Facilitating tax cheats

Just before the budget the government announced new rules for real estate transactions aimed at cracking down on tax cheats and speculators. So naturally, we now have real estate agents trying to rush sales through before those rules come into effect:

Kevin Liu of Barfoot & Thompson's Onehunga office sent a letter out to home owners in his area, asking them to get in touch if they were thinking of selling.

This is because there was steep demand from "some groups of buyers" which he said would be affected by a new law due to come into effect from October 1.

To get around new tax and banking restrictions, those buyers now wanted places, he indicated.

But the only reason to want to do that is to cheat on your taxes, either in New Zealand or overseas (overseas buyers might also be wanting to hide corruptly-acquired money from their own governments). But Barfoot & Thompson don't seem to care about that; all they want is their commission, and they seem to be knowingly willing to facilitate tax cheating and money laundering to get it.

Are fossil fuels really an industry we want to promote?

The Herald this morning has a piece about one aspect of the government's subsidy of the fossil fuel industries over renewables:

Government spends up to 20 times more money on wooing oil and gas companies to New Zealand than it does on promoting renewable energy, newly released figures show.

The disproportionate funding was justified, Government officials said, because of the large royalties paid by petroleum companies. The Green Party said it further confirmed the Government's misplaced priorities.

[...]

Officials said the amount of taxpayer money spent on attracting petroleum and mineral exploration was small compared to the returns. "For example, the 15 petroleum exploration permits granted [in 2014] had $110 million in committed work programme expenditure. In the year to June 2014 the Crown received $389 million in petroleum and minerals royalties and levies."

Which sounds good, but of course it ignores something: the cost of carbon. According to the 2013 ETS Annual Report, mining of coal produced 1,574,162.2 tons of carbon dioxide equivalent, while mining of natural gas produced 8,039,823.9 (there is no figure for mining of oil, but I assume its in the natural gas figure), for a total of 9.614 million tons of CO₂. Note that that's just from the mining, not the carbon contained in the fuel dug up. Carbon prices are artificially low at the moment, at ~$7 / ton, due the legacy of the government's disastrous policy of allowing bullshit credits into our market, but even at that rate the carbon from mining costs us $67.3 million, nearly 20% of the total value. At the more realistic social cost of $25 / ton, we're looking at $240 million, over 60% of the total (the difference, $173 million, is basicly a subsidy we're paying for the oil industry in fire and flood). And if the social cost of carbon goes over $40 a ton - something Treasury assumes will happen by 2020 - then we're looking at the carbon cost outstripping the royalties.

Theoreticly this isn't a problem provided the mining industry is actually paying that social cost. But when that social cost is already a significant fraction of total revenue (and is arguably much higher and being artificially subsidised by a denier-government) then we should really be asking ourselves whether this is an industry we actually want to promote, or whether we should cease promotion and let it fend for itself because the social costs - which the government will have to pay for - are outweighing the benefits.

Watching the state

Back in March, the Herald reported that the police were routinely demanding personal information from New Zealand companies - and receiving it - without any form of warrant or statutory authorisation. Now, the Privacy Commissioner has started tracking these demands:

The number of times agencies such as the Police and Inland Revenue receive personal data from a range of companies is to be revealed.

Companies that hand over the information - often without a warrant or the knowledge of the customer - will now be asked to provide a record of requests to the Office of the Privacy Commissioner, which will publish a record.

[...]

Mr Edwards said his office has been working on a pilot transparency reporting project, and had found an initial group of agencies and stakeholders generally supportive.

"This year we intend to trial asking companies to keep a standardised record of requests for information from law enforcement agencies and to report this information to us. We will then publish this information."

But while this is good news, and it will give some idea of who the police's biggest targets are, it seems like a clumsy way to gather this information. Why not go to the source and ask the police? The obvious conclusion is because they have refused to cooperate. Secondly, while its great to have data on these demands for information, its not enough. To point out two examples, police can demand extremely intrusive personal information, such as phone and internet metadata, or even the content of messages themselves, using a production order, while Customs can seize your phone or laptop at the border, snarf its contents, and go through literally every aspect of your life. And neither even bothers to count how often these powers are used, let alone keep statistics on who they target and how often such searches are successful. If the Privacy Commissioner wants to start keeping tabs on state invasions of privacy, tracking the use of these two search powers would be a great start.

The problem with (UK) Labour

The UK's youngest MP, the SNP's Mhairi Black, gave her opening speech to the house of Common syesterday, and highlighted UK Labour's central problem: betrayal of its core values:

“Like so many SNP members I come from a traditional socialist, Labour family. Like so many, I feel that it is the Labour party that left me, not the other way about,” she said.

“The SNP did not triumph on a wave of nationalism – it triumphed on a wave of hope – hope that we could have an alternative to the wave of Thatcherite neoliberal policies from this chamber, hope that representatives could genuinely give a voice to those that don’t have them. …

“I mention it in order to hold a mirror to the face of a party that seems to have forgotten the very people they’re supposed to represent – the very things they’re supposed to fight for.

UK Labour will apparently respond by voting for Tory austerity. Because that's who they are now: just another pack of NeoLiberals in suits, unwilling to present any alternative. And then they wonder why people don't vote...

...or why people don't vote for them. Because in the part of the UK with functioning proportional representation (sorry, Wales, I do not regard your intentionally cripped and disproportionate version of MMP as functioning), they're now hemmoraghing votes to the Greens:

The Green Party is on course to take ten seats from Labour in next year’s Scottish Parliament elections, a new poll shows.

The left-wing environmentalists will increase their MSP count six-fold from two to 12 if a new poll conducted by Survation is repeated on 5 May.

The Greens are polling 11 per cent in the proportional representation list vote for the parliament, up from 4 per cent at the last round of elections in 2011. They are fighting for third place with the Conservatives, who are on 12 per cent.

Labour are just ahead of the two parties of 19 per cent, down from 26 in the previous round of elections. The SNP are far ahead on 45 per cent.

So that's 25% of the Scottish Labour vote, gone in one election to a party willing to present a green and left alternative, rather than more NeoLiberalism. And the only thing that's stopping the same thing from happening at Westminster is the UK's unfair electoral system.

Stop the spies in Wellington tonight

New Zealand's spies are currently gathering at the NZ Institute of Intelligence Professionals conference in Wellington. And the newly-formed "Stop the Spies" campaign will be there tonight to protest against them:

When: 17:30, wednesday 15 July
Where: Rydges Hotel, Featherston St, Wellington

"Stop the Spies" wants three things: the abolition of the SIS, the abolition of the GCSB, and withdrawal from the US "Five Eyes" alliance. I support all three. Our spies are a threat to our democracy, as are their links with the US. And since they cannot be reformed, they must be destroyed.

Trickle-down doesn't work

Up until this year, the government's chief "plan" to address poverty and inequality has been to do nothing, tell the poor to get jobs (while deliberately keeping unemployment high to keep interest rates low) and pretend that economic growth would help. The problem? It doesn't work, and they know it:

In the paper dated 1 February 2013, officials wrote that the Government had a credible and wide ranging programme to address poverty which targeted a number of its causes and effects.

"The Government's primary approach for addressing child poverty is to promote social mobility through paid employment driven by economic growth, clear work expectations and improved educational performance while ensuring that New Zealand's social security safety net continues to support people who cannot support themselves."

In last year's release the following paragraph was deleted, but this time it has been included.

It reads: "However, in the short- to medium-term this programme is not likely to result in a large reduction in measured child poverty using an incomes or material deprivation basis. Recent experience with the Working for Families package has shown that it is possible to achieve significant direct reduction in poverty, but doing so requires significant additional investment."

But despite being told that their policy was ineffective, the government refused to change it. Instead, they kept up the same failed policy until John Campbell forced child poverty onto the political agenda. Then, they did the least they thought they could get away with (which was, to be fair, vastly better than anything Labour had done or planned to do). You'd almost get the impression that they just didn't care about the poor at all, except insofar as it might affect their polling...

Meanwhile, this also shows us how the OIA's protection of "free and frank expressions of opinion" is routinely abused by Ministers. Advice of a policy's drawbacks and failures is redacted, while advantages and successes are released. The result is to turn official information into just another propaganda tool for Ministers. This is not the purpose of the Act, and it further calls National's implementation of it into question.

New Fisk

Iran nuclear deal: However the great and good represent it, America has now taken the Shia side in the Middle East's sectarian war

Greece, quislings and onerous debt

On Monday, we learned that Greece's SYRIZA government, elected on a platform of opposing austerity and backed by a referendum reinforcing that message, had turned quisling, agreeing to a humiliating and vindictive continuation of austerity in exchange for the possibility that the EU might give them more money to give to Germany's bankers. Its a terrible deal which will make things worse in Greece rather than better, and not just economicly - SYRIZA having joined PASOK and New Democracy as quislings, Greeks who want a government which works for them rather than German bankers really only have Golden Dawn, who are actual Nazis, to turn to. Meanwhile, it has also utterly discredited the European Union as a democratic institution, and made it clear that is is instead a tool for the economic domination and subjugation of other countries by Germany. If Germany doesn't like your government or its policies, they will economicly carpet-bomb you, then get the ECB to trigger a bank run to force regime change. No sane or democratic country should belong to this institution, and voters who want to actually control their own countries and pursue policies other than NeoLiberalism should be voting to get out ASAP.

And then today we learn that the IMF doesn't think the deal will work anyway:

The International Monetary Fund has warned that Greece will require far more generous debt relief than is currently on offer from its creditors, as MPs in Athens prepare for a crucial vote on Wednesday on a new bailout plan. An IMF report leaked to Reuters shows that Greece’s public debt is likely to peak at 200% of its national income within the next two years, with the risk that the actual outcome could be even worse.

[...]

The report highlights the IMF’s scepticism about Greece’s ability to meet the ultra-tough budget targets insisted upon by its European creditors, and suggests that Athens should receive a 30-year grace period before it has to start paying off its debts.

Putting into question the fund’s involvement in the bailout, the report paints a far darker picture of Greece’s public finances than that contained in the blueprint released at the end of the marathon eurozone leaders’ summit on Monday. “The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date – and what has been proposed by the ESM,” the IMF said, referring to the European stability mechanism bailout fund, which will be used to bankroll the Greek bailout.

But as Germany opposes actual debt forgiveness (because a) it means admitting that the money is lost; and b) it reduces political control for them to get their quisling NeoLiberal friends back in power), its not going to happen. So the upshot of the IMF's message is that Greece would have been better off walking away, repudiating this onerous debt, and making a new start. And that would probably have saved them from Nazis too.

This is wrong

The median Auckland house "earned" more than a backbench MP last year:

New Zealand house sales and median prices rose in June, with Auckland's median house price rising a record 26 per cent to $755,000 over the past year, amid signs that supply shortages and surging prices in the country's largest city may be prompting buyers to look elsewhere.

The number of houses sold nationwide increased 29 per cent to 7,426 in June compared with the same month a year earlier, according to the Real Estate Institute of New Zealand.

This is what a bubble looks like: when your house "earns" a top-end salary just by existing. And its a perfect example of why we need a capital gains tax. If it had been earned honestly, that $156,000 would be taxed at the appropriate marginal rate (meaning 33% for most of it). The failure to plug this loophole allows wealthy property-owners to reap enormous incomes without paying a cent of tax on them. And that is simply wrong.

Meanwhile, those MPs with multiple Auckland properties are probably laughing all the way to the bank.

Climate change: Inadequate

That's Climate Tracker's verdict on National's 2030 emissions reduction target:

New Zealand is far from doing its “fair share” of climate action, with its climate plans, submitted this week to the UN, and rated as “inadequate” by an independent international analysis: the Climate Action Tracker.

[...]

New Zealand’s “inadequate” rating indicates that its commitment is not in line with any interpretations of a “fair” approach to reach a 2°C pathway: if most other countries were to follow New Zealand’s approach, global warming would exceed 3–4°C, a world that would see oceans acidifying, coral reefs dissolving, sea levels rising rapidly, and more than 40% species extinction.

“New Zealand’s climate target shows it’s far from doing its ‘fair share,’ and is anything but ambitious,” said Bill Hare, CEO and Senior Scientist at Climate Analytics.

“While most other governments intend cutting emissions, New Zealand appears to be increasing emissions, and hiding this through creative accounting. It may not have to take any action at all to meet either its 2020 or 2030 targets.”

And that last bit is the problem in a nutshell: National doesn't want to do anything. So they've set a "target" that can be met without doing anything, and then changed the baseline to make it sound more ambitious. This isn't a policy, its a snooze button - and one which will make it vastly more difficult to take real action later.

New Fisk

First rule of refugees – don’t be a Muslim if you want help

Sounds like racism

Over the weekend, Labour unveiled its new political direction: racism:

Real-estate figures leaked to the Labour Party, which cover almost 4,000 house sales by one unidentified firm from February to April, indicate that people of Chinese descent [identified by whether their name "sounded Chinese" - I/S] accounted for 39.5 per cent of the transactions in the city in that period.

Yet Census 2013 data shows ethnic Chinese who are New Zealand residents or citizens account for just 9 per cent of Auckland's population.

Labour's conclusion (as obligingly passed on by the Herald): OMG! Foreigners are buying up all our houses and leaving decent honest white folk unable to buy their first home! Which might be true, but this data doesn't show it. Because even if you accept that a "Chinese sounding" name indicates Chinese ethnicity, and ignore some stuff about name diversity which could distort the results, you're still left with the fact, as the Herald puts it, that

It is not known if the Chinese buyers were based here or overseas.

Because what your name "sounds like" doesn't indicate anything at all about your residency or citizenship. And to be very clear, New Zealand citizens or permanent residents are kiwis, regardless of what their name "sounds like". Kiwis with "Chinese sounding" names are just as entitled to buy a house as anyone else. And foreign speculators are foreign speculators regardless of what their name "sounds like". By tarring a specific ethnicity (or at least something that "sounds like" it), Labour's point just ends up sounding like an ugly racist megaphone.

And I assume that its deliberate. Its obvious enough and revolting enough that anyone looking at it would say "hey, this sounds like racism!" even in a party as talentless and dysfunctional as Labour. I guess they've decided that Winston really is heading for the exit, and are trying to position themselves to grab his 200,000 dead white racist voters, and bugger their supposed party values. But if this is the direction our largest "centre left" party is heading in, I don't see why any decent person would want to support it.

Facebook cheats on its taxes again

Once again, Facebook paid virtually no tax in New Zealand last year:

Facebook paid just $43,000 of tax in New Zealand last year, according to financial statements filed with the Companies Office.

The social media behemoth reported its New Zealand income rose 41 per cent to $1.2 million for the 2014 calendar year.

However, substantial expenses meant the company was able to claim a loss.

It paid $43,261 of tax, or about the same amount as a mid-range doctor or lawyer would.

Those "expenses" were almost certainly charged by another part of Facebook, as part of its global tax evasion strategies. All perfectly legal, of course, but the net result is that we get robbed, other countries get robbed, while Facebook piles up cash in Caribbean tax havens and lobbies the US government for a tax holiday so it can repatriate it to its shareholders tax free. Isn't it time they paid their fair share, here and everywhere else?

New Fisk

Macedonia's uniformed border thugs await war-weary Arab migrants arriving at Europe's doorstep

A massive increase in digital device seizures

Last year, in the face of media interest in digital border searches and device seizures prompted by some pretty obvious cases of political bullying and admissions they were harassing people for the FBI for "brownie points", Customs was forced to release some statistics. They said that 2014, they seized 845 devices at the border. Earlier statistics suggested that roughly 50% of these seizures were for copyright. Today, Customs released some more statistics to an FYI requester, apparently showing a massive increase in digital searches:

Records show that Customs intercepted 187 prohibited items from digital devices between 1 and 14 January 2015 from entering New Zealand. 137 items breached Intellectual Property Rights, five items were deemed objectionable material, and 45 items were categorised as "other" in Customs' database.

Assuming that "items" equals "devices seized" (which seems to be the case from previous data), 187 items in two weeks represents a massive increase in searches. Even allowing for the fact that January is a busy month, applying the same rate of seizures per visitor to other months implies that Customs carried out over 3500 digital seizures in 2014, more than four times as many as in 2013. And at this stage its worth noting that these are seizures. As Customs says,

The number of devices searched at the border would be significantly larger than the number of devices detained at the border by Customs for forensic examination.

And again, almost three-quarters of those seizures were for intellectual property. This is what Customs wants your password for: because you're watching TV.

While I don't think too many people would be upset at them seizing legally objectionable material such as child pornography at the border, when 97% of seizures - and a massively higher proportion of searches - finds no such thing, it suggests they are being over-vigorous.

But what really stinks is that after a year, they still don't have data on this. They're exercising a highly intrusive search power, enabling them to trawl through almost every aspect of someone's life, and they don't even bother to count how many times they are doing it. And that is simply unacceptable. We count search warrants. We count strip searches. We count surveillance warrants. We do this because we understand that intrusive search powers need to be combined with statutory monitoring so we can assess their effectiveness and whether they are being abused. Customs don't want to count their searches, but what data they have released strongly suggests that they do too many of them and find too litle - i.e. that those powers are being applied arbitrarily and abusively. And that is unacceptable.

(The information for this post came from FYI, New Zealand's online OIA request site).

Why are we detaining a mentally ill man arbitrarily?

New Zealand is not supposed to engage in arbitrary detention. Our Bill of Rights Act states very clearly that everyone has the right not to be arbitrarily arrested or detained. But according to the UN, that's exactly what we're doing:

The United Nations Human Rights Committee says a sex offender with an intellectual disability who has been locked up in psychiatric hospitals and prisons for 45 years should be released and paid compensation.

In a decision sent to the Government two weeks ago and given to the man's lawyer today, the committee's working group on arbitrary detention said the man should have been moved to a care facility after his minimum non-parole term ended in 2004.

The man's lawyer, Tony Ellis, said his client, known only as Mr A, is now 58 and was sent to a mental hospital at the age of 12, released for a year when he was 38, and has been in prison ever since.

The UN working group has found the man had been unlawfully detained for the past 11 years, and discriminated against because of his intellectual disability.

This isn't enforceable, but it is likely to be persuasive in the inevitable domestic BORA action. The mentally ill need help, not punishment; detaining them effectively indefinitely and denying them treatment is both discriminatory and simply fucking stupid.

One of the reasons the UN reached this finding is because the government didn't even bother to respond to their inquiry. Yes, a major UN human rights body told them it was examining a case, and the government did nothing. I'm not sure whether its arrogance or utter stupidity, but it suggests something is very wrong at MFAT and Corrections.

No customers for Ruataniwha

For the past couple of years the government and Hawke's Bay Regional Council have been pushing the Ruataniwha Dam and its associated irrigation scheme. The government has silenced dissent and gagged DoC in an effort to force the schem through, while HBRC has thrown money at it and is trying to pretend that recent resource consent restrictions which limit farm nitrogen output in the area don't mean anything. But meanwhile, farmers don't actually want to buy the water:

Farmers in the footprint of the proposed $600 million Ruataniwha water storage project in Hawke's Bay say they will not buy the water because it is too expensive and it would make their farms unprofitable.

The Hawke's Bay Regional Council is developing the dam, which will hold 96 million m³, but for construction to begin it must pre-sell at least 40 million m³ of water.

But the chairman Fenton Wilson said the council's investment company HBRIC has sold only about half that amount.

Radio New Zealand News visited six farmers in area that will receive water from the proposed water storage scheme, and all said they were not signing up to buy the water because it was not financially viable.

None wanted to be named because they feared a backlash from the Central Hawke's Bay community for being perceived to be anti-dam. All supported water storage, but said the numbers did not stack up.

HBRC was warned that the dam was fundamentally uneconomic back in January, but kept on throwing cash at it. And its hard to escape the view that the entire thing has been a huge waste of ratepayer's money.

Winning the argument on rental standards

It looks like the opposition has won the argument on standards for rental homes and has forced the government to require insulation:

“The new law will require retrofitting of ceiling and underfloor insulation in rental homes over the next four years. The requirement applies from 1 July 2016 for social housing that is heavily subsidised by Government, and from 1 July 2019 for other rental housing, including boarding houses. There will be exemptions, such as where it is physically impractical to retrofit insulation due to limited space underfloor or inaccessible raked ceilings.

“There will also be a new requirement from 1 July 2016 for all landlords to state in tenancy agreements the level of ceiling, underfloor and wall insulation to help better inform tenants. These new insulation requirements in our tenancy laws are the logical next step following our programme to retrofit insulation in 53,000 state houses and the 280,000 grants from the Warm Up New Zealand scheme.

[...]

“The Ministry of Business, Innovation and Employment will have new powers to investigate and prosecute landlords for breaking tenancy laws as part of these reforms, particularly where there is risk to the health and safety of tenants. The changes will also ensure tenants can take concerns to the Tenancy Tribunal without fear of being evicted for doing so.

Its not a warrant of fitness scheme, but it probably does the job, at least if landlords obey. A lot will depend on whether increased risk of illness is considered a risk to health and safety, and on whether the penalties are enough to force compliance. It will also be interesting to see who is legally responsible for state houses: the chief executive, or the Minister.

Meanwhile, its another great example of how the opposition can force policy change by leading on an issue. Maybe Labour could learn a lesson from that on other issues?

More spying on their allies

The NSA supposedly protects the USA from its enemies. Instead, its been spying on Germany, a close US ally, for decades:

The US National Security Agency tapped phone calls involving German chancellor Angela Merkel and her closest advisers for years and spied on the staff of her predecessors, according to WikiLeaks.

A report released by the group on Wednesday suggested NSA spying on Merkel and her staff had gone on far longer and more widely than previously realised. WikiLeaks said the NSA targeted 125 phone numbers of top German officials for long-term surveillance .

[...]

WikiLeaks published what it said were three NSA intercepts of Merkel’s conversations, and data it said listed telephone numbers for the chancellor, her aides, her office and even her fax machine.

“The names associated with some of the targets indicate that spying on the Chancellery predates Angela Merkel as it includes staff of former Chancellor Gerhard Schroeder (in office 1998-2002), and his predecessor Helmut Kohl,” WikiLeaks added in a statement.

Barack Obama recently called Germany an "inseparable" ally. The actions of his spy agency may be about to test that - because nobody likes it when a supposed friend is just a two-faced spy.

Guilty

Silvio Berlusconi has been convicted of bribery:

Former Italian PM Silvio Berlusconi has been found guilty of bribing a senator in 2006 in an attempt to bring down the then centre-left government.

A Naples court sentenced Berlusconi to three years in jail and banned him from holding public office for five years.

[...]

The billionaire was accused of giving 3m euros (£2.5m; $4m) in 2006 to Sergio De Gregorio, then a senator from the anti-corruption Italy of Values party, to switch to Berlusconi's People of Freedom party and thus undermine the government of the time.

Unfortunately he won't actually be going to jail because Italy's crazy statute of limitations law will kick in before the appeal period expires, effectively halting the trial. So he'll be convicted, but not punished. And then Italy wonders why it has a corruption problem...