders the right to vote on the proposed Super City,
says Labour’s Auckland issues spokesperson Phil Twyford.

Press Release: New Zealand Labour Party

Phil Twyford - Auckland Issues Spokesperson 4 May 2009 Media release

Local Government Minister Rodney Hide today confirmed the Government has immediate plans to introduce several Bills into Parliament. The first Bill will establish the Auckland Council as a legal entity and will move to constrain the decision-making powers of the existing councils.

“What also appears likely is that the urgency legislation will be used to prevent Aucklanders from exercising their rights to a referendum on the plans. The Local Government Act provides for a poll of electors to be held before reorganisation of local government occurs,” says Phil Twyford.

“The Government must confirm immediately whether it will use urgency to remove this right, which would give Aucklanders the chance to decide on the final shape of the Super City.

“National made fundamental changes to the recommendations made by the Royal Commission on this issue, and there are no guarantees whatsoever the select committee process will result in the Government listening to Aucklanders’ views.

“If the select committee hearings held on the proposed Resource Management Act changes in Auckland last week are anything to go by, the consultation process would be nothing but a sham exercise,” says Phil Twyford.

“Prime Minister John Key and several of his ministers have spent the last few weeks pretending to play good cop to Mr Hide’s bad cop, suggesting that none of the Auckland governance proposals are set in stone.

“But today’s announcements, including the details of the major Bill setting out the new structure of Auckland’s local governance, make it clear that none of their plans have changed at all.

“National promised in its election manifesto that it would consult Aucklanders once the Royal Commissions recommendations were known. It hasn’t done this, and in the wake of the doublespeak over the past few weeks, it is even more imperative that it seeks a proper mandate,” says Phil Twford.


ENDS

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Name the Secret Lobbyists

Green Party Co-Leader Russel Norman called today in Parliament for the identity of secret lobbyists to be revealed.

Tuesday, 5 May 2009, 2:43 pm
Press Release: Green Party

"It is vital for open, honest politics that the role of lobbyists is not kept secret," said Dr Norman.

According to media reports, Parliament's Speaker Hon Lockwood Smith has granted eight people special passes that give them access to the Parliamentary complex to lobby MPs.

"The public have the right to know the identity of the secret lobbyists who have been granted special access to Parliament. MPs are there to work for the people, and the public should know who is being granted special access to their representatives."

Dr Norman raised the issue in Parliament today and has written to the Speaker to ask that this information be made available to the public.

It appears that Parliamentary Services are refusing to identify the lobbyists because it might impact on their privacy.

"It's pretty simple really - if the lobbyists don't want to be identified then they shouldn't be asking for passes that give them special privileges that the average person doesn't have," said Dr Norman.

The Green Party is concerned about the impact that lobbyists acting for special interest groups can have on open, honest Government. It is Green Party policy to set up a registrar of lobbyists - along the lines of the Canadian model - to let the public know who is trying to influence their MPs.

"We don't want to end up with a situation like in the US where millions of dollars are spent on lobbyists http://www.opensecrets.org/influence/index.php by groups such as the tobacco and arms industry," Dr Norman said.

For more information:

Please see the Green Party Open Government Policy http://www.greens.org.nz/policy/open_government

www.opensecrets.org/influence/index.php

ENDS

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The racist liar responds

Hone Harawira has more to say on his Waikato University experience with me in a press release he has distributed to everyone he could think of and which follows below my comments.

Let me repeat again, never at any stage was my question racist or even aggressive as Harawira suggested on Maori TV, he is simply a liar. My question was in support of Maori and other minorities. Numerous students in the class, both Maori and non Maori were upset in the way he shouted me down, they thought it was unfair and rude. When the students clapped it wasn't because of him putting me down, it was simply because they supported his comment about being tangata whenua, nothing to do with me. There was a racist in the room and that was Mr Harawira who didn't like the name Maori used in the same sentence as Chinese and homosexuals.


Racism – 30 Years On
Wednesday, 6 May 2009, 9:53 am
Column: The Maori Party

Ae Marika!
By Hone Harawira
MP for Tai Tokerau

30 years ago last week, a group of Maori and Pacific Islanders put an end to 25 years of racism at Auckland University.

For years and years, Pakeha engineering students had been using graduation week to dress up in hula skirts, workers boots and helmets, paint obscene slogans and symbols on themselves, get drunk, and stagger around Auckland city performing a mock haka and abusing people – because they thought it was “a bit if fun”.

And they’d done it every year, despite pleas from Maori and Pacific students, the students own association, the Race Relations Office, the university itself, Maori leaders and many others.

In 1979 though it all came to a swift and abrupt end, when He Taua decided there had been enough talk, and took action.

And then last week, a student wrote a complaint to everybody he could think of, about the language that I was using during a lecture I gave at Waikato University, and I was immediately reminded of the He Taua incident that I had been part of all those years ago, and how some things hadn’t changed very much at all.

Over more than 35 years of public speaking, I have learnt to “sniff out” a redneck in the audience, and it seems that last week at Waikato, I’d picked out another one.

University students are notorious for their lack of respect for authority, their use of bad language, and most people who know me know that I’m cool with that. Students are also encouraged to challenge arguments and theories as well, and they’re also used to winning because in most cases they operate in big groups, 100 of them to one lecturer in most cases, but it seems that they ain’t that comfortable when somebody turns up and rams their arguments right back down their throats.

So when this smartarse started laying on his educated drivel about Maori being a minority in this country “like Asians and homosexuals”, I decided to teach him a few lessons – like (1) as a guest lecturer I don’t operate by the same rules as his other lecturers (2) just because I’m a politician don’t mean I have to play intellectual handball with him (3) as an intelligent individual I don’t have to put up with his racism (4) as a Maori activist I am more than happy to put him in his place.

Seems that just like 30 years ago, rednecks and racists still like to strut their stuff behind the walls of academia, safe from the prying eyes of wider society. Unfortunately for them, 30 years on there are still people like me happy to turn up and knock some of those walls down.

Oh yeah, and one other thing. When I nailed this guy guess what happened? All the Maori students in the audience clapped.

ENDS

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Why politicians don't like electoral change

Ever wonder why it seems so difficult to get any change in our political system? Here is part of a very interesting citation by

Professors Karp, Bowler & Donovan. The full citation is posted here link text(Why Politicians Like Electoral Institutions)

Our answer to that question is that winners become invested in, or at least attached to, the rules that made them winners. Winners are committed to the status quo—even if they are very recent winners and even if they are in the opposition. This is a somewhat different interpretation of why institutions represent “congealed preferences” than offered by Riker,to whom we owe the phrase.Winners are reluctant to
change rules that made them winners and—hence— we can expect to see only very slow changes in those sorts of rules. We know that the people and parties who form governments change relatively frequently. But we also know that the electoral institutions that structure how these governments come into place are quite static.Much of the stability of election rules may reflect that being in parliament (winning) quickly unites actors who differ in terms of policy preferences
and ideology at least on one dimension. Winning election and serving in parliament leads to a unifying electoral self-interest that dampens support for institutional
change among those who may have embraced change when on the outside looking in.

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When textbook macro pays off

Macroeconomics doesn't get much plaudits around now, but here is a real-life story that should hearten those who think the field

is really broken. It concerns Andres Velasco, a distinguished macroeconomist who is currently the minister of finance in Chile, and who also happens to be a good friend, colleague and co-author.

Until the current crisis hit, Chile's economy was booming, fueled in part by high world prices for copper, its leading export. The government's coffers were flush with cash. (Chile's main copper company is state-owned, which may be a surprise to those who think Chile runs on a free-market model!) Students demanded more money for education, civil servants higher salaries, and politicians clamored for more spending on all kinds of social programs.

Being fully aware of Latin America's commodity boom-and-bust-cycles and recognizing that high copper prices were temporary, Velasco stood his ground and decided to do what any good macroeconomist would do: smooth intertemporal consumption by saving most of the copper surplus. He ran up the largest fiscal surpluses Chile has seen in modern times.

This didn't make Velasco very popular. Last November, public sector workers marched in downtown Santiago, burning an effigy of Velasco.

But by the time the financial crisis hit Chile, Velasco (and the Central Bank governor Jose de Gregorio, another fine macroeconomist) had accumulated a war chest equal to a stupendous 30% of GDP.

The price of copper plummeted 52 percent from Sept. 30 to year-end, and Velasco dusted off his checkbook. In the first week of January, he and Bachelet unveiled a $4 billion package of tax cuts and subsidies... Velasco’s stimulus spending, includ[ed] 40,000-peso ($68.41) handouts to 1.7 million poor families...

The surpluses accumulated during the good years has given the Chilean government unusual latitude in responding to the crisis. As a result, the economy is doing much better than its peers. As Bloomberg reports, "the country’s economy is expected to grow 0.1 percent in 2009, as the region contracts 1.5 percent, according to the International Monetary Fund."

And does good economics pay off politically? Eventually, yes. Five months after being burned in effigy, Velasco is currently President Bachelet's most popular minister.

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Our most popular stories

Hop on to the blog and have a look at some of these great article. Post a comment or two while you are there and give us your opinion.

Three strikes proposal: Good for our democracy?

Never heard of Gerald Celente?

Criminal Investigations Amendment Bill

NZ: Monarchy or Republic?

Scathing speech to British PM

Economists forecast a longer and deeper recession

Democracy in the 21st century!

Money for nothing

Local government rates ballooning

Dunedin stadium

Referendum to cap rates

Town Prints Own Currency to Support Local business

New York/Auckland supercity problem?

UK: Local Elections - Make the Politicians accountable

I.O.U.S.A. the movie

Local government, a test bed for Direct democracy

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Minister calls for public input into Auckland governance

Local Government Minister Rodney Hide is calling for New Zealanders to contribute their views on the future of Auckland governance

through select committee hearings to be held in Auckland over the next few months.

“I know Aucklanders are passionate about their local communities and their region and we want to hear their views,” Mr Hide said today after a Cabinet meeting to decide the legislative programme for the Government’s proposed structure of Auckland local government.

“The proposed structure of one Auckland Council, with 12 members elected from wards and 8 at large, and 20 to 30 Local Boards, has been designed to ensure good governance for the Auckland region for the next 50 to 100 years,” Mr Hide said.

“As the Royal Commission on Auckland governance highlighted, the existing structures don’t work. The Commission said Auckland’s regional council and seven territorial authorities lacked the collective sense of purpose, constitutional ability, and momentum to address issues effectively for the overall good of Auckland.

“Our proposal will overcome these problems by allowing Auckland’s civic leaders to think regionally, plan strategically and act decisively in a way that has not happened for the past six decades.”
Mr Hide said the Government’s legislative programme for Auckland governance would consist of three separate Bills. The first two Bills will be introduced to Parliament next week and the third Bill will be introduced later in the year.
The first Bill will proceed under urgency and without Select Committee hearings. It will:

establish the Auckland Council as a legal entity;

establish the Auckland Governance Transition Agency (AGTA), responsible for rationalisation and transition to the new governance arrangements; and

constrain the decision-making powers of existing Auckland councils and their subsidiaries.

The second Bill will proceed through a Select Committee process ending in September. It will:

provide for the high level framework for the structure of the Auckland Council – eight members elected at large and 12 members from wards, and 20-30 Local Boards including their high level functions;

empower the Local Government Commission (LGC) to determine the boundaries of the wards of the Auckland Council and the Local Boards, and the Boards and their membership; and

provide for the integration of Auckland’s water infrastructure.

A third Bill will be introduced later this year to provide for the ongoing governance structure, functions, roles and powers of council and local boards, and detailed legislative framework for governance arrangements.

Mr Hide said he wanted people to contribute their views on the composition of the proposed Auckland Council, including the numbers of ward councillors and at large councillors which is currently eight and 12 respectively.
The Government also wants to hear people’s views on the roles of Local Boards. At present it is proposed that the Boards would:

act as an advocate for people in their area;

maintain an overview of services provided by the Auckland Council within their local area;

undertake responsibilities and duties delegated by the Auckland Council;

prepare an annual submission to the Auckland Council for expenditure within its local area;

have input into the regulatory policies and plans of Auckland Council;

have delegations for specific decisions, e.g. swimming pools and libraries;

develop their own policies and plans on some local matters, including dog control and liquor control and assist the Auckland Council to develop regional policies with local variations eg local parks; and recommend the making of local bylaws under the Local Government Act 2002.


“It’s important that people make their views known to the Government so we get the right structures in place to ensure good governance for the Auckland region well into the future, and also guarantee that local grassroots democracy is preserved and promoted for the benefit of all,” Mr Hide said.

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Note to Rodney Hide

Here is a note I recently sent to the Minister of Local Government after a speech he made.

"Secondly, I want greater transparency and accountability in local government". Does this mean you will be including binding referendums in the final legislation if you truly believe and mean what you say Rodney?

"While the Local Government Act 2002 emphasises the need for transparency and accountability in local government, in practice few new mechanisms have been introduced to apply those principles". Yes! How true is that!

Someone has to be brave enough to give the people a say Rodney, will it be you?

Best wishes

Steve Baron
Better Democracy NZ
www.betterdemocracy.co.nz

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Paul Holmes: A right royal debate

NZH Sunday May 03, 2009
It can seem absurd, when you think about it, that our head of state is an elderly, unelected woman who lives in a Victorian palace

in an old imperial city on the other side of the world.

Of course, the Queen has occupied the throne for nearly 60 years and has fulfilled her role as Queen with impeccable propriety.

Apart from the famous period in the fortnight after the death of Princess Diana when she so hopelessly misread public sentiment in Britain and round the world, I cannot recall her ever putting a foot wrong.

But that is not the point.

What does a modern King or Queen of England have to do remotely with us? Why should such a figure be our head of state?

United Future leader Peter Dunne has raised the republican issue again. He wants to move forward to establish ourselves as an independent republic, starting with a referendum before the next election.

A new survey finds people pretty evenly divided between maintaining the monarch and standing on our own with, presumably, our own president.

He says he is tired of politicians who mutter that it is inevitable we become a republic and then do nothing about it.

So, what should we do? It is a hard one. There are probably good reasons to swing either way.

It is a mysterious and ancient thing, kingship. Every culture in the world has made kings at some point. Many have got rid of them too. Even into our modern, rational era, kingship hangs around. Somehow it has lasted.

And even nations that have rejected kingship still bestow upon certain leaders and families a royal status.

In the United States, the President is in possession of kingly powers, a kingly apparatus, kingly protection, kingly motorcades and kingly mana.

The Americans for a long time imbued the Kennedy family with a kind of royal status. The Kennedy White House in the early 60s was known as Camelot, King Arthur's court, in which all was beautiful and young and pure.

The endorsement, or anointment, if you like, of Barack Obama by Ted Kennedy and Caroline Kennedy elevated Obama hugely, effectively placing an ermine robe upon his shoulders.

Of course, in the United States if you do not like the king, he can be got rid of every four years.

What I am saying is that no matter what system of government we have, we seem to appoint monarchs anyway, so it may not matter how we appoint our head of state. Yet it does of course.

Again, in the end it does not seem right any more that our head of state, the ultimate authority, is an old lady with a posh voice rattling round that vast palace down the end of The Mall who happens to be the Queen of England.

The Queen may have a genuine affection for New Zealand. But the country that owns her, the United Kingdom, does not really care about us any more or think about us much.

Any New Zealander who goes to the UK to live or work finds this out pretty quickly. They have enough on their plate without having to go the extra mile for us, never mind that tens of thousands of our young men fought and died for British survival when Britain was on its knees.

It is not as if the Queen can do anything for us. She is not one of us. Not really. She is not the bacon on the pig, as it were.

And, as the NZ Herald reminded us this week, the British Royal Family was not able to send, or did not think it worth sending, one of their own to attend the state funeral of our most revered citizen, Sir Edmund Hillary, a man the monarch herself had honoured again and again and whose ascent of Everest just before her Coronation in 1953 seemed timed by the gods to bless her reign.

The Royal Family did not bother. We are too far away, I guess. The head of state is too old for the trip. Her husband may be too gaga. It was mid-winter there at the time and the rest of them might have been too grumpy.

So there is plenty that is no longer right about the Queen of England being our head of state.

At the same time, the system ain't really broke. And if it ain't really broke why would you go through the agonies of fixing it?

It has taken us a decade to get our heads round MMP. It wore us down, the MMP debate, that whole constitutional upheaval, first trying to understand it, then trying to work out how to use it. And what it all boiled down to is that the MPs we elect can head off and team up with anyone once they get into Parliament. But, on the other hand, it has increased the range of representation in the Parliament and that is a good thing.

I am not sure there is an appetite for further constitutional reform at the moment. No one can really be bothered. No one wants another two years of difficult, passionate and probably arcane debate.

As John Key says, there is too much else to attend to.

In any case, why would any prime minister rattle this part of the constitutional cage if there is no clamour for it?

Then there is the problem of who would be president and how that appointment would be filled. Is there really anyone we could consider worthy of such election? Or would the prime minister of the day elevate a crony, an old party hack?

In the end, the nice brilliance of the Crown is that the identity of the person of the monarch is out of our control. It is a divine appointment, an accident of birth, well out of the reach of dirty human hands.

Our acceptance of this defies logic and the modern way of doing things, I know, yet there is something satisfactory about it nevertheless.

Monarchy has served us very well for a very long time.

The ceremonies and the robes and the ribbons and the grand carriages and processions fascinate us.

These all possess magic as well as majesty and much of it goes back hundreds of years, connections with a glorious past.

Given where the majority of our people originated, New Zealanders might be hard-wired to the need for a king or queen. But this need, if it exists, might not survive the present incumbent.

Queen Elizabeth is quite a different creature from the son who will replace her. Elizabeth was a beautiful young woman when she began her reign and, while she is the most photographed woman in the world, she retains a remoteness and mystery.

We really do not know a lot about her or about what she likes and does not like or about how she fills her days. Charles, on the other hand, has been through too many of our own experiences of life to retain any mystery or charisma.

I cannot see anything changing quickly. In the end a choice between monarchy or republicanism for New Zealand might stay in the too hard basket for many years to come.

And yet, the Americans understood the problem with a king right back at the birth of their nation.

It was commonly held that no king across a vast ocean can govern a people on the other side of that ocean.

Of course, in those days, a British king still had a big hand in governing. The modern Queen does very little of that. But in deciding the US constitution, in electing their own executive and in being determined to establish a democratic republic, they had to make sure there was real and effective representation for the citizens.

They had to stand on their own feet as individuals, as communities and as a republic. They had to really take responsibility for themselves.

I wonder whether, in our retention of the British Crown, we have quite made that leap and whether we have quite grown up.

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Consultation appeases shortcomings of representative democracy

Interesting NZH Editorial. So what is the answer to these shortcomings?

Politicians on the campaign trail set great store by their willingness to listen to and heed the views of the public. In power, they continue to tip their hats to consultation. It is a useful means of appeasing concerns about shortcomings in the "democracy" quotient of representative democracy. Governments are happy to believe that legislation, whatever its content, has the requisite cachet if they can say public opinion has been sought. Unsurprisingly, this has promoted a divergence between the theory and practice of consultation.

That has been well illustrated by the process adopted by a parliamentary select committee considering changes to the resource management law. The loss of council authority to protect trees of a certain type or size is at the heart of unease about the new legislation. More than 80 tree lovers have written to the committee seeking council retention of that power. But only about 45 minutes was allocated to hear their concerns when the committee visited Auckland.

Others missed out because the select committee failed to advise them when or where the hearing was to be held. An attempt will be made to accommodate them next week, via teleconferencing, but their opportunity to speak will be extremely limited. Doubtless, many people will wonder why they bothered. Indeed, the brief time allotted to dissenting views speaks volumes of the committee's attitude. In effect, the Government's wish to amend the Resource Management Act as quickly as possible has made the consultation process virtually worthless.

When contentious legislation attracts many submissions, practical steps have to be taken so committee proceedings do not get bogged down. But the hearing of the tree lovers' views ensures not so much that there will be no plodding but that matters will proceed at the speed of light. It is consultation in name only.

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John Roughan: Get on with untying apron

NZH: Peter Dunne has a point. If we are going to ditch the monarchy, as most of us expect we will one day, we should get on to it. Wait for a reason and we could wait forever.

This idea that we might act when the Queen dies is pure procrastination. We probably will not act then either. The end of a long reign will bring such an outpouring of tribute and so much interest in the elevation of Prince Charles, that the monarchy will probably get a new lease on life.

It is a fine institution for Britain. The reason we should ditch it is that it is not here. It is not here when a head of state should be. It is not here for Waitangi Day. It wasn't here when we buried our most esteemed national figure last year.

The Queen's failure to send at least one of her family to Sir Edmund Hillary's funeral was deeply hurtful, I thought at the time. It wasn't the right time to say so and it is not the New Zealand style to make much of a slight in any case.

The country was consoled with invitations to a commemorative service at Windsor Castle three months later. To my mind, that gesture added insult to injury.

I can understand the Hillary family accepting the invitation but I was embarrassed that our Prime Minister and other so-called dignitaries scuttled over there.

The monarchy does not do much wrong and would not have intended to disappoint us, which means it didn't know what Hillary meant to this country. If that is so, our head of state is more remote than I'd supposed.

It is absurd to persist with a constitutional figurehead who lives on the other side of the planet. There might be no pressing need for change but we could do so much more with an indigenous office.

A head of state needs an intimate knowledge of the country, its public opinion and politics. A distant monarch could not dismiss a government here, even if it was necessary.

The action once taken by an Australian Governor General required proximity to a parliamentary crisis and confidence that enough of the public would accept the dismissal. That act was an exception to the rule for vice-regal figureheads.

As a rule, the government-chosen representative lacks the mana of the sovereign to act on its own judgment when necessary.

The lack is most evident in this country at Waitangi every February 6. If there is any day we could expect the Queen's representative to be at Waitangi it is that one. Yet Sir Anand Satyanand wasn't there this year.

He was there the previous days but had a prior engagement in Auckland on the anniversary of the day his forebears made the Treaty. I simply don't understand that and not for want of inquiries to his staff.

Neither of the Governors General appointed during the Clark Government have done their Waitangi duty as stated by their immediate predecessor, Sir Michael Hardie Boys.

He bravely attended the ceremonies when the prime minister did not. He sat in the centre of the dawn service and said it was important the Crown was present.

His successors kept a lower profile, if they attended at all, in obvious deference to Clark's problems at that place. But if this were Britain would the Queen fail to front up for its most seminal national occasion because Gordon Brown had found it uncongenial? I doubt it.

Would the presidents of the United States or France? Those are elected heads of state with powers that could not easily be reconciled with the supremacy of Westminster parliaments. Constitutionalists in countries like ours generally recommend a parliamentary appointment.

Unfortunately, voters usually disagree. If Australians had been offered a republic with an elected presidency it might have passed their last referendum. An appointed proposition was defeated by a combination of monarchists and elective republicans.

But constitutionalists are right that elections wouldn't work for a ceremonial position. How would you campaign for it? We would need some other means of choosing and we could probably find one in Maori tradition.

Tainui's hereditary method does not cut the mustard. It looks a little too passive and imitative of the British. But more generally the highest chiefs were chosen, I understand, by some sort of consensus.

Any replacement of the monarchy will raise Treaty issues and it should be the primary source of reference for a New Zealand head of state. The recently repatriated final court was the first step in finding our own constitutional feet. We should not wait too long to take the next.

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Face of Parliament changing

First it was Helen Clarke now Michael Cullen. What do you think the legacy of these two prominent politicians will be and how would you rate their performance?
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Dunne: Time to have our say on republic issue

UnitedFuture leader Peter Dunne is calling for a referendum on whether New Zealand becomes a republic.

Sunday, 26 April 2009, 1:57 pm
Press Release: United Future NZ Party
Media Statement

26 April 2009


Hon Peter Dunne

MP for Ohariu

Leader of UnitedFuture


Dunne: Time New Zealanders had say on republic issue

UnitedFuture leader Peter Dunne is calling for a referendum on whether New Zealand becomes a republic.

Commenting on the Republican movement’s recent poll showing a sharp increase in the numbers of people favouring a republic, Mr Dunne said it is time for New Zealanders to have their say.

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He proposes a two-stage process over the next decade.

Mr Dunne says the first step should be a public information programme about the pros and cons of becoming a republic, culminating in a binding yes/no referendum on whether we have our own head of state.

He said this should be done during the term of the current Parliament.

“If the result of that referendum is no, then the issue stops there and then.

“If the answer is yes, then a full proposal, including how the new head of state should be selected, should be developed and put to a second referendum during the term of the next Parliament.

“If that proposal is endorsed then, the Republic of New Zealand could be initiated some time after the 2017 general election,” he said.

Mr Dunne says he personally favours New Zealand becoming a republic, with a non-executive president along the lines of the Irish model, and directly elected by the public every five years.

“I think New Zealanders are ready for this debate, and should be given the opportunity.

“I am tired of politicians who say it is probably inevitable we will become a republic at some stage, but who are unwilling to do anything to bring it about – that is extremely weak.

“It is time to trust New Zealanders to make a bold decision about the future of their country,” he said.

Ends


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Brown urged to call referendum

LONDON (Reuters) - Two government ministers urged Prime Minister Gordon Brown on Monday to offer voters a referendum on electoral reform to overcome the

By Kate Kelland

disillusionment with politics caused by the scandal over MPs' expense claims.

Health Secretary Alan Johnson -- widely seen as a possible successor to Brown -- said the Labour leader should give Britons the chance to adopt proportional representation. Ed Miliband, climate change secretary and in charge of the party's election strategy, said now was "a moment for big reform."

Johnson, writing in The Times, said public "anger and disquiet" -- fuelled by days of revelations of how politicians abused their generous expense allowances by making claims for everything from pornographic films to cleaning out a moat -- "demands a response."

"We have the mandate to pursue the issue of electoral reform and to hold a referendum on a specific new system," he wrote. "We need to overhaul the engine, not just clean the upholstery."

The expenses scandal has damaged all three main political parties but is causing the most damage to Labour, in power for 12 years.

At present Brown looks almost sure to lose the election due by mid-June 2010, opinion polls putting support for Labour in the low 20s, some 16 points behind the Conservatives.

Johnson said Brown should look again at a 1998 report on electoral reform, commissioned by the government, which called for the introduction of proportional representation but was ignored by Tony Blair.

The referendum should be held on the same day as the next national election and should offer voters a choice between a PR system and the current first-past-the-post system, Johnson said.

"The mood of the public now is in favour of a root and branch look at how our democracy works," Johnson told BBC radio later on Monday. "It would be absolutely perverse if, in the course of that debate, we didn't look at the fundamental issue here -- how people elect their representatives."

Miliband, speaking at an event run by The Guardian, said Britain needed "a more pluralistic political" system where power is shared in different ways.

"Parliament needs to change," he said. "It looks to too many people like a 19th Century institution."

A poll published in Saturday's edition of the left-leaning Guardian found that two-thirds of the voters sampled want Brown to call an election before Christmas -- a highly unlikely move.

The Guardian/ICM poll also found that more than a quarter of voters planned to reject mainstream political parties in favour of minority ones because of the expenses scandal.

(Editing by Tim Pearce)

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