Tuesday, October 28, 2014

Innovation, who should lead?


I attended two presentations over the past two days that has made me even more aware of the importance of innovation and the danger of accepting the status quo.

I attended a lunch time presentation yesterday from Sir Tipene O'Reagan in support of a local Ngai Tahu owned insulation and energy company, Awarua Synergy. The company was created out of the pioneering Bluff Healthy Homes project, a four year programme to insulate many homes in a low decile community. Awarua Synergy has grown substantially since its early days and now provides a wide range of energy related services, using cutting edge technology.

While I didn't agree with all Sir Tipene's views around the future of  New Zealand's energy supply (he appeared to support greater investment into hydro), there was much that I did agree with. We pay substantially more for our energy than most other OECD countries despite the fact that ours is cheap and clean to produce. I couldn't find data to support it, but Sir Tipene claimed the average cost of electricity for householders in New Zealand was 70% more than in Australia. Our electricity market is a flawed one and is supported by the Government as a form of taxation. Our electricity producing infrastructure is largely paid off (hydro dams) and because it mainly uses a renewable resource the cost of production is minimal. We should be paying very little for our power and this would make a huge difference to the living costs of struggling households and provide a competitive advantage for our exporting industries.

It is unlikely that the flawed market will be fixed any time soon and it therefore makes sense for electricity consumers to try and manage best in the environment they are stuck with. Awarua Synergy, like many other businesses, have recognized that making homes more efficient in terms of energy use (for different budgets) should be a growth industry. Providing the possibility for homes and businesses to disconnect from the grid also makes sense, especially when there is no certainty around power companies paying reasonable rates for excess production and the growing cost of line charges.

This morning I attended a breakfast presentation by Rod Oram that many have probably already heard. Rod provided an economic overview of where New Zealand was placed in a global sense. Using data and graphs he was able to show how New Zealand had survived the economic recession reasonably intact, made some gains but unless we have a strategy to become more sustainable as an economy, future projections were depressing. Current predictions from Treasury and economic advisors see our country struggling to achieve 2% growth a year for some time into the future (based on our current activity and direction). This questions the Government's overly optimistic claims that are unlikely to be delivered.

Rod had lots of examples of other nations and companies where innovative thinking and research had lifted a primary commodity into products of high value. He explained how our reliance on raw logs and powdered milk to produce much of our export income exposes us to the fluctuations of those markets. As a pasture based agricultural industry we are constrained by the environmental limitations of this form of production and the external costs of the industry (contaminated water and greenhouse gases) begin to outweigh income. Competing dairying production from the likes of China and the US use housed herds where waste is more easily captured and turned into energy to power the farm. This is cost effective, if not animal friendly. While there is a market for more natural pasture fed protein, unless it is managed in a sustainable way (that accounts for animal welfare the environmental effects) we lose the market advantage.

The value famers receive for their production (meat, fibre, milk) will always be limited as long as we remain at the bottom of the value chain and export the raw commodity for others to add the value. Rod had examples of where other companies and invested in research to move dairy beyond cheese and yoghurt and into pharmaceuticals that produced an even higher rate of return. Rather than increasing income through increasing production, adding value makes far more sense and could see payouts to farmers treble and remain relatively stable. By focusing on research and producing more sophisticated products Nestle has been able to enter a greater range of markets than Fonterra and ensures a more stable and predictable income for itself and its suppliers.

Rod also expressed concern at the sort of overseas investment we were allowing into New Zealand. Rather than partnerships where there are mutual benefits, we are allowing too many overseas owned businesses to access our resources so that they can add value themselves. For example Fonterra doesn't produce infant formula and yet we have allowed a Chinese company to build an infant formula plant here to ship back to its home market. We are allowing others to profit from we should be doing ourselves.

I was inspired by James Shaw's maiden speech on Tuesday where as a Green he openly supported market forces where markets are responsibly governed within sustainable parameters. James cleverly uses his family history to explain how we must always look beyond current thinking and ideology and recognise that leading change has economic advantages. We may not be able to single handedly change the world for the better but we can take a lead in showing how it can be done and reap the substantial benefits.


Saturday, October 25, 2014

Thoughts on Labour Day and the New Zealand Worker


Labour Day is a good time to contemplate how much we really value workers in New Zealand. Sadly many of the concerns of the labour movement over the past hundred or so years continue today and  battles won in the past are having to be fought again.

Blackball miners went on strike in 1908 because the crib time (lunch time) was only 15 minutes and the food had to be eaten in the depths of the mine. The mine manager also wanted to increase the working day to 10 hours. The resulting strike action ended New Zealand's reputation as the country without strikes but the action taken by the miners saw the 8 hour day remain and their crib time extended.

The miners endured a torrid time to achieve their claims, the Arbitration Court fined the miners $75 pounds (equivalent of $12,111 today) and when they refused to pay, their possessions were seized and auctioned off. However by 1913 New Zealand was one of the most unionised countries in the world.

I wonder how far we have really come when the current Government proposes to make meal breaks more flexible (meaning optional in some circumstances), strikers will have their pay deducted, employers will be able to opt out of collective bargaining and then employ workers on individual contracts (with terms and conditions less than those in the collective). Employers will be able to change working arrangements with only 4 weeks notice and vulnerable workers, such as cleaners, will not have certainty of employment if their place of work has a change in management. It will be even more difficult for union representatives to have access to workers on worksites under the proposed changes. The Government claims that more flexibility will benefit employer and employee but because the employer generally has all the power now, poorer working conditions seem inevitable.

In the 1950s and 60s New Zealand had a far more equitable working environment and most families could maintain a good lifestyle on one income. Most managers and CEOs didn't earn incomes much more than a few times what their lowest workers were paid, but now we have CEOs earning up to 120 times their lowest paid worker. While CEOs regularly get sizable increases to their salaries (Warehouse Group CEO Mark Powell recently had a 68% increase), 48% of workers got no pay rise over the past year.

Demonising unions has always been a factor in the industrial landscape and the word 'union' is generally used in a derogatory way. When teachers speak out against the government's proposed changes to the sector, the government often dismisses those arguments by claiming the concerns come from 'a union'. The word union is used very manipulatively by the Government and employers and has effectively eroded the status and image of unions to the extent that workers who would benefit from belonging to one, feel discouraged to do so. Federated Farmers is a Union for farmers and BusinessNZ is a union representing employers interests, yet you rarely hear the word union used in relation to these groups. It has recently been revealed Federated Farmers have even received financial support from the Government.

Less than 20% of workers are unionised now and the largest and strongest existing unions tend to represent professional groups. The balance between employer interests and the workers is an important one and this balance has clearly shifted heavily in the employers' favour over the last thirty years.

Most families cannot survive on one wage any longer and the minimum wage is now considered to be well below a living wage. 40% of children living in poverty have parents in work and the working poor is a growing demographic in New Zealand. Security of employment is a luxury now with workers increasingly casualised and forced to remain on call for uncertain hours. Financial commitments such as mortgages are hard to support when monthly incomes fluctuate and many families end up in debt through having to borrow to get through lean weeks.

Many workers have more than one job to try and boost earnings and, for many, their hours of work will go well beyond the 40 hour week to meet work expectations or to make ends meet. With around 13% of New Zealand's workforce working more than 50 hours a week, we work longer hours than most OECD countries.

Working conditions and health and safety are also eroding in many sectors. Longer hours, tired workers and lack of continuity can cause more accidents and working nightshifts for extended periods can create mental health issues. Some sectors have become extremely unsafe, with forestry workers in particular suffering unacceptable numbers of injuries and deaths (ten forestry workers died in 2013 alone).

There have been countless examples of worker exploitation and disregard for health and safety in New Zealand over recent years. In many cases there is no real accountability for employers and it is the workers who are left to suffer. Mismanagement of Solid Energy saw the loss of hundreds of jobs and yet the responsible CEO was place on gardening leave while still earning his $1.3 million salary. Peter Whittall was responsible for the deaths of 29 miners and yet escaped charges and is free to manage other mines.

Migrant workers are also being exploited in New Zealand. Rather than employing New Zealanders on legal minimum wages, migrant workers are imported who don't understand market rates and can be tricked through dodgy contracts that over-charge for accommodation etc. Orchardists, the food industry, the construction industry in Christchurch and the Dairy industry have all been guilty of exploiting imported workers.

The very worst exploitation of workers occurs within our territorial waters and on foreign owned fishing boats where virtual slave labour is common. Men are often taken against their will from struggling Asian countries like Laos and are forced to work in shocking conditions where beatings, sexual abuse, 18 hour days and death and serious injury are common. Men lost overboard are abandoned, serious injuries are left untreated and all for minimal or no pay at all. Michael Field's recently published book, The Catch, graphically describes the horrific underbelly of the fishing industry.

Anzac Day has become one of our most widely recognized commemorative events, with growing numbers of people remembering and honoring the sacrifice of those who died in major wars purportedly for the benefit of us all.  Perhaps workers who make large personal sacrifices in support of our economy should also be recognised in a similar way. Earlier this year I attended a moving service to unveil a memorial stone in Invercargill for International Workers Memorial Day. The 6,000 workers who die in their workplace every day throughout the world deserve recognition as do the 51 New Zealanders who died while doing their jobs in 2013.

It is very clear that the balance between worker and employer has shifted too far in favour of the employer and workers are again being undervalued and disrespected. We do need stronger and more effective unions and greater union membership to shift the balance back again. New Zealand is becoming an increasingly unequal society at a rate that is faster than most OECD countries and this trend must be stopped and reversed before the damage done becomes too great. Having 27% percent of our children being brought up in poverty, when many of their parents are in work, is unacceptable in a resource rich country like ours.



Wednesday, October 22, 2014

John Key's Multiple Identities


Question to the Prime Minister

Russel Norman: How many times since November 2008 has he spoken with Cameron Slater on the phone and how many times, if any, has he txted him?

Prime Minister: None in my capacity as Prime Minister.

John Key explained to the house after further questions, "I happen, for the record, to use my Ministerial Services funded phone to ring my wife. When I ring my darling wife and I put the cat out at night, I do that in my capacity as the husband, not the Prime Minister."

The Prime Minister has admitted to having multiple identities and can potentially shift in and out of them at random moments. This must be very difficult for him especially if Bronagh becomes aware that John also considers himself to be the cat's husband as well.

I have noted four identities that John Key has admitted through Question Time, he can be a Prime Minister, a leader of the National Party, Bronagh's husband and the cat's husband. We can also find out that he has other identities through a google search. He is obviously a father and Wikipedia reveals another identity as a "smiling assassin".

It makes it difficult for the opposition to question John Key about his decisions and actions if he was not the Prime Minister at the time. It must also must make it difficult for his Government Caucus colleagues and parliamentary staff if they don't know whether he is acting in his capacity as the cats husband or maybe the leader of the National Party when they are talking to him.

What does it mean when Key signs documents (his signature is likely to be consistent in appearance no matter what his identity is at the time)? It could be a real concern if he signed an important Free Trade agreement while in his capacity as a father or spoke at an international forum as the Smiling Assassin.

I guess Key must have some control over which identity he adopts at a given time because since 2008 he has never spoken to Cameron Slater as the Prime Minister. One wonders what identity he uses at such times, the Smiling Assassin seems the most logical.

Future question times are going to be very difficult from now on as John Key switches identities. There can be no accountability as the Prime Minister if he was using the Smiling Assassin identity when particular actions are decided, although it may explain the nature of some of those decisions (workers' rights, child poverty?).

We will have to manage the next three years as best we can with a shape shifter for a Prime Minister.

Sunday, October 19, 2014

Secrets, Lies and Revelations


There is a lot this National Government doesn't want us to know. They have made it clear that we shouldn't measure child poverty, that we don't need independent environmental reporting and any official information requests are delayed indefinitely, especially if the information is inconvenient. Scientists should be gagged, data manipulated and anyone who expresses a contrary view to the Government will still get slated by Slater their blogging hit man.

Now that the election is over and National is back in the driver's seat for the next three years, interesting stuff is being revealed:

The first is research that a number of Ministries and the SFO had been working on for some time to quantify the amount of economic crime that is occurring in New Zealand. The draft document, obtained by Radio New Zealand (through the OIA), was never presented to cabinet as intended and work in this area has been stopped. This seems bizarre as the numbers are huge, with up to $9.4 billion involved. The Government has focused the majority of its attention on benefit fraud instead and yet this involves a tiny fraction compared with the white collar crime that is regularly occurring.

It is clear that beneficiaries get dealt to far more severely than tax fraudsters and the full extent of benefit fraud may actually be less than what is claimed. The Auditor General's report on benefit fraud includes overpayments where no dishonesty has been proven:

"For the purposes of this report, we use the term “benefit fraud” more widely, to include cases of substantiated overpayments, regardless of whether criminal prosecution resulted from investigation."

Beneficiaries generally have owed sums remain in the books until their death, while unpaid tax is often written off. It also appears that a history of fraud and tax evasion from corporate entities does not appear to be an issue to this Government. Westpac continues to be the bank of choice for government banking despite successful court action to retrieve $416 million of avoided tax in 2009. The Government is also subsidising Kidcorp to set up early childhood centres in low decile communities despite the corporation being caught over-charging the Ministry of Education for teaching hours by over $1.6 million in 2012.


Another revelation is around child poverty and more OIA information that Radio New Zealand has received that was finally released after the election. Treasury has been feeding advice to the Government that does not actually represent the evidence but has been shaped to fit the Government's political imperatives. Although higher wages, reduced taxes and higher transfer payments were thought to be the best way to reduce poverty, Treasury recommended that struggling families shouldn't be paid more and even withheld evidence that supported the value of providing food in schools. It is a defining element with this Government where officials feel that they can't give genuine, evidence based advice, but just provide what the Government wants to hear (bullying cultures are common).

We also find our Prime Minister up to his old tricks of pretending not to know stuff when he obviously does and is deliberately lying. What Key claimed was just a regular meeting of military heads in the US has been proven wrong and it beggars believe that he didn't know this when he misled the public on its importance. McCully has confirmed that New Zealand is already part of a coalition against IS, contradicting the PMs denials and it is fairly obvious that New Zealand will probably be sending fighting troops to the region as we did in Afghanistan (despite claiming otherwise earlier).

During the last term the Government sold state assets to boost Government coffers that had suffered a loss in revenue due to the tax cuts to the wealthy. Despite English claiming that there would be no more asset sales after 2014 he is leading the sale of around five billion worth of state houses. The money raised will go straight to the coffers and won't be used to help solve our growing housing shortage. It appears that the welfare of struggling New Zealanders will now be the responsibility of the Salvation Army.

It's going to be a long three years...

Sunday, October 12, 2014

Sledgehammers, Nuts and Terrorism


Over the years there have been numerous dangerous sects and political movements, real and imagined, that our Government and our secret service have felt the need to protect us from. Within New Zealand's borders most of those threats have been imagined ones.

When I was attending Otago University and the teachers' college in the late seventies one of my fellow college students had his passport taken from him because of his association with Ananda Marga (he was learning meditation through them). Ananda Marga was founded in India in 1955 to promote the liberation of self, pursuit of bliss and service to humanity. In 1967 its headquarters were attacked by locals who were incited by communist leaders and the organisation also ran foul of Prime Minister Indira Gandhi because of criticisms of government corruption.

Ananda Marga had grown very quickly in the 60s and, combined with its anti corruption stance, posed a perceived threat to the Indian Government (consequently no government employee could be a member). The organization was internationally denounced by the Indian Government so that its criticisms, that were probably valid, would lose credibility.

In Australia, despite the peaceful activities of Ananda Marga the Government believed it to harbour militant fanatics. Members of the organisation were blamed for the 1978 bombing of the Sydney Hilton, site of the first Commonwealth Heads of Government Regional Meeting (CHOGRM). It was later revealed that the charges were a fabrication and the original informant initially tried to impicate the Hare Krishnas but was encouraged by the police to spy on Ananda Marga instead. The three convicted Ananda Marga members have since been pardoned and have received compensation.

At the time of the Sydney bombing Ananda Marga members in New Zealand were also being spied on by our own secret service and they had their passports confiscated so that they couldn't leave the country. None had committed any offence. The member I knew was training to be a teacher and was regarded by myself and other students as a decent and thoughtful person and was no threat to anyone.

Currently Australian Government, especially the PM, are whipping up an atmosphere of fear with grossly exaggerated stories of potential terrorism and beheadings. Abbot is using the perceived threat to push through tougher laws that will allow passports to be confiscated and to spy on citizens traveling to conflict zones. John Key is talking about passing similar legislation in New Zealand with minimal evidence of risk

I am concerned that Key and his Government are following the same path of over-reaction and hysteria regarding the potential threat of those who are Muslim seeking to travel. As with members of Ananda Marga we already have an example of a Muslim convert having his passport confiscated and SIS evidence being withheld, a clear breach of human rights.

Obviously ISIS or ISIL are quite different beasts than Ananda Marga but it is clear that only a handful of New Zealanders (if any) would be looking to involve themselves in the conflict in Syria and Iraq. Any legislative changes focusing on young Muslims will probably lead to innocent local people being persecuted and normal processes to prove innocence will be forgotten. Already the inflammatory behaviour of the Australian Government are seeing innocent people being targeted by members of the public who have no understanding of the complexities of the conflicts and are attacking anything and anyone believed to be connected to Islam.

I like the idea of New Zealand's Islamic community working with our Government to properly assess the real local risks and to formulate an appropriate response. We do know from the wars in Iraq and Afghanistan that it is difficult to get sustainable peace through escalating conflict and we definitely don't need that conflict spreading beyond the environment where it is actually occurring. We also shouldn't send forces to Iraq and Syria based on fabricated threats within our own country.

Saturday, October 11, 2014

Invercargill Proves Ministers Wrong


According to Paula Bennett the best way to lift children out of poverty is to get their parents into work and Bill English claims that our local body councils are causing poverty by not making more land available for housing.

An editorial in the Southland Times the other day summed it up well, poor people just need more pay.

Invercargill has heaps of land available for building new houses on and 95% of us are employed. If we were to agree with both Paula and Bill then Invercargill shouldn't have a real poverty problem. It doesn't take much of a statistical search to find what I did for my supporting letter published today:

Dear Sir

I wish to write in support of the editorial (October 9) ‘Higher pay, not housing, will close gap’.

This Government also claims that getting people into work will alleviate poverty and reduce our shocking child poverty statistics. 

95% of us in Invercargill are employed. If we were to believe the Government there should be no poverty issue here. 

Using school deciles to get an overview of the wealth of Invercargill then we find that out of 29 schools, 6 are decile 2 and 5 are decile 3. Around 2,200 of our children attend schools from communities where there are very low household incomes, overcrowded homes and income support is common (factors used for the decile assessment). 

We have 5% unemployment and yet around 30% of our households are really struggling. Invercargill food banks are recording growing numbers of working families who need support. 

Over the last year almost 50% of New Zealand workers did not receive a pay rise and the 2013 census revealed that the median income in some poorer communities in New Zealand actually dropped since 2006. According to the census Invercargill’s median income is $27,400 (a living wage is set at around $39,000) and many will earn less. Only 23.5% of us earn over $50,000.

It is about time all working New Zealanders had a fair share of the wealth that their work has helped generate. Hard work should be rewarded with a living wage and all of our children should be properly housed, fed and clothed.

Yours sincerely...

Interestingly Invercargill has lost its middle income earners and we have become a city made up of the affluent and the poor, with little in-between.


Last night I slept rough with a wonderful group of caring people (most on moderate or minimal incomes) who were trying to raise money to provide temporary accommodation for those in need and then tonight I attended a gala dinner and art auction ($125 a ticket) where bids of many thousands for art works were common. The void between affluence and poverty was starkly represented for me.

In Invercargill there seems to be lots of money to support our sports stadium and buying art, but very little for our most vulnerable who are just wanting a home they can call their own and wages they can live on.

We are struggling to get support for our homeless cause and I would be very grateful if anyone reading this are able to give us a donation.


Tuesday, October 7, 2014

Planet Key Survives...


The election is over and the dust has largely settled (accept for Te Tai Tokerau) and things aren't looking too good for the National Government's third term:
  • They lost their majority and will now have to rely on their coalition partners who were troublesome last time. National will hope that there are no skeletons in David Seymour's cupboard and that Peter Dunne can hold it together for three years.
  • After talking up their management of the economy and suggesting tax cuts in the future, English has had to reveal that the books aren't looking too good. The Government is starting their 3rd term with a budget deficit of $2.9 Billion.
  • The economic forecasts are also looking more than a little shaky with our most significant industry losing momentum. Dairy prices have dropped substantially and are not projected to rise in the near future and the government had invested much in the ongoing demand for milk powder. 
  • A drop in log prices will also impact negatively on the economy and could see a large lay off of forestry workers. 
  • With projected Government income dropping there is a lot of pressure to shift more funds into the struggling health sector. The Government continually talks about the many millions more that they have invested into health, but the extra spending hasn't kept up with inflation and increasing demand. Health has reached a point where no more efficiencies can be made and the only solution left is cutting services and the Southern DHB has reached crisis point. Green Party candidate Rachael Goldsmith has exposed attempts to cover up a lack of mental health beds in Invercargill. 
  • The Government is also facing the consequences of not addressing the housing shortage in any meaningful way over the last six years. We have a growing homeless problem and a severe shortage of lower cost housing and those that do exist are often substandard.  
  • Hekia Parata has struggled with the Education portfolio and is widely seen as one of National's most unpopular Ministers. After two court decisions going against her and having to pull back from increasing class sizes it is likely that the IES initiative and changes to the teachers council are going to be strongly opposed. Educators cannot understand why more money is being spent on increasing the pay for some principals and teachers when Special Education is underfunded and many school buildings are substandard. 
  • The 2013 census revealed growing inequality and in many areas median incomes have dropped. 27% of children are currently experiencing poverty.  
How the Government will manage the crises confronting them is already becoming clear:
  • Create distractions like a new flag
  • Attack those who expose their inadequacies, especially Nicky Hager, to limit their ability to do this in the future.  
  • Limit the availability of data and research that shows the extent of the social, economic and environment damage through: Cutting funding to Statistics New Zealand, gag scientists, remove independent environmental reporting, not measure child poverty effectively.
  • Blame others like local body councils.
  • Spread ministerial responsibilities so that it isn't just one Minister who is responsible for a problematic area. This will make it difficult for the opposition to expose ministerial failure when a Minister can shift responsibility to another and deliberately complicate governance so that obfuscation is easier. The responsibility of housing is now spread around three Ministers (English, Housing New Zealand; Bennett, Social Housing;  Smith, Building and Housing). Key can no longer be attacked for his oversight of the GCSB and SIS as he has passed on the day to day responsibility to Finlayson. 
  • Continue attacks on Labour leaders and manipulating media so that the party's effectiveness in opposition is limited. Cameron Slater lives on in his attack dog role while National will make sure that their connections with him are less obvious.
  • Shift responsibility of social services to NGOs like the Salvation Army but cut funding to those  that try and address the causes. 
  • Further demonise and isolate unions, beneficiaries and teachers.
  • Rely on the fact that those who suffer most from growing inequality and failing governance don't vote
It will be interesting to see how the Government will manage a stronger Green Party this term. National has cleverly kept the lid on most sectors and have the measure of Labour but they haven't managed to destroy the Greens. It is difficult to undermine a leadership team that have survived numerous attacks and have long experience. As quickly as National determinedly hides the evidence of their failures the Greens just as quickly expose them, no wonder Key fears us most

"They go hard, they go really hard... I don't feel bullied but they don't hold back." 

The next three years will be a battle between a party that succeeds through blurring what is ethical and legal and using dirty politics to manage opposition and the Greens, where transparency and evidence are paramount and hard questions their forte.