Thursday, March 28, 2013

EQC's latest privacy fail

Two days ago we learned that EQC had inadvertantly emailed its claims database - containing information on 80,000 people - to a client. That was bad enough, but now its just been revealed in Parliament that they've had another privacy fail, this time mailing out the names and bank accounts of over 2,000 people.

This is unacceptable. EQC's lax practices around sensitive personal information have just exposed 2,000 people to a risk of identity theft and fraud. And these are the breaches we know about. How many others have there been which have not yet been brought to the attention of politicians and the media?

Obviously there needs to be accountability for this, including heads on spikes. But more importantly, EQC needs to sort its shit out, and start treating people's private information with the care and respect it deserves.

Update: Link added.

The Orcs are back

Three years ago Kiwis took to the streets to stop the government from digging up our national parks. The government apparently backed down - but like rust, National never sleeps. And now they're trying to devastate our natural heritage again, issuing exploration permits for schedule 4 protected land:

The Government is allowing mineral prospecting on protected conservation land despite promising in 2010 no mining will be allowed on such high-value estate.

Eight consents have been granted to prospect and explore for coal and other minerals in Coromandel and the West Coast's Paparoa National Park.

That's despite public outrage in 2010 when the government proposed freeing up some conservation land for mining. It was forced to back down and promised there would be no mining.

There is no reason to issue these permits unless the government is planning to mine. Issuing exploration permits while mining is forbidden is simply daft. So, it looks like National lied to us in 2010, and that the pillage of our natural heritage is back on.

A bombshell for the electricity industry

Meridian Energy thinks it is "unlikely" to reach a new deal with Pacific Aluminium to supply electricity to the Tiwai Point aluminium smelter. Pacific Aluminium disagrees (apparently believing that Meridian will sell them cheap power for no reason), but there's a real possibility that there will be no deal. Which according to Pacific Aluminium would mean that Tiwai Point would have to close.

They could be scaremongering, of course, trying to use the threat of thousands of job losses and ~2% of GDP to blackmail the government into leaning on Meridian. But if they're not, then suddenly one third of the South Island's electricity supply (and 15% nationwide) is up for grabs. And this will have consequences.

The most immediate one will be a drop in electricity spot prices and reduced profits for electricity companies. Those with fossil-fuel plants (Contact and Genesis) will be worst affected, as they will no longer be able to rely on annual shortages to reap windfall profits. But it will also affect hydro generators as well. Which means that Mighty River Power will be far less profitable and the government will get a far worse price for it than it was banking on. Whoops. Selling it looks like an even worse idea now, and even if they proceed the lower prices should put paid to the rest of the asset sales programme.

This in turn is going to leave the government with a $5 to $7 billion hole in its books, money it has already budgeted and spent. So their magical surplus target goes out the window as well. Whoops again.

On the positive side, Tiwai Point emits over half a million tons a year of CO2 in direct emissions. Not only will this pollution be eliminated, but we will also no longer have to pay to subsidise it. In 2009 Carbon News estimated Tiwai Point's pollution subsidies at more than $200 million - or around $225,000 per job.

Even better: flooding the market with cheap hydro will displace polluting fossil fuel generation from the electricity system, forcing its mothballing or permanent retirement. Which means not just lower emissions, but also a decisive shift towards renewables. It also means that those peaker plants Contact and Todd Energy have built will be redundant pretty much from day one - with no shortages to cover, they won't be burning much.

The down-side: no-one will be building new wind-farms for a while. But that does give us time to get policy in place to direct new investment solely towards renewables.

Obviously the shutdown of Tiwai Point would be bad for Southland. But there's some silver lining to this cloud. And if it happens we are just going to have to make the best of it.

The latest Christian moral panic

The Christians are trying to recriminalise prostitution again. Their latest argument? Claims that South Auckland is flooded with underage prostitutes being pimped out by their relatives. But to point out the obvious, the law is already perfectly capable of dealing with this. Pimping, receiving earnings from, or being a client of an underage prostitute is a serious crime, punishable by 7 years imprisonment. Compelling a minor to work as a prostitute (as claimed in the article above) is even more serious, with a penalty of 14 years. These are serious offences that police and CYFS will act on immediately. If Pastor Membrey or Asenati Lole-Taylor know of this happening, then they should be reporting it to police so that the guilty parties can be prosecuted. The fact that they are not doing that (and the fact that they claim that police are simply returning underage prostitutes to their alleged pimps, rather than handing them over to CYFS and making arrests) suggests that their real problem is with legal sexual services, rather than illegal ones.

[Also worth reading: Queen of Thorns on the topic]

Wednesday, March 27, 2013

David Carter must go

Parliament has descended into a farce for the second day in a row, with two MPs thrown out for demanding that the Speaker enforce Standing Orders and stop John Key from summarily abusing questioners. Its been apparent since his first day in office that David Carter is simply not up to the job of Speaker, and this week simply confirms it. He needs to go. The question is "how"?

Parliament's Standing Orders contain no formal provisions for removing an incompetent Speaker. Which means that informal methods must be used to make Carter's position socially untenable. One option would be for the opposition to formally move a motion of no confidence, on the basis that the Speaker requires their confidence to be able to do their job effectively. Another would be for someone to devote a General Debate slot to the Speaker's failure to manage the House. Alternatively, opposition members could simply repeatedly seek leave for a vacancy to be declared in the Speakership and an election be held. Finally, there is the option of a walk-out, a simple refusal to attend until the Speaker resigns.

All of these are "nuclear options", in that they will irreversibly destroy the relationship between the Speaker and the opposition. But given how bad things are, that actually looks like the best course of action.

Alternatively, we could all just cross our fingers and hope that Carter grows a brain, buys a copy of "Speaker for Dummies", and becomes less of a partisan hack. But how likely is that?

Member's Day

Today is a Member's Day, and the big show is the committee stage of Louisa Wall's Marriage (Definition of Marriage) Amendment Bill. While a cursory reading of the Order Paper would suggest that it might not happen (being behind both the third reading of the Habeas Corpus Amendment Bill and the committee stage of David Clark's Holidays (Full Recognition of Waitangi Day and ANZAC Day) Amendment Bill), given what happened two weeks ago (when Parliament worked together to give us a timely debate), I'm not willing to make that call. The question is not whether they start it tonight, but whether they get it finished. There are a number of amendments put up (and I assume a number will be offered from the floor), and each will require a personal vote - which means ten minutes of waiting while MPs mill around in the lobbies. Given that this is the internet age, surely there's a better way of doing it than that?

Speaking of amendments, in addition to the expected referendum clauses (two versions each from Winston Peters and Brendon Horan), Louisa Wall Su'a William Sio is also trying to expand the scope of her bigot amendment to give religious institutions the right to discriminate in the provision of services. That is unacceptable, and MPs should vote it down. The whole purpose of human rights law is to remove bigotry from the public sphere. If religious organisations don't want their buildings "polluted" by same-sex marriages, they have a solution: don't offer them to the public, and keep them solely for the use of their members.

Correction: Corrected name of the guilty. This gives me some hope that the broader bigot exemption won't pass.

Tuesday, March 26, 2013

Alabama lies to its schoolkids

Back in 2003, the US Supreme Court struck down anti-sodomy laws with Lawrence v. Texas. But despite this, Alabama still has a law on its books requiring teachers running sex education classes to tell students "that homosexuality is not a lifestyle acceptable to the general public and that homosexual conduct is a criminal offense under the laws of the state."

The good news is that there's now a push to repeal it. The question is whether Alabama state legislators will recognise that times (and the law) have changed, or insist that teachers continue to tell lies to children in order to promote bigot "values".

The Solid Energy files

Treasury dumped a pile of documents relating to Solid Energy on Friday. While there have been a couple of revelations from them so far (notably about the government's dishonesty in presenting it for sale while knowing it was in trouble), journalists seem to still be going through them. Meanwhile here's a few things I've noticed:

  • In 2006 Treasury highlighted concerns about Solid Energy's violation of consultation requirements for major projects [PDF, 22 - 28]. The company had spent $50 million and was planning to spend $67 million more on land and mineral rights purchases in Southland for its lignite projects. Officials were "concerned that considerable capital expenditure has occurred without any substantive prior consultation with officials or Ministers. Solid Energy's SCI requires formal consultation if any capital expenditure item exceeds 25% of shareholder funds. The land and minerals purchases to keep the options open for the project in total will significantly exceed this threshold." They called the lack of consultation "unacceptable". Later in 2008 [PDF, 26 - 29] Solid Energy objected to lowering the consultation threshold to a number more in line with those of other SOEs.
  • Solid Energy's joint venture deal with Cargill over the Spring Creek mine was structured to enable Cargill to dodge US taxes [PDF, "unlimited company structure"]. Treasury did not object to this, but its hardly appropriate for a state-owned enterprise with a statutory duty to exhibit a sense of social responsibility to be enabling tax evasion.
  • Solid Energy justified its joint venture on the basis that it would allow it to pay higher dividends. It then didn't pay out those dividends, instead re-investing profits in capital development. This is part of a repeated pattern, in which Solid Energy repeatedly promised dividends but then never delivered them.
  • In 2008 Treasury raised strong concerns about Solid Energy's valuation [PDF, 32 - 39], after it increased from $450 - $500 million to $7.8 billion in a single year. The new figure included the company's coal-to-liquids projects, which Treasury generously called "speculative" (they had purchased land and mineral rights, but nothing more; judging from information they provided in 2007 [PDF, 48], this assumed a high energy price / low carbon cost scenario. In other words, they were valuing as if the ETS didn't exist and would never affect them). Treasury "[did] not think it is credible for the company's estimate of its commercial value to increase by a factor of 15 in one year; nor do we think an estimate subject to variability of -70% to +200% is robust enough to be presented in the way that it has in the draft SCI". Solid Energy subsequently revised its value to $3 billion [PDF, 6], but this figure still included other speculative projects, and Treasury labelled it "unrealistic". However they noted that "the valuation is however the company's estimate, so it is the Board's responsibility to justify it".
  • In 2010 Solid Energy pulled the same scam again [PDF, 12 - 14] increasing its valuation from $2.5 to $3.9 billion. $800 million of that was the discounted value of proposed lignite investments which had not been made yet. Treasury again raised questions of credibility.
  • These revaluations had an effect on the consultation requirements mentioned above. By revaluing the company to $500 million in 2007, Solid Energy effectively doubled its consultation threshhold from $60 to $120 million. If the threshold had remained at 25%, then the later revaluations would have effectively removed any government oversight of large investment decisions.
  • And the smoking gun: in 2009, Treasury explicitly advocated SOE's taking on more debt in order to pay higher dividends [PDF]. They expected that this pillage could raise as much as $2 billion in special dividends for the government. Unstated: that it would effectively shift debt from the government's books to those of SOEs. It is unclear how vigorously SOEs followed this instruction; journalists may want to follow up on that.

There's no doubt more in there to be found, but what I've noticed so far is troubling enough. The overall picture I get is of an SOE running rogue, resisting oversight by its shareholder and focusing on empire-building rather than returning dividends to the people of New Zealand. In addition to that, we have pillage by the government in an effort to hide its true levels of borrowing. Its a dismal picture which raises serious questions about the governance of our SOE's and what they are allowed to get away with, and it really makes me wonder whether Solid Energy was uniquely bad, or whether we'll find similar problems with Meridian, Genesis, and Mighty River.

National guts conservation again

Another day, and another bunch of public servants sacrificed to the Moloch of austerity. Today its the Department of Conservation, where 140 jobs are going. To try and put a positive spin on things, the government is saying that they are "largely regional management and administration positions" - "they're just managers, nothing important here". But the blunt fact is that these people do important tasks, and cutting them is going to impact badly on DoC's ability to protect, manage, and enable access to the conservation estate for the enjoyment of New Zealanders.

When we think of DoC, we think of National Parks, great walks, and endangered species. So the people we think of as "frontline staff" whose demise would affect our experience are the people who maintain the tracks, the people who maintain the huts, and the people who babysit the Kakapo. But behind them there's a host of people who do the planning and monitoring, who decide what goes where, where people are visiting (and so which bits need extra tracks and huts), and whether the impacts are acceptable. They also do things like processing and monitoring concessions - consents for businesses to use the conservation estate by e.g. running a white-water rafting business, building a treetop walkway to show off our native species in a new light, or whether to build a monorail. They assess and track the conservation value of different parts of the estate, allowing them to provide factual advice when the Minister of Energy wants to stick a coal mine on it. And they fulfil the Department's statutory function to advocate for conservation values, by using their local knowledge to inform local resource consent decisions. While its "back office", these are important functions. Cutting them is going to mean that stuff doesn't get planned, monitored, processed, or advocated for - which in turn is going to mean a poorer end-user experience. And depending on whether they adopt a precautionary or flailing approach to the administrative overstretch, it is either going to mean reduced public access (as they deny access where impacts cannot be properly measured), or a long-term degradation of the conservation estate (as they let things past which shouldn't be). Most likely both.

Despite National's rhetoric, there is no free lunch in public sector austerity. There is no "waste" that can magically be cut to save money without impacting on service delivery. These cuts are going to hurt DoC's core functions. And we need to hold National accountable for them.

(But I guess this is what happens to a department which tells Gerry Brownlee that its not OK to dig up our national parks...)

Feeding the watchdog

Earlier in the month we were reminded again of the terrible state of the Ombudsman's Office. Underfunding has left them basically unable to perform their basic functions, unable to investigate OIA complaints in a timely manner. But now Parliament seems to be doing something about the problem, with the Officers of Parliament Committee recommending an extra million dollars a year to cover hiring six new investigators [PDF]:

We consider an increase in staffing necessary for the Office of the Ombudsmen to continue to perform its statutory duties satisfactorily. The number of complaints to the Ombudsmen has increased sharply over the past decade, and there has been considerable pressure on the office’s staff to meet heavy caseloads. While temporary funding was provided in 2010/11 and 2011/12 and included in the baseline from 2012/13 in an effort to clear the backlog of cases, new requests for assistance have continued to increase, particularly since the Canterbury earthquakes. In the view of the Chief Ombudsman, the financial constraints under which the office is operating — and the pressures on its staff — are acute, and mean it will increasingly be unable to achieve its performance targets for
resolving complaints.


We acknowledge that the Office of the Ombudsmen provides a valuable and important service to Parliament and the New Zealand public. Balancing the work expected of the office against the current financial climate, we consider it appropriate to increase funding for 2013/14 and out-years to provide for an additional six investigating staff — an increase of 12 percent in the number of investigators.

The bad news? This is less than the Ombudsman asked for, and therefore less than it needs. But Treasury decided they could cope with only four additional investigators (presumably by just working them to death), so the Committee split the difference.

This increase should mean the backlog decreases. But we're probably still a way from having the well-funded, fast, efficient service the public expects and deserves.

Update: Something I hadn't noticed: the Committee explicitly rejects pay increases for ordinary staff. The Ombudsmen themselves are covered by the Remuneration Authority, so automatically get a raise. The people doing the actual legwork, OTOH, are a different story. They apparently haven't had a pay rise in years, to the extent that they've suffered a 15% cut in real terms - more than enough to have an effect on the productivity of the office. This injustice also needs to be corrected. But somehow I think that MPs (who also get automatic pay rises every year and are effectively insulated from such petty concerns as money) will be unsympathetic.

Monday, March 25, 2013

The Cyprus deal

So, Cyprus apparently finally has a bailout deal. The cost? Basically total economic collapse, and a decade-long depression. if that's what "success" looks like, you really have to wonder what Eurocrats define "failure" as...

But its been obvious all along that the EU/IMF's definitions of success and failure have nothing to do with the fate of ordinary Cypriots, but rather with the "credibility" of the Euro (which means presenting a threat to Spain and Italy should they ever ask for a bailout). But even on that front, they've failed - the capital controls needed to staunch the damage the EU/IMF has caused mean that Cyprus will still be in the Euro only in theory. In practice, the common currency has been ended in all but name.

All of this was avoidable. The problem with Cyprus' banks was caused by the EU/IMF's "bailout" of Greece, and known about for a long time. But rather than working slowly towards a solution, the EU/IMF sat round until it became a crisis. And the result will be to further de-legitimise the EU as an institution.

But the worst thing is that this won't actually solve anything, and all Cyprus' pain will be for nothing. The economic disruption caused by the managed collapse of one of Cyprus' two main banks (and the effective freezing of every business's bank account), plus the natural effects of German-imposed austerity is going to mean a blowout in Cypriot government debt, which will mean another bailout in a couple of years time. But hopefully by then Europe will have some better leaders...

New Fisk

Lebanon is like a Rolls Royce with square wheels… it has a lot that’s worthy of praise but it doesn’t run so well
Bahrain hit by doctors' desertion

Confronting the Nazis in Christchurch

Over the weekend, the "Right Wing Resistance" - a local Nazi group, complete with uniforms and Hitler salutes - tried to stage a march in Christchurch. And a bunch of ordinary people turned out to oppose them, and tell everyone that racism isn't welcome in Christchurch.

This is as it should be. The answer to speech you don't like is more speech, not less. And the people of Christchurch made it crystal clear that they support democratic values over Nazi ones.

Fiji: Unsurprising

Ever since the 2006 coup there have been doubts over whether Fijian dictator Voreqe Bainimarama will relinquish power and return the country to democracy. Now we have an answer, and unfortunately its negative: having eliminated all the political parties, Bainimarama is planning to contest the 2014 elections.

While this is what he should have done back in 2006, against the backdrop of eight years of dictatorial rule (not to mention torture and murder), it suggests that Fiji's new "democracy" will just be a veneer over an ongoing military dictatorship. And Bainimarama's comment that he is confident of victory immediately brings the fairness of the upcoming elections into doubt.

Fiji needs civilian rule, not a continuation of dictatorship. Sadly, it looks like Bainimarama's plan for Fiji is just more of the same.

Don’t undermine Aotearoa!

The government recently released a discussion document on "reforming" the RMA. The "reforms" they have in mind? Removing democracy from the process, allowing developers (or Wellington) to bulldoze local communities.

This is not a good idea, and it needs to be opposed. Avaaz has a petition up calling on John Key to dump the reforms. You can sign it here.

Friday, March 22, 2013

National: Restoring discrimination

National's bill to restore age-discrimination in pay rates passed its third reading last night. So, from May 1st, National's cronies will be able to pay someone less simply because of their age. And this is apparently how National "closes the wage-gap with Australia": by cutting wages. No, that doesn't make sense to me either.

We wouldn't accept "Maori rates". We wouldn't accept "women's rates". We wouldn't accept "gay rates" or "Catholic rates". So why are we accepting youth rates?

Any reintroduction of discrimination is a backward step. But its so very, very National, isn't it? Impoverishing the young and poor to enrich the greedy old.

A basket case

Last year the government was publicly pimping Solid Energy for sale as part of its privatisation programme. Meanwhile, Treasury had concluded that the company was a basket case on the brink of insolvency:

Ministers were saying publicly that Solid Energy was being prepared for sale, even as Treasury officials warned of possible solvency issues.

Documents released by the Treasury this afternoon show that the company was placed under ''intensive monitoring'' in June last year because it was pushing ahead with an aggressive expansion, with bullish assumptions for the price of coal, even as prices were plunging.


''We are concerned that if management is unable to fully achieve their objectives, potential breaches to debt covenants and in a worst case scenario potential solvency issues could emerge in the medium term,'' officials said in a briefing to Ministers on June 5.

Which suggests that the government was less than honest about both its sale programme, and the $5 - 7 billion it had already banked from it. It also raises the question of why they waited so long to act, when the problems were obvious and pressing a year ago.

The full documents are here. It looks like they'll take a while to trawl through, but Vernon Small and Gareth Hughes seem to be competing over Twitter to see who can find the juicy bits first.

Doubling down in Cyprus

So, having had their bank-robbery plan thrown out by the Cypriot Parliament, the EU/IMF have doubled down in Cyprus, issuing an ultimatum that they will crash Cyprus' banks unless it agress a deal with them by Monday. Note that that's a deal with them; the EU/IMF does not want Cyprus to cut a deal with the Russians. Meanwhile, a top Eurocrat mutters darkly about "unrest" in Cyprus. Its called "democracy", and once upon a time the EU was committed to it.

So its the EU's road or the highway. Cyprus will become a German economic colony and no negotiation will be entered into. And they wonder why people vote Eurosceptic... the EU really is its own worst enemy (and on this front, its worth noting that Cyprus' main opposition party is mildly eurosceptic; I expect that will be a lot less mild come the next election).

The irony here is that Cyprus's banks are in this position because they played along with previous EU demands on Greece. But as always, "solidarity" is a one-way street, code for "subservience".

Cyprus' Parliament is currently working on a solution - but its unclear at this stage whether anything will be good enough for the EU/IMF - or whether it will be able to solve the problem the EU/IMF has now created. Their attempts to take advantage of a newly-elected president and blitzkrieg policy through in his first week on the job has caused a bank run and likely destroyed Cyprus's financial services industry (which is 20% of its economy). As a result, Cyprus will probably need another bailout in a year or two's time. A less dictatorial solution would have been a lot less damaging.

The kiss of death

Susan Devoy's appointment as Race Relations Commissioner has received what should be, in a sane world, the kiss of death: she's been endorsed by Richard "Wogistan" Prosser:

New Zealand First's Richard Prosser fell out with his colleagues when he said Muslim-looking men should be turned away by Western airlines.

As for Dame Susan now being in charge of complaints on those sorts of views, he says she'll do a great job.

"I think she'll be superb. I shared a plane ride with her once a long time ago. Race relations are good in this country, I think we're a model for the world."

Someone should really ask Paul Henry what he thinks as well.

The position of Race Relations Commissioner is above all about credibility and mana. And on that front, Devoy is fatally compromised, and will be unable to do the job effectively. Rather than collecting her salary for five years while giving us a substandard service, she should resign and make way for someone who can be an effective voice for better race relations in New Zealand.

Fiji's new constitution

Since the coup in 2006, Fiji's military dictatorship has supposedly been working towards a return to democracy. Except, of course, they haven't. First, they scrapped elections promised for 2008. Then they abrogated the 1997 constitution in favour of rule by decree. Things looked up last year when they hired a Kenyan constitutional expert and began a consultation process on drafting a new constitution. But when that came up with a constitution they didn't like, they burned it in front of him and threw it out. And now, they've scrapped the constituent assembly that was supposed to debate, amend, ratify and legitimise the new constitution, and unilaterally imposed their own draft.

Bainimarama naturally blames the political parties for this, who showed a "lack of commitment by the political parties to register under the requirements of the law" (you know, the one it is impossible to register under and which outlaws all unapproved political activity and which even the registrar of political parties had no faith in). The real reason of course is that the constituent assembly could have amended the draft. And there are clauses in the draft that Bainimarama cannot afford to have removed - namely those granting himself and his cronies perpetual and irrevocable immunity for the coup (alongside, of course, a clause saying that coups are illegal and that any purported grant of immunity has no effect).

Fijians now have two weeks in which to comment on their future constitution, after which it will be imposed anyway. Given that the regime now openly supports torture, I doubt they'll be getting any adverse feedback.

As for the draft itself [PDF], its not a terrible document, if you ignore the immunity clause and the worrying provision that the military is responsible "at all times" for ensuring "the security, defence and well-being of Fiji and all its residents" (giving them a licence for future coups). It is of course full of irony, promising "respect for human rights, freedom and the rule of law" and affirming freedom of the press, publication and the media; freedom of assembly; freedom from torture; and judicial independence (all of which Bainimarama has revoked). If it was passed by democratic means, it would be largely uncontroversial. But the manner of its imposition makes it illegitimate from the start. Assuming of course it ever gets that far. Bainimarama has gone back on his word repeatedly, and there's no reason to believe he'll behave any differently when it actually comes to giving up power.

Thursday, March 21, 2013

No accountability for Solid Energy

Last month, we learned that Solid Energy was on the brink of bankruptcy. The management the public of New Zealand had entrusted to guard our asset had blown our money on empire building, while paying themselves enormous salaries and bonuses. The public deserves serious answers on how this happened: on why those decisions were made, on the effect of government pillage, and on the degree of oversight exercised by the shareholding Ministers. Sadly, we won't be getting them: the government majority on the Commerce Committee has voted against an inquiry:

There will be no full parliamentary inquiry into Solid Energy after government members of the Commerce Select Committee today blocked the move.

Labour's commerce spokesman Clayton Cosgrove, who stood in for committee chairman Jonathan Young today, said Labour made a request for a full inquiry but the ``National Party toadies have turned that down''.

"There will be miners sitting on the West Coast expecting us to do a job and look into this matter given the $389 million debt.''

He said Parliament was not doing its job by declining an inquiry.

This can only be seen as a cover-up. National doesn't want us to look at what happened with Solid Energy - presumably because they think it would reflect badly on them and their stewardship of the public's assets. This simply isn't good enough, and we deserve better.

Was Devoy's appointment unlawful?

Yesterday Justice Minister Judith Collins appointed former squash player Susan Devoy as Race Relations Commissioner. Other people have already argued strongly that this is a poor appointment, and I agree. Quite apart from her total lack of experience and dodgy views on such matters, the Race Relations Commissioner must have mana. Devoy has none. But there's another aspect to this that is worth exploring: the appointment may be unlawful.

The Human Rights Commission (of which the Race Relations Commissioner is a member) is a Crown Entity. Ministers make a lot of crony appointments to Crown Entity boards, but they can't appoint just anyone. Section 29 of the Crown Entities Act says that they may only appoint members who meet the statutory criteria of the relevant Act (if any), and that they

may only appoint or recommend a person who, in the responsible Minister's opinion, has the appropriate knowledge, skills, and experience to assist the statutory entity to achieve its objectives and perform its functions

The requirements for appointment to the Human Rights Commission are here. They're structured as a collective responsibility across the entire Commission, so its not a problem that Devoy has basically none of the knowledge or experiences desirable in subsection (1)(a). More important are the specific requirements for filling the position of Race Relations Commissioner, which require the Minister to "have regard to" the proposed appointee's
(a) understanding of current race relations in New Zealand, and of the origins and development of those relations:

(b) appreciation of issues or trends in race relations arising in other countries or internationally, and of the relevance of those issues or trends for New Zealand:

(c) ability to perform the functions stated in section 16.

I think Devoy is a clear fail on both (a) and (b). As for (c), the specified functions are phrased in administrative terms, but include "lead[ing] discussions of the Commission in relation to matters of race relations" and "provid[ing] advice and leadership on matters of race relations arising in the course of activities undertaken in the performance of the Commission's functions" - so its a fail there too.

In summary, it is highly doubtful that Devoy meets that statutory criteria for the office she has been appointed to. The advice on her appointment should make very interesting reading...

About time

The Ombudsman will conduct a broad investigation of OIA processes across the entire public sector:

The agency charged with reining in the power of government is to investigate the way public bodies are releasing information as citizens complain of being shut out.

The Office of the Ombudsman is to begin its own investigation into the way the public service is responding to the Official Information Act as allegations are made of a "paralysis of democracy".


A recent investigation into the Ministry of Education's handling of requests to do with Christchurch schools raised questions about the processes used by government agencies to deal with requests.

Constitutional lawyer Mai Chen said the problems raised questions about how well public servants understood a law intended to give balance to the "David and Goliath" inequality between citizen and government.

Good. When the same issues crop up in complaints again and again across a wide range of public bodies, then the best way to reduce them (and to reduce the Ombudsman's workload to something more manageable) is to prevent the problems from happening in the first place. And hopefully this inquiry will achieve that. Otherwise we're going to see the system become increasingly dysfunctional as the Ombudsman drowns in complaints, and agencies become ever bolder about unlawful refusals because there are no consequences (and even if there are, they will be so slow that the relevant staff will have moved on by then, so it will be Someone Else's Problem).

At the same time, this will need to be combined with education to ensure that agencies start acting on the findings of this investigation, and proper resourcing so the Ombudsman can deal with their complaints backlog. Its now a six month wait between complaining and even being assigned an investigator, which means that there is simply no point complaining about late requests or unlawful transfers anymore, let alone withholding of newsworthy or time-sensitive information, because the request will have been resolved before the Ombudsman even gets to it. Which means that there's just no incentive on agencies to comply with the law at all.

Wednesday, March 20, 2013

Farmers lose; we win

The natural environment won a big victory today:

The Mackenzie Basin's status as an outstanding natural landscape is official, but questions remain about how it will become a reality.

The Resource Management Act considers an outstanding natural landscape the highest form of protection - outside of public conservation land.

The Mackenzie Basin's status was confirmed yesterday in a ruling from Justice Williams in the High Court. He was responding to a Federated Farmers appeal over a 2011 Environment Court declaration the basin be declared an outstanding natural landscape. The High Court hearings took place in August last year.

However, Justice Williams said Federated Farmers had now "reached an acceptance that the decision on the outstanding natural landscape was final".
The Mackenzie District Council still has to work out the details about exactly how that outstanding landscape will be protected, but it is likely to mean tight restrictions on large-scale irrigation and subdivision. Farmers lose, but the environment wins.

NZ police use torture

The Daily Blog has another appalling story of police brutality. In the process there's this disturbing description of the police's behaviour:

[The police officer] then begun to shove, push me across the street on the pedestrian crossing holding my arms up behind my back, above my head so that it made me bend over forward. I got to the other side of the pedestrian crossing, the pain became too much.

This treatment continued for a prolonged period of time.

There is a name for this tactic: it's called strappado, and it is a well-known torture technique used by (among others) the Spanish Inquisition, the Israelis, and of course the Americans. And now its being used by NZ police during arrests to deliberately inflict pain on criminal suspects. This is not a "reasonable use of force" consequent to arrest; it is torture, and it is absolutely unacceptable. Those who use it need to be prosecuted.

The GCSB coverup

Last night 3News revealed that Police and Spies had engaged in a systematic cover-up of their illegal spying on Kim Dotcom. The details are in 500 pages of court documents obtained by 3News and Grant Robertson. The first batch of these have gone online today and they are utterly damning.

First, there's what GCSB was saying to police when they learned their spying had been illegal. On being sent a grovelling apology by OFCANZ, an un-named person at GCSB said:

[Name redacted is] providing a summary document to our legal advisor about the TF DEBUT case and the compliance issues encountered. This document will likely then be stored on file (in case it is needed for future reference), but we do not expect it will lead to any further action or questions asked. None of us are of the opinion that there needs to be any follow on discussions - certainly at a Deputy Director level.

later that week, someone from the GCSB clarifies;
[name redacted] wrote up a brief document, to catalogue the nationality issues encountered and submitted it to [name redacted]. [He?] was pretty relaxed, and has stored this away in case we need to give an account to the IG. Absolutely no further action required.

They conclude by saying that "People here have been pretty relaxed about it all".

So, just to make that clear: GCSB learns they have been violating their Act by illegally intercepting the communications of a New Zealand resident, and they decide that no-one needs to know about it, nothing needs to be done, and that they can be relaxed about it. Which is what happens in organisations where everything is secret and there is no oversight or accountability.

And in case anyone was wondering, yes, it was a serious breach. The GCSB's affadavit makes it clear that they weren't just tracking Dotcom, but were also interception his communications (in order to determine "atmospherics" within the group). And that isn't just unlawful - its a crime.

Its not enough for GCSB staff to lose their jobs - someone needs to be prosecuted and ideally go to jail for this. Otherwise, the law means nothing.

Our military is spying on us II

Back in January we learned that the police were using the military to do an end-run around legal limits on surveillance. So how many times has this happened? Someone was curious, and used FYI, the public OIA request site, to find out:

During the last three calendar years the NZDF has provided surveillance assistance to the NZ Police on a total of fifteen occasions, as follows:

2010 RNZAF One
2011 RNZN One RNZAF Five
2012 RNZAF Eight

So this abuse of military power appears to be increasing, as police search for new ways of bypassing the legal restrictions we place on them.

This is not something we should tolerate. The NZDF is (supposedly) for defending New Zealand, not for spying on the public. This use of military force for ordinary domestic policing is well beyond the powers contemplated by Parliament, or the public. If the military isn't going to stop doing this, then Parliament must make them stop - either legislatively, or by taking their toys away so they cannot abuse them (and us) in this manner.

New Fisk

The eyes of the world are trained on Israel. But will there be anything to see?

Cyprus revolts!

The Cypriot Parliament has voted against the German-imposed bank robbery, with not a single MP voting in favour. While the plan had been modified to exclude smaller deposits, that wasn't good enough, and tellingly not even government MPs voted for it - they all abstained. I guess the crowds gathered outside Parliament made it quite clear what the consequences of robbing them would be.

So, the EU/IMF's bluff has been called: they can either pony up more money, or let Cyrpus default and risk it taking down the rest of the Eurozone. Lets hope they're not gamblers.

(Last night Crooked Timber posted a choose-your-own-adventure for the crisis, What would you do: Part 2, the Island of Surpyc. We seem to be at 33, but with virtually no chance of a successful re-vote).

Meanwhile, this is the first real democratic pushback against EU/IMF austerity. Long may it continue.

Tuesday, March 19, 2013

Head on a spike

Hugh Wolfensohn - the GCSB legal "expert" who supposedly failed to understand the law he'd helped write - has resigned:

The man who was in charge of the Government Communications Security Bureau when Kim Dotcom was placed under surveillance has resigned from the spy agency.

Hugh Wolfensohn was deputy director of the GCSB, and was acting director when the internet entrepreneur was illegally monitored.

Radio New Zealand's political staff say it's understood Mr Wolfensohn has been on leave since late last year.

The bureau has confirmed he has resigned and a spokesperson said they had no further comment.

Good riddance. Wolfensohn knew about the spying (and probably authorised it), and given his intimite knowledge of the Act, its impossible to believe that violating it was an innocent mistake. Losing his job is the least he deserves. And now perhaps we can see some criminal prosecutions as well?

Williamson shits on our constitution

The Ombudsman is one of our final constitutional backstops. They have the power to hear complaints about any government body, and make recommendations if a decision was unlawful, unjust, mistaken, or just plan wrong. While the law speaks of "recommendations", in practice they are binding rulings, and always obeyed. Until now, that is.

Last year the Ombudsman considered a complaint about levies imposed by the Plumbers, Gasfitters, and Drainlayers Board. The Regulations Review Committee had heard a similar complaint, and come to the unanimous conclusion that the fees were unlawful and recommended their disallowance (which National voted down). The Ombudsman has now released their full decision [PDF] in which they agree with the RRC, and recommend validating legislation (well, technically that the Board and MoBIE raise it with their Minister) combined with a partial refund of unlawfully-collected fees.

Normally, that's what would happen. But Maurice Williamson, the Minister responsible for this clusterfuck, disagrees. While he is pushing validation, he is refusing any refund, full or partial:

Mr Williamson yesterday dismissed Mr McGee's recommendation.

"I think the Ombudsman's Office is wrong. The board would be technically insolvent if they had to pay this money back," he said.

The Ombudsman notes this, but also notes that the Board should receive government support to compensate the victims of its failure. But Williamson is too cheap for that. And his desire to save a piddling $600,000 is trampling on one of our most important (but unstated) constitutional provisions.

What can be done? Well, if Ministers ignore the Ombudsman, then we need to force them to obey. The OIA has language making Ombudsman's decisions on the Act binding and imposing a public duty on all agencies to give effect to them. Thanks to Williamson, I think its time we inserted a similar provision into the Ombudsman's Act. Because clearly, we can no longer rely on the good will and constitutional impulses of Ministers any longer.

Will Talent2 pay for their failure?

The government has announced a $6 million support package for schools to compensate them for the extra time and work required by the failed Novopay system. Good. But I have one question: will Talent2 be footing the bill? After all, the only reason we're paying out this money is as a result of their failure. Shouldn't we hold them liable for it?

National quietly plans to impose the Cyprus solution in NZ

Something I didn't know: National is quietly planning to impose a Cyprus-style bank-robbery should a bank fail in New Zealand:

The implementation of OBR would see all unsecured liabilities that rank equally among themselves, including deposits, having a portion frozen. The Reserve Bank says the OBR policy could save taxpayers' more than NZ$1 billion regardless of whether there is a bank failure or not.

However, Norman points out that if a bank fails under OBR, all depositors will have their savings reduced overnight to help fund the bank’s bail out.

“(Finance Minister) Bill English is proposing a Cyprus-style solution for managing bank failure here in New Zealand - a solution that will see small depositors lose some of their savings to fund big bank bailouts,” Norman said.

Full details of the scheme are here. And indeed, in the event of a bank failure, we get robbed so that banks can keep operating. Supposedly this will "strengthen incentives... on creditors to provide greater external scrutiny". So, in Treasury-land, we're all expected to be forensic accountants and assess banks for financial health before entrusting them with our money. I bet they think it will also "strengthen incentives" on bank managers - who get golden handshakes and bonuses regardless - to avoid bankruptcy. Oh wait, they do.

This isn't acceptable. Kiwis need to be able to trust their banks. And we can't trust them with this policy in place. Instead of robbery, we need a proper deposit-insurance scheme, one which isn't open to South Canterbury Finance-style rorting. And if National won't give it to us, we need a government which will.

More on Cyprus

Over the weekend, the EU / IMF blackmailed Cyprus' president into robbing his own citizens to protect German bondholders in the country's corrupt, money-laundering banks. The NeoLiberal Eurocrats were hoping for a nice, clean job, done under cover of a holiday weekend, so that Cyprus' people would wake up to a fait accompli. Its turning out rather differently:

Cyprus took the unprecedented step on Monday of closing its banks until Thursday as officials scrambled to renegotiate the terms of a controversial bailout that threatens to force savers to take a €5.8bn (£5bn) hit to their deposits.

Finance ministers from the 17-country eurozone were holding an emergency video conference call amid recriminations over the aid package, particularly in Moscow, where a spokesman for Vladimir Putin attacked the plan as "unfair, unprofessional and dangerous".

There's no parliamentary majority for the plan as dictated, so the government is having to renegotiate it on the fly to have less of an impact on small savers. Meanwhile, public anger is growing, with Cypriots taking to the streets to denounce Germany, bankers, politicians, and the EU. Its pretty clear that any politician voting for the robbery is risking a political lynching at the next election (and maybe a real one too); the question is whether they will listen to their people, or to a bunch of unelected Eurowankers in Brussels.

The long-term impact of this is going to be unpleasant - and not just on Cyprus. The EU has basically destroyed public faith in its own banks, and created incentives for a bank run in other European countries. Meanwhile, its also fatally undermining itself as an institution. After all, if the EU means austerity and German robbery, imposed against the wishes of the local people, why would any country want to remain a member?

Monday, March 18, 2013

More Novopay

Not content with failing to pay people, Novopay is now apparently going to tell them they've been sacked as well:

A new bug in the beleaguered Novopay system could see education staff sacked at the end of the school term.

The glitch is threatening to terminate contracts on April 21, many of them the contracts of permanent teaching staff.


Many of the principals ONE News spoke to today said they had tried to correct the termination date, with no luck.

Some said they noticed the glitch at the beginning of the school year, sent in the right forms and saw the error corrected. But since then the system has reverted their staff back to the old April 21 termination date.

I can see the cost of the PPTA's lawsuit for humiliation and distress climbing even higher.

Isn't it time the government sorted this out? And if Talent2 can't or won't do it properly, isn't it time the government replaced them with someone who will?

David Shearer's "mistake"

Oh dear. It seems Labour Leader David Shearer has fucked up big time. Here's the news from Patrick Gower:

David Shearer has corrected MPs Register of Pecuniary Interests after not disclosing United Nations bank account. Says it was mistake.

A "mistake"? Looking at the Standing Orders, bank accounts only need to be declared if they contain more than $50,000. Obviously, that's the sort of trifling sum people forget about all the time. Its a mistake anyone could have made...

OK, I'll can the sarcasm now. Shearer clearly knows the rules around bank accounts, because he already declares one (a term deposit with Westpac). So he can't claim ignorance as a defence. If he deliberately tried to deceive the New Zealand public about his assets, then he's morally unfit to be leader of the Labour Party, or an MP for that matter. But even if we accept his excuse, and ascribe it to sheer forgetfulness (something which I think the New Zealand public would find extremely difficult to believe), then he's too incompetent for the job.

Meanwhile, its worth pointing out: knowingly making a false return is Contempt of Parliament, and the argument that this was not knowing requires superhuman credulity. Will Parliament hold its own to account? Or will they once again collude in their cozy conspiracy of silence around these matters?


The Warm Up New Zealand / Heat Smart home insulation program is one of the government's few policy successes, producing health benefits four times greater than its costs. So naturally, they're planning to shitcan it:

The future of a $330 million subsidised home heating and insulation scheme is in doubt despite tracking ahead of budget and being considered a huge success.


Minister of Energy and Resources Simon Bridges admitted the initiative was a winner but couldn't say if it would continue in its current form.

Bridges said about 230,000 homes would be retrofitted when the scheme ended in September.

A version of the scheme which targets lower-income families might be an option, Bridges said, but no decision had been made to include any announcement in the Budget on May 16. "While I understand this creates uncertainty for some in the insulation sector, I want to give an assurance that the matter is being considered carefully."

While the scheme is a huge success, I guess we need to look at it this way: what's the benefit for rich people in keeping poor kids out of hospital? None at all. Meanwhile it means slumlords - including slumlord MPs - face pressure to upgrade the quality of the housing the rent out. So you can see why they want to get rid of it. But from the point of view of the rest of us, it just looks like sheer insanity.

New Fisk

The cost of war must be measured by human tragedy, not artefacts

The EU starts a bank run

The purpose of the EU / IMF interventions in Ireland, Greece, Portugal and Spain was supposedly to restore confidence and stability to the banking sector (what it has turned out to be in practice is to socialise the debts of incompetent bank management onto the innocent publics of those countries, while protecting the profits of bank share- and bond-holders, who are mostly German). But when faced with the prospect of another bailout in Cyprus, instead they have insisted that the bailout be funded by a "one-off" tax on people's bank-deposits. The result was easy to predict: a bank-run:

Cypriots reacted with shock that turned to panic on Saturday after a 10% one-off levy on savings was forced on them as part of an extraordinary 10bn euro (£8.7bn) bailout agreed in Brussels.

People rushed to banks and queued at cash machines that refused to release cash as resentment quickly set in. The savers, half of whom are thought to be non-resident Russians, will raise almost €6bn thanks to a deal reached by European partners and the International Monetary Fund (IMF). It is the first time a bailout has included such a measure and Cyprus is the fifth country after Greece, the Republic of Ireland, Portugal and Spain to turn to the eurozone for financial help during the region's debt crisis. The move in the eurozone's third smallest economy could have repercussions for financially overstretched bigger economies such as Spain and Italy.

People with less than 100,000 euros in their accounts will have to pay a one-time tax of 6.75%, Eurozone officials said, while those with greater sums will lose 9.9%. Without a rescue, president Nicos Anastasiades said Cyprus would default and threaten to unravel investor confidence in the eurozone.

So, in order to restore confidence in Cypriot banks, the EU / IMF has destroyed confidence in Cypriot banks. Who'd have thunk it? Meanwhile, the Cypriot government has been forced to impose a ban on electronic transfers and a bank holiday, which now looks set to stretch into mid-week. Which, if the aim is to keep the banks function so the wheels of commerce keep turning, seems hugely counter-productive as well. And even then, its not going to help: the moment the banks re-open, people will pull their money out and stash it under a mattress (or, in the case of those non-resident Russians, in some other tax-haven), because its clearly not safe there anymore. Which means Cyprus is back where it started, only billions of Euro poorer. Some "bailout".

And the kicker is that the legislation to do this hasn't been passed, and is already looking dodgy. Cyprus' President does not have a majority in the legislature, and needs the support of other parties to pass the bill - and they are looking decidedly dubious. Will Cyprus be the country that finally says "no" to the EU / IMF gangsters and brings the whole rotten system down? I'm kindof hoping that they will be.

[More commentary on European Tribune]

Friday, March 15, 2013

Equality of sacrifice?

Wellington is currently under severe water restrictions, with any outdoor use of water banned. Wellingtonians are being asked to limit their personal use of water by 30L a day by taking shorter showers. But according to this Radio New Zealand news report [audio], "businesses, including golf courses will be exempt".

Because the worst drought in memory couldn't possibly be allowed to interfere with rich wankers playing golf. Equality of sacrifice? I think not.


The UK Ministry of Defence has admitted the unthinkable: the war in Afghanistan is unwinnable:

British soldiers fighting in Afghanistan are part of a campaign that attempted to “impose an ideology foreign to the Afghan people” and was “unwinnable in military terms”, according to a damning report by the Ministry of Defence.

The internal study says that Nato forces have been unable to “establish control over the insurgents’ safe havens” or “protect the rural population”, and warns the “conditions do not exist” to guarantee the survival of the Afghan government after combat troops withdraw next year.

In other words, UK soldiers are being asked to risk their lives in pursuit of a futile goal which cannot possibly be achieved. And so are Kiwi ones. We should stop wasting our time, stop asking people to die for nothing, and bring everybody home.

More contempt from Solid Energy?

Yesterday, Solid Energy's Don Elder and John Palmer finally fronted up before the Commerce Committee to answer questions about how they'd run the company into the ground. During the hearing, Palmer specifically denied claims that Solid Energy had asked the government for a billion dollar capital injection to fund expansion:

Mr Palmer also said the company had never approached the Government seeking a $1 billion capital injection, as suggested by Mr Key shortly after it was revealed late last month the company was struggling under $389 million in debt.

"Were we talking to the Government about the possibility of capital and receiving that from the Crown? The answer is no," Mr Palmer said.

"A specific $1 billion capital injection, I'm reasonably sure we did not ask for it in exactly those terms."

It appears that he was less than forthcoming:
Prime Minister John Key this morning released documents detailing Solid Energy's ambitious expansion plans which would have required capital investment of $2-3 billion a year until 2021 or a total of up to $27 billion.

Key released the papers in response to Labour's claims he misled the public about Solid Energy approaching his Government about a $1 billion investment to become the "Petrobras" of New Zealand, a request he says his Government turned down.


In the 2010 documents, Solid Energy is reported as tabling a proposal to transform itself into a "National Resource Company" whose operations would include coal mining, lignite conversion to higher value products, coal seam, underground coal gasification, and marine methane hydrates.

A report on Solid Energy's proposal is here, and Treasury's response is here.

Palmer may claim that he was technically correct, in the same way that Bill Clinton did when he claimed that "I did not have sex with that woman". But its also clear that he materially mislead the committee. There's a name for that: Contempt of Parliament. And we shouldn't tolerate it.

This doesn't absolve the government of blame for pillaging Solid Energy to pay for its tax cuts for the rich; that seems to have played a significant part in things. But it looks like there's plenty of blame to go around, and some of the responsible parties are trying to lie their way out of trouble. They shouldn't be allowed to get away with it.

The cost of tax evasion

How much does tax evasion cost us? Sure, IRD estimates that its between $1 and $6 billion a year, but what does that mean in policy terms? Writing in the Herald, Catriona MacLennan puts it in context: if the rich stopped cheating, we could eliminate child poverty:

Instead of focusing unjustified criticism at the poorest people in the community, who are struggling to get by on inadequate incomes, let's put more effort in to ensuring that the most well-off in New Zealand pay their fair share.

The report last December of the expert advisory group on solutions to child poverty - "Solutions to child poverty: Evidence for action today" - contained a list of 78 recommendations for addressing child poverty in New Zealand.

The cost is estimated to be between $1.5 and $2 billion a year - less than the amount owing in child support and probably less than the amount of tax evaded every year.

If people who choose not to pay the tax for which they are liable instead decided to start pulling their weight, there would be enough money to stamp out child poverty.

National is happy to tolerate tax evasion, and they're happy to tolerate child poverty. But if you polled ordinary kiwis, you'd find them much less sanguine about the issue. Both are social evils. Tax cheating robs government of revenue it needs to help us build a better society, while boosting inequality and reducing social solidarity. Child poverty robs children of their future, and imposes long-term costs on the rest of us. Both need to be eliminated. And we need and deserve a government which will commit to that.

Thursday, March 14, 2013

Austerity doesn't work

Writing in The Guardian, Aditya Chakrabortty reminds us of the historical verdict on austerity: it almost never works:

[Y]ou would have to be one of the austerity jihadists to believe that you could cut your way out of a slump. The entire modern history of expansionary fiscal contraction, as coalition ministers used to call it, is that it almost never works.

Instead, severe austerity tends to turn recessions into depressions, consign millions to the dole or under-employment and lead to frightening political turbulence.

The most famous episode of austerity was during the interwar years, as Germany, Britain, France and Japan all fought to stay on the Gold Standard even amid the Great Depression. The deflationary impact of keeping their currencies pegged to gold, along with the austerity policies they followed to do so, was disastrous.

In Britain, unemployment jumped from 10.4% in 1929 to 22.1% by early 1932, even while government debt surged. In Germany, the Social Democrats stupidly clung to the orthodoxy of austerity, pushing joblessness up to to 30% by 1932, and opening the door to the Nazis.

Despite that, history is repeating itself all over Europe. The pursuit of austerity in Eastern Europe has caused governments to fall in Bulgaria and Slovenia. In Spain, it has pushed unemployment to 26%, causing political turmoil. In Greece, it has created political space for open fascism. Meanwhile, in New Zealand, our government remains wedded to the ideology of cuts, resulting in record unemployment, prolonged hardship, and economic stagnation.

Austerity doesn't work. Its time our government abandoned this ideology and tried something that does.


Why is Solid Energy in so much trouble? Yes, there's the drop in coal prices, and the badly-managed diversification plan, but on top of that it seems that National pillaged the company, forcing it to borrow in order to pay larger dividends to offset its tax-cuts for the rich:

Yesterday, however, Labour Party leader David Shearer produced a May 2009 letter sent by then State Owned Enterprises Minister Simon Power to Mr Palmer, telling him the Government wanted the company to increase its gearing or debt levels.

Mr Power also indicated he wanted Solid Energy to pay higher dividends to the Government.

That was in spite of noting in the same letter that the company was forecasting a decline in its financial performance - including profit and dividends - for the next four years because of falling coal prices.

Responding to questions from Mr Shearer in Parliament yesterday, Mr English confirmed his Government "did make the decision to allow Solid Energy to take on more debt" during its first term but "decisions about how much debt to incur were made by the board".

Right. So English thinks that the board's decision was "independent" despite pressure from the Minister. And if you believe that, I have a round building in Wellington for sale.

This is the sort of shit private owners do: forced borrowing, extra dividends, run the company into the ground. And its one of the reasons NZ companies are so shit and people don't want to invest in them: strip-mining a company like this kills profits int he long term. But government owners are meant to be smarter than this. Sadly, under National, they're not.

Solid Energy's problems go way deeper than this of course. At the end of the day, its a business with no future, and its going to have to deal with that sometime. But being treated like a piggy-bank by the government of the day didn't help, and its one of the reasons hundreds of people are now out of work. And we need to hold the politicians responsible for that.

Stand up for human rights in Fiji II

In addition to tomorrow's protest in Auckland, people will also be protesting in Wellington against torture and human rights abuse by the Fijian regime:

When: 13:00 - 15:00, Friday 15 March
Where: Fijian High Commission, Pipitea Street, Wellington

More details here.

Wednesday, March 13, 2013

The vote

Parliament voted on the second reading of the Marriage (Definition of Marriage) Amendment Bill tonight, and passed it 77-44. The Dompost's Warwick Rasmussen tweeted the tally-sheets, and they're up here and here. The first-reading passed 80-40, and the changes were that Labour's Raymond Huo switched from an abstention to a "yes", while National's Brownlee, Coleman, McKelvie and McCully sided with the bigots this time. This shifts the balance in the National Party firmly to the bigots - but then, we knew that, didn't we?

Meanwhile, Labour's Damien O'Connor, Ross Robertson, and Su'a William Sio still voted against the bill. Time to de-select these pricks already. Labour wouldn't accept those spouting racism or sexism, and it shouldn't accept bigots either.

Stand up for human rights in Fiji

There will be a protest in Auckland this Friday against torture and human rights abuse in Fiji:

When: 12:30, Friday 15 March
Where: Grass verge opposite Aotea Square, Queen Street, Auckland, marching to Britomart.

According to The Standard, David Shearer will be speaking at it. Hopefully he'll be able to take a strong position on this, rather than his usual chickenshittery.

Unlawful and unacceptable

Since the Christchurch earthquakes, EQC has been inundated with OIA requests, as homeowners have resorted to statutory mechanisms in the face of bullshit from officials. Their response? Don't answer anything for five months

Frustrated Cantabrians hunting for information on their broken homes have swamped EQC with thousands of Official Information Act requests, pushing the 20-day response deadline out to an unprecedented five months.

Christchurch homeowners say waiting almost half a year for crucial information on their properties is "inexcusable" and the chief ombudsman says the current waiting list is "not satisfactory".


[Andrea Laws] filed her first request in early August 2012 and said she received only part of the information in mid-September.

EQC refused to send Laws any more information for months until she complained to the ombudsman, she said.

"They really didn't want to do the OIA. I had to ask them two or three times where my response was and when it came through there was email correspondence that said: ‘Do not provide the claimant with information or time frames'," she said.

This is unlawful and it is unacceptable. On the first front, the OIA requires a response " as soon as reasonably practicable, and in any case not later than 20 working days" after the request is received. While the twenty-day limit can be extended, that cna only happen if it is for or requires searching a large volume of information, or if required by consultations with other agencies. Being flooded with requests and just not feeling like doing them is not an excuse. Any agency faced with such a situation should be hiring extra staff to cope, not ignoring requests.

Sadly, there seems to be little we can do about it. It is not a crime for agency CEO's to flagrantly ignore the law, and they face no employment penalty for doing so. And that is simply not good enough. EQC is a Crown Agent. Its members can be removed summarily by the Minister. And unless they clean their act up and start obeying the law, that's exactly what should happen.

The nuclear option on Solid Energy

Last night, Campbell Live finally got Solid Energy to front up, with a detailed interview with its strategy mnager Bill Luff. The problem? Mr Luff appears to have answered questions that just last week he was telling Parliament he couldn't answer. As a result, Clayton Cosgrove has gone nuclear and has laid a complaint of contempt of Parliament with the Speaker:

Clayton Cosgrove said: “I was astounded to see Solid Energy’s strategy and corporate affairs manager Bill Luff singing like a canary to media yesterday and today. Mr Luff’s openness and transparency was in stark contrast to his appearance, along with his colleagues, at the select committee last Thursday.

“The executive team repeatedly stated that they couldn’t answer questions because the events happened before their time, they didn’t know and they didn’t have the information.

“Yet just 48 hours before former chair John Palmer and former chief executive Dr Don Elder are due to appear before the committee, Mr Luff provided detailed information to the media. Where were those answers last Thursday?

This is a serious allegation, and it deserves a serious investigation. SOEs have an obligation to be honest with Parliament - it represents their shareholders after all - and Luff appears to have violated that obligation. And while those sorts of spin tactics - stonewalling and obfuscation until you feel like talking - may be acceptable in the minds of big-business sociopaths, they're not acceptable in our Parliament.

David Shearer: Spineless chickenshit

Yesterday Winston Peters flung down the gauntlet on asset sales, declaring that NZ First would buy back stolen assets at no more than cost - and borrow if necessary to do it. Labour leader David Shearer's response? He "won't rule it out but we won't rule it in either". I'd ask him to tell us what he really thinks, but its clear that he doesn't really think anything. He's just a spineless chickenshit, saying nothing for fear of offending anyone.

This isn't good leadership, and it isn't good politics either. Back in the sixteenth century, Machiavelli noted that

A prince is also respected when he is either a true friend or a downright enemy, that is to say, when, without any reservation, he declares himself in favour of one party against the other; which course will always be more advantageous than standing neutral... Because he who conquers does not want doubtful friends who will not aid him in the time of trial; and he who loses will not harbour you because you did not willingly, sword in hand, court his fate.

Machiavelli was talking about wars between semi-feudal states, but his reasoning boils down to "nobody likes a fence-sitter". And that applies equally to democratic politics too. By offering nothing to either supporters or opponents of asset sales, Shearer (and Labour) earns the contempt of both and the support of neither.

Member's Day

Today is a Member's Day. But while everyone is looking forward to the second reading vote on marriage equality, its just not going to happen.

why? Because yesterday the Finance and Expenditure Committee released its report [PDF] on the Budget Policy Statement 2013 and Treasury's December 2012 HYEFU. This takes priority over all other business on the Order paper, so Parliament will spend most of this afternoon debating it (rather han merely one hour on the General Debate). And following that there's a third reading debate (up to two hours) on a local bill, and the committee stage of Chris Auchinvole's Habeas Corpus Amendment Bill (no set time limit), and an hour on David Clark's Mondayisation bill before we even start on marriage equality. If we're lucky, the House will get started on the debate - but I don't expect them to finish it or vote. Instead, we're looking at a vote on the 27th, and hopefully the committee stage on April 17.

Tuesday, March 12, 2013


Voters in the Falkland islands have voted overwhelmingly to remain a British territory, with only 4 of 1,517 votes cast voting against. I'd say that's a convincing mandate. But the Argentine Government is refusing to accept it:

Ahead of the referendum, Argentine President Cristina Fernandez de Kirchner had said the inhabitants' wishes were not relevant in what is a territorial issue.

To the contrary, its the only thing which is relevant. The UN recognises the principle of self-determination, and its simply unthinkable in the modern era for a democratic country to legitimately claim ownership of a territory whose people do not want to be governed in that way.

Of course, exactly the same principle applies to Scotland...

Not corrupt, just incompetent

The Office of the Auditor-General has released their report into Shane Jones' decision to grant citizenship to Yang Liu (AKA Yong Ming Yan). The short version? He wasn't corrupt, just a shit Minister:

Mr Jones had significant concerns about the advice he was given, but did not take steps to clarify that advice with other officials. He also knew that both the New Zealand Police and Immigration New Zealand were still actively investigating Mr Liu, but did not consult those agencies before making his decision. In keeping with his usual approach for ministerial decisions, he wanted to make a final decision quickly.

Mr Jones authorised granting citizenship to Mr Liu, effectively under section 9(1)(c) of the Citizenship Act. This provision gives Ministers a broad discretion to approve an application if there are exceptional circumstances that make it in the public interest, such as humanitarian concerns. He did not record the reasons for his decision, and Mr Liu's advisers were notified of his decision before the Department was notifed. This effectively deprived officials of an opportunity they might otherwise have had to correct the misunderstandings on which Mr Jones' decision was based.

The next day, Mr Jones annotated a letter from Mr Samuels in which Mr Samuels asked for consent to officiate at Mr Liu's citizenship ceremony. Department officials understood the annotation to be approval for a private ceremony and then gave approval for the ceremony to be held urgently. Mr Jones did not appreciate that the Act required him to approve a private ceremony or that the application did not satisfy the normal criteria for urgency.

(Emphasis added)

In most workplace, such an abysmal performance would result in retraining or sacking. In the Labour Party it apparently merits promotion. Go figure.

There's plenty of blame for the Department of Internal Affairs as well for failing to brief Jones properly and letting him behave in this fashion. The Auditor-General is recommending some changes in process to ensure that this doesn't happen again and that future decisions are publicly defensible.

A victory on meal breaks

Back in 2009, the government introduced legislation to steal workers' meal and rest breaks, replacing statutory entitlements with vague promises of "reasonable" and "appropriate" "breaks" (during which employees may in fact have been required to work). But despite threats to pass it under urgency, the bill went through select committee - and then stalled. And now, after two and a half years, the government has backed down and discharged it.

Its a victory, but only a minor one. Still, its good to hear that one way in which National was planning to make life worse for ordinary people has been defeated.

Still starved

Bad news from the Ombudsman's office today: they're still overloaded and starved of funds, and so effectively unable to process OIA complaints in a timely fashion. This was supposed to have been sorted out last year, when the Government Administration Committee acknowledged systematic underfunding and promised to do something about it. But the measly $300,000 increase recommended by the Offices of Parliament Committee simply wasn't enough (and was supposed to be spent on higher salaries rather than extra people to boot).

The OIA is only as effective as its enforcement mechanism. Systematically underfunding the Ombudsman's Office means less transparency, and less accountability. While politicians and bureaucrats might be happy with that, we shouldn't be.

What veto?

So, National has admitted the reality that the Holidays (Full Recognition of Waitangi Day and ANZAC Day) Amendment Bill is going to pass despite its opposition - and magnanimously declared that it won't veto it. To which my response is "what veto"?

Standing Order 321 gives the government the power to overrule Parliament if a bill would have "more than a minor impact" on its aggregate finances or a single vote. I've discussed the origins and dubious post-MMP constitutionality of this clause here, but beyond the objection on principle (Parliament legislates and appropriates, and the executive should just have to lump it on the rare occasions when it overrules them), it would also be drawing a very long bow indeed to claim that this bill would have any effect on the government's finances at all. Yes, public servants would benefit from this law - but the government is paying them anyway for the day regardless of whether they work or not, so where's the financial impact?

National seems to be trying to claim a power it simply does not have. Its in keeping with their autocratic, authoritarian style - but hardly with our constitution.

An affront to democracy

Later today, the Keep Our Assets referendum petition will be presented to Parliament. It is the largest referendum petition ever, with ~392,000 signatures. And for the second time, the government has announced that it will ignore it, no matter what the outcome.

No matter what your political persuasion, this cannot be seen as anything other than an affront to democracy. The referendum question isn't loaded. It's not misleading, vague, or meaningless. It will give a clear indication of whether the public support the government's partial privatisation programme or not. And there's therefore no wiggle room for the politicians to ignore it.

(Similarly, its not an attempt to deny or deprive people of human rights, which is about the only other reason I can see for a referendum to be ignored. But as I've long made clear, that should be done up front, in the acceptance phase, by checking all referendum proposals for consistency with the BORA and rejecting those which are inconsistent).

Our referendum legislation has always been half-hearted (too high a threshold, half-arsed questions, no requirement for the government to even respond to a vote, let alone obey it), and our politicians have never been keen on it, viewing us as dirty peasants whose grubby paws need to be kept off the machinery of power. And this has become a festering sore on our democracy. To fix it, we need to reform the CIR Act to give it teeth, to allow us to restrain our politicians when they get out of control. I've got some thoughts on how to do that here and here.

Meanwhile, National has once again shown its contempt for democracy. We need to hold them accountable for it, otherwise they'll never learn.

Monday, March 11, 2013

A closer look: Freshwater "reform"

The government released its proposed reforms to the management of freshwater over the weekend. The full report is here [PDF], but the quick version is that the government is proposing greater iwi involvement in water decisions, an "optional" collaborative planning process, a "National Objectives Framework" setting guidelines for quality, and more guidance for councils on dealing with overallocation. Much of this should be uncontroversial: iwi need a greater say (its their water after all), and some consistency on water quality standards would be useful. Some of the rest however is highly troubling.

Take, for example, their proposed "optional" collaborative planning process. This is modelled on the process used by the Land and Water Forum, and justified on the basis that:

Communities need to come together to decide how to use and manage their freshwater resources.

Well, the people of Canterbury did exactly that. And in retaliation the government stripped them of their democracy and placed those decisions in the hands of a group of unelected dictators, who are now (contrary to Cantabrians' expressed will) handing over all their water to farmers. So its hard to take this proposal seriously when the government is so obviously two-faced about it.

But even if we ignore government dishonesty, the proposal stinks. Yes, its all about consensus etc - but when you get down to the nitty gritty, it allows councils to say "we will use this process", appoint stakeholder groups to it (which may have no community support or mandate), and then use the fact that they have to strip all other parties of procedural and appeal rights over the decision. And that simply stinks. it is one thing for such collaborative processes to bind participants - they've agreed to take part, after all. Its quite another for them to purport to bind third parties, who were not consulted and had no input. Its simply a recipe for local government to steamroller their communities and dictate decisions with no right of appeal - classic National Party, in other words.

On overallocation, they're big on talking it up as a problem, but stop short of imposing the concrete solution of actually charging commercial users for their use of our water. Which means the problem is just going to continue. Given that large parts of the country (including most of Otago and Canterbury, and parts of Hawkes Bay) are already overallocated, I expected a bit more urgency on this. They are taking baby-steps, by regulating for better accounting information (which is required for any permit or resource rental scheme), but its very definitely kicking that can down the road. Which sadly isn't surprising.

So, no real solutions, and another attack on democracy and public input. More of the same from National.