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A solid start on housing

Over the weekend, Labour used its 100th birthday celebrations to remind everyone of what the party can be, by presenting a real alternative on housing. First, with a promise of more money for emergency housing for the homeless. Second, by promising to rebuild and grow the state housing stock, and turn Housing New Zealand from a money-gouging slumlord into a public service department aimed at ensuring everyone has a roof over their heads. Finally, with a mass affordable-home building programme, underwritten by cheap government money and the compulsory acquisition powers of the Public Works Act, to burst the housing bubble. And as a bonus, extending the capital gains tax on rental properties while eliminating negative gearing.

Its a good combination of policies which tackles the problem head-on. And while National is trying to pretend it is what they were doing anyway (while simultaneously claiming that it won't work - so they think their policies don't work?), it is lightyears from their combination of foot-dragging and looking for someone to blame.

The tricky bit is going to be the delivery. Not the money side - that's easy enough - but whether they can build that many houses. Thanks to the running down of the education system, we have an under-supply of builders, which limits the capacity of the market to respond to shortage. But that's solvable in the medium-term, and this is a long-term policy - and I would rather have a government which actually tries to solve our problems than one which flings its hands up in despair at them (while privately making out like bandits at the expense of everyone else). And at the least, Labour looks like they're trying to earn a Ministerial salary, rather than National's demanding them for doing nothing.

Australia covers up sexual assault on Manus Island

Australia's refugee gulag on Manus Island has seen sexual assaults, rapes, even a murder. Now it turns out that their mercenary camp guards are being paid to keep silent about these crimes:

Wilson Security paid at least one Australian security guard to keep quiet about an alleged sexual assault of a local Manus Island worker, in a number of separate payments of up to $15,000 made by the company.

7.30 understands at least one guard, who was present on Manus Island on the evening of the alleged assault and quickly removed from the island the following day on July 16 2015, was paid just over $15,000 by the security company.

The money included the worker's remaining annual leave entitlements and was offered as a non-disclosure payment, meaning the worker could not discuss the incident, nor the work he was doing for the company in the offshore detention centre.

The removal of the workers involved in the alleged rape was considered controversial at the time as local Papua New Guinea police claimed they had not been able to investigate the matter after the local PNG worker had been found naked and disorientated in the men's bathroom on the island in the early hours of the morning.

There is a name for this: perversion of the course of justice. Those involved need to face charges for it. What's worse is that this is ultimately being paid for with public money. But I guess once you start paying people to run concentration camps and torture refugees, then little things like perverting the course of justice and undermining the rule of law seem inconsequential.

Time to get rid of negative gearing

Deborah Russell has an article in the Herald today about negative gearing, the ability of rental property owners to offset losses against their other income. This is effectively a subsidy from the rest of us to property speculators, who pay lower taxes while enjoying tax-free capital gains when they sell. This subsidy in turn helps drive speculation. And it costs us a lot: $250 million a year;

We know that a fair amount of it is going on: in response to an OIA request, Inland Revenue confirmed that in the 2014 tax year, rental property owners claimed about $780m in tax losses. That could amount to a tax subsidy of up to $250m.

One simple way to remove this subsidy, and hopefully provide a slight cooling influence on the property market, is to not allow losses on rental property income to be claimed against other income. Rental property investors could still carry the losses forward, and offset them against any profits that they ever make from residential rentals, but they couldn't write the losses off against other income, like salaries or business income.

Its a good idea, and one the government needs to act on. Better yet, implement a capital gains tax and drive out the speculators entirely. Of course, that would require them to actually do something, rather than just looking for someone to blame, so I think the likelihood of them actually doing it is low.

Looking for someone to blame is not a policy

New Zealand has a housing crisis. An entire generation is being locked out of the housing market by greedy speculators, the average Auckland house price is just short of a million dollars, and people are living in cars because they can't afford rent. But rather than doing the obvious - imposing a full capital gains tax, building more houses and crashing the market - National's "housing policy" seems to consist entirely of looking for someone to blame. Last week it was local government. Today, its the Reserve Bank:

Prime Minister John Key has expressed further frustration about the Reserve Bank's response to rising house prices, saying that it should not need any more time to investigate stricter rules for property investors.

Reserve Bank deputy governor Grant Spencer last night said that the bank was considering new loan-to-value ratio (LVR) restrictions, but would not introduce them before the end of the year.

Spencer also told the Government to get its own house in order, by taking another look at its immigration and tax settings.

On Wednesday, the Prime Minister had urged the bank to target investors with tougher lending rules, saying it should "just get on with it".

Because obviously its the responsibility of the unelected, unaccountable Reserve Bank, rather than the elected, accountable government, to decide policy in this area.

You can see why the government wants to dump this problem on someone, anyone else: deflating the housing market is going to make a lot of people (particularly people who feel rich because they own a house, or people who have paid too much for a house in the last four years) very unhappy. But it needs to be done. This housing crisis is tearing our society apart and it needs to be resolved.

We pay John Key almost half a million dollars a year. We pay his crony-Ministers more than quarter of a million each. They don't get the big bucks for doing nothing, sitting on their hands and blaming other people - we pay them to take responsibility and solve our problems. And if they're not going to do that, they should step aside for someone who will.

New Fisk

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Open government: Have your say

The government is supposed to be running public consultation on their (late) Open Government Partnership Action Plan sometime next month. Meanwhile, ECO, the Environmental and Conservation Organisations of Aotearoa New Zealand - have beaten them to it, launching their own survey on the issue. They're seeking to learn people's priorities on which of the OGP values (accountability, transparency, participation, and technology for accountability and participation) people prioritise, as well as suggestions for action plan commitments.

You can fill it out here.

The results will be provided to the government to help inform the development of the action plan, but will also help get some solid data about what we really want. And it will be an excellent club to beat the government with if they ignore us again.

The survey will be open until 26 July.

National doesn't care about justice

This week is the 30th anniversary of homosexual law reform in New Zealand. Up until 1986, consensual sex between men was illegal, and punishable by up to seven years imprisonment. Hundreds of people were prosecuted under this law, and jailed unjustly for something which should never have been a crime. But while the law was changed, its victims still carry those convictions. This week, Green MP Kevin Hague presented a petition to Parliament calling for those convictions to be reversed:

Thirty years on from homosexual law reform Green MP Kevin Hague has presented a petition to Parliament calling for an official apology to the men who were convicted before 1986 for having sex with other men.

He wants the convictions overturned and said it's time the government put things right.

"For those people who are still alive, this will have cast a massive blight on their entire lives most likely, the same might apply to families [of men who aren't alive], because one of the consequences of a conviction quite often is that it tore families apart."

Hague is right. Our government committed gross injustices. It needs to make that right. Forgiving convictions is the least it can do (arguably, its victims are also deserving of compensation). Unfortunately, Amy Adams has dismissed it out of hand as "too hard". Faced with an ongoing injustice, National just shrugs its shoulders and says "meh".

While there are obvious challenges caused by the conflation in the law of consensual and non-consensual sex, I don't think it is beyond the wit of the government to fix this. The courts are legally required to retain records, so its not as if the core data is missing; all it will take is some time spent trawling through them to find relevant cases. National's upfront refusal to do this tells us clearly that they simply do not care about justice. And if that's the case, the Minister should resign so we can get someone who does.

New Fisk

I read the Chilcot report as I travelled across Syria this week and saw for myself what Blair's actions caused

Can SSC sue Paula Rebstock?

Back in 2012, the state services Commission hired National Party crony Paula Rebstock to run a witch-hunt into leaks from MFAT. The report she produced was a complete hatchet job, which ignored evidence and slandered innocent public servants. A subsequent investigation by the Ombudsman has recommended an apology and compensation to Rebstock's victims. Which leads to an obvious question: can SSC sue Rebstock to recover those costs? After all, she's an independent contractor who hasn't just failed to perform her job to the required standard, but (according to the Ombudsman's report) displayed utter incompetence if not outright malice in the performance of her duties.

Normally you'd expect Rebstock's contract to contain an indemnity clause in which she indemnifies her principal against the costs of such incompetence - that's why contractors are paid the big bucks, and why they have muppet insurance. But it turns out that Rebstock didn't have a contract with SSC. Instead, according to a request filed through FYI, the public OIA request system, all she had was a single page appointment letter, the public service equivalent of a handshake agreement. So, I'm not sure if they can sue or not. But they should, because otherwise they're simply encouraging her (and other crony contractors) to do a bad job in future. Contracting out is supposed to result in greater accountability due to higher incentives for performance. Obviously, that doesn't work if there are no incentives against non-performance (see also: private prisons, charter schools, social bonds, and anything else National has privatised).

Sadly, I don't expect SSC to actually sue. Rebstock is a government crony, and SSC didn't get where it is today by standing up for public service values (or basic competence). So instead we'll be faced with the waste of $200,000 of public money, plus an unknown amount in compensation and legal fees to the victims, because SSC won't do its job. The sooner Rennie is gone and his replacement takes over, the better.

Blair lied

The Chilcot report has been published, and its official: Blair lied. He lied about WMD. He lied about the necessity of going to war. He lied about the consequences.

His lies cost at least 150,000 Iraqi lives and created at least a million Iraqi refugees. And he and his co-conspirators - Foreign Secretary jack Straw, JIC Chief John Scarlett, MI6 head Richard Dearlove, plus George W Bush and all his wretched little NeoCon minions - must be held to account for them.

Chilcot said he had not made any conclusions about the legality of the war, saying that it was the place of a properly constituted international tribunal. It is now time for such a Tribunal. Aggression has always been a crime under international law, and it is only foot-dragging by states parties which prevents the ICC from exercising jurisdiction over it. But if the ICC can't, then the UN and the international community must - just as they did for Yugoslavia, just as they did for Rwanda, and just as they did for the Nazis.

it is not enough for the establishment to disown Blair and his co-conspirators, to say that they were wrong. They must actually be held to account for their crimes. Because if they're not punished, if they have impunity form justice, then their successors will simply commit more such crimes.

Finally, if there's one overwhelming lesson to be learned from Chilcot, it is this: Do not invade anyone, ever. Sadly, the British establishment, raised on nostalgia for imperial glory and a toxic "special relationship" with the US, is unlikely to learn it. Which is why they need to be driven out, permanently. Their replacement will probably be just as shit, but they'll at least be shit in a different, and hopefully less destructive way.

New Fisk

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No extraditions to China

For the past two years the Chinese regime has been trying to negotiate an extradition treaty with New Zealand. The barrier, of course, is human rights: defendants in China do not receive fair trials, may be tortured and forced to "confess", and may face the death penalty if convicted by their kangaroo courts. Even if not murdered by the state, China's prisons and "re-education camps" are appalling and constitute an ongoing human rights abuse. All of this provides a cast-iron reason to refuse any extradition.

But National really wants to toady to China, so their farmer-cronies can sell more milk. So for the past four and a half years, they've been trying to extradite a murder suspect. They've tried to get around the human rights issues by seeking and receiving assurances from the Chinese regime that the victim will receive a fair trial and will not be executed or tortured. But there's a problem: the High Court doesn't believe China's bullshit:

The Government has been ordered to reconsider a decision to extradite a New Zealand resident to China for questioning about a murder, due to fears he could be tortured or forced to make a confession.

[...]

In her ruling, Justice Jillian Mallon said Adams had followed a "thorough" and "considered" process when making her decision.

However, she had not explained why the Government could trust China's promises to protect Kim, when information about his treatment could only be shared between the two governments and not other people.

"In view of New Zealand's limited experience with assurances from [China] and the limited information from other countries about their experience with [China] honouring assurances, this may be inadequate to protect Mr Kim's rights."

Mallon said it wasn't clear whether promises to give Kim a fair trial would protect him from "ill-treatment" and the right to silence beforehand, given China's laws did not allow Kim to have a lawyer present for pre-trial interrogations.

Unbelieveably, the Minister is actually considering appealing. Which shows how badly National is willing to surrender fundamental human rights for milk sales.

The Minister should not appeal. The Chinese regime's "assurances" are not credible and mean nothing in practice. New Zealand should not extradite anyone to China until it has established a solid track record of fair trials and respect for human rights.

Social bonds are a failure

Last year the National government had the brilliant idea to financialise misery, through "social bonds", complex financial instruments which basically boil down to "paying the finance industry a pile of cash to be an intermediary in contracted-out social services". It was a stupid idea, susceptible to all the failure modes we see in private prisons: cherry-picking, stat-juking, lowball targets and Ministers incentivised against admitting failure, and the government was trying to make it even stupider by guaranteeing high returns, effectively removing nay incentive to perform from the contract. So its good news that negotiations over the scheme have collapsed:

The government's first social bond has collapsed, with negotiations breaking down and the provider walking away.

[...]

The first was to be a programme to help people with mental health problems get into the workforce, and the plan was to put employment consultants in GP practices.

But the provider, Wise Group, confirmed yesterday that it had withdrawn from the scheme.

It would not make any further comment saying it had been directed to refer inquiries to the Ministry of Health.

I guess the government wasn't offering them enough guaranteed profit for these parasites to think it was worthwhile. Meanwhile, they've already flushed $1.6 million on negotiations, but that's a tiny amount compared to the cost of letting the finance industry fuck up mental health provision. And it is far, far better that the scheme fails now than when it is actually responsible for the real lives of real people.

Meanwhile, we should all remember that the finance industry is parasitical on the real economy and serves no real purpose. Like the hippo arse-leech, it survives by inserting itself into the squishy parts of the real economy and sucking. Involving it in government services (or anything) is inherently inefficient because of parasitic load (or what economists call "rent-seeking"). We should be trying to eliminate it, not turn over government to it.

Assented

The Official Information (Parliamentary Under-Secretaries) Amendment Act was signed into law ysterday. Which means that Parliamentary Undersecretaries, such as David Seymour, are now subject to the OIA.

If you want to ask him anything, FYI has already set up request pages for his portfolios here.

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For crashing house prices

Writing in The Spinoff yesterday, former Reserve Bank economist Arthur Grimes suggests a radical solution to the housing crisis: crash the house price by 40% by building 150,000 houses in six years:

In March 2016, the REINZ Auckland median house price reached $820,000. Four years previously, it was $495,000 – that’s a 66% increase in 4 years. What’s more alarming is that in 2012, many people considered that house prices were already getting out of reach for most people. That was particularly the case for young people and low income earners.

That extraordinary increase – coupled with the already high level in 2012 – was behind my call to a recent Auckland Conversations event that policy-makers should strive to cause a 40% collapse in house prices to bring the median back to around $500,000.

My call for policies to drive a house price collapse is driven by my personal value judgement that it’s great for young families and families on lower incomes, to be able to afford to buy a house if they wish to do so. My concern is not for older, richer families, couples or individuals who already own their own (highly appreciated) house.

Naturally, John Key - supported by those older, richer families, and personally owning three properties in the Auckland region (plus fuck knows what through his network of trusts) - thinks this is "crazy". But when average Auckland house prices are just short of a million dollars, and an entire generation is being locked out of the housing market by greedy speculators who can leverage the inflating values of their existing properties, its the solution we need. And the primary cost - the evaporation of illusory paper wealth - isn't a cost at all (though it will be very real for speculators who have over-leveraged themselves, and for the few people who have managed to get on the Auckland housing ladder in the last five years - though in the latter case, at least they'll have a house to live in and they'll be no worse off materially than they were before).

Politics is, at its core, about who gets what. There is no "win-win" solution for the housing crisis. If the boomers want their kids to be able to enjoy the sort of life they had, to have the security of owning their own home, then house prices have to drop significantly. And if they don't want that, fuck 'em.

The Australian election

Australia went to the polls over the weekend in a rare double dissolution election, and have voted themselves a hung Parliament. While the final numbers will depend on postal votes (as in New Zealand), the initial results (plus seats in doubt) suggest an equal tie between Labour and the coalition, with a crossbench of six minor party and independent MP's deciding who forms a government. As for the Senate, Malcolm Turnbull's gamble to free himself of an unccoperative crossbench has backfired spectacularly, and seen the re-emergence of One Nation and Pauline Hanson to boot.

Austrlaia isn't used to this. Like the UK, they're used to a strapped-chicken electoral system delivering unfair but decisive results. So the politicians are reacting with outrage, declaring that they'll refuse to negotiate with each other, as if that will change the result. They need to grow up, accept the hand the electorate have dealt them, and try to make it work.

As for how that's going to happen, its anyone's guess in the lower house. Labor may have a slight advantage as they can rely on the support of the Greens, but its really going to come down to the two MPs of the "Nick Xenophon Team" (Australia still having personalist parties) In the Senate, it looks like the Coalition simply won't be able to enact their desired policies, so its either three years of (moderated) Labor or three years of stasis. Unless of course the politicians throw their toys again and demand another election because they don't like the result...

Meanwhile I'm left boggled by the electoral commission of a supposedly first-world country which takes three days to produce even a preliminary count. Waiting for postal and special votes for the final results is one thing, but in this day and age, a modern electoral administration should be able to count everything on the night. And if they can't, you really have to wonder whether they are sufficiently resourced to do the job.

A bribe predicated on a lie

Remember sheepgate? Murray McCully bribed a Saudi businessman with $10 million of public money, supposedly to avoid a $30 million lawsuit. But it turns out that that lawsuit didn't exist:

The Nation has obtained Cabinet papers from 2013 showing Mr McCully claimed the Government faced a $20-30-million lawsuit if it didn't resume livestock exports.

[...]

However, Mr Al-Khalaf's business partner George Assaf has told The Nation they had no intention of suing the New Zealand Government.

"We have never taken any action or thought about this. We may get a legal opinion but we had no appetite, no ambition to take any Govt to court let alone NZ," he said.

He also appears to have been trying to secretly resume live sheep exports, in contravention of New Zealand law.

Which means that McCully appears to have misled Cabinet - and Parliament. Isn't it time he was held responsible for this, and sacked?

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