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An Invitation for Paula Bennett!

Paula Bennett has a new slot on the Breakfast Show on TV 1. Sadly, she can't seem to find a Labour MP to debate her. 

Geoff Simmons responds in this video. 

 


How the Tax Working Group Can Make Polluters Pay and Encourage Business Growth.

The economy needs to shift rapidly this century in order to meet our environmental challenges. This is a huge opportunity to do things better, to be clean and clever with our growth and to improve our standard of living at the same time.

We urgently need to nudge businesses in a sustainable direction. But we also need to remember that government doesn’t always (or even often) have the answers. Instead of banning or regulating things as left wing governments tend to do, we need to encourage businesses to innovate and seek out new opportunities to take our economy in a new direction.

The Tax Working Group report (due out next week) is the next opportunity for this Government to take such an approach. What should they be recommending in terms of the environment?

A Price on Water

Looking long term, water is our greatest resource. It is the true backbone of our economy and society, and will only become more so. It provides us with life, energy and agriculture.

First and foremost we must avoid the mistake of favouring commercial water users over the public and customary rights. The access of the public and tangata whenua must be sacrosanct. This hasn’t been the case in the past, such as in Canterbury where nitrates are contaminating people’s water supplies.

Where water is scarce, which is most of the country, commercial water users should pay for their privilege. It is a scandal that water bottlers have got away with paying nothing but the cost of a consent. However the biggest users of water are electricity generators and farmers.

As the demand for water rises, the best way to respond (unless you are a Marxist) is with a price. And the money raised from that price should go to settling Maori rights over freshwater, to improving the quality of that freshwater, and to the local communities that water is being taken from.

Charges on Water Pollution

Charges can also help some forms of water pollution. Nitrogen, mainly from cow pee, is a major problem in many waterways. We need to use charges to make polluting farmers pay, and use that money to reward farmers that are farming in a sustainable fashion. Simple carrot and stick stuff, and so easy to do. Just watch those farming practices change when this is in place.

And yes, the same goes for our urban waterways. Councils should be fined for breaches of water quality and the money used for clean up.

A Decent Price on Carbon

The price of carbon has risen under this Government as they have made relatively minor changes to the Emissions Trading Scheme. The price needs to rise much higher – at least double the current level. We also need to move away from giving away free credits to polluting businesses.

Another big issue is removing the tax incentives that encourage people to use fossil fuels and not plant trees. Here are a couple of examples:

  1. Our tax system currently favours small scale pastoral farming (which benefits from tax free capital gain) rather than forestry.
  2. Our fringe benefit tax favours gas guzzling double cab utes and companies that provide car parks for their employees, but these same tax breaks don’t apply to public transport.

This provides businesses with certainty and incentives to change their practices in the long term. Ultimately businesses and people on the ground will be the ones finding the best way to reduce emissions, not governments.

A higher carbon price is how we will see change in our economy – not by banning oil and gas exploration and running the risk of importing coal in a few years time.

Waste

We are currently working on a Waste Policy but the same approach applies – we should use economic instruments to make polluters pay and provide incentives for them to clean up their act.

This stuff isn’t rocket science. Working with business, rather than against it, is essential to making our economy sustainable and lifting our standard of living at the same time. Sadly this is an anathema to many of the left wing politicians that claim to care about the environment. 

Read more about how TOP policy benefits sustainable business and our Clean Water Policy.


Geoff Simmons takes his place among Party Leaders at Rātana

Geoff Simmons spoke at Rātana last week, taking his place with leaders from the other parties. He also met with Kaapua Smith and Che Wilson of the Maori Party. Some of The Opportunities Party membership/followership asked about his speech, so we decided to publish it in full. This is his speech, sort of. He improvises.

“How Can we Honour Rangatiratanga and the Treaty?  

Rangatiratanga is the key to honouring the Treaty. However, it seems to me that the word, the symbol, the very concept of rangatiratanga is something that Pakeha New Zealanders fear.

I believe this fear is based on a misunderstanding about the term. If Pakeha really understood the term I think they would not only want Rangatiratanga for Māori in order to honour the Treaty, but they would also want it for themselves.

Let me explain what I mean. Through many Treaty settlements we have seen that Māori generally value mana over money. You only have to look at the Treasury calculations that show that Māori have settled at less than two cents in the dollar for the value of what they lost.

Unfortunately all Pakeha see in Treaty settlements is the money. This is a problem because with this mindset we think Rangatiratanga is about money too. Under the “money” mindset if someone else has something, I don’t. This breeds anger and division.

However the mana mindset is very different. If you have mana, there is nothing to stop me from having mana too.

That is why The Opportunities Party believes there is nothing to fear in resolving Māori water rights. Māori want clean fresh water as much as any Kiwi, probably more.

And so it is with Rangatiratanga. Giving Māori rangatiratanga doesn’t mean anyone else loses their Rangatiratanga. Maori communities can have Rangatiratanga. Pakeha communities can have rangatiratanga. Pasifika, LGBTQI, any community can have the same.

Some call Rangatiratanga devolution. I like to call it giving people a greater say over the things that impact their lives.

Of course, in giving communities a greater say there will be mistakes. But mistakes are what lead to growth.

Rangatiratanga will help people realise the limits of what money and government can achieve. That will encourage communities and families to do things differently and step into the gap.

In fact, the only group I can see that would lose from rangatiratanga are career politicians as they would not longer be able to take credit for the achievements of communities.

In summary, rangatiratanga is misunderstood. But if it were fully understood, I am confident that it would be embraced by Māori and Pakeha alike.

(photo credit: Phillip Capper)


Does the new Blue/Green Party have a Clue on Freshwater?

The concept of a blue green party - one that is willing to work with either Labour or National and bargain with both on behalf of the environment - is a sound one. We welcome any party that genuinely shares that goal. Of course the risk with any new party is that they are just as tied to the National Party as the current Green Party is to Labour. So the first question is whether they truly represent the environment or are simply a Trojan horse to get National back into power. Time will tell on that front.

One could argue that with our strong business and environmental credentials The Opportunities Party is already in that blue green space. The Maori Party recently announced a renewed focus on the environment and arguably could say the same thing. Competition of ideas is good for democracy, and ultimately we all want what is best for the country.

The new blue green party will live or die on policy. We have seen many small parties with big ideas, but they have failed to make a dent in Labour and National's tinkering at the edges approach. This is because they either don't have the bargaining power (Look no further than the Green Party and ACT) or because they have had no real policy to speak of (NZ First, and at times the Maori Party).

The Opportunities Party already has a detailed environmental policy ready to implement (without more working groups) that will reward sustainable businesses and make polluters pay to clean up the mess that they make. We welcome any new party that wants to draw on our policy or thinks they can do better.

So what do we know about the new blue green party’s policy platform? Not much as yet. What has become clear is that the leader of the nascent party in waiting Vernon Tava thinks that our water quality woes are because of poor enforcement, not because of poor standards. We beg to differ.

If you want more information on our approach to improving water quality, check out our policy here.

Our Woeful Water Standards

Enforcement of water quality regulations by Regional Councils is certainly a problem, but not the only one facing our fresh water.

In recent times it has become pretty obvious that the water quality standards set by the previous National Government are far too low. The biggest problems in fresh water quality that haven’t been dealt with yet are sediment and nitrogen, and on both counts the current standards need a lot more work.

First up let’s deal with the easy one: sediment. This basically is dirt in our rivers and lakes. This is a problem because we all like clear water and the dirt is way better on our land. The limit approach simply doesn’t work for sediment. Instead we need regulation.

The previous National Government did put some regulations in place around fencing waterways, which will help sediment a little bit. Regulations for planting around waterways and having a dedicated minimum riparian margin would help even more.

But the big unresolved issue is the regulation of erosion prone land. There has already been some work limiting new plantation forestry on erosion prone land (although we are yet to see how that works out in practice, because enforcement is an issue there). However, there has not been any similar regulation of pastoral farming.

We continue to let sheep and cattle graze almost vertical slopes where the soil regularly falls into our rivers and ultimately the sea. This is simply not good enough. All erosion prone land needs to be planted with permanent trees. These could be native trees such as manuka (to yield honey) or if the farmer wishes to continue farming with cattle they could be deciduous trees like poplars. Either way, we should help landowners get them planted and bank the carbon credits.

Nitrogen is trickier because it is a byproduct of our economically successful dairy industry. But again the standards set by the previous National Government are woeful. The bottom line for nitrogen is more than six times what is healthy for the environment. Recent evidence also suggests it is also six times the level that is safe for drinking in terms of the risk of colon cancer.

This standard is simply not good enough. The high level of nitrogen was allowed by the previous National Government in order to allow the dairy industry to continue to grow unabated. This is despite the fact that many recent dairy conversions will probably prove to be uneconomic in the long run.

In most parts of the country this problem can be fixed with little or no loss to the economy. In fact many farmers will more profitable running less intensive farms with lower costs, less debt and happier cows. Farm values may fall as a result. However, given that will be due to lower output rather than lower profit there is no real economic damage done, just the pricking of a crazy speculative bubble.

It is only really in certain spots such as the porous soils of Canterbury where this may not be enough. In those place the communities may have to choose between shifting their economy to alternative crops or allowing their environment to be despoiled.

If a community consciously makes the choice to despoil their environment in pursuit of economic growth, that choice should be respected (as long as that environment is not of national significance). However, again the previous National Government stacked the decks against the community in the way they set their standards. By setting the standards low, they put the onus on communities to argue for higher standards. As we have seen in Canterbury it took a massive resource and science base to argue against vested interests from the dairy industry, so most communities failed.

Instead, we should set standards high and let the dairy industry pay for the science to convince local communities that they should accept lower standards in pursuit of profit. The evidence suggests that with this set up in most cases the community will say no and stick with the higher standards.

The Opportunities Party stands by our position on fresh water.

We eagerly await the environmental policy of the new blue green party to see if they can do better than this.


Housing is to Blame for Rising Inequality

Yesterday’s report from Oxfam shows that the rich are getting richer and the poor are getting poorer. The question is what is driving this?

Most people have probably seen the graphs from the United States showing how the average income there has flattened since the 1970s, while the paycheck of corporate CEOs and owners has gone up and up and up. Could it be income that is driving inequality here also?

Employees are certainly not getting their fair share in the United States, but there is less evidence of that happening here in Aotearoa. Our Productivity Commission has done the work, and the real problems here are not miserly employers. Instead, the issue seems to be sky high housing costs and poor productivity (the fact that we are not working smarter, which is also partly driven by our obsession with housing).

Are Workers Getting Their Fair Share?

When we work smarter, each person produces more in their day’s work. The idea is that they should get rewarded by being paid more as a result.

There was a lot of upheaval in the 80s and 90s about which we can debate the merit. However since 1996 the labour income share has pretty much stabilised, with more than 90% of any increases in labour productivity (working smarter) going to workers. That isn’t bad - nothing like what we see in the United States. This is backed up by the fact that since the mid 1990s income inequality hasn’t really been rising.

It seems like since the mid 1990s, workers have been pretty much getting their fair share. So we can’t lay much of the blame for rising inequality at the feet of employers.

Housing

The real problem that lies at the heart of rising inequality in New Zealand is housing.

Sky high house prices are the reason why the rich are getting richer - with the top 20% of households now owning 70% of the wealth. And housing is also the reason why the poor are getting poorer. Half of Kiwis don’t own their own home and have to rent. Rents have been rising faster than wages and prices (which determines benefit increases) since the early 1990s, probably longer.

This without a doubt has been the thing that has hurt beneficiaries and the working poor the most. Generally it is the poor and young that don’t own their own home, and so they have not benefited from the house price rises and have had to pay the higher rents without their income rising to match. When you look at inequality, poverty and child poverty figures they haven’t risen since the economic reforms of the 80s and 90s. However, when you include housing costs, inequality and poverty have risen, particularly amongst the young.

The real problem isn’t wages. It is housing.

Housing is Also One Reason Why Incomes Aren't Higher

Here's the kicker: housing isn't just the driver of inequality, it is also one of the reasons incomes aren't higher.

The big difference between incomes in New Zealand and other countries is not due to tight-fisted employers. It is due to low productivity. We simply aren’t working smarter as a country. This is a complex issue and to fix it we need to invest more as a country in infrastructure, technology and skills.

What is preventing us from investing in working smarter as a country? The main reason is because we put all our money into housing. 

New Zealand has the most tax favourable environment for investment in housing of any rich country.

This has led to us having more of our assets tied up in housing than any other rich country. And what do we get for all this? The most unaffordable housing in the developed world. Meanwhile we have low levels of investment in technology and businesses that can actually create jobs and higher incomes.

So the tax breaks encouraging investment in housing is certainly to blame for rising inequality, and is also partly responsible for our low incomes compared to other rich countries. 


School Choice Comes With Hidden Price Tag

The NZ Herald ran an opinion piece featuring Briar Lipson’s analysis of The Tomorrow’s Schools Independent Taskforce in the New Zealand Herald. This analysis was sadly skin deep.

It is easy to caricature the proposed reform as removing school choice from parents and supplanting it with bureaucratic control. However, this overlooks the big hidden price tag that school choice has delivered. 

For starters there was no analysis of whether we might end up with fewer bureaucrats overall if some back office functions could be more efficiently shared between schools. As an example, currently every school (even one with 20 students) pays for an auditor to go over their accounts every year. That is hardly value for money. Nor was there any discussion of whether public schools should be spending taxpayer money advertising to attract more students.

Yet these issues are dwarfed by the elephant in the room of school choice: the fact that it hurts the poor. This has been the result of school choice whenever it has been tried anywhere in the world.

Let’s make sure we are all on the same page. The aim of the education system is to help everyone achieve their potential. Some people have learning difficulties, and this is more likely for students from poorer households. An education system should invest more in these people to ensure they have a fair go.

Our education system doesn’t do this. Compared to other countries, our education system does very little to close the gap in attainment between rich and poor. Basically, we put the same amount of resource into students from poor households as we do for those from middle class ones. The result is that poor students turn up to school roughly 2 years behind richer students, and that gap never closes.

School choice is a major driver of this. Since introducing choice, all the middle and upper class parents have exercised that choice and moved to “good schools”. These “good schools” aren’t actually the schools that help students the most, rather the ones that the other middle and upper class families attend. The result is that students from poor households have been ghettoized into low decile schools.

But we fix this with extra money through the decile system! Yeah, nah. The extra money given by the decile system is more than outweighed by the extra resources middle and upper class parents bring to a school. That isn’t just more money through fees and fundraising but extra help in class and skills around the Board of Trustees table.

There is a way to fix this and keep school choice, but it isn’t cheap. It requires spending a lot more money on schooling disadvantaged pupils. The Tomorrow’s Schools Independent Taskforce suggested that current decile funding needs to be doubled to ensure schools have the resources to help those from disadvantaged backgrounds.

There is a another way to lift the achievement of poor students up to their well-off peers. It doesn’t cost any money. It doesn’t reduce the achievement of the students from richer backgrounds at all. It is called removing school choice.

Here’s the thing: students don’t just learn from teachers. They learn from each other. They learn from the role models they see in their class every day, including other students and their parents. If their classmates can do something, they start to believe they can do it too.

This is why streaming is so damaging for the students at the bottom of the heap. Once a student is labelled by a school or a teacher as “dumb”, they will tend to live up to that expectation. And if you lump all those students together all you have is a recipe for discipline problems.

If we want all our students to have a fair start in life, then the cheapest way we can do that is by making our classrooms look like our society. Is that too much to ask? Sadly it doesn’t happen through school choice.

So there is the real choice being put forward by the Tomorrow’s Schools Independent Taskforce - either we wind back school choice or we spend a lot more money on educating students from poor households. They have recommended doing a bit of both.  I do agree with Briar that you should comment on the Tomorrow’s Schools Independent Taskforce recommendations. And when you do, please think about how we get the best out of all our young people, not just your own child.

 

 

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Wealth Inequality - High & Not Likely to Reduce Any Time Soon

The year is winding to a close, but last week gave us yet another reminder of why The Opportunities Party is the only prospect for real change.

Firstly we had the Statistics New Zealand wealth report. Not a great deal has changed since 2015 in terms of how wealth has shared, but that is precisely the point. It isn’t likely to change in the future either.

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The Listening Tour: Workshop Results

During the month of October, The Opportunities Party held several workshops around the country to listen to how people related to the party and where they wanted to see it going in the future.  

We’re still listening.

If you want to have your say you can fill out this survey.  The form will remain open until after the leadership election. Remember, only registered members can vote in the leadership

If you are not a member yet, let us know why not?

It’s a great time to get involved, get heard and get us into Parliament.

We need to give reason a seat at the table.

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Teacher Strike - It is (Mostly) Not About the Money

This week is seeing a rolling teacher strike across the country. It appears the unions and Government have reached an impasse - there is just too much distance between their positions.

The Government claims there is no more money, which is of course nonsense. There is plenty of money in the kitty, but they are rightly worried that if they give in to the teachers then other wage demands will escalate.

What are the real issues behind the teacher’s strike? What light can the international data shed on the situation?

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What New Zealand can learn from Trump

An analysis of the economic conditions which gave rise to Trump in the United States suggest we should be worried here in New Zealand. It comes down to one key thing: productivity.

Productivity growth is essentially working smarter, as opposed to working harder. Our low productivity growth means we’re working harder, but we’re not working smarter. This means that each year there is not much more to go around.

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