The Sunday Series with Jamie Whyte - 27 July 2014

Jamie Whyte talks green tape, why it's bad for the economy (and the environment) and how ACT plans to untangle us from it.

Auckland's Unitary Plan won't make a jot of difference to housing affordability

It doesn't matter whether the Unitary Plan allows for relatively intensified development inside the Rural Urban Boundary, or greenfield developments outside of it, aka subdivisions. 

That is because the problem Auckland has at its core is anti-development legislation - the Resource Management ACT (RMA).

It isn't right when developments in Long Bay, for example, take 18 years to get off the ground and can be held up by people living in the Coromandel.

The RMA came into effect in 1991. 

At that time the ratio of median house price to median income was around 3 to 1. 

That means before the RMA, a median house price was $300,000 and the median household income was $100,000.  That's easily affordable. 

Today it is almost 6 to 1. 

Even if median incomes moved to $150,000 (which they haven't), median house prices have increased to $750,000.  That's quite unaffordable.

It takes too long to build a house in Auckland, and it costs too much.

The RMA has created the situation in Auckland where perfectly responsible developments are opposed and delayed to the extent that, if they ever get off the ground, the extra costs have pushed up the price of the final product.  It has made housing unaffordable, and created a crisis.

It is therefore irrelevant what the Unitary Plan says about where properties can be built, and what land can be developed. 

Unless the RMA is dramatically reformed to create a presumption of development and a restriction on the opposition to developments, the Unitary Plan will mean nothing. 

And that is because people in Coromandel will still be permitted to oppose, and thereby delay, developments in Auckland.

Author of this blog post, Nick Kearney, is the Local Board Member for the Kaipatiki Ward. 

The inner Waitemata Harbour suburbs of Beach Haven, Birkenhead, Chatswood, Birkdale, Northcote Peninsula, Glenfield, Hillcrest and Marlborough make up the Kaipātiki local board area. It is bounded by the Northern Motorway to the east.



Nathan Guy Must Stop Making Excuses And Do Something

Primary Industries Minister Nathan Guy is looking for excuses to justify his inaction amid growing calls by kiwifruit growers that the industry needs an independent inquiry, ACT New Zealand Primary Industries Spokesman Don Nicolson said today.

“Initially the Minister said he wouldn’t initiate an inquiry because Zespri was before the Courts on a charge of smuggling.

“Now that Zespri has been found guilty, he is using the excuse that an internal inquiry is already taking place and there is no need for the Government to step in.

“But growers who have contacted ACT do not have any faith in the internal inquiry,” Mr Nicolson said.

“New Zealand Kiwifruit Growers Incorporated (NZKGI), which is charged with conducting the inquiry, is the very organisation that commissioned the 2007 Grant Samuel Report into Zespri and then suppressed it because it was unfavourable.

“What has changed in NZKGI since then?

“NZKGI has no credibility when it comes to conducting an independent inquiry into Zespri.  The report won’t be worth the paper it is written on.

“The Minister’s continued position of doing nothing is unacceptable.  By failing to take action, the Minister appears to be sanctioning Zespri's poor business behaviour that threatens our reputation.
“Kiwifruit is big business for New Zealand and our reputation relies on Zespri acting as a good corporate citizen.  If its reputation is damaged our entire industry will suffer.

“The Government forces all growers to export through Zespri.  It is therefore the Government’s responsibility to ensure that Zespri’s operations are above board.   Initiating an independent inquiry is the only way the Government can do this,” Mr Nicolson said.



Kiwifruit Collaboration Arrangements ‘Most Likely Illegal’ In International Markets

Claims by former senior personnel of Turners and Growers that Kiwifruit New Zealand’ s application process for Collaborative Marketing Arrangements (CMA) with Zespri is ‘farcical’ and ‘lacks openness, fairness and integrity’ is further indication that all is not well in the kiwifruit industry, ACT New Zealand Associate Primary Industries Spokesman  Robin Grieve said today.

 Former Turners and Growers development manager, Murray Malone, and  former Managing Director of Turners and Growers, Jeff Wesley, told rural newspaper ‘Straight Furrow’ that New Zealand’s collaborative arrangements could be seen as collusion in the eyes of international trade. 

They say, under the CMA process growers are ‘forced to collude with Zespri to fix price and to dominate market position.’  While not illegal in New Zealand, this is ‘most likely illegal in some of the target markets in which the fruit is sold including China’.

“Growers in the kiwifruit industry have faced big challenges over recent times and it is imperative that their financial returns are not compromised by an inefficient and dysfunctional marketing system which has the government’s fingerprints all over it,” Mr Grieve said.

“The government imposed a monopolistic marketing system on the industry and then just walked away, leaving Zespri without proper oversight.   Now the problems are piling up.

“Without the option to take their business elsewhere growers are trapped.   It is time the government, which denied growers the freedom to sell their produce elsewhere, takes its obligations more seriously.   

“ACT has been calling on Minister Nathan Guy to launch an independent inquiry into Zespri since it was convicted in China for smuggling.  Yesterday, ACT called for the potential inquiry to include claims by growers that they are subjected to bullying and secrecy by the company. 

“The Minister owes it to growers to initiate an inquiry to ensure his regulations are not propping up a marketing system that is costing growers’ money and possibly forcing them to act illegally,” Mr Grieve said.








Minister Can No Longer Ignore Calls For An Inquiry Into Zespri

Primary industries Minister Nathan Guy cannot continue to ignore the damning claims of bullying, secrecy and unacceptable behaviour from concerned growers who are forced by the Government to supply their produce to monopoly exporter Zespri, ACT New Zealand Associate Primary industries Spokesman Robin Grieve said today.

“ACT has been calling on the Government to initiate an independent inquiry into Zespri’s activities after it was convicted of smuggling in China.   ACT now wants the inquiry broadened to look into concerns expressed by growers about the lack of transparency and intimidation by Zespri,” Mr Grieve said.

“A One News story over the weekend revealed the growing discontent among growers concerned with Zespri’s behaviour.   A number of growers were too afraid to appear on camera but told One News they are so appalled with Zespri’s conduct they would no longer deal with Zespri if they had the choice.

 “Zespri Board candidate, Tom Wilson, confirmed their claims saying people are ‘reluctant to stand up and voice their genuine concerns’ as the ‘Zespri PR network can destroy people’.  He says Zespri’s culture is arrogant, self-serving and needs to change.  

“ACT opposes monopolies - especially government mandated ones - because they generally become bloated, inefficient, and lazy.  ACT believes it is Zespri’s monopoly status and lack of proper oversight that has caused the current problems.   They are a monopoly out of control.

"It’s time for the Minister to listen and take action by launching an independent inquiry. 

“The inquiry currently being undertaken by New Zealand Kiwifruit Growers Incorporated is not independent and therefore the validity of any findings is compromised. 

 “Growers need an assurance that they are doing business with a reputable company.  At the moment there is no way they can find out.  Growers who question Zespri appear to be stonewalled and faced with intimidation if they speak out.

“The Government is responsible for how the kiwifruit industry is set up.   It is the Government’s responsibility to get to the bottom of this issue,” Mr Grieve said. 


Labour’s Limit On Share Fund Size Intrudes On Shareholders’ Rights

ACT New Zealand will not support Labour MP Damien O’Connor’s Dairy Industry Restructuring Amendment Bill (No2), ACT New Zealand Primary Industries Spokesman Don Nicolson said today.

The Bill would limit the proportion of Fonterra co-operative shares that can be held in its shareholders fund to 20 per cent of Fonterra’s share total.

“Legislating tighter limits on the size of the fund is an unnecessary intrusion into the rights and interests of shareholders to determine the destiny of their own company,” Mr Nicolson said.

“Fonterra has sufficient constitutional safeguards and mechanisms for representation and communication to allow shareholders to determine the size of the  fund.   Shareholders are more than capable of doing this without interference from Government.

“ACT believes the Government’s regulatory involvement with Fonterra should be limited to ensuring that the supply and sale of milk and milk products within New Zealand are open to competition.
“Fonterra is the world’s largest exporter of dairy produce and New Zealand’s largest company.  It competes in an ever-changing world and needs to be able to respond to changing circumstances and continue to evolve as a company for the benefit of its shareholders.

“Excessive and unnecessary government involvement will only hinder its ability to do this,” Mr Nicolson said.


More Questions Raised About Zespri's Operations

Zespri’s apparent bad administration in China raises serious questions about their operations and reinforces the call that kiwifruit growers should be free to sell their products to customers and exporters of their choice, ACT New Zealand Primary Industry Spokesman Don Nicolson said today.

Zespri Management Consulting Corporation and one of its employees have recently been found guilty in a Shanghai Court of false customs declaration.

“If this is what has been allowed to happen in China, what confidence can growers have that this isn’t happening in Zespri’s other markets?” Mr Nicolson said.

“In November 2011, Zespri was fined in Korea for anti-competitive behaviour in the Korean market.  Just this weekend the New Zealand Herald revealed that Zespri has a serious employment issue with their highest paid offshore executive. Now rural newspaper, Straight Furrow, has revealed Zespri may be involved in transfer pricing.

“The full cost of management and governance oversight is borne entirely by growers, therefore growers need confidence that Zespri’s processes are rock solid. With all these issues coming to light, growers will be wondering, how much worse is it going to get?

“Ultimately, ACT would like to amend the Kiwifruit Industry Restructuring Act 1999 so that growers can sell their products to the customers and countries of their choice.  But in the interim, the government as authors of Zespri’s enabling legislation must launch an inquiry into this developing fiasco,” Mr Nicolson said.  


ACT Calls For An End To Zespri Export Monopoly

ACT New Zealand Primary Industry Spokesman Don Nicolson today called for an end to Zespri’s export monopoly following the revelation that a Zespri subsidiary, Zespri Management Consulting Corporation, and one of its employees were found guilty in a Shanghai Court of false customs declaration.

“In 1999, the Government passed the Kiwifruit Industry Restructuring Act to restructure the kiwifruit industry and create a monopoly exporter which all New Zealand kiwifruit growers are forced to use to sell their products,” Mr Nicolson said.

“Not all growers have been happy at being forced to use Zespri and after these latest revelations who could blame them?  What grower would want to associate with a company that has been involved in criminal activity?   The unethical actions of one subsidiary has undermined confidence in Zespri with the fallout affecting the whole New Zealand industry.

“The best way to keep a business honest is by allowing customers to vote with their feet and leave if they are unhappy.   But under the 1999 Act, New Zealand growers are unable to export their kiwifruit through anyone else and are stuck with Zespri no matter what they do.

“The New Zealand Kiwifruit Growers Incorporated is instigating an inquiry but  ACT doubts it has a wide enough scope or independence from the industry to be satisfactory.

“ACT believes ‘less is best’ when it comes to government involvement in business and in the lives of citizens.    Therefore we believe the Government should move to amend the Kiwifruit Industry Restructuring Act 1999 to give kiwifruit growers the freedom to export their products to the destinations and customers of their choice,” Mr Nicolson said.

Why ACT Is Different

Imagine what might happen if there was a centre-left coalition.  

They believe we can just pass a law saying all wages have to be paid above a certain amount.  Anyone who was working below that amount would get a pay rise.

They believe we can attain real economic growth by simply printing more money.
Everyone could then buy a new house, car and what not.

They believe the Government can spend millions of dollars on all sorts of wonderful programs, without affecting the private sector negatively, as hey, it’s not like taxes come from it.

Unfortunately that is all fantasy.

But according to other political parties, it seems that there is no reason why you cannot legislate your way to prosperity.   

ACT thinks differently.

We understand that wages are determined by supply and demand.

We understand that minimum wages price some workers - usually the young and inexperienced - out of the market.  The minimum wage diminishes their opportunity for a head start.

We understand that printing money results in inflation - an invisible tax on savings, which is the key to capital formation.  

Not only will printing money fail to stimulate economic growth in the long run, it may also cause recessions and the misallocation of resources in our economy due to the distorted price signals.

We understand that welfare programs, implemented with the best of intentions, can have detrimental outcomes: increased dependence on handouts, high marginal tax rates which remove the incentive to work and the occasional abuse of taxpayers’ dollars.

Furthermore, with the recent crisis in Greece, we understand what happens when the Government goes bankrupt.

Governments cannot spend so carelessly. That’s why ACT advocates for smaller government that operates within a disciplined budget and low taxes, which will not crowd out the private sector and prohibit the creation of wealth.     

If we look at other issues such as the "manufacturing crisis”- other parties were quick to blame the current Government and their so called "hands off" approach - as if the Government has not dug its hands into our economy deep enough.

It appears that not only do they lack understanding in sound economic theory, but some economic facts too.

Out of its 33 members, the OECD (Organisation for Economic Co-operation and Development) rated New Zealand the second most restrictive in terms of Foreign Direct Investment regulations.

Foreign Direct Investment plays a crucial role in our modern economy.  Not only does it contribute to job creation, real income growth and raising our standard of living, but also many other positive externalities such as technology and skilled-labour training.

This is why ACT wants to remove unnecessary regulation and red tape that does nothing except make it harder to do business.

I do not wish to demonise other political parties, because as I mentioned before they do have the good intentions.  Unfortunately, as they say, the road to hell is also paved with them.

One of the main insights of economics is that it demonstrates to men how little they really know about what they imagine they can design.

I believe only ACT's policies, founded on sound economic principals, understands this.

Speech by Peter Jiang to 2013 ACT Annual Conference, The Farm, Kaukapakapa, Saturday, February 23 2013.

ACT - National Agreement Nets Significant Policy Gains for ACT

ACT New Zealand Party President Chris Simmons and ACT MP Hon John Banks today announced the details of ACT’s Confidence and Supply Agreement, highlighting a number of very significant policy ‘wins’ for ACT.

Mr Simmons said the new agreement builds on the two parties’ strong, constructive partnership of the past three years and advances ACT’s core economic and social policy goals. 

“In particular ACT wanted to see controls put in place to prevent excessive Government spending and poor quality regulation, improved choice in education, especially in disadvantaged communities, and reform of other key policy areas that are currently holding New Zealand’s economy back,” Mr Simmons said. 

Hon John Banks said that the policy programme outlined in the agreement was an excellent platform for ACT in Parliament and a strong base from which to continue building the relationship between the two parties.

“It shows that National is willing to make changes in these key economic and social policy areas to ensure our joint aspirations for a more prosperous New Zealand are met,” Mr Banks said.

Key features of the agreement are:

• Continuation of ACT’s focus during the last term on publicly monitoring progress on improving the country’s economy wide performance using international benchmarks, and building on the work of the 2025 Taskforce, with a requirement for Treasury to report annually on the progress being made to improve the quality of institutions and policies, raise productivity, and reduce the income gap with Australia. 

• Continuation of ACT’s work during the last term to reduce the regulatory burden on businesses and individuals through taking the Regulatory Standards Bill through to the new Parliament, with an agreement to pass a mutually agreed Bill based on Treasury’s preferred option (option 5) within 12 months.

• Continuation of ACT’s work during the last term on the Spending Cap (People’s Veto) Bill with an agreement to incorporate a legislated spending cap through a mutually agreed amendment to the Public Finance Act. 
• Reform of the Resource Management Act, including simplifying legislation to ensure there is only one plan (a “unitary” plan) for each district.

• The provision to set up a trial charter school system - under sections 155 (Kura Kaupapa Maori) and 156 (designated character schools) of the Education Act – for disadvantaged communities, specifically in areas such as South Auckland and parts of Christchurch where educational underachievement is most entrenched.  A private sector-chaired implementation group will be established to develop the proposal for implementation in this parliamentary term.

• The establishment of a taskforce to produce a comprehensive report on governance issues relating to state policy towards state, integrated and independent schools. 

• The implementation in this parliamentary term of the Welfare Working Group recommendations 27: Parenting obligations, 28: Support for at-risk families, 30: Income management and budgeting support, and 34: Employment services.

• To introduce competition to ACC’s Work Account.

• To support National’s Post-Election Action Plan.

• The appointment of Hon John Banks to the positions of Minister for Small Business, Minister for Regulatory Reform, Associate Minister of Education and Associate Minister of Commerce. 

Mr Banks said New Zealand is facing very challenging times. 

“This agreement is a significant achievement for ACT, addressing not just economic issues but key social issues as well, in particular those that are currently contributing to our very high rates of unemployed, undereducated and socially marginalised young people. 

“I intend over the next three years to advocate for further advances in these areas as well as in the areas of government spending and regulation, labour market reform, and other policies to reduce the burden on businesses and boost productivity and economic growth.

“I would like to thank former ACT MP and Parliamentary Leader John Boscawen for the lead work he has done over the past week to finalise the terms of the agreement.  His advice and ACT Party experience has been invaluable and stands us in good stead to reinvigorate and strengthen the Party over the next three years.

“ACT looks forward to working with National, and Prime Minister John Key, to put in place policies to strengthen our country and put us on a path to prosperity,” Mr Banks concludes.