Welcome
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
I like Judith Collins. I like her determination and bluntness. I like her policies.
But she’s still a girl.
If she really understood how boy racers tick, and how to build a loyal constituency to counterbalance the boy racer fraternity she’ll lose, she would not be crushing those cars. It’s such a waste.
She could recoup costs and sicken the "boys" with one simple change.
Get those confiscated cars into the hands of dreary "old" guys, like me.
We could play with them instead of killing ourselves on Harleys. I’d tool around town in a Subaru glowing underneath with devilish blue light. If we got them cheap enough we could turn our tyres to smoke in school carparks at weekends – carefully OSH supervised of course.
The disposals would need only two conditions – bidders must be women over 45 or guys over 55, and they can’t onsell them or allow anyone under those ages to use them.
Guys understand smashing your competitors’ toys. It just means you go and build bigger better ones. But to have your toys whiffling around in the hands of incompetent old sissies – that would be real pain.
It was good to hear John Key’s unapologetic defence this morning of the $2k per day cost of Graham Scott. Radio Pravda of course did Labour’s bidding in repeatedly tagginig him as "former ACT candidate", without explaining that he is one of the world’s top treasury advisers. He gained international respect for NZ’s public sector restructuring (while he was Secretary of the Treasury) during the 1980s.
National of course did its share of smearing "consultants" generically during Labour’s term. Labour had hundreds of its propagandists on various consultancies, as well as experts who delivered vital value. I enjoyed Labour’s squirming under those attacks, though I urged my colleagues (and some National MPs) against them. Labour were defenceless because they could not explain the real reasons for even the sensible consultancies. They were idealogically snookered.
Employment law rgidities make consultancies prevalent in both the public and the private sector. Often the jobs they do would be better done by short term employees. But it is not easy to ensure that temporary employees do not renege and extract ‘compensation" when their contracts are not rolled over.
Employment law also favours consultancies for jobs where it is very hard to know, without sucking to see, whether the person can deliver the hoped-for value. Consultants can be offloaded immediately if they prove to be duds – not so with employees.
And consultants are often used where their expertise is specialist and valuable precisely because they hop from crisis or engagement to engagement. They’ve seen so many of the relevant circumstances in many different organisations, whereas for the organisations those circumstances or problems are hopefully infrequent.
As to Graham Scott’s daily rate, after normal independent business overheads, it is probably less than the pay of many of Phil’s most useless current and former colleagues.
I should disclose an interest – I wish the government would use experienced lawyer consultants more frequently when law is being created. Governments of all stripes gaily engage QCs to defend the State (and force citizens into such waste) in the litigation that follws inevitably from badly drafted law. QCs cost from $3-10k per day.
I saw plenty of law going through my Select Committee that cried out for some experienced lawyering. It was produced in good faith by teams of hardworking public service lawyers and advisors. It is no discredit to them to say that the output could have been a lot better if the spending on half the junior internal people had been replaced or supplemented with spending on a couple of very experienced specialist temporary outsiders.
Any extra cost would be saved by avoiding just one muddled law court case once passed. Poorly framed law typically generates mutliple cases before the courts work out glosses to make an ambiguous provision more predictable, if indeed they ever manage to clarify it. Think about the lawyer costs of both sides in court cases. They’re just the tip of the iceberg, at between $30k to $300k for each side. Under that is the time of lawyers puzzling and writing fierce letters to each other in cases that do not get to court, and the citizen costs of negotiating under uncertainty.
A cost to the community of at least $1m would be a minimum for a typical muddled provision, and many times that for the more significant ones.
I’ve been puzzled by the lack of informed commentary on the Wolak report. A couple of days initial vituperation was to be expected. The DomPost for example is still grumping about the reforms that brought NZ energy out of lala land, to pay prices that acknowledge scarcities in things like gas, and the costs of capital that we have to borrow, because we do not save enough of our own. They can’t write about electricity without the canard that Max Bradford’s EIRA was weird.
In fact separating generation and retailing from distribution was and is internationally mainstream. The European Union is still trying to get to where Max took NZ in one go.
Now more balance is emerging. Two commentaries across my desk today claim there are errors in the Wolak report. One is from Energylink of Dunedin, and the other from Auckland University.
But even if Wolak is read uncritically his report does not justify fears of “gouging” or "robbing us blind". It warns against pressure on the Minister for political redress:
A1.12. Remedies that ask suppliers not to exercise unilateral market power when they have the ability and incentive to do so, or subject them to political pressure or popular scorn for exercising market power under these circumstances, are likely to be ineffective and may even degrade system reliability and market efficiency. …. Managers will instead be asked to balance the risk of political pressure or popular scorn against the wrath of their shareholders for not maximizing the return on their investment. Therefore, remedies that tell suppliers not to exercise unilateral market power can create instances where the firm might not take actions that benefit shareholders and consumers for fear that these actions are deemed politically unacceptable and will subject the firm’s management to public scorn.
Wolak must have expected sensationalisation, but not for the coverage to be quite as incomplete as it has been.
For example, Wolak does not say there can or should be refunds for us electricity consumers. Wolak says that the generators derived $4.3 bn from use of their market power to price high during low rainfall years. They were able to charge more than their short run marginal cost. But he does not say that they should not have got the full $4.3 bn.
Indeed Wolak suggests that they should get new source income, the premiums from what he calls ‘reliability insurance’.
Under his scheme generators to get the premiums for compulsory reliability insurance. I’m not numerate enough to work out from his price formula what that premium income might be. Perhaps it could get near the $4bn level. How could it be much less if current prices are somewhere near the middle of the range needed to justify new generation? If we New Zealanders are not willing to pay what it costs to get new plant, then we will not have it, and in dry years the lights will go out.
I’ve not seen much Green comment on Wolak. In the past they’ve understood that energy will not be saved, nor will there be much wind or other green generation if the price is too low. Sadly, after geothermal, gas and coal are still the cheapest forms of generation.
But Wolak is pretty clear about what he thinks we need most to reduce the market power on which he has reported – a new fossil fuelled power station in the South Island, and more fossil fuel generation in the North Island, not under the control of existing major owners.
So there’s plenty in the Wolak report to keep the pot boiling. And I’m still waiting for the interpreters who read the algebra to tell us all whether he thinks we should be getting cheaper power overall, or just a similar total cost spread different ways.
I trust our Government now has a simple answer to Obama’s request for us to send more troops to help him defer defeat in Afghanistan.
"Sorry, we’re in chronic trade deficit. You’ve decided to stuff the world dairy market and to lie about our role in the dairy trade.
"If you’re too weak to withstand your agri-business pressure to preserve free trade, even in an area vital to your friends, you’re not going to have the guts to hold the course needed to win a long struggle in Afghanistan. We’re not going to sacrifice our guys in a hopeless cause.
"Besides, we can’t afford to send more troops if we can’t export at prices that will pay for it."
Not surprisingly the NZ Law Society is limp on the Fiji government’s siezure of control of the previously independent Fiji Law Society. Our Society is mumbling about the Fiji government’s intentions, rather than the dangers of the control itselt.
There’s a simple and disgraceful explanation. The NZ government in 2006 took over control of lawyer registration and discipline in New Zealand.
So the NZLS can’t match Peter Williams QC’s claim that the Fiji legal system is now like that of Hitler’s Germany. Peter explained that the Fiji government will now control even the Society’s handling of complaints about lawyers by the government itself. That’s been the case in NZ since the 2006 Lawyers and Conveyancers Act 2006 came into effect last year.
I’m proud that Phil Goff accused me in the House of personal responsibility for holding that legislation up. I believe I was largely the cause of 2 years delay. It was passed after I left Parliament.
To be fair to Phil he knew that it was a woeful piece of law. I believe he did not push it, because he too was worried about its poor design, and embarrassingly bad drafting.
But he got little help to improve it. A feeble NZ Law Society leadership agreed to the loss of independence, despite saying privately they were worried by it. They ceded the independence of the profession because they saw it as the price for preserving some parts of the NZ lawyer monopoly over what the Act calls "reserved work".
So no wonder you can’t find any firm NZLS statement on its website about the move in Fiji. This is not a criticism of the current President, John Marshall. He has to play the hand left him by his predecessors.
The debate on radio this morning over firearms law did not raise one of the explanations for the rate of non-renewal of firearms licences (despite retention of their guns by many who did not renew).
I can not tell how material it is as a factor, but I know as a matter of certainty that some of the non-renewal was because of a fear that registration of firearms was a preliminary to a planned confiscation, along the lines of the 'buy-back' in Australia, and the UK.
It had become folklore in parts of our hunting community that confiscation was part of the same 'townie' movement that had seen fox hunting banned in Britain, and that led to frequent airing of the views of Philip Alpers on radio and TV.
Happily there is now much more trust of the Police, in no small measure attributable to the tireless liaison efforts of Joe Green and the commonsense of the Council of Licensed Firearms Owners, and its wise leadership by John Howat.
But the suspicion has not gone entirely. A threatening Bill still lurks low on the Parliamentary order paper.
Early in my time as an MP I went on tour with the Law and Order Select Committee, to hear submissions on an Arms Amendment Bill that would have required the registration of firearms, as well as firearm owners. Some 6000 submissions were heard.
They made a deep impression and the Chair of the committee (Labour's Janet Mackey) was persuaded by the logic to advocate for much more sensible law. At the time, the official Police line was to oppose changes to what the government had proposed.
Subsequently they've been much more reflective of the common sense position advocated by the Council of Licensed Firearms Owners.
During the drought a couple of years ago one of the ‘save the horses’ groups asked me to graze on my land a number of horses that had not been bought after a Kaimanawa muster.
The horses (a dozen) were duly delivered, on condition that the Trust look after them, and come back to break a couple of them for our use, and eventually take them away (when the drought was over). They were led to a 1000 acre ‘paddock’.
After several months of exploring as one mob, they divided into 3 groups. 12 have become 15 with at least 3 foals.
They are not scared of us or our vehicles. In the dark the scaring goes the other way, when they bolt with a thunder of hooves. They look marvellous, tails streaming as they cross the skyline.
But now the Trust seems to have vanished. If anyone knows how to contact Murray Haitana please let me know. I’m not very concerned, but I did not intend to establish a wild herd.
Surprise surprise – people who are told the power company can not cut them off for not paying if they claim to be "vulnerable" are beginning to "abuse the system".
What else did the Electricity Commission think would happen?
When weepy coroners and dopey regulators and calculating politicians infantilise their "clients", by rewarding pretended helplessness along with real helplessness, in any sphere, of course we get lots more helpless.
New Zealand already has comparatively high retail power charges. The cheats imposes their costs on those who do not cheat. Once the Electricity Commission got involved in telling all retailers how they must exercise their right to stop selling to people who wont pay, it was certain that poor people who do pay would help subsi8dise those who choose other priorities for their spending.
The group Bill English has pulled together for tax ideas is the best representation that I’ve seen of the best NZ can offer in a specialist field of expertise. Not a passenger among the list announced today!
Chaired by Prof Bob Buckle, the group includes Rob Cameron, Paul Dunne, Arthur Grimes, Rob McLeod, Gareth Morgan, Mike Shaw, Geof Nightingale, Casey Plunkett, John Shewan, Mark Weldon, John Prebble and David White.
For Victoria University and David White in particular, this is a return on patient effort to make at least the tax area of the Commerce Faculty at Victoria University a forum for independent expert debate of a kind that the public service has not been permitted.
From time to time they’ll wonder ruefully how they werre flattered into giving the time this will consume, for whatever pitiful sums (if any) they’ll earn from it. I assume that Bill English must have assured them it will be worthwhile, and they’ll not suffer the fate of the Cameron Task Force on securities law – having policy infants dump their recomendations.
The announcement says the group will review issues in medium-term tax policy, rather than making specific policy recommendations. Will capital gains tax be considered under the head of "tax integrity"?
Some have suggested that the Minister of Finance wants a capital gains tax to mitigate the fiscal disaster he’s inherited.
I reckon we’ll have a CGT within 4 years, but not because Mr English will be forced into it as a fix for current difficulties.
For a start it’s almost inconceivable that a CGT would tax gains made before its start date. So there’s not much likelihood of any significant revenue until the cycle moves from bust back to boom.
Secondly, a principled tax would make capital value losses deductible. Even if losses were capped (value loss floor) or were only offsettable against CGT, the current outlook could suggest losses in government revenue, or little gain, from a CGT for the foreseeable future.
Still, I’d be willing to buy an iPredict contract on the likelihood of a CGT within four years. Bill English will be interested in the integrity of the tax regime. If a CGT is necessary to reduce distorted investment incentives, we’ll get it.
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