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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 Writers’ Walk:

“It’s true you can’t 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

Leave Fonterra to sort itself (or not)

  • August 28th, 2015

The amalgamation/monolith structure of Fonterra was a mistake. But it is what we have and pulling it to bits now could compound the mistake.

The Fonterra monopoly came from a conjunction of  dairy politics with the instincts of a leftist Clarke Cabinet, at a time when they needed to rebuild trust with business. The Fonterra ‘capture the value chain’ slogans appealed to a Cabinet nurtured on coop=good/big battalions/commanding heights socialism. So they legislatively outflanked the Commerce Commission, relegated official reservations, and created the monolith.

The Herald has an excellent review of the reasoning and the outcomes by Tony Baldw, an official at key times. But his recommendations could be used to support those who’d like now to pull levers the other way, and impose new structures, equally well meant, equally sloganistic,  and equally without knowing the future any more reliably.

I led the legal team working for the Dairy Board on the Globalco proposal that got killed by the Commerce Commission in 1999.  As an MP I sat on the Select Committee that refined the Dairy Industry Reform Act after the deal to set up Fonterra.

My personal view had been that the stand-out best solution was to set up two competing coops, preserving the competitive challenge of their different cultures. But deliberately creating a cluster effect instead of a monolith was anathema to the coop fundamentalists of that era.

The McKinsey and Boston Consulting Group work focussed on the potential gains from size. In my opinion they were too influenced by what they thought was politically acheivable. They  knew what Dairy Board people who were expected to win the internal political struggle wanted to hear. So the relative sophisticates of NZ Dairy Group from Hamilton were subordinated to the cult figures of Kiwi, gathered around Craig Norgate in Hawera. The latter seemed  better at shed politics.

I am a strong believer that coops are a robust and sensible mechanism for collective farm gate marketing by and for farmers. I do not share the scepticism about the ability of farm leaders to become excellent directors. But I am deeply sceptical about the group think that emerges in any institution insulated from the constant reality challenge of genuine competition in its key operations. ‘

I am aware of no evidence that business is necessarily better when it is bigger, and especially when it gains monopoly power. Jeremy Moon’s business did not come out of the Wool Board. It was not an insight of raw material suppliers. Whittakers Chocolate is tiny by world standards but it is taking on Nestle and Cadbury and their big owners and winning in Australasia, apparently without the outside capital people believe Fonterra must have, and without legislative preference. But the rewards for that kind of entrepreneurship go to those whose unique skills and experience create the value. Farmers can’t buy that income stream just by recognising that it is a great source of value, and setting out to capture it.

This is not to contend that scale is irrelevant. It was sensible to create coops at least big enough to afford efficient scale processing plant, and to attract the kind of management talent that might develop breakthrough gains to match the huge gains in on farm productivity.

However the farmer-rule faith folk had persuaded themselves that coop needed monopoly, to eliminate “weak sellers” and competition at the farm gate. They believed that size gave the power to dictate to markets and consumers, so you could cut out the returns that otherwise go to ‘parasitic’ middlemen, like marketing experts and entrepreneurs.

So we got a single dominant player, with all its problems, including a lack of local alternative employment for ambitious execs who challenge orthodoxy within Fonterra.

Baldwin cites the Aus Competition and Consumer Commission’s common sense:

“if you cannot beat your rivals at home, how can you hope to do so overseas?”

His material from the Australian Productivity Commission (ACP) may have been covered in agricultural papers in New Zealand before, but if so I’ve not seen it.

The farmers pressing for the merger of Alliance and SFF, and legislative ‘rationalisation’ of killing capacity, wanted the Fonterra model. Were they asked for the analysis to justify ignoring the ACP “dismissal of the claim that a single dairy co-operative would give it market power to influence international prices — a myth that has dominated and constrained the New Zealand industry for so many decades?

Baldwin goes on “While the Australians have preserved effective competition at the farm gate, New Zealand’s industry leadership has for decades focused on eliminating it. Fonterra claiming that it’s our “national champion” is equivalent to saying we should have the All Blacks without the Super 15 and ITM rugby competition”

But does that mean Fonterra should now break up?  The logic is not obvious just because the value added businesses could use more capital. Successfuly challenging Nestle et al needs much more than capital. Quantitative easing has made debt capital almost free. But even if removing the capital constraint would set that side of the business free, it would still be risky. We’d get the benefit of knowing what the market saw as the increased risk from what it might pay for those businesses separately.

Baldwin implicitly treats returns of 5-8% on capital as inadequate. If they are relatively low risk over the long run, they are actually good. Just not as good as pomised by the Fonterra creation puffery. And if he is ignoring the return from land values the criticism is misleading. All around the world increases in rural production are captured into land value increases. They always make returns on capital employed in farming look poor. But they are real gains, obtained over centuries.

What alternative investments would farmers make with capital released from Fonterra? Cutting debt probably. But we need to know if the return on that is better than the return on the under-performing businesses withing Fonterra, as they are now valued. If  they have option value for Fonterra it may not be worth splitting them out. It is  a respectable achievement not to lose money consistently in ancillary and experimental businesses.

In the absence of compelling analysis I hope Fonterra now holds its course against criticism. But the NZ government should ensure there is nothing in the legal environment to prevent  its (NZ owned)  competitors from growing rapidly:

  1. so New Zealand farmers have more eggs outside the Fonterra basket, and
  2. so Fonterra has more domestic competition for milk, for employee brains and for strategies.

Inequality presentation on Monday evening

  • August 22nd, 2015

I’m looking forward to the LEANZ session on 24 August. Max Rashbrooke, author of Inequality: A New Zealand Crisis (2013) will present. This inequality issue has long interested me, starting with passionate student egalitarianism.

Max is universally respected as a nice and well intentioned man, but the Spirit Level believers (financial inequality causes social pathology) have a lot of explaining to do. Recent reports suggest that New Zealand ‘inequality’ in spending power terms has not deteriorated over many years.  Max will undoubtedly comment on those reports.

I hope he also addresses others, such as the Spirit Level’s flawed statistics on health correlations with inequality.

My main concern about The Spirit Level emerged on first reading. It appeared to show strong correlations, but it assumed causation. That might be fair enough, but my first edition did not contain anything convincing on the direction of causality.

I’m told that  a new edition has a chapter on the direction of causality. Hopefully Max will have evidence on whether poverty causes poor personal and human capital (e.g. lack of persistence and other characteristics that accompany, and seem responsible for relative wealth and economic outperformance). Or do cultures that fail to train for such traits come first and cause inequality?

That is a far more important question than whether there is a correlation. Because if the culture causes the inequality, and not the other way round, the poverty may not be remediable by financial transfers to reduce inequality. If the transfers merely subsidise and cement poor cultural values in place, they may exacerbate poverty.

If that is the case (which became the subject of bitter argument after disclosures of decades of huge transfer payments to the population of rioting Ferguson, Missouri) then investment should be in forms of education that are explicitly culture changing.  That is if there is evidence that such efforts work, presumably when targeted at the right time of life (for example young mothers).

After billions spent in 40 years of our DPB, and a great deal of good will and hope, it seems to me our increases in inequality (where established) suggest a causality in the direction our grandparents would have thought, intuitively.

But of course the first requirement in all this is an open mind, trained to recognise the power of self delusion.

Former Auckland Medical School man Graham White QSO reminded me of this when he sent a link to the 2014 IEA paper (linked above) with:

“The Unnatural Nature of Science”  -  Lewis Wolpert  -  ”The capacity for self-delusion, even among scientists, should never be underestimated: conviction can have profound effects on observation.”

and

“Thinking Fast and Slow” – Daniel Kahneman  - “The prominence of causal intuitions is a recurrent theme in this book because people are prone to apply causal thinking inappropriately to situations that require statistical reasoning …     System2 (viz., thinking slow) can learn to think statistically but few people receive the necessary training.”

 

Cunning RMA move is Constitutionally dodgy

  • August 18th, 2015

Every young Aucklander unable to afford a house should applaud the Hon Nick Smith’s cunning scheme to force planners to take that cost into account. If Dr Smith uses his plan boldly enough he may gut the paralysing Auckland PAUP and negate the Hon Peter Dunne’s veto on RMA reform. The scheme also highlights the constitutional barbarism lurking in last year’s Supreme Court “King Salmon” decision.

The details so far are sketchy (described by Kiwiblog drawn from behind Richard Harman’s Politik paywall). But it seems to be a delightful fulfilment of prescient comments by Patrick Smellie in April on the Supreme Court decision.

The King Salmon decision was welcomed by those who fear changes to the status quo, but it contained the seeds of a constitutional time bomb.  Effectively it may say (see here and here) that Cabinet policy documents could trump words of the statute under which they had been issued.  It interprets the authority of National Policy Statements with an effect akin to validating them as products of  a “Henry VIII clause”.

Normally Parliamentary intention is supreme, and Cabinet (the Executive) instruments will always be treated as subordinate to contradictory implications of the legislation. In defence of the Supreme Court, the RMA is drafted with no respect for normal rule of law or constitutional conventions. The Court is obliged to try to make it work.  ’Environmental law’ is like family law, scarcely predictable enough in result to justify the term ‘law’. It has become a contradiction in terms. The RMA is a conglomeration of worthy slogans and powers. They authorise often incompetent mini-rulers to issue decrees which reflect and express their uncosted aesthetic, spiritual, class and political or tribal prejudices.

Now the Court approach may have given the National government a get out of jail card to end the economic sabotage of Peter Dunne, and the planners. Unfortunately for the rest of us there is a risk that Cabinets will become keen on the device. They may start defacing other statutes with similar versions of “Henry VIII clauses”. They will thwart the certainty and constraint on executive power intended by  Parliamentary conventions. They effectively delegate back to the executive the power to decide what a statute will mean from time to time.

That in turn will likely lead the Courts into attempts to confine the King Salmon approach and distinguish it out of existence.

An obvious tactic will be to draw on the Supreme Court’s King Salmon focus on the care and deliberation that had gone into the relevant National Coastal Policy Statement. A Court trying to undo the damage of that decision could decide it must examine closely the quality and procedures of subsequent Cabinet policy statements designed to corral the planners. Such court interest will set up constitutional tensions we might have avoided if the Hon Amy Adams had not been blocked by Mr Dunne.

But lets appreciate the genius in the current proposal.  If Dr Smith uses his plan boldly enough he may at least end the planners’ assurance of unearned, untaxed wealth for Auckland’s property incumbents at the expense of the rest of New Zealand. And if the device is likely to become discredited over time, and negated by fresh court decisions, Dr Smith might as well be hung for a sheep as for a lamb in the meantime.

 

Was our Saudi sheep farm wasted money whatever happened?

  • August 6th, 2015

A startlingly blunt report in the Telegraph says that “If the oil futures market is correct, Saudi Arabia will … be in existential crisis by the end of the decade“.

If correct it also makes our ‘ investment’ in a desert sheep farm to secure a FTA look  unrewarding. Even if the bribe had secured the the FTA instead of exploding in our faces with more ill will and mistrust, the Telegraph scenario would have Saudi Arabia unable to buy much from us within this decade.

The report says:

” The Saudis took a huge gamble last November when they stopped supporting prices and opted instead to flood the market and drive out rivals, boosting their own output to 10.6 million barrels a day (b/d) into the teeth of the downturn.

Bank of America says OPEC is now “effectively dissolved”.  

If the aim was to choke the US shale industry, the Saudis have misjudged badly…”

The Saudi central bank’s latest stability report is cited:

“The main impact has been to cut back on developmental drilling of new oil wells, rather than slowing the flow of oil from existing wells. This requires more patience,” it said.

But it appears that everyone has misjudged the extraordinary inventiveness of the US drillers who created and are still developing the fracking miracle.

“The problem for the Saudis is that US shale frackers are not high-cost. They are mostly mid-cost, and as I reported from the CERAWeek energy forum in Houston, experts at IHS think shale companies may be able to shave those costs by 45 per cent this year – and not only by switching tactically to high-yielding wells.

Advanced pad drilling techniques allow frackers to launch five or ten wells in different directions from the same site. Smart drill-bits with computer chips can seek out cracks in the rock. New dissolvable plugs promise to save $US300,000 a well. “We’ve driven down drilling costs by 50 per cent, and we can see another 30 per cent ahead,” said John Hess, head of the Hess Corporation.

It was the same story from Scott Sheffield, head of Pioneer Natural Resources. “We have just drilled an 18,000 foot well in 16 days in the Permian Basin. Last year it took 30 days,” he said.

You have to be awed at an industry that can innovate as fast as the US drillers. The report cites an insider’s warning that:

the resilience of the sister industry of shale gas should be a cautionary warning to those reading too much into the rig-count. Gas prices have collapsed from $US8 to $US2.78 since 2009, and the number of gas rigs has dropped 1200 to 209. Yet output has risen by 30 per cent over that period.

… even if scores of over-leveraged wild-catters go bankrupt as funding dries up, it will not do OPEC any good.

The wells will still be there. The technology and infrastructure will still be there. Stronger companies will mop up the cheap, …. Once oil climbs back to $US60 or even $US55 – since the threshold keeps falling – they will crank up production almost instantly.

OPEC now faces a permanent headwind. Each rise in price will be capped by a surge in US output. The only constraint is the scale of US reserves that can be extracted at mid-cost, and these may be bigger than originally supposed, not to mention the parallel possibilities in Argentina and Australia, or the possibility for “clean fracking” in China as plasma pulse technology cuts water needs.”

The result?

“Saudi Arabia is effectively beached. It relies on oil for 90 per cent of its budget revenues. There is no other industry to speak of, a full fifty years after the oil bonanza began.

The article goes on to highlight the costs of the Saudi royal family’s leadership of the Sunni cause in the bitter struggle between Sunni and Shia across the Middle East.

“The country has  been burning through its foreign reserves at a vertiginous pace.

The reserves peaked at $US737 billion in August of 2014. They dropped to $US672 billion in May. At current prices they are falling by at least $US12 billion a month.

It then cites Standard & Poor’s negative outlook:

“We view Saudi Arabia’s economy as undiversified and vulnerable to a steep and sustained decline in oil prices,” it said in February.

The Telegraph concludes:

“The Saudis are now trapped. Even if they could do a deal with Russia and orchestrate a cut in output to boost prices – far from clear – they might merely gain a few more years of high income at the cost of bringing forward more shale production later on.

Yet on the current course their reserves may be down to $US200 billion by the end of 2018. The markets will react long before this, seeing the writing on the wall. Capital flight will accelerate.

The government can slash investment spending for a while – as it did in the mid-1980s – but in the end it must face draconian austerity. It cannot afford to prop up Egypt and maintain an exorbitant political patronage machine across the Sunni world.

Social spending is the glue that holds together a medieval Wahhabi regime at a time of fermenting unrest among the Shia minority of the Eastern Province, pin-prick terrorist attacks from ISIS, and blowback from the invasion of Yemen.

Diplomatic spending is what underpins the Saudi sphere of influence caught in a Middle East version of Europe’s Thirty Year War, and still reeling from the after-shocks of a crushed democratic revolt.

We may yet find that the US oil industry has greater staying power than the rickety political edifice behind OPEC.”

But Peak Oil will rescue them, no doubt.

Thanks Phil for drawing this to my attention.

Cycle trip – AO2 – Alps (Aorangi) to ocean (Oamaru)

  • August 5th, 2015

Raving about the joys of an 8 day cycle tour in Catalonia prompted suggestions that others should get the benefit, on Trip Advisor.

That reminded me of this year’s previous bike delight – the 301km Alps 2 Ocean trail from Mt Cook Village to Oamaru.

The guide books suggest 4-6 days – and they are right. Our group of 4 cyclists did it in four days with three overnighters, stopping at Twizel, Omarama and Kurow.

That is not arduous for fit cyclists, but if I did it again I’d build in more time to do side events and to play. The country is so spectacular it is a shame to rush through.

It is great late summer country. Though it was February, we started from Mt Cook village in snow turning to sleet for the first few km down Lake Pukaki. By the bottom of the lake  we were pushing along under hot dry sun.

Next time I’d:
a) Stop for a meal or coffee at Braemar Station down the side of Pukaki;
b) Try salmon fishing around the farms in the Ohau Canal.
c) Stay at Ohau Lodge because it is a favourite place. That could make a short trip from Twizel so build in a long picnic, or fishing.
d) Go gliding at Omarama
e) Spend more time around the Waitaki hydro lakes, taking more swims.
f) Otematata might have been a good overnight stop to extend the time on the Waitaki hydro lakes.
g) Perhaps do a farm stay nearer to Oamaru, instead of the Kurow motel (though it was clean and spacious). Kurow the town does not have great eye appeal but the pub was friendly.
h) Spend more time looking around Oamaru. Arriving there very early afternoon should be a target, and stay overnight.

We had a spouse car taking luggage from motel to motel. A commercial service doing the same thing would make the logistics easy. Our dedicated driver enjoyed the trip. There are plenty of sights and cafes and things to do, though it would probably work better for the drivers if there were two of them for company.

The track surface is good but you’d not take specialist road bikes on it. Cross over tyres would be fine. The last day is mostly riding great plains and rolling hills

Prices in New Zealand

  • August 4th, 2015

Several weeks in Europe have been humbling, as travel usually is.

Among the surprises was how cheap it was to eat and drink well, even in Germany, one of the richest countries in the world. In Spain 8 of us could regularly have a generous evening meal, with drinks, for between Euros 110 and 140.
Why are our prices so high in comparison to wages, even under hospitality’s intense competition?
This problem has been exercising the Productivity Commission. Their answers on housing costs do not really satisfy. Why are excess margins not being competed away on materials? Do we have a uniquely New Zealand form of conspiracy that needs no organising?
The Commerce Commission’s prosecution of PGG Wrightson (where I was a director long ago) and others could help. The Commission alleges illegal price agreements on the NAIT tags and services farmers are obliged to buy. I hope there is a clear outcome. If collusion is proved there should be a seriously deterrent level of sentencing.

Takamore v Clarke and death focused cultures

  • June 16th, 2015

What a tragedy that New Zealand pretends respect for people fighting over where bodies should decompose.

Takamore v Clarke, the last highly publicised fight went as far as the Supreme Court. Hundreds of hours of legal and law enforcement intelligence spent without laying down a clear principle to tell the Police and other authorities promptly and exactly who decides a dispute over where a body will be buried. Hundreds of official hours spent delicately imploring people to be reasonable, who were apparently culturally bound to display conspicuously that they were driven beyond reason.

Martyrdom, sacrifice of valuables, suttee and law breaking are common extravagant signalling activities. They conspicuously display extreme emotion. Activists need prosecutions for law-breaking if they are to acheive their purpose of showing the depth of their convictions by willingness to suffer penalties.

If the courts were not so apologetic, they might have objectively seen the advantage for all concerned of a legal bright line determining process, triggered at a very early stage of dispute. Then those who need to make a signal display of willingness to transgress, can do so early and relatively cheaply, and save the community the costs of pointless attempts to compromise when the fight is the real objective, not the outcome.

Presumably, for the families involved in our recent fights, it is working.

With official New Zealand doing back flips to avoid enforcing court orders the Takamores showed the world (the story went beyond New Zealand) that they were so grief-ridden (or guilt or pride-ridden?) that they would deny normal courtesies to a widow and children, and thumb their noses at the law, to assuage their grief and loss (of a family member who had been out of close touch for years).

This rot of exaggerated respect for the dead is not confined to lawyers. The Prime Minister fell into a trap when he left the Pike River families with the impression that no resource would be spared in recovery of their loved ones’ bodies. Instead of instinctively drawing the line a secular government should always draw, to preserve fairness vis a vis the daily losses of other families to arguably preventable deaths, he descended into a competition to show maudlin compassion.  Since then Bernie Monk has become too boring to listen to. Yet he and the Pike River families have been almost bound to keep accusing the government of heartlessness in not spending more millions on dangerous recovery missions. Understandably they could feel that they were some-how disloyal to their dead if they did not at least try to keep the government to its word, however pointless.

It has never been the role of an intelligent secular state to promise the return of citizens’ bodies for family funerals, however dramatic the circumstances.  Fishermen, soldiers, hunters, aircraft crew and passengers frequently disappear. For Christians, Jesus’ suggestion that we let the dead bury the dead (Luke 9:60 thanks Brendan), should be excuse enough to avoid the lure of death focused cultures.

Official New Zealand is now wallowing in hind-focused ‘celebrations’ of historical courage and sacrifice. My father and grandfather who spent more than 4 years each away fighting wars, were deeply suspicious of the types who liked public commemorations. Dad’s term was ‘base wallahs’ – people good on parade but who steered clear of the front. Dad and Grandfather would have valued being thanked and celebrated if they thought the speechifiers milking these exercises actually respected their values.

But a government that leaves today’s service-people with no air defences, and could fine a farming couple $40k for not obediently kneeling to commands to wear safety helmets on their own bikes,  would have struck them as the kind of rulers they were fighting. They would not have listened long to speeches from politicians trying to wrap themselves in lost historical glory, paid for by people whose values they now despise.

Our service-people did not demand or expect to have their bodies returned.

New Zealand rulers have lacked the intellectual courage to defend secularism for a very long time. Our national museum has been wasting treasure funding the repatriation of shrunken heads of slaves killed by Maori expressly for the purpose of selling those heads. Ostentatious wailing parties accompany the heads at taxpayer expense. A state organisation that should be absolutely dedicated to preserving and communicating objective knowledge of culture and history is essentially propagating a lie. The affected piety and mourning that attends the return of those artifacts (for destruction in the ground) falsely implies that they left New Zealand in some gross contravention of indigenous culture, for which modern westerners should feel guilty, and for which modern compensation is due, and useful.

Only pitifully useless cultures reward and steer their people into conspicuous displays of their ‘love’ (or pride or guilt?) by fighting over and spending treasure on anonymous long dead parts of bodies. Successful cultures spend their treasure, their emotions and their time on the future, not wailing pointlessly over the dead.

Some of New Zealand’s rulers are leading our culture into the past as fast as they can drag us.

 

Investment Advice

  • June 11th, 2015

On Q & A on Sunday I predicted the Reserve Bank’s drop in interest rates. Most commentary I’d seen before (and since) suggested the Bank would hold off change for a little longer.

I had no inside information – the RBNZ does not leak in my experience. But I reasoned that if there was near universal expectation of a reduction, market pricing and planning and spending decisions would reflect that expectation. Accordingly no behavioural benefit was secured from deferring the reduction, and the Bank would know that.

Ergo

Next time you need currency advice watch to the end of Q & A when I’m a commentator.

Instead of the Wellington Super City

  • June 9th, 2015

How many commentators on the Local Government Commission decision will waste the minutes of scarce public attention to a local government issue? The public decided long ago that an Auckland-style uber-government for our region was not their idea of improving local democracy.

So they’ll have little patience for whining that the people got it wrong. I’ve heard astonishing contempt from believers in amalgamation. They thought the ‘ignorant’ proles should have been grateful that their betters were working to ensure they could be governed remotely by them, instead of by locals they might know in their neighbourhoods.

But there are serious improvements that the region should be working on. In my opinion the greatest need is to improve the chances of getting more good councillors and fewer passengers and nutters. The current election process can involve thousands of serious voters in voting decisions they know to be farcical. Even close followers of public affairs end up voting on  name recognition, not sure whether it is from mere repetition, notoriety (even for idiocy) or because of a previous media career.

Unstructured democracy is fantastic at one thing – ejecting people who have lost the public’s confidence. But it can be terrible at finding good people. Modern ‘politics as tournament’ journalism dissuades nominations from the eminent people of proven acheivement outside politics who would in the past have served (for no pay) as city fathers and mothers.

So the LGC should start debate on moderating the risks. Aspects of our current election system can result in councils few sensible people would choose to join. Majorities can ride on the backs of a few public-spirited competent members.

There is a risk that today’s LGC announcement will spur those who are convinced that ‘someone must do something’ into calling for a reflex transfer of fresh powers and assets to the regional council. Unfortunately, the GWRC is exposed to the worst risk (after the ludicrous DHBs) of lurch voting on name recognition.

That is not because it is a retirement home for former mayors and MPs. I think their experience can mitigate the risks of poor perfomance. Without some of them, and the tight control of Fran Wilde in particular,  the GWRC would have looked chaotic, and been more wasteful than it has been.

But it is still largely bereft of the kinds of experience needed to run businesses with hundreds of millions in assets and turnover. In particular it is not a suitable owner for the regional network services that should be amalgamated:

1) Most analysis suggests that scale efficiencies can be obtained from amalgamating region-wide network services, such as water and transport.

2) The very large and capital intensive businesses thereby created need more reliable governance than comes from the accidents of local government elections. No prudent director wants to serve on a board without enough other members with the professional knowledge and experience to hold sophisticated management to account;

3) Assembling such boards needs systematic shoulder-tapping, and succession planning. They can’t risk being suddenly left without someone who knows where to look for the bodies in financial information, or who can smell consultant bullshit dressed in engineering or planning jargon.

4) Succession planning is unreliable in democracies. Yet publicly owned agencies need the healthy discipline of involuntary ejection of members from time to time, by voters, or at least by people who themselves are subject to voter control.

5) The regional network agencies should balance those needs. They should have nominated members of regional constituent territorial authorities, who go if they lose electorally, plus coopted directors appointed for their recognised qualifications and experience.

Nearly two years ago I urged that the effort going into foisting a super-city on us should instead go into more focussed reforms.

Gareth is right – lets kill all the cats

  • May 18th, 2015

Though it says that is not the conclusion, an absolutely fascinating article in The Atlantic should lead to a much greater drive to rid New Zealand of feral cats. Toxoplasmosis may be far more sinister than we’ve thought.

We’ve long known it could be bad to let cats nest in the hay shed. Fouled hay caused abortions in stock. And we knew pregnant women should avoid cats.

But now toxoplasmosis, that needs cats for its life cycle, is implicated in schizophrenia, promiscuity, traffic accidents and increased suicide rates.

If you like your beef rare, you should be on Gareth Morgan’s side in this one. Read the article in full to find out why, and to be amazed.

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