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Bryce Edwards’ Political Roundup: The Battle over medical marijuana

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Political Roundup by Dr Bryce Edwards.

[caption id="attachment_4808" align="alignleft" width="150"]Dr Bryce Edwards. Dr Bryce Edwards.[/caption]

This week Helen Kelly had her official request for medicinal cannabis deferred by the Ministry of Health. This has renewed debate about whether the Government’s procedures for dealing with such requests are working or major reform is required.

Former CTU president Helen Kelly has mounted a campaign that seeks to reform the government’s procedures over medicinal cannabis. Kelly has blogged about her predicament and campaign – see: Life and death and Cannabis. This must-read post sets out her problems with getting appropriate treatment.

Blogger Russell Brown is strongly critical of what he believes are unreasonable and poorly thought out bureaucratic hoops applicants must jump through to meet the Ministry of Health’s criteria – see his blog post, Helen Kelly’s letter.

Associate Minister of Health Peter Dunne has responded to such criticism saying “The application has… been deferred, not declined, by the ministry, until it receives the information it had requested. The delay in resolving this case, rests, for whatever reason, with the oncologist’s ongoing lack of response” – see Jo Moir’s Former union boss given two months to live – nearly a year ago.

The only approved medicinal cannabis in New Zealand is the mouth spray Sativex. It is not funded by Pharmac and costs over $1000 a month. Any other product must be approved by Dunne. Moir reports that “As of January 27, the ministry had received 120 applications for medicinal cannabis, of which 105 have been approved. Another five are still in progress and 10 have not been granted for various reasons including the application being withdrawn, cancelled, declined or incomplete.”

Peter Dunne continues to receive a lot of flak for his role in the process, especially in relation to Helen Kelly’s request. But not everyone is laying the blame entirely at Dunne’s feet. In his post, Kia kaha, Helen Kelly, Russell Brown argues that the Minister is far from being the main problem: “Dunne is habitually, and often unfairly, pilloried in these matters. Yet in delivering the new National Drug Policy last year, he had to carefully navigate the National government’s cynical and entirely political stance on drug law reform to become the first minister to acknowledge that a significant portion of the harm from illicit drugs lies in the laws that make them illicit. Dunne is also constrained by the official advice he receives.”

See also Brown’s blog post, A dramatic and unremarkable decision. Notably, in the comments section, the Drugs Foundation CEO, Ross Bell, says “I think what this case highlighted is that our Medicines Act can work really well, in that the minister has the ability to make these decisions.  It also shows that, fundamentally, we don’t need to change our drug laws to allow medical cannabis (we do need to change laws for lots of other reasons though). All we simply need to do is have a much wider range of medpot products regulated under medicines law (and then have those fully subsidised).”

The Politics of medicinal marijuana

But shouldn’t the system be more straightforward? After all, on the face of it, the decision to allow access to medicinal marijuana for those in need should be simple. So “Why are the politics so hard?” asks Danyl Mclauchlan – see his blog post: Politics and meta-messages

Mclauchlan says it’s a question that has baffled him for a while: “The answer, I think, is something experienced politicians know instinctively, which is that when you take a position on an issue and make a statement about it, you actually send two messages to the voters. There’s the first, surface message, which in the case of medical marijuana would be about compassion and scientific evidence and easing suffering and so on, and the meta-message, which is that you’re partly legalising pot and this makes you a pot-head and a hippy etc. And for many, many voters it is the meta-message, operating on a mostly subconscious basis that is the more powerful and influences their perceptions of the politician or the party sending it.”

If the Government is really so concerned about public opinion, then Helen Kelly says it’s within their power to find out how the public feels – see Michael Forbes’ Helen Kelly wants referendum on legalising cannabis at the next election. Kelly says she has spoken with a number of MPs who support her call for a referendum in 2017. 

A Press editorial says this call for a referendum is ultimately “misdirected” – see: Reform, not referendum, needed on medicinal drug laws. The editorial argues, while it’s useful for raising awareness of the issue, “A referendum is unnecessary. Medicinal cannabis use is not a conscience issue, it is a clinical one. Any reform should be guided by research and the advice of medical experts rather than a nationwide poll.” The newspaper says that if the hurdle is a lack of high-quality research, then “get it”.

The issue is obviously not a classic left-right ideological one. Jenesa Jeram of the right-wing think tank The New Zealand Initiative says medical marijuana is a rare case where greater government regulation is desirable on safety grounds – see her column, I agree with Helen Kelly.

The views of politicians

Moved by the plight of Nelson teenager Alex Renton, Labour’s West Coast MP Damien O’Connor began work last year on a private member’s bill designed to improve access to medicinal cannabis – see: Laura Mills’ O’Connor drafting medicinal cannabis Bill.

 

Stressing that “he was not advocating the decriminalisation of cannabis”, O’Connor says he has “believed in the benefits of medicinal cannabis since the 2000s, when he was on a select committee which backed its use” and he believes wider public opinion is now favourable towards allowing its use. 

This seems borne out by the results of a Herald DigiPoll from September that found 70% want medical pot legal. Seventy per cent of respondents said “they wanted the drug legalised only for medicinal use under strict conditions. Fifteen per cent wanted it kept illegal for all uses and 13 per cent wanted it legalised for all uses.”

In the midst of attempts by Alex Renton’s family to secure permission for medicinal cannabis to be used in his treatment, Jo Moir reported on the views of MPs – see: DHB delays treatment application for teenager in coma. According to this, Andrew Little “agrees with O’Connor that it was time for a debate, and would support a bill on the matter”. And Green Party co-leader Metiria Turei, Act leader David Seymour and Maori Party co-leader Marama Fox were also “open to a debate on the issue.”

Winston Peters appeared more hesitant saying: “nobody could stop a debate in Parliament but he’d want to be sure all other legal options were exhausted before considering granting access to medicinal marijuana.” 

A survey of other MP views is also found in Isaac Davison’s MPs back calls for medicinal marijuana, with “many saying they would vote in support of improved access to medicinal cannabis if a conscience vote was held”. Those clearly in favour of reform included National’s Maggie Barry and Chester Borrows, and Labour’s Annette King and Iain Lees-Galloway. “Labour MPs Kelvin Davis, Phil Goff, and Phil Twyford all said they would probably support a law change, while others including David Shearer said the law should at least be reviewed.”

Social Development Minister Paula Bennett came down “firmly against decriminalisation”, even for medical purposes: “I would absolutely be anti any loosening of our cannabis laws. Children’s lives are completely destroyed by their parents’ use of cannabis.” Gerry Brownlee and Paul Goldsmith were “likely to oppose” a law change and Hekia Parata was undecided.

John Key was also opposed. And in Russell Brown’s blog post, Helen Kelly’s letter, he reports on the Prime Minister being asked about medical marijuana at a school assembly, and replying: “This is the fundamental message. Drugs are bad for you.”

Decriminalising cannabis

Helen Kelly has said the issue of whether or not cannabis should be decriminalised could also be addressed at the 2017 election. That’s certainly the referendum Waikato law professor Alexander Gillespie thinks New Zealand should be having – see his opinion piece, Cannabis debate more urgent than nation’s flag. He argues that the health risks of marijuana use are real, including addiction, increased risk of accidents and mental illness, particularly for individuals genetically predisposed to particular mental illnesses such as schizophrenia.

But Gillespie also says “The difficulty is that if we use the test of risk as the benchmark for what should be prohibited, then tobacco, alcohol and gambling should also be banned.” He says cannabis laws as they stand are unrealistic and mean illegal markets get rich while the wider community takes the impact.

The must-read item on New Zealand’s drug laws is Philip Matthews’ Drug reform is not a Dunne deal, based on a fascinating interview with New Zealand Drug Foundation CEO Ross Bell.

Matthews writes: “The irony is that decriminalisation of drugs can reduce harms more effectively than prohibition. This is where the Drug Foundation now finds itself. Bell’s current angle is that our drug law turns 40 this year and is showing its age. Time for an overhaul.”

Now that “the US has fallen”, Bell says there are “some inevitabilities now” in terms of drug law reform in this country and talks about some of the options, including his opinion that we already had the answer in the Psychoactive Substances Act. He says the “bizarre” goings on around that legislation have probably “scared the horses for a while” and the politicians are probably right in their instinct to tread very carefully on drug law reform. 

Also on the decriminalisation issue, see Paul Little’s Our weed ban is simply dopey and Brian Rudman’s NZ should take a leaf out of liberal cannabis law from last year.

Of course liberalisation could be good business too – even in terms of medicinal marijuana. Jamie Gray reports today on horticulture expert Mike Nichols’ concerns that NZ could miss boat on medical cannabis exports. Writing in NZGrower the ex-Massey University lecturer said NZ should not sit by and watch an opportunity to develop an export industry in medicinal cannabis go the same way as the opium poppy industry.

Finally, if you would like to support Helen Kelly’s application to use cannabis oil in her cancer treatment, you can sign the online petition, which currently has about 3500 supporters – go to: #Help4Helen Permission 4 Helen Kelly 2 use a cannabis oil 2 help control her pain & nausea.

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NewsRoom Digest: Top NZ News Items for February 19 Edition, 2016

Newsroom Digest

Today’s edition of NewsRoom_Digest features 4 resourceful link of the day and the politics pulse from Friday 19th February. It is best viewed on a desktop screen.

NEWSROOM_MONITOR

Noteworthy stories in the current news cycle include the Government’s books still in deficit by $92 million, the plight of New Zealanders living in Australia at the top of John Key’s mind as he entered talks with Australian Prime Minister Malcolm Turnbull in Sydney, and a lawyer saying the police response to a 111 call at the top of the East Coast was beyond disappointing.

POLITICS PULSE

Media releases issued from Parliament by political parties today 

included:

Government: Social Housing Reform Bill passed into law; Consultation begins on AEOI implementation; Mid-year accounts broadly in-line with forecasts; New redeveloped school opened on Great Barrier Island; NZ removes UN sanctions against Iran;New Plymouth fully connected to Ultra-Fast Broadband;A new season of Cricket Smart gets underway; Mackenzie Country Trust established;Joint effort to address Auckland’s transport challenges; Young people the focus of new Science Challenge

Greens: PM’s trip an opportunity to restore human rights;Govt deficit highlights policy failures; Bluegreens Forum should be more than greenwashing

Labour: Botched EQC repair numbers keep rising; Report slams Nats ‘openness’ and ‘transparency’; Damning Auditor-General report on Defence Force; Key must now work to restore reciprocal rights

Māori Party: Supporting Māori Housing Providers

New Zealand First: Desperate NatsUse Sports Stars – What Is It Costing Us?; Government Fast-Tracks State House Sell-Off

LINKS OF THE DAY

AG RESPONSE TO NZDF & MILTECH INQUIRY: In 2014, the Office received a request from Hon Dr Jonathan Coleman, then Minister of Defence, to look into a procurement arrangement involving the New Zealand Defence Force (NZDF) and Miltech Limited (Miltech), a commercial business servicing life jackets for NZDF. Click here for more:http://www.oag.govt.nz/media/2016/miltech?utm_source=subs&utm_medium=subs&utm_campaign=miltech

CEO CONFIDENCE SURVEY: Findings from PwC’s New Zealand CEO Survey, released today, show New Zealand CEOs are less positive about the outlook for the global economy than they were last year, but remain optimistic about their own business growth. The survey can be found at: http://www.pwc.com/ceosurvey

FINANCIAL STATEMENTS OF THE NZ GOVT: The Financial Statements of the Government of New Zealand for the six months ended 31 December 2015 were released by the Treasury today. Click here for more:http://www.treasury.govt.nz/publications/media-speeches/media/19feb16

NZ REMOVES UN SANCTIONS: New Zealand has completed the domestic processes required to lift the United Nations sanctions against Iran. Further information for exporters can be found on the MFAT website:https://www.mfat.govt.nz/en/trade/un-security-council-sanctions/

And that’s our sampling of “news you can use” for Friday 19th February .

Brought to EveningReport by Newsroom Digest.

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Carolyn Skelton: Why I’m voting for the current NZ flag…. For now.

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Opinion by Carolyn Skelton – I will be voting to retain our British colonial-NZ flag, for now, because the whole process related to March’s referendum is fatally flawed. We needed a far more in-depth discussion about the meaning and relevance of our current flag. Furthermore, any change to rid ourselves of British imperial symbols needs to be part of a far deeper restructuring: changing the flag is a superficial exercise that masks our continuing subservience to Queen and empire(s). There hasn’t even been a far reaching and in-depth discussion of our current flag. Some history: United Tribes of NZ Flag The current NZ flag wasn’t the first used to represent NZ/Aotearoa. An earlier one, known as The United Tribes flag was designed in the 1830s. (See about this flag at the NZ History: Nga korero a ipurangi o Aotearoa website  *) 2000px-Flag_of_the_United_Tribes_of_New_Zealand.svg It was seen necessary as NZ was not a British colony at that time, and ships built here needed a flag to fly and register under. An earlier design was rejected as it had no red in it, and apparently New Zealanders liked red as it was seen as an indication of “rank”. Under British Resident James Busby’s authorisation, Māori chiefs voted on some designs, and a flag was selected. Following some tweaking by some in new South Wales , the British King approved the flag that became known as the flag of the United Tribes of New Zealand. It was considered an important step in encouraging Māori chiefs to act collectively.

To northern Māori, the United Tribes flag meant that that Britain recognised New Zealand as an independent nation, and thereby acknowledged the mana of their chiefs.
The Union Jack as NZ flag After the signing of Te Tiriti o Waitangi in 1840, the Union Jack replaced the United Tribes flag as NZ’s flag: ** “Some Māori, including the Ngāpuhi chief Hōne Heke, believed that Māori should have the right to fly the United Tribes flag alongside the Union Jack, in recognition of their equal status with the government. Heke’s repeated felling of the flagstaff at Kororāreka in 1844–45 was a vivid rejection of the Union Jack as a symbol of British power over Māori. The Ngāi Tahu chief Tūhawhaiki’s hoisting of the United Tribes flag on the island of Ruapuke in Foveaux Strait in the 1840s also symbolised Māori independence.” The Union Jack was used as the NZ flag until the 1950s. Current NZ Flag – imperialist maritime origins The current NZ flag has strong maritime associations.*** A UK law of 1865 declared that all ships of a colonial government must fl a blue ensign with the colony’s badge in it. NZ had no such badge, but one was added in 1965, stamping NZ on it with red letters and a white border. In 1899 the southern cross stars were added as to make a signalling flag– four red stars in a white circle. This was first used at sea, but gradually migrated onshore. Following a rise in flag waving at the outbreak of war in South Africa in 1899, PM Seddon introduce the NZ Ensign Bill in 1900 – pretty similar to our current flag. After some tweaking, the Ensign became a legal requirement for NZ government owned ships, eventually becoming recognised as NZ’s national flag. The national Māori Flag, (also known as the Tino Rangatiritanga /Māori Independence flag), was devised in the 1990s in connection with attempts to inform Maori of breaches of Te Tiriti. **** In 2010 , with some support by the Māori Party, this flag was flown on the Auckland Harbour Bridge on Waitangi Day for the first time. So, the alternative candidate flag for the March referendum, retains the blue and stars from our current flag. NZ_flags1_3424761b These elements are more a reflection of, not just our colonial history, but a narrow part of that history: that of the British and NZ navies. Slapped onto that remnant, is a fern and black colour. In the PM’s promotion of this flag, and the enlistment of selected high profile (ex)All Blacks to promote the flag, provides strong associations of masculine sporting prowess. Thus, the candidate flag represents very selective and skewed elements of our history and culture. Many crucial aspects have are hidden by it: the whole of Māori struggle for sovereignty, independence, equality and rights; plus the struggle for women to gain equality n a very masculine dominated national culture. Flawed process and flag long list The whole process of selecting a candidate flag was flawed, with the PM’s desire for a fern leading public discussions. Among the long list of alternative flags, the ones that seemed to me to represent a broader view of our history and culture/s, were the variously coloured koru ones with stars: not one of them made the long list. Like these ones: 25480-johntflag3 16981-myflagfinal Or this with a strong Māori motif, with elements of the United Tribes flag: 8677-flagdani8 Instead we got a short list of three fern designs and one colourless, unimaginative koru design representing very little. Change will come, and will acknowledge wider changes, culture and struggles The alternative, referendum, candidate flag brand us commercial-style with strong associations of a rugby and masculine dominated sections of our society – and laughable contains unacknowledged elements of British imperial maritime dominance (blue background to the stars), even while claiming to shed trappings of being a British colony. When we change our national flag, we need a deeper discussion of this long history of changing cultural processes and struggles: we need to acknowledge Te Tiriti, and the first inhabitants of this land; and we need a flag that represents the whole of the country and it’s cultures. References: *’United Tribes flag’, URL: http://www.nzhistory.net.nz/politics/flags-of-new-zealand/united-tribes-flag, (Ministry for Culture and Heritage), updated 21-Jan-2016 ** ‘Union Jack’, URL: http://www.nzhistory.net.nz/politics/flags-of-new-zealand/union-jack, (Ministry for Culture and Heritage), updated 11-May-2015 ***’The NZ flag’, URL: http://www.nzhistory.net.nz/politics/flags-of-new-zealand/maritime-origins, (Ministry for Culture and Heritage), updated 20-Nov-2015 **** ‘The national Māori flag’, URL: http://www.nzhistory.net.nz/politics/flags-of-new-zealand/maori-flag, (Ministry for Culture and Heritage), updated 11-May-2015]]>

Tony Alexander’s Weekly Economic Overview February 18 2016

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Economic Analysis by Tony Alexander.

[caption id="attachment_3709" align="alignleft" width="150"]Tony Alexander, BNZ economist. Tony Alexander, BNZ economist.[/caption] Last week I wrote about the weakness in world sharemarkets in terms of specific factors. These included losses for energy sector businesses because of the structural decline in oil prices, slowing growth in China and worries about debt and capital outflows, weakness in the Japanese economy, and worries about the impact of tightening US monetary policy. But there are wider issues in play which also lie behind the growing disquiet. One of these is the ineffectiveness of very loose monetary policies in recent years in stimulating growth in Europe and Japan. Another rapidly rising worry is the inability of loose monetary policies to boost inflation, and the growing uselessness of central banks maintaining 2% inflation targets when they seemingly no longer have the tools to much influence inflation. Related to that is concern that as they keep easing to aim at a target they are no longer able to hit the flood of cheap money will cause asset bubbles and collapses bringing new economic woe. Related to that is the realisation that central banks have very little ability any longer to insulate their economies when not just cyclical but shock-driven downturns come along. So as the monetary policy backstop disappears from investor and business expectations the risk is that investors rush to less risky assets – bonds – and businesses build even greater cash buffers and hold off on investments. This big picture loss of monetary policy effectiveness means come the next wave of shocks countries will need to rely upon fiscal policies – but from governments with already large debts. The way out is structural economic reforms aimed at boosting the ability of economies to adapt to change. But such reforms bring short-term pain, there is no appetite in Europe or Japan to inflict or accept such pain, and out of this will come a long-term redirection of capital away from those parts of the world toward America, Australasia, and the rest of Asia. These big shifts mean we should expect continued bouts of extreme financial market volatility.

To read the full analysis, continue reading below or click the link: Download document (pdf 291kb)

When The Barrel’s Empty The global financial crisis was caused by an over-supply of over-priced houses causing plummeting prices and huge losses for those who financed the excess construction (the builders had a boom!). The situation arose because of an official policy by the US Federal government to boost home ownership in the 1990s encouraging a relaxation of lending standards, blind eyes being turned to such laxity, and the US roller coaster encouraging similar surges overseas. Home buyers borrowed too much, banks lent too much, investors financed bank lending too willingly, and central banks and rating agencies miscalculated the riskiness of the lending products. Egg on everyone’s face in other words from too much credit flying around. As house prices corrected downward and the falls backwashed into securities backed by house values investors dumped such products, banks recorded huge losses, investors backed away from banks, and for about six weeks over September – October 2008 the world stood on the cusp of a new Depression as the global banking system seized up. Courtesy of hefty injections of cash by central banks, major interest rate reductions, and eventually easier fiscal policies we saw a 1930s repeat avoided and green shoots appearing in March 2009 in the form of economic indicators falling at a slowing pace in the United States. After that a huge sigh of relief around the world caused sharemarkets to recover, housing markets to rise, confidence levels to soar, and currencies of risky countries such as NZ to jump sharply. We soared from less than US50 cents in early-2009 to over 76 cents by year’s-end. Then things started to falter as the life giving gasps of breath of 2009 as economies surfaced from beneath the waters gave way to laboured breathing as attention turned to high government deficits and debt levels, Greece of course, the unwillingness of businesses and households to borrow and so on. To counter this post-GFC weakness central banks decided the best thing to do to spur things along would be to pump more credit into the world economy through direct money printing and sustained, falling, interest rates. Basically, the central bankers decided to engage in a hair of the dog that bit them exercise of recreating the loose credit conditions of pre-GFC while at the same time working with banking sectors to boost capital bases and lending practices ready for the next crisis. As monetary policies stayed loose however the economic outcomes failed to reach levels desired by all, yet each time a new bout of the heebie jeebies went through investors the fear and selling quickly turned to buying as central banks eased policies even further. In fact things eventually reached the stage whereby bad economic data would be greeted by rising share prices in anticipation of lower interest rates and more money printing. Money looking for a home and ending up in shares and commodity futures. But all that cash sloshing around the world had some major deleterious impacts. As investors sought yield in a low interest rate world assets like residential property prices got bid back up again along with commodities – witness our dairy boom. And as investors, finding themselves flush with cash, kept firms afloat which pre-GFC would have been closed down and their parts flogged off, excess quantities of goods appeared – especially in China which engaged in a huge series of stimulatory packages from 2009. Worries about deflation resulting from excess production and altered consumer, business, and wage earner price-setting behaviour led to more easing of monetary policy, more cash, more over-valued assets, more excess production. And investors started to act on the new reality of sustained low inflation and central banks not likely to raise interest rates much for a very long period of time. They flooded into low yielding bonds. And as this was happening imbalances in some markets like oil and dairy products brought logical big falls in prices. And at the same time China’s economy lost the puff created by the mother of all stimulatory programmes focussed on construction from 2009 at the same time as the period arrived for it to transition from growth driven by exports, manufacturing, and fixed asset investment to services and consumption. Unfortunate timing. Which brings us to late last year. An environment of the following.
  • -Worries about the impact of the first US monetary policy tightening since 2006.
  • -Worries about global growth as China continued to slow.
  • -Worries about unstable capital flows associated with expectations of a probable big devaluation of the Chinese yuan.
  • -Worries about major asset and profit write-downs in all businesses associated with the energy sector.
Which brings us to where we are now with the two new big worries driving markets downward. The first is concern about bank profitability as write-offs will have to be undertaken for exposure to the energy sector, slowing economic growth, and tight margins caused by sustained low interest rates. The second is the killer and it goes right back to one of our main comments/warnings from late-2009. We warned that because of the massive easings of fiscal and monetary policies to fight the GFC, the next time a big hit came along governments and central banks would have very little dry powder to help insulate their economies. In fact central banks have used the past six years depleting their remaining dry powder reserves trying to stimulate their economies – and they have failed. We wrote that central banks cannot create growth. All they can do is buy time for the private sector to get back on its feet and start investing and growing naturally with the sugar hit of low interest rates and loose liquidity eventually being taken away. But while time has been bought, governments needing to create better conditions for growth have failed to restructure their economies (Japan and Europe), and businesses used to loose monetary conditions have shuddered each time at the thought of the sugar disappearing. And in multiple countries including New Zealand, Australia, Europe, and now the markets speculate perhaps even the US, the sugar bowl has had to be put back on the table with interest rate rises being reversed – twice in our case. And now here we sit with analysts concluding that central banks have failed to stimulate growth, forgetting that such is not their job on a sustained basis. But the conclusion these analysts reach is nonetheless the same as if they did have better understanding of the role of central banks. There is nothing left that central banks can do of any great magnitude to boost growth any longer. The realisation that central banks have become near impotent as a buffering factor for weak economies is sweeping the markets reinforced by the sheer desperation shown by the Bank of Japan in introducing a negative interest rate. The Japanese economy recorded no growth in 2014 and only 0.4% in 2015. So what is going to happen now? Commercial banks will be able to finance themselves so a credit crunch scenario as happened awhile over 2008-09 is extremely unlikely. But funding costs may rise briefly until losses have been revealed by large lenders to sectors such as energy. Little interest rate rises will get lost in the wash of central banks still easing and introducing negative rates so businesses and households won’t back away from borrowing because of debt servicing costs. Growth forecasts for this year and next will get revised down slightly, inflation will stay low and deflation worries persist, and businesses will look to boost productivity to cut margins facing downward pressure from easing retail prices in some countries. But here is the key thing which means that even though central banks have become toothless tigers, the world economy will do alright. The world is awash with cash. The cash is looking for a home. Some of that cash will be eagerly used to purchase the assets of distressed businesses more than would have happened in the past because return on investment hurdles are lower than pre-GFC. Thus underneath what for the next few years will be a series of bouts of market turmoil and negative headlines, capitalists will be buying and restructuring companies which can’t hack it, new technologies will continue to be developed and implemented, and countries with specific driving factors such as we have will enjoy strong currencies and migration inflows as they will look so much better than other places. But in areas where these economic forces are not free to function – much of Europe and Japan – the aversion to pain will produce more useless policy easing, rising government debt, and eventually long-term capital flight to other parts of the world – America, Asia, and Australasia. Not Eastern Europe because of the deteriorating situation between economically failing Russia and economically stagnant Europe. Not the Middle East because of the munted energy sector and war. Not Africa because as the sugar of huge Chinese investment passes without political, social, institutional, and legislative structures being reformed, old under-performance will return. Dairy Speaking of under-performance – dairy. For a number of years now it has been as politically incorrect to say anything negative about the dairying sector as it is to say cats should be killed. ( I was jumped on by many 10-15 years ago for predicting a sub-$3 payout.) But thankfully we have been able to slip in a few reality checks along two themes. The first has been an observation from practising economics since the mid-1980s that while we can all generally make some good reasoned predictions about where demand for a commodity will go, we are all completely hopeless at forecasting supply growth – be that for oil, iron ore, coal, LNG, beef, wool, or of course milk. And if you can’t accurately forecast both supply and demand changes then you have no hope of predicting prices. Currently the Europeans in our media are being “blamed” for producing too much milk and depressing prices. But here in New Zealand we have invested in high cost feeding out regimes, pushed into more marginal land, and focussed capital on more and more milk production – rather than avoiding what has been our second theme – not going up the value added chain. We have failed to radically boost the proportion of our milk going offshore as highly processed high margin items. The usual example is infant formula. To boost value added capital needs to be invested in such things. But that means lower payouts to farmers in the short to medium term. Yet farmers have raised substantial debt to boost production by buying increasingly expensive land and animals so they have made it clear that maximising the payout is everything and capital cannot be retained in any great magnitude to take dairy cooperatives up the value chain. And this will never happen in New Zealand. In dairy all we will ever be primarily is a bulk producer of milk which we dry out and bag for someone else to reliquify or process further. Why? Because dairy farmers enter the industry taking on the daily challenge of working the land, working with their animals, handling the weather, the pests, the diseases, the regulations, the sheer unpredictability of so many things around them with the aim of extracting maximum milk from the land available to them. (Same as sheep and beef farmers for meat.) And the industry has a great career structure for doing this. Few aim to make enough capital as quickly as possible so they can get their organic infant formula from named animals into Asia. Some do. The vast majority don’t. Dairy re-investment occurs almost always back in the land by the farmers, not up the chain. Under the cooperative structure where someone will buy everything you produce once you are in we cannot rely upon dairy to lead our economy to higher wealth. Or any other commodity which we minimally process. But why then has our economy grown so long on the back of some animal? Because for a long time we were a low cost producer of high quality products. Now we are not so cheap, and other countries are getting in on the game as they try to boost their domestic food security. China has barely started on milk. But this is not an argument against our primary sector in the end – only a reminder that our farmers survive as a driving force behind our economy because of what drove them to the land in the first place – acceptance of a challenge, willingness to learn as much as possible on the job and proudly teach it to others, and to change land use when the numbers demanded it. That is the crux of it and the best current illustration is the land being given over to growing manuka bush for bees to feed on to produce high value manuka honey. Exports of honey from New Zealand are now worth $300mn. In same dollar terms that is where the wine industry was in 2002. Wine exports are now worth $1.5bn. Some farmers are also converting to milking goats. As long as land use can freely change in New Zealand then farming will always be a key part of our economic base, though it won’t take us up the OECD ladder and that is why we need the Auckland agglomeration and the talented people developing and implementing new technologies. Only if a government were to ever try and retard that land use change process with artificial support mechanisms would we sink – like in the 1970s up until the painful removal of SMPs. Google it young ones. And why have I written this? Because for the first time in over two decades whilst speaking at a conference last week of people involved in the animal industry, someone asked if it might be a good idea for the government to help dairy producers with a price support mechanism. Then it happened again at a different session this morning in Matamata. It would never work because farmers would not give up payout in good times, because no-one knows what average level payout can be accurately assumed for the next decade, because the taxpayer has in the past bailed out farmers who in the 1970s and 80s benefitted from price equalisation schemes set with prices too high, and because it is necessary in all sectors that when hard times come the most indebted and highest cost units get weeded out. Same as happens in every other sector. If price stabilisation is important then each farmer could have done it for themselves with a special bank account. The old hands probably did by keeping debt down. They will be the ones buying some of the assets which will come on the market in the next two years. Like they did in 2009, 2003, and 1991 Housing What things cause house prices to fall and are any of these things likely in the near future? Soaring interest rates. -Nope. Our central bank is under pressure to cut rates further following last year’s 1% reduction in the official cash rate, central banks overseas are either easing or delaying planned rises, and one of the factors causing recent sharemarket weakness has been worries about deflation. In NZ inflation is just 0.1% and the RBNZ has found itself unable to get headline inflation back into the target range of 1% – 3%. Soaring house supply. -Nope. Courtesy of massive net migration flows NZ population growth is picking up. NZ’s average population growth rate is 1.1% per annum. Growth last year was 1.9% following 1.5% in 2014. Since 2006 the population has risen by 411,100 people. At an average nationwide house occupancy rate of 2.7 people that means a need for 152,000 houses. Since 2006 consents have been issued nationwide for 204,000 houses. With some 80% of consents estimated as adding to the housing stock this means 163,000 extra houses. Take off about 12,000 houses in Christchurch removed from the available stock by the earthquakes five years ago and things are about in balance until you allow for an aging population bringing more households of just one or two people. So no over-supply BUT. Auckland has a big and worsening shortage. Many other parts of the country will have an over-supply. So if you are an Auckland investor jumping boots and all into the regions buying what you consider to be cheap properties with good yields be very, very careful. Those locals giggling outside the dairy may not be laughing at the latest headlines regarding some celebrity, but at you. Watch for investors whipping back toward Auckland once this run of regional growth peters out perhaps early next year. Migration outflows. -Nope. The net gain last year was 65,000 people, our economy is in good shape compared with others, we are distant from worsening geo-political situations offshore, and the commodities boom has been and gone in Australia. Annual flows will likely peak this year but the easing off is likely to be very gradual and occur over many years. NZ Dollar The NZD has weakened over the past week despite dairy prices falling much less than expected in the fortnightly auction (but they still fell 2.8%) and retail spending rising more than expected, mainly in response to low inflation expectations recorded in a quarterly Reserve Bank survey. This survey rarely receives any attention but has taken on increased importance because of low 0.1% inflation in New Zealand, the Reserve Bank’s displayed failure to forecast inflation accurately any longer (they are in good company), their displayed failure to boost inflation (again not alone there), and the way monetary policies elsewhere are being eased anew as inflation readings track lower and lower. Basically the expectation is building that the RB will have to follow the offshore trend and ease monetary policy – which in itself gives us an answer to the question of whether an easing or two this year will much depress the NZD. It won’t because policies are also being eased elsewhere. Maybe more than that however, policies are being eased offshore in economies with low inflation and weak growth. We also have low inflation but good economic growth. For exporters the message here remains the same. Now and then the NZD will have a decent run downward but it probably won’t stay low for long given our economic state relative to other economies. It might be a good idea to boost hedging whenever we approach US 60 cents and AUD 90 cents.

You will find current spot rates here. http://www.xe.com/currency/nzd-new-zealand-dollar

If I Were A Borrower What Would I Do? Personally I would fix three years at 4.49%. It is true that rates may go lower if the Reserve Bank eases monetary policy again. But there is some upward pressure on bank funding costs offshore currently because of worries about European banks. Plus the NZ economy does not need a boost from even lower interest rates, as evidenced by the strong growth in retail spending discussed just below. The only argument in favour of lower interest rates comes from inflation persistently under-shooting the target range. But the RB will not feel the need to lower rates to try and boost inflation if it believes doing so will not in fact boost inflation. Offshore the easiest monetary policy settings ever seen are not lifting inflation and wages growth is slowing in the UK, Japan and Europe therefore there seems little reason for believing lower rates here would suddenly alter pricing behaviour. In addition there is no evidence that people are worried enough about deflation to put off buying durable and discretionary items. That is a key argument against letting deflation development – that people will stop buying to wait for lower prices and the longer they wait the weaker their spending, the deeper the recession, the further the price falls and so on in a Depression spiral. We are not in recession so that deflation link is completely different from the environment we all think of and fear when saying deflation must be avoided, the 1930s Great Depression. For Noting We consumers have been doing a lot of spending recently with strength assisted by falls in petrol prices, a tourism boom, strong population growth, reasonable jobs growth, and low interest rates. In seasonally and price adjusted terms core retail spending (no cars or petrol) grew by 1.4% during the December quarter after rising 1.1% in the September quarter. Full year growth was a very strong 5.8%.Spending growth on durable goods was even stronger at 3.6% for the quarter and 10.6% for all the year.
The Weekly Overview is written by Tony Alexander, Chief Economist at the Bank of New Zealand. The views expressed are my own and do not purport to represent the views of the BNZ. To receive the Weekly Overview each Thursday night please sign up at www.tonyalexander.co.nz To change your address or unsubscribe please click the link at the bottom of your email. Tony.alexander@bnz.co.nz
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The Commons & breaking the consensus: social movements, resistance & social change conference II

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Analysis by Caroline Skelton. At the Social Movements, Resistance and Social Change II Conference in Auckland last year, there was much talk of the “commons”, and also of the need for the left to embrace dissensus as a way to challenge the status quo, especially that of the current “neoliberal” consensus. See my earlier report on the conference. The importance of the Commons to the political left There was much discussion of the “commons” (crucial natural and cultural resources available equally to everyone). Such analyses incorporated aspects of the labour movement, union and work-based politics with issues of environment and climate change. The foregrounding of environmental issues is a way in which class-based left wing politics of the 21st century differs from much of that from earlier in the 20th century. The environment is a common good that sustains us all: climate change impacts on everyone. The focus on the world we all share, makes a sharp difference in values, ethics and approaches between left (valuing the commons and how it means we must all work together collaboratively and share resources) and right (valuing private property, competition and individual efforts ,while dismissing the notion of the commons). Various conference papers focused on research related to collaborative ways of working. As with the collective actions in Italy (referred to in my earlier conference report) examples were provided of existing practices that could be developed to move beyond the current destructive politics of the right: practices that need to be nurtured, and developed in a move away from the status quo of vast inequality gaps, life-damaging poverty, unaffordable housing, inadequate incomes, precarious living, and unsustainable environmental policies. Rancière, the police order, and dissensus A few presenters talked about the “police order” and Rancière’s writings on consensus and dissensus. Rancière was critical of the way any consensus marginalises some groups of people, meaning their voices are rarely heard, or at least not heard positively. Dissensus comes from actions that will disrupt the consensus and provide a space for the previously silenced people to be heard Tim Lamusse’s presentation used the example of protest and the attempts by authorities to silence the protesters: “Contesting heteronormativity: Queer politics of intelligibility, speech and protest at the 2015 Auckland Pride Parade.” Once gay pride parades were protest actions against marginalisation, brutal abuse, and suppression of LGBTI voices. Now the parades seem to embrace the social, economic and political status quo in many ways. At the 2015 parade, a group, No Pride in Prisons, protested against police inclusion in the parade, and as a result were treated harshly by the police and/or security guards. After the parade, Lamusse was reported to have said, on behalf of No Pride in Prisons:

we wanted to highlight the fact that the queer, Maori and Pasifika communities are disproportionately harassed and targeted by police.
The group claimed that three protesters were assaulted by police. Michael Field reported on claims that a transgender protester got her arm broken, as did LudditeJourno. And Chris Trotter pondered on the “corporate slickness” of current Pride parades. [The featured image is taken from that post] In Lamusse’s conference paper, the police force was part of his analysis of the consensus maintained by the police order. However, the police order does not necessarily relate to judicial institution. It’s any institution or process where consensus dominates, pressuring and enticing people towards certain kinds of behaviour, attitudes and beliefs. For more on Rancière see Eugene Wolter’s post: “Who the fuck is Jacques Rancière”, and the Jacques Rancière blog. Possibly the interest in Rancière was partly due to the current “neoliberal/neoconservative” consensus, which has resulted in socially, politically and economically destructive inequalities of income and wealth. This consensus has been embraced to some extent by left wing parties today. Today, with the focus by most political parties on attracting the votes of “middle New Zealand”, those living precarious lives – the unemployed, underemployed, working poor, sick and disabled – tend to be treated negatively, and/or their voices are silenced, their experiences become invisible. The consensus needs to be broken for left wing politics to gain wider acceptance once again, and be incorporated into a swelling grass roots movement of movements. It’s easy to see why Rancière’s theories have gained some attention from those involved visual arts (as reported here), and for those looking for imaginative ways of giving visibility to those whose voices have been marginalised and suppressed. The recent rise in popularity of the likes of the Scottish Nation Party, UK Labour Party leader Jeremy Corbyn, and the “socialist” US Democrat primaries candidate Bernie Sanders suggest the beginnings of a break from that consensus. [caption id="attachment_9165" align="alignleft" width="300"]CbO2ptEUsAAGRJP Image from scoopnest and NZ Herald.[/caption] The throwing of the fake dildo at Steven Joyce in protest at the way the TPPA is “raping our sovereignty” is such an imaginative action of dissent.Peter Jackson waving the NZ dildo flag was part of John Oliver’s response to the dildo incident and Steven Joyce. The widespread and diverse responses to this act provide a lot of material for evaluating the success of such actions in breaking the neoliberal consensus, and contributing to a way forward for the political left.    ]]>

Mystery of the 1983 Vanuatu “nuclear free” girl finally solved

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Report by David Robie. This article was first published on Café Pacific By DAVID ROBIE [caption id="attachment_9219" align="alignleft" width="300"]June Keitadi Feb 2016. June Keitadi Feb 2016.[/caption] So the mystery is finally over. In 1983, I took this photo of a young ni-Vanuatu girl at a nuclear-free Pacific rally in Independence Park, Port Vila. She was aged about five at the time. She was just a delightful happy painted face in the crowd that day. But her message was haunting: “Please don’t spoil my beautiful face” had quite an impact on me. When monochrome and colour versions of this photo were published in various Pacific media and magazines, a question kept tugging at my heart. “Who is she? Where is she from and what is she doing now?” Her placard slogan became the inspiration for my 2014 book, Don’t Spoil My Beautiful Face: Media, Mayhem and Human Rights in the Pacific, published by Little Island Press in New Zealand. I would have loved to have named her in the book with the cover image of her. So this spurred me onto to more determined efforts to discover her identity. First of all I posted the photo – and a Hawai’ian solidarity video that also showed the little girl, discovered by Alistar Kata – on my blog Café Pacific late last year. More than 1000 people viewed the blog item, but no tip-offs. Then it was posted on other blogs. [caption id="attachment_9220" align="alignleft" width="226"]June Keitadi in 1983. June Keitadi in 1983.[/caption] Finally, friends at Vanuatu Daily Digest reposted my appeal – and hey presto, there she was discovered on the southernmost island of Aneityum (traditional name “Keamu”). And ironically, my wife Del and I were on that island at the same village, Anelkauhat, where she lives, on last Christmas Day – but never knew, of course. In fact, I think we may have even seen her that day now that I have seen her photo from the island, but didn’t realise who she was. After all, this was 33 years after I had seen her fleetingly as a child in Port Vila. She is June Keitadi (Warigini) daughter of Weitas and Jack Keitadi, then curator of the Vanuatu Kaljoral Senta with Kirk Huffman. Her sister, Shirley Loughman, says June is the assistant bursar at Teruja secondary school on Aneityum. According to Selwyn A. Leodoro, Anglican regional secretary of Port Vila and New Caledonia, one of the many VDD readers who have responded and identified her, June was very “surprised” about the search for her and keen to meet up. All going well, Del and I hope to visit Vanuatu again later this year, and we would love to personally give her a copy of the book with her cover photo. Today June is married to Ruyben Warigini and they have three children and a granddaughter. Tank yu tumas to Gwen Amankwah-Toa – she was the first to contact me – and to all those who have helped piece together the puzzle. 1983 girl found – living on Aneityum The original Cafe Pacific posting On Evening Report See June at 1min 08 in this “Nuclear Free” Huarere string band video –]]>

Keith Rankin on Michael Joseph Savage and Labour’s Universal Welfare Reform

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Analysis by Keith Rankin.

My ‘most important New Zealander’ of the twentieth century is Michael Joseph Savage, one of many single men who migrated from Australia to New Zealand is the 1900s. Born and raised to an Irish Catholic family in Ned Kelly country – and in the Ned Kelly decade (1870s) – he came to New Zealand in 1908, aged 35. Thus New Zealand’s most loved Labour Party leader spent less than half of his life in New Zealand.

Savage was more a rural battler (as indeed Ned Kelly was) – less an urban unionist, as his Australian-born predecessor Harry Holland was. He was no class warrior. As the conservative NZ Herald noted on 16 Oct 1938 (Michael Joseph Savage: Crowning honour of a people’s love) while he was Prime Minister, he was a Kiwi type of Aussie – modest – and was able to bridge the political divide. The political changes that happened in the post-depression late-1930s might not have happened at all – or might not have been bedded in as reforms that all New Zealanders could own – without his ability to rise above partisan politics. The capstone achievement of the Savage-led ‘social security’ reform was a genuinely ‘universal’ superannuation that caught the imagination of middle New Zealand; the world’s first explicit demogrant, a ‘universal basic income’ for all older New Zealanders.

Savage shared some of the prejudices of his times. P.S. O’Connor noted in 1968 [in “Keeping New Zealand White: 1908-20”, republished in The Shaping of History; Judith Binney ed. 2001] that (c.1919) “MJ Savage was particularly alarmist. The teeming millions of the East were less than a stone’s throw away and New Zealand was faced by a rushing horde of Asiatics which it must try to stem both by laws of its own and by negotiations with Asian governments themselves.” Savage was no ideological leader. He led by listening, and following. Labour’s contest of ideas was infused by a variety of ‘progressive’ and other philosophies. Savage was the pragmatist who the people could trust. 

What passed for social security in New Zealand during the Great Depression of the early 1930s was little more than a highly conditional and stigmatising ‘charity’. The humiliating means tests that people in need of help were forced to undergo were almost worse than the material deprivation that drove them to seek help in the first place. In the years leading up to the postponed 1935 election, Labour became committed to a system of both comprehensive and universal ‘pensions’. Later they adopted the new American expression ‘social security’ to give their proposals a new-age post-depression gloss.

‘Comprehensive’ meant covering all categories of need. ‘Universal’ meant rights-based publicly-sourced income; all people in a particular category would receive the same benefit regardless of financial means. The first cab-off-the-rank was the ‘age’ category, legislated for in 1938 with universal superannuation, payments commencing in 1940. The second category to go universal was ‘motherhood’ (in 1946). During the war, families would be reluctant to work overtime if their means-tested family allowances were reduced ‘pound-for-pound’ of overtime income (what today would be called an ‘effective marginal tax rate’ of 100%).

The working class – Labour’s core constituency – favoured comprehensive redistribution whereby capitalists paid high taxes and working families in need (eg unemployed, incapacitated, widowed, aged) received comparatively generous benefits. This was the ‘selective’ (‘targeted’) ‘non-contributory’ model pioneered in New Zealand in 1898 with the old-age-pension. And senior Labour MPs such as Walter Nash and Peter Fraser did prioritise this working-class welfare. But they had gone into the 1935 election with commitments to universalism; welfare for all, not just wage-workers and their families.

In 1937 an Interdepartmental Committee (of public servants) was tasked with converting the 1935 vision into a practical policy. The committee included senior Treasury economist Bernard Ashwin, and Walter Nash’s staffer JS Reid. They were committed to fiscal neutrality – think ‘balanced Budget’ – and appropriately so. Monetary experiments were a separate aspect of Labour’s wider policies; it was through wise political management that universal welfare should not be seen as dependent on perceived ‘funny money’ (whether or not monetary policies widely advocated in the 1930s were in any way ‘funny’). Finance Minister Walter Nash was in London while the committee was deliberating.

The Interdepartmental Committee favoured a new 7.5% flat tax (a special ‘social security tax’) that would supersede the special unemployment tax that had been levied during the Depression. And they recommended a universal age benefit of 10s ($1) per week that would co-exist with a higher (up to $3 per week) age benefit for those elderly with little other income. This well-thought-out reform could have been legislated for in 1937; it indeed proved to be the blueprint for the eventual September 1938 legislation.

However, a Labour Caucus Committee was formed. It proposed to abandon or delay the universal component in return for a lower tax rate, and more means-tested benefits. Further, Walter Nash had been persuaded late in 1937 to go for an ‘actuarial scheme’, like the short-lived 1975 Roger Douglas scheme. This insurance approach was the preferred model in Europe, and schemes of this type had been mused over by conservative governments, including New Zealand’s own. These schemes – like Kiwi Saver – involve compulsory or semi-compulsory saving, and rely on the alchemy of compound interest. Walter Nash persuaded himself that such a scheme with a large compulsory contribution could eventually fund both universal benefits and pay off the public debt! The reality of such schemes is that the people who pay the biggest contributions – men on high salaries with secure fulltime jobs – get by far the greatest share of the benefits. And attempts to pay off the public debt – fiscal consolidation – create depressed economies (while not actually repaying the debt), as we see in Europe today.

When Nash presented his actuarial insurance scheme to his caucus there was a revolt. This was precisely the opposite of what Labour had been elected on in 1935. Caucus trumped Cabinet. Savage kept his powder dry. In April 1938 he announced the caucus version as the essence of the Social Security legislation that would be placed before parliament that year. Labour activists loved it. The wider community was disappointed. Where were the universal benefits? Caucus had gone for a socially divisive redistribution scheme. Cabinet had gone for a contributory scheme whereby the benefits would be delayed and would mostly go the richer people who made the biggest financial contributions. Where was the middle ground Labour had promised?

By announcing the proposals in this way, Savage gave voice to the people. The public debate that ensured made it clear that neither the overtly redistributive not the actuarial approaches would be acceptable. A Select Committee was formed to take public submissions. This Committee suggested a progressive raising of the income test that would be applied to the Age Benefit. Savage realised that this proposal still didn’t cut it. The people wanted to get something – albeit content to wait for retirement – in return for a social security tax that they were happy to pay. The voting public clearly wanted some universal (non-means-tested) benefits to be funded by a flat-rate tax.

Two days before the legislation was due to be presented to Parliament, universal superannuation was inserted into the bill. Initially it would be only 4s per week ($20 per year). But, in the bill’s provisions, it would rise by $5 every year until it reached the level of the means-tested benefit. Indeed, under Nash’s second Labour Government, the Age Benefit had become universal for persons aged 65 (still means-tested at age 60). Elizabeth Hanson (The Politics of Social Security, 1980) reports that the basic idea of the smaller universal benefit was that of JS Reid. And the idea of the four-shilling universal benefit increasing every year was that of the Government Actuary, Stanley Beckingsale. It was these public servants who created the part of the social security legislation that allowed New Zealand to truly ‘lead the world’ in welfare reform.

The simplicity and the fairness of the universal approach caught the public imagination. Labour was returned to Government with 56% of the popular vote. National could only whinge in the wings. Sooner rather than later, National became equally committed to the universal approach. And today we still have universal superannuation, despite the best efforts by Labour to destroy it in the 1980s, and by National to once again take the ‘we too’ approach, this time in the 1990s. 

(As a matter of interest, Elizabeth Hanson reports that the final costing for the first year of Social Security in New Zealand was $30m; ie £15m. The actual cost was 10,393,942 pounds.)

With Universal Basic Income on the agenda today in the same way as Universal Superannuation was in the 1930s, can Andrew Little emulate Michael Joseph Savage, and pilot (through appealing where necessary to people over party, and to people over nay-sayers) the common-sense solution over today’s louder and more-interested calls for more redistribution or for more savings. Can he grasp and extend the Basic Income Flat Tax reform that was such a winner for Savage? My sense is ‘no’. I hope to be proved wrong.

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NewsRoom Digest: Top NZ News Items for February 18 Edition, 2016

Newsroom Digest

Today’s edition of NewsRoom_Digest features 2 resourceful link of the day and the politics pulse from Thursday 18th February. It is best viewed on a desktop screen.

NEWSROOM_MONITOR

Noteworthy stories in the current news cycle include the Criminal Bar Association saying figures predicting 100 deportees sent back from Australia will be imprisoned here in the next decade are an underestimate; and the Privacy Commissioner, John Edwards, saying law enforcement and other government agencies made nearly 12,000 requests to 10 companies for their customers’ personal information over a three-month trial.

POLITICS PULSE

Media releases issued from Parliament by political parties today

included:

Government: Kiwis encouraged to celebrate Pacific languages; Construction of NZICC underway; Statement on David Bain’s application for compensation; Recruiting the next State Services Commissioner; Bill English – Speech to the Institute of Public Administration New Zealand; Final data-set enhances at-risk youth profile; One million fewer letters, improved services for clients; Customs K-9s graduate; Minister welcomes first Police graduates of 2016

Greens: SkyCity sod-turning no cause for celebration

Labour: John Key must stand up for Kiwis in Australia; National set to pass charter for corruption; Orchardists should look in their own back yards

New Zealand First: National Warring Over Flag; Motives And Logic Behind Bigger Truck Deal In Question; Weak Politicians To Blame As Corruption Rises

LINKS OF THE DAY

INVESTMENT IN YOUNG LIVES: The Treasury has today released Characteristics of Children at Risk, a paper with information about children aged 14 and under who are at risk of poor future outcomes. Click here for more:http://www.treasury.govt.nz/publications/research-policy/ap/2016/16-01/ap16-01-infographic.pdf

WORLD WAR ONE MAORI PHOTOS: Images of Māori First World War servicemen are wanted for inclusion in an authoritative history book on the Great War due for publication in 2017. People with suitable photos are asked to scan them at a minimum of 300 dpi and provide details of the serviceman, including where they are from. Send the scan and the information to the 28th Māori Battalion websitehttp://www.28maoribattalion.org.nz

And that’s our sampling of “news you can use” for Thursday 18th February .

Brought to EveningReport by Newsroom Digest.

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Bryce Edwards’ Political Roundup: NZ’s unequal education system

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Political Roundup by Dr Bryce Edwards.

[caption id="attachment_4808" align="alignleft" width="150"]Dr Bryce Edwards. Dr Bryce Edwards.[/caption]

How unfair is New Zealand’s education system? And who really pays the price? A number of recent reports and investigations highlight major problems in primary and secondary education, and a deepening divide and crisis in school achievement.

Last week the OECD released the report, Low-Performing Students – Why They Fall Behind and How To Help Them Succeed. It showed New Zealand children from poor families are over six times more likely to do badly at maths than children from well-off families. Among OECD countries, only Israel, Poland and Ireland performed worse – see John Gerritsen’s Poverty holding NZ school kids back at maths

The report has reignited debate about what appears to be a deepening socio-economic divide in education. Today socialist John Braddock published a strong condemnation of our education system – see: Rising school costs deepen class divide in New Zealand education

Braddock says social inequality is being translated into the schooling system by David Lange’s “Tomorrow’s Schools” reforms, implemented in 1989. These effectively resulted in a system of competition between schools based on neighbourhood socio-economic status.

Likewise, the Herald’s education reporter Kirsty Johnston says “New Zealand has known about the achievement gap between rich and poor for 25 years. And yet it persists” – see her must-read report from late last year: Search continues for schools silver bullet

That piece forms part of an excellent three-part series by Johnston about the effects of hardship on student achievement. You can also read Education investigation: The great divide, and Our school divide: Simple project lets kids take lead on learning.

John Clark of Massey University’s Institute of Education responded to this series with an excellent examination of The inequality of school achievement. He argues that to make any meaningful changes to the education system, the government needs to also focus on “non-educational policies such as employment, taxation, family support, health, welfare and so on and so forth which are the primary causes of the inequalities which children bring to school and impact the most on school achievement.”

Unsurprisingly the National Government thinks otherwise, and the Minister of Education has argued that we need to look elsewhere for understanding success: “What makes the biggest difference to a kid’s education is something every kid and parent knows – the quality of the teaching in the classroom. Other critical variables are the quality of school leadership, parental engagement and community expectations” – see Hekia Parata’s Socio-economic factors are often overstated

And on the issue of teacher quality, the Minister has cause for celebration, with a newly released international survey ranking New Zealand teachers “fourth out of 35 countries” – see RNZ’s NZ teachers rank high in professionalism

But in terms of economics and inequality, you only have to look at its influence on where parents are choosing to send their kids to see that it has a major impact on the education system – see Michelle Duff’s excellent report from last year: White flight: why middle-class parents are snubbing local schools. In this, the “educational apartheid” that has started to feature in the system since the introduction of Tomorrow’s Schools is made clear.

The cost of “free” state education

The cost of so-called “free” state education was highlighted last month by the publication of a survey which added up all the various costs for parents of putting their kids through school – see Kirsty Johnston’s Free education: Parents of 2016 babies will be shelling out $37,000.

This item also reports on a soon-to-be published University of Otago study on the stress parents face over the increasing cost of modern state education, and parents concerns to spare their kids any embarrassment and bullying for not being able to join in with their peers in paid school activities.

It is clear that even many middle class families find the cost of state education burdensome. The crucial difference is that they can, and do, stump up. This can be seen in the voluntary donation data released by the Ministry of Education last month, which is covered in Andy Fyers and Katie Kenny’s Decile 10 schools take lion’s share of school donations. According to this data, “More than half of voluntary donations paid to state and state-integrated schools in 2014 went to decile 9 and 10 schools”. Decile 1 schools received about $56 in donations per student, while for decile 10 schools the average was about $324.

This inequity can be illustrated with examples of schools within a region – see Amy Jackman’s Schools rely on $1b donations during 15 years of ‘free’ education system. In this she contrasts “Wellington Girls’ College ($542,000) and Wellington College ($502,000)” with fellow Wellington school Wainuiomata High, which “received $13,500 in 2014 – or about $18 a student.”

What are the donations being spent on? Jo Moir reports that Schools rely on parents paying donations to cover the cost of education: “According to many principals, the money is essential to providing the sort of education parents expect… the Education Ministry says they generally contribute to education costs – the same costs the ministry claims to cover through its operational funding to all schools.”

A Dominion Post editorial argues that the real problem is Education is not free but nobody ever does anything about it. It holds out little hope that the current review of the funding system will do anything about the reliance on parental donations, with the Minister saying they are here to stay as she “congratulates herself” over her “choice” to fundraise for her own childrens’ schools.

A Press editorial states that the reliance on donations makes it clear that the government is underfunding schools – see: When you’re told education is free, they don’t really mean free…. The editorial declares “activities that are largely supported by parent donations at high-decile schools should not be denied children from lower socio-economic backgrounds. If anything, it is even more important those pupils have the extra learning opportunities they might not otherwise get.”

That’s certainly Duncan Garner’s conclusion and he comes straight out and asks “Why don’t we just fund our schools properly?” – see his heartfelt column, Do the maths – education isn’t free and schools need more help

Garner believes that it’s simply wrong for concerns about money and fundraising to “get in the way of a decent and a full education for the next generation” and he’s willing to pay more tax to help make that happen. For a similarly passionate declaration of the need to pay more taxes in order for the state to adequately fund social provision, see also Polly Gillespie’s Go on, tax me.

So, is the education system being underfunded in New Zealand? A mixed answer to this comes via another OECD report, Education At A Glance 2015 – covered by Kirsty Johnston in New Zealand still lags behind on per-student education spending. She sums up the mixed findings saying “while New Zealand spent a high proportion of both its GDP and total public expenditure on schools and universities, our students still get about US$1000 less each than the OECD average.”

Tales of education poverty and riches

Examples of how schools and parents are struggling with the cost and underfunding of education are plentiful at the moment. For example, Rosee Hodgson, who works as a Solutions to Child Poverty Advocate for the Anglican Diocese of Christchurch, says “In my work I see over and over again that the back-to-school period is not experienced in the same way by everyone” – see: Back-to-school costs bite hard for the poor.

Schools have even resorted to using the Givealittle fundraising website to cover their costs. Last week Westland High School set up a page to help rebuild the school following a fire – see Newshub’s Westland High School closes after fire.

School swimming pools are also under financial threat, with fundraising becoming crucial. Jo Moir’s Schools are relying on donations to keep their pools open reports that “In the last six years, more than 150 schools have been forced to close their pools due to the cost of maintaining them and another 130 school pools are at risk of closing.”

And some students do not own the right gear to swim in the pools. Last week Glen Innes School sought donations of togs to go along with the donated towels that it already receives from local gyms as so many of their students were missing out on school swimming lessons because of a lack of gear – see: Tom Furley’s School asks for swimming tog donations

In the context of such struggle, it’s not surprising to see the Ministry of Education facing especially strong public evaluations of it’s own spending. The Ministry’s current Wellington office building refit is being criticised by opposition parties – see Vernon Small and Jo Moir’s Ministry of Education boss says $19.5 million on office revamp couldn’t be spent on teachers. But for a contrasting view see David Farrar’s A stairwell is a lot cheaper than a lift

The Ministry’s use of outside consultants is also being criticised – see Jo Moir’s Ministry of Education boss promises to chop $40 million consultant bill in half

Inequality of special education

There are rising concerns about the funding and arrangements for special education services in schools. This is partly prompted by news last year that “More than $32 million of funding for children with special needs has languished in government coffers for two years, leaving schools to foot the bill” – see Jo Moir’s Government underspend punishes schools

Since then, some cuts to “frontline workers” have been controversial – see Kirsty Johnston’s Cuts, underspending, delays in special education revealed

And the New Zealand Educational Institute has just released a survey of special education needs co-ordinators in schools showing “89 per cent of respondents thought students with special education needs had inadequate support” – see: Union calls for extra support for special needs in schools

A parliamentary inquiry into how schools deal with children with dyslexia, dyspraxia, and autism spectrum disorders has also been a very useful forum for further debate on how the system works (or doesn’t). The Education and Science Select Committee’s hearings late last year are well covered in John Gerritsen’s Parents tell of failure in special needs system and Learning disorder heartbreak shared with MPs

The provision of special needs education resources has a distinct inequality aspect, too, according to Jo Moir’s article, Special needs students in poor communities missing out on exam help. This reports on Ministry of Education figures that show “Special needs students in private schools and high decile state schools are receiving publicly-funded assistance in exams at a much higher rate than those at low decile schools”. According to the Ministry, students in decile 10 schools are 17 more likely to get special assistance conditions for students sitting exams than those in decline 1 schools.

Will education reforms solve the inequality problems?

A review of school funding is underway but Hekia Parata has indicated voluntary donations are here to stay, saying “Our system allows parents who are able to, and want to, to provide extra to get extra”– see Erin Speedy’s How can we change the way schools are funded?

For more on the Education Act review, see John Gerritsen’s Who should decide school closures? And the Minister of Education deals with some of the criticisms of her review in Newshub’s Hekia Parata: Education Act changes shift focus to kids.

Some are calling for the current decile funding system to be overhauled. Critics say the concept is good, but in practice it is inadequate and further stigmatises poorer schools, acting as a sorting device for parents. For example, retiring principal Peter Gall from Papatoetoe High School says “it contributes to further inequity rather than addressing equity issues. Without a doubt we need differential funding but labelling schools with a socio-economic index is not called for. It’s bad policy. We are the only country that overtly labels schools. To me, it’s stigmatising for low deciles and it’s very misunderstood” – see Kirsty Johnston’s ‘We’re the only country in the world that overtly labels schools’ – Harsh lessons from retiring principals

At the last election Labour had a policy of providing an annual grant of $100 per student to schools that agreed not to ask parents for voluntary donations to fund general school operations.

Act’s David Seymour claims this makes no sense, saying New Zealand is “not a communist country” – see Erin Speedy’s ‘Free’ education cost set to mount to more than $1 billion. Seymour reportedly sees the policy as an assault on a “New Zealand tradition that parents had always contributed to schools, whether it be on the school board, organising a working bee, going on camps or taking part in a school fundraiser.”

The current review of the Education Act has prompted the PPTA’s Tom Haig to ask: Who has power in the education system? His conclusion seems to be that although the Minister of Education has significant influence, and the principals of top schools are powerful, the most influential figures on the system are actually the parents of students at the top schools: “Their choice to attend these schools, pour resources into them, and fight for them (with advocates like Matthew Hooton) is the flip side of the ‘struggling schools’ story.”

Finally, a few weeks ago Mike Hosking asked “Are private schools worth ten times the amount of a public school?” – see his “Mike’s Minute” video, Public vs. private schools. He reports that his family has used both public and private schools, and concludes that the $16,000 he spent on annual school fees was “not really worth it”, and complains that much of it is simply “driven by elitism”.

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Across the Ditch: David Bain Compo Bid + Sheldon’s NZ Flag Shoutout + Cricket Test & Aftershocks

Across the Ditch: Peter Godfrey, of Australia’s radio FiveAA, and Selwyn Manning of EveningReport.nz deliver their Across the Ditch bulletin. This week:

  • Gales + rain and Cyclone Winston
  • David Bain’s compensation bid hits a wall
  • Sheldon’s NZ Flag referendum shoutout
  • Australia and NZ set to play the final of the two test Cricket series in Christchurch just days after a magnitude 5.9 quake struck causing moderate damage in places. Aftershocks are forecast for throughout the match.
Across the Ditch: broadcasts live weekly on FiveAA.com.au and webcasts on EveningReport.NZLiveNews.co.nz and ForeignAffairs.co.nz.]]>

NewsRoom Digest: Top NZ News Items for February 17 Edition, 2016

Newsroom Digest

Today’s edition of NewsRoom_Digest features 5 resourceful link of the day and the politics pulse from Wednesday 17th February. It is best viewed on a desktop screen.

NEWSROOM_MONITOR

Noteworthy stories in the current news cycle include the Salvation Army releasing its State of the Nation report; Child, Youth and Family (CYF) rejecting claims it is massaging child abuse statistics to make it appear the number of cases is dropping; and Corrections Minister Judith Collins saying more prisoners could be double-bunked or put in container cells to cope with the forecast rise in prisoner numbers.

POLITICS PULSE

Media releases issued from Parliament by political parties today

included:

Government: Mandarin language assistants welcomed; New Crown company incorporated; TPP will not affect the cost of medicines; Wide ranging Tax Bill passes 3rd reading;Prime Minister to visit Sri Lanka;Sexual violence victims benefiting from Offender Levy; Support continues after latest shake; $4.75m for international science partnerships

ACT Party: Seymour apologises for understating housing costs

Greens: Government must rewrite rental housing bill to save lives; Salvation Army Report Shows Govt Targets Are Designed To Make Ministers Look Good; Prison muster blowout reveals Government failure; Dirty politics is back

Labour: Why is CYFs investigating less child abuse?; Secret Cabinet paper scathing of emergency housing; KiwiRail security fail – tickets available for free; Govt should hang head in shame over report; Goodwill from teacher aides being exploited; Housing crisis makes life a misery for many Aucklanders;Student debt killing hopes of home ownership; Commissioner fears for children in residences

New Zealand First: Global Dairy Prices Stem From Bad Trade Agreements; Gangs Exploiting Thin Blue Line

LINKS OF THE DAY

2015 DELIVERS MORE BIRTHS: In 2015, 61,038 live births were registered in New Zealand, up 3,796 (7 percent) from 2014, according to Statistics New Zealand. Click here for more:http://bit.ly/1OfjUfJ

ABRIDGED PERIOD LIFE: New Zealand abridged period life tables for the total New Zealand male and female populations indicate the trends in life expectancy between the construction of New Zealand complete period life tables was released today by Statistics New Zealand. Read more: http://bit.ly/1Qjz4YU

INTERNATIONAL SCIENCE PARTNERSHIP: $4.75 million will be invested through the Government’s new Catalyst Fund in 18 global strategic partnerships to support high-quality research in areas that will deliver a range of benefits to New Zealand. The full list of Global Research Partnerships is available at: http://www.mbie.govt.nz/info-services/science-innovation/investment-funding/current-funding/funding-for-international-partnerships/funding-opportunities

STATE OF THE NATION: The Salvation Army launched its State of the Nation report today. Entitled ‘Moving Targets’— it examines a range of indicators to highlight good and bad aspects of the nation’s social and economic conditions.The full report is available at: www.salvationarmy.org.nz/MovingTargets

VACANCIES RISE IN JANUARY: The number of job vacancies grew by 1.5 per cent in January, with an 8.7 per cent increase over the year, according to the latest Ministry of Business, Innovation and Employment (MBIE) Jobs Online report. Click here for the report: http://www.mbie.govt.nz/info-services/employment-skills/labour-market-reports/jobs-online

And that’s our sampling of “news you can use” for Wednesday 17th February .

Brought to EveningReport by Newsroom Digest.

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