Jan 31, 2008

How The New York Times Sees The Changed Primary Race

Read this....

Is The Opposition Asleep?

The previous post was the result of our having a read of all Parliamentry questions asked of our star Foreign Minister Winston Peters over the last several months. What is notable, is the lack of searching questions by National, and the extent to which the Minister is being kept honest by questions by various Green MPs. Unfortunatley we don't thing that we can rely on the Greens to follow up on work that Trevor Louden has done on the possible support, by NZAID funds, of travel to get togethers with Mexico's Zapatista rebels (Army of National Liberation).

According to the CID websiteCID administers the Travel Fund at the request of NZAID to assist New Zealand NGOs to participate in significant international development conferences, meetings or workshops on development.

Please note this allocation from the CID NGO Travel Fund listed in CID's 2007 Annual ReportLatin America Solidarity Committee – Richard Jeffrey to attend the Encuentro of the Zapatista Communities with the Peoples of the World conference to be held in Chiapas Province, Mexico, 21-31 July 2007 $3,500

Could you please tell me why NZAID/taxpayers money is funding travel to Zapatista run "Encuentros"?

What does such travel contribute to New Zealand's foreign aid programme?

These seem to us to be questions that should be asked by the Opposition and the mainstream media. If this is true we believe that Minister Peters should resign and that heads should roll in MFAT and NZAID also.

We also question what Mexico's attitude to this issue is? Is this really what we want to be happening when we are asking Mexico to agree to negotiate an FTA with us? Again these are questions we would have expected from the media and the opposition.

What Is Going On Here?

15707 (2007). Heather Roy to the Minister of Foreign Affairs (07 Sep 2007): What reports or briefings if any have been prepared by Ministry of Foreign Affairs and Trade officials regarding the speech given by the Minister of Foreign Affairs at the launch of Thales New Zealand on Monday 3 September 2007; what was the content of any reports or briefings and who were they prepared for?
Rt Hon Winston Peters (Minister of Foreign Affairs) replied: None.

Was this the speech we heard about at which Winston embarrassed every New Zealander in the room by suggesting that French investment in New Zealand was better than American investment, and that Lockheed Martin has overthrown the Allende regime in Chile???

Was this New Zealand policy?

Was it appropriate for the New Zealand Foreign Minister to say this?

We wonder what Secretary Rice says about this?

Interest Free Student Loans Bad Policy

Here we have a chance to prove our political independence. Interest free student laons are dumb, dumb, dumb. We understand why National has adopted the policy, but this is bad policy.

What Does Edwards Withdrawal Mean For the Democratic Race?

Our initial view at The Hive (where we understand Republican politics better than the Democrats) is that the withdrawal would be an even thing - maybe working just a little in favour of Clinton, as Edwards' supporters were more like Clinton supporters.

Two assessments out today seem to confirm this:

Where will John Edwards' supporters go? Edwards has a strong preference for Obama; it's clear from listening to him speak at campaign events and debates that he respects Obama's co-embrace of the change message. But when I spoke to Edwards supporters in Iowa and New Hampshire, they didn't share their candidate's affinity for the Senator from Illinois. That makes sense: Edwards' base is working class whites, a group among which Clinton has done very well and Obama has done very poorly.
The door is open for Edwards to endorse down the road. (We'll have to wait to see if a
deal has been made.) I suspect he will definitely not endorse Clinton, and may or may not endorse Obama. (If Obama fails to speak about poverty on the stump, however, all bets are off.) I think anything short of full-throated Obama endorsement will mean that his supporters split relatively evenly between the two remaining Democratic candidates in the race.

The above from Mother Jones and this from a Professor we have never heard of, but as he agrees with us he must be good:

"With Edwards and Giuliani dropping out, the race effectively becomes a two-person contest in both parties, effectively dashing hopes of brokered conventions on either side.
"The Edwards withdrawal is likely to be a wash in terms of favoring either Obama or Clinton, especially without an endorsement from the former North Carolina senator. Polls show Edwards supporters were split roughly evenly between Obama and Edwards.
"If anything, it is conceivable that more of Edwards's supporters may drift to Clinton instead of Obama. Edwards attracted considerable support from voters over 50 and the less educated, groups that Clinton has won handily in states like New Hampshire. Exit poll results in New Hampshire also suggest Edwards's supporters in the January 2008 primary also prefer Clinton over Obama with respect to honesty, trustworthiness and qualification to be commander-in-chief."

On The Buses

In smart move NZ Bus has reached out to Poneke and given him an exclusive on latest plan's for Wellington's bus service.

But The Hive is more worried about this article in today's Dominion Post about a robbery and sexual assault on Wellington buses, and the lack of action from either drivers or passengers.

Repeal The Electoral Finance Act

Mike Moore writes a moving article which ends with a plea to Labour to repeal the Electoral Finance Act which he describes as a "repressive, unworkable, flawed law"

My plea to the party I love is to just repeal the act. Accept it's wrong in substance and principle before it hurts us further and does the exact opposite of what's intended by encouraging big money to circumvent this law. J'Accuse.

NZ Herald Also Calling It A Win To Key

John Armstrong in today's NZ Herald writes that in the battle of the speeches, John Key has come out the winner.

If there is a winner from this week's battle of the speeches, it is John Key.

Coming opinion polls will point to who really secured the spoils. For now, National's leader can claim a tactical victory over the Prime Minister thanks to sharp political acumen on the part of him and his advisers, plus a dose of good luck.

Dominion Post Editorial Gives Round One To Key

The Dominion Post Editorial today will not be what Helen wants to be reading.

In the red corner is a battle-hardened prime minister who has spent almost three decades in the parliamentary bearpit and possesses an encyclopaedic knowledge of policy.

In the blue corner, Mr Key is an untested newcomer who has only a passing acquaintance with Parliament's strange ways and suffers from the added disadvantage of having spent most of the 1990s overseas.

But on the evidence of yesterday it is Miss Clark who needs to lift her game to win this year's election, not Mr Key.

First blood John Key.

Time To Take A Stand Against A Political Public Service

All public servants and MPs should read page B5 of today's Dominion Post. On it are words of great wisdom from New Zealand's best political lobbyist, Barrie Saunders. We cannot yet find an electronic copy of his piece.

We endorse his plan for restoring the independence of the public service. We hope CEOs and the SSC move fast to implement those elements not requiring legislative change. And we hope that Government agrees to give priority to new legislation reinstating open tenure for departmental permanent heads. Because if they don't then radical changes will be necessary by any incoming National Government.

Jan 30, 2008

Giuliani To Withdraw: McCain A Big Step Closer To The Presidency

Pressure from The Hive, and now Kiwiblog was obviously too much for the Giuliani campaign. CNN is reporting that he will tomorrow follow our advice and endorse McCain. You read it first on The Hive.

Now all we need is for Obama to get the Democratic nomination and the Presidency is McCain's. We will explain later - off to dinner.

McCain Wins In Florida

With 54% of precincts reporting the netowrks are beginning to call a McCain win. his lead appears to be extending. He is on 35% to Romney's 31%.

The tracking poll we use has yet to get the republican race wrong.

This will kill Giuliani and we repeat he should withdraw and start working with McCain.

This is bad for Romney who apparently outspent McCain 3 to 1 in Florida.

This is the initial CNN analysis.

McCain Leading In Florida

With 44% of precincts reporting John McCain has 35% of the votes to Romney's 32%. Giuliani is third on 15%.

Lunch With The Undercover Economist

In his blog En Avant Jim Donovan has highlighted the forthcoming visit to New Zealand by Tim Harford, author of The Undercover Economist and an opportunity to hear him speak on 29 February. He is in NZ to promote his new book The Logic of Life . We might book a table also Jim. Thanks for the tip.

Was New Zealand Invited To Davos?

When was the last time that New Zealand didn't attend a trade ministers gathering at Davos? The gathering this year was a lunch hosted by Swiss Finance Minister Doris Leuthard. 20 Ministers were invited. Australia's Minister Simon Crean was there. Was New Zealand's Trade Minister Phil Goff there - don't forget he was close by? If not why not? Were we invited? Or have we lost interest in the WTO? The speech given by the PM today suggests that she is not hoping for much from the Doha Round.

All good questions which we are sure many journalists are already following up.

Apple Access To Australia

A few weeks ago we were critical of the lack of coverage in the New Zealand media about the first ever case New Zealand has taken against Australia at the WTO - apples. We were therefore pleased to see today that there were two publications looking at the issue. The Dominion Post (inspired maybe by last night's Australia Day Reception Tim?) wrote a good Editorial on the topic. There is also an analysis of the issues in The Independent (page 4). The Independent suggests that a successful result from the WTO could potentially be worth $50 million plus a year.

The article in The Independent is quite interesting, particularly the comments made by Agriculture Minister Jim Anderton

In the meantime the way remained open for Australia to come back to New Zealand with a mutually satisfactory resolution to the issue, said Agriculture Minister Jim Anderton.

"The ball is now in Australia's court to come up with a proposal. We would assess any proposal made by Australia on its merits."

Is Jim hinting that behind the scenes Australia is seeking an out of court settlement? Certainly we don't think Australia will want to be seen to have lost the case in the WTO as this might encourage further challenges to its strict import regime (which developing countries in particular argue is more about trade protection than disease prevention). We will watch this space very closely.

Key 1 Clark 0

That is the assessment of the Dominion Post's blog Inside the Beltway in a post entitled Key Bests Clark In Opening Salvo.

The Press Gallery

Poneke has another thoughtful contribution today (two actually), this time on the role and motivations of the press gallery. Poneke suggests that the gallery journalists now aspire to be "king makers".

But is not as bad as it could be:

"The New Zealand press gallery pack has yet to succumb completely to its own self-importance. It has not quite got as far up its own backside as its Australian counterpart."

We recommend you read the complete post.

Three Councillors Fail To Attend Retreat

There is a short opinion piece from Margaret Butler of Johnsonville in today's Dominion Post. She applauds the three councillors who chose to stay away from the Council's $16,000 retreat.

We disagree with the Butler view and we think that the Dominion Post should also.

The three councillors have failed to do their duty. The retreat was all about getting a shared vision for the next three years. given the size of the rates take and the assets being managed $16,000 is nothing.

The three councillors concerned should be being lambasted by rate payers and The Dominion Post and questions should be asked about their fitness to serve. Throw them out, we say, and find three replacements who are willing to work constructively for a better Wellington!

Peters Takes Partner To The Ice

It is good to learn that the chances of Winston Peters suffering frost bite in Antarctica have lessened with the news that he has taken his partner Jan Trotman with him on his trip to the ice. This seems a bit unusual to the team at The Hive, but we want our star Foreign Minister to stay fit, healthy, and warm so he can continue delivering so many outstanding results for New Zealand on the international stage.

The Clark Speech

Those who want to read it can click here. As with the Key speech, we will leave it to others to focus on the youth issues which are grabbing the headlines. We will focus on the economy.

Clark is clearly intending to run on her record and to sell an optimistic view of the future:

Without doubt our economy is now more resilient, and that’s critical when there’s global market volatility of the type experienced this year. This is not a time for gambling with our country’s future.

Growth will slow a little this year, but is still expected to stay above two per cent. That used to be as good as it got.

The economy is expected to return to its trend rate of three per cent growth next year.

At this time of international turbulence :

· employment remains very strong, with employers experiencing skills shortages,
· unemployment is forecast to stay low,
· business confidence remains reasonably positive on investment and staffing intentions,
· there is continuing strong growth in Asia which gives support to our commodity prices,
· in the global credit crunch, the structure of the New Zealand banking system has meant New Zealand has not been as exposed as some countries. Banks in New Zealand and Australia are judged to have been more conservative in their approach, although a number of non bank deposit takers have been affected, with adverse effects for people’s savings.
· the government is in a sound fiscal position which gives us room for manoeuvre if required.

Overall, while there is clearly global uncertainty, there is no sensible prediction of the “R” scenario here – that is no more than the silent prayer of the Opposition !

While at the same time suggesting that National wasn't up to it last time in office:

The truth is that New Zealand is still paying the price of past years of economic failure and harsh social policy.

Broken families and shattered lives were the product of long term, intergenerational high unemployment and deprivation. We see the results in family, youth, and other violence in the community. While crime rates overall go down, violent offending goes up. Today’s young violent criminals are the children of the “Mother of All Budgets” in 1991.


That was the politics of deception of the 1980s and ‘90s – the politics New Zealand banished eight years ago.

Unfortunately there is not much sense of new direction - instead we are supposed to believe that existing policy directions, supplemented by the soon to be announced BY THE PM (not you Mr Goff "I hope soon to be able to report progress with China – the most ambitious negotiation we’ve been engaged in to date.") China and GCC FTA outcomes, plus further infrastructure investment, will be enough for us to continue growing in a sustainable way.

So our assessment:

High marks on infrastructure and trade policy - even higher if you can start a negotiation with the US.

Negatives are the excessive optimism about our short term prospects (has the PM read Bollard's speech?); failure to address tax; failure to focus on productivity growth; failure to commit to a bold vision such as taking us back to the top half of the OECD in per capita GDP; failure to accept or even acknowledge the economic costs of proposed environmental policy. And we are very angry about the characterisation of the very reforms that have allowed New Zealand to enjoy such a long period of economic growth. This is plain dishonest.

We wanted to see more about new direction. If you are to win in 2008 Helen, you are going to need to provide this.

McCain's Lead Widening In Florida

The Reuters/C-Span/Zogby tracking poll now has McCain on 35%. This is 4% ahead of Romney. This is the second day in a row that McCain has shown upward movement. Huckabee and Giuliani are in a neck and neck fight for third.

We will report results and analyse these later on today.

The Herald On Key

John Armstrong writes that Key hit all the right buttons in his speech yesterday. He also liked the detail and substance to the announcements on youth training and crime

"Labour believes National's leader is highly vulnerable to accusations of substance-deficiency. The speech is all about destroying that avenue of attack by having Key offering a bucketful of ideas in a narrow area of focus"

"However, the policy detail also reflects National's far more disciplined approach to policy development than was the case with some of the skimpy policies released at the 2005 election.

The speech thus bears the confident sound of a Government-in-waiting, rather than an Opposition looking for something new to say

Fran O'Sullivan says the speech was "notable for his move to set the agenda by stipulating the "questions" (not policies - that comes later) that this year's election will be fought on."

Fran looks at Key's agenda setting questions:

* Why, after eight years of Labour, are we paying the second-highest interest rates in the developed world?
* Why, under Labour, is the gap between our wages, and wages in Australia and other parts of the world, getting bigger and bigger?
* Why, under Labour, do we only get a tax cut in election year, when we really needed it years ago?
* Why are grocery and petrol prices going through the roof?
* Why can't our hardworking kids afford to buy their own house?
* Why is one in five Kiwi kids leaving school with grossly inadequate literacy and numeracy skills?
* Why, when Labour claims it aspires to be carbon-neutral, do our greenhouse gas emissions continue to rise at an alarming rate?
* Why hasn't the health system improved when billions of extra dollars have been poured into it?
* Why is violent crime against innocent New Zealanders continuing to soar and why is Labour unable to do anything about it?

And she notes that Key is now honour-bound to clearly state before the election takes place just what National's answers will be. She also suggests that Key has "undermined Clark's pledge of "relentless" positivism by stating National will be "unrelenting" in its quest to lift New Zealand's economic growth rate and raise interest rates.
Labour once stated an ambition to get New Zealand back into the top half of the OECD on GDP per capita income basis.

But it let the ambition slide."

The Herald Editorial is also positive and calls National's proposed solutions to juvenile crime "practical".

Jan 29, 2008

National's Economic Agenda

We are sure that most comment will be on the social agenda contained in Key's State of the Nation Speech, so our focus will be on his vision for the economy. The Dominion Post and The hive yesterday called for substance and detail so we are glad that priorities have been identified. Key's agenda is:

The National Party has an economic plan that will build the foundations for a better future.

We will focus on lifting medium-term economic performance and managing taxpayers’ money effectively.
We will be unrelenting in our quest to lift our economic growth rate and raise wage rates.
We will cut taxes, not just in election year, but in a regular programme of ongoing tax cuts.
We will invest in the infrastructure this country needs for productivity growth.
We will be more careful with how we spend the cash in the public purse, monitoring not just the quantity but also the quality of government spending.
We will concentrate on equipping young New Zealanders with the education they need for a 21st century global economy.
We will reduce the burden of compliance and bureaucracy, and we will say goodbye to the blind ideology that locks the private sector out of too many parts of our economy.
And we will do all of this while improving the public services that Kiwis have a right to expect.

We are generally comfortable with this agenda. It is quite close to our own. We would have put the productivity message in brighter lights - both higher growth and higher wages depend on better productivity growth.

We strongly support the call for improvement in the quality of government expenditure. The focus has been too much on quantity. there are huge gains to be had by improving public service productivity.

Clearly we agree fully with the tax message.

As recently as today we posted on the locking out of the private sector from some parts of infrastructure investment, so we also endorse keys comment about "blind ideology".

And we support strongly anything that is done to improve our education system.

On the negative side we would have liked to see Key talk about immigration (we urgently need more skilled immigrants) and local government reform (but maybe this is hinted at - "the burden of compliance and bureaucracy").

Overall we give Key a strong pass. It will be interesting to mark the PM's speech tomorrow using the same criteria.

The Key Speech

Just reading the speech. Will comment later.

Champion Of The Earth

Congrats to the PM on her award from UNEP. We won't spoil things by asking too many questions about the price the economy is going to pay for this award.

This award, of course, will give Helen a new career opportunity post election (whether she wins or loses). As we have reported before she is well placed to become the new boss of the ILO, but the timing is a little tight.

But the UN Environment Programme is better timed. The job comes up on 15 June 2010. We had thought that UNEP was a pretty dreadful organisation, based in Nairobi. But on checking the website it doesn't look that bad. The next meeting is in a real hardship location - Monaco.

This has caused us to wonder if there is any coincidence between all this and the decision by Helen Clark's Government to host the UN World Environment Day in June. We had been thinking, before today, that this was simply about trying to take some more votes away from the Greens and National in election year. But maybe there is a wider agenda. This from the UNEP press release:

New Zealand will be hosting this year's World Environment Day - one of the principal vehicles through which the United Nations stimulates worldwide awareness of the environment and enhances political attention and action. The event will take place on 5 June 2008 with the slogan "Kick the Habit! Towards a Low Carbon Economy".

Lower Taxes And Increased Infrastructure Investment?

Kiwiblog has drawn attention to some suggestions made yesterday by The Hive on how to grow productivity. This has drawn some comment, including from one reader who questioned how it is possible to cut taxes and increase infrastructure investment?

We don't see any conflict between these goals. For a start, we don't see infrastructure investment as the sole preserve of Government. And it is not the sole preserve of Government. Have a look at Infratil's portfolio for example.

Unfortunately the current law makes it difficult to fully harness the potential infrastructure investment from the private sector. Changes need to be made. The rules on tolling an existing road for example make it non-economic to allow the private sector to build a second Mount Victoria tunnel. The law needs to be changed.

Second, we see huge potential for local government (particularly a rationalised local government) to accelerate infrastructure investment. We haven't looked at this figure lately but last time we did we noted that in the Wellington region alone local government was sitting on around $10 billion in assets but only around $500 million in debt. There is a similar situation in Auckland. Won't this increase the rates burden? Not necessarily. We reckon that the amalgamation of the 9 Wellington Councils into one would create a saving of well over $10 million (just on the abolition of the 8 Councils alone). At a 10% interest rate that's another $100 million available for infrastructure. The savings would actually be much greater when duplication at Council staff is eliminated.

Third, we wonder why local government needs to own some of these assets. Why should Greater Wellington own most of the port? Why should Wellington City own a minority shareholding in the airport? We think that they should sell these assets and invest in better infrastructure.

Has anyone noticed how the Wellington Port has become a property developer? What is happening to the extra money being earned from this activity? What would we do with this? We would suggest to Greater Wellington that they either sell this asset, or invest this new income in new infrastructure. A new port at Clifford Bay would be a great place to invest it.

Fourth we see huge waste in central government expenditure at present. The $47 million being spent on spin doctors would be enough to pay for an almost $1 billion in new infrastructure at the rate that central government is able to borrow. Do readers know that the government operational expenditure on IT last year was over $1 billion? We would be amazed if a 10% saving couldn't be achieved in this area without anyone outside the IT industry knowing. That's another $2 billion freed up for infrastructure (at the rate Government can borrow at).

So the above is about $4 billion extra for infrastructure investment. Add Auckland's assets in, and those from other parts of the country, and other areas of Government waste, and the figure will get much larger. And this will have no impact on tax cuts what so ever. Short term anyway, the tax cuts will come from the structural surplus.

McCain Moves Back Into Lead

John McCain might be about to do it again, win that is. The latest Reuters/C-Span/Zogby poll has him in a slight lead over Romney - 33% to 30%. Rudi is still way back but has moved past Huckabee to third place. The Hive continues to call for him to withdraw and endorse McCain. McCain appears to have been helped by the endorsement of the Florida Governor Charles Crist.

Will National And Labour Squeeze The Minors?

John Armstrong explores the implications of the current contest between the two big parties for the smaller parties in today's NZ Herald.

Key's Election To Lose

Colin James suggests in the NZ Herald that John Key doesn't need any king hit out of today's speech. He sees 2008 as the election that is there for Key to lose and for Clark to win. We agree with much of Colin's analysis. One sentence jumped out however, "Some on the front bench cannot expect to be there in a Key Cabinet." Colin doesn't think the current front bench for National is credible. Who does Colin James see as being dropped? Unfortunately he doesn't tell us. Nor does he suggest who the replacements will be.

We are pleased to learn that Key has been spending the vacation boning up on policy. If we are to see a Presidential style election campaign - Clark v. Key - he will have to ensure that he is more comfortable debating policy in all areas. To date this has been Helen's trump card.

The Need For UN Reform

There is a good Editorial in today's NZ Herald on the need for UN reform. We agree with every word. New Zealand, as a non-permanent member of the Security Council can have only little say on this, but we hope that New Zealand is backing the work being done by UK Prime Minister Gordon Brown. We recall New Zealand playing a reasonably positive role on UN reform under previous Governments. We can't really see why that position would have changed much under the current Government. Winston Peters should be a bit more open and let us know what the current position is. We are sure he will have detailed and sophisticated views on what needs to be done. Maybe Mr McCully should allow Winston to explain these views through a few questions for oral answer.

Threats to North Island Electricity Supply

The NZ Herald has picked up on the risks to electricity supply in the North Island this winter.

"Basically we have run down our reserve generating capacity to the extent that not much has to go wrong to put us in a very dicky situation,"

The Hive assumes that Energy Minister David Parker is learning some rain dances. The power going out in Auckland a few months before the general election will be a bad look for the Government. Rather than rain dances we would be accelerating plans for a gas powered power station close to Auckland.

David Benson-Pope's Struggles Continue

We are not sure why David wants to hang around on the back benches, probably in opposition, but he is going ahead in seeking the nomination for Dunedin South, even though he has two strong challengers. It will be interesting to see how the association with one of the Ministry for Environment scandals will affect Clare Curran's chances. It will also be interesting to see how head office votes on this. Will they back scandal prone Benson-Pope or the candidate from the far left - Curran? This story is front page on today's ODT...

Jan 28, 2008

Some Changes at The Hive

It has been suggested that we are a little too serious and too focused on the political here at The Hive. This is not surprising given our mission statement, but we take constructive criticism on board.

To this end we are going to extend our focus a little. We have spotted a new wine blog which seems pretty interesting so to help this venture along, in the same way others did to us when we were very new, we will include a link. We are also going to include reviews of fine New Zealand restaurants that our team has visited (two on our team are well qualified to comment). We also plan to give some hot tips on interesting speakers coming to town.

We hope you enjoy these additions.

Winston To Miss The Two Big Speeches

Winston Peters has decided to avoid difficult questions this week about his reaction to the important Clark and Key speeches. Instead he is heading for the ice. A pity penguins can't vote Winston.

Who Is Going To Win In Florida?

Unfortunately our favorite tracking poll from Reuters/C-Span/Zogby is only of limited help this time. We can say with some confidence that the winner will be either McCain or Romney. Both are tied on 29.9% (actually McCain has a marginal lead244 to 240 respondents) but the trend seems to be slightly Romney's way (he has caught McCain up).

The news looks really bad for Giuliani who is sitting on 12.5% in 4th place. He should withdraw now and endorse McCain.

Big Moves At Infratil

Marko Bogoievski, Telecom's previous CFO is staying in Wellington and is joining the already impressive team at Infratil. He will take on the title of Chief Operating Officer. It is great that Marko is staying in New Zealand and Wellington in particular.

Crisis Looming For North Island Electricity?

The Press today suggests that we have a problem.

The Hive has been worried about these issues for some time. Good on The Press for taking up the cause.

We need a new thermal plant near Auckland asap!

Tax Cuts The Key Issue For Voters

The NZ Herald today drills down into the factors most likely to influence voters in 2008 by running a Digi-poll.

Tax come out as the biggest issue, particularly for Aucklanders.

In a Herald Digi-Poll, just over one quarter (25.5 per cent) of respondents picked tax cuts as an issue likely to influence their vote in the election - more than for hospital waiting lists (17 per cent), the economy (15.1 per cent) or law and order (14.2 per cent.)
The prospect of lower taxes was especially high on the minds of Aucklanders, where one-third of respondents picked tax cuts, compared with 22 per cent of the rest of New Zealanders.

Nor was it just an issue for respondents who said they would vote National - it was top of the list for both National and Labour supporters - with 29 per cent and 23 per cent respectively saying tax cuts were likely to influence their vote.

Attitudes to climate change and energy efficiency were also interesting:

Despite the publicity about the carbon emissions trading scheme and energy efficiency programmes, global warming was chosen by 9 per cent. Just 2.1 per cent of National supporters picked global warming in their choices, compared with 11 per cent of Labour's and, not surprisingly, 43 per cent of those who said they would vote for the Green Party.

This would tend to confirm that Labour's re-born belief in these issues is as much about who gets the "Green" vote as it is about the environment.

Transmission Gully Update

It is clear from a very good interview on Morning Report of the local Transit New Zealand Manager that the front page story in the Dominion Post is a complete beat up. The project is not facing any delays or cost overruns, and Transit has not lost any fault lines. As we noted in our earlier post - the Dominion Post can do better.

WTO: Chances Of An Easter Breakthrough?

Well there has been no breakthrough at Davos but Trade Ministers who met there over the weekend are still talking of the possibility of an outcome in 2008. To achieve this they will need some kind of big progress, and it seems that a meeting around Easter is being planned to achieve this. Lets hope this comes to pass. If Phil Goff can help pull this off, as well as the China deal, the involvement of the US in the Trans Pacific Strategic Economic Partnership, and maybe the FTA with The GCC, he will indeed be well placed to become New Zealander of the Year (and maybe Labour Party leader also??).

Further Attempts To Delay Transmission Gully?

The front page of the Dominion Post is again carrying a story questioning Transmission Gully. It seems that Transit are having trouble with three landowners and this is complicating the task of identifying the exact location of the fault line that is meant to run across the proposed alignment of the new road. It carries a quote from super brain local geologist Tony Edwards "It would not be wise to build a road or a bridge within about 200 metres of the fault" he says. For the record, SH1 passes over a bridge at the mouth of the Pauhatanui inlet just before the famous T2 lanes in Paremata. Guess what also is spanned by this bridge? The same fault line that Transmission Gully will have to deal with.

Come on Dominion Post, you can do better.

Roger Kerr Soft On Inflation?

Queen Bee almost spat out her weet-bix this morning. The Dom Post is carrying an article by a Roger Kerr questioning the Reserve bank's focus on inflation. On closer reading we see it was by a Roger J Kerr a director of Asia-Pacific Asset Management. There is a remarkable coincidence of views between Roger J Kerr and the CEO of the NZX.

DOMPOST Editorial Asks Important Questions

Today's Editorial in the Dominion Post requests substance not rhetoric from the two Party leaders in their major speeches this week. we agree particularly with the focus in the Editorial on New Zealand's position within the OECD. Helen Clark's Government has failed to deliver on its goals. What would John Key do that would get us back up the wealth league?

The Hive believes that the key is productivity growth. Again Labour has failed to deliver. Our productivity growth ranking is almost exactly the same as our wealth ranking in the OECD, near the bottom. This is no coincidence.

How can we get back near the top? Tax cuts, huge infrastructure investment, bigger technology investment by business backed up by world class broadband, less domination of the economy by Government, rationalisation of local government, and moving in concert with the OECD on climate change policy response, not trying to be the leader.

Last week's study on relative transport costs between Australia and New Zealand was a real eye opener.

Jan 27, 2008

Around The Blogs: New Zeal

As regular readers will know we don't always see eye to eye with Trevor Loudon's New Zeal but we do have high regard for his energy and his research into radicalism here in New Zealand. In this regard there are two recent posts we wish to draw attention to. The first relates to the late Syd Jackson and a number of trips to Libya. Our advice to Trevor is to keep digging. Who paid his airfares on these trips and did Syd visit Geneva for any UN meetings first?

On the topic of the UN The Hive has been unhappy with media reporting on the questions that have been asked of New Zealand by "the UN" about the so-called anti-terror raids. Trevor usefully exposes who is behind these questions on the UN side. None other than the United Nations Special Rapporteur on Human Rights while Countering Terrorism. The rapporteur mentioned in this case is our old friend Mexican Marxist Sociology professor, Rodolfo Stavenhagen. No surprises here.

Obama Victory Bigger Than Anticipated

Obama has beaten Clinton by a bigger than expected margin in South Carolina 55 percent to 27 percent. South Carolina native John Edwards finished third with 18 percent. At least Clinton came second.

As expected the South Carolina balloting splintered along racial lines, with 78 percent of Obama's support from black voters and 20 percent from whites, a CNN exit poll found.For days, Clinton's aides have tried to spin Obama's impending victory as a nonevent, arguing that he enjoyed an insurmountable edge among blacks, who made up half of the Democratic electorate here. Nonetheless, Clinton led in polls here for much of last year.About a third of Clinton's voters yesterday were black.

Some in the Clinton camp believe she won by losing in SC, saying Obama was forced to abandon his multiracial, multiethic call for change that catapulted him to victory in Iowa in favor of a conventional campaign targeting a racial voting bloc.

We Continue To Move Up The Rankings

The Hive continues to move up the rankings. Our Alexa 3month average rank is 1,796,474 (we have yet to be going 3 months so this is not a true ranking). In comparison our 1 week average has been climbing steadily and now stands at 597,891. Our New Zealand rank has climbed to 3,603.

We began this blog on 30 November 2007 but only started gathering detailed metrics on 10 December. Since then we have been visited 5,194 times and had 9,259 page views, by 1,645 unique visitors. Our visitors spend an average of 2m 24secs reading The Hive. We are being read in 53 countries. New Zealand is, of course, #1 followed by the US, Australia and the UK. We have readers in 44 states in the US. California is #1 followed by New York then Virginia. In New Zealand most readers are from Auckland followed by Wellington City. If the Hutt etc was added in Wellington's readership would match that in Auckland.

Technorati have us at a rank of 962,510 with 8 authorities. They remain way behind in their analysis so we will come out much higher. They cite 42 web references.

Many thanks to those who have linked in to The Hive. As far as we know we have reciprocated in all but one case. We have not linked into Three Point Turn (Alexa rank 4,910,536) because we object strongly to being listed as fascists! We actually have issues with being called "Right" also. Or to being called a "usual suspect" so often by the ex-expat (who we otherwise enjoy immensely). For the record we have never met David Farrar (though we are often in the same room or at the same events) and we have zero links with the National or any other political party. We continue to criticise bad policy and the causes of bad policy. Where Government gets it right or when the opposition get it wrong, we say so. We are not aware of once praising the National Party (though we have praised a few individual performances on particular issues (as we have Phil Goff and Michael Cullen etc for Labour). We do admit to giving ACT a pat on the back for their honesty on the emissions trading legislation. Maori and Peter Dunne also received some positive comments in that regard as did a couple of National Party MPs David Carter and Tim Groser.

A big thanks to all who visit us from the NON-FASCISTS here at The Hive.

Fran O'Sullivan: The End Of The Golden Weather

Fran O'Sullivan writes in the Herald on Sunday a more detailed analysis of Bollard's recent speech. Fran suggests that Bollard's concern is no longer inflation - which he thinks he has licked. Instead he is worried about maintaining the confidence of overseas investors who we need to keep supporting New Zealand.

Fran has mentioned this in her piece, but we are surprised other media commentators have not made more of Bollard's warning on the negative impact of the Government's proposed emissions trading regime - which he sees potentially adding 0.5% to inflation. He sees this as a potential cause of shock to the economy.

South Carolina: Who Is Going To Win?

According to the final iteration of the Reuters/C-Span/Zogby tracking poll, Obama's lead is being cut but it remains healthy. What is interesting is the strength of Edwards' support. Should he somehow beat Clinton back into third place this race would get even more interesting.

Two trends to watch in this poll - how many blacks will vote Clinton? And how many whites will vote Obama? Opinion polls suggest that Clinton is still attracting good levels of support from black voters but Obama is attracting only 10% support from white voters.

We will be analysing the results once they start coming in. Turnout is apparently heavy.

Jan 26, 2008

Fran Analyses The Prebble Resignation And Bollard's Speech

Fran O'Sullivan has returned from leave with a good analysis in today's NZ Herald of the Prebble resignation - which she had predicted - and of the speech Bollard gave yesterday on the gathering economic storm "Bollard yesterday pointed to demand and cost side risks to the operation of monetary policy: the oil price surge, the commodity boom, the synchronised global housing boom, the shock to personal consumption from the run down in household savings across the advanced economies, and efforts to mitigate the risks of climate change.
Bollard's message, judged important enough to issue in a separate paper, was a sobering one.
It demands a sober response from Government
." Fran suggests that the Government's response to date has not been adequate .."But there is an element of wishful thinking and outright spin at work".

The Hive agrees.

The Clash Of The Two Party Leaders

John Armstrong of the NZ Herald analyses the clash due next week between John Key and Helen Clark with both due to make important speeches.

But Herald Poll Tells a Different Story

The NZ Herald today leads with the results of the latest DigiPoll. These are a bit different from the Roy Morgan result - see below. National is still in the lead on 47.5% to Labour's 38.7%, but the gap has narrowed. The Greens are the star performer on 9.5%. The result for NZ First is similar to the Morgan poll - support slipping, and below the key 5% threshold.

National On 52% In Roy Morgan Poll

Kiwiblog has an analysis up on the latest Roy Morgan poll.

The most interesting is the analysis by Roy Morgan:

“The latest New Zealand Morgan Poll shows continued weak support for the Labour Government.
“With an election due later in the year, the increasing support for the Opposition National Party, now at 52% - its highest level since the 2005 election -
should be a huge concern for members of the Labour Government.
“With the Reserve Bank of New Zealand leaving interest rates unchanged at a record 8.25% on Thursday, and predictions of increasing inflationary pressures heading through 2008 putting upward pressure on interest rates, Helen Clark could become a political victim of the global economic uncertainty ‘washing up’ on New Zealand’s shores.”

The Greens can take some comfort from this poll as they are up to 6.5%. The result for NZ First is very bad. They are on 3.5%, the lowest level since October.

Jan 25, 2008

Obama and Clinton Both Down, Edwards On The Rise

The latest Reuters/C-Span/Zogby tracking poll for South Carolina continues to give Obama aa healthy lead, but he is down 4% from yesterday to 39%. Hillary Clinton is down 1% to 24%. Edwards is up to 19%.

Meanwhile it has just been announced that the New York Times has endorsed McCain and Hillary Clinton. The New York Primary is on Super Tuesday.

WTO: Divisions Remain On Non-Agricultural Market Access

As a group of Trade Ministers converge on Davos for a mini-Ministerial it seems divisions remain in the key area of non-agricultural market access. This overview from Bridges Weekly Trade News Digest.

Winston Welcomes News That Clarkson Will Stand Again

Winston First Leader Winston Peters has just issued a statement on the news that Bob Clarkson is to stand again in Tauranga. We repeat the carefully worded statement in full:

"New Zealand First Leader Winston Peters welcomes today’s announcement that Mr Clarkson will contest the seat of Tauranga in this year’s election.

Mr Peters says that an announcement regarding his own future will be made in due course."

Will Winston be announcing his retirement from politics?

Will he be announcing his agreement to the PM's offer of High Commissioner to London?

Or will he be contesting Tauranga also?

Will we be able to sleep at night (something Winston has never done) until we know the answer?

One Down, How Many More To Go?

SSC boss Mark Prebble is to finish up in June. Some more diplomatic than The Hive are saying nice things about his contribution. We cannot bring ourselves to do the same. We will never forgive the role played by Prebble while CEO of the Pm's Department in giving, first Jenny Shipley, then Helen Clark, bum advice on the US FTA. We believe that he personally scuppered the chances of us getting a negotiation started. Our sources on this are impeccable. Clinton was lined up to say yes, but Prebble told Shipley not to ask - "he might say no". And then with early Bush, we know that the phone call with the White House was set up, and then he advised Sutton's office to cancel the call.

His role as SSC boss has been less than impressive also.

How many other CEOs are going to do the honourable thing?

Helen Clark Help Or Hindrance? Is Chris Trotter Backing Goff?

Chris Trotter writes today (we have only got a hard copy of this article sent to us from an ODT reader sorry) that a worryingly large chunk of Labour's core constituency had become alienated from the Clark-led Government. He suggests that this might represent as much as 5% of the electorate. He suggests that if Labour is to have a serious crack at winning a fourth term, it has to get these voters back. "It won't get them while Miss Clark is Prime Minister" Then the killer blow.....

"Put Phil Goff in charge and it just might"

New Zealand Road Transport Costs Over 30% More Expensive Than Australia???

This is shocking. We are trying to track this Road Transport Forum report down. How can we compete with this type of differential? No wonder our productivity performance is so much poorer than Australia's.

Doom And Gloom On Economic Front

Radio NZ leads with exporters trying to survive ("grimly holding on") the continuing overvaluation of the NZ $ and the Dominion Post is leading with an article highlighting the implications of high debt levels. These are not things that a Government wants to see at the start of election year (Labour strategists had been working on the assumption that the realities of the structural imbalances in the economy would not be seen by the average voter until 2009 - the 2009-2011 strategy was to be one of saying "we left the economy in perfect shape, look what National has done to ruin things").

The PM will find these sentences from the Dominion Post as particularly worrying:

"Mr O'Donovan said provincial New Zealand was likely to do well this year, spurred on by a diary boom, higher commodity prices and solid growth in rural property prices.
"[But] if you're sitting in the main cities you're not going to be too happy." Wage growth would be offset by higher petrol, food, rent or mortgage servicing, he said.

Don't more voters live in urban New Zealand than rural New Zealand?

Jan 24, 2008

McCain And Romney Lead In Florida

Poor Rudy. All that money and all that effort on winning Florida. Looks as though this has all been wasted. Expect Rudy to withdraw if these poll results come true. This will work in favour of McCain, indeed Giuliani should do the honourable thing now and let McCain sew the nomination up more quickly.

We have just watched Rudy being interviewed by Larry King. Not convincing.

Rice To Visit In February?

Trans-Tasman says yes.

We had heard from Washington sources that an announcement might me made on this soon, then the trail went cold.

Will this visit help or hinder re-election prospects for the Government (and for host Winston Peters)?

We favour a bipartisan approach to foreign policy and hope that, should she come, Secretary Rice is given a very warm welcome from all New Zealanders, and that the Government uses the visit to assert its firm commitment to continuing improvements in the relationship. Things are certainly heading in the right direction. Will there be an announcement on the trade front during this visit? Goff indicated prior to Christmas that there might be an announcement as early as January. Announcement by Rice would, however, add real substance to a visit.

Obama Has Huge Lead In South Carolina

The latest Reuters/C-Span/Zogby tracking poll is out ahead of the Democrat vote in South Carolina. He is on 43% compared to Hillary Clinton's 24%. This poll has been more accurate for the Republican race than for the Dems but this lead for Obama is impressive.

Sustainability Labour's Trump Card?

We posted this morning about the 9th floor's addition to Michael Cullen's NZ Herald op-ed. Nick Smith has done an analysis on exactly the same issue (did you know that the PM mentioned 'sustainability' 42 times in her annual speech to Parliament last year???). Have a read of Smith's speech. Would you make this issue the centrepiece of your re-election campaign?

Greens Seek Help From Voodoo Also

Voodoo solutions to the current economic problems are not the preserve of Winston Peters and his Party. The Greens (well so called co-leader Russel Norman anyway) are putting the blame on oil, and their solution is to collectivise transportation.

“The Government needs to help the Reserve Bank deal to underlying inflation pressures by rapidly accelerating policies to reduce the oil dependency of the New Zealand economy.

“These policies include better and safer public transport, cycling and walking. They include investing in rail to move freight off roads and onto rail. The Government has increased spending on some of these but at the same time has increased spending on roads much more. We also need to seriously improve the fuel efficiency of the vehicle fleet.
“The reality is that finite resources in all areas are adding to inflationary pressures in a world reaching its limits. We are seeing this with food prices at the moment where increased demand from biofuels and rising populations is meeting finite supply of arable land. The result is rising food prices.

Sorry, Greens this won't help much. If transport is the problem, lets look at costs in the sector. We think that are too high, and Government policy, as well as poor quality infrastructure, are the reasons. We would love to see a comparison between NZ costs and Australian costs for example.

This also seems a bit of an attempt to distance the Greens from the Labour-led Government.

Winston Disagrees With Helen And Michael Over Health Of Economy

It didn't take long into election year for the cracks to begin to show. The Greens started their attempts at separation over the weekend and now Winston is disagreeing with the Government over economic management. Does this mean that the rats are about to jump ship completely and swim for their lives? The need is less urgent for Peter Dunne as he has an electorate seat, but the Greens and Winston Peters Party are having trouble with the 5% threshold.

For the record we agree with some of what Winston is saying, but we don't agree with his implied policy cure. This is not the result of speculators and usury by foreign banks. A Muldoonist type control and nationalistic economic agenda is therefore not going to solve anything. Rather it would send us down the gurgler - as Muldoon's policies did last time they were tried. Rather than Winston's explanation we see the fault lying it is less than prudent financial management by the Government of which Winston is a key support, and by the Reserve Bank failing to increase rates just before the last election - we wonder why they didn't?

Will Winston Support The China FTA?

Tim Selwyn has asked this important question on his blog Tumeke. The Hive is strongly supportive of this FTA and we are confident that Labour, National and ACT will vote for it in Parliament. So there is no danger of it not being ratified.

But will Winston Peters chose this issue as another opportunity to be seen jumping from Helen's lap? Will he really be happy to see the concessions on so called Mode 4 (temporary movement of labour)? Isn't this close to freer immigration? And will the FTA not contain provisions on liberalising investment?

However, if Winston does oppose this important policy, how on earth can he remain Foreign Minister? How can the Foreign Minister be seen as opposing the most important development in relations with one of our most important trading partners? Would not his staying on as Foreign Minister while opposing this important policy not be interpreted by the electorate as an act of extreme hypocrisy by both Labour and NZ First?

The media should bee all over this topic............................................

Good To See Stronger Rebound On NZX

The markets seem to be reacting positively to the OCR announcement, particularly the widespread view that increases this year are now less likely.

The NZX is up over 1%. This intepretation from the NZ Herald.

OCR Remains Unchanged

As expected the Reserve Bank has left rates where they are.

We repeat the press release in full:

OCR unchanged at 8.25 percent

The Official Cash Rate (OCR) will remain unchanged at 8.25 percent.

Reserve Bank Governor Alan Bollard said: "The outlook for the New Zealand economy remains broadly consistent with the view outlined in the December Monetary Policy Statement. While the housing market continues to cool, the labour market remains tight, domestic income growth is still strong, especially from dairy, and core inflationary pressures persist.

"Since the December Monetary Policy Statement there has been ongoing turbulence in international financial markets and a deterioration in the outlook for the United States and European economies. We will be watching these developments closely, particularly their implications for the Asian and Australian economies and for world commodity prices.

"Despite this, the New Zealand economy is projected to keep growing reasonably well. Ongoing inflationary pressures are underpinned by an expansionary fiscal policy, and rising food and energy prices, which will be under further pressure with the Emissions Trading Scheme in a year's time.

"On balance, the outlook for interest rates is little changed from the December Monetary Policy Statement, but the level of uncertainty has increased. Although CPI inflation is expected to remain above 3 percent during 2008, we believe that the current level of the OCR remains consistent with future inflation outcomes of 1 to 3 percent on average over the medium term."

So long as fiscal policy doesn't get too inflationary we would interpret Bollard as signalling no change for most of the year.

UPDATE Winston And The Chef

Tim Selwyn has commented on his blog that he has met the Chef Gayle, who worked at the NZ Embassy in Paris in the 2000/2001 period. He says that Gayle told him that the only negative was having to fund her way to Paris. So that indicates that the book we cited may be wrong. Nevertheless we think it a good idea for Rodney Hide or someone else to extend the timeframe for the question to maybe the last 10 years.

One commenter on Kiwiblog has suggested that Chefs are employed out of the pocket of NZ Ambassadors. We have checked and find this to be incorrect info. They and other household staff and drivers for Ambassadors are paid by Embassies and High Commissions.

There has also been interesting comment on the positive implications for New Zealand cuisine should these chefs return to NZ. Certainly we are aware that either Logan or Brown spent time working for the NZ Embassy in Brussels. This seems to have been positive.

We do wonder what Winston Peters' core constituency think about NZ Ambassadors and the supports they are provided with? Winston has been Minister now for coming on three years. What changes has he made? Of course, there are rumours that suggest that Winston might be angling for his own private chef, driver, butler and cleaning staff in London in a year's time (which is why the expendable Derek Leask has been sent as a seat warmer).

And Fallow Shows Why He Is Wrong

When you are up to your nostrils in debt, you hope no one makes waves. Brian Fallow has another article in the NZ Herald which raises similar concerns to those which we raised yesterday.

New Zealand sailed through the last US recession in 2001 relatively unscathed. Growth slowed to 2 per cent before picking up again.

But inevitably there are differences between then and now.

This time the wave crossing the Pacific comes at a time when the economic boat is lying lower in the water.

New Zealand is in the worst-of-both-worlds phase of its cycle, when growth is weak but inflation is still strong and monetary conditions extremely tight.

While the housing boom is clearly over, its legacy includes levels of debt for some households that will prove uncomfortable, if not untenable, in the context of a global credit crunch.
And with a gap of nearly 5 percentage points between our official cash rate and the average among the G7 economies, it would not be wise for exporters to count on any relief on the exchange rate front, heightened risk aversion notwithstanding.

Cullen Explains Why NZ Is Well Placed To Weather Storm

In an opinion piece in today's NZ Herald Finance Minister Michael Cullen explains why he thinks New Zealand is well placed to weather the current global economic storm. We are pleased that he is so focused on inflation. His comments on the forthcoming budget were also encouraging. Unfortunately the 9th floor got to look at the draft and guess what they added as the final paragraph??? Expect sustainability in all speeches from all Ministers all year (until the election anyway).

The Budget I am currently working on - including the personal tax cut package I will announce - will be a Budget for these times. It will be a Budget that will not exacerbate inflationary pressures, that does not make us more vulnerable to global shocks, and that takes our challenges seriously.
It will also be a Budget that keeps a long-term view in balance. Our economy has been rebuilt over the last eight years.
We now have an unprecedented opportunity to become the world's first truly sustainable nation and in the process become more prosperous than ever before. While we work through today's challenges, we must not take our eyes off that prize.

What The Equity Market Turmoil Means For New Zealand

Brian Fallow interviews a few local economists and reports the conclusions in today's NZ Herald.

How great the impact of a US slowdown on New Zealand is will depend on how long it lasts and how much validity there turns out to be in the idea of "decoupling".
Decoupling is the theory that the Asian economies, which have generated most of the world's growth in recent years, have enough momentum of their own to shrug off at least a short drop in their exports to the US.
If they do, the impact on commodity prices, whose current strength underpins the growth prospects for New Zealand and Australia, our largest export market, should be modest.

Jan 23, 2008

Has The Fed's Action Worked?

This is just in from the New York Times.

We can see why this cut might help short term in the US. However, we see it as pretty negative for New Zealand for reasons we have been explaining all day. Perhaps investors have cottoned on to the negative implications here, and this might explain the less than overwhelming vote of confidence on the NZX.

The Hive team is becoming increasingly worried about inflation - in NZ, in the US and in Australia. We don't expect central bank action in NZ or Aus short term, but it is looking increasingly inevitable in 2008.

Is NZAID Supporting Travel To Zapatista Gatherings?

Trevor Louden's blog asks some important questions about the controls around NZAID funding programmes. Could NZAID be funding indirectly travel by NZ radicals to Zapatista gatherings? We hope not, otherwise heads will have to roll. Who is the Minister responsible for NZAID? Winston Peters?

Good to see NZAID's Don Clarke playing a staring role again in one of Trevor's posts.

Blogs On One News

Good to see blogs making the TV One news. Well done David Farrar for doing the grunt research which exposed the truth behind The Standard.

NZ First: Anti-Immigration and Anti-Foreign Investment?

A key support for the current Labour-led Government, the NZ First Party seems to be taking the recent survey on housing affordability more seriously than the Prime Minister. Housing Spokesperson Pita Paraone has issued a press statement on the subject. The results are "appalling" says Mr Paraone, and NZ First wants a real solution found to this problem. What concerns The Hive is this paragraph - "An insatiable appetite for property investment, a population explosion through immigration, no foreign ownership restrictions and low wages are further impediments to the pursuit of the Kiwi dream of owning their own home."

We do not see this problem as having been driven by either immigration or foreign investment. And it is interesting that a few interest rate hikes by the Reserve Bank have managed to cool things off. The Hive sees explanations such as those suggested by NZ First as misleading and potentially harmful to our economy. We do not want to see immigration or foreign investment as issues raised by any party in the forthcoming election.

NZ First is well placed to help solve this problem by insisting on a Budget for 2008 which boosts productivity and which reduces inflationary pressures on the economy. If the government doesn't deliver such an outcome they should vote against the Budget. They can also start being more questioning on the Government's emission trading policies. These are going to increase energy costs for all consumers. The elderly will be particularly hard hit. Will NZ First be doing anything to support this core constituency or will they sit back preferring instead to continue to enjoy the baubles of office?

The Hive has a further question. How is it possible to be Foreign Minister and head a party which has anti-immigrant and anti-foreign investment attitudes?

NZX Back In Positive Territory

It is great to see that the NZX appears to be breaking its run of losses. The market is up 0.9% on yesterday's close. The NZ market had been a bit over priced before Christmas. The recent run of falls have corrected that. There are now some good buys starting to emerge. Some investors clearly agree.

But there is a cost to the US interest rate cut, and as we feared this moring exporters will pay that price. This report from the NZ Herald.

NZ Well Placed To Weather Storm?

Just heard the PM on the radio praising her Government's economic management and suggesting that we are well placed to weather this storm. Read below.

Inflation outside the Reserve Bank's targets, the highest interest rates in the OECD, and over vaalued exchange rate, and an election year lolly scramble - just where we want to be right now? Yeah right!

Weldon Sees Recession Posssible in 2009

Writing before the Fed's largest rate cut in 23 years NZX boss Mark Weldon wrote this for the NZ Herald:

Moreover, if the US Federal Reserve cuts interest rates by up to 100 basis points over the next 12 months, as expected, the differential between us and the US will be more than 100 bps higher than today's 400 bps gap.
If this occurs, money will flood into New Zealand seeking yield, pushing our dollar higher.
Interest rates will be too high to borrow so businesses won't invest, stalling (already low) productivity growth.
Exchange rates of yet higher levels will finally rip the guts out of our export and manufacturing sectors - the growth engines of our economy.
This has the classic makings of a tipping point. It's a scenario call: if the RBNZ raises rates this year it will, in my view, be the catalyst to push us into recession in 2009. If it doesn't cut rates, the same may very well occur.

We have 0.25 to go....

Thanks Ben, Now We Have Inflation And Recession To Worry About?

Will the Fed's emergency interest rate cut of 0.75% solve the root cause of the current global jitters? No.

Will it result in more stability on equity markets? Maybe - but only in the short term.

Will it mean increasing concerns about inflation in the US? YES.

It might, however, mean a more stable day here, even the possibility of the NZX finishing in positive territory for the first time this year.

At The Hive, we don't like inflation, we don't like recession and we don't like the growing differential in interest levels between the US and New Zealand. We don't want the carry trade to spring back to life. High interest rates and a high NZ$ is just what we don't need here.

Jan 22, 2008

Europe Starts Down - Recession Looking More Likely

While New Zealand stabilised a bit today (after a very bad start), 20 minutes into the trading day Europe's three main markets have all started well down - between 3.88% and 5.5%. This does not auger well for our market tomorrow.

Yesterday's sell off is front page on this morning's New York Times.

We hate to say it but we are looking at more of a recession than a slow down.

Obama v. Clinton

You may have seen bits of the recent debate between the two Senators on the TV news. This is what the New York Times made of it...........

The Importance Of Ethnic Communities In The Forthcoming General Election

The ex-expat has a thoughtful post today on the electoral significance of Auckland's Asian voters. Attached is an article which we recall reading from last year, in which Lincoln Tan talks about the importance of the internet in wooing Asian voters.

Like the ex-expat we are expecting all the political parties to be thinking about how to woo these voters. They have different interests and do not vote as a block - just look at the different factions within the taiwanese community as an example, but if one was able to harness large numbers of Asian votes it could well be the difference between government and opposition, and could also be the key to hitting the 5% threshold. Winston Peters, who has campaigned for so long on anti-migrant and particularly anti-Chinese themes is unlikely to attract many votes from this pool of potential voters, and likewise their left wing economic policies (particularly anti-trade views) are unlikely to make the Greens that appealing. But ACT could do much better from the Asian communities than it is at present. Maybe having a Vice President with virulently anti-Chinese views is unhelpful??? It is a pity for Peter Dunne, that we don't have more Taiwanese living in New Zealand!

Both Labour and National are becoming increasingly active in this space. Pansy Wong (Chinese and Taiwanese) and Richard Worth (Korea and India) seem to be getting some real traction. And Tim Groser, as a former Ambassador to Indonesia and a former boss of the Asia Foundation is a real asset. Recent migrants will tend to favour the Government that allowed them entry into New Zealand. More long established New Zealanders will be more willing to vote on policy.

The challenge really, will be to get these communities to drop their suspicions about democracy, to make sure everyone who can vote is enrolled, and to get them out to vote. Traditionally the turn out from the asian communities has not been fantastic, so it is all opportunity. It is going to be interesting to watch how this opportunity is exploited over the months to come.

We hate to say it, but the key factor in this space remains Winston Peters. If he starts an anti-Asian or anti-migrant campaign he is going to cause both National and Labour to be cautious in responding. At this stage anyway, strategists on both sides of Parliament want the opportunity to work with Winston should he be re-elected to Parliament. That means that they are not wanting to go to war with him prior to the election. Nor will they want to be making the pledges on immigration and people to people links with Asia that our Asian communities will be wanting to vote for. This is a fascinating topic and we are grateful to the ex-expat for raising it.

The Hive thinks that New Zealand's increasingly diverse cultural scene is a wonderful thing and we want to see it continue. There is a global war for talent on at present, and it isn't going to end anytime soon. New Zealand will continue to lose many good people because our wage rates are so low. This makes immigration policy crucially important for our economic future. We hope both Labour and National will be adopting ambitious and Asian friendly immigration policies for the forthcoming election. We also hope that Winston's time as Foreign Minister has changed his attitude to immigration . We don't want immigration to be a negative factor in this election.

NZ Shares Dive

The NZX 50 has lost over 2% of its value in the first 10 minutes of trading.

Update 1026 the NZX 50 is down 3.87%

Update 1340 the NZX 50 seems to have stabilised and the decline has been pared back to just under 3%. We hope this trend continues.

WTO: Doha Outcome Still Possible in 2008

A meeting yesterday between the EU and US Trade Ministers suggests that an outcome from the Doha Round may still be possible in 2008. Both seem hopeful that the meeting of Trade Ministers in Davos on Saturday will settle the way forward.

As we have noted previously, the big problem area for these negotiations seems to be tariffs on industrial goods, not agriculture. On that front there is a Reuters report out suggesting continuing problems.

Petition To Free Saudi Blogger

Avaaz have a petition you can sign, which might also help Fouad al-Farhan.

We highlight two paragraphs from the letter below:

This is about more than Fouad’s case, more even than Saudi Arabia. It’s about the emergence of a vital and honest public sphere in the whole region and around the world. Other governments are watching closely; if the Saudi regime ends Fouad’s blogging career without repercussions, they won’t hesitate to crack down on dissident bloggers in their own countries.
By supporting Fouad now, we stand up for freedom of speech everywhere. One voice can be silenced, but many voices–all of our voices, around the world–cannot. Join the call for Fouad’s release–sign the petition now.

The fact that the New Zealand Government is not showing leadership on this case is deeply disturbing in this context.

The full Avaaz letter reads as follows:

Dear friends,
Fouad al-Farhan, one of Saudi Arabia’s most popular bloggers, was arrested on December 10 and remains in prison. He has not been charged with any crime.
Saudi Arabia isn’t known for free speech–but in recent years, it has allowed blogs to emerge as a vital new medium for civil society to flourish. Now, the entire Middle East blogosphere is at risk–if the Saudis continue to detain al-Farhan, other bloggers could be intimidated into silence.
But public pressure can make a difference here. The Saudi government has already reacted to media coverage of Fouad’s case. The more of us act quickly to call for his release, the more we can raise the profile of his cause–until the Saudi government decides to free Fouad rather than suffer more negative publicity. Avaaz will send this petition to governments and the global media–click below to sign it now!
Fouad al-Farhan, a father of two, is sometimes called “the Dean of the Saudi bloggers.” He is one of the few bloggers in Saudi Arabia willing to risk writing under his own name. Most of his writing focuses on cultural issues, and his blog’s tagline reads “Searching for freedom, dignity, justice, equality, public participation, and all the rest of the lost Islamic values.”
But when Fouad questioned the imprisonment of a group of academics and other Saudis who had planned to form a civil rights organization, the Interior Ministry asking him to sign an apology for questioning the Kingdom’s policy. He refused on principle. Within weeks, he was arrested without charge and taken in for “questioning.”
This is about more than Fouad’s case, more even than Saudi Arabia. It’s about the emergence of a vital and honest public sphere in the whole region and around the world. Other governments are watching closely; if the Saudi regime ends Fouad’s blogging career without repercussions, they won’t hesitate to crack down on dissident bloggers in their own countries.
By supporting Fouad now, we stand up for freedom of speech everywhere. One voice can be silenced, but many voices–all of our voices, around the world–cannot. Join the call for Fouad’s release–sign the petition now.
With hope,
Ben, Esra’a, Galit, Ricken, and the whole Avaaz team
PS: You can also sign this petition in Arabic at this link–
Please take a few minutes to sign it and send it to your family and friends. This is our chance to win the war for freedom of speech in the region. We cannot sit back and watch bloggers be arrested one by one with little action fading away with time.
Fight back now and fight hard - or we lose this chance forever.
(Also - Don’t forget

Tighten Your Seat Belts: Very Rought Ride Likely Today On NZX

We are not sure that the news could be much worse for stock market investors. As we noteed yesterday, the NZX's future direction will largely bee dictated by developmentss offshore. So what happened yesterday?

Share prices in Asia, Europe and the Americas all plunged by significant amounts; Wall Street only avoided joining the tumble because U.S. markets were closed Monday for Martin Luther King Day.

Markets in Europe reacted with London's FTSE 100 Index down 5.5 percent at 5,578.20; the CAC-40 in Paris down 6.8 percent to 4,744.15; and Frankfurt's DAX dropping 7.2 percent to 6,790.19.

In Japan, the benchmark Nikkei 225 index closed on 13,325.954 points, a slide of 3.9 percent and its biggest dip in two years. Shanghai's Composite index fell 5.1 percent. Hong Kong's Hang Seng index suffered its largest percentage drop since the terrorist attacks of September 11, 2001 when it fell 5.5 percent to 23,818.86 points.

India's Sensex stock index fell nearly 1,353 points or 11 percent -- its second biggest percentage drop ever -- to 17,605.35 points before recovering to 7.4 percent.

The Toronto Stock Exchange opened more than four percent down, falling by 543.13 points to 12,193.13 and taking around US $68 billion off the market's value. A drop of 6.6 percent last week wiped out gains made by the market last year.

Elsewhere in the Americas, stocks in Mexico tumbled by 4.77 percent on opening while markets in Argentina and Brazil fell by 4.64 percent and 6 percent respectively.

Thanks for the summary CNN.

Colin James On The Challenges Ahead For The PM

In today's NZ Herald Colin James looks at the steep climb ahead for the PM if she is to retain power:

The contrast with the opening month of the three most recent election years is stark. In each of those years Labour came off large December poll leads, 15 per cent average against Jenny Shipley's fraying Government in 1999 and 11-12 per cent over the National oppositions of Bill English and Don Brash in 2002 and 2005.

This election-year Labour comes off a December average 15 per cent deficit to National, the mirror-image of 1999. And the strong economic tailwinds of 2002 and 2005 have turned round into a light but freshening headwind.

By Christmas the Cabinet was looking as frayed as Shipley's at the end of 1998.

More From Moore On The Constitution

In today's NZ Herald Mike Moore answers some of the questions that were raised following his initial rush of blood on the need for a constitutional debate. Mike suggests that he isn't the best person to champion this issue. Who would be? Phil Goff?

Was Goff Premature?

Did he announce something that he wasn't supposed to. His comments on the state of play for the China FTA as reported in the New Zealand Herald today don't seem as bullish as his comments yesterday on Radio NZ. Is he seeking some wriggle room? Was Helen not pleased?

Jan 21, 2008

Anyone Brave Enough To Call The Eventual Contestants In US Presidential Elections?

This article from the New York Times suggests continuing caution. "People paying close attention to the 2008 presidential race have no idea what will happen next. The contest keeps defying precedents."

What would Hillary do about the economy as President? This morning's New York Times analyses.....

For the record The Hive is already concerned about Hillary's stated views on trade policy. We don't like her desire for "a more active role in the economy to address what she called the excesses of the market" much either. Let's hope that the Republicans select McCain.

Taiwan Under US Jurisdiction?

We have not heard this before, but Asia is less our field than the Middle East or Australia and the US. This theory, which we have stumbled upon, suggests that Taiwan is not independent or part of China. Instead it is occupied territory of the USA. In more technical terminology, this means that Taiwan is a US overseas territory under the jurisdiction of the United States Military Government (USMG). Have a read.....

Still No Action On Saudi Blogger

We are getting sick of this. Aside from a request for more info from duty minister Jim Anderton early in the New Year there are no public signs of action from the NZ Government to seek Fouad al-Farhan's release. If you share our frustration why not do something about it. Send an e-mail to the PM's foreign policy adviser andrea.smith@parliament.govt.nz and copy in the New Zealand Ambassador in Saudi Arabia trevor.matheson@mfat.govt.nz. In case he is not there copy in his #2 peter.noble@mfat.govt.nz . Ask them "what has happened?" And tell them that you are expecting action from the New Zealand government on this case.

Good News For Government On China FTA

Why it takes a month we don't know, but Phil Goff today released Wellington's worst kept secret, that FTA negotiations with China have been completed and that the process is now one of legal rectification. There is unfortunately not much detail released, but it would appear from his comments that all goods are covered including dairy. Side deals on labour and environment appear to have been concluded also.

The Hive is surprised at the luke warm reaction from retailers, they should be the strongest champions of free trade. John Walley's dinosaur grouping of manufacturers were expected to be negative. Likewise the Greens are true to form in opposing sensible economic policy.

This is good work by the Government. Phil Goff and Helen Clark both deserve praise for delivering this outcome.

The way this big news was released (by a radio interview) is interesting. This appears to be a solo Goff effort as opposed to a carefully managed Government release (where is the press statement? Why were stake holders not given a heads up etc). We had been thinking that Helen Clark was wanting to release this info herself - after Wednesday's Cabinet meeting. Could this be a sign of tension between the PM and her best performing Minister?