On this site you'll find posts and pages from recent years. The site began as part of my public law practice after leaving Parliament in 2005. Accordingly it records my opinions, not necessarily those of Franks & Ogilvie of which I am a principal, or any client, or the National Party for which I contested the Wellington Central electorate in November 2008.
From the Wellington Writersí Walk:
“Itís true you canít live here by chance, you have to do and be, not simply watch or even describe. This is the city of action,the world headquarters of the verb”
– Lauris Edmond, from The Active Voice
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Since we had to get up to speed with the domestic implications of free trade agreements, we've been paying more attention to international treaties. As usual the fine print is far more important than the title. The Ukraine predicament is a reminder, as explained below by my colleague Rob Ogilvie.
"A suggestion that the US had given “security guarantees” to the Ukraine was alarming. Security guarantees are a staple of international diplomacy, and when given by the world’s only super-power, they matter. US security guarantees to Germany and Japan have kept them from rearming, although that happy period in world affairs is ending. Both World Wars last century were triggered (though not caused) by security guarantees. And it is exactly a hundred years since the boundless optimism and easy internationalism of fin de siècle Europe ended in the then unimaginable bonfire of WW1.
"History will no doubt clarify individual thoughts and motives of February 2014. As a generalisation, in foreign policy Russia thinks chess, the US thinks monopoly. It could all be blundering and opportunism. However, it is at least possible Putin and his advisors have again suckered a naive US administration. The people’s revolution in Ukraine has given Putin the long awaited opportunity to annex Crimea, and possibly the rest of Ukraine, without fear of serious consequences.
"Tweaking Russia’s tail was fun when Russia was weak and demoralised, but now Russia is stronger and determined. It will not allow Ukraine to align Westward – any more than the US would permit Alaska to secede to Russia or China. The US should have realised a misplaced tweak could lead to aggression. If they chose to do the tweaking, they had better know their next steps.
"Perhaps the tweaking by Ukrainians was spontaneous. Whatever, the US again looks flatfooted. Post Syrian fading “red line” the current US administration seems feckless, in international affairs at least. Soaring rhetoric without hope of action – hence strategically irrelevant and a tyrant’s free pass. Thankfully vainglory is leavened with real cowardice. Obama will quickly reign in the braver, more reckless members of his team. “Grave consequences” (a Cuban missile crisis level threat) became “there will be costs” and now the plainly risible “we will work closely together to support Ukraine and its people at this historic hour” (sending victim support teams?). Meanwhile, the US has quietly withdrawn its navy from the Black Sea.
"And what of the other serious player, the Germans? The idea of Germany lecturing Russia over the future of Ukraine would be funny if it wasn’t so bizarre. Putin must be itching to say to the talented Merkel “you tried that twice last century, how did that work out for you?”. Ukraine is firmly within Russia’s strategic orbit, paid for in blood, treasure and horror way beyond our experience, and no amount of wishful thinking or bluster will change that. Germany (in Stalin’s famous quip about the Pope) has no divisions. So why would Putin care for a moment what they say?
"Back to the “security guarantee”. When the Soviet Union imploded the West realised to its consternation that many of their nukes were in Ukraine, then degenerating into chaos and kleptocracy. A historically aware Ukraine was reluctant to just give away its only deterrent force. So a series of deals were done – money and support in return for the nukes. The nukes were returned to the much more responsible democratic Russia (sic!) and the US, Europe and Russia gave Ukraine a set of “security guarantees”. The fine print makes interesting reading. They each make pleasant sounding promises not to blackmail or invade. But when it comes to the money clause, instead of “we will come to your aid if anyone invades you” they jointly promise to urgently report any aggression to the …..Security Council of the UN! Where Russia has a veto. Enough said. Clearly wiser heads prevailed.
"The Ukrainians weren’t fooled, and knew it was race against time to secure the right to emigrate Westward before Russia reasserted itself. Perhaps if the West had left well enough alone Ukraine might have stayed independent long enough to pull it off. But along with so much of the post Berlin wall promise, that will now just be a historical footnote “what could have been”.
"There are lessons here for NZ. Relying on loose arrangements with a fading superpower, or the good offices of the UN is not a defence strategy, it is wishful thinking. Read the fine print."
School boarding house matrons and wardens and other sleepers on call for care have just won the right to be paid the minimum wage for sleeping.
It was absolutely predictable, from the earlier decision to similar effect for sleeping IHC caregivers.
So now some boarding houses will close. In others, employees will be replaced by electronic surveillance of dormitories and remote call services, or by self-employed contractors. Adults, fully competent to know their own best interests who value their allowance for sleeping on premises, with a low risk of being disturbed, are now told by the law that they must be protected from their free choice. It is illegal, and many of their jobs will disappear, having been priced out of the means of those who must pay.
For the union it is a 'victory', because they answer to ideology, not to the isolated farm parents who will have to bring the kids home for correspondence, not to the children who have to 'private board' losing the companionship of the hostel, not to the workers whose jobs are replaced by technology (including many not in the union).
It will not stop there. Outdoor education establishments, where the instructors take 24 hour responsibility for the kids, will be next. It won't kill them all off. Rich kids and rich schools will absorb the extra costs. But it will help price those experiences out of reach of poor kids and poor schools.
The wonderful people who took us rafting early this month are almost certainly in the line of fire. The kind of guiding we received is already expensive, without paying guides for every moment. But the Courts will not be able to protect them. They have to apply badly written law.
Most ashamed should be the National government. It has known for years that this was coming. Three years ago we urged Minister Wilkinson to do what the UK government did when it realised what could happen, and clarify the law to make it clear that sleeping is not working. For a client we drafted simple changes to apply the UK precedent. As far as we could tell, Wilkinson did nothing. So the first targets of the union action (in IHC homes) cost the country's health budget over $200m without improving the health of a single person. She did not even have the courtesy to respond substantively to our offers of expert help in drafting and developing policy explanations for the obvious remedy.
John Key replaced her in Cabinet. Simon Bridges now has a chance to fix this for the future. Judging from our experience on the sleep-over issue she was no loss. But New Zealand has suffered a serious loss on her watch.
Similar losses are suffered from lack of leadership capacity in many Ministerial portfolios. The preference of the National Party for mediocre "representatives' of identity groups (youth, women, ethnics) ahead of demonstrated competence is not unique to them. If the parties we support are reflecting voter demand, unlike Singapore we New Zealanders want to be ruled by shop-window display groups. They pretend that no group goes "unrepresented" especially the vast groups of the nice ninnies, the "mean-wells" as well as the lazy, the ignorant, and the bludgers.
Today, the price is being paid by the kids who need to live at school, and their parents and paid caregivers.
Here's guessing at Shane Taurima's personal grievance strategy when he's had time to calculate.
He and his colleagues may have grounds to claim to the just announced enquiry, that they thought the employer had acquiesced in their activism, or tacitly approved it. In other words they were simply getting with the programme.
Employment Courts often over-ride terms of employment contracts and express workplace rules, if they've been ignored in practice.
State broadcasters work in a milieu of implicit support for the left, and barely suppressed contempt for and suspicion of others. Maori in State broadcasting have been allowed for decades to act as if they've had an exemption from Broadcasting Standards requirements for balance. They've almost universally acted on a right to promote "Maori aspirations" (often equated to the Maori Party), to call the 'race card' on anyone who questions those "aspirations" irrespective of the legal orthodoxy of the question or challenge.
I've praised their practical exemption in posts on this blog, here and here because it has freed them from some of the self-censorship of political correctness. Unrelenting reflex hostility to National and favouritism to the left seemed a small price to pay for their fresh air. So I appeared many times with Willie Jackson. I loved the regional Maori radio host with a nice touch in irony who told his audience "Hey listen up you horis – I've got an ACT MP to educate yous" then would not go back to music for over 20 minutes, even when I said on air that the audience must have evaporated.
It would not take much diligence to find plenty of examples of decades long practice from which Maori broadcasters might assume that the obligations of objectivity and political neutrality were waived for them.
We've got the incomparable Moore Wilsons here, so the Foodstuffs/Progressives duopoly is constantly challenged on quality and local suppliers have an alternative outlet.
There is little sign though that Moore Wilson sets out to compete on price however. So we have a residual personal interest in how the Commerce Commission investigation pans out.
All power to Shane Jones, using Parliamentary privilege for a purpose intended, though the absence of debate with him suggests feeble briefing in response from Countdown.
Vector maintains the drumbeat of monopoly complaint about price control.
After years of pushing, monopolies and their lawyers persuaded Lianne Dalziel, then Simon Power, to extend rights of appeal against Commerce Commission decisions. Traditionally appellants had to dress up arguments about financial and economic theory as questions of law and process. Courts stretched their jurisdiction to give the regulated some backstop error protection.
In bigger, richer countries that error protection and quality control function is performed by specialist administrative tribunals. New Zealand decided to economise. The “Part 4 merit review" law changes, from 2010 allowed the Courts to step into the shoes of the Commission to make changes it thinks it should, without having to find 'error of law'.
Safeguards to mitigate the risk of more obscene feasting by lawyers include:
a) limits on Court tinkering just because it can – the Court may only change an IM if the result would be "materially better"; and
b) limits on tactical advantage from stringing proceedings out – the Commission's ruling applies in the meantime, and any Court-ordered change is back-dated (claw-back).
The Commission's 2010 Input Methodologies are testing these novel powers of the High Court. Over 30 lawyers debated for months the economic and financial orthodoxy of the Commission's methods for working out what "workable competition" would deliver to comparable businesses that were not monopolies.
The results have been summarised as posts here, and here.
Vector is not happy. The Chief Executive is reported in the Herald saying:
"The court said the alternative approaches proposed by Vector and others did not provide a 'materially better' outcome than the commission's approach," said Mackenzie. "It is now evident that the 'materially better' test is unworkable."
Perhaps the Herald left something out of its report of Mr Mackenzie’s comments The 'court did not accept our claims' is not usually evidence that the law is "unworkable'. But Mr Mackenzie said more:
The ruling gave the commission "wide discretion over the conduct of New Zealand's critical infrastructure, but it gives no guidance to how the test of 'materially better' can be assessed robustly.
This is decidedly odd. Over 600 pages of judgment contain substantial guidance. But he goes further:
"The country's infrastructure providers are deprived of an effective process to challenge the regulator's determinations."
I'm really curious now. After Vector has spent millions in an exhausting process, is there more than disappointment to justify the claim that the process is not effective? Vector are a serious company. They’re not slow to take their arguments to court. What exactly are they now saying.
Is Mr Mackenzie signalling a push to dump merit review? Vector has a competent and busy regulatory team? What are his lobbyists now urging on the government? Surely he will be asked what he is asking for.
After a season of business complaining about regulatory uncertainty, with business journalists briefed to quote investors alleging that it is putting them off investment, it will be very curious if no one asks Vector why they want to build that uncertainty?
MEUG has taken the constructive step of appealing one aspect on which the High Court felt compelled to leave uncertainty.
MEUG’s appeal seeks a more certain application of certain findings and views of the High Court.
The Commerce Commission deliberately biased its methodology in favour of the monopolies, with the stated intent to encourage investment and innovation. MEUG had pointed out that the Commission simply asserted that such generosity was needed, without evidence, without particular logical and theoretical reasoning, and without counting the cost to users (including investment by other businesses) if it resulted in excessive electricity prices. The High Court agreed with MEUG, and noted that Australian case-law was critical of assumptions similar to those applied by the Commerce Commission. But the High Court decided that the law governing merit reviews did not allow it to order the correction of the relevant input methodology without more evidence and expert support to establish that the result would be “materially better”.
MEUG believes that the High Court read its powers too narrowly. The Court of Appeal can eliminate that uncertainty and give useful pointers for the future on how the review regime should work.
Without an authoritative decision on appeal now, the key issue of concern would almost certainly be appealed in a fresh merit review by the High Court when the Commission changes the relevant IMs in due course.
MEUG’s appeal will clarify the powers of the High Court. Success would increase certainty for consumers and suppliers and substantially reduce current uncertainty for investors about permitted returns.
Without a successful appeal it could be 2020 before users get any benefit from the High Court finding late last year. If the High Court had decided in favour of MEUG, it would reduce what suppliers could charge by around $150m per year. Instead the Court held that it was restricted to inviting the Commerce Commission to have a rethink when it next modifies the relevant input methodologies. The could be any time in the next 3 years. If it is not done before November this year, any change will be immaterial until the end of the 5 years regulatory period starting next year.
Even if the appeal does not succeed, Court of Appeal views could make it easier for the government to know how to tidy up the rules. A review of the merit review regime is scheduled. Without senior court comment on its first outing there could be a disinclination to try to improve it until there has been more judicial attention. MEUG’s appeal on points of law will provide that.
Under the legislation a successful appeal is the only way to secure claw-back of amounts overpaid in the past. Even if the Commerce Commission agrees with the Court views in support of MEUG concerns that the permitted return was too high, a change of mind by the Commission in a review does not result in claw-back.
Disclosure – My firm is acting for MEUG in this matter.
I hope the Wellington City Council is seeking urgent legal advice. Its pious members voted for a “living wage” for its employees. Of course they're using other people’s money (including many pensioners who'll be on far less than the 'living wage'). According to Business New Zealand the 'living wage' formula would make it now $22.89, but its promoters are trying to disguise that with an upward adjustment of only a few cents, to $18-40.
That raises an interesting legal question. Which version has our Council signed up to?
Hopefully the caring councillors were their usual duplicitous selves. Claims to support the living wage slogan were presumably coupled with cunning words that meant no such thing. But we'd all like assurance on questions such as:
Was discretion reserved to resist employee claims for the $22.89;
Assuming it was, exactly what version of "living wage" did we get? Does it distinguish DPF's 16 year old living at home (who should now get $46k) from the single income family of four in the slogan;
If the formula was not the “living wage” of the public campaign, is there exposure for being misleading and deceptive. Celebrating employees must have thought they could rely on Councillor claims to support the slogan; and
If the Council must now renege, is there liability to employees who spent up large in reliance on their employer's words?
I should wade through Council minutes to piece it all together. But it will be too infuriating. The trite "reasoning". The wilful ignorance. The glib indifference to longer term implications (such as blocking turnover in jobs the incumbents will now 'own', unable to find anything better). And probably an equal indifference to moral and perhaps legal duties but with little practical likelihood that anyone will enforce them against the reckless Council and Councillors.
Surprise, surprise – disclosure regime does not constrain extraction of monopoly profits from Christchurch airport users.
The Commerce Commission report that disclosure has been ineffective would have been a surprise if it had found the other way. Light-handed regulation by way of disclosure against benchmarks is effective only when there is a realistic prospect that the government will impose price control if the monopoly persistently exceeds the benchmarks.
Bear it in mind that the benchmark includes bias of error allowances for the monopolies that the Commission itself has acknowledged are "generous".
Christchurch Airport is probably coolly calculating that the government will be loath to take on a fight with yet another limb of the Canterbury 'peoples' republic' establishment at this time, so will leave Christchurch Airport outside price control. Canterbury businesses will suffer under inefficient peoples' republic pricing for a while yet.
Pity about people like the eloquent owner of Airpark featured on Campbell Live last evening.
The changes announced could restore lost breakfast habits – the DomPost, Morning Report and last night's dinner (from the microwave because I'm too late home). Here's hoping that Guyon's professional standards will rejuvenate the session.
Mary Wilson's Checkpoint will be top competition for the other strong drive time offerings, with Jim Mora to give us some light with the dark. She's been their lonely remnant custodian of the core news journalist skill, a hyper-sensitive bullshit detector. But unrelenting Checkpoint makes it too hard to arrive home in good humour.
RNZ is known as Radio Pravda to many of my generation for the ideological cant that has passed for insight at the weekends. But what sent me off to commercial radio in the mornings was its infuriating lack of penetration. Ideological preferences do not matter much to me if the journalist still has bullshit detectors that operate with some impartial reliability.
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I've just come off 6 days rafting down the Clarence River with 13 friends. We're raving about good times that surpassed all expectation.
The river starts above Hanmer and reaches the sea near Kaikoura. Rafting it should be on every New Zealander's heritage 'must do' list, like the Otago Rail Trail.
Do it for the scale of the country, its emptiness, the clarity of the sky, the alternating serenity and rush of rafting. Do it to enjoy the chatter of your raft-mates, the walking and climbing from campsites among scrub and snowgrass. Do it to swim in deep blue pools and drink the water you swim in all the way down. Do it to boil the billy on wood fires and taste the difference between manuka and willow smoke in your tea. Do it to be without electronic contact for the entire trip.
Do it to sip your Waipara wines as the swallows zip and dart over your camp after insects in the evening.
We saw no one outside our party on the entire 180km trip. The flow grows from easily fordable clear water at the put in, to mostly unfordable azure pools and white rapids near the sea. There is nothing scary however in a river with nothing more than grade two rapids, but be ready to paddle hard in short bursts, or against the hot afternoon wind, or the cold southerly.
If you are a foodie do it with the magnificent guides of Ben Judge and Bridget Jessep. I recommend the trip to gourmands even if they hate getting wet. Treat that part and having to paddle as the price of being allowed to share their meals. Time on the water is the filler between eating and drinking. Their food is not just fuel. Without formulaic meals, each trip has a menu reflecting the cook's shopping preference at the time with the best of local produce. Looking at our pics we seemed to be endlessly eating!
They cook over firewood you will gather. They get a billy boiling the same way for morning and afternoon tea, to wash down the home baking.
The guides cajole, reassure, answer questions and listen with every sign of interest to the insights of each new-comer to the river, which they've no doubt heard scores of times before. Without their personalities longer days in less than perfect weather could drag. Instead, they accept leadership of each raft troop, to make every day fresh and memorable.
Do it before the river and the guides are over-whelmed by demand. Enjoy one of the most truly unspoiled experiences New Zealand can give you.