Wednesday, February 28, 2007

Pull Finger!

There are plenty of opportunities for the Nats to sink the spoon into this sordid bunch of sorry socialists. One of the most frustrating aspects of being a loyal National Party member is seeing them miss the boat.

Here we are with the kick off of a $1.5 million rates inquiry, which deliberately misses the key point—and we have not a whisper of protest from National’s Local Government spokesmen John Carter and Mark Blumsky. Well, boys, get off your lazy arses and start doing your fucking jobs.

National’s local government policy, as far as policies go, is a reasonable document--particularly surprising since it was written by Nick Smith, and is two years old. But it misses out on key issues, and is in need of dire reform. It spends far too much time talking about “consulting” with local government, while local government continues to waste increasing amounts of ratepayers’ money at alarming rates. Local Government doesn’t need “consultation”. It is a slimy cesspool of mediocre socialist politicians who hide behind vast layers of bureaucracy to intervene in ordinary ratepayers’ lives. We’ve gone well beyond the time for consultation. What New Zealand needs is a tough minister to go in and take a big fucking axe to the useless fuckers.

National's challenge in Government will be to pick off policy areas that directly send the socialists squealing and send them into disarray. New Zealand voters have no great sympathy towards the unaccountable never-beens that make up local authority “elected” representation. It’s time to sock it to the buggers.

One of the many lessons of Margaret Thatcher’s greatness was her ability to identify the things that whip the pinkos into a lather. Her reformation of local government in the late 80s—local government that at the time had far more responsibilities devolved to them than New Zealand ever had—was, in part, about putting a lid on some of the mindless socialist mess-ups of the time. Where Thatcher failed was that she didn’t clamp down on the socialist-dominated local authorities’ power to spend.

And here lies the great fiasco that is the Government’s inquiry into local government funding. It is a pointless talk-fest that will spend months coming up with different economic models for how to rate and pay for local government services. Who pays, and with what mechanism, doesn’t actually matter.

It’s their bloody spending that is the problem.

Local Government is rotten to its core. The degrees of bureaucracy required to do anything, apparently in the name of democracy, have created a whole new, and vastly expensive, organizational model: the consultocracy. The requirement to consult with the community, and every competing organisational unit, over even the most thoroughly trivial of developments, places colossal burdens on the ratepayer. Special interest groups need to be included in decision-making for no other reason than they will make noise if not included. In a town like Auckland, there are a lot of special interest groups.

The industry that feeds off this system is wasteful in the extreme, with no external pressures or motivations to act efficiently. Take the case in point of a friend of mine, the manager of a major project in the Auckland region. He was appointed last year, and, being new to the Council, had little knowledge about how the Council operated. In his project team were a group of external consultants, who had been hired by his general manager. As part of this project, he was required to put out a tender for consulting advice on a key aspect of the project. He asked his manager whether it was appropriate for him to go to the Council’s internal procurement office to work out the tender process on that advice. His manager told him to use another external consultant to provide that external tendering advice.

Thus when the external consultant gave the wrong advice about how to go about administering a tender process for external consultancy services, the project manager called the procurement office. The correct advice on the tender process for external consultancy services was given within two minutes. Thus the waste of $15,000 on faulty advice by a consultant on internal council processes. The consultant in question continues to be retained by the project manager, on the basis that she has indispensable relationships formed over fifteen years as an external consultant to Council.

Auckland Regional Council’s expenditure remained static for ten years up until 2001. In the last five years, the Council’s spending has doubled. Auckland City Council—again static over the previous period, but up 60% in the last five years. Bay of Plenty Regional Council—up by 150% over the same period. Canterbury Regional Council’s spending is up by 70%. All in all, local authorities spend over $5 billion—about 4% of GDP—on local authority services. That compares with $3.5 billion in 2000, and $2.8 billion way back when Statistics started keeping records in 1993.

All the while, the asset base of local authorities has ballooned in the last six years, as trivial little empire-builders have self-perpetuated an asset portfolio of $44 billion in 2000, to a whopping $80 billion this year.

Not that Auckland City Councillors actually feel the pinch when they pay their rates bills. The socialist-dominated Council is full of middle-class pinkos—with the sole exceptions of Leila Boyle and Bill Christian—who live in million dollar homes.

They are, in sum, a waste of bloody space.

Local Government is a creation of Parliament. It has, of itself, no legal power other than that which Parliament has given it. It is high time that Parliament stopped passing the buck for local authority excesses, and reined them in.

So in the interests of being constructive, here are some proposals that are so sensible Mark Blumsky and John Carter don’t even have to think about, and it will give them respect, gratitude of the public, and the enmity of every card-carrying Labour Party scumbag who seeks a cushy job in local government before joining Aunty Helen’s also-ran caucus.

  1. Take responsibility for the activities of Local Government. Stop passing the buck on wayward, overspending, inept and bloated councils by claiming that’s what local electors want. The degree of apathy by voters in local government is directly related to their frustration that nothing will change the irresponsible habits of empire-building petty politicians.
  2. Cut the number of local authorities from 86 to 6. There’s far too much inter-council squabbling, duplication of services, and electable opportunities for would-be meddlers. With one stroke of the pen, tell them to fuck off.
  3. Restrict each of the local authorities to ten elected representatives, elected by first past the post. At present the most obscure and petty-minded patch-protector gets elected, and reelected, by doing nothing more than promising a couple of neighbours that they will get their pot-holes fixed. It will also have the added effect of forcing some 500 socialists in elected council positions to get a real fucking job.
  4. Tightly define the core responsibilities of local government: water, wastewater, roading, and rubbish collection. All of these services should be tendered out. With just six local authorities, the services will have a critical mass for international best-practice supply of such services. Council’s role will be restricted to selecting the best service supplier.
  5. Reduce non-core responsibilities to no more than ten percent of total expenditure. Force the pinkos to cancel their empire-building pipe dreams that have nothing to do with the infrastructure of the region. Ten percent is more than enough to pay for libraries and parks.
  6. Require councils to reduce staffing levels by 30%. This is easily achievable by restricting the functions of local authorities to core requirements.
  7. Freeze rates for five years. With efficiencies from amalgamation, staff reduction, and a tight focus on core activities, there is no reason not to achieve this.
  8. Local government has no interest in creating competition in infrastructure services, and as the stadium debacle showed, councils are unable to separate their commercial interests from their civic interests. Require councils to sell off port and airport assets. The proceeds of the sales should be returned to individual ratepayers in annual installments over a ten year period. Ratepayers who would otherwise squeal that community assets are being sold and proceeds squandered by councils will be appeased by having the assets directly returned to them.
  9. Remove the building consents and RMA processes from local government. Instead, create one national organisation processing building consents. This will remove the vastly expensive inconsistencies between local authorities. Better yet, commercialise the consents processing entirely, and restrict the activity of a central agency to auditing and standards.
  10. Give the Minister of Local Government the authority to sack any council, and appoint a commissioner to sort out problems. The mere threat of intervention by the Minister will place a degree of restraint on their excesses.

Mark Blumsky, you have expressed frustration that you are unable to achieve anything as a National backbencher. Well, buddy, if you want to distinguish yourself, pull bloody finger and make a name for yourself by reforming one of the biggest fucking rorts in town.

Tuesday, February 20, 2007

Funding Our Future

Rob Cameron, one of the architects of the SOE model, has suggested that the ten largest SOEs partially float on the capital markets.

This is a good concept, but it’s not realistic under this government. Frankly, I doubt much that a John Key-led National government would partially list any of the SOEs, let alone the ten largest ones. Selling off state assets is seen as selling off the family silver at the expense of future generations.

State owned enterprises are an historical anomaly. They were set up during the Fourth Labour government to provide commercial structures and governance, in anticipation of privatisation.

State owned enterprises account for about $25 billion on the government’s balance sheet. Some of the largest—Meridian, Mighty River Power, Genesis Energy, and TVNZ, all face significant competition from the private sector.

There is little strategic argument for setting up a company with purely commercial imperatives, and then determining that the government should own those companies. TVNZ’s massive losses in value over the past few years can be attributed, on the one hand, to government interference into board operations, and a blind unwillingness to divest from a commercial entity that faces huge competition and high risk.

Again, we return to the core problem that politicians have: selling off SOEs is commercially sensible, but politically sensitive. It doesn’t matter how silly it is to own multiple competing energy generation companies—or even an airline.

There is another, much better option, which John Key should pursue. And it lies in the Super Fund.

Michael Cullen champions the Super Fund as his own. To be fair, it is one of the few significant economic achievements of this Labour Government. It has some $12 billion in assets, diversified across low and medium-risk investments in New Zealand and offshore. The taxpayer is contributing to its growth at the rate of a couple of billion a year. Its investment performance has been solid.

The Super Fund works because it operates outside of political interference. The super fund managers are professional fund managers. The guardians’ sole interest is in the economic performance of the fund. Even Helen Clark’s recent comments about investments in tobacco companies don’t matter a jot to the Super Fund guardians. And nor should they.

The Super Fund has now reached a size where it is untouchable politically. No politician can raid it to fund short-term, hare-brained schemes, and it is seen by the public as a legitimate means of securing New Zealanders' future. John Key's solution is to make it even harder to touch, and even more secure.

John Key should transfer all state owned enterprises to the Super Fund. This will have an immediate effect on the size of the super fund, into a significant public asset worth some $40 billion. The Super Fund guardians can then decide which of the SOEs to keep, which to partially or wholly divest from, and which to float on the capital markets.

While this will result in a direct reduction in the government's fiscal position--surpluses will be lower as profits from existing SOEs are moved to the Super Fund--it will also remove the need for the Government to make ongoing contributions directly to the Fund. The existence of a moderately-performing $40 billion super fund, earning 7% returns, will create an $80 billion fund over ten years--more than enough to cover the super liability bubble over the next forty years as baby boomers start drawing on it.

The positive effect on the capital markets as at least a dozen attractive, high-performing investments start trading domestically will make the New Zealand sharemarket immediately more viable for New Zealand investors.

There will be other options for establishing SOEs for a National Goverment--the ACC employers' fund is ripe for creation of at least two, and possibly three separate SOEs, with an additional $8 billion in assets that could be transferred to the Super Fund, thereby opening up ACC to private competition and investment.

It’s time to take the ownership of SOEs out of direct political interference, and place them in the actual interests of New Zealanders’ future.

Thursday, February 01, 2007

Dear Jeanette Fitzsimons...

Dear Jeanette Fitzsimons:

I have yet to see anything in the eleven years in which you have been in Parliament, which demonstrates in even the remotest sense, your contribution to New Zealand. I estimate that in real terms, you have earned over $3 million in your private salary, personal allowances, and superannuation (not to mention your very dodgy schemes--such as your Christchurch office which is owned by the Green Party and chartges rent to Parliamentary Services, which you in return use to fund your Green Party election campaigns)--with no net return to the country.

However, now is your chance to have a lucky break. Yes, Jeanette: I realise that you will soon also be entitled to receive National Superannuation, so I give you one lasting legacy to New Zealand.

Put a stop to this stupid bloody food miles junket. I've already heard far too many bloody pseudo-greenies, who are no less socialist than your very red self, proclaim the hazards of "food miles". As even your co-leader accepts, the food miles argument is a complete bloody crock.

So here is your solution. Go on a junket to Britain--if you accompany Judith Tizard you should be able to save on a companion fare--and tell those silly buggers in Britain off. Produce a new standard for food miles. Be the first person, internationally, to come up with an international measure, which actually presents the carbon footprint as it is. Make sure it favours New Zealand for once, rather than Europe.

Hell, we all know that the food miles theory was invented by European trade protectionists anyway, and cottoned onto by your ignorant pinko-greenie ideologues because they've become bored with protesting about other stuff. So go set the record straight. If they're going to be making food miles the new fad, give them some proper bloody information and some standards that favour us. Like, for example, how New Zealand lamb actually consumes less carbon than British lamb.

There's a good lass.

Kind regards,

Insolent Prick

P.S. I note you still get extra resources from the Labour Government in return for propping up those disgusting pinko liberals. Do you think you could please use your influence to see if the repulsive socialists have repaid the money they stole to buy South Island votes, and indeed the election last year?

Spongiformus Tizarditis

Life is not always easy for the Beehive staffer. Risks of the job include finger-cramps, public humiliation, and quite frequently, bouts of mental retardation. While the cut and thrust of representing relatively competent ministers with actual portfolios, such as David Cunliffe, Annette King, and Phil Goff must have their respective merits, the life of one of the lesser spin doctors must be particularly gruelling.

Take Judith Tizard's office, for example. In seven years of ministerial office, Tizard has never been promoted to Cabinet. She is the first ever Associate Minister for Arts and Culture. Her position of "Minister Assisting the Prime Minister on Auckland Issues" provides the excellent ruse to travel with the PM on the latter's domestic and international itinerary.

It's all a bloody shame, really. With Tizard's excellent breeding--her father a deputy prime minister and Finance Minister, who last distinguished himself in 1989, when as Defence Minister, he labelled the recently-deceased Japanese Emperor Hirohito a "war criminal"; and mother a mayor, governor-general, and perhaps most importantly, an entertaining panellist on Beauty and the Beast--it's a shame that so little has become of Judith Tizard.

Judith Tizard is Helen Clark's closest personal friend. While Tizard no longer resides at Premier House (she has obtained a separate taxpayer-funded dwelling in Thorndon), Tizard was Clark's electorate secretary for three years prior to entering Parliament. While working for Clark, Tizard also had the opportunity to finally finish her Bachelor of Arts in History. Of course, it did take eleven years to complete, which probably explains Tizard's immaculate modesty, generosity towards others, and her unwavering commitment to listening to both points of view.

What is harder to explain, however, is this post from one of Tizard's ministerial staffers yesterday. Since Tizard's office is staffed by a rather large number of people--at least seven press secretaries in the last few years--it's not easy tracking down who wrote it. But it deserves special attention. The comment reads:

Office of the Hon Judith Tizard said...
Could you please correct the entry for Judith Tizard as follows:
- IP lists Judith Tizard as "Auckland councilor" [sic]
- Judith served on the Auckland Electric Power Board (1977-1983), and the Auckland Regional Councillor for Panmure (1988-91);
- When Parliament is sitting, Judith resides in ministerial housing in Wellington - not at Premier House;
- Judith is Patron of 11 organisations including the Mt Wellington Women's Bowling Club and the Auckland Brass Band. She is an Honorary member of the Otahuhu & District RSA, and Honorary Vice-President of the Otahuhu & District Highland Pipe Band.

My response was:

Dear office of the hon judith tizard:

No correction necessarily. You have made the correction here. I'm not sure what your point is, precisely, but I can tell you this. We do not yet live in a society where ministerial offices dictate the tone and content of what is said about them.

Now go and do some bloody work. No doubt Ministerial Services pays you a bloody whopping great salary for you to do something somewhat more productive than act as editor of my blog.