Thursday, May 26, 2016

Budget Solves Housing Crisis

On first reading the 2016 Budget did not appear to have a substantial focus on housing, but closer analysis of the spending priorities reveals the Government's strategy.

Housing has created a huge ideological problem for National. The party does not support a large state housing sector and is not prepared to take on the responsibility of increasing the supply of social and emergency housing.

I can imagine the consternation and frustration within National's cabinet in dealing with the growing evidence of a housing shortage and surveys and polls showing increasing numbers of voters expressing dissatisfaction at the Government's performance in this area. I believe that Judith (Crusher) Collins may have come up with a solution. As the restored Minister of Corrections she has been determined to put public concerns regarding conflicts of interest and her close relationship with Cameron Slater behind her as she grows her power base again.

Ministers must compete against each other for a share of the budget to finance their portfolios and the $355 million increase for prisons is a huge win for Collins when one compares that to the $258 million being provided for social housing. 4,585 individuals and families are on Housing NZ's priority waiting lists and yet the money set aside to address the demand will only build a paltry 750 houses in Auckland.

Collins is clearly building a corrections empire and although her earlier attempt at privatising prisons was a failure she is keen to grow the status of the portfolio. It costs around $100,000 a year to keep someone in prison and while this may seem a lot of money it is probably much cheaper than providing social housing and all the wrap around services needed to support struggling families and individuals. The demands on mental health services are also increasing and the police have become the first line responders for those suffering from mental health episodes and police cells and prisons are already being used to house those with mental health disabilities.

By expanding the numbers that corrections manage it will take the pressure of housing and social services. The wonderful thing about prisoners is that many voters support the idea of punishment so that there is no expectation of quality care. Already double bunking cells are being considered and there is potential to add 5,000+ plus prisoners to the current 10,000 with little extra spending.

All the Government needs to do is remove all the homeless from the streets and put them in prison and a cost effective solution is found that doesn't challenge National's principles and can pave the way to future tax cuts. Of course the police will be much busier arresting more people and managing the increased paper work so that perhaps almost $300 million will go some way to supporting that.

Then there is the issue of those who may criticise the Government's unethical plans and the likes of Nicky Hager using his investigative skills to expose them. A beefed up GCSB would be needed to keep tabs on unwanted attention and $178.7 million would go a long way to achieving that.

Of course all this is purely speculation and intended as satire...

Saturday, May 21, 2016

Homelessness Finally Hits Middle NZ

It is likely that New Zealand hasn't experienced this level of homelessness and lack of decent housing since the depression. Even in 1905 the importance of state housing was recognised by Richard Seddon and his Liberal Government:

"...alarmed by growing reports of extortionate rents and squalid living conditions in the working-class districts of New Zealand cities, Seddon inteoduced the Worker's Dwellings Act. Its purpose was to provide urban workers with low-cost suburban housing, far removed from city slums and grasping landlords."

Up until 1991 the state housing stock grew to generally meet demand and totaled around 70,000 at peak. If we had continued on the same trajectory of state house building as we had from 1950 to 1990, we would have over 90,000 state houses now and a constant, ongoing, supply. Market rentals were brought in the 90s, around 8,000 state houses were sold off and underfunding has been the reality since. Well built state housing had created the supply of low cost housing for future generations and the state houses of the 40s are still seen as solid options for private owners compared to the leaky buildings of the deregulated 90s. The majority of new houses are being built for the affluent and we are consequently ranked third in world for the size of our homes.

Given that it is now common for multiple families to squeeze into a one three bedroom house and how many are forced to pay up to $400 a week to live in a garage, it does seem as though we have a back to the future scenario.

This Government has known since 2008 what the previous Labour Government had begun to address, New Zealand was falling behind in meeting the growing demand for social housing. Report after report has crossed the desks of National Ministers detailing the needs and describing system failures and have been deliberately ignored. The numbers of those on Housing NZ urgent waiting lists continued to grow despite tightening the criteria and it can now take up to two years to address an urgent housing need.

This populist Government understands that to remain in power it must retain the support of middle New Zealand. It has deliberately sought to spin the realities of welfare failures so that greater levels of tolerance for poverty can be achieved and less spending is necessary. The Government has been hugely successful as they have managed to restrict the funding and drastically reduce the capacity of the country's main provider of social housing.

Middle New Zealand have accepted the spin that the 43%+ of Pasifika families live in over-crowded homes because that is a cultural choice. Middle New Zealand comfortably swallowed the explanation that a large percentage of Housing NZ stock was not fit for purpose as it was the wrong size or in wrong place (despite the refusal to support the claim with evidence). Middle New Zealand largely accepted the suggestion that the Government is ill equipped to manage social housing (despite it doing so successfully from the 1930s to the 1980s). Middle New Zealand also appears to agree that our housing shortage is because city councils are not providing enough land for developers.

Middle New Zealand did not have first hand experience of the deliberate underfunding of state house maintenance (now estimated at $1.5 billion). The demand that the Housing NZ pay a $118 million dividend was generally accepted and the explanation that the dividend was necessary to "place a discipline" on the crown entity went without a protest from middle New Zealand.

Those protesting at the removal of state houses from prime real estate in Glen Innes were largely condemned by middle New Zealand and yet the 156 state rentals were going to be replaced by only 78. The plan to sell all the 1,500 state housing in Tauranga and Invercargill has not met large protests as middle New Zealand felt comfortable with the plans and those who were directly impacted were too frightened to say anything (trouble makers are likely to find themselves homeless).

There was some feeling of discomfort when it was revealed that the poor condition of a state house was implicated in the death of a young child, but it was presented as a maintenance issue rather than the tip of an iceberg. The 50,000 children who are being hospitalised annually because of poor quality housing mainly passed under the radar as these are not the children of middle New Zealand. I have heard it said that the problems are more likely to be caused by poor house management than a problem with the house itself as much of middle New Zealand has experienced living in uninsulated homes and survived. They forget that heating was cheaper, overcrowding wasn't an issue and many mothers stayed at home and kept the house warm during the day. Blaming the poor for their situation is encouraged amongst middle New Zealand.

The Green Party's announcement of a new policy to address the housing crisis included the plight of a mother who did not fit the generic picture of someone needing social housing. This mother was white and was obviously educated and articulate. She had been married and employed but a marriage failure and having to leave work to care for her seriously ill daughter had reduced her income and she found herself homeless. She needed to remain in Auckland to be close to the Starship Hospital but couldn't find anywhere to live. She could no longer adequately care for her sick child and nothing would be available for almost two years. Her only current option is her car.

Middle New Zealand is beginning to take notice...

Wednesday, May 18, 2016

The Brilliance of John Key

Leaders of other conservative Government's look at John Key's continued popularity with envy. New Zealand's National Government has the same agenda as most other conservative governments and yet despite New Zealand's richest blatantly continuing to capture a greater share of the country's wealth and government services being increasingly reduced and privatised, the Prime Minister remains popular.

John Key's public persona has managed to capture populist elements that have made Donald Trump so successful but is moderated by a slick PR team and constant polling. The dismantling of our welfare state has been a gradual one but to get to our current point where livable wages are no longer considered reasonable and decent housing is not a human right, is quite an achievement.

John Key's government has managed to continue the work begun by Ruth Richardson and has obviously learned from Jenny Shipley's mistake of not ensuring public acceptance of drastic welfare change. Ruth Richardson's Mother of All Budgets is regarded as the most significant step in dismantling our welfare state. Drastically cutting welfare benefits was a deliberate strategy to drive down wage costs. It was Richardson's belief that maintaining unemployment at around 5% and keeping welfare payments low, workers would then be more likely to accept lower wages. Child poverty was below 15% pre 1991 but escalated to 30% by 1992. While there was some reduction under the previous Labour Government, with the introduction of the Working for Families tax credit, child poverty is again close to 30% in 2016.

The dismantling of labour laws in favour of individual contracts and limiting the number of collective agreements effectively destroyed the power of unions in the private sector to the extent that only 20% of our workforce is now unionised. The balance of power has been successfully shifted in favour of employers. There is now a pervasive belief that workers should be grateful for any employment opportunity (regardless of the conditions) and that demanding living wages and certainty of income will place unnecessary pressure on the economy. The fact that productivity has increased far faster than wages is an indication that the value of labour in achieving productivity gains is not being recognised. A large casualised workforce that is available on demand for minimal wages is the current industrial reality.

The subtle shift to a Government that spends more on corporate welfare than addressing social need has been hugely successful. We now have a growing demographic called the working poor that cannot survive without the support of Working for Families (WFF), an accommodation supplement and reliance on food parcels. The Government now spends more on subsidising wages and landord's incomes than it does on traditional welfare spending. In 2016 the combined spending to subsidise these two is likely to be around $6 billion. It is being left to NGOs like the Salvation Army and other charities to fill the gaps that were once the Government's responsibility. Food banks were largely unnecessary before 1991 and now they have become an essential institution for the survival of many, 150,000 parcels are being distributed annually. Those who need a safety net to manage unfortunate circumstances have to endure unnecessary stigmatisation and the embarrassment of asking for charity. Most want "a hand up" rather than a "hand out" as it is now perceived.

John Key's popularity continues despite growing evidence all around us that we have become an increasingly unequal society. Homelessness is very visible in our cities' streets, domestic violence is a growing problem (almost 300 callouts a day) and the health effects of child poverty causes 40-50,000 admissions to our hospitals every year. Our prison population is also growing, we are close to reaching 10,000 prisoners, which gives us one of the highest incarceration rates in the world (worse than Mexico). Our growing numbers of mental health sufferers are more likely to end up in a police cell than receiving support from underfunded health providers.

The Government clearly has a responsibility for child health, social housing and reducing criminal offending and yet John Key and his Ministers have enthusiastically used the blame game to shift that responsibility. It is suggested that child poverty is because of poor parenting, the lack of housing is because of local authorities not making land available to developers and better teaching will create more responsible, work ready citizens. This approach reduces the expectation that more Government spending is the answer and the Government's public service mantra of delivering more for less is the result.

New Zealand's working poor work in our rest homes, our early childhood centres, in our farms and our orchards. They are found in our fast food outlets, supermarkets, fish factories and clean our houses. Many are under-employed or work multiple part-time casual jobs to make ends meet. A large number of our poor are women and many are sole parents. They live in cars, garages or overcrowded, substandard houses. The majority of our poor are Maori and Pacifika or migrants on work visas. 30% of our children live in homes where incomes do not allow them to have their basic needs met. Most of these families feel powerless because livable wages are unobtainable and getting government support is often too difficult or takes too long, many give up.

The wealthy of New Zealand applaud Key's determination to keep taxes low and keep the property bubble inflated and donations to the party flow in from all those benefiting from limited market interference. "Facilitation payments" are now becoming common practice and business interests appreciate the easy access to the PM and his Ministers. Many in middle class New Zealand have also bought into the culture promoted by the wealthy champion of "middle New Zealand" Mike Hosking, suggesting that people create their own destinies and welfare just encourages dependency. Sadly this satirical send up of Hosking is not that dissimilar from his own or many views being publicly expressed.

Extreme wealth and poverty are now generally viewed as realities in New Zealand that must be tolerated rather than solved. The rich and middle class vote and the majority of our poor and migrant workers don't or can't. John Key's brilliance has been seen in his ability to keep the voting public onside as he creates a new New Zealand based on PR rather than fact. He may not have changed the flag, however his real legacy will be to create extreme inequality in a land of plenty.

Monday, April 11, 2016

National fails with the important stuff

The health and resilience of our economy, our people and our environment are the important stuff any government should have as overarching priorities. The National Party is approaching eight years in government and its record in these three key areas is not particularly good. Our rivers are becoming increasingly polluted, we have one of the lowest GHG reduction targets and almost 1/3 of our children live in relative poverty.

National Governments do not have any historical reputation for championing social causes or lifting environmental standards, but they survive because of the perception that they can be trusted to manage our economy.

Displaying some rational economic vision and leadership is important for our ongoing survival as a nation in an often turbulent global economy. The Great Financial Crisis came about because of loose regulations and giving too much rope to financial institutions. New Zealand came through that crisis relatively unscathed but I would have thought that the lesson to be learned from the GFC would be to avoid regulatory regimes that encourage exploitation and greed.

New Zealand has developed into one of the most accessible economies in the developed world and it is either through extreme naivety, or putting profit before being a good global citizen, that has allowed us to become one of the worlds popular havens for avoiding tax and laundering criminal funds. The National Government ignored 2013 IRD advice about closing loopholes and has even promoted the profits available in the foreign trust industry (around $24 million a year).

We also have increasing numbers of foreign investors who are able to buy New Zealand houses and farms for easy capital gain. Obviously this overseas pressure lifts the price of our houses beyond the budgets of most New Zealanders, making us the most unaffordable housing market in the world. A buoyant housing market that provides good returns for investors (foreign or otherwise) is more important than affordability for this Government. It is also concerning that investment into property is encouraged rather than into productive industries that would increase employment.

Governments should also have a role in determining and supporting broad economic priorities for the country that will generate useful (and hopefully sustainable) economic activity that will benefit the the majority of its citizens.

In 2008 the National Party came into power wanting to emulate the Australian economy. National's "Brighter Future" included increased mining (sexy coal) and oil exploration. Australia's economy had boomed through its coal exports to China and the oil industry was highly profitable. Despite the fact that climate change was a growing issue, and the shift to clean renewable energy was well underway,  the National Government opened up vast areas of our territorial waters and conservation estate for exploration. Solid Energy was encouraged to borrow and think big and oil companies were given tax breaks and subsidies to see what they could find.

The promotion of a future in fossil fuel crashed and burned. Solid Energy collapsed spectacularly owing hundreds of millions and losing hundreds of jobs. Despite tax cuts, subsidised seismic surveys and letting oil companies set their own safety rules the collapse in oil prices and fracking has made off shore drilling unprofitable.

National's generous 2009 and 2010 tax cuts hugely benefited the already rich and were supposed to encourage investment in growing employment. The fact that tax fraud costs us around $8 billion a year and most of our wealthy benefit from untaxed capital gain didn't influence the decision. Little of the tax windfall created more jobs and most was obviously spent on luxury cars and even more property. The average size of the houses we are building are the third largest in the world. The tax cuts also caused a loss of around $2 billion a year in tax income and this loss has had to be made up by demanding more in dividends from SOEs, selling state assets, reducing the investment in Kiwi Saver and cutting expenditure.

National stopped funding the Buy Kiwi Made campaign and Government procurement increasingly favoured cheaper overseas manufacturers. New Zealand has consequently lost previously successful manufacturing businesses, like Dunedin's Hillside Workshops, that employed skilled labour.

In 2011 the National Party promoted a major $11 billion investment into motorways despite no prior cost benefit analysis. Few of the motorways have proved to be cost effective since and instead there has been growing demand for investment into more efficient public transport systems, especially in Auckland.

National abandoned its previous goal of matching Australia by increasing average incomes and Bill English began promoting the advantages of a low wage economy. Over $3 billion is now being spent on the Working for Families tax credit that is necessary to compensate for the low wages that many families struggle to live on.

In 2014 the National Party campaigned with a goal of doubling the value of farm exports with a major focus on increasing dairy production. $800 million was budgeted for irrigation schemes so that dairy farmers could grow herd numbers and intensify the industry further. The advice to spend more on research and development and concentrate on adding value was ignored and growing imports of fertilizer and feed supplements supported a higher input (but more vulnerable) industry, but greater volumes of milk.

Obviously little was learned from the Solid Energy debacle and a glut in the global milk supply saw the bottom drop out of the dairy markets and many who had been encouraged by the Government to invest in ongoing expansion were badly caught out. We have also been left with costly environmental damage (compacted land and polluted rivers) with little income to manage it.

This National Government will go down in history as the one that increased public debt by over $50 billion and substantially increased inequality. It will be known as a Government that was plagued by conflicts of interest and growing our levels of corruption. The historical evidence will also show an inability to build a resilient and sustainable economy and an unhealthy enthusiasm to support sunset industries and 'boom and bust' economics. Rather than lead and manage the economy for the benefit of all it chose to let it be exploited by a privileged few.

This National Government can't be trusted with the important stuff.

Tuesday, April 5, 2016

NZ Tax Haven, "a quiet little achiever"

The Pulitzer Center is a collective of independent journalists dedicated to supporting investigative journalism on issues of global importance. New Zealand's Nicky Hager is a member.

The Panama Papers has exposed one international operation (there may be more) that has been shifting secret funds belonging to corrupt politicians and dodgy companies to hidden trusts in a variety of tax havens. The politicians includes Putin and the King of Saudi Arabia and some of the companies are involved in profiting from the Syrian war. Interestingly New Zealand is listed as one of the significant tax havens where 12,000 foreign trusts have found a home. We share the tax haven status with the likes of the British Virgin Islands and the Sychelles.

The details exposed through leaked documents from the Panamanian law firm Mossack Fonseca make frightening reading as possibly trillions have been hidden away to avoid tax or hide illegally gained funds. New Zealand is referred to as being "quiet little achiever" as a tax haven for criminals.

The response to this embarrassing revelation is interesting. The Government has taken the line that New Zealand was given a clean bill of health for our tax regime by the OECD in 2013 and nothing we are doing is illegal. Key explained that New Zealanders have to pay tax and we expect full disclosure of any economic activity. However, while foreign trusts have to disclose their existence they don't have to declare the real source or amount of money involved. Key promotes the fact that the management of the trusts in NZ earns our industry around $24 million a year. It appears if we can earn money through accepting foreign trusts little else matters.

New Zealand's economy is one of the most open in the world, we are ranked 2nd in the world for the ease of doing business. We allow foreigners to buy property with few restrictions and our current Government has provided tax breaks, free services and lump payments to overseas film companies, oil companies and Rio Tinto. We have it written into law that under table payments are an acceptable part of doing business overseas and have paid around $12 million on a massive bribe to a Saudi businessman so that we can further a trade deal with one of the most morally corrupt countries in the world. It appears that all is fair in war and business under a National Government.

New Zealand has amongst the fastest growing inequality in the world and is complicit in supporting corrupt businesses and individuals globally in avoiding paying tax. The economic activity and profits generated from the efforts of the world's workers are being funneled up to an elite few, who then shift their profits to off shore tax havens. There is less tax money now available to support the hospitals, schools and general infrastructure of developed nations around the world and rather than deal with the loop holes, austerity measures in government spending has become necessary. This is a global problem, but it appears that New Zealand is a major player in supporting tax avoidance and hiding the profits of illegal activity.

One of the reasons that New Zealand is such a popular tax haven is our image as a first world country and our international reputation of honesty and respectability. It appears that this tax haven revelation has exposed the rather grubby underbelly of our 'honest' little nation. We are no longer clean and green and we are no longer a nation built on honesty and integrity. The flag referendum failed so creating a banana republic will become John Key's real legacy.

Postscript: lots of evasive talk and diversionary tactics from Key today in the house including blame for the current legislation shifted to Labour and yet someone found this today that revealed that a 2011 tax change that National instigated was probably a pivotal element in creating our current situation. It also explains why there was a huge increase in foreign trusts since that time.

Tuesday, March 29, 2016

The Power of Truth: a political renaissance imminent.

The election of Trudeau and rise of Jeremy Corbyn and Bernie Sanders are challenging the domination of Neoliberalism within our Five Eyes allies. The cause of the downfall of economic liberalism is probably due to its success in shifting the world's wealth to a powerful few and alienating the middle class. The rise of socialist politics and the labour movements 100 years ago was driven by inequality and the blatant exploitation of working people and we are currently experiencing a similar scenario that is fueling another era of political change.

For a period after the great depression Labour Governments dominated and Roosevelt's New Deal created new hope. Savage's "applied Christianity" in New Zealand was a much needed shift to a more equitable sharing of New Zealand's resources. Good housing, fair pay and well resourced public education and health systems were seen as essential to building our social capital and lifting many families out of poverty.

Sadly the relatively egalitarian societies of the 1950's have been eroded over the last 60 years as the philosophy of free markets, deregulated financial systems and individualism have slowly taken hold again. The balance of power that was finally achieved between working people and employers has been eroded too and now only 20% of New Zealand workers are unionised and very few in the private sector. Income insecurity through greater casualisation and the growth of the working poor are the result of the industrial imbalance as successive governments (from both the left and the right) have been increasingly influenced by business interests. It became generally accepted, politically, that people exist to support the economy rather than the other way around as it surely should be.

For neoliberal governments to retain power, while increasing inequality, they have had to spend increasing amounts on PR and rely on the support and growing impotence of the Fourth Estate. To ensure that the true extent of increasing poverty and environmental degradation doesn't become widely known, pop culture and terrorism have provided useful distractions. The National Party have survived Nicky Hager's thorough exposés (The Hollow Men and Dirty Politics) largely because of National's skillful use of Crosby Textor strategies and the main stream media's reluctance to invest in further investigative journalism. Successful independent investigative journalists are generally attacked and discredited if they challenge the status quo. National also relies on influencing the main stream commentary of any damning exposé to diminish the impact as the general population is unlikely to read the originals (the 20-30,000 copies of Dirty Politics sold represents a small % of the voting public).

Jeremy Corbyn and Bernie Sanders have been successful despite the mainstream media largely dismissing them. Jeremy Corbyn's support as the leader of UK's Labour Party should no longer be in question, he won the leadership contest by a substantial margin (almost 60% of first preference votes) and is ahead of Cameron in leadership polls. However, constant media reports about his 'extreme' politics and the ongoing personal attacks have dogged his leadership. Even the BBC is being petitioned for biased reporting.

I have just returned from the UK where I witnessed first hand the reaction to the Conservative Government's cut to disability benefits. When the wealthiest in the UK have never had it better, the austerity measures directed at the most vulnerable are now being seen as cruel and unjustifiable. Like New Zealand food banks are becoming essential (largely unnecessary in the UK before 2004) for the survival of many families as wages and benefits no longer cover living costs and Corbyn's advocacy for the struggling is becoming harder to dismiss.

Bernie Sanders has run a strong campaign in the Democratic Presidential Primaries through principled messaging and refusing corporate support. Sanders, like Corbyn, has gained traction through the consistency and basic morality of his messages. Living wages, social justice and a clean environment should not be expensive luxuries that are unaffordable and are increasingly viewed as fair and essential for a secure future for ordinary people. US voters are seeing the evidence of what a low tax, small government approach does to essential services and infrastructure as third world conditions become commonplace for many. Arianna Huffington's Third World America is a revelation as the 1% suck the operational wealth out of the country.

Slick Crosby Textor PR and flag debates are beginning to wear thin in New Zealand as more and more New Zealanders wonder about our government's real priorities and increasing numbers of ordinary New Zealanders are experiencing economic hardship and suffering the results of a housing shortage and dairy crash. There is less tolerance for Ministry blowouts and management pay rises when many families struggle financially.

As Corbyn and Sanders have demonstrated, the popular shift of the political centre to the right has probably ended and it is time to return to earlier policies that support a fairer distribution of resources and wealth. Sander's claim that he is a "democratic socialist" would have meant instant death as a candidate even two years ago, but no longer. Taxing the rich more and actually expanding government (social services can't be delivered effectively without people) is again being acceptable as a rational approach. These ideas are no longer a political anathema as they once were because the trickle down never occurred and better government services haven't resulted from constant cuts.

Political change in New Zealand won't be led by media revelations of Government incompetence but by ordinary people seeing what is actually happening within their own families, those around them and to their immediate environment. John Key and his Government have been clever in their slow dismantling of state housing and privitising social services, much has occurred under the radar and hidden by constant distractions. However hospital waiting lists grow, the housing shortage reaches a crisis point, our prisons are bursting through a population growth and our education system is seen as increasingly inequitable.

There has been a lot of pressure in the past for the Green Party to focus on being an environmental party only and to leave social policy to the Labour Party. To some the Green's lack of success (our votes have actually increased every election since 2005) is due to poor messaging during election campaigns that hasn't attracted more conservative voters (environmental causes have support across the political spectrum). My own belief is that the political foundations of the Green Party (and Values before) are based on the conservative notion that we live on a finite planet and operating in a sustainable way is essential to our survival. However, we have a holistic approach to politics and also believe in social fairness, sound decision making (based on evidence and democratic processes) and nonviolence. Our philosophies and policies are very similar to those of Corbyn and Sanders and yet it took over thirty years of promoting the same thing before they were widely accepted. With patience the Greens should expect the same recognition.

Labour lost its way when it abandoned its socialist roots for neoliberal economics. It began the process of liberalising New Zealand's economy and shifting core services to the private sector. Helen Clark's government did not reverse many of the hardline changes to labour laws and benefit cuts brought by the previous National one. Labour has contributed to the current environmental and social crises and struggles against Key's claims that National has done more recently in these areas than Labour did in it's last term.

In New Zealand politics the only party to stay true to its policies and principles over the last 25 years is the Green Party. Act's attempt to be more green than the Greens is a joke, Winston is consistent in his pursuit of his own political survival, leaping on to anything that may provide populist attention from immigration to the Treaty. Like Corbyn and Sanders the Green Party's credibility comes from its principles and consistency. The truth is generally revealed eventually and when National is properly exposed for its mismanagement then voters will look for a trustworthy option to implement the necessary change. New Zealand's third largest party (Trudeau's Liberal Party was a distant third before the Canadian election) is poised and ready to lead the renaissance of social democracy with an environmental edge.

Wednesday, March 9, 2016

What would really happen to Farming under a Green Government?

During the campaign in 2014 I attended a Southland Federated Farmers meeting in Invercargill and John Key happened to pop in and give an impromptu speech. Interestingly he had more to say about the Green Party than anything else. He told those present in blatant terms what he believed would happen to farming if the Greens got into Government and Russel Norman ever became the Finance Minister. He described slashed farm profits, stock being run off farms and unreasonable environmental regulations. More farmers heard about the Greens agriculture and economic policies from Key than from the Greens ourselves.

An older woman in a rural community told me bluntly that I shouldn't even try to campaign in her community because "farmers don't like the Greens". The billboards that I put up on my own property in the same community barely lasted a week before they were ripped off and completely removed apart from the little bits of corflute that remained connected to the screws (although I must add that our vote did double at the local polling booth, 4 votes to 8 votes).

The Greens didn't get into Government in 2014 and yet the very scenarios that Key predicted would happen under the Greens have happened anyway, slashed profits and many farmers desperately reducing stock numbers.

The question farmers should be asking now, leading into the next election, should be: What would have really happened to farming if the Greens had got into Government?
  1. Research and Development spending would have risen considerably and many farmers would have been able to take advantage of the tax credits for their own efforts to become more efficient and sustainable. There would have been Government support for developing innovative ideas to add value to what we produce so that our economy wasn't so dependent on commodity markets. Fonterra was reluctant to spend too much on R&D because it limited the immediate returns to its farmer shareholders.  The extra $1 billion investment in R&D that the Greens proposed would have made a substantial difference to providing some alternatives for farmers now.
  2. Many within the industry criticised the Green Party's support for organics and any shift in that direction would have saved many farmers now. Fonterra short sightedly reduced it's support for organics and has now been forced to do an about turn as the international price for organic milk powder is now almost five times that of conventional milk powder. Under a Green Government we would have had many more farmers still receiving good prices for their milk and shifting to organic practices would have also reduced negative environmental impacts.
  3. 75% of our exports markets put a high value on our green credentials and the key point of difference for our dairy industry in global markets was its pasture base. Greater intensification and a focus on quantity over quality has meant that the industry shifted to a higher cost model that relied more on imported feed and fertilizer. $2 million tonnes of palm kernel (PKE) was imported last year from a source that is hugely environmentally damaging. The phosphate we import comes largely from the Western Sahara and we are one of the few countries that ignore the political ramifications of purchasing an illegally obtained resource. Not only does the phosphate come from a dodgy source, but its high cadmium content is slowly poisoning our soil. Under a Green Government we wouldn't have damaged our green credibility to this extent and dairy farming would have shifted to more sustainable practices. One of the reasons for the current financial pain is that the higher levels of externally sourced inputs (feed, fertilizer) has reduced the ability to absorb lower prices.
  4. Biodiversity is important to the Green Party and this makes economic sense as well. By supporting mixed farming models and encouraging biodiversity actually spreads risk and would enable farmers to more easily shift to more profitable areas. Our opposition to the introduction of GE to New Zealand agriculture is partly because most GE developments in agriculture supports herbicide and pesticide tolerant crops which leads to the destruction of biodiversity and the support of industrial style farming. The high use of pesticides and herbicides has health risks and also contributes to the destruction of useful species like bees that other industries are dependent on. While there are clearly medical and other potential benefits from GE research its use in agriculture has yet to produce benefits for New Zealand and our access to GE free markets is currently much more valuable. We would lose many of those markets if GE organisms were released into our farming environments.    
  5. The Green Party's tax proposals, including a carbon tax, actually would have given SME's (including farms) more business certainty around taxation and encouraged greater investment into low carbon alternatives. Farmers would have been rewarded for sustainable practices and our economy as a whole would have been in a much stronger position to meet our Paris commitments. In reality the impact of fluctuating commodity prices would have greater effects on profitability than a carbon tax and the Green Party had planned to have a reduced carbon tax for farmers anyway. 
  6. Farming is a far more sophisticated industry than ever before and greater investment in ICT would have had benefits for farmers as well. John Hart is high on the Green Party list and his farming and ICT background would have introduced useful knowledge into parliament. There are fewer MPs with farming backgrounds and the Green Party has many candidates that have business and farming experience. If the Greens had been in Government that expertise could have influenced all manner of legislation that would have had positive impacts on the farming industry. 
  7. The Green Party has questioned the National Party's population based funding systems that have a negative impact on sparsely populated rural communities. Considering the value that our agricultural sector adds to our export income and domestic economy it doesn't make sense that the funding for rural roads has been reduced and the health services in rural communities have been cut. With the high level of suicides amongst farmers the cuts to mental health support does not make sense. We desperately need to retain experienced farmers within the industry and we have lost too many good people through lack of investment into caring for our more isolated communities. 
  8. Our current education system is focused on literacy and numeracy and is less responsive to recognising and developing individual skills and talents. It is a pity that our advisors for science and technology have been sacked and the support for hands on practical learning has been reduced. The farming industry desperately needs a larger pool of local workers and farmers who have an interest and passion for the industry. We need our urban students to be exposed to working with plants and animals at a young age and understand the importance of producing food so that agriculture is seen a valuable and attractive vocational option. The Green Party's support of school gardens and Enviro Schools has real value for the future of farming in New Zealand. 
  9. Fiscally responsible, evidence based policies are important to the Green Party and in the last election our policies were independently analysed for fiscal accuracy by Infometrics. This year Metiria Turei promoted the widely supported idea that Treasury should have the ability to independently cost all parties' policies so that voters can more easily compare the fiscal realities of their proposals. It is clear that this Government has not applied robust cost/benefit assessments to many of its major projects. The evidence of the Green Party's economic credibility is in its own fiscal management. We raised more money for the 2014 election campaign than Labour and manage to have a high impact in campaigns with modest expenditure. For the last two campaigns we have stuck to strict budgets and had minimal debt at the end without relying on large corporate donations. 
National deserted it's rural farming base many years ago, there are very few in National's cabinet who have any connection to farming and yet rural communities continue to support the party against all evidence. Todd Barclay was a 23 year old ex tobacco company employee when he replaced the experienced Bill English in the Clutha Southland Electorate. His obvious inexperience and angry outbursts at campaign meetings did not reduce voter support for the National candidate and his performance since has been concerning. The fact that National put up such an inexperienced candidate in a safe National seat was also an indication of how much it takes the rural vote for granted. 

The traditional loyalty to National as a responsible economic manager and farmer's friend needs some serious re-evaluation from rural communities. National ran a smart campaign in 2014 but governance should be more than slick PR. Policies and track records are actually important and the Green Party deserves more serious consideration if farming in New Zealand is to have a real future.