Too important to stay home

Stopping Winston Peters is too important for Northland voters to stay home, says ACT Northland candidate Robin Grieve.
"If Northland voters care about roads, getting tough on burglary and stock rustling, opening up mineral exploration and reforming the RMA, they must use their vote to say so," said Mr Grieve.

"At the Northland Field Days more than half of voters said they wouldn't vote. I doubt that only 19 per cent are undecided or not voting.

"For comparison, the vote in the Christchurch East by-election fell 48 per cent from the previous general election.

"Northland cannot afford such a turnout. Centre right voters come must out in numbers to defeat this political opportunist.

"Peters has been rejected in Hunua and Tauranga, and he's now bringing the the most opportunistic campaign in New Zealand history to Northland.

"The morning after the election, Northland needs long term interests attended to. This is something only National and ACT are able to actually do."

Free Thoughts - On Grey Power and NZ Super

In my recent ACT Party conference speech I called for a referendum on options for the future of New Zealand Superannuation, with a view to ensuring we have a fiscally sustainable structure which can accommodate our lengthening life expectancy and the demographic reality of a rising proportion of retired-to-working-age people.

The objective is to ensure that the New Zealand Superannuation scheme is fair across the generations, and sustainable for future governments.

This issue has long been a political football. It is too hot an issue for politicians to handle. My idea is to take it away from politicians of any particular party – including ACT.

I have called for a referendum process akin to that being used for deciding on a new flag – ie establish a group to identify options, and put those options to the public to determine by referendum. One option would be ‘no change’.

A parliamentary committee representing all parties would appoint a non-parliamentary expert group. Their task would be to consult with the public and establish some options on how the New Zealand Super scheme might gradually evolve over time so as to ensure it remains fair and sustainable.

An editorial in the Dominion Post (26 February) was supportive of the idea:

“A referendum could help break the logjam of pension politics and allow the country to finally deal with a serious problem. Everybody knows that we can't keep dodging this issue, even if the politicians insist on doing so.”

An NBR editorial (23 February) noted that making changes now “will hurt a lot less than having to undertake the fiscal and political equivalent of an enforced naked roll in an entire bed of nettles, sometime in the 2020s.”

That observation nicely makes the point that changes planned for New Zealand Super today, if any, are about preparing for the decades ahead, particularly those around mid-century. The need for change is only going to become more apparent with each census – why not stake out a plan now so that future generations aren’t caught unawares?

Because opponents of change typically seek to muddy the waters around this issue, one obvious point must be made: a gradual lift in the age of eligibility would not affect those now retired, nor those close to retirement.

I was disappointed to see a report in the Oamaru Mail, where Grey Power President Terry King, came out strongly opposing the idea of a referendum, describing it as “a cheap publicity stunt”, and asserting, contrary to all evidence, that there is “no justification, financial or otherwise, to increase the age of eligibility”.

This is a sad response, and wildly out of line with the reality of the situation.

I have a simple message for Grey Power. 

This is about the New Zealand we leave for the generations ahead.

This is about your grandchildren, not about those currently retired.

Grey Power: This is about your grandchildren

ACT Leader David Seymour is disappointed to read of Grey Power’s opposition to addressing the sustainability of NZ Super.

"In a press release, Grey Power president Terry King claimed that my call for a referendum process akin to the flag committee was ‘a cheap publicity stunt at the expense of retired people’," said Mr Seymour.

“Supporting a referendum on age isn’t about changing the system for current retirees. It’s about signposting a clear plan to ensure the system is sustainable as the population ages and people retire in the decades to come.

“While adjustment of the system is probably inevitable, it is important to have this discussion now so that we can avoid a sharp shock in future, and give younger generations the time to make plans around changes in legislation.

“This issue has long been a political football. It is too hot an issue for politicians to handle. My idea is to take it away from politicians of any particular party – including ACT.

“A referendum could help break the logjam of pension politics and allow the country to finally deal with a serious problem.

“I have a simple message for Grey Power: this is not about current retirees. This is about your grandchildren, and the New Zealand we leave behind for them.”

Attached is a longer newsletter from Mr Seymour on this subject.

Newsletter - Grey Power.pdf35.9 KB

Free Press 2/03/2015

Only Businessman
Robin Grieve, an orchardist and health and safety consultant, is the only Northland by-election candidate who’s supporting himself in the private sector. “A council bureaucrat, a career politician, a district councillor, and a self-employed businessman walk into a bar…”

Breathtakingly Short-sighted
National isn’t taking advice on the tough issues.  Last Wednesday in Parliament a National back bencher was asking Hon Anne Tolley soft pedal questions so she could hold forth on the generosity of national super.  Ms Tolley was revelling until ACT Leader David Seymour asked: had she seen any Treasury reports on the scheme’s sustainability? No.  The Minister for Social Development, the biggest spender in the Government, had not read a vital Treasury report. 

The Answer
The Treasury’s Long-term Fiscal Outlook predicts the cost of NZ Super will rise from 4.4 per cent of all economic output today, to 7.9 per cent by 2060.  Small beer?  It is the compounding effect that should worry taxpayers.  The government’s on track to be indebted by 198 per cent of GDP by then.  Even the Dom Post is (reluctantly) endorsing ACT’s plan (more on this later).

Not Giving Up
Making Superannuation sustainable is too important to ignore. David Seymour has written to all parliamentary leaders asking them to support ACT’s initiative of having a public consultation and referendum on Super.  They should all be on board. Today’s swing voters may  appreciate Prime Minister John Key’s pledge to maintain the status quo, but historians will not be so kind.  Labour want to help, but dropped their policy of raising the age after losing the election.  Hon Peter Dunne wants to explore variable rates for people who take Super earlier or later.  The Maori party know, or should know, that the Maori population are younger and it is young Maori taxpayers who are in the gun if things don’t change.  The Greens are always talking about sustainability, what about fiscal sustainability? We still hope to appeal to Winston Peters’ affinity for referenda.

Credit Where It’s Due
The NBR is crediting the Taxpayers’ Union with blowing the lid off corporate welfare. Normally think-tank like organisations do lead debate on such issues, but the party of ideas raised the issue months before the T.U. We also remain the ones who can influence it in parliament.  The original and best call for ending corporate welfare is here:

Breathtaking Resignation Letter
After 13 years heading the Intergovernmental Panel on Climate Change, Rajura Pachauri has resigned saying his work was not only as a ‘mission’ but as ‘his religion, his dharma.’  We like missions and religious freedom as much as the next person, but shouldn’t the IPCC be a place of science? For the record, Free Press subscribes to Matt Riddley’s ‘luke warmer’ school of thought on climate change, which goes like this: “we started with an open mind but the hockey stick, climate-gate, and flat 21st century temperatures all made us a tad sceptical.  The problem is real but it’s the size that matters and it’s nowhere near as bad as the alarmists make out.”

No Case for Fireplace Bans
Speaking of science. Last week we were briefed by the Parliamentary Commissioner for the environment.  She is respectable on most environmental issues. As it turns out levels of PM25, very small particles that cause the most health damage, are not problematic in Auckland. There is no health case for banning fires on a narrow isthmus where 40 per cent of PM25 is salt. It probably won’t make much difference but we’ll ask anyway: what was Auckland Council thinking?

Military training assistance to Iraq
David Seymour spoke in parliament in favour of playing our part in Iraq.  You can watch his speech here or read it here. We think of the Kiwi effort as a tiny contribution to nation building, the sort of thing the so-called progressive left used to support – and obviously will again, when they return to power. So Labour is playing this for the politics, which is shameful.

Imitating Churchill?
The PM was in full-on Churchill mode in supporting Iraqi nation building. Unfortunately he has gone all Neville Chamberlain on ensuring a viable long-term structure for NZ Super.  The NZ First Leader, with the advantage of his first name, probably wins on Churchillian style but his substance was cut-and-run Chamberlin too.  What would the WWII generation think of that?

Dom Post Love In
A sure sign of ACT’s revival is the love-hate attention paid to us by the increasingly erratic  Dominion Post. Two editorials, several letters to the editor, a cartoon, and half a dozen news stories on ACT last week alone.  Even when they agree with us the tone is teenage snark, but the times, they are-a-changing. 

The Winterless North
ACT’s good keen man in Northland is already campaigning.  At the Northland Field Days this weekend he was well received by those worried that National is forgetting Northland.  He’s giving a month of his time and needs your support for billboards, letters, and advertising.  You can donate to Robin’s campaign here:

Deployment of troops to Iraq

Delivered by ACT Leader David Seymour on February 24, 2015.
Video is available here.

On Sunday night I was at a barbeque in my electorate and an 8-year-old girl asked me what the Government is doing in or about the situation in Iraq. Her mother later came up to me and she said she could not believe that such a young person would be so concerned, or even so knowledgable, about such an issue. I reflected to her that actually I was 8 in 1991, and some of the first images I recall from that time were Patriot missiles knocking down, Scud missiles, Stormin’ Norman” Schwarzkopf, Desert Storm, tanks rolling across the desert, and so on.

I raise this, for the benefit of other members, because these issues are visceral; they run deep. We are intuitively aware of them, even at a very young age. They raise dilemmas that are timeless, as we have heard from a variety of different members. I want to run through a kind of paraphrase of exactly what I told the 8-year-old girl.

The most important question is: how do we respond to bullies? There are two broad answers, both of which have been given in different ways by previous speakers. One is that you give some humanitarian aid, try to do some reconstruction, and hope that the bullies will be nice to you. The other is that you actually take aggressive action against the bullies.

As I said to her at the time, unfortunately this is a case where we are facing a genuine evil that is fluid and dynamic. It is futile to hope that they will be nice to us because it is our very liberal values that offend them. What we must do is stand up to them.

But it leads to another dilemma, which is: what can an external force intervening into what is an impossibly complex situation in the Middle East—as it has been, as we have been told, for several millennia—achieve by way of bringing about peace? I have to say that I have considerable scepticism about what intervention in such a theatre can achieve. I only wish that some of my colleagues around the House could apply the same scepticism when it comes to intervening in a domestic economy, but I digress.

Nevertheless, we have another dilemma and another consideration to consider. That is: how does a small nation, militarily, demographically, economically insignificant in the context of global affairs, ensure the best possible safety and freedom for its own citizens? Again we have a dilemma. We can either hope for a rules-based world and for the rule of law to be extended from the few fragile Western democracies—I think it was nine from the member across the House - that have been able to sustain this for a period of time, and perhaps one day that will come.

But the alternative is that we can think back to what the Athenians told the Milesians in the Peloponnesian War several millennia ago: it is a sad truth, which is echoed down the ages, that right and wrong, so far as the world goes, is a matter in question only between equals. It is with no great pleasure that I remind the House that the course of most global affairs is that the strong have done what they have been able, and the weak have suffered as they have had to.

So in this world it is indeed important that a small nation considers collective security and our relationship with our allies. Even if I may be sceptical about how much good can be done intervening in such a theatre, we have to take seriously the fact that so many countries, including all of our closest allies, are committed to intervening and standing up to the bullies in this theatre.

With all of that in mind, I believe that the Prime Minister’s position as stated this afternoon is the correct one. Our armed forces are first class. Their role as trainers will have the minimum perverse impact on the situation into which they go. If there is an armed force that has the sense of diplomatic intervention to actually make a peaceful difference in such a theatre, then I firmly believe it is ours. Those troops go with the blessing of this Parliament for their safety and against all of the challenges that they will face. Thank you. 

A simple question for Mr Peters: Where do you live?

"Winston Peters has set a new record, being economical with the truth only hours into his campaign," claims Northland ACT candidate Robin Grieve.
Mr Peters is announcing he will stand in his home electorate. The electoral law is very clear about what makes a candidate's electorate a place of residence:
72 Rules for determining place of residence within New Zealand
(1) Subject to the provisions of this section, the place where a person resides within New Zealand at any material time or during any material period shall be determined for the purposes of this Act by reference to the facts of the case.
(2) For the purposes of this Act, a person can reside in one place only.
(3) A person resides at the place where that person chooses to make his or her home by reason of family or personal relations, or for other domestic or personal reasons.
"How will Mr Peters get out of this?" asks Grieve.
"Clause 1 tells us we must look at the facts, so:
"Will he deny clause 2 and tell the people of Northland that he can be in two places at once?
"Will he deny clause 3 and deny he makes his home in St Mary's Bay?
"Or will he apologise for having mislead the public within hours of his announcement?"


Northland doesn't need yesterday's man

"It's great that Winston Peters is finally taking an interest in Northland. But frankly we don’t need yesterday’s ideas from yesterday’s men in our region," ACT Northland candidate Robin Grieve said today.

"Peters has been rejected by Hunua and ousted from Tauranga - why would Northland now offer him a seat? His interest in the region has only just cropped up - New Zealand First did not even bother to stand a candidate in the general election just five months ago."

Grieve, an avocado orchardist at Poroti, has lived and made a living in the Northland Region most of his adult life.

"I eat and breathe Northland, I know the region, and I know what needs to be done. We need an MP who is dedicated to unlocking the potential of the region's physical resources and supporting infrastructure investment beyond Auckland.

"The last thing we need is a career politician parachuting in and trying to run a dirty campaign to increase his own profile.

"If he's serious he should sell his home in St Mary's Bay, Auckland, and move north. I would be happy to show him around our beautiful region."

Exclusive Economic Zone and Continental Shelf Amendment Bill

Delivered by ACT Leader David Seymour on February 26, 2015.
Video is available here.

A former long-serving and very honourable member of this House has counselled me to stay for the full debate and listen to what other members have to say so that you can actually join into the debate and contribute to it, rather than showing up, reading a speech, and leaving. I am mindful that if I was to respond to everything that I have just heard properly, I would completely run out of time before I got to make any points of my own. But I have to say: what a bizarre contribution from Gareth Hughes.

He told us that this is not just a technical amendment, despite it being only 6 pages; it is actually a bending and breaking of the law. Well, let us just be clear about what this bill does. It says that Shell Todd Oil Services can continue doing what it was already able to do before new legislation and regulation was introduced. It will still have this new legislation and regulation and its full effects applied to it. However, it will be given more time so that it does not come to be in contravention of these news laws and regulations. So, if anything, what we are seeing is additional regulation of the offshore oil industry. I cannot believe that the Green Party would be against that.

He then complained that the Government frequently bends the rule of law, for example, to help people doing oil exploration who find themselves to be under threat from protest. What exactly does he want us to do? Does he really believe that anybody he happens to disagree with does not deserve the protection of the rule of law and actually should be forced to live in a world of anarchy?

And then for the ultimate oddity he said he is lodging a protest vote. He wants to see this go to the select committee, but he is not actually going to vote for it to do so. As Ōtara Millionaires Club used to sing: “How bizarre.”

Then we had Eugenie Sage from the Green Party say that we are not thinking about community. This really goes to the heart of what this debate is about. Actually approximately $1.3 billion to $1.4 billion each and every year, about 0.5 per cent of the country’s GDP — yes, that does have an effect on the community, and we are going to hear about this more and more.

Although this is a small technical bill, it brings into stark relief the way that the extractive industry and regulation are very tightly linked. If we look around the world, we can see just how much of a contribution economically the extractive industries make. This is particularly important at a time when regional New Zealand—places like the Northland area, for example—is facing declining and ageing populations and serious problems funding its local governments, and yet it has large potential to create jobs and become wealthier to extractive industries.

You can see this all over the world. In Alberta, for example, the province of Canada that has the most extractive industries, you have a median family income of $94,000. In Newfoundland and Labrador, from whence people commute by aeroplane to work in those industries, it is $70,000. It is very clear.

In Western Australia it is $68k. In Tasmania it is $48k. Again, the contrast that you get from having extractive industries and what that can do for regions—particularly regions that are facing economic challenge and that do not feel like a rock star economy—is very, very large.

Have a look, for example, a little bit closer to home. The average incomes in Taranaki are $74k for a household and in Northland they are $60,000. This is the economic difference that it makes.

[Hon Simon Bridges]: So why do the Greens oppose it?

[David Seymour]: Because they do not think that making money is actually beneficial for the community, Mr Bridges. That is the problem. And perhaps another prejudice that we should raise here is that there tends to be a belief in some quarters that the extractive industries are not sexy and cool and sophisticated, and did we not see that come out with the member Gareth Hughes waxing liberal about what we could be doing with the so-called smart economy while, as someone who has had one or two things to do with a few people who work in this industry, I can tell you that the extractive industries—oil and gas for instance—are enormously sophisticated, high-productivity industries working with large amounts of capital, and that might explain why the average wage for a New Zealander is $50,000 and the average wage for someone in the mineral industry is $105,000.

The Act Party wholeheartedly supports this bill. Thank you.

On petrol pricing and calls for enquiries

Labour MP Stuart Nash recently called for a parliamentary enquiry into petrol prices. National MPs in the finance and expenditure select committee voted against such an enquiry.  They were right to do so.

Inquiries can be expensive and often politically motivated.  Inquiries should only be initiated on solid evidence, not on a politician’s hunch. Too often they are motivated by opportunistic grandstanding.

For a start you need some evidence that there is a problem. The evidence offered was weak, citing MBIE weekly oil price monitoring data – namely the time series data on the “importer margin”.

What is the “importer margin”?  Most people will assume it somehow represents profit margins.

But it does not.  It represents the amount available to retailers to cover domestic transportation, distribution and retailing costs, and profit margins. If all those elements other than profit margins had been stable, which of course they have not, then there may be an issue to consider a little further.

So, the data simply does not connect with the issue that is claimed to be a problem. No wonder the FEC rejected the idea of an inquiry.

More broadly, the last inquiry into the industry in 2008 found the New Zealand domestic petrol market is fundamentally competitive and that retail petrol prices are not fast to rise and slow to fall.  Subsequent NZIER studies in 2011 and 2013 also found no asymmetry in adjustment of prices in New Zealand petrol prices.

Here are some points to consider on this, and other, inquiries.

  • Inquiries should be initiated on solid theoretical and empirical evidence, and not on a politician’s hunch after looking at a graph of aggregate data that does not even mean what the label suggests.
  • New Zealand politicians have a track record of calling for populist inquiries (e.g. milk and supermarkets) that find nothing.
  • In 2008, the AA called for an inquiry into fuel prices. The MED inquiry found that the domestic petrol market is fundamentally competitive and that retail petrol prices are not fast to rise and slow to fall.
  • Inquiries/investigations are not costless. Indeed, they can be very expensive. For example, the 2009 Commerce Commission electricity investigation cost millions ($3.5m).
  • The Commerce Commission can initiate a part 2 investigation or part 4 inquiry, if it thinks one is required.
  • The illegal exercise of market power is very difficult to detect using empirical data and the results are very easy to dispute. For example, the ‘Wolak’ electricity price investigation was widely criticized and theoretically it was never going to be able to say whether firms were illegally exercising market power.
  • An asymmetry in adjustment of prices is often used as evidence of anticompetitive behaviour. But NZIER studies in 2011 and 2013 found no asymmetry in adjustment of prices in New Zealand petrol prices.
  • Even if an asymmetry in adjustment of prices was found it is not in itself evidence of market power – this price pattern (called ‘Rockets and feathers’ - prices often rise like rockets but fall like feathers) has been found across many industries – even extremely competitive ones. There are a number of economic theories to explain this.
  • The “importer margin” data from MBIE obviously does not give a useful perspective on petrol company margins, in so much as these margins might reflect a public policy concern. Apart from not representing just the profit margin, the MBIE’s retail price data also doesn’t include supermarket fuel and loyalty card discounts, regional discounts (which can be 20 to 30c under the average national price) and other costs such as credit card interchange fees, distribution costs, advertising and rental costs. Exchange rate hedging adds yet another level of complexity to assessing the margins in this extremely complex industry.

In short, the evidentiary hurdle for an inquiry was not only not met, it didn’t even get off the ground.

Seymour to party leaders: Let’s cooperate on NZ Super

ACT Leader David Seymour has called for meetings to discuss the possibility of a referendum to determine the future structure of New Zealand Super.

“Today I wrote to each parliamentary political leader to request a meeting which would form the first step towards a more sustainable superannuation system,” said Mr Seymour.

“Most of these leaders are represented on the cross party group for the flag referendum, a largely symbolic issue. I hope they will see the value of using a similar process for a far more substantial issue.

“Superannuation is one of the government’s main expenditures making long term fiscal arrangements unsustainable, and the one that is most easily rectified.

“If the government doesn’t act, The Treasury forecasts that net government debt will reach 198 per cent of GDP by 2060, when current tertiary students are set to retire[1]. For context, Greece has net government debt of 176 per cent of GDP.

“A consultation and referendum process could address many aspects of NZ Super, from the age of entitlement, to the level of entitlement, to arrangements for those who wish to retire at different ages.

“The government must be proactive on this issue. History will judge us all the better for having taken action and given the public a say now, rather than forcing future generations to deal with a huge fiscal headache.”