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JTF: Four Tests | Sep 15, 2008 00:10
"Four tests will need to be met – we're not going to pay for tax cuts by increasing borrowing; we're going to make sure any tax cuts don't lead to a cut in social services; we're going to have to ensure that there is a fair and just element in any tax cuts; and we're going to have to be satisfied that any tax cuts will not add to the imbalances and pressures in the economy." - Dr Michael Cullen, Minister of Finance, 4 November
That was 6 months ago, when the weather was warm, the cheese was plentiful and Labour was only 13 point behind in the polls. Back then, Cullen's tests read like a political haiku: simple, elegant and open to any interpretation you want.
But with this week's $10.4 billion tax cut package has turned it into a riddle. If it's not coming from increased borrowing or a cut in social services, where's the $10.4 billion coming from?
Most of it has come out of the surplus, which has been milked dry by this tax cut. The surplus in 2012 was predicted to be $3.9 billion, but with the tax cut, the latest forecast puts it at $154 million.
But the surplus wasn't big enough. To make the tax cut fit into the surplus, Cullen had to cut the allowance for future spending. That's the money that we see every budget for new initiatives. Cullen sliced $250 million off that allowance. But that allowance "stacks" – that is, every year where it's taken out, it impacts on the following years, too. So the effect would be twice as big in the second year, three times as big in the year after that, and so on. That adds up to $1.1 billion less spending in the next four years.
It's not a "cut in social services", says Cullen. It's "a slower rate of improvement in social services than would otherwise occur". It's some seriously dodgy ground.
And still, after eating up the surplus and cutting down the allowance for future spending, that still wasn't enough. Less taxes mean less revenue for the government. After 2009, there won't be enough cash for the NZ Super Fund, so that's going to have to be funded out of debt.
Gross Sovereign-Issued Debt (excluding settlement money held by the Reserve Bank) is forecasted to rise from $31.8 billion to $35.5 billion in 2012 – and it's virtually all because of the tax cuts. Does that mean it's failed the "increased borrowing" test? Not quite. The Government's debt target is fixed to 20% of GDP, so as GDP rises, the Government can borrow more money without "increasing borrowing", since it's still within its "20% of GDP" limit.
It might sound like a whole lot of bollocks, but to be fair, the Government has aimed 20% of GDP target for a while now, and debt as a percentage of GDP is a fair way to judge the size of the debt relative to New Zealand's ability to pay for it. So as a percentage of GDP, debt is actually expected to drop from 18.2% in 2007 to 16.8% in 2012.
Despite all the numbers pointing in the other direction, the bottom line is that the debt track has not gone up – which means that in the grand scheme of things, there has not been increased borrowing. National have yet to release their economic policies, but unlike Labour, they see the 20% of GDP debt target as arbitrary and will have no qualms if it goes higher.
The fairness test is passed with flying colours – though everyone expected the brackets to shift, the changes to the lowest rate was unexpected. It benefits every tax payer, and it's a particular relief for low-income earners.
As for the final test, Cullen is counting on the economic cooldown counter the inflationary pressures of the tax cuts, but the pundits are not so sure. It's bigger and comes sooner than the Reserve Bank had expected, which puts pressure on them to keep interest rates higher for longer. The jury's still out on this question, but we're sure to know before the election.
JTF: "In the red" and Rail "Myth" | May 11, 2008 00:00
"Skyrocketing living costs mean the average New Zealand family is going into the red simply to cover everyday expenses." – Sunday Star Times, 4 May
The Sunday Star-Times claimed that in 2004, the average household was just scraping by, but in 2008, the average household is going into debt just to pay the bills – that is, every week, they spend more money than they earn.
Sure, households are facing the squeeze from several different areas, but the idea that the latest series of price rises have pushed the average household "into the red" is arbitrary and unfounded.
The last Household Economic Survey (HES), conducted by StatsNZ in 2007, showed that the average household expenditure on the purchase of housing was $38.30 per week. Unbelievably little? That's because the HES includes everyone over the age of 15, and many of them don't have mortgages. For example, people who are renting or own their house mortgage-free.
So the SST used independent mortgage data for the average household mortgage, but didn't adjusting the income. The "average family" in that model had the burden of an average homeowner with a mortgage, but only the income of the average household (which is arguably lower).
It's a mismatch that highlights the bigger issue. All this "average family" business is just a big fat statistical construct. The fact that a column of numbers add up to a negative doesn't mean families have crossed a magical threshold and are suddenly "in the red". It just an arbitrary comparison between two different sets of numbers, and they weren't really comparable to begin with.
The only clear conclusion we can draw from these numbers is that most of the squeeze is coming from the mortgage. Average mortgage rates have gone up from 6.9% in 2004 to 9.7% in 2008. Mortgage repayments have shot up, and that's put pressures on families with mortgages. But it also tells us that the bad news about food isn't so bad after all.
According to the 2004 HES, households spent 12.3% of their pre-tax household income on food. In the 2007 HES, it dropped to 12%. Even we take into account the significant increases in the last two quarters, that still only gets it up to 12.1%. In the last four years, income has grown faster than expenditure on food. So, while prices might have risen, Kiwis are making sensible choices at the supermarket and getting by.
"Mr [Richard] Prebble said it was a myth to say rail was environmentally friendly if the production of rail, locomotives and the need for trucks to take goods to destination were counted." – NZPA, 5 May
How does he know? According to Prebble, when he was the Minister of Railways in the late 80s, the rail bosses told him. It's hard to find any evidence to back him up, but there's a mountain of material to prove him wrong.
The most authoritative is a Energy Efficiency and Conservation Authority (EECA) report from 2000. It worked out the energy intensity of different kinds of transport, and found that freight transport by road used 3.10MJ/t-km (that's 3.1 million units of energy to move one ton of goods one kilometre), while rail only used 0.61MJ/t-km. And that took into account the energy used by trucks to get goods to the railway station.
Chris Kissling, Professor of Transport Studies at Lincoln University, says that the gap is probably not as big now. With rising fuel prices over the last ten years, fleet operators have worked hard to find ways to become more energy efficient. And although rail is New Zealand is less efficient than other countries because of our terrain, Kissling was unequivocal: "[Rail] is less energy intensive, and will always be less energy intensive."
But what about the cost of laying tracks and building trains compared with building roads and trucks? A European study estimated that the environmental cost of the "up- and down-stream processes" for heavy road vehicles was three time higher than similar costs for freight rail. All the evidence is weighed heavily in rail's favour – unless you count the dark horse of transport, coastal shipping.
It has even lower energy intensity than rail, but is currently held back because of dirty fuels. While Kissling was optimistic about the rail buy-back, he says that it needs to be well-managed, otherwise, New Zealand would be better off turning to the sea.
JTF: Climate change progress, or lack thereof | Apr 27, 2008 00:00
"The latest annual greenhouse gas inventory report shows New Zealand's emissions rose less than one per cent between 2005 and 2006... the increase of less a percent is an improvement on the previous year's increase of 3 percent." - David Parker, Minister for Responsible for Climate Change Issues
If Parker is breaking out the champagne, he'd better have the world's smallest bottle. The best news he can take out of the latest report on New Zealand's greenhouse gas emissions is that our position is getting worse – though getting worse at a slower rate. But even that change is still insignificantly small.
Under Kyoto, New Zealand is obligated to bring its average net emissions between 2008-2012 down to 1990 levels, or to pay for the difference. The latest report showed that in 2006, New Zealand generated 26% more carbon dioxide equivalent emissions than it did in 1990.
As late as 2005, it was thought that New Zealand would be able to meet its Kyoto targets and then some, but now that seems highly unlikely. The last set of projections expected the current trend to continue, and that by 2012, New Zealand would have blown its Kyoto target by 45.5 million tonnes of emissions.
At the current price for carbon credits, that bill would come to a total of $943 million. That bill has risen rapidly over the last few years, mostly due to the international price of carbon credits more than doubling in the since 2006.
Another big chunk of that is, believe it or not, the price of milk. The last set of projections took into account the increase in dairy prices, which is expected to increase the number of dairy cows in New Zealand. The extra cows are expected to generate an additional 4.3 million tonnes of emissions between now and 2012. And that's just the flatulence. Processing the milk from these cows will require additional power, pumping another 1.5 million tonnes of greenhouse gases into the atmosphere.
Altogether, the additional emissions will cost New Zealand about $120 million at the current price for carbon credits.
But the price effect works the other way as well. In the 2006 projections, the increase of the price of oil from US$30 to US$60 per barrel was expected to make more people use public transport, or simply travel less. The effect is to reduce oil usage and reduce emissions by a whooping 14.5 million tonnes over between 2008-12 (that's worth $300 million). The price of oil has nearly doubled again since then, and current is currently at US$118 per barrel.
"New Zealand's greenhouse gas emissions are growing faster than almost any developed country." - Nick Smith, National Climate Change Spokesman
That's an exaggeration, but sadly, a fairly small one. The 2006 international figures haven't been compiled yet, but according to the 2005 figures, the growth in New Zealand's net emission since 1990 is the 6th highest among the 23 developed countries that are signed up to Kyoto. If we just looked at growth in the last 5 years, New Zealand still ranks 7th out of 23. Our emissions have grown even faster than the United States, which has not ratified the Kyoto Protocol.
So does Helen Clark deserve her latest gong as "Champion of the Earth"? New Zealand is so far behind on its climate change targets that any debate about whether we should be a world leader or fast follower just plain ridiculous, but it's worth noting that the talk about New Zealand's obligation under the Kyoto Protocol is usually only referring to the first "Commitment Period", or 2008-2012. In the grand scheme of things, it's not a very long time, and more recent climate change policies may prove their worth over the longer term. That isn't going to stop us from having to fork out a billion dollars in 2012, but at least we can take comfort in the knowledge that the money is providing other countries with the incentives to do what we've failed to do.
JTF: Australia-NZ wage gap & FTA | Apr 13, 2008 00:00
"Since the election of a Labour-led government in late 1999, any widening in the wages gap [with Australia] has been stopped in its tracks. The latest available data shows that in 2007, the wage gap was just 0.4 per cent wider than it had been when Labour first came into government." - Trevor Mallard
Those numbers are calculated using the average exchange rate for the last 17 years, which doesn't take into account the real changes in purchasing power between Australia and New Zealand that occurred during that time. Nitpicking? Not at all. Though it looks like – and is – a dry technical detail, the difference which results is massive.
Mallard's calculations show that the Australia-New Zealand gross wage gap rose by 0.45% during Labour's time in government. The same figures, when adjusted using using Purchasing Power Parity figures from the OECD (which takes into account the real purchasing power of our respective currencies) show that the average weekly Australian wage was 21.6% higher than New Zealand's in 2000. By 2007, that had risen to 25.9%.
It's risen 4.3% during Labour's time in office – nearly 10 times what Mallard originally claimed.
That's hardly good news for National, either. The last time that they were in government, the wage gap rose by 12.2%. Year for year, that's more than twice as fast as the gap rose under Labour.
When taxes are taken into account, the gaps has grown faster under Labour. The reason is simple – tax cuts introduced in Australia. For example, the top tax rate in Australia is 45%, and the top tax bracket used to be $60,000 a decade ago. It's now at $180,000. While the government counters with its own Working for Families, in fact, the Australian family tax benefits are even more generous.
"Gross wages have moved apart and tax policies have amplified that growth," says Dr Patrick Nolan from the NZ Institute of Economic Research.
The bottom line is that wages in Australia are higher than New Zealand, the gap is growing, and that neither government in the past 17 years has had success in catching up.
"People have come around and recognised that that is factually correct, that taxes are higher in NZ on most incomes," says Nolan, "and they're getting higher – more and more people are paying higher taxes in New Zealand, whereas in Australia it's going a different way."
"When you've got a country like Australia, which has got the attraction of bigger cities and better weather and beaches, you're already in a position where you're behind the 8-ball. So if you have higher taxes, it makes it harder to attract people. It's one of the few things we can actually compete on, and we just haven't been competing on it.
"My big concern is that it's going to be a debate around who benefits and by how much, and we're going to get into a bidding war, when it should be about what's the most economically sensible approach. What's important is that we design a tax system that encourages a strong economy and that rewards people when they make decisions about working and looking after their family, and when we have a strong system and a strong economy, then that's when people will stop migrating, when we'll be able to attract people back."
"The balance of payments will worsen as a consequence of [the FTA with China], not improve, because the growth of their exports will be greater than the growth of ours – which are limited anyway – and one of the key, fundamental elements of an unsound economy is a serious balance of payments deficit." - Winston Peters
No. According to the National Interest Analysis conducted by the Ministry of Foreign Affairs, New Zealand exports to China is expected to be 20-39% higher over the next 20 years as a result of the FTA with China. That's US$180-280m worth of additional income for New Zealand exporters each year. Chinese exports into New Zealand, on the other hand, is only expected to be 5-11% higher during the same period. That's worth an additional US$40-70m each year.
The maths is not hard. New Zealand exporters will benefit more than Chinese exporters from this deal, which will help improve the balance of trade in New Zealand's favour.
JTF: Beneficiary debt & FTA | Mar 30, 2008 00:00
"The percentage of Ministry of Social Development clients who owe debts is 19.8% of their total current clients – this is a very small increase since 2000, when 18.8% of Ministry clients had debts with the Ministry. The percentage is not 70% as Judith Collins says." - Ruth Dyson
It's a good comeback – shame that she took 6 months to come up with it.
During Question Time at Parliament in September last year, Judith Collins grilled Dyson about why "70% of beneficiaries are in debt to Work and Income". Dyson avoided the point, but now, six months later, has discovered that Collins came up with the 70% figure only because she failed to count superannuitants as part of the equation.
Dyson is right to point out that the debt figures includes superannuitants, and so the total number of MSD clients should, too. But because superannuation isn't income tested, accidental overpayment are less likely to happen and they are less likely to owe money to Work and Income. With half a million superannuitants in New Zealand – compared with 270,000 on benefits – the final numbers draw attention away from the genuinely large number of beneficiaries who owe money to Work and Income.
In 2007, 178,359 beneficiaries and 129,775 former beneficiaries owed money to Work and Income. Whether you divide that by 270,000 beneficiaries or by 770,000 MSD clients, these are still big numbers.
More importantly though, Dyson's focus on the number of debtors neglects the size of the debt. Current and former beneficiaries owe a total of $763.8m – that's up from $450m in 1999. And in 2006/07, even after 15,000 in-person client check-ups and 39,000 investigations and reviews, Work and Income still overpaid $150m worth of benefits, further adding to beneficiary debt. This is down from $190m of overpayments in 2001/02.
But what does a high level of beneficiary debt actually mean? Overpayment by Work and Income is a significant part of it, in addition to benefit fraud. These are avoidable elements that the government is trying to reduce – with limited success. More than a quarter of the debt, however, is "recoverable assistance", interest-free loans that help beneficiaries cover unexpected costs, so this element of debt is due to Work and Income loaning – rather than giving – money to beneficiaries.
"I support advances of payment to beneficiaries when they meet the criterion, which is that that person or his or her family has an immediate and essential need," Dyson said in Parliament. "I would prefer that to be the way to remedy the situation, rather than the alternative of their having to pay high interest to a loan shark."
"This House will decide on whether there is a free-trade agreement with China at the end of the day." - Annette King (answering on behalf of Phil Goff)
When a significant treaty between two countries is signed, the treaty and an accompanying National Interest Analysis is brought before Parliament to be reviewed by a Select Committee. Then the Select Committee decides on... well, not a lot. Under Parliament's Standing Orders, they have to "consider whether the treaty ought to be drawn to the attention of the House".
Why is it so watered-down? "Parliament does not have the right to say no [to the treaty]," says Victoria University international law lecturer Joanna Mossop. "The power to enter into treaties rests solely with the executive, which is cabinet."
"Before this process was introduced, there was no requirement for the government to report to Parliament about what treaties it was entering into. This process raises the profile of important, significant treaties and [give] the opportunity for Parliament to debate these treaties. [It] was designed to improve democratic discussion and debate, but ultimately, Parliament cannot refuse."
Parliament still decides on whether or not to pass legislation that will implement the treaty in New Zealand, but that, along with the Select Committee consideration of the treaty, both happen after the treaty is already signed. But the treaty still has to be ratified after that – something the government won't do unless Parliament passes the legislation.
"Historically, it was the monarch who bore the obligation to other monarchs," says Mossop. "In our system, we have the separation between the executive, legislature and judiciary, and that the power of the monarch has generally been absorbed by cabinet [the executive]. New Zealand is represented on an international level by the executive, so it makes sense that it's the executive or cabinet that has the power to enter into those international obligations."
"It's not necessary that that's the way it's always going to be, but that's the way it's worked out as a result of our constitutional history and the way we run thing."
JTF: Report filing paper shufflers | Mar 16, 2008 00:00
"Over the past eight years the bureaucracy has grown out of proportion to those parts of the state sector that actually serve the public... Since 2000, the number of bureaucrats has grown from 26,200 to 36,000." - John Key
Sieving out (as Key put it) the "paper-shuffling and report-writing" bureaucrats from the civil servants who "make a real difference in people's lives" is tricky business.
According to StatsNZ's Quarterly Employment Survey (QES), there are 35,950 civil servants who are "mainly engaged in formulating and administering Central Government policy". Treasury, on the other hand, says that there are 8,495 equivalent full-time staff working for "policy departments".
Which figure tells us how many bureaucrats there are? Well, neither. They count different departments, but both lump everyone in a department into the same category, telling us very little about who does what.
The detailed breakdown of selected sectors provided by National actually show that the number of bureaucrats is likely to quite small. Even in the Ministry of Social Development, one of the government's largest departments, there were only 359 policy staff and 855 corporate and governance staff, compared with 8,291 service delivery staff, including those from Child, Youth and Families.
But the breakdown also proved Key's main point – though small, the number of these bureaucrats have grown faster than the rest of the government and faster than the rest of the economy since 2000. That means that the proportion of bureaucrats has increased.
So if there are more bureaucrats in 2006 than in 2000, does that mean there're too many? Only if the civil service was fine in 2000. And it wasn't, according to Deputy Director of the Institute of Policy Studies, Professor Jonathan Boston.
"There was a widespread view that the cutbacks during the 1990s had been such that many departments were struggling. Many were employing large numbers of consultants because they didn't have the core staff that they needed, and there were various activities that were at risk because of limited capability. Even members of the National Party at the time accepted that there were some real issues facing the core public service in the late 1990s that would need to be addressed."
Now that Labour has brought them back, how do we know if our paper-shuffling, reporting-writing bureaucrats are earning their keep?
"With difficulty, to be blunt," says Boston. "Although we have a very elaborate system of specifying performance in advance, of monitoring performance, and then reporting on how well the performance has been, at the end of the day the non-financial stuff is not actually very useful in telling people whether or not you've got value for money."
Just two weeks ago, Secretary of the Treasury John Whitehead voiced his concerns over the ability of government agencies in "achieving results and value for money".
"I think it is fair to say our current level of connection and citizen focus is well short of where we can be," says Whitehead. "We still don't provide the performance information to drive that focus and we don't measure and assess value for money in public service provision in ways that we could. There is a sense that performance measurement and assessment is treated by some as a compliance exercise or a risk to be avoided or minimised."
But while these accountability measures are failing, the public service is not, according to the World Bank. Their Worldwide Governance Indicators collates survey data on governments around the world and ranks them on six key dimensions, including "Government Effectiveness". This measures "the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies."
The indicator took a dive in the late 90s when the civil servants thinned out, hitting rock bottom in 2000, but recovered when the bureaucrats started coming back. The bureaucracy, it seems, might have made a difference to the health of the whole public service.
In 2006, New Zealand ranked 8th out of 212 countries for Government Effectiveness.
JTF: Brownlee - 93.53% Bullshit | May 02, 2008 00:00
Last Sunday, we debunked National's Energy Spokeman Gerry Brownlee's claim that the electricity system is in crisis, but this week, he's continued his campaign with two of the most bogus "facts" we've seen this year.
"National Party Energy spokesman Gerry Brownlee says he understands that Labour's emergency stand-by power generator at Whirinaki is running flat out burning up to one million litres of diesel every 24 hours." - National Energy Spokesperson, Gerry Brownlee
If we're to take "running flat out" as meaning "operating at 100%", Brownlee's about 93.53% off. According to Contact Energy, operators of the Whirinaki power plant, it was running at 6.47% of its maximum output in February. In January, it ran at 2.34%. When questioned about his claim, Brownlee told the Herald on Sunday:
"I think you'll find, when you see the figures, that it's running at something like 16 hours a day at full speed."
You'd be forgiven for thinking that "16 hours a day" meant "16 hours every day". Not the way Brownlee is using it. The figures show that it ran for 16 hours on a day - on one single day, that is - and only at full speed for 11 hours. When presented with the figures, Brownlee backed down further. Kinda.
"With all due respect, you've got to sharpen up a bit here. These people [at Contact Energy] are trying to put a bit of gloss on a very big turd. The deal here is that yes, across a month, it might have only run for 3% [up to 24 Feb] of that month. But there were days, there were hours, and there were other batches of time during that month where it had to run otherwise the lights would go out."
That's not true, either. According to Kieran Devine, General Manager of System Operations at Transpower, Whirinaki kicked in because the hydro generators were trying to conserve water for winter. That's to say, if the demand for power went up further than it did, or if Whirinaki didn't run, the hydros would have kicked in again. The lights would not have gone out.
But the system was also tighter than usual at that time, said Devine, because power plants were taken down for maintenance to ensure that they were ready for winter, and the Huntly power station couldn't operate at full capacity because the river (which it uses for cooling) was too hot. During winter, when power usage is highest, these problems will disappear.
"Genesis boss Murray Jackson told the [Select] Committee that at winter peak the North Island would be 1000 M/Ws short of supply." - National Energy Spokesperson, Gerry Brownlee
No, he didn't. According to the Genesis Energy spokesperson, the 1000MW figure refered to the capacity that went when the Pole 1 interisland cable was taken down for maintenance and the New Plymouth power plant was closed. These were things that everyone in the industry and everyone on the Select Committee already knew about, and didn't mean that the North Island was 1000MW short of supply.
Brownlee's mistake could be excused if the National Winter Group - a group of industry experts that includes members from Genesis Energy - didn't just release a report earlier in the month outlining the situation. They looked at a worst case scenario, in which we experienced a one-in-twenty-year high demand, a one-in-ten-year low in generation, with Pole 1 remaining completely useless. If this happened, they expect that we would still have 348MW of reserve capacity left, but we would be vulnerable to major faults. If Transpower brought Pole 1 back at half capacity - which it's currently considering - then we could survive the worse case scenario plus a major failure without industrial users having to cut back.
But even under a worse-than-worst-case-scenario, with the biggest power generator failing and Pole 2 going down as well, it still wouldn't get close to 1000MW. Not only did Brownlee misunderstand Jackson and demand government action without checking the facts, but he claimed something that flew in the face of common sense.
Tsk tsk, Mr Brownlee. Pretty poor effort for a would-be Energy Minister.
JTF: Housing and Electricity | Feb 24, 2008 00:00
"The Housing Minister all but confirmed that first home buyers will have to earn at least $70,000 a year to get into one of Labour's 'affordable homes'. Of course the average household income is less than $70,000." - National Housing Spokesperson, Phil Heatley
Heatley got the house prices right - Minister of Housing Maryan Street confirms that the 500 houses in the Hobsonville project allocated as "affordable housing" are going to have a price tag "in the low $300,000s", and banks would generally require a household income over $70,000 to approve such a loan.
The debate took a strange turn, though, when one survey said that the average household could borrow enough for the Hobsonville house, but according to another, they couldn't. Street quoted the 2007 NZ Income Survey, which said it was $75,140, while Heatley looked at the 2007 Household Economic Survey, which showed the median household income to be $67,973.
Aucklanders have the second highest level of income in the country, and young couples generally have a higher-than-average household income. This suggests that the kind of people who would buy one of the affordable house in Hobsonville - young couples working in Auckland - probably earn more than $70,000.
Just because they can get a mortgage doesn't mean it's affordable, though. One of the key indicator of housing affordability looks at how much of the household income is being spent servicing their mortgage. If it's over 40%, a household is defined as being in "mortgage stress". A $320,000 mortgage would cost over $600 each week to service, which is more than 45% of a $70,000 per year income. That's tough going for any household.
Street acknowledges that Auckland is a tough market for housing, but points out that there's plenty of government help available. The government will match Kiwisaver contributions for deposits on first homes, the Welcome Home Loan scheme can also help with deposits, and the new Shared Equity scheme can reduce the borrowing amount.
But Heatley says that these schemes don't address the core issue that housing is too expensive. He says that National will reduce taxes and bring down interest rates to increase what households can afford to borrow, and streamline the RMA to lower the cost of development.
Another point of conflict is the Metropolitan Urban Limit (MUL), which restricts the land available for development. Street says that it's needed because "the prospect of urban sprawl, particularly with the traffic problems that that would create, is just too horrible to contemplate." National, on the other hand, supports extending or abolishing the limit, which would reduce land prices.
"If the MUL shifts," says Heatley, "and more money has to go into infrastructure, we're well aware that we have to do that. Infrastructure investment does not scare us."
"Labour's failure to future-proof our energy infrastructure is to blame for looming electricity shortfalls this winter. They should admit there's a problem and plan to get through it, avoiding public shock at cold showers, industrial shut-downs, and dimmed street lighting." - National Energy Spokesperson, Gerry Brownlee
Electricity shortfalls are not looming. There is concern about the capacity to meet peak demand, but this is a normal part of the system functioning.
A lot of things would have to go wrong simultaneously for the emergency measures to take effect, says Stephen Gale, an energy sector specialist at strategic consultancy firm Castalia. "You'd have to have the [inter-island] cable be unusuable, unusually calm weather so that the wind generating capacity we have was of no use, and then you'd have to have some other [power] plant fall down."
"But you'd know it's happening, and you get on the phone and do something about it." Power-intensive industrial users get the call and a deal is made. When peak supply is tapped out, some of these major users cease operations for a short time. Normal users are unaffected.
Why don't we just build more peak capacity? Because it would sit around doing nothing for the other 362 days of the year. "It's unhealthy for the system to have so much spare capacity that you never even have the sniff of a problem," says Gale, "it's vastly expensive to do that, and it's a hidden cost that everyone would be carrying."
JTF: Crime out of control? | Feb 10, 2008 00:00
"Violent youth crime is at an all-time high." - John Key (State of the Nation Speech, 29 Jan)
That's true, but violent old people crime is at an all-time high, too. Violent crime for every age group over 13 is, technically, "at an all-time high", and the fastest growing group of violent offenders is in the 51-99 category. Boot camp for old people, anyone?
Young people still commit far more violent crimes than people over 30, but the increase in violent crimes isn't specific to youth – it's happening across the board. Youth crime as a whole, on the other hand, is actually decreasing. 2006 saw the lowest number of police apprehension for youth offending since 1995. When the change in population is taken into account, that's a 17% decrease over ten years.
Fiona Beals, a Education Studies lecturer at Victoria University, says that the way young people are stereotyped in youth crime debates has a negative impact, especially on those who are already vulnerable.
"Young people become pawns in an adult game," says Beals. "Often the solution is seen as education, but an education based on controlling young people, keeping them at school, and limiting their opportunities can be more damaging than helpful."
"Why is violent crime against innocent New Zealanders continuing to soar?" - John Key (State of the Nation Speech, 29 Jan)
It might be because the police are getting better at filing. The biggest changes in violent youth crime rates occurred in mid-2005 – when the Police changed over to the new National Intelligence Application database.
An independent report in 2006 found that the level of recorded crime shot up dramatically after 1 July 2005. Violent crimes, which was 3% higher than the previous year, suddenly jumped to being 10% higher. But if there was a real surge in violent crimes, it didn't show up in 111 calls or ACC claims.
The report concludes that "the increase in recorded crime is not primarily driven by an increase in actual criminal incidents, but by different recording practices associated with a new computer system." While there is evidence that the actual incidence of violent crimes is on the rise, it's probably a smaller increase than the raw figures suggest.
"We often get [crimes] happen in this [summer] month that we wouldn't have happening in winter." - Annette King (NZPA, 31 January)
More violent and sexual crimes do occur during warmer weather, says Pat Mayhew, Director of Victoria University's Crime and Justice Research Centre. While this can be partly attributed to tempers rising with the temperature, there are practical reasons, too. People stay out later at night, when crime is more likely to occur, and drink more, which also contribute to violent crimes. In the colder months, property crimes are more likely.
While seasonal differences can explain the spate of murders in January, it doesn't really need explaining at all. The number of murders in a month is very small, so even tiny, random change can appear to make a huge difference, when it actually means very little over the long-term. This statistical volatility means that we can't draw conclusions based on a month or two, we have to look at the data over a much longer period.
Analysts generally work out the long-term trend by looking at five year blocks. Between July 2002 and July 2007, there were 489 cases of homicides (including attempted murders, manslaughter, etc.). In the five years before that, there were 523.
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