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Why Christchurch Should NOT Become the Next Barcelona

Newsroom’s David Williams is cataloguing the growing concerns in Canterbury about the safety of their drinking water. So far the focus is on private wells, but if Cantabrians looked to the lessons of European cities like Barcelona they should be worried about where things are headed.

In 2008, Barcelona built a desalination plant to take the salt out of ocean water. It was very expensive and energy intensive and was paid for by the people of Barcelona. And it wasn’t needed. There was plenty of water for the city to drink, but nitrate levels from intensive pig farming in the region of Catalonia had made their water undrinkable.

The parallels with Canterbury are numerous. Both cities lie on fertile plains, with plenty of land and water. While we have a love affair with milk, the Spanish are passionate about pork.

As Catalan pig farming grew, the question arose of what to do with the resulting sewage. At first, the pig farmers put it in the rivers, which threatened the drinking supply. So the people paid the pig farmers to collect the sewage and spread it on the land. Eventually, the sheer volume of pig farming meant the land couldn’t use all the nutrients. Once again, it ended up leaching into the rivers. Almost half of ground water in Catalonia is now unfit to drink.

Instead of asking pig farmers to pay for the true cost of their operations, the local government opted to bear it instead. Among other initiatives, it built the desalination plant and spread the €6million annual cost over Catalonia’s taxpayers. They now pay for expensive water so they can have cheap pork.

It’s a bizarre situation that’s blatantly unfair and economically insane. Instead of dealing with the cause of the problem, they have opted to pay more to put a band-aid over it. It is a classic example of privatising profits and socialising losses.

This is the future of the Canterbury Plains if we keep going in the direction we are headed. Already the land can’t absorb all the nutrients being spread on it, which is why nitrate levels in ground-water are rising. We should have seen the warning signs long ago when the environmental problems emerged, but now the basic human right of clean drinking water is threatened.

We need to learn from Barcelona and deal with the cause of the problem, instead of paying even more for a band-aid.

No one has the right to pollute our fresh water. Cantabrians need to decide what pollution and water use limits are acceptable to them. Then, market-based instruments should be put in place to reward farmers who operate in an environmentally friendly way and encourage the rest to transition to sustainable farming practices.

We simply cannot continue with business as usual.


ACT’s Cartoon Version of Freedom

The ACT Party’s relaunch in Auckland yesterday was mostly made up of reheated policies from the 1990s. However, it did include a new colour (pink), a renewed focus on ‘free speech’, and a new slogan: “ACT for Freedom”.

The trouble is that the idea of freedom has come a long way since the 1990s and no longer means what ACT thinks it does.

ACT’s rebrand comes on the back of some good work. They have been leading an important debate about assisted dying, which is about improving individual freedom of choice in a carefully regulated environment.

More recently, both ACT and the Green Party on the other side have sunk into the murky swamp of free speech and identity politics. This has apparently attracted them some donations, but is free speech really about freedom? What is ‘freedom’ these days anyway?

What is Freedom?

The idea of freedom has come a long way since the 1990s when ACT first started. Back then, freedom was all about freedom from government intervention. Around the turn of the millennium, Nobel Prize winning economist Amartya Sen started talking about “development as freedom”. In other words, not just freedom from but also freedom to do things that enable a fulfilling life. I argue that freedom is actually a balance between these two perspectives.

From a values perspective, this more rounded view of freedom is usually grouped with other ideas like creativity, self-expression, and choosing your own goals. In other words, freedom means ‘you do you’. Individuals should decide what success looks like for them and havethe best possible chance to achieve it. That means making sure that other people don’t stomp all over their opportunities. This is why freedom is actually a balancing act between freedom from and freedom to.

A Gap in the Political Marketplace

There is clearly a gap in the political spectrum for people who care about freedom. Labour and their sub-party the Greens are positioning themselves as the parties of “kindness”. This can help freedom to but often sees the State override personal freedoms. Whereas the National Party focuses on traditional ideas of economic and financial success, leading to a focus on freedom from. Meanwhile, New Zealand First and other Christian parties scrap over conservative values, which are usually the antithesis of freedom entirely.

Neither the right nor the left have a monopoly on the idea of freedom. True ideas of freedom and self-expression are actually centrist: they lie between the left and the right. It seems a shame then for those on the Far Right to capture the term, when they (like National) are really only interested in freedom from and economic success.

What Does Freedom Actually Look Like?

A balanced perspective on freedom leads to policy ideas like an Unconditional Basic Income (UBI). Give everyone an amount of money, no questions asked. This offers some recompense for the unpaid work that many people do and gives people the opportunity to pursue their passions.

High-quality education is also essential for freedom because, when done well, it provides equality of opportunity for young people. This is also good for our economy since it enables us to make the most of the talents of all our citizens, not just those from wealthy backgrounds. In reality, giving everyone the same opportunities means spending more on some tamariki than others (which is not ACT policy).

Free Speech

What does a more rounded definition of freedom mean for ‘free speech’? Despite ACT’s clever branding, this issue is not actually about freedom. As I have said, true freedom is about doing whatever inspires you, provided that it doesn’t stomp on the opportunities of others. True freedom also brings responsibilities. This stuff is hard.

Most Kiwis don’t like the Government deciding what we can and can’t say. However, given modern social media and what happened in Christchurch, we can also see the risks of allowing unfettered ‘hate speech’ relating to race or religion, etc. This is a classic example of balancing freedom from and freedom to.

The question is where to draw the line in our speech laws. In my view, this would be best settled not by politicians, but by ordinary people via a Citizens’ Jury. Sure, lawyers would need to advise the jury to help ensure we could enforce the line. But on a ‘values question’ like this one, why leave it to politicians to make the call? Why not let ordinary people write the law? Politicising it will only lead to more grand-standing like we have seen from both the ACT Party and the Green Party. And nobody really wins from that – apart from media hungry for a public spat.

 

Image Attribution: Alpha Stock Images - http://alphastockimages.com/


Private Profits, Social Losses: The Story of the Canterbury Plains

New studies suggest that the risks from nitrates in drinking water could be higher than previously thought. This will add to the list of concerns facing anyone living on the Canterbury Plains.

Why are nitrates a problem?

We have known for some time the risks of increasing nitrate levels in our water. The impact on fish, eels, and bugs living in our rivers and lakes is well understood. Nitrogen combines with phosphorus and light to grow algae. At low levels this provides food for aquatic life, but you can have too much of a good thing. Algal blooms can clog rivers, rob them of oxygen, and even kill off life completely.

Algal blooms are a massive turn off for anyone wanting to swim in a river and they can also turn toxic, which poses a threat to pets and children that might eat them. We are increasingly seeing these sorts of events all over the country thanks to warmer temperatures and higher levels of nutrients in our water.

Much of the increase in nutrients in recent years is the result of dairy farming. Dairy cows pee in far greater concentrations than the soil can use, so the remainder leaches into aquifers and rivers.

Canterbury is unique

However, what is happening in Canterbury is unique. The sheer scale and speed of change in converting land to intensive dairy farming combined with the stony soils mean a tsunami of nitrogen is heading into the region’s rivers and aquifers.

The nitrogen levels in fresh water in Canterbury are often far above the level that can trigger algal blooms. In many places, they are even above safe levels for wildlife.

Incredibly, some parts of the Canterbury Plains are now at high enough concentrations where human health is threatened. So called “blue baby” syndrome occurs when nitrate levels are so high that they prevent a baby’s blood from carrying sufficient oxygen. The Canterbury DHB is closely watching this problem and medical officer of health Alistair Humphrey has been raising concerns about it for some time.

But nitrate levels will continue to rise in coming years as we see the full impact of past land-use decisions.

It gets worse. Recent studies in Denmark suggest that nitrates in drinking water at much lower levels might pose a risk of colon cancer. The evidence is at an early stage but if it holds up, we can expect the World Health Organisation to lower the guidelines for acceptable nitrate levels in drinking water.

Such a change would pose real problems on the Canterbury Plains. Dairy cows would need to be reduced on a massive scale – far greater than current proposals to protect the environment.

Private profit, social loss

The current situation is already pushing the cost of private profit-seeking onto the public. Private citizens have been robbed of their right to quality drinking water and are being forced to buy bottled water or install nitrate removal systems at a cost of $2,000 per person. It is New Zealand’s equivalent of the sort of private profits and social losses that we saw during the Global Financial Crisis.

Sadly, the private profits haven’t even turned out to be particularly significant. Fonterra’s struggles have been well documented and the increased milk supply from places like Canterbury hasn’t made their job easier. Farmers have taken on large debts, betting on a high price for milk that hasn’t eventuated. Many dairy conversions have been carried out purely to pursue capital gain in land values.

Now, we face the massive challenge of transitioning an industry that is already struggling both economically and financially. The head-in-the-sand approach of the previous National Government isn’t good enough. The blunt regulation pushed by the likes of the Green Party will see farmers go under in huge numbers. The Opportunities Party has developed market-based solutions that reward farmers who innovate and farm in ways that don’t damage the environment. Only then can we improve the environment without sending farmers to the wall.


The Three Asks of Extinction Rebellion

Like the School Strike, the worldwide movement Extinction Rebellion has received a lot of attention lately. And rightly so. Climate change is probably the greatest threat and opportunity we face as a planet. But are their demands a good idea?

First let me say that activism is absolutely essential. Extinction Rebellion is a welcome voice in the environmental debate. I’m not personally much of a protester, but some of their protest ideas are a great way of sparking a conversation. I think they are excellent at asking the questions – it’s then up to organisations like The Opportunities Party to provide the answers.

So I want to take the position of ‘critical friend’ and examine Extinction Rebellion’s three “asks”:

  1. Tell the Truth: Governments must tell the truth by declaring a climate and ecological emergency and work with other institutions to communicate the urgency for change.
  2. Act Now: Governments must act now to halt biodiversity loss and reduce greenhouse gas emissions to net zero by 2025.
  3. Beyond Politics: Governments must create a Citizens’ Assembly on climate and ecological justice and be led by its decisions.

Let’s deal with the easy stuff first.

Beyond Politics

I agree with this 100%.

As Chloe Swarbrick says, if you designed an institution to deal with many of our modern challenges, it wouldn’t look like Parliament. As The Opportunities Party says, we need a “democracy reset”. This includes more extensive use of citizens’ assemblies to make decisions.

For that to work, there has to be much greater devolution of power, which both the major political parties oppose (for obvious reasons). And yet this would help honour the Treaty of Waitangi. Devolution is the essence of rangatiratanga, except that everyone can have it – not just Māori.

Some of our local authorities have successfully used citizens’ assemblies to start adapting to sea level rise. This should be happening a lot more.

While some claim that this approach would result in a ‘postcode lottery’ of different approaches in different areas, I personally don’t see that as a downside. I see it as useful experimentation.

Tell The Truth

Yes! And this is central to TOP’s values. But framing also has an important impact on how ‘truth’ is received. There is little doubt that an environmental emergency is impacting the climate, biodiversity, and clean water. Either we try to address these issues as a planet or deal with the consequences. It’s an emergency either way.

But is that an effective way to frame it? I’m no psychologist, but I do know that if you put people into a state of fear they are less open to change. Instead, they hunker down and focus on taking care of themselves and their family. This is not a helpful mindset. We need the sort of wartime mindset where people came together to fight for King and Country and shared what little they had until the enemy was defeated.

In my view, we need to truthfully demonstrate that there is an emergency BUT there is also a way to win this battle and still live in the best little country in the world. We might need to do some things differently, but we can still have great quality of life. That is certainly the objective of The Opportunities Party, which is why we support the use of new technologies like gene editing that could help us make that transition to a low carbon economy. 

Some have criticised the Climate Emergency as being purely symbolic, which it is. However, it has raised the profile of the issue, which leads nicely into the next ask: Act Now. 

Act Now

Definitely! Without taking action a declaration of a Climate Emergency is just window dressing.

But should the goal be net zero carbon by 2025? That’s a big ask. To achieve it, we either need to get out of all our cars, trucks and planes by 2025 or switch them to electric. Sadly, neither scenario is likely.

The other path to net zero carbon is to plant lots of trees. Don’t get me wrong, trees are great, and we have lots of erosion prone land that should certainly be returned to native bush. But we probably won’t get that. We’ll probably get lots more pine instead, and I’m not sure that’s a great thing for our rural communities.

The real challenge with climate change is to remove fossil fuels from our lives as soon as possible. It isn't sexy but one key way to do that is to get a decent price on carbon. We need to crack on with reducing fossil fuels instead of continuing as we are and planting trees to make ourselves feel better. Plus we won’t need to import a whole lot of fossil fuels from dodgy Middle Eastern regimes.

As for agricultural emissions, that’s a lot more complex. Luckily, Parliamentary Commissioner for the Environment Simon Upton has suggested a way forward by using trees to offset other agricultural emissions. This is the pathway to net zero on land.

In short, we absolutely need to act now. But the right way forward is a lot more complex than slogans. If we want to set a stretch goal, I’d be talking about phasing out fossil fuel use by 2050, rather than anything to do with net zero carbon.


Why We Have a Policy Committee

The Opportunities Party Policy Committee is what sets us apart from other political parties. It ensures that we produce best practice policy based on what works, free from political influence.

In most political parties, policy is made by the politicians. They work out what is acceptable to the public and which ideas do well in polls or focus groups, and put those forward to the public. The result is an echo chamber: people end up hearing policies that they like the sound of, instead of anything challenging or new. It doesn’t matter what will work to solve the problem identified, or even what the problem is. If the idea is popular, it flies.

In some political parties, members can also put forward ideas. This is a different route, but usually ends up as another version of the same thing: popular ideas get through. It hardly matters what will actually work as long as it sounds good.

This is how we end up with career politicians pushing ideas that simply don’t work. Kiwibuild is a great example. The Labour Party pushed it while in opposition for 3 elections, yet nobody ever bothered to think about how to implement it. Instead it got dumped on the laps of officials who somehow have to make a donkey run like a thoroughbred horse.

No wonder the legacy of career politicians is more tinkering around the edges rather than real change. Their job is to look like they are doing something rather than actually doing anything useful.

How Does TOP Make Policy?

TOP is unique in that we keep policy development separate from politics. Our candidates and spokespeople don’t have direct control over the policies they promote to the public. That’s the role of the Policy Committee.

Of course, candidates, spokespeople, and even members can put forward ideas. They can suggest policies and get involved in the teams that develop them. However, the final say on what makes party policy rests with the Policy Committee.

At present, the only member of the Policy Committee is Party Leader Geoff Simmons, but that will soon change as we are currently recruiting more members.

When fully constituted, the Policy Committee will comprise experts in policy development and a variety of specialist disciplines, including social, environmental, economic and cultural expertise.

The criteria the committee will apply for new policies will be:

  1. The robustness of the evidence base,
  2. Value for money (ideally policies will be revenue neutral, but if not they need to demonstrate strong value for money),
  3. Fit with existing policies, and
  4. Fit with the Party's values (which will unveiled soon). 

For issues where evidence is lacking and considerable value judgements are involved instead, the Policy Committee will seek guidance from the party’s membership base.

The processes for developing policy were trialled for the gene editing policy and will continue to be refined over time by the Policy Committee, the Policy Manager, and the teams involved in developing policy. But we are happy to have the skeleton of a solid process in place, which will serve us well in the future.

That way, The Opportunities Party will continue to produce best-practice policy based on what works, free from political influence.

 

Image Attribution: Alpha Stock Images - http://alphastockimages.com/


Wasp Control and Gene Editing

New Zealand has a wasp problem. In the beech forests of the north-west of the South Island, wasps feed on the honeydew exuded by the trees. In some areas, their combined biomass has been estimated at nearly 4 kg/hectare – more than that of the birds and mammals in the same area.

Wasps compete with native birds, such as rifleman, fantail, whitehead, and yellowhead, for food, insects as well as honeydew. Wasps eat 99% of the available honeydew, leaving none for native fungi, microbes, insects, and birds. They even attack hatchlings.

The context for our wasp problem is that our current set of tools to control them is not working. Indeed, most of the tools we use to control invasive pests are becoming less effective – except 1080 poison, used for possums, which is effective but excites a good deal of public anxiety. If we can’t control invasive pests, we will see native bird and other animal species becoming extinct.

The targets the world set for the year 2020 in the 1992 Convention on Biodiversity (not signed by the US) have not been achieved. Globally, species are becoming extinct at an unparalleled rate, due to the impact of humans on fragile ecosystems. What is to be done?

Entomologist Professor Phil Lester, and colleagues from one of the National Science Challenges, NZ’s Biological Heritage, is working on New Zealand’s wasp problem, investigating the potential of a novel control for wasps based on gene editing. One of the Science Challenge’s goals is to develop new pest controls that can be used at landscape scale. Of these, gene drives to control wasps are looking promising.

Sadly, current regulations prevent turning this idea into a reality. However The Opportunities Party is proposing to change that, allowing gene editing where no new genetic material is added to an organism. The outcome is just like selective breeding, only faster. This would allow us to tackle some of our trickiest environmental challenges; including wasps. 

A gene drive is a genetic modification to a target genome, such as the wasp genome, that consists of three parts: an enzyme to cut the DNA (known as CRISPR-Cas 9), a short strand of guide RNA, and a target gene. The team’s target genes for wasps are those used in spermatogenesis. Once the target gene has been altered, rendering the male wasp infertile, the modification will surge through the population, with nearly 100% penetration.

There are lots of opinions about gene drives. Some people think they have no place in conservation. Others, like Professor Lester, think the benefits could be huge (potentially the eradication of wasps in New Zealand within a few years), but we still need more research before any conclusion about their potential or effects can be made. For instance, it’s possible that in some species wild populations will develop some resistance making gene drives ineffective. In that case the gene drive wouldn’t work. Unfortunately, there’s not enough evidence yet to support either case.

Phil Lester and his team have worked on the genomes of three wasp species in New Zealand (common wasp, German wasp, and Western yellowjacket) to identify the genes responsible for spermatogenesis, and understand the range of variation in specific genes.

Highly variable genes would enable us to develop gene drives that target a specific genotype. Targeting a highly conserved gene (with little variation), on the other hand, would be more effective in eradicating an entire population.

The next step was to design guide RNA for a CRISPR-Cas 9 transformation, and test it in vitro. Once tested, the team designed a precision drive targeting some New Zealand gene variants that are not found in the European wasp. They also looked at the potential for off-target effects. In the case of their target wasp spermatogenesis gene, they are very different to those in other species, such as the honey bee. There is no possibility that the modified gene could jump from the wasp into bee species.

The next stage was to do some modelling to understand the effect once deployed in a landscape. The findings were surprising. Complete gene sterility doesn’t work (because it is too devastating for reproduction in the wasps), but partial drone sterility would substantially lower populations. Eradication might be possible when gene drives are combined with pesticide. Although pesticides are not very effective on their own, the modelling shows that, if used in conjunction with a gene drive, they could knock out a wasp population in 20 years.

Are there risks? Phil Lester says that there is a risk that the gene drive might fail and disappear. But as far as our native forests are concerned, there is a greater risk – that of doing nothing. More work investigating the potential of gene drives is needed. This technology is definitely a tool worth investigating.

 


Budget 2019: Tinkering or Transformation?

The Wellbeing Budget has finally arrived. But has it lived up to the hype? 

The short answer is no. The Budget has delivered a lot, probably more than many expected. However, from the outset the Government has restricted itself to tinkering at the edges of its existing spending programme. Real change is unlikely without making some big calls to redirect money where it is most needed. 

Some positive signs for Mental Health and Child Wellbeing

Mental Health and Child Wellbeing have both received big injections in this Budget. Mental health has received an extra $1.4b and Child Wellbeing $3.5b over the next four years. The new frontline mental health service and cuts to school fees in poorer communities will both be welcomed. 

However, time will tell whether this new money ends up in the hands of the people that need it most. Two key examples are welfare reform and addiction services. Benefit changes will have fallen well short of what child poverty advocates have called for, with most of the money in the Child Wellbeing package going into the Education system and Oranga Tamariki, rather than into the hands of the poorest in our society. It looks a little bit like this Government doesn't trust poor people to make good decisions with their money. And we also know that around $150m per year additional funding is needed for addiction services, but only about 10% of that has been allocated under the Mental Health package. 

It looks like there will be more to do if we really want to prevent our social problems rather than just put the ambulance at the bottom of the cliff. 

Other than that... 

Other than those it is lean pickings. The Budget contains a lot of tiny initiatives, many of which are business as usual but have been shoehorned to fit into one of the Government's "priority areas". Some of the links are pretty dubious:

  • pretty much anything to do with education has been put into the Child Wellbeing category (which has been branded as a child poverty package but ain't);
  • funding for the Royal Commission on abuse in state care appears in the mental health package; 
  • subsidies to film companies apparently "support innovation";
  • eradicating Mycoplasma Bovis and improving biosecurity will apparently "transform the economy"; and 
  • Kiwirail has received a much needed $1b injection of capital but this is dwarfed by $1.7b on aircraft. 

You get the picture. The fact is that the business of Government trundles on, no matter how each government chooses to dress it up. Unless an administration is prepared to really question business as usual, a government has to fund new priorities out of the leftovers and scraps. This means that transformational change will take years, which isn't really the point of transformational change. 

Transformational Change Means Questioning Business as Usual

What this Budget tells us is unless this Government is prepared to be bold and question business as usual, they won't deliver truly transformational change. The fact is that spending pressures just chew up too much of the pie, so there isn't anything left over to make much of a difference. Here are a few examples of the sort of bold changes that would really make up a transformative Wellbeing Budget:

  1. New spending for NZ Superannuation in this budget alone was about $900m. Over four years that is equivalent to the entire Child Wellbeing package. Funding NZ Super isn't that difficult in the good years (like this one) but come the bad years younger generations might start questioning whether that is really adding to the country's "Wellbeing". The Opportunities Party have suggested means testing NZ Super and using the money to really help families with little kids thrive. This would not only make make NZ Super sustainable and be a fantastic investment in our country long term. 
  2. New spending for our Health system in this budget is about $1b. This dwarfs anything else in the budget, and with the exception of the improvements to mental health services, we will see very little new services as a result. This is just the cost of keeping an unsustainable system going. The health sector will require reform, it is just a question of when, not if. 
  3. Given we face these costs rising into the future we either need to make changes or find new forms of taxation to cover them. Lifting income taxes would just make younger generations pay for the profligacy of older generations. We need to find a way to tax wealth, particularly the equity tied up in our overinflated housing market.  

Photo credit: Lenore Edman


Who is Better at Balancing the Books?

Opening the Government’s books to the public was supposed to take the politics out of Budget time. That goal has clearly failed. It seems like every budget descends into bickering between the Right and Left, leaving any member of the public who isn’t part of either tribe confused. With the furore over the Treasury “leak” this year has probably been worse than any.

This bickering is all heat and no light. The fact is that both Labour and National have shown themselves fully capable of balancing the books in the short term, and both are completely useless in the long term.

Who is better at managing the books?

Since the Fiscal Responsibility Act was passed in 1994, both National and Labour have proven completely capable of managing the books… at least in the short term.

Sure, there have been bumps along the way, including most recently the Global Financial Crisis. But over time, surpluses have prevailed and debt has been reduced. And now debt is so low that the debt target has rightly come under scrutiny, as it is preventing us making long-term investments that would benefit the country.

The relaxed debt target and the fiscal black hole

Given our creaking infrastructure, booming population, and low debt (by international standards), relaxing the debt target was a pragmatic move by the Government. The net debt target of 20% of GDP was completely arbitrary and made no difference to our international credit rating.

What about National’s claim that it vindicates their claim of a “fiscal black hole”? The crucial point here is how the extra money the Government borrows gets spent.

The risk that National is pointing to is that Labour might spend the extra cash they borrow on operational spending pressures, such as teacher salaries. Generally speaking, running deficits and pushing up debt for operational spending is not a great idea outside of a recession. If Labour did that it could vindicate National’s claims of a fiscal black hole. However, given Labour’s past record it is unlikely they would do that.

On the other hand the Government should be investing more in things that will make our country run better in the future. Our infrastructure is groaning loudly and needs urgent attention. Running up debt in order to invest in infrastructure is an obvious thing to do, especially when interest rates are so low. That is basic business sense that National should understand. 

The key thing with infrastructure spending is that we must avoid falling into the trap of allowing politicians to fund their pet projects. Instead the Government should create a transparent list of the country’s infrastructure priorities so we know the money is being well spent.

Neither Labour nor National is Facing the Long Term Issues

However, this short term success of both parties masks a glaring omission. The Crown Accounts have never included our biggest liability by far: New Zealand Superannuation. If they did, it would show that the country is actually bankrupt, and neither Labour or National have done anything about it.

Treasury doesn’t include this liability in the books because it argues we can reform NZ Super to make it affordable. In reality, we haven’t managed to do this in decades, despite full knowledge of the long shadow it casts over the Government’s books.

NZ Super currently takes up 16% of government revenue, and climbing. This year the bill increased by $1b. By 2030, it will tick over 20% and by 2060, it will swallow one quarter of every tax dollar. We can’t grow our way out of this – despite what the NZ First leader claims – because NZ Super is tied to wages.

With more and more baby boomers retiring, the costs of NZ Super will continue to rise, as they have done since 2008. So far, we have absorbed that cost by cutting every other aspect of public spending. That will eventually become too difficult and we will have to dip into the Cullen Fund. And when that runs out? We can’t borrow money to pay this ever-rising bill. We must either raise taxes or reform NZ Super.  

The picture gets worse when you add in our growing Health bill. Again this year the country's Health bill jumped by $900m, and apart from the mental health changes there won't be new services to show for that. On current estimates by 2045 Health and Super will make up half of Government spending. Both need urgent reform, but neither National nor Labour have the guts to do what is needed.  

Pre-funding NZ Super is bailing the Titanic out with a spoon

Instead of facing the unaffordability of NZ Super and reforming it, we are pre-funding it with the Cullen Fund. The purpose of the fund is to convince us that NZ Super is affordable, when it is clearly not. The Coalition Government has restarted payments to the Cullen Fund, instead of paying down debt or investing in sorely needed infrastructure.

It gets even nuttier. The Government is also talking to the NZ Super Fund about setting up an incredibly complex contract for the Fund to invest in infrastructure through a public-private (but actually 100% public) partnership. The Government will end up paying the NZ Super Fund a higher return than if it had simply borrowed the money itself.

This magical merry-go-round of money is designed to fool voters that the Government’s books are solid, NZ Super is affordable, and we can still get the infrastructure we need.

It is all a sham.

Better to end the whole sham now. We should reform NZ Super (and our health system) to make it affordable, and start taxing equity (wealth) instead of incomes. This would put the government books on a truly solid footing long term, and we could start investing in the infrastructure programmes our country sorely needs.


My TOP Budget Priority for Water Quality

The TOP priority for water quality in the Budget 2019 has to be a serious boost to the Overseer tool, which many regional councils use to regulate farmers to maintain or improve water quality in their area.

In simple terms, farmers are asked a few questions about their farm and then Overseer estimates how much nitrogen (mostly from cow pee) is leaching from their soil into our rivers and lakes. The regional council then sets limits for individual farms and holds the farmer to account for any reductions needed.

It’s a big deal because the results it generates could alter land values by billions of dollars.

What’s the problem?

Overseer has had problems with reliability and accuracy for years, and it produces wildly different estimates whenever it is updated. Farmers have been well aware of this but the problem came to national prominence when it caught the attention of Parliamentary Commissioner for the Environment Simon Upton. And since then, Eloise Gibson at Newsroom has covered the issues in depth.

Currently, Overseer is jointly owned by the Government, a Crown Research Institute, and several fertiliser companies. Since the private sector is involved, both the tool and the data it uses are jealously guarded. This has led to concerns over the data and the transparency of the tool itself.

Firstly, some fear that the data are not suitable to apply to all of New Zealand. Weather and soil types vary hugely across the country, and there are concerns that the data do not reflect these complexities. In Budget 2018, the Government allocated $5m to address this issue, but there has been no public review of any improvements achieved.

Secondly, the tool itself is a black box and isn’t open to critique. Since it is increasingly used as a regulatory mechanism with massive financial implications for farmers, there needs to be confidence in its robustness. At the very least it needs an independent review and, as Eloise Gibson points out, some are calling for the Government to take over the tool entirely. This would at minimum require buying out the fertiliser companies.

Why is Overseer so important?

Why do we need a water quality tool at all? The only alternative we have seen overseas is to establish input controls, i.e. telling farmers how to farm. For example: “On this type of soil, you can only put this many cows, unless you build a barn or plant trees beside your river…” Etcetera. For many decades, our farmers have rejected input controls, preferring to work out the best way to farm themselves. This freedom has led them to be among the most productive in the world. But it has also contributed to the parlous state of our rivers.

If we want to improve water quality and still allow farmers to find the best way to farm, then we need to regulate them on outcomes, not inputs. And this would be impossible to do without a tool like Overseer. It would simply be too expensive to set up water quality monitors under the soil or next to rivers and streams on every farm to figure out who is doing the leaching.

An improved Overseer is better than no Overseer

Farmers have been the first to write off Overseer when it performs poorly or inconsistently. Many think it should be scrapped entirely. Without action, Overseer faces a crisis of confidence.

However, farmers should realise that without a functioning tool like Overseer, we are headed down the path of European-style input controls. Most farmers would dislike that even more. Farmers should be the first people calling for Overseer to be improved, not thrown out.


Give Pharmac a Break

It seems to happen every few years... the heat comes on Pharmac to provide a particular drug. In the last month alone, there have been outcries about medication for epilepsy, lung cancer, and epipens. And we are always told: “Such and such other country funds it!”

But every funding decision Pharmac makes involves a web of detail and some tough, heart-breaking calls. Maybe sometimes it gets the balance right, maybe sometimes it gets it wrong. But in general, this is an incredibly robust model that has served us well for the past 26 years. The problem is really that it has been too successful. Let’s briefly review why we have Pharmac in the first place.

Why Pharmac?

Just about every country in the world has trouble with health spending rising faster than incomes, and New Zealand is no exception. This has been the case since World War Two and is predicted to continue well into the future. By 2040, health and NZ Super are predicted to make up half of all Government spending.

Pharmac was set up in 1993 as a way of curbing those escalating costs. It has proved to be the most durable and successful reform of its era. The idea is that Pharmac has a fixed budget to spend in the most cost-effective way possible. It bargains with drug companies to keep the prices down. It also weighs up how effective different drugs are across different medical conditions. In simple terms, Pharmac uses its budget to buy as many healthy years of life as possible. It is a pretty thankless task because every decision means someone, somewhere misses out.

Is Pharmac Too Successful?

The problem might be that Pharmac has been too successful. For almost 30 years, it has curbed the growth of the drug budget – in fact, drug spending has fallen – while the rest of health spending has continued to balloon. Not many other countries employ the Pharmac model. Many want to implement something similar, but it is too hard to fight the drug companies’ PR machines. No wonder then that most of those countries provide the latest expensive drug – they spend way more than we do on drugs! Also, those countries are mostly richer than us, so no wonder they can afford to spend more. 

Today, the pressure is on once again for Pharmac to fund certain drugs. Is it me or is it a coincidence that these stories always seem to crop up around election or budget time? I may be cynical, but these stories appear too well timed to not have some drug company PR operating in the background.

Don’t Throw the Baby Out With the Bathwater

The crucial thing, as always, is to keep politicians out of drug-spending decisions. If they get their mitts on them, we will be prey to the PR campaigns of drug companies wanting to flog their latest drug.

The way to deal with this problem (if we decide it is a problem) is to simply allocate Pharmac more money and let it decide how to spend it using the existing processes. Let’s leave things that are working well alone.

The only tweak to Pharmac’s processes that might be needed is to make greater use of citizen’s juries to help Pharmac make some of the tricky values-based decisions it faces.

The place where real reform is needed is not within Pharmac at all, but across the wider health system. We need to apply the same degree of rigour as Pharmac does to all our health spending. We currently spend a lot of money on operations and some of them add very little to our healthy life span. If we scrutinised this area much more closely, it might indicate whether to allocate a greater proportion of money from the standard health budget towards funding more drugs. Given how good Pharmac has been at controlling costs compared to the rest of the health system, that seems likely.