Announce protest actions, general chit chat or give your opinion on issues we haven’t covered for the day.
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On 8 November David Parker will sit down with fellow trade ministers from the TPPA-11 countries in Da Nang, Vietnam, and decide what to do with the deal. The officials have just finished three days of intense technical discussions in Tokyo.
There is now a 50/50 chance they will agree to proceed with the deal without the US and on what terms.
At most, some of the most objectionable parts of the existing agreement will be suspended (or ‘frozen’) pending re-entry by the US. Nothing is to be rewritten, except the rules for entry into force (which previously required the US’s participation).
All its toxic elements remain, to come into effect if the US decides to re-engage.
In other words, our new government may decide in the next few days to adopt an agreement that all three parties said should not be ratified when National tabled it in the House.
What parts of the TPPA might be ‘frozen’? In Japan, the officials considered around 50 items tabled by each country. Because of the ongoing shroud of secrecy, we don’t know what was on New Zealand’s list – and the TPPA’s secrecy pact means we won’t know for at least another four years unless the government decides to tell us!
We know the eleven countries have agreed to ‘freeze’ about one third of the 50 items. A lot of these are on intellectual property (but not extending copyright for another 20 years, giving Hollywood, Sony etc the benefits without any cost to the US). Some other requests have been dropped.
The officials will try to agree on the remaining half when they reconvene in Da Nang tomorrow, then pass the remaining decisions to the trade ministers and if necessary the leaders. They won’t have a lot of time, because they will be meeting on the margins of the larger APEC meeting which they also have to attend. Hence, the 50/50 risk of an outcome.
Crucial remaining issues on the list for ‘freezing’ include investor-state dispute settlement (ISDS), the ban on countries requiring personal or corporate data to be held locally (see my previous blog on the e-commerce text), and the rule that prevents state-owned enterprises from giving preference to local firms when they buy and sell products and services.
But other important items are not on the agenda. These include the special rules that protect foreign investors (a separate issue from ISDS); the annex that allows big Pharma to have greater influence over Pharmac’s decisions; the requirement to adopt international conventions on intellectual property (such as the UPOV 1991 convention on plant varieties that the Wai 262 Waitangi Tribunal report said was inconsistent with the Treaty); the government’s right to prefer buying Kiwi-made; requiring foreign firms like Amazon to have an actual presence inside New Zealand to subject them more effectively to our consumer protection and tax laws; insisting that foreign buyers of resources like forests process the logs locally to promote work, regional development and ease the shortage of products; and many more.
This is the time for action. It is time to hold the new government to account through every avenue you have available.
Remind Labour it said there was no valid economic rationale, even when the US was involved, and a potential for job losses. And that it called for a health impact assessment –repeated to the new government by Doctors for Healthy Trade this week.
Remind New Zealand First it denounced the special rights for foreign investors who could enforce them against the government for massive damages in dubious offshore tribunals. There’s no point in saying we won’t have it in future agreements if it’s in the TPPA.
Remind the Greens they said the TPPA belongs to a failed neoliberal model, when the country and the world need genuine sustainability and the capacity to address climate change.
Above all, remind them they voted for real change.
Look at how this Washington insider blog managed to catch the real stock of our Ambassador to the US…
The party circuit began for many at the Embassy of New Zealand last Tuesday. Perhaps the island nation known best to Americans as the filming location for the Lord of the Rings movies could fulfill Barrack’s prediction. But Ambassador Tim Groser made no attempt to hide his elation about the evening’s guest list. There was senior adviser Rick Dearborn and campaign field director Stuart Jolly, and campaign committee chairman Michael Glassner. The White House’s incoming chief strategist, Steve Bannon, was reportedly spotted, too. Jon Voight, Trump’s most famous Hollywood supporter, was en route. Breitbart writer Matt Boyle, who once joked that he would be Trump’s White House press secretary—alas, the job went to Sean Spicer—manspreaded on a couch near Groser’s lectern.
“Getting access to Trump will be everybody’s ambition,” the ambassador said. He beamed at all of his new friends. “We have got off to a flying start.”
It didn’t matter that Groser had helped craft the Trans-Pacific Partnership, the trade agreement from which Trump today withdrew. It didn’t matter that Groser has spent much of his career promoting other trade policies antithetical to Trumpism. Disagreements be damned, what mattered now was access—something everyone scrambles for with each regime change in Washington, but always demurely. Yet Groser was unabashed: he regaled the crowd with the story of how he first snagged Trump’s cell phone number (he knew a guy who knew a guy), and professed his own thrill about the end of “PC” culture. The Trump campaign may have decried Hollywood, but Groser and the scores of guests in black tie were openly star-struck by the new folks in town. (Except, perhaps, Alabama Senator Richard Shelby’s wife, Annette. Asked if they planned to stay long, she looked at me with eyes that seemed to say, “Darling, you must be joking.”)
…remember, Groser not only attempted to sign away our democratic and economic sovereignty with the TPPA, he tried to lock Labour out of any changes to stop foreign land sales and John Key had the GCSB spy on diplomats to try and get Groser a job as the WTO boss.
Wouldn’t Helen Clark be a far greater ambassador to the US to protect NZs interests than Groser?
In the brilliant political thriller, ‘A Very British Coup‘, a truly Left Wing Government has to confront the vested interests of the right wing and Deep State by cleverly out manoeuvring the economic and political sabotage waged against it.
As the corporate interests attempt to cut off funding for the Government, Perkins (the fictional Left wing Prime Minister) cuts a banking deal with the Russians and at a press conference writes for the rabid right wing tabloids tomorrow’s headline ‘Perkins saved by Kremlin Gold’.
That’s how we should view Winston’s sudden desire to reopen trade with Russia that has so many pundits scrambling to explain.
I’ve said it many times, this Government will be far more radical than the corporate mainstream media pundits are claiming. Having spoken to some of those who were part of the behind the scenes negotiations, I believe this Government is deadly serious about reforming and changing Capitalism in this country.
The impact of the report from the University of Canterbury that shows National are nothing more than a front for Chinese business interests weighed very heavily upon negotiators and Winston’s desire to reduce China’s political and economic influence over NZ was one of the reasons he went with Labour and the Greens.
Winston sees Chinese political and economic influence over NZ as an existential threat to our democracy, and one way to eliminate that influence is to find a completely different market for all the milk powder they are buying and can hold over us if we start having opinions on China’s claim to owning large chunks of the Pacific.
Russia is a huge importer of dairy and by re-opening possible trade there, NZ suddenly reduces its dependence upon China for our economic well being.
Winston has been playing these chess games in his head for a very long time and he intends to win.
Late in 2015, The GCSB and SIS had to front for the Intelligence and Security Committee. Questions were being asked about what the bloody hell the GCSB thought they were doing spying on our trade partners to try and get Tim Groser a job. Instead of answering those questions, the mouth pieces for the GCSB and SIS said they couldn’t answer that – but they could talk about ‘Jihadi Brides’.
John Key immediately then seized upon this (as if this had been planned all along) and in front of the media played up the domestic threat posed by ‘Jihadi brides’ which justified expanding spy powers.
It later turned out that the entire spin line about Jihadi Brides was bullshit because they didn’t even live in NZ!
Now that NZ doesn’t need Jihadi Brides to gloss over questions as to why the hell our spy agencies were spying for Tim Groser, who are our spy agencies now targeting?
What deadly threat to our safety is there now?
Why look at that, environmental activists and social media activists – what a fucking surprise…
Homegrown terrorism threat is angry young people adrift from society
The warning about disaffected youth comes from the Strategic Risk and Resilience Panel, a committee of “free thinkers” set up in the centre of government to forecast threats to national security.Details of meetings of the panel, released through the Official Information Act, show the panel’s focus was developing a “risk register” which posed specific security threats to New Zealand.
The full minutes of the meeting were withheld but the Department of Prime Minister and Cabinet released a summary showing the panel was provided a “draft profile” assessing the risk posed by terrorism.
It showed key issues included “the importance of continuing to focus on the threat of radicalisation of disaffected youth”.
It also stated that there was a need for “a more forward looking approach in particular focused on community cohesion” and “more focus needed on the drivers of domestic extremism”.
Examples given to the panel were “those radicalised due to strong positions on ecological and technological issues” but the security services have previously expressed concerned over online targeting by Islamic extremists.
…it’s a funny thing about all these new search and surveillance powers we awarded the police with (which allowed them to be retrospectively cleared of all the illegal spying they did for the supposed Urewera terrorism case).Those powers we granted the cops were supposed to be used for serious organised crime or suspected terrorism.
The cops have started using those very powers we were told had to be implemented to save us from terrorism against suicide survivors and we have the Police spying on prisoner rights activists without even bothering to get any judicial oversight whatsoever.
Hell even my own case against the Police where they committed an unlawful search on me is an example of this mad rush to increase vast powers of search and surveillance for the cops with fuck all checks and balances for imaginary monsters that don’t actually exist.
The sleepy Hobbits of muddle Nu Zilind have handed enormous powers over to the Police and the State security apparatus because they were spooked into believing there were some terrorism bogeymen threatening us, but the reality is that these powers have been obscenely expanded to be used against anyone who is calling for civil rights changes in NZ.
By deliberately highlighting environmental and social media activists as the new threat, the power of the 5 Eyes network can be legitimately used to now target them.
The new Government must demand far greater checks and balances over this because we can all clearly see where naming these activists as a threat is leading us to, an excuse to start mass surveillance against anyone these paranoid clowns perceive as a threat.
It seems that the popularity of ‘anti-capitalism’ that is growing around the world has caught up with New Zealand. Like the word socialism is it much abused. Usually it is a critique of the symptoms, rather than the cancerous disease of capitalist society. The election of the Labour led Coalition to power is a good test of the futility of trying to heal capitalism’s symptoms instead of eliminating the disease.
A Labour led Coalition with the Greens and NZF is a better option to yet another NACT regime, but only because it has promised to roll back marginally some of NACTs reactionary policies. If it succeeds in forming a stable government and delivering on some of these promises, this will generate even more hysteria on the right.
Working people should defend it from the right but criticize it from the left when it fails to deliver. Workers must learn to exercise their independent class interests because the Labour led Coalition cannot.
Working people will decide the future. From our experience of this capitalist Coalition we will learn how far center-left populism can go before risking the retaliation of international capital.
Not very far. For all the talk about ‘capitalism failing’ from Peters and Ardern, what they mean is that the state has to intervene to correct the ‘excesses’ of the market.
This is the promise made by all social democrats for over a century. As part of the Liberal Government of the 1890s the Fabian socialists stood for state intervention to control the market by forming a Labour Party to represent workers in parliament. Ever since social democracy has acted as a brake on workers political development.
In Russia in 1917, the social democratic Provisional Government collaborated with the Tsarist generals to mount a coup to smash the soviets. It failed because workers and poor peasants who had begun to form their own government from below could see through its treachery. In Germany in 1919 German social democracy collaborated with the ruling class to join a Government that repressed the armed workers uprisings. It succeeded because the masses still had illusions that in government social democracy would protect their interests.
The lesson is that social democracy always capital over labour. Social Democracy always puts profits before people. Its job is to manage capitalism by promising to reconcile the opposing classes and make us all ‘middle class’. Yet capitalism cannot be rendered classless. For more than a century it has been in a terminal, destructive, cataclysmic, decline. Either we go down with it or we fight to replace it with survival socialism.
When the new Coalition’s promises to feed the poor, build affordable houses, boost the unions, clean up the water, drive the speculators out, etc., are broken, it will because they are more scared of their capitalist masters than they are of working people they claim to represent.
They panicked in 1984 when they feared a Chile type coup unless they destroyed economic protectionism. In 2000 they learned from the ruling class push-back against Clark’s ‘Closing the Gaps’ that they cannot tax the rich to put people before profits without facing a bosses’ strike. Already the new Coalition has backed off its promises as in the case of the TPPA. It talks against neo-liberalism yet won’t act to break with it’s fetish of fiscal responsibility.
Workers will learn that parliamentary politics was always a talk shop where workers were frustrated, bored into passivity, criminalized and repressed, while the bosses stole our labour, our basic rights, our livelihood and our lives. Class struggle is a steep learning curve and we are losing.
Workers will understand that they have to form their own working class party to make the changes needed to right the wrongs of poverty, inequality, suicide, climate change, and the destruction of basic democratic rights of privacy, freedom from surveillance and dirty politics. A workers’ party would stand for what Labour once professed but has long renounced, the socialization of the means of production, distribution and exchange.
It wouldn’t be a top-down policy wonk party of middle class bureaucrats. It would be run by the democratically organized rank and file in the unions and workers’ councils. Self-employed would overcome their indoctrinated fear of socialism expropriating their toothbrushes when they see that crisis-ridden capitalism forces them to fight to survive by blaming the workers below them rather than the bosses above them.
So, whatever happens to this new government, New Zealand’s downward trajectory as part of a global capitalism in terminal decline, means that workers have to wake-up to their class interests, reject the parliamentary circus, and organize a genuine workers’ government capable of playing a part in rescuing humanity from extinction before it is too late.
Dave Brownz is TDBs guest Marxist blogger
TPPA’s impact on democracy
Let’s not do e-commerce in the TPPA-11!
Just when you thought you knew all the reasons why the Labour-led government needs to walk away from the TPPA-11, let me add another item to the list and another minister for you to tweet – Clare Curran.
The flow of data across borders through the Internet is massive and ever-increasing. We all use the services of Amazon, Google, Expedia or Alibaba. But we also increasingly recognise the downsides – negative impacts on jobs and local businesses, their notorious tax avoidance practices, and the ability of these mega-corporations to control, sell and manipulate data raises huge problems for privacy, data protection, consumer rights, anti-competitive practices, and cyber-security.
How many of us simply click the box when the website says we have to agree to its rules or accept cookies to proceed without thinking about the rights over our information that this gives to the giant global corporations who run the digital platforms and services? And how many of us know the TPPA guarantees those rights to those corporations? If these rules remain in a TPPA-11, our government will face huge problems in trying to regulate the digital domain, especially through privacy laws that protect our personal information as new situations emerge, and to ensure that businesses and organizations that hold our data safeguard and handle it appropriately.
The TPPA is a brilliant stealth attack by the tech industry, often symbolised by the acronym GAFA (Google, Amazon, Facebook and Apple). In recent years, they have massively increased their lobbying presence in the US. This year Google is the top corporate spender on lobbying in the US, dishing out US$6 million in just three months.
One of their main goals is to prevent governments from regulating their operations and cement their dominance for the indefinite future through trade agreements. Over time, they have managed to incorporate their ‘digital trade’ issues into the US trade agenda. In particular, the US made unrestricted transfers of data to wherever in the world the companies want to hold them, and bans on requirements that data is held inside the country of origin, among its highest ‘trade’ priorities.
The landmark was the electronic commerce chapter in the TPPA. It’s not something we have talked much about here. But it is hugely important for the future. Specifically, Article 14.11 on Cross-Border Data Transfers by Electronic Means and Article 14.13 on Location of Computing grant businesses the freedom to outsource data storage and processing to anywhere they want without any limitation. They significantly undermine the ability of the NZ government to secure our data against unauthorized or unlawful processing, or accidental loss or destruction of, or damage to, personal data.
Even though there is an exception permitting governments to adopt or maintain measures inconsistent with the cross-border transfer of information it is not strong enough to protect the policies, laws and regulations we need to safeguard privacy. The US insisted on wording that would allow it to maintain its weak privacy and strong state surveillance laws. Other countries have recognised this. The EU has rejected the same language proposed in the TISA negotiations, and there is a ‘placeholder’ for cross-border data transfers in the EU – Japan FTA because they couldn’t agree on a strong enough exception.
Other parts of the TPPA’s e-commerce chapter would restrict our ability to require access to source codes. That’s how you can check on practices like Volkswagon’s fraudulent software to disguise excessive emissions and Google’s gender algorithm that meant only men got shown jobs for senior management positions, and how you can ensure there are effective protections against hacking.
The e-commerce chapter was insisted on by the US. The US is no longer in the TPPA. If the TPP’s e-commerce rules are kept in the TPPA-11, the beneficiaries will be the major US technology companies, and possibly those from China, neither will have to give anything in return. We will be the losers, again.
The Japanese media reports that Vietnam, and possibly other countries, want to remove the data provisions at least from the agreement. The new government needs to support them at next week’s APEC meeting in Vietnam, and add the e-commerce rules to the agenda for a comprehensive independent review of the TPPA-11 before it makes any decisions we will regret far into the future.
Thanks to Burcu Kilic, from Public Citizen in the US, for input on this. To read more about the e-commerce agenda and its implications, see Jane Kelsey, TiSA – Foul Play, UNI Global Union, 2017, http://www.uniglobalunion.org/news/tisa-foul-play
“I am not a Monster” hissed the monster.
Judith Collins is rising…
National’s new-old shadow cabinet stresses continuity – with a dash of mongrel
So Judith Collins jumps from 15 to nine and takes on transport, with English acknowledging her skills are suited to opposition – and Transport Minister Phil Twyford would soon discover that.
…let’s put aside the way the mainstream media have framed this as the creation of the greatest and most powerful opposition in history, the mocking of the fact that ‘Crusher’ Collins only crushed 3 cars misses the real point…
Just three cars destroyed under ‘Crusher’ Collins’ law
The law that earned the former police minister the nickname “Crusher” resulted in just three cars being confiscated and crushed.National’s Judith Collins introduced a law in 2009 which allowed vehicles to be seized and destroyed.
The plan was to target illegal street racing, which led to crashes. Collins said the same measure should be applied to those who fled from police.
…what this really shows is that despite knowing this draconian legislation wasn’t working, she heavily promoted it anyway.
That’s not something to mock, that is something to fear. She knew crushing boy racer cars played to her base while also knowing it didn’t work.
That mentality from a Cabinet Minister is bad enough, imagine if she won the National Leadership?
Bill English warns Labour: ‘it’s not our job to make this place run’
Bill English has revealed the roles his MPs will hold as National “pushes the button on Opposition” – saying the party will use its size to frustrate progress for the new Government.
Parliament resumes next week and English today announced the portfolios he has assigned to his team, including a big promotion for Judith Collins.
“You should expect more tension and more pressure in the Parliament, and particularly through the select committee process. Because we are the dominant select committee party,” English said.
“And that is going to make a difference to how everything runs – it’s not our job to make this place run for an incoming Government that is a minority.
What exactly is Bill English threatening here and what should the new Government do about it?
Bill is talking about the select Committee process which National dominate because they were the Party with the most votes.
This is a unique threat (and one that was brought up with Labour Party strategists a couple of weeks ago). It means National could stymie, block, slow down and filibuster the new Government’s political agenda.
Normally the Select Committee process is an important and fundamental process of our Democracy. It allows the public, political interests and industry interests to all have a say on the law as it is being drafted.
The idea is that we all sit down and work through law so that everyone feels they have input in the final legislation.
What Bill is threatening is to just run malicious interference for the next 3 years to slow down any way for the new Government to pass its agenda.
It’s less a declaration of opposition as it is a threat to sabotage our democracy.
I think there is only one way to deal with political maliciousness of this level, and that is to punch back twice as hard.
I think that the new Government should come out and say that if National are only interested in childish tactics of disruption rather than constructive engagement on the issues that face all New Zealander’s, then they will pass their first 100 day legislation all in one hit and ram it through under urgency which would bypass the select committee process altogether.
National Party stake holders will howl in rage at National for allowing legislation to be passed that they can’t even have input in.
Watch how quickly National drop the spite and tantrums if they’re behaviour forces the new Government to bypass them altogether.
While no one wants to set the precedent of using urgency to pass all domestic law, the new Government must understand that National have nothing to contribute other than spoiling tactics and their threats to undermine the Select Committee process must be addressed harshly.
National are still in denial they lost the election, the new Government should send them a short, sharp message that they did.
There needs to be a voice for the Cannabis Industry if the new referendum is to mean anything.
The problem of course is that while it’s illegal, it can’t speak.
We need a heavily regulated, taxed market that allows for small and medium business to become craft beer level enterprises.
A certification process for recreational cannabis and medicinal cannabis growers and a licence process for retailers.
We don’t want commercialisation or mass market advertising, that simply allows for trans nationals to move in.
Moving to a taxed and regulated cannabis market would create jobs, tax revenue and a huge drop in prison and policing costs.
If the referendum question only settles medicinal cannabis or personal use, we will have all missed a real opportunity to control cannabis, weaken organised crime and build economically on it.
Announce protest actions, general chit chat or give your opinion on issues we haven’t covered for the day.
Moderation rules are more lenient for this section, but try and play nicely.
EDITORS NOTE: – By the way, here’s a list of shit that will get your comment dumped. Sexist language, homophobic language, racist language, anti-muslim hate, transphobic language, Chemtrails, 9/11 truthers, climate deniers, anti-fluoride fanatics, anti-vaxxer lunatics and ANYONE that links to fucking infowar.
I think the Greens need Marama Davidson as their new co-leader.
The disastrous election result where they lost half their support in the space of 2 months wasn’t a reflection on the policy platform the Greens ran with, it was horrifically incompetent tacticians which didn’t foresee what would happen to Metiria when she courageously announced her welfare fraud.
What SHOULD have happened is Metiria would have already paid the amount owed before admitting it. By leaving it an open issue, the mainstream media tore Metiria to pieces.
While that tactical mistake was damaging, the real impact was Jacinda and her popularity which had ore to do with the Greens losing support.
Nandor posted some thoughts on the political philosophy of where the Greens need to move towards in the future and I think his targeting of new generation small and medium ethical business is very smart.
The truth for the Greens is that their dreams of being a 15% Party are dependent on the strength or weakness at any given time of Labour. The Greens vote was actually far softer than anyone suspected and with Jacinda now in charge of Labour, it is unlikely to woo much of that back.
So where do the Greens grow? It can’t be at the exclusion of social welfare policy, but it could be an extension of Green values into business.
The Greens could gain support from NZ’s small and medium ethical business community by promoting ethical tax breaks for those businesses. The Greens are all about allowing the market to decide by using state regulation to send the market signals. What better signal could you send the market than by supporting and promoting ethical business?
If small and medium sized business complied with independently tested environmental, ethical and sustainability standards then they should be eligible for a tax break for making that investment.
Promoting Green values into business doesn’t weaken the stance they take on poverty, it simply broadens their voter appeal and that’s what the Greens need to desperately be doing between now and the next election because the vote they lost to Jacinda won’t just walk back to them.
Taking a far more proactive approach to woo ethical business is smart but if core activists feel that’s eroding its social justice obligations the Greens could just be replacing leaving supporters with new ethical and small business voters.
That’s why they need Marama as the new co-leader.
Her activist credentials are better than anyone else, she is amazing on policy and connecting emotionally with voters when she does media and the inroads into beneficiary votes that she begun needs time to work.
Seeing as the ministerial positions the Greens gained were all very white, they need Marama front and centre to be true to their diversity values.
Marama has the intelligence, leadership skills and vision to retain the social justice and environmental values while Shaw can woo small and ethical business.
We can’t have a progressive Government without the Greens, but they must start rebuilding if they area to remain a vital voice in 2020.
Those helping put together the negotiations of the government understood throughout that the Greens had to be given real political muscle if the new government was to function properly.
The Greens now have the chance to prove that.
Policy targeted towards beneficiaries and the poor alongside ethical and sustainability tax cuts for small and medium business is a way to gain voter attention and attract support at a time when Jacinda is hogging all the environmental headlines and attention.
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Halloween came early for parasitic land bankers. On 30 October, new Housing Minister, Phil Twyford, issued a bold statement that has barely been reported or commented on: land bankers are firmly in the laser-sights of the new Labour-Green-NZF coalition government.
At the same time that Prime Minister Jacinda Ardern announced an impending ban on the sale of existing homes to foreign investor/speculators – Minister Twyford issued a clear warning to land bankers that the recently elected Coalition Government would be prepared to seize their land under the Public Works Act;
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Minister Twyford was unequivocal;
“We’ve got a Housing Minister now that accepts there is a housing crisis. You don’t want to have one land banker holding out a massive new development that’s going to deliver thousands of new homes.
…You might want to have it in your back pocket, but you’d use it very, very sparingly.”
He said that the new government recognised the reality of the housing crisis and was “going to throw everything at it“.
The National Business Review highlighted land banking in 2013, when Leith Van Onselen offered his “less regulation is best” ideological response to over-coming the problem (I refuse to sugar-coat it by calling it an “issue”). His mantra consisted of freeing up more land; the removal of regulatory constraints on the supply of land, along with more permissive planning policies;
“…land banking – an especially baneful form of rent seeking at the current time – is more prevalent in situations where land supply is constrained and planning approval processes are slow and uncertain. Land banking is also only profitable where the value of land is rising faster than the cost of capital. And in the absence of physical barriers to land supply, land price increases above the level of inflation are driven primarily by policies and regulations that artificially restrict the supply of land.
It stands to reason, then, that the removal of regulatory constraints on the supply of land, along with more permissive planning policies and infrastructure provision, would increase competition amongst both developers and land owners, thereby driving down the cost of land/housing. The existence of high levels of competition would, in turn, make land banking particularly risky, as another nearby owner would always have the opportunity to move to the market ahead of the land banking firm.”
Whilst Van Onselen recognised the “baneful” nature of land banking, his proposed more-market “solution” is not without dire consequences. In the “absence of physical barriers to land supply” by “the removal of regulatory constraints on the supply of land“, urban sprawl into valuable food-producing rural land creates new problems through unintended consequences. Interviewed on TVNZ’s Q+A on 29 October, Horticulture New Zealand CEO, Mike Chapman warned;
Horticulture New Zealand is calling on the new Government to protect locally-grown food as urban sprawl threatens valuable growing land. Its CEO, Mike Chapman, says the impact is already “quite extreme”.
“If we don’t, we’ll be increasing our imports – fresh, nutritious locally grown food will not be available, and at the moment, we don’t have country of origin labeling, so the consumers won’t know where they’re buying their food from. It could be from anywhere in the world,” says Mr Chapman.
Reliance on the “marketplace” to solve our housing problem can be a dubious proposition.
This is especially the case when commercial firms actively exploit a problem for greater profits. This property-brochure from Guardian First National Real Estate in Johnsonville, Wellington, illustrates that (some) companies are not above exploiting a problem for purely personal gain;
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Note the reference to “Do up, develop or landbank?”
Perhaps one of the worst cases of land banking and profiteering was reported in 2013 by the NZ Herald;
A land banking business with a big piece of residentially zoned real estate on Auckland’s outskirts has made more than $6 million a year for almost two decades – doing nothing.
QV records shows Yi Huang Trading Company owns 39 Flat Bush School Rd, which it bought in 1995 for $890,000.
Now, this 29ha block is listed on the market for $112.6 million, promoted as “the land of opportunity, vacant but close to Barry Curtis Park”.
[…]
The sale has left developers fuming. They say land bankers are ruining the city and that the sale will be tax-free because the company has held the land for so long.
Conversely – and with some justification – land banking is also a necessary tool by those developers who actually intend to build on them. As one project is completed, and another begins, the developer must ensure a constant supply of readily available land “in the pipeline”.
As Van Onselen reported in 2011, quoting from work by Professor Alan Evans, Director of the Centre for Spatial and Real Estate Economics at the University of Reading (United Kingdom);
…as well as causing delay and increasing uncertainty, the process of seeking planning permission lends itself to strategic thinking and behaviour… the lack of certainty created by [such] a system is that it encourages the possession by large developers such as volume house builders of land banks… which can be developed at some future time. A developer such as a volume house builder will seek to ensure continuity in the supply of sites for development so as to ensure that management, equipment and labour can be used efficiently… without being laid off or idle. Commentary on the financial pages of newspapers would suggest that a land bank of at least 3 years supply seems to be regarded as necessary for the financial health of a house builder… not having a site available for development at the right time can mean that a exorbitant price will have to be paid to buy one, in order to keep the firm in business…
Speaking on The Nation on 4 November, Housing Minister Twyford appears to be fully cognisant of this particular problem and showed little reticence to proactively intervene in the “market”;
“Because of capacity problems in the industry, particularly workforce issues, it is going to take us a little while to ramp up. And our modelling has always been based on the idea that in the first three years, we’ll probably deliver about 16,000 homes, and in the third year, we’ll start to hit the average of 10,000 a year. There are three main ways that we’re going to deliver KiwiBuild. So, the first is that we’re going to say and are already saying to the private sector, to developers and builders, if you’re doing a development and you think that some of the properties in that development – might be a set of townhouses, for example, somewhere – would meet the KiwiBuild affordability criteria and design specs, then come to us. We’ll look at them, and we could buy them off the plan, speeding up your development, taking some of the risk out of it, and ensuring that we get a supply of high-quality affordable homes for first home buyers.
[…]
One of the problems at the moment, actually, is that many of the apartment projects that are underway are having real problems with financing. So by the government willing to underwrite or buy units off the plan, that actually takes away some of the risk and uncertainty and will speed up those developments.”
This is precisely the kind of market-intervention which many progressives have been demanding. Minister Twyford even spelled it out;
“So we’re going to intervene in the market to fix that market failure by building large numbers of affordable homes. That’s the job of government, to do that.”
The alternative? To do nothing as National allowed the free hand of the market to run it’s course, and unsurprisingly our housing crisis worsened. Journalist and commentator, Tim Watkin, painted an increasingly bleak picture of urban life in New Zealand in the early 21st Century;
“… what social service agencies are now reporting is a growing – yes, growing – group of Kiwis living in their cars or renting garages. Social workers in South Auckland to a person say they can’t remember it being this bad. Rents have risen 25 percent in five years and emergency houses are full.
If you can’t afford the rent, there’s nowhere to go. Except your car, or perhaps someone’s garage.
And this isn’t just extended families bunking down in a garage while they wait for a house, as we’ve seen for years. This is a new rental property market; people paying strangers to live for months, even years, in a garage. You won’t see it on TradeMe, but we’re talking about $300 or more a week. One family had been living in a garage for two years and are paying $380/week.
Wesley-Smith was taken to Bruce Pulman Park in Takanini by Manuaku East MP Jenny Salesa, where families and individuals can be found most nights near the public toilets, sleeping in their cars. Salesa says one car-dwelling family a week turns up at her office seeking help; half aren’t engaged with the Ministry of social Development.”
Watkins was merciless in his criticism of the capitalist exploitation of the housing crisis for selfish ends. Firstly with “mum and dad property investors”;
So it’s time for mum and dad property investors to ask themselves a few hard questions. If the cost of your borrowing is forcing people to pay rents they can’t afford, maybe you shouldn’t be in the landlord business. Even if you are only one stone in the mountain, have you borrowed too much to morally justify your investment?
But he reserved his most trenchant ire for parasitic land-bankers;
But even more in the gun are the property developers, especially those who are land banking in this market. It’s time to call out those land bankers and say enough.
Financially, it’s a no-brainer for them. Especially if they’re lucky enough to own land in a Special Housing Area with all the privileges of accelerated consents and greater intensification attached. You’re quids in, the government has put a premium on your land and land values are skyrocketing. So why go to the risk and hassle of actually building?
The answer: Because your land banking is making kids sick. It’s driving families into their cars. It’s increasingly immoral to fiddle while Auckland burns.
Auckland desperately needs houses and if you’re a developer sitting on land, then you’re putting your own finances ahead of the need of families to have a roof over their heads.
Watkins pointed out then Housing Minister Nick Smith’s response to land-banking;
Housing Minister Nick Smith denies that land banking is a problem in his Special Housing Areas.
Watkins was on the button; Nick Smith is in full Denial Mode when it comes to land-banking.
On 3 June last year, I lodged a OIA request with Nick Smith, asking;
1. Does the government keep a record of how much land is “landbanked” in New Zealand?
2. If the answer to Question 1 is “yes”, how much land has been landbanked in Auckland, Wellington, Hamilton, Christchurch, and Dunedin?
3. Please provide any Ministerial, Ministry, or Cabinet papers that relate to the issue of landbanking.
After nearly two months and reminders sent to Smith’s office, the Minister finally responded on 20 July. His response to my three questions consisted of one paragraph;
“The problem with your request is that ‘land banking’ is a loosely used phrase a bit like ‘speculation’ that has no agreed definition. A person or company may own a section of land and not build on it for some time for all sorts of reasons and there is no definition of how long this is for it to be deemed land banking. We do keep track of the progress made on developments in Special Housing Areas and I refer you to the publicly available reports that set out the progress on development of these areas (http://www.mbie.govt.nz/info-services/housing-property/housing-affordability).”
Remarkably, Smith added at the end;
“I can confirm that no information can be found within the scope of your request.”
Smith either has a badly-flawed, John Key-like memory – or he was being economical with the truth. Two years earlier, on 30 November 2014, Housing Minister Nick Smith had referred specifically to land banking, expressing his frustrations at the practice;
“The Government and the Council are determined to release sufficient land supply and we’re not going to allow land price inflation of the sort we’ve seen over the last decade.
I want the land owning development community to realise that the Government is serious with Council about freeing up land supply, and they cannot bank on ongoing high land price appreciation that has encouraged land banking over the last decade.”
As with the previous National government refusing to define and measure poverty, by claiming that “‘land banking’ is a loosely used phrase a bit like ‘speculation’ that has no agreed definition” Smith was clearly hoping/praying that public/media attention on this issue would fade away.
It was a forlorn hope/prayer. Pressure was mounting on Smith.
Indeed, three weeks prior to writing to me insisting there was “no agreed definition” on land banking and “no information can be found within the scope of your request” – he was threatening land bankers with seizure;
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Despite insisting he had “no information” or “definition” of the problem, Smith was considering seizing property from land bankers – something he recognised as running counter to National’s pro-capitalist kaupapa;
“If you look at many of the other governments in other parts of the world that have used those powers, they have worked effectively.
Yes, we are the National Party, but we have responded in a very pragmatic way to the challenges in Christchurch. And that has involved overcoming some of those pure views about property rights.
We are pragmatic, and pragmatic answers are needed to the housing challenge that New Zealand has.”
Even Wellington’s Dominion Post – not a socialist ‘rag’ by any means – was vocal in it’s criticism of land banking and National’s inability to act. Their editorial on 28 March this year was scathing;
Smith himself once said it was “offensive” that an investor in Auckland could buy land in 1995 for $890,000 and put it on sale in 2016 for $112 million. “The biggest problem is Auckland is the issue of landbanking,” Smith said.
Smith’s approach to the problem was to rely on the special housing areas in Auckland, which allow for faster consents for large housing developments. Developers can face a “use it or lose it” clause which penalises them if they don’t lodge consent applications. His critics, however, argue that this rule doesn’t guarantee house completions.
And that is the problem with land-banking, it seems. It is merely a symptom of a deeper malaise, and fixing it might require radical changes. It remains to be seen what one city council can do by way of encouraging or scaring developers into building more affordable houses.
Some such as economist Arthur Grimes have suggested that the Government should use the Public Works Act to buy land for housing. This is a reasonable suggestion, draconian though it might seem. The housing crisis is so serious that radical measures of this sort have to be considered.
The National-led Government, however, with its deep allegiance to property rights and its natural sympathy for the business class, would never accept such a proposal.
Nick Smith’s heresy to the most basic capitalist tenet – the supremacy of property rights – did not go unnoticed by Anthony Robins. Blogging on The Standard on 4 July last year, he astutely pointed out;
“I don’t often agree with the Nats, but I think there are (rare) circumstances where land bankers could be paid off, moved on, and the land put to use. But – the extinguishing of private property rights? Seizure of land? Just imagine if Labour had proposed it. There would have been an instant orgy of political and media outrage. Because it’s National though, there will be barely a whisper.“
Robins’ comment had a prescient quality to it. A Labour Minister – Phil Twiford – has now threatened to do precisely what Nick Smith threatened (but never had the guts to actually follow through on).
By brandishing the Public Works Act as a ‘stick’, Twyford has put land bankers on notice. Either develop the land or have it seized by the State to house the homeless.
In a civilised society, for land bankers to sit on empty, buildable land whilst families are packed in over-crowded houses; in garages, or survive in vans and cars – is an affront to any notion of fairness and decency.
It would be like someone hoarding food in times of famine, to get a better price later.
And if Minister Twyford invokes the Public Works Act to seize land, the National Party should think twice before screaming in outrage. It would be sheer hypocrisy on their part.
For one thing, former Housing Minister Nick Smith threatened precisely the same thing.
Secondly, the housing crisis is a legacy of the previous National government. It’s their mess we’re cleaning up.
Use it or lose it, land bankers. The party is over.
Minister Twyford – let’s do this.
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Postscript: Speaking of “legacies”
Meanwhile, National persists in it’s exercise in futility, maintaining their fantasy-charade of the “great gains made over the past 9 years“;
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National’s denial is partly to blame why our horrendous housing crisis spiralled out of control.
During it’s nine years in office, National continued to point-blank deny the social problems it faced. This continuing denial will ensure they remain in opposition for the coming decade.
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References
Mediaworks: Government prepared to seize land for housing projects
Radio NZ: Foreign home buyers to be banned – PM
NBR: Auckland – the land bankers paradise
TVNZ: Q+A – Horticulture New Zealand CEO, Mike Chapman
NZ Herald: Land bought in 1995 for $890,000 – owner will sell for $112m
Macrobusiness: Why developers land bank
Scoop media: The Nation – Lisa Owen interviews Phil Twyford
NZ Herald: Bennett slammed over child poverty claim
NZ Herald: Government look at hardline measure to seize property for development
Dominion Post: Editorial – Landbanking is a big part of the housing crisis
Twitter: National – “great gains made over the past 9 years“
Additional
NZ Herald: Key admits underclass still growing
NewstalkZB: Demand for food banks, emergency housing much higher than before recession
Morgan Foundation: How Minister Smith Could Deal with Land Banking
Morgan Foundation: Would it be Crazy to Reduce House Prices by 40%?
Other Blogs
The Pundit: How Special Housing Areas are failing & the immorality of land bankers
The Standard: National to seize privately owned land
The Standard: So there was a housing crisis after all
The Daily Blog: On calling out the excesses of capitalism
Previous related blogposts
Can we do it? Bloody oath we can!
Another ‘Claytons’ Solution to our Housing Problem? When will NZers ever learn?
National’s blatant lies on Housing NZ dividends – The truth uncovered!
National continues to panic on housing crisis as election day looms
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= fs =
Government Takes First Baby Steps On Foreign Control
But Needs To Get Its Arse-Kicking Boots On, And Fast
The Campaign Against Foreign Control of Aotearoa (CAFCA) congratulates the Government on taking its first baby steps on the major issue of foreign control. Of course we are pleased that it is going to ban foreign speculators from buying houses. But, really, this is what our American friends would call nickel and dime stuff.. We also note that real estate agents are saying that the ban is two years too late, that such speculators bolted as soon as the law required that they show a minimal connection to this country, namely by having an IRD number and a local bank account number. Still, better late than never. It’s just a pity that Labour’s primary concern seems to be structuring the ban in such a way that it will allow NZ to sign the Trans Pacific Partnership Agreement without attracting the wrath of those at the TPPA big kids’ table. Signing the TPPA would be a betrayal of the huge number of New Zealanders who passionately campaigned long and hard against it. Forget about the TPPA, Jacinda – with or without the US, it’s a dog.
CAFCA also commends the Government for promising to toughen up the laissez faire regime that allows foreigners to repeatedly buy up NZ’s prime farmland and countryside. Agricultural land, land in general, and our priceless scenery in particular, are NZ’s unique comparative advantages in the global economy. Why be mugs and allow the ownership and benefits to go offshore? Start by closing loopholes like the outrageous rort that allowed a US billionaire to become an NZ citizen because of “special circumstances” and thus be exempted from any legal restriction on buying up chunks of the country.
CAFCA is pleased that the Greens’ Eugenie Sage is the new Minister of Land Information, which puts her in charge of the Overseas Investment Office (CAFCA has often suggested that the OIO’s work could be done by a monkey with a rubber stamp). She has promised to run a tighter ship at the OIO (which wouldn’t be hard). She might like to start with this week’s abrupt halt to the public release of the OIO’s monthly Decisions (approvals). When we inquired about this, we got this answer: “I’m unable to give you an indication of when we will be publishing Decision summaries”. WTF?
But land sales, although they get a lot of attention, only involve tens of millions of dollars. The real guts of any modern economy, the high rollers’ lounge of the capitalist casino, is the business sector. That’s where the billion dollar deals are done. And we’ve heard nothing from the Government about what, if anything, it plans to do about the transnational corporations that so dominate the NZ economy (apart from the commendable, but comparatively minor, aim of trying to get them to pay their fair share of tax). For example, what does the Government plan to do about the cosy cartel of Australian-owned banks, who suck billions out of the NZ economy every year?
Let’s go from the general to the specific. What is the Government going to do about South African-owned insurance company Youi, an unrepentant corporate repeat offender? It won the latest (2016) Roger Award for the Worst Transnational Corporation Operating in Aotearoa/New Zealand.. You can read the damning Judges’ Report at http://canterbury.cyberplace.co.nz/community/CAFCA/pdf/roger-award-2016-judges-report.pdf Here’s one quote from that: “Needless to say, although the company was successfully prosecuted and fined a token sum last year, not one of the managers and executives responsible has been prosecuted, the company continues to operate in New Zealand under its Reserve Bank licence, Youi remains a full member of the New Zealand Insurance Council, Hansard records no mention of the scandal in Parliament, television continues to carry the company’s deceptive advertising, and the Chief Executive Officer on whose watch it all happened has been promoted”.
Here’s another specific example, although much bigger, older and much more entrenched. What is the Government going to do about the country’s biggest bludger, the transnational owners of the Bluff smelter? They have twisted NZ governments, both National and Labour, around their little finger for at least 50 years. If Jacinda Ardern is serious that climate change is her Government’s nuclear free issue, then she will have to confront and face down the smelter’s owners. And do better than the Clark Labour government which folded when the smelter owners threatened to leave the country if Labour brought in an emissions trading scheme. Memo to Jacinda – if they threaten to go, hold the door open for them and help them load their suitcases into the airport shuttle. And make sure that they (those recipients of corporate welfare par excellence), and not the NZ taxpayer, foot the bill for cleaning up their mess. That would involve Labour facing up to the 2003 and 04 indemnities signed by Michael Cullen, Labour’s Minister of Finance at the time, accepting that the taxpayer, and not the smelter owners, would be responsible for the cost of cleaning up toxic waste produced by the smelting process. Hands up all those who knew about that.
As for Winston Peters, the Grand Old Man of this Government, suffice it to say that we’ve been led up the garden path by him before on this very subject of foreign control. Back in the 90s he campaigned very hard on this issue, went into coalition with National at the 1996 election, was given real power over foreign investors in his specially created portfolio of Treasurer, and did – SFA. I recommend you read what we wrote about him at the time https://www.scribd.com/doc/24211537/2258-Christchurch-New It’s 20 years old but a fascinating trip down memory lane. CAFCA stands by what we said about New Zealand First then: “…we conclude that the party quite correctly campaigned hard on foreign control because it was, and is, a major issue of broadbased public concern. But that the leadership essentially adopted the issue for opportunistic reasons, as it later did with immigration. With power in its sights, it backflipped and rendered the policy innocuous; once in office, it essentially abandoned the policy and the entire issue”. But, hey, it’s not all bad news – the racing industry extols Winston as their greatest ever Minister, so that’s something, isn’t it.
We wish this Government well but its aims are truly modest via vis this vital issue. It needs to be a lot bolder. Labour in government is always terrified of upsetting business (it left it to Peters to start making slightly critical comments about capitalism). It is scared of provoking a business backlash (which was threatened by business against the Clark government in the 2000 “winter of discontent”). In other words a capital strike, class warfare from the top down. And instead of asking the people who voted it in to back it in such confrontations, Labour always buckles to business (which, in this country, means business dominated by transnational corporations).
Our advice to the Government on how to approach this subject is simple and succinct – less arse kissing and more arse kicking.
In a letter today to Prime Minister Jacinda Ardern, three health organisations set out major concerns on the Trans Pacific Partnership 11. The three groups, Doctors for Healthy Trade, the New Zealand Nurses Organisation, and OraTaiao: New Zealand Climate and Health Council, urged Ms Ardern to be mindful of the risks to health posed by the massive Trans Pacific Partnership (TPPA) investment deal. The TPPA had been negotiated by the previous government, behind closed doors.
“The TPPA is a serious risk to health. The new government should not be following blindly into this. Housing is not the only risk to New Zealand in the TPPA” Dr Erik Monasterio, spokesperson for Doctors for Healthy Trade said.
The three health organisations urged the Prime Minister, as she goes into discussions in Vietnam, to hold fast to four bottom lines:
1. No Investor-State Dispute Settlement (ISDS): There are alternative dispute resolution procedures which are effective and legitimate. ISDS must go. It is inappropriate for the 21st century – as a dispute settlement model it has been rejected by the EU and most recently the US.
2. Remove the provisions in the TPPA deal that extend the duration of patents and on biologics (a category of medicines). Keeping our current laws will help sustain PHARMAC’s quality and protect the long term health future of New Zealanders. If these TPPA provisions are only ‘suspended’ (not fully removed) they may be brought back to life at any time.
3. Maintain the ability of New Zealand governments to protect the health of New Zealand communities through legislation, policy, regulation and enforcement, without adding additional costs.
4. Commission an open and participatory health impact assessment to guide decisions in this and all similar investment negotiations.
“Re-negotiation is needed to ensure that investment agreements benefit all. That means not only making medicines affordable for everyone, but also protecting health from future risks, not just unaffordable housing but the biggest risk – climate change” Dr Monasterio said.
Kim Dotcom and Mona Dotcom announce that they have resolved their lawsuit against the New Zealand Police in which the Dotcoms sought a remedy for their claim about the unreasonable use of force in the military-style raid of their family home in January of 2012. The Dotcoms also raised the concern that their home and family had been under intrusive visual surveillance by the Police which had not been authorised by the Court.
The complaint arose from events occurring in the early morning of January 20, 2012, when 72 police officers including the heavily armed Special Tactics Group (STG) and the Armed Offenders Squad (AOS) descended on the Dotcoms’ family home in Coatesville to make a number of arrests at the request of the United States in an Internet copyright matter. Landing two helicopters just outside the family home, the entry team sprang to action, wielding M4 Bushmaster rifles.
The forces entered the Dotcom home and held the Dotcom family, staff and guests at gunpoint. The officers caused considerable damage to the Dotcom property as they stormed through the house, around the grounds and over the roof. Mona Dotcom, who was 7 months pregnant with twins, and the Dotcom children were traumatised. Neither the Dotcoms nor their guests were allowed to talk to each other or their lawyers for an unreasonable period.
The United States’ basis for the raid, online copyright infringement, is not even a crime in New Zealand.
The lawsuit against the New Zealand Police sought an acknowledgment of the harm caused to the Dotcom family, including the children, Mona and Kim.
“Today, Mona and I are glad to reach a confidential settlement of our case against the New Zealand Police. We have respect for the Police in this country. They work hard and have, with this one exception, treated me and my family with courtesy and respect. We were shocked at the uncharacteristic handling of my arrest for a non-violent Internet copyright infringement charge brought by the United States, which is not even a crime in New Zealand. They could have easily knocked at our door at a reasonable hour and advised me of my arrest. Instead, due to what I believe was a misguided desire to cater to the United States authorities and special interests in Hollywood, a simple arrest became a Hollywood-style publicity stunt tailored to appease US authorities. The New Zealand Police we know do not carry guns. They try to resolve matters in a non-violent manner, unlike what we see from the United States. We are sad that our officers, good people simply doing their job, were tainted by US priorities and arrogance.” says Kim Dotcom. “We sued the Police because we believed their military-style raid on a family with children in a non-violent case went far beyond what a civilised community should expect from its police force. New Zealanders deserve and should expect better.”
Kim Dotcom further stated, “until recently, Mona and I wanted vindication in the High Court so that those involved would take responsibility for the raid. We have taken time to consider whether a trial would be in the best interests of our family. The New Zealand Government has recently changed for the better. Our children are now settled and integrated safely here into their community and they love it. We do not want to relive past events. We do not want to disrupt our children’s new lives. We do not want to revictimise them. We want them to grow up happy. That is why we chose New Zealand to be our family home in the first place. We are fortunate to live here. Under the totality of the circumstances, we thought settlement was best for our children.”
Ron Mansfield, New Zealand counsel for the Dotcoms, stated, “the Dotcoms hope that this action has brought the Police misconduct to everyone’s attention and that it has led to change in the way Police will handle future similar operations. The misconduct of the Government Communications Security Bureau (GCSB), which accepts that it also unlawfully spied on the Dotcom family by the interception of private communications over an extended period, remains before the Court. The GCSB refuses to disclose what it did or the actual private communications it stole. The Dotcoms understandably believe that they are entitled to know this. That action is pending appeal in the Court of Appeal.”
