We are on sunny Magnetic Island in far North Queensland for an extended period, before embarking on a package tour of Arnhem Land and then returning to NZ early October

The weather is truly wonderful and the media is a nice change from NZ. I listen and watch the ABC and read The Australian. Both excellent operations with one left of centre and the other right.

Like most if not all countries colonised by a European nation whose citizens stayed and dominated government, Australia’s relationship with its indigenous population has been troubled. For more than 50 years Australian governments have tried to improve public policy and help the indigenous population, but few believe they have got the formula right despite spending billions.

The Albanese government is proposing that Aboriginal and Torres Strait Islanders would have a Voice in Parliament courtesy of an amendment to their Constitution which requires a referendum. The Voice would be able to comment on issues relevant to the indigenous population. It would not have a vote

This proposal has been long coming. Unlike NZ, indigenous Australians were not involved in creating the Federation in 1901 and were not properly recognised until after the 1967 referendum which was passed with 90pc support

When announcing the proposed referendum Albanese did not provide details as to how it would operate, out of a concern that some might get obsessed with the detail, and thus vote against the very simple constitutional proposal. He argues that as governments cannot bind their successors it is not necessary to provide all the detail as to how it would work

It should be noted that currently their are 11 indigenous people in the Australian Parliament. Technically they of course represent their constituents not just indigenous voters so it can be argued this 60,000 year old civilisation does not have not have the voice it deserves. While many live mainstream aboriginals live near major centres, there are still many thousands in the real outback in WA, Queensland and the Northern Territory

Clearly there is a lot of public support for the constitutional change long sought by many but not all indigenous leaders and others

What’s interesting though is to read the well argued cases against the proposal including from some indigenous leaders.

The case against includes the following points

We should have the detail as to how it would be constructed and operate before voting on the simple principles

Whether an activist High Court might strike down state or federal laws or administrative decisions on the basis they breached the constitution

Will it effectively be a third chamber

This could be the end of democracy as currently understood

Will it in the real world improve the position of indigenous people as distinct from providing employment opportunities for those actively involved.

One such critic is Country Liberal Senator for the Northern Territory Jacinta Price, an indigenous women from the outback. Referring to past attempts at improving life for Aborigines she said in The Australian, “We have every right to question, seek clarity, or outright disagree with a vague proposal that’s being sold as a completely new approach to resolving disadvantage. There is zero proof the voice proposition will be successful. ATSIC and the many bureaucracies are testament to to the likelihood of it failing; but enshrining it in the Constitution determines if it should fail it can never be dismantled”

She recommends if the government wants to create a Voice it legislate for it first to see if can work.

The interesting aspect of the debate is Jacinta has been engaged in a vigorous debate with Sydney based commentator Peter Fitzsimons’s who she alleges tried to bully her and says she is out of touch. This from his rather expensive Sydney dwelling.

The debate so far including letters to the editor is mostly respectful and civilised. Hectares of newsprint has been used to convey many different views.

But what has struck us is the incredible contrast with NZ. Our media has wilfully refused to drill into and tease out what’s going on with numerous policy directions, which to me look like strangling the essential elements of a quality democracy.

When it comes to discussing these critical issues Australia is light years ahead.

If the Government gets its way, around $100 billion of community owned three waters assets, will be effectively nationalised. They will be placed in the hands of the most convoluted monopoly structure I have seen, with iwi leaders substantially in the drivers’ seat.

One might have thought a transaction of this scale would have attracted the attention of our business journalists, capable of going beyond the so called co-governance aspect.

Are property rights too boring for business journalists these days to matter?

I read the serious media including the NZ Herald and Business Desk, but as yet have not seen any articles, which dealt with the relevant elements.

I have read articles by political journalists looking at it all from a political angle, and swiping anyone who might question governance arrangements as racist or dog whistling.

I may have missed it, but I have not seen anything in mainstream or business media that thoroughly dissects the case for nationalisation and whether the extraordinarily complex arrangements embodied in the proposal, will deliver the benefits claimed.

This is seriously important for everyone, so why have mainstream media not allocated a significant journalistic resource to it?

After living in a few other countries, I came back to NZ, in part because I thought it was a quality democracy, and also because it had a free media, albeit one not as sophisticated or as well resourced as that in Australia, the UK, Canada and the US.

While our Governments can swing from left to right and the media rolls with it, I never predicted our mainstream media would turn a blind eye to assaults on the quality of our democracy, including the conflict of interest issues around the Mahuta family.

There are some who think journalists have been bought off by government money. That will be true for some cases but I suspect it’s more likely they are either happy to ride along with the proposals, or are simply too scared of the critics, to engage in this important issue.

Either way it reflects very badly on our business media and leader writers. When I compare the risks take by war journalists and those who live in authoritarian countries such as Russia and Hungary, I know where courageous journalists live. It is not New Zealand.

It’s not too late guys. Just read the Bill and look at what some non mainstream media is publishing.

These are key questions to ask:

1. Are the three waters operations across the country so uniformly bad, wholesale state control is justified?
2. How should local authorities be compensated for their loss of property rights?
3. If there is to be forced aggregation is four entities the right number, or should it be more like ten to allow some natural groupings to form?
4. Why are they not based regional council boundaries and why is Gisborne lumped in with Wellington and Nelson?
5. How can captive customers ensure the new entities are not typical flabby monopolies that gold plate their systems?
6. Why should iwi have a dominant governance position of assets created by communities since 1840?
7. Could the new system lead to the entities paying iwi royalties for water which originally comes from the skies?

The Three Waters proposal driven by Local Government Minister Nanaia Mahuta is a totally unnecessary, very divisive battle with local government and the people of New Zealand.  

The focus has been on whether there should be co-governance with iwi leaders, and also, whether it adequately prevents privatisation, which I see as a red herring maybe designed to divert attention from the real issues.  

The critical question is whether the failings of local government are such, that their Three Waters assets should be confiscated by the state, reformulated into four entities, and then handed back into a convoluted governance regime involving iwi and local government nominees.   

Having looked at the papers behind the proposals I do not believe they meet the necessary threshold.  Yes, there are problems, as Local Government NZ has recognised for many years, but they do not in my view justify central government overriding local government in this heavy-handed manner.  

The first real issue is water quality, which the government has dealt to by establishing the water quality agency Taumata Arowai.  It has only just started operating but will have a real role in ensuring New Zealanders have access to quality water across the whole country.   Anyone who says the Three Waters proposal is necessary to ensure quality supplies is either seriously ignorant or just telling lies.  

The Three Waters advertising last year was dishonest in that it implied the nationalisation was required to ensure quality water, when the Taumata Arowai had already been established in law.  That was a shocker for which heads should roll in the public service.    

The second real question is how to finance and manage the three waters systems throughout the country.  Clearly over the next 30 years the capex requirements will be high, maybe $180 billion, but I note many in the sector considered it to be grossly inflated.   Some local authorities may lack the expertise to manage the upgrades required, or have the ability to finance them with their current limits on borrowing.  

Short of local government imposing excessive burdens on their ratepayers or central government underwriting local authority debts, there are a range of options which can be found on the website of the now 31 local authorities opposing the governments’ plans.  Three of these councils are taking legal action.  For more information see: https://www.communities4localdemocracy.co.nz  

If after exhausting all options with local government, which it has not yet done, the Government then decided decisive action was required it would require a careful plan.  The logical course would be to collaboratively work through the issues with local government and come up with an agreed formula.  I suspect instead of just four entities there would be more like 10, with Auckland City left entirely alone.

Some of the boundaries defy the common-sense test.  Gisborne to Nelson including Wellington is Entity C, which is not rational, particularly when it’s remembered that Horizons in Manawatu is actually split with Entity B.  The logic of Entity C is to accommodate Ngai Tahu, which in the 19^th century controlled the South Island outside of the Nelson area.        

At that point the Government might well decide to underwrite the new entities to reduce their borrowing costs.  The alternative, which the Government has decided on, provides the proposed entities with such a level of independence from local government, it can borrow freely.  The massive risk to ratepayers is that insulated from local government politicians the entities will be able to gold-plate their systems, and charge the 100pc captive customers.  No wonder Standard and Poors likes it!!

I see the Government may establish a regulatory agency to ensure this doesn’t happen but I remain sceptical it will be effective.   Monopolists always have good explanations for their cost structure.   I remember been told by the head of NZ Railways, when they employed 23,000, they were about as efficient as they could get.   Now KiwiRail employs fewer than 5000.  Mahuta’s claim Three Waters will create, presumably an additional 6000-9000 jobs, reinforces my scepticism.  

The co-governance concept comes from iwi leaders who rejected the Key Governments’ declaration, fresh water belongs to everyone and as representative of the people, it was the Government’s job to regulate usage, in conjunction with local government.  

Fresh water is not the same as dams, pipes and sewage processing, assets built up by local governments since 1840.   The water ownership issue should be dealt with directly by the Government and not conflated with Three Waters.  Mahuta has further deepened suspicion about Three Waters by refusing to declare iwi will not be able to demand water royalties.

The net result is, like Putin’s war on Ukraine, we have a very unnecessary battle within this country to deal with some real but not insurmountable problems.  I hope the National Party commits itself to pressing the reset button, assuming the current Government is too pig headed to do that itself.       

In the meantime, it would be nice if the missing in action media, could really drill down into the issues, rigorously analyse the problem, weigh the alternatives and provide some real clarity.   That might regain it some credibility presently lacking on Three Waters.  And while doing that remember, just because people oppose co-governance, doesn’t mean they must be racist as asserted by one writer.

We have a high-quality democracy which is in serious danger of being degraded by a radical interpretation of the Treaty partnership concept.   No one should be surprised when its defended.  I would have thought this would be of some interest to the media, or is that too much to expect?

Last year I posted “democracy or partnership” and asked what do we want.  Since then, the partnership and co-governance concepts, have gained legs with the Three Waters proposals and the twin health authorities.  In addition, at local government level in the same vein, we have seen non-elected appointees given voting rights on council committees.   

PM Ardern uses the partnership term frequently, and in a TVNZ interview with Jack Tame, National Leader Christopher also equated the Treaty with partnership. 

When starting a journey, it is useful to know where it will end, otherwise one can end up in an uncomfortable zone, where retreat is difficult.  Somehow, I suspect few political leaders, other than the Maori Party and ACT, have really thought through the partnership concept, and we are heading for a rough time, unless there is a course correction.

Since writing last year’s post I have read the famous 1987 Lands case where the Court of Appeal, then headed by Sir Robin Cooke, opined the Treaty created an enduring relationship between the Crown and iwi that was “akin to a partnership”.  This followed legislative changes prior to 1987, to move from the Treaty texts, to the “principles” of the Treaty.  The principles were not defined in statute, but given to the Waitangi Tribunal to define.     

What does the Treaty partnership mean?

When writing last year, I assumed the term meant the two parties – Crown and iwi – were equals and should be governing the country together.  In other words, that the Crown itself was a partnership.  However, after reading the Court decision and further reflection, I believe what the Court had in mind was something much less expansive, that did not radically undermine democracy, and would be less divisive than what we have today. 

I don’t believe it decreed, or even had the view that the Crown-iwi itself, was a partnership, as two lawyers might form.  I think what the Court meant was the Crown had an on-going obligation to iwi, to honour the Treaty as best it could, having regard for current realities.  One such reality is that Maori do not live under tribal leaders, and all are tribally and ethnically mixed, including with “ngati-pakeha”.  

I am comfortable with this interpretation, which is liberal but not radical.   I recognise some Maori leaders and others prefer the expanded version, which is clearly not consistent with a credible democracy.

Legal definition of Maori – some practical issues

As most know the legal definition of a “Maori”, is any descendant of a Maori, which means over time the proportion of Maori in the community with a whakapapa connection will increase, without necessarily a concomitant connection to Maori community or culture.   I accept the legal definition, even though for some, it fails the common-sense test.  To me those with predominantly non-Maori ancestors are New Zealanders or kiwis, just as I am not English or European, even though my ancestors back several generations, came from the Northern Hemisphere.  Another way of putting it is that over time Maori and Pakeha have become different ends of the same biological and cultural spectrum.     

Treaty principles

The texts of the Treaty are precise, but because of translation issues, are not entirely consistent with each other, and so we now have the “Treaty principles” courtesy of the Waitangi Tribunal. However, the problem is they are infinitely elastic . In the eyes of many they provide the scope to relate all sorts of public policies to the “principles”. This road is a guaranteed formula for endless inward looking, often unpleasant and very unproductive debates. A country pre-occupied with looking at itself, is not heading to a good place.  There are many world-wide experiences we can draw from, showing the dangers of separatist policies.     

The good news is that within our democratic system there is ample scope to tailor services for Maori, other ethnicities and social groups.   The vaccine roll-out showed the limitations of one system working for all.  The same goes for education and social services etc.  Pacific Islanders are outside the Treaty coverage but they too sometimes require tailored services.  Curiously the large Asian grouping, with several ethnicities, seems to adapt well to mainstream policies.  

Of course, in 1840 when the Treaty was signed, few if any could have thought about state provision of education, health and social welfare services, to say nothing of the allocation of spectrum frequencies, which is why these matters should be treated on a social equity basis and not some tenuous link back to the Treaty.          

We have monumental challenges with school attendance levels and slipping education standards, housing affordability, obesity, productivity, and now inflation.  This Government is over reaching itself on several fronts.  It needs to take a breather and deal in a practical manner with the real problems it can solve, instead of creating new ones around an expanded version of the Treaty.  It would be a real tragedy if Labours’ major legacy was a diminution of our quality democracy.  

All political leaders should set out clearly how they see the partnership concepts fits with democracy.  The same goes for the media, which has been astonishingly silent on the single most important issue facing the country.  ACT and the Maori Party are clear, but for the rest their collective silence is deafening.     

Update 2024

We have a serious and growing problem of wealth inequality and too many families lack the ability to adequately provide for their daily needs.  

This is all exacerbated by insanely high house prices, the growth of single parent families, drug consumption and obesity.  It’s bad for race relations, undermines social cohesion and will ultimately result in more crime and social costs, much of which will be borne by taxpayers.        

Tax is neither “love” nor “theft”.  Governments require a proportion of GDP to protect its citizens, provide essential services, create a prosperous society and help ensure all have the opportunity to succeed.  Some incomes are way overtaxed and there are also gaps in the tax system.

It’s a sad reality of life that new taxes are extraordinarily hard to introduce politically.  Successive governments have relied on bracket creep to increasing the state’s share of national wealth, in order it can look like Father Christmas, either with more spending or so-called tax reductions.  We need to have a mature discussion about tax policy, sans the histrionics that typically accompany any suggested changes or new taxes.    

Unlike many on the right, I don’t believe the most important issue is whether the central and local government spend 25% or 35% of GDP. The real issue is the quality of spending. Unfortunately, many of those in charge of spending the taxpayers’ money are rarely driven by the need for frugality and cost effectiveness. I exclude most ministers of finance over the past 30 years or so who have generally done their best to be prudent, fending off big spending colleagues.

There is a vast array of interest groups who argue for more spending and claim that most Government departments and agencies are underfunded.   Departments themselves rarely if ever say they are over funded and offer money back to the Crown.  The NZ Taxpayers Union is one of very few organisations that actually wants to trim Government expenditure.     

Tax policy can help, but not solve by itself, some major problems such as absurdly high house prices, income inadequacy and wealth inequality.  In the case of house prices, even if the land was free, houses still cost too much to build.  I suspect the Accommodation Supplement actually supports rental rises in the private sector.  (See my post about housing, which is mostly a supply issue) 

The complex “Working for Families”, effectively allows employers to pay less than would otherwise be the case. Worse, it creates effective high marginal tax rates for hundreds of thousands of people. It cannot be abolished in one step but its negative effects could be reduced.

The median income in NZ is around $55,000.  No one on that income should be paying 30% of their marginal income in tax, as they currently do.  Nor should anyone earning a modest $70,000, face a marginal tax rate of 33%.   Income from labour is way over taxed, capital gains are undertaxed and asset transfer from parents to children, or other recipients, are not taxed at all.  

Taxing term deposits earning about the same as inflation is simply not fair and partially drives the push into rental housing, by those with savings.

The last real reform of the tax system came from Roger Douglas’s 1984-7 budgets which slashed the top rate from 66% to 33%, introduced GST at 10% and eliminated a collection of wholesale taxes.  Since then the system has become very complex and thus difficult to change without disadvantaging someone.  

Labour’s decision to re-introduce a top rate of 39% on income over $180,000 is lazy thinking, but politically understandable. Certainly not transformative. National’s proposal to index tax brackets was a good, if belated, attempt at fairness.

Transfers between generations and gifting, are windfall gains for recipients and should be taxed. Why exempt them while taxing people earning the median wage at 30% with higher effective marginal tax rates for those who receive Working for Families Assistance?

Capital gains should be taxed in a way that is simple to administer, fair and consistent with rapid economic growth.  Not easy.  

I propose major changes to each category 

Income tax:

There be three tax brackets: 0%, 22% and 33%. The tax brackets should be indexed to median incomes.  

Income levels

$0-27,500 0%

$27,500-110,000                    22%

$110,000 and above               33%

This would create a massive $8 billion plus reduction in Government tax revenue which would have to be offset by other taxes and expenditure reduction.

Capital gains

Currently, contrary to popular belief, not everyone can avoid being taxed on their capital gains.  Property developers and share traders (as deemed by IRD) pay income tax on their profits, while those holding some offshore shares pay a deemed rate of return of 5% on their shares.  Second home owners can pay income tax on properties sold within 10 years.  

All taxes, particularly capital gains, have technical and political problems.   Taxes on unrealised gains often create cash flow problems, if little or no income is produced, while waiting until the assets are sold can distort investment decision making.  

The Michael Cullen report went over the top by ignoring inflation and created too many compliance costs to be viable operationally and politically.  Rather than bring all assets under one tax regime I propose it be tailored for each asset class.    

This area requires real tax expertise.  The Government should seek advice from the experts about the best way of bringing more capital gains into the income tax net, in way that is consistent with an economic growth strategy.   

Inheritance or asset transfer taxes

All transfers of cash and other assets, other than between life partners, would be subject to tax at the flat rate of 22%.  This would apply to all transfers per annum of $5000 or more.  

It would be paid by the donor, whether living or not.

Taxes for “bad goods”

At present we tax alcohol and tobacco at high rates on the basis they discourage consumption of goods because they are bad for health.  There is a case for extending these taxes, but no change should be made without the most rigorous analysis of the facts including the record of them in other countries.

Environmental taxes:   

Any extension of these taxes (including carbon taxes) should again be subject to the most rigorous analysis.

Alternative GST proposal

As an alternative to taxing asset transfers and bringing more capital gains into the income tax net, I would be happy with GST at a flat 20pc with appropriate adjustments for beneficiaries and some others.

Expenditure reductions

NZ Super: The age qualification should be increased from the current 65, to 70, starting in 2022, reaching 70 in 2032. The increase from 60 to 65 happened without too much fuss. People under the age of 70 who cannot work at their normal jobs for physical reasons, could access a benefit along with other beneficiaries.

Kiwisaver subsidies:  End all KiwiSaver subsidies and make it compulsory at the 3 plus 3% level.  

Corporate welfare:  End any subsidies that could be deemed corporate welfare.  Potential to save at least $1B.    

Conclusion

The proposals would improve the lot of those of average and below income and or wealth, at the expense of the rest.  While the wealthier sections of the population would initially be worse off, they also benefit from living in a less fractured society.  

Declaration: These are my personal views which have been informed by real life experience including: Press Secretary to the Labour Party leader Bill Rowling, PR Manager NZ Manufacturers Federation, a similar position at the NZ Meat Board including a 3.5 year stint in New York, consultant to the NZBR, 25 years as a Government Relations consultant and as chair of the NZTU, which ended in early 2021

Updated April 24, 2021

The departure of Donald Trump from the White House was a victory for the US democratic system, which only just succeeded.   If then Vice President Mike Pence had wavered under enormous pressure from President Trump and his cult-like supporters, Joe Biden might not be in the White House and there would have been serious civil disorder.  The Republicans haven’t given up, they are now trying to make voting more difficult in several states.  Democracy is a model under threat from many quarters, and losing around the world.

It is easy to forget how recently democracy has become mainstream.  In Britain women over the age of 21 only got the vote in 1928 and in the US, universal suffrage only became accessible to all Afro-Americans in the last 55 years, because, prior to the 1960s voting reforms, there was serious voter suppression in parts of the country.  Some former East European countries like Hungary have retreated from the democratic model and others like Greece and Italy have struggled to deal with major economic challenges. 

At present New Zealand has a quality democracy.   We have fairly-drawn electorates, an easy voting system, and a reasonable level of political literacy.  Money struggles to buy Government policy, which is all as it should be.  

However, we have no reason to be smug, because this democracy is under threat. Governments since 1987 and the Courts have been entrenching a modern view that the Treaty of Waitangi means there is an ongoing “partnership between the Government and Iwi”.  Some Maori leaders want a form of co-governance between Parliament, elected by all New Zealanders, with one which has to negotiate policy with iwi leaders.  

The partnership concept has been advanced in small steps, without the Government first holding an honest conversation with all New Zealanders.  Apart from concerns about the costs in the early stages of the treaty settlement process, New Zealanders have basically remained silent while governments negotiated settlements and wrote the subsequent legislation.  

I have voted in general elections for decades, and for referenda on liquor laws, the parliamentary term, MMP, marijuana and end of life choice, but never on whether we should have a partnership model of government with anyone else.    

For the record, while I prefer they don’t exist, separate Maori seats or even Maori wards, do not undermine our democracy, provided each is based on the same electoral numbers as general electorates and wards.  Nor do I think a requirement for central and local Government to have regard for the views of Maori, destroys democratic integrity, provided the consultation process is genuine, and also that it doesn’t necessarily mean agreement must be reached.  

These provisions help create social cohesion that is critical to successful democracies.  However, we could soon reach a point when the word “democracy” will not accurately describe our form of government.         

For anyone who thinks I may be exaggerating the threat to our democratic model, I strongly recommend they read the 2010 iwi-sponsored 129 page “The report of Matike Mai Aotearoa – the independent working group on constitutional transformation”.  It is all laid out with a plan to achieve the transformation by 2040.  The recommendations are not about making the Treaty fit within the current constitutional arrangements; rather it creates a whole new form of Government based around a minority view of what the Treaty means.

The recently released Government commissioned “He Puapua”, report of the working group on a plan to realise the UN declaration on the rights of indigenous peoples of Aotearoa/New Zealand, takes the iwi report a step further. It’s not clear exactly where this report sits with Government thinking, but looks like an indication of a pathway to radical change. 

New Zealanders need to wake up and get real about the Treaty, and the history of this country since Maori arrived around 1200 AD.  The three article Treaty was a well-intentioned effort on the part of the non-democratic British Government, to deal with what it saw as a very untidy situation in New Zealand, where 100,000 odd tribally divided Maori lived alongside a couple of thousand British settlers, some of whom were seriously disorderly.  

A key part of the backdrop to the Treaty were the inter-tribal musket wars in the decades up to 1840.  In his comprehensive book (“The New Zealand Musket Wars”) historian lawyer Ron Crosby, has written about the devastating impact on Maori in respect of the tens of thousands killed, enslaved or cannibalised.  Prior to the arrival of Europeans Maori tribes fought regularly but lives lost were modest compared to the Musket Wars for obvious reasons.  

Captain Hobson was asked to negotiate a Treaty which ceded sovereignty to the British Crown, protected Maori property rights and treated them all as British subjects.  At the time there were around 500 tribes, no secure property rights, no border controls and no central government, notwithstanding the 1835 tribal confederation declaration that New Zealand was a country.  

In the English version, Article 1 unambiguously had the Maori ceding sovereignty to the Crown.  Unfortunately, this was imperfectly translated into the Maori version, which most of the 500 Maori chiefs signed.   A few did sign the English version and some did not sign it at all.  The Treaty itself was written a few days before Hobson met with the Chiefs and the Maori version was translated by Henry Williams over a couple of days.  Inadequate effort was made to ensure both versions said precisely the same thing.   (See Claudia Orange “The Treaty of Waitangi”)

This must have been one of the most sloppily negotiated Treaties between any two countries (in our case Tribes) of the Nineteenth Century.  That it is seriously regarded today is a testament to the patience and long game played by Maori leaders, who have used the Courts and lobbied with great skill to claw back what they now see as lost ground.  It also attests to the reasonableness of the Crown in recent decades, to at least partially remedy the errors of the past.     

Regardless of the flaws in the Treaty process and subsequent events, New Zealand has slowly morphed into a fully independent democratic country, where everyone, including Maori, has a reasonable chance of a quality life.  Government legitimacy today derives from the quality of our current democratic institutions, not from what happened in 1840.      

It is a remarkable contrast with Australia where the aboriginals had been for roughly 60,000 years, yet were deemed to own no land – Terra Nullius it was declared to be.  The Maori had been in New Zealand for just 600 years prior to the arrival of the Europeans and were by the Treaty considered to own all the land, notwithstanding the reality there was only about 100,000, over a space now occupied by five million people.

Over the past few centuries, the democratic model combined with a well-regulated market economy, has proven to be far superior to: unconstitutional monarchies, theocracies, military dictatorships, anarchy and tribalism.  It has delivered freedom, higher living standards and increased life expectancy, for people of all races, even though within countries there are commonly divergences between ethnicities.  We should maintain and improve our institutions to meet the varying requirements of our largely successful multicultural society.      

Since 1840 we have seen the breakdown of the old tribal management and lifestyle, which has been replaced by Maori living in a similar way to the rest of the population.  At the same time, they have intermarried to considerable extent, and some like my successful middle-class second cousins, are as pale as myself.  Regardless of blood, all descendants of Maori are legally deemed to be Maori, regardless of skin colour.     

Iwi, newly enriched through the treaty settlement process, are now akin to large managed funds, with some statutory powers, not available to others.   That power can be used to commercial advantage.  It will inevitably lead to opaque public policy decisions which will undermine confidence in the integrity of Government.   

The media and others too frequently stigmatize Maori as impoverished and on the fringes of society.  That was some truth in that 100 years ago, but not today.   Most poor people are not Maori and not all Maori are poor, even though proportionally they are less well off than those of European descent, and have worse statistics in crime etc.  Like thousands of renting Kiwis, they face major hurdles becoming home owners and the same challenges providing for their families.  We have major equity issues with the bottom quartile, which requires urgent solutions.     

There are ways of meeting the different needs of Maori and other cultures within one democratic governmental system.  As a strong supporter of the market economy, I recognise that “one size does not fit all”.  There will be ways in say education and health services and possibly even prisons, that different systems can be developed for those Maori who want them.  It has to be handled in a practical manner – separate heart or cancer units in hospitals would for instance be absurd, because we barely have critical mass at present.  

All Kiwis should accept there is still some negative flow on from the previous colonial era.  None of these challenges should be beyond the wit of governments.  However, they should stop naively entrenching iwi powers in statutes, because that will end badly one way or the other, and New Zealand will lose its credibility as a quality democracy, with the same rights for all.  

Its democracy or partnership – we cannot have both.

Authorities: Keith Sinclair “A History of New Zealand”, Michael King, “Penguin History of New Zealand”; Claudia Orange, “The Treaty of Waitangi”; Vincent O’Malley; The New Zealand Wars”; Ron Crosby; “The Musket Wars” – see also Ron’s “The Forgotten Wars”; Elizabeth Rata, “Marching through the Institutions: “The Neoliberal Elite and the Treaty of Waitangi”; Brian Easton’s, “Not in Narrow Seas: The Economic History of Aotearoa New Zealand”; The report of iwi sponsored “Matike Mai Aotearoa – The Independent Working Group on Constitutional Transformation”. 

You can follow my posts at www.barriesaunders.wordpress.com

If our majority Labour Government is true to its roots it will:

1. Aim to increase the rate of state house building from the present 2000-3000, to 5000-10,000 over the next ten years. This along with necessary sales and demolition, would result in an increase from the present 64,000 units, to somewhere between 100,000 and 120,000.

2. Find cost effective ways of helping local government finance the infrastructure costs of new housing sites. The NZ Initiative has some some good policy work here.

3. Regulatory reform, including the RMA, is complex but must be done with great care and at speed.

Affordable housing is possible but it requires many things, including a Government that actually wants to achieve it. At present it looks like the PM and Finance Minister only want to slow home price rises, not reduce them back to the 2017 prices, when housing was a “crisis” in the eyes of Labour, and now just a serious problem.

This is not good enough – housing affordability should be a very high priority for the government – it trumps all but the economy. My big concern with the Government is their lack of understanding of how the machinery of state actually works.

It took nearly 40 years of poor public policy to create the present situation. It could be fixed within ten. Let’s see if our Government has the fortitude to grasp the nettle.

The Wellington City Council (WCC), never short of ways of spending ratepayers’ money, wants to improve the Golden Mile, with one option banning all private cars.

There is no shortage of people who don’t like private cars and don’t care much for business either, who will cheerfully go along with this thinking.  Some fantasise about Wellington having European shopping streets with only foot traffic.  Get real, we have just 200,000 people in the city with commuter workers adding to lunch time shopping.  There are other places to shop and of course increasingly online.

Wellingtonians need a serious reality check.   The private sector is struggling with much higher rates than residents for equivalent value properties, high costs and infrastructure weaknesses, including road access to the airport and Eastern Suburbs, to say nothing of stormwater failures.

On top of this we have a seismically challenged Civic Square including a library which might “require” $200 million to strengthen or rebuild, on top of the Town Hall which is costing at least $100 million.  And then there is the Convention Centre underway at a cost of around $160 million.  And don’t forget the Council is considering $30 million to re-work Frank Kitts park.

Some apartment owners are struggling under seismic requirements as are commercial property owners including the Amora Hotel.  At times I wonder whether our Council is not in a fantasy land where some fairy godmother is just going to magic up the money for everyone.

The unusual geography of the city inevitably makes moving across the city rather challenging.   As a long time Te Aro resident, I am familiar with the way traffic flows as well as foot traffic across the city.  I don’t believe the WCC has proved there is a big problem requiring tens of millions.

The big transport issue for commerce and residents is a second tunnel and much better road access to the Eastern Suburbs and airport.   That should be the priority.

While it would be desirable to the reduce the private traffic flow down the Golden Mile, it is critical the benefits of this outweigh the costs.   None of the proposals in my view achieve this.

The low cost effective option is to eliminate all 99 private car parks on the Mile from Courtenay Place to Lambton Quay.  Use that freed up space for a mix of wider footpaths, bike racks, seats and trees.

 

Revised July 17 in the light of feedback 

The most interesting thing about the Ministry of Transport commissioned Sapere report on the future of POAL’s freight operations, is that compared with the status quo, all options will add costs to the economy.

However Sapere’s terms of reference required it to assume POAL’s freight operations would have to move sometime, so the question was when does this have to happen and where is best?

Surprisingly a new port at Manukau is assessed as the least expensive producing net benefits of -$1,982 million net present value and the Firth of Thames the most expensive at -$7,294 million.  Moving the entire freight operation to Northport (half owned by Port of Tauranga – POT), was estimated to be a net -$6,252 million, POT, a net -$3,703 million and a shared Northport – POT, a net -$6,847 million.

Sapere helpfully provides an explanation as to why its conclusions materially differed from the Wayne Brown led Working Group.  A key point is they took a 60 year perspective rather than Brown’s 30 year.   (See page 15 of the executive summary – Sapere “Analysis of the Upper North island Supply Chain Strategy Working Group Options for moving freight from the Ports of Auckland”.

The good news for the Auckland City Council and the Government, is the decision does not have to be made in a rush.  Sapere thinks we have 10-15 years to make the decision.  Provided it can get the necessary consents, the container terminal may have sufficient capacity for around 30 years.  After that a substantial amount of reclamation will be necessary.

Both the Manukau Harbour and Firth of Thames sites have not yet been rigorously investigated in sufficient depth, to be confident that the indicative costs will prove to be realistic.  The Firth of Thames is favoured by the lines, but is very expensive.   A POAL there would be real competitor for POT.

It is clear from Sapere that neither option could likely be consented under the RMA and thus would require special legislation.  This flows from the Supreme Court decision regarding King Salmon (2014) and how the New Zealand Coastal Policy statement affects RMA applications in the coastal marine area.  Special legislation would be more than challenging for any Government, unless by some miracle commercial, environmental and Maori interests were supportive.  Probably when pigs start flying.

Interestingly Sapere rejected the argument that Manukau would not work because of its harbour and the dredging that would be required.   They took expert advice which did not agree with this widely held view.  Most ports require some maintenance dredging.

Sapere also rejected the claim moving the freight operations out of the current site would materially improve Auckland transport problems, because the new activity on the port land would generate its own traffic and the diverted freight would mostly enter the city through other routes.

And they rejected the claim made by the Wayne Brown report that by using the land for other activities Auckland City would be better off financially.

The politics of POAL’s future are extraordinarily complex.  NZ First desperately wants to be seen as a great advocate for Northland to win a seat, while many in the affluent suburbs of Auckland would like to see the port relocated, and presumably not replaced by high rise office blocks or apartments.

The National Party has not said much.   A majority of its supporters in Auckland want the port moved, but they have not yet seen a definitive cost.   Given POAL is owned solely by Auckland City, the rational response should to say go and lobby Phil Goff and co if you want a change.  The Government should not trample on the City’s property rights.

The Labour Party and Auckland Mayor Phil Goff, have many major transport projects underway. The last thing they need is an extra, very complex and expensive freight transport project to deal with.  Auckland City is not able to fund an entirely new port anytime soon.  In that respect Sapere has done them a favour by kicking decision time down the road.

The option not considered is that POAL remains on most of its current site indefinitely, and the marketplace takes care of the freight growth by greater efficiency at POAL, and more freight going through POT and Northport.  POT is convinced it has a lot room to increase its throughput, that was not recognised by either the Wayne Brown report or Sapere.

Personally I don’t care whether POAL remains on its present site, moved to Manukau or the Firth of Thames, or some deal is done with POT and or Northport.

But having removed the central planner with the Port Companies Act 1988 and established the ports as commercial businesses, I am opposed to any taxpayer money going into any port.   Port investment is for the shareholders, which is mostly local authorities, with a few such as POT, having significant private shareholding.

However as owner of KiwiRail and the roads, the Government has a key role in determining how ports will be linked into the transport network.  Hopefully the Government will take its time on working through these complex issues, and not be influenced by one political party’s needs, or those in the leafy suburbs who want the container cranes out of their sight.

I chaired the 14 member Port CEO Group from 2002-2015.   http://www.barriesaunders.wordpress.com

The notion that money can be used to buy policies via donations to a political party, is repugnant to anyone who supports a quality democracy.   I believe there is too much anecdotal information around to dismiss the concerns held by several commentators.

What has not been discussed is the role the MMP system plays in the way monied interests view political parties.   Under MMP smaller political parties don’t expect to get 35% plus of voters and thus target their campaigns around a few issues.  These few issues attract not just voters but money which supports them.

As major parties Labour and National have to appeal to broader constituencies and thus cannot indulge too many narrow special interests.  When negotiating with smaller parties, Labour and National have to make policy concessions, much as that might grate with their supporters.   Thus we have a situation where MMP provides the opportunity for those with money to influence specific policies.

We have laws relating to political donations and the fact some behaviour has resulted in prosecutions and also SFO investigations, show the system does work.   Could it be better?  I think so but don’t support the notion we have a Royal Commission as proposed by Bryce Edwards.  Royal Commissions are expensive long winded exercises which sometimes produce reports that don’t get acted on.

The USA has heaps of laws in this area, but their system allows people to effectively buy policies.  The challenge with any new law is to prevent policy buying, without creating undue compliance costs or simply change the way the policy buying works.

My proposition is two fold.   First, require political parties to disclose the names of all donations above $1000 or $15,000pa.   Second, require all donors to be on the electoral roll.  This would mean no corporate, union, foundation or any other organisations, donating to political parties.

By reducing the donation disclosure level to $1000, donors will be part of a much larger group and thus hopefully less shy about being disclosed.   Also the $1000 limit, combined with the requirement they be on the Electoral Roll, will make it extremely difficult for donors to get around the $15,000 current disclosure level.

The two proposals will require some consequential review of legislation applying to  others, to ensure they were not used to get around the requirements for political parties.

New Zealand has a great reputation for transparency and non corrupt politics.   My proposals would reduce reputational risks and enhance our democratic institutions.

 

 

 

Next Thursday we have a public holiday to “celebrate” 180 years since the signing of the Treaty of Waitangi.  Unlike the USA which every July 4 celebrates the Declaration of Independence without reservation, Kiwis have mixed feelings about the meaning of our national day.

Some Maori believe they still haven’t got justice.  Many non-Maori feel threatened by Maori claims for what is seen as “extra rights”.  They are not prepared to say what they think because they fear being demonised like the Hobson Pledge group, which quite rightly is concerned about undermining the integrity of our democratic fabric.

This is a pity because it was a remarkable event – a powerful colonial power elects to negotiate a treaty with the chiefs of the indigenous population, instead of simply declaring it a colony and establishing direct rule.   This contrasts with Australia where the indigenous Aboriginals were treated as virtually irrelevant.

The extraordinary failure of our education system to teach New Zealand history for at least 50 years, is the major reason why so many are often confused and bewildered.  Hopefully this will be in part remedied by Government plans for all schools to teach NZ history.

However I expect this process will be controversial in itself as there are many histories.   I don’t have much confidence the Ministry of Education will produce a balanced history curriculum, but that is not a good enough reason to continue mass ignorance of the population.   It will be a bumpy process, but it is a journey that must be made.

In the meantime it would be great if everyone feels they can participate in public discussion without the fear of being slagged off in the media, particularly social media.   My own thinking has evolved over the last 40 years, but below is a note I wrote 15 years ago, which I stand by today.   Considered responses invited.

“The essential elements of the Treaty (Property rights, citizenship and sovereignty) should be honored because that is the right thing to do.  However the Treaty should not be seen as blueprint for government policy for the following reasons:

1. The documents are not robust enough. The various versions contain significant differences which means there was no true meeting of minds and explains why there has been so much debate about its meaning.  It is a moot point whether all Maori signatories understood fully the term “government” in the sense of sovereignty.  (See the English translation of Article One of the Maori version.)  It should be noted also that some Maori chiefs signed the English version and some did not sign at all.
2. Society has changed in ways that make some aspects of Article two less relevant today. Maori Chiefs do not have anything remotely resembling the role and authority they had over members of the tribes in 1840.  Maori and “Pakeha” (i.e. everyone who is not Maori) are increasingly intermingled racially and culturally.  While many Maori and non-Maori Kiwis will identify themselves as one or the other, many also see themselves on a continuum – somewhere between “Maori” and “Pakeha” or non-Maori.
3. New Zealand has become a democracy with all that implies in terms of individuals being equal in the eyes of the law but also the importance of respecting the views of minorities and protecting their rights. Trying to build a society on the basis of an imperfectly drafted minimalist treaty would be like governing on the basis of the Old Testament, the Koran or the original version of the American Constitution, which did not give the vote to women or Afro-American slaves.

The Government should

1. Complete as soon as is practicable the historic Treaty claim process.
2. Ensure that all New Zealanders are treated equally in the eyes of the law but that the interests of Maori and other minorities are also protected.  The partnership concept is a creation of the Court of Appeal and the Treaty Industry.  It is not mentioned in the Treaty and is not consistent with democratic principles.
3. Actively assist those less advantaged.  In achieving this goal the government may use non-government agencies, including Maori agencies, to deliver education, health and social welfare services.
4. Recognize and help nurture Maori culture and language because it is the indigenous culture of New Zealand, not just because of the Treaty.
5. Protect property rights.  However it should also be accepted that from time to time the Government has considered it necessary to qualify or remove these rights in the national interest, as evidenced by the Public Works Act, mining legislation and the RMA.   An issue to be addressed in each case is whether compensation to the affected party is appropriate.”