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Christchurch earthquake & moral hazard

Written By: - Date published: 12:00 am, September 9th, 2010 - 94 comments
Categories: Economy - Tags: , ,

Fran O’Sullivan joins us in asking why the Government was so quick to completely bailout the South Canterbury Finance investors and is being so miserly with earthquake victims:

“Just imagine the uproar if the sequence had been reversed [if the earthquake came before the SCF].

Consider: Key goes down to the earthquake zone. Tells Cantabrians the Government will get behind them. But it will not be able to stand fully behind those who don’t have earthquake insurance. As he told TVNZ’s Q&A programme on Sunday: “It’s the 5 or 10 per cent of people that don’t have insurance that have said, ‘Look, I’ll risk it’ … and that’s the moral hazard for the Government because, on the one hand, if we pay everybody out, why would people take insurance. On the other hand, you’re gonna have people with real hardship and deprivation, and it’s getting that balancing act right. It’s not going to be easy.”

His Government has since indicated it will come to the party with a range of social services. But nobody is pretending a bailout is on the way for those who failed to take out insurance.

Consider again: if having already made crystal clear his Government’s view that it was too concerned about moral hazard risks, and the signal that would be sent if the Crown restored the losses of uninsured earthquake victims, Key then turned around a day or so later and said the Government was prepared to overlook moral hazard concerns when it came to South Canterbury’s bond investors and creditors and fully pay them out so it could get full control of the situation.

I suspect the uproar of hatred that has been pouring out against South Canterbury founder Allan Hubbard on far too many uncontrolled websites over the past week would have instead been directed against a Government arguably looking after well-heeled opportunists to whom it did not owe a red cent as they were not covered by the guarantee scheme.

As Maier said on Tuesday last week: “A lot of bets in the casino paid off big time today.”
What we have ended up with is very untidy: the Government has paid out “in the know” bond investors and foreign preferential shareholders who did not qualify for the guarantee.

Forget about moral hazard – the smart money now knows that the Key Government can be “gamed”.

I want to make a point about this moral hazard argument that the government is so concerned about with the earthquake, which it wasn’t concerned about with SCF.

The moral hazard argument is that if the government cover someone’s losses now, it will encourage them to take uninsured risks in the future in the expectation of a government bailout if things go wrong, imposing even more costs on the government in the future and unhinging capitalism by allowing return without risk. Both the SCF bailout and covering the costs of uninsured homeowners and workers could create a moral hazard.

But, in the case of the earthquake victims at least, there’s the social justice argument that you can’t allow families, especially children, to suffer because of the poverty or mistakes of the parents or their parents’ employers. Do people deserve to have their lives ruined because they couldn’t afford insurance? We have a moral duty to help.

It seems to me that there’s a simple solution: help people now, prevent people taking uninsured risks in the future.

How does it work?

Damage insurance: Government extends EQC coverage to all homes and contents affected by this quake, regardless of whether the people had home insurance or not (side question: if you’re a renter, your landlord presumably has the house insurance so gets EQC cover but do you get EQC cover for your contents?)

In future, EQC is funded not out of a levy on home insurance policies but by a levy on residential rates. Every property owner pays rates, so there’s no moral hazard problem of people not bothering to get home insurance – instead, everyone is covered and everyone pays. Bear in mind that you can’t get earthquake coverage from private insurers in Christchurch any more but there are still major earthquakes occurring.

Wages: Government covers the wages of all employers who can’t work due to the quake on top of any private insurance that businesses have. No-one is left out of pocket.

To avoid moral hazard, in the future wage insurance for disasters will be covered by a compulsory public insurance scheme like ACC, funded by a tiny payroll levy. And I do mean tiny – a $100 million pool expected to be paid out once a decade could be funded with a levy of just 1 cent per hundred dollars of wages. Again, everyone gets covered now and there’s no moral hazard for the future because a compulsory and universal insurance scheme has been introduced.

The government can help the people who need help now while avoiding creating an undesirable moral hazard for the future. The question is: will it choose to?

PS. Since my piece the other day, respected business journo Patrick Smellie has written an article dismissing the suggestion that the earthquake could be an economic boon, and Treasury has put damage at $4 billion and the initial output loss at 0.5% of GDP.

94 comments on “Christchurch earthquake & moral hazard”

  1. Loota 1

    One thing which aggravates me no end is how the NATs are willing to come up with in depth schemes, mechanisms and rationale over months and months in order to transfer a shit tonne of money over to their mates and random speculators vis a vis South Canterbury Finance.

    But can’t be assed trying to think through how they can help ordinary NZ’ers. Instead its “Not insured? You should’ve known better. Next.”

    • Marty G 1.1

      Paul Henry saying that uninsured people failed to take ‘personal responsibility’ so stuff them is a prime example of what you’re talking about.

      The ability to double think is amazing – i’ve seen him encourage an unemployed executive to go on the dole and 20 seconds later call a sickness beneficiary a bludger.

  2. Jenny 2

    My question is, what about those who couldn’t afford mortgages and have had to rent, but have lost their homes?

    If the rental property that housed their family has been damaged and is now uninhabitable, and as a result, they and their family are in a shelter. What assistance is being being given to them?

    Is the Minister of Housing going to break his silence on this issue?

    Is Housing New Zealand going to get the budget to increase their housing stock to meet the need for more rental accomodation?

    • Rex Widerstrom 2.1

      Very good questions, to which I would add one more: What, if anything, will be done to stop landlords who own an intact house profiteering as demand hugely exceeds supply by racking rents? And as a corollary, will a sitting tenant facing eviction on a flimsy pretence so the owner can flip the house and bring in new tenants at a much higher rent have any sort protection (other than the long, drawn-out and unpredictable Tenancy Tribunal process)?

      • Jenny 2.1.1

        Your right Rex to stop the speculators the obvious thing to do, is for Housing New Zealand to buy up the necessary number of suitable and undamaged empty homes from the private sector to add to their rental stock and rehouse all the homeless families.

        Sure this would cost, but it would only be a tiny fraction of the money made available to bail out SCF investors. Even Fran O’Sullivan realises who is the more deserving.

        captcha – “bought”

        • Herodotus 2.1.1.1

          How long do you think that will take, great idea.
          There will be months years depending upon the lenght of after shocks.
          There will be extensive geotech work being undertaken so as not to build on suspect land or to ascertain what geotech requirements are needed to protect the land, also I would imagine that the fault will have to be tracked & mapped.
          Roads that had minor hairline cracks on Monday now due to aftershocks have 1m fracture lines. One reason why it is taking so long to review the damage. So in some cases raoding and other infrastructure initially passde has subsequently required 2nd or 3rd visits to find out that it requires remedial or replacement.
          Making land available, it does not magically appear from a tree. There is extensive town planning infrastructre planning e.g. stormwater, wastewater efects on traffic movements etc. If we fast track then there is a great potential for poor planning and a disaster. this sad event has allowed us the potential to redesign a major city and with wisdom and knowledge to improve on what was there.
          We currently have one major disaster partically caused by haste, poorly designed law and companded by poor decision making. Do we really want to be the authors or 2 really basd decisions within a year?

          • Jenny 2.1.1.1.1

            .
            Herodotus it would only take a matter of days for HNZ to buy up the necessary number of undamaged vacant rental properties.

            My point. There should not be one family homeless while there is one empty house.

            captcha – “fixes”

            • Jenny 2.1.1.1.1.1

              In fact with the political will it shouldn’t take more than an afternoon to ring all the real estate agents and offer them a lump sum for all the vacant properties on the books.

              If there are any families still in shelters by the end of next week it is because someone wants it that way.

            • Jenny 2.1.1.1.1.2

              In fact with the political will it shouldn’t take HNZ more than an afternoon to ring all the real estate agents and offer them a lump sum for all the vacant properties on their books.

              If there are any families still in shelters by the end of next week it is because someone wants it that way.

            • Herodotus 2.1.1.1.1.3

              There will always be a sector of the pop whos actions are detesable e.g. breaking and stealing from special needs school as per TV1 news. You would require a willing vendor, and with this catastrophe so freash that to spend time and valuable resources in this would be taking away from the initial needs. HNZ cannot even manage the properties within Auck that the either own or lease. “My point. There should not be one family homeless while there is one empty house.” agreed, That is if there are any vacante properties within Chch which I doubt.
              But my response was that I think the relief effort re housing and infrastructure will being to slow down for many valid reasons. Yet there will be some incl bloggers & media with their selfish agendas that are more important than those at the coal face working thru the issues that the public will not be aware or have any understanding of as to why. e.g. the results of after shocks requiring extra inspections. I have not heard from media of this, so many will be unaware of such events and the unavailablity in their situation of roading, building inspectors and other staff.
              Whilst there is this immediate need, as a minor feel good for those in Chch when the initial problems are resolved, perhaps a AB game against Canterbury (festival type incase Dan or Richie get injured for next year) at Lancaster Park and free with TV rights and a telthon type assisting in financial support for the area. (A bit like the forest fires in the mid 80’s in Sydney when our cricket team went and played the Aussies in a one dayer)

              • Jenny

                .
                Herodotus, from your comments I gather that you think rental tenants on low incomes made homeless by the quake, are undeserving of any government help to get a roof over their heads. (Well at least, less deserving than the millionaire investors in SCF who were bailed out to the tune of $1.6 Billion)

                Firstly you cynically set the scene with a broad smear:

                There will always be a sector of the pop whos actions are detesable e.g. breaking and stealing from special needs school as per TV1 news.

                Secondly you infer that putting funds into housing the homeless renters will be taking money from more deserving causes, (though you don’t say what, but most of us can guess):

                …to spend time and valuable resources in this would be taking away from the initial needs.

                Thirdly along with fake praise, you try and infer that there may be no suitable houses:

                “My point. There should not be one family homeless while there is one empty house.” agreed, That is if there are any vacante properties within Chch which I doubt.

                Well on this you can easily be proven wrong;

                Here are scores and scores of recent listings for unsold houses in good condition at reasonable prices in Christchurch, on just one Real Estate company’s website.

                Some are advertised as already tenanted but many are vacant.

                You can wriggle and squirm all you like, but the fact is, that for a small fraction of the cost of bailing out well off investors who bet on a lemon, all the families suffering homelessness from the earthquake could be housed.

                All it will take is the political will. The “Moral Hazard” that Fran O’Sullivan talks about is when apologists for this sort of double standard like your good self, try and argue against any bailouts for the less well off affected by an earthquake but have no problem gifting hundreds of millions of dollars to the well off.

                • Jenny

                  .
                  Herodotus; It is interesting, that in your diatribe against Housing New Zealand taking any role in housing the homeless, you also claim (without citation):

                  HNZ cannot even manage the properties within Auck that the either own or lease.

                  This shows to me that you are philosophically opposed to the state having any role in the social provision of housing even in case of dire emergency. Using the old chestnut that the public sector is inefficient, your argument implies you believe the private sector would be better left to house the low paid homeless, and that state rentals should be abolished, or run as a subsidy for privat landlords. Which is arguably happening now in Auckland where HNZC leases homes from private landlords providing them with a permanent income.

                  I also notice that you think that rather than address the problem, you suggest “feel good” palliatives:

                  Whilst there is this immediate need, as a minor feel good for those in Chch when the initial problems are resolved, perhaps a AB game against Canterbury (festival type incase Dan or Richie get injured for next year) at Lancaster Park and free with TV rights and a telthon type assisting in financial support for the area. (A bit like the forest fires in the mid 80′s in Sydney when our cricket team went and played the Aussies in a one dayer)

                  Your suggested strategy, reminds me so much of the arrogant quote from Roman times in answer to the inequality of that ancient decadent society, give them “Bread and Circuses”.

                  P.S. Another weird thing. When you click on the link to the real estate listings, it it like the Christchurch earthquake never happened. In this alternative universe, middle class suburbia is as immaculate and untouched as ever.

                  capcha – “columns” -Roman maybe? collapsing even? – (Herodotus, like your argument.)

  3. tsmithfield 3

    Can’t agree with the article by Smellie. Something he has overlooked is that substantial amounts of the money will come from overseas insurers via reinsurance by NZ insurers and reinsurance by the EQC.

    Thus a lot of the money coming into the Canterbury, and indirectly NZ economy will be coming out of the bucket of overseas investors. Thus, new money will be coming into the economy. Therefore, it won’t be a zero sum game, so far as the NZ economy goes anyway.

    One interesting thing to note with the effect on Christchurch and its surrounds is the vast disparity of the effect. Many of the houses (including mine thankfully) have been largely unaffected. I went down to work on Saturday morning to check out our building. I was expecting to see the area (Sockburn) flattened. Our building is typical tilt-slab construction. I have always felt a bit nervous about being in that type of building with having great slabs of concrete that could potentially tip over. However, to my surprise there appeared to be little or no impact on the area. We rang around our clients on Monday morning and most of them had little damage as well.

    Given the proximity, shallowness, and strength of the quake, it is amazing that there was not a hell of a lot more damage.

    It appears that the damage is largely limited to eastern areas with sandy soil, and older buildings that weren’t earthquake-strengthened.

    Where rebuilding is required my view is that the government, insurers etc should put money into buying up land that will stand up well to earthquakes for rebuilding houses. I see little point in rebuilding on land that is likely to suffer the same effect next time there is a major quake. The alpine fault is still lurking, after all. In this way some real gains could be made for the city in terms of survivability next time there is a big shake.

    • Marty G 3.1

      ts. your problem is that you’re seeing GDP as a measure of economic wellbeing. The fact is we’ve lost $4 billion of capital wealth and will now be replacing it.

      It’s not just me and Smellie saying this. check out the rightwing economists at The Visible Hand in Economics. The author, Matt Nolan, is regularly published in the Dom.

      As TVHE says:
      ” [People are] confused between the flow concept, which is investment and GDP, and the stock concept, which is capital and underlying wealth. We have lost capital, and we have lost wealth – this negative shock is not just sucky for the people who had to face a disaster, but it IS a “negative for the economy” in terms of measured wealth.

      I mean flip, if destroying a city is “good for the economy” why don’t we send the tanks into Wellington to blow it up right now? Actually, I’m in Wellington – lets make that Auckland instead

      And there was a very good article on yesterday’s morning report.

      I think it’s somewhere here: http://www.radionz.co.nz/audio/national/business/morning/2010/09/08/morning_business_for_8_september_2010

      and this ABC article

      http://www.abc.net.au/news/stories/2010/09/07/3004467.htm?site=thedrum

      don’t mistake economic activity for economic wealth.

    • lprent 3.2

      It is pretty obvious. It is a negative to zero sum game. At the end you don’t have any better abilities to generate wealth than you did before the quake. Sure a few people will be better off because they’re doing construction, but others will take a hit.

      Unconsolidated (compaction) or weathered sediments (slips) are always the big issue in earthquakes and probably cause more damage than the actual shaking. One of the issues with trying to pick winners in house siting is that you really can’t be too sure about what sites are ‘safe’ until after the event that destroys some. Even then, a slightly different other event may cause a destruction that the first didn’t. You can only really estimate and guess. It is simpler and more effective to simply over engineer.

      These local shallow earthquakes are far more dangerous to ChCh than the alpine fault. That will have dissipated most of its high yield energy through distance and won’t affect the local sediments as strongly.

      • Mr Magoo 3.2.1

        Rod Oram spoke exceptionally well (again) on the topic on national radio. (podcast available)

        It is worse than that. The foreign money rebuilds the old assets and it is true that all those working on this are extra stimulus. Note also that the industry it will be propping up is in serious trouble and looking at laying off 20k people at the moment.
        However those overseas insurance firms are going to want to recoup that money and thus premiums for the whole country are going to go up to cover that – so we pay in the end anyway.
        He also noted that the rebuild will not increase productive capacity at all.

        The way I see it this just ends up being the short term stimulus the nats failed to give us in the first place. What is better is that this foreign money it is coming from greedy insurance companies. Sure we have to pay it back but in the interim it is stimulus and if the government borrowed it for stimulus we would have had to anyway.

        He was saying he hoped that CHCH and the government would use this as an opportunity to rebuild the city and make it better rather than just rebuild what was there.

        Fat chance there of course. Between the greedy insurance companies wanting to do the min possible and this no-ideas government that will never happen.

    • Lazy Susan 3.3

      substantial amounts of the money will come from overseas insurers via reinsurance by NZ insurers and reinsurance by the EQC

      This is a specious arguement as insurance payouts are not “free” – they are paid for with past and future premiums. Had there been no insurance or EQC then the money saved on premiums would have been available to invest in the economy.

      Captcha: faults!… is this software really that smart?

      [lprent: Nope. It just has a very long list of words and a pseudo random number generator. Humans are good at reading meaning into almost anything – tealeaves? entrails? captcha? ]

    • Draco T Bastard 3.4

      It’s always a zero sum game no matter how hard the economists, RWNJs and other idiots try to believe it isn’t. When there are limited resources (real resources, not money as money isn’t a resource) then it is always an either/or option. You either put the resources into doing one thing or the other. In this we are now putting resources into rebuilding Christchurch rather than doing the 1001 other things that the community needs.

      And yes, as has been pointed out, the loss will be increased by the deadweight loss of profit.

  4. tsmithfield 4

    “your problem is that you’re seeing GDP as a measure of economic wellbeing. The fact is we’ve lost $4 billion of capital wealth and will now be replacing it.”

    Depends on how we rebuild. The earthquake has shown us what stands up and what doesn’t.
    To that extent what we have lost was going to be lost at some stage anyway. So, a fair degree of the damage could be described as a contingent liability. That contingent liability has been effectively offsetting the asset values in Christchurch for decades.

    If we rebuild in ways that mitigate future problems we will have eliminated a fair degree of the contingent liability for the future, so there will be an effective net gain in assets over the long term as there will be less loss in future events. Therefore, even from the perspective you are arguing real wealth will have improved because the spend will reduce future liabilities, not just replace what has been lost.

    • Marty G 4.1

      We’ve lost $4 billion of physical capital. Now we have to expend financial assets to rebuild that. It is not a wealth gain. It is a wealth loss. The rebuilding will boost GDP but that just shows the limitations of GDP as a measure of economic or broader human welfare.

      • Bunji 4.1.1

        GDP is just cashflow. Any analysis of a balance sheet for the economic wealth of a person or business is going to look at assets as well as cashflow, as it needs to for a country. Yes, your cashflow has increased, but your assets have been wiped out. The bank isn’t going to look at your mortgage more favourably if you get a pay rise but the house it paid for has been destroyed.

        (and GDP certainly isn’t even trying to be a measure of broader human welfare…)

    • Loota 4.2

      If we rebuild in ways that mitigate future problems we will have eliminated a fair degree of the contingent liability for the future,

      If you can tell me how Key and Brownlee’s ‘retroactive building consents’ i.e. ‘build now and get it approved against current standards sometime in the future’ system will get Christchurch to improve their buildings and “mitigate further problems” I will be really impressed.

      Basically the only improvement I see happening is that old weaker buildings have been taken out of the stock. But the earthquake did that, not the Government.

  5. The dilemma seems to originate from a misplaced expectation of consistency.
    Welfare for the rich has never been a problem for National and ACT.
    It’s only abhorrent to them when it’s welfare for those who actually need it.

    • F.Y 5.1

      true. I’d say it’s not entirely “welfare” but the passing of potential to influence power structures in the future. Poor people/non-company investors are outside the group/culture and could believe/do anything. Why give them anything? They’re impossible to control/predict.

      By giving money to SCF investors but not specifically people who have lost in the quake, the balance of power goes to those with the financial resources to influence Christchurch in the rebuild/allocation of work/livelihoods.

  6. BLiP 6

    I see that premiums are going to rise for all of us because of that luckless lot in Christchurch – its something about “spreading the risk” – fucking socialist insurance industry!!

    • Loota 6.1

      I propose that we put a 100km ring around Christchurch and legislate so that insurance companies must draw their increased premiums from within the radius.

      After all, why should I have to pay for someone else’s frakked up property with my insurance money when I chose to live in a property sitting on top proper bedrock and they took the risk of living on swampland?

      Teach them some individual frakkin responsibility for their bad choices.

      • Mark M 6.1.1

        Your all class Loota. (NOT)
        cantabrians dont complain when regular North Island floods push up premiums , when overseas Earthquakes and Tsunamis push up premiums.
        thats because we have compassion , something you, on whatever planet you live on seem to be lacking.

        Im sure if the shit hit the fan in your area you would be the first one whining for help.

      • Puddleglum 6.1.2

        I’d go further Loota – I don’t think I should provide a subsidy to all those who build on hills, near the shore, in wet areas, etc., etc.. In fact, I think it should be illegal for insurance companies to charge any two home-owners the same premium – why should I pay for my neighbours’ bad decisions on how they situate their house on their property, the kinds of materials they use, etc.?

        And don’t tell me the transaction costs for insurance companies (who would no longer be able to operate from actuarial tables at all) would go through the roof. So what? Why should I subsidise the insurance companies doing business by having them walk all over my economic freedom NOT to have to pay for others’ mistakes??? Of course, that would mean that all our premiums would probably go up astronomically as the cost of the insurance business goes up but at least we’ll all be FREE and unconstrained by our fellow human beings’ choices!

        Bliss!

  7. jbanks 7

    You buy a house, you buy insurance.

    That is all.

    • BLiP 7.1

      You invest with a finance company, you take the risk, that is all . . . oh, hang on

      • jbanks 7.1.1

        There was a Guarantee Scheme in place that both Labour & National supported. The Govt. is obligated under this guarantee to pay out the investors. The Govt. is under no obligation to pay out home owners who choose not to insure.

        It’s really not that hard to comprehend.

        • Blighty 7.1.1.1

          no legal obligation, no. But that’s not the test of whether a government is doing what’s right. If it was (Godwin alert) then everything that the National Socialists did was OK because it was within the law of Germany at the time.

          the question is what is morally right, not whether the government is doing the bare minimum that it legally must.

          • jbanks 7.1.1.1.1

            What’s morally right is what is best for the survival of the group. Paying out house owners who undermine our vital insurance system will only benefit them at the determent of society.

            • r0b 7.1.1.1.1.1

              I’m just curious jbanks – who do you think makes up “society”?

              • jbanks

                A collection of individuals.

                • r0b

                  Individuals, like, say, house owners?

                  • jbanks

                    House owners are a part of society. But as I said, paying out those minority uninsured individuals would be at the expense of society as a whole.

                    • r0b

                      I don’t think it’s so easy jb to distinguish between the health of society as a whole and the health of the individuals who make up society,

                    • jbanks

                      “I don’t think it’s so easy jb to distinguish between the health of society as a whole and the health of the individuals who make up society,

                      Imo if people choose to risk not to have insurance then that’s their responsibility. Giving people without insurance the same benefits as those with is a dangerous precedent to set.

                    • r0b

                      Imo if people choose to risk not to have insurance then that’s their responsibility.

                      Imo one of the defining features of a society is how it chooses to take care of its weakest members.

                      Gotta go for now…

        • BLiP 7.1.1.2

          Can you please show me where in the DoG it says New Zealand has to pay back foreign investors, with interest?

        • Draco T Bastard 7.1.1.3

          The government is only obligated to do so if the finance company hadn’t broken the terms of the agreement. This government didn’t even wait long enough to discover that before paying out.

    • Blighty 7.2

      like BLiP said but also, what do you say to the children of parents who lost their jobs, couldn’t afford insurance, and now have wrecked houses? Do you say ‘thems the breaks, kid’?

      • jbanks 7.2.1

        What on earth are you on about? Welfare is still available after the earthquake. There’s even Earthquake Support Subsidies & Earthquake Redundancy Payments.

        Also there’s no such thing as ‘couldn’t afford insurance’. You buy a house, then insurance is part of this process.

        Wtf is the point of people getting insurance if the state will bail them out if they choose not to fork out all that money for it?

        • Pascal's bookie 7.2.1.1

          So you object to the 350/week/employee subisdy being paid to SME owners who failed to get insurance?

          • jbanks 7.2.1.1.1

            Morally I object. But I think that it’s a pragmatic thing to do temporarily.

            Forking out tens to hundreds of thousands to people I object to.

            • Pascal's bookie 7.2.1.1.1.1

              Why is one pragmatic and the other not?

            • mickysavage 7.2.1.1.1.2

              So Social Welfare for employers and wealthy investors is OK but Social Welfare for income poor landowners is not?

              • jbanks

                You got it. It’s about viable investment.
                Not paying out irresponsible landowners will not be detrimental to our economy. Not paying out employers and SCF investors would be.

                You own a house, you have insurance. No exceptions.

                • F.Y

                  Not paying out irresponsible landowners will not be detrimental to our economy. Not paying out employers and SCF investors would be.

                  LOL You’re taking the piss, surely. Are the implications of the statement due to self parody or mental retardation?

                  • jbanks

                    You not speeka da finance fool?

                    SCF’s collapse would have damaged the economy a whole lot more than the cost of paying out investors.

                    • BLiP

                      You’ll have some evidence to back that up, then?

                    • jbanks

                      Finance Minister talks of ‘minimal disruption’ to wider economy from South Canterbury collapse.

                      http://www.nzherald.co.nz/business/news/video.cfm?c_id=3&gal_objectid=10670273&gallery_id=113600

                    • bbfloyd

                      not forgetting, of course, that the nats encouraged a rash of high risk investment by extending the guarantee scheme earlier this year. one wonders how this would have played out if they had played it straight.

                      if you were capable of pulling your head out of your arse, then wiped your eyes with a clean rag, you might see the timeline that goes back to that decision creating a huge money pit for the wealthy nat backers.

                      btw, how big will your payout be?

                    • BLiP

                      That’s it? A New Zealand Fox News Herald puff piece – reporting the words of Blinglish – without one specific?? I’m going to assume you’re in Christchurch and waiting for your primary school to re-open. There’s the indelible odour of young troll about you. Tell me, what’s your favourite iwi?

                • Blighty

                  or, to put it another way: ‘fuck you poor peps ,more taxpayer money for the rich!’

  8. Richard 8

    I think that there is absolutely a moral argument to provide for the uninsured in CHCH. Yes, it would be better if those people had insurance, but due to some combination of being either poor, stupid, or misinformed, they don’t. We should be helping them out of their situation, not blaming them for their situation.

    In some ways, the same argument applies to SCF. If somebody who invested in SCF lost so much that they could no longer avoid housing, clothing, or food, then the various social mechanisms that we have (dole, etc) should have looked after them. And that would be good. Such people (if there were any) were obviously stupid, greedy, or misinformed, but we shouldn’t blame them for this, we should help them out of their predicament.

    The problem with the SCF bailout is that it didn’t just target those who really needed help, it targeted those who had only lost a bad “investment” (which is likely the majority of investors) and also those who invested at the last minute in the anticipation that they would be bailed out. Neither group actually need rescuing by the tax payer from the poverty line.

  9. disengaged 9

    One thing (of the many) that I am finding interesting about the SCF Vs Quake debate is that most people seem to be assuming that the SCF investors were all greedy fat cats taking advantage of the taxpayers to feather their own nests, whereas the uninsured quake victim is a worker poor, hard done by victim. I actually suspect that they may in fact both be very similar people.

    Most of the people who I know that have been effected by SCF (which granted is a limited subset) are retired people who have invested large portions of their lifesavings into SCF for two reasons: 1. Because of that nice Mr Hubbard man and 2.Because it was covered by the Govt Guarantee Scheme and therefore the risk of them losing their lot was greatly reduced. They weren’t greedy or looking for quick returns, but because they are living off of the interest of these investments even a 1% increase on return would make a big difference to their life. So if they had lost their savings they more than likely would be left pennyless at a time in their life where it is impossible for them to recover (not a great deal of employment opportunities for octogenerians).

    Turning to the uninsured quake victims, If you have a mortgage then normally it is compulsory to have your house insured (not the contents), in fact if you don’t do it yourself in many cases the bank will do it on your behalf and add the premiums onto your payments. So the people most hurt are likely to be the retired people who are asset rich (paid off their home many years ago) but are cash poor (living on a pension) and have cut their expenses to the bone. They will have no means to rebuild and many may be forced to give their independance and move in with family, retirement homes etc.

    Either way it’s not a pretty picture and I’d like to think that New Zealand is the type of country that will work to help those in need.

    I like your idea of compulsory EQC cover being included in rates (I’d also like to see third party car insurance added to registrations too, but that’s for another debate). As at the moment the only benefit I see from EQC is to the insurance companies, not to the insuree.

    • Pascal's bookie 9.1

      Either way it’s not a pretty picture and I’d like to think that New Zealand is the type of country that will work to help those in need.

      This.

      • jbanks 9.1.1

        Providing welfare such as Earthquake Support Subsidies & Earthquake Redundancy Payments – YES

        Spending tens of thousands on fixing or hundreds of thusands on replacing your home –
        NO

  10. Bill 10

    Why is the industry of vultures (private insurance) allowed to exist in a civilised country?

    People making profit out of the misfortune of others, or those peoples’ fear of misfortune, while condemning those who didn’t buy into the fear or who couldn’t afford to, is beneath contempt.

    In the earthquake situation, the existence of private insurance is about to lead to a whole raft of class ridden aftershocks that wouldn’t exist if the state controlled the entire insurance market.

    Time to shut out the private insurance companies.

    • clandestino 10.1

      Insurance is one of the most brilliant and fair concepts ever conceived by man. Get your head out of your ar$e

      captcha: ‘market’…this thing IS rigged

      • Tigger 10.1.1

        Cland – that’s the stupidest generalization I’ve read in ages.

      • Vicky32 10.1.2

        Oh yes – do you remember that before Fire Brigades existed, competing insurance companies would literally fight so that their crews could sign up a desperate home-owner while her house burned around her ears, and only then would the winner extinguish the flames? Brilliant – yeah.
        Last night on Fair Go I saw again the story of Sovereign’s refusal to pay out for a man who’d had a mortgage protection policy, and who had lost a leg, on the grounds that he needed to have lost *two* limbs in order to qualify! Brilliant for Sovereign, yes, but fair? Get *your* head out of your bank book…
        Deb

        • Loota 10.1.2.1

          Come now Vicky, I am pretty sure the guy who got maimed had an insurance policy which stated very clearly, somewhere in the 30 pages, in 7.5 point arial, as part of a footnote, that the insurance company could only pay out in the event of losing two limbs and a simultaneous martian invasion. Look that’s fair and square, buyer beware.

          Yeah thank you Sovereign, you bunch of ***holes.

          • Vicky32 10.1.2.1.1

            The worst thing is that the insurance was through ASB who insisted on it as a condition of his mortgage – he hadn’t even wanted it, then was thankful he had it after the horrible trauma of losing his leg.
            I know what company(ies) to avoid! I’ve noticed that most insurance companies always go out of their way to not pay out – except I must say good on you State who paid without question when some tosser stole my son’s bag at the IMAX cinema in Auckland in 2008…
            Deb

        • clandestino 10.1.2.2

          What about all the times insurance has worked for those who bought it? The stolen stereos, the broken windows? As a fair measure of risk and value it is proven.
          I suggest you watch less TV….or get a job

          • Loota 10.1.2.2.1

            Frak the stolen TVs and the broken windows, we are talking about a man maimed for life here and a corporate which has walked away; not replacing BS material possessions.

            • clandestino 10.1.2.2.1.1

              What about the straw-man in the hayfield??? You’re gonna have to do better than that emotional blackmail…show me something endemic

              • Maynard J

                How about this. Two Christchurch homeowners face houses in ruins. One will get all their money back, and be well looked after in the mean time. One has no idea what their future holds and can do nothing tohelp their situation now. The first, of coruse, took out home insurance, the second did not. The first, in paying for insurance, forfeited the fourth week of a European holiday. The second, in not buying insurance, chose not to forfeit new shoes and school uniforms for their children, home heating and repairs on a washing machine.

                How is that brilliant and fair? Simple example, but the idea that those who don’t take insurance out are being cowboys with risk is absurd, inaccurate and simplistic. It’s easy to spend a little extra money if you have a lot to spare, once your needs have been met.

        • infused 10.1.2.3

          How about they read their policy… It’s the same as investing… for gods sake, do some research first. Almost a darwin award.

          • Maynard J 10.1.2.3.1

            Yeah, the dumb bastard should have known that they were going to lose one limb in a few months and looked for a policy that would have covered it. But then perhaps they did, and the two-limb policy didn’t cover a scalping while using a go-kart and they couldn’t afford both policies, and their crystal ball got it wrong, they lost the limb and didn’t get scalped. ffs mate are you really stupid enough to believe what you wrote there?

            If that’s how dumb you are, no doubt you’ll be up for one when you decide to chop your arm off with a chainsaw to win a bet or something that’s actually stupid.

            • infused 10.1.2.3.1.1

              The one arm/one leg/two arm/two leg is quite comonly known. People should read their policy.

      • Puddleglum 10.1.3

        I can see how insurance is brilliant, in the sense that it’s a brilliant device for leveraging money from anxious people in individualistic societies where they are left to manage risk in isolation from each other.

        But how is it ‘fair’?

        • Bill 10.1.3.1

          It is fair insofar as we are all fair game. No?

          I mean, seriously. My peers (as expressed through societal norms) expect me to get life insurance!

          ie Society expects me to pay money to get money for when I no longer exist? And if I don’t then I’m selfish…not that insurance agencies are shameless profiteering bastards?

          • clandestino 10.1.3.1.1

            The money’s for your kids (if you have any). Why can’t some people just accept some things are here to stay coz they are simply too good to throw away??

            • Loota 10.1.3.1.1.1

              Yeah, you’ll see this argument come back to haunt ya.

            • Bill 10.1.3.1.1.2

              No, you idiot. The money’s for the recipients (the insurance companies) to invest and make a profit from.

              You’re just the expression of the fear factor that provides them with their cash flow.

              • clandestino

                Riight…it’s idiots like you that are gonna cost us all a fortune…we’ll see how that comes back and haunts us.

  11. Treetop 11

    I have been doing a comparison with the Christchurch earthquake residents and South Canterbury Finance. I have asked myself the following questions:

    1. Christchurch earthquake magnitude?
    2. Government assistance for the Christchurch earthquake residents?
    3. Source of resources for the Christchurch earthquake residents?
    4. Level of trauma for the Christchurch earthquake residents?
    5. Duration of trauma for the Christchurch earthquake residents?

    Substitute the word Christchurch earthquake for South Canterbury Finance.

    My fifty years of life has taught me to look at my own resources first.
    Read the fine print when signing a contract.
    Experience is something you get after the event.
    Anger is an emotional response to discomfort.
    What goes around comes around.

  12. Jenny 12

    Fran O’Sullivan worries that the Christchurch Earthquake is a “moral hazard” for the government.

    The answer must be that:

    The Christchurch Earthquake has split open this government’s caring facade’ and revealed a very serious deficit in their ability to address the problem of those on low incomes made homeless by this quake.

    The Minister of Revenue has put out a statement on the earthquake here.

    Yet dispite the homelessness caused by the earthquake the Minister of Housing is still keeping silent about what the response from his department will be.

    In Fact yesterday in Hon. Phil Heatley’s first Media release since the earthquake. It was like it never happened.

    Media Release – 08 Sep – Hon Phil Heatley

    Has the Minister and his Government Department been caught flat footed by this disaster, because Housing New Zealand has been turned from a Social Service provider, into a cash cow provider for landlords and developers?

    In my opinion there is no excuse for even one family to be homeless by the time of the Mayoral election. If any suitable and undamaged property on the market is left empty by the inaction of the Ministry of Housing then serious questions need to be asked.

    I hope both candidates are lobbying central government for a proper response, from the Ministry of Housing. If not the voters of Christchurch need to ask why?

    Is this silence from the Ministry of Housing trying to hide a deliberate and callous decision made by the Minister and his advisers not to make a response to the Earthquake?

    Is Housing New Zealand trying to increase their rental stock Christchurch to meet the demand?

    Will the Minister allow them to?

    captcha – “actions” how we will know them.

    • Jenny 12.1

      With Minister of housing Phill Heatley still crouched under his cone of silence. Now might be a good time for the shadow minister of housing to speak up.

  13. Where have we seen this before, oh yes big banks baled out while subprime homes abandoned for c
    carparks.

    antispam: pause (between aftershocks)

    • Bill 13.1

      Indeed Dave.

      I live a ways south of Christchurch and am about to put up my first refugee…a renter who has lost their home and is touring the S. Island on the fly buying time. (Anybody want to claim that such people are not refugees…internally displaced persons?)

      In two weeks my home opens to a Cantabrian seeking temporary respite. And I very much suspect the fact it is temporary is only down to the fact that their connections are just a bit too deep for them to feel able ( at this moment) to tear up their roots and walk away for good.

      There are going to be significant numbers of people flooding out of Christchurch in the not at all too distant, adding all types of additional pressures to already barely adequate social provisions in NZ.

  14. Augustus 14

    The more risk cover can be taken away from private insurers the better. A universal levy through rates is a far better option. That would also not give insurance companies an excuse to increase premiums, after all they’d cover less risk. Maintaining the insurer’s profit margins was not part of my insurance policy contract when I signed it, but it seems to be their all overriding concern. They must spend more staff time on finding loopholes than on helping clients.

  15. prism 15

    I was unsure of tenants responsibilities for insurance as I had read about a demand for reimbursement for house damage against a tenant by a landlord. It seems that a tenant can be found liable if a landlord can make a viable case against him/her. If there was to be an absence of moral hazard to both parties, it seems the tenant needs to pay a compulsory minor insurance cost to cover the risk of negligence etc. I think people would not know the extent of tenants’ liability – at present the dwelling insurance situation seems inadequate.

    I found this – on the NZ Dept of Building and Housing info under landlord’s obligations : link
    Pay rates and any insurance taken out by the landlord. (Any insurance taken out by the landlord is unlikely to cover the tenant’s liability for damage.)

    This is expanded further on the Otago university site :
    What insurance should I have?
    The landlord is responsible for insuring the building. As a tenant you need to have your possessions adequately covered by an all risks policy. It is also advisable to take out liability cover in case of major damage to the landlord’s property (eg a fire caused by cooking or by an electrical fault in an appliance owned by the tenant).
    Otago link

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  • The CIA Torture Report
    Earlier this week, the United States Select Committee on Intelligence released the Committee Study of the Central Intelligence Agency’s Detention and Interrogation Program.  The report, which was five years in the making, looked into the CIA’s interrogation techniques from 2001...
    Greens
  • Haere Rā 2014
    We’ve almost reached the end of the Parliamentary year so I wanted to take a moment to reflect on some of my highlights of the term in this blog post. It’s been an absolutely hectic year juggling an election campaign...
    Greens
  • Labour applauds High Court decision on Ruataniwha
    Today’s decision by the High Court on the Ruataniwha scheme is a victory for NewZealand’s environmental groups, says Labour’s Conservation spokesperson RuthDyson....
    Labour
  • A welfare system for the 21st Century
    Today Child Poverty Action Group released a background paper on ‘The complexities of ‘relationship’ in the welfare system and the consequences for children.‘ The report includes 16 recommendations to modernise our welfare system which is no longer fit for the...
    Greens
  • Welfare system out of date and out of touch
    A new Child Poverty Action Group report released today highlights another example of how our outmoded social welfare system is harming kids, says Labour’s Social Development Spokesperson Carmel Sepuloni.  “The complexities of how a ‘relationship’ is defined in the welfare...
    Labour
  • NZ should formally recognise Palestine
    New Zealand should follow the lead of Sweden, and now recognise Palestine as a separate state On 30 October, Sweden’s new government formally recognised the state of Palestine, only the second Western country to do so, after Iceland. Down here...
    Greens
  • James Shaw’s adjournment speech on behalf of the Green Party
    It is a great honour for me to speak on behalf of the Green Party in this adjournment debate. I thank my colleagues for the privilege. I became a MP only 12 weeks ago, a period of time that seems...
    Greens
  • Time to end legalised cruelty of factory farms
    We can ensure that animals are kept in safe and ethical conditions. Claims of economic impact and practicality as justification for animal cruelty just don't stack up.Use our easy e-letter to write to the Minister for Primary Industries Nathan Guy...
    Greens
  • Government can’t rely on geothermal to grow itself
    While Electricity Authority figures showing geothermal has risen from the fourth to the second highest source of power generation are a promising sign for a geothermal renaissance, there can be no cause for complacency, Labour’s Energy spokesperson Stuart Nash says....
    Labour
  • Big bickies for bosses despite subpar performance
    While public service workers are experiencing Grinch-like wage increases state sector bosses have pocketed early Christmas presents in the form of whopper pay hikes, Labour’s State Services spokesperson Kris Faafoi says. “Unbelievably State Services Commissioner Iain Rennie got an additional...
    Labour
  • Consent should come before research grants for phosphate mining
      The Government’s decision to make a grant by Callaghan Innovation to Chatham Rock Phosphate is highly questionable, says Labour’s Science spokesperson David Cunliffe.  “The fact is that the company still has to get a marine consent to mine the Chatham...
    Labour
  • A Tale of Two Farms
    Pig farming has yet again been thrust into the public view with two programmes this week on Campbell Live highlighting the very different conditions for pigs on two very different farms. The first programme exposed the awful conditions on a...
    Greens
  • Dirty Dairy Accord failing to clean up rivers
    The first monitoring report of the Sustainable Dairying Water Accord fails to show progress on cleaning up our rivers since the Accord was introduced, the Green Party said today. The Accord's targets for stock exclusion are weaker than the previous...
    Greens
  • The Indignant Kiwi: Why we need to do more to protect our national bird
    A kiwi, about to be released into the wild, was first introduced to Prime Minister John Key and German Chancellor Dr Angela Merkel on her recent visit to New Zealand. By all reports, Dr Merkel was delighted to meet the rather indignant...
    Greens
  • Conflicted interests and health promotion; my opinion.
    As it happens, I know quite a bit about health promotion. It was an area I worked in prior to becoming an MP. What differentiates health promotion from the strict biomedical model, or from health education, for example, is its...
    Greens
  • Transparency on foreign buyers register needed
    News that Overseas Investment Office officials have been working on a register of foreign buyers of New Zealand homes is a welcome surprise, but Land Information Minister Louise Upston now needs to be clear on the details of the project,...
    Labour
  • National moves on state house sell off
    The Labour Party understands the Government has decided to move ahead with a mass sell-off of state houses. Labour’s Housing spokesperson Phil Twyford says he has been told by sources that Cabinet agreed the plan for their sell-off this week....
    Labour
  • Back-down on expert teacher plan welcomed
    News that the Government has backed down and returned to the drawing board on its flagship ‘expert teacher’ policy will come as a welcome Christmas present to schools and teachers, Labour’s Education spokesperson Chris Hipkins says. “Teachers throughout New Zealand...
    Labour
  • John Key can’t duck the blame for internet and phone price increases
    Shareholders are winning out over Kiwi households in the latest episode of the long-running fiasco on copper network phone and internet prices, Labour ICT spokesperson Clare Curran said today. “As predicted last week hundreds of thousands of Kiwi households now...
    Labour
  • An astounding disregard for Māori Affairs
    I have sat on the Māori Affairs Select Committee for most of the last 12 years. I love the committee, its work, its constituency and I especially love how it works differently than other committees, with a strong commitment to...
    Greens
  • Plunging dairy payout will hit regions hard
    The plunging dairy payout will hit New Zealand’s provincial towns and farm service industries hard, Labour’s Primary Industries spokesperson Damien O’Connor says. “Farmers have been bracing themselves for this expected announcement but it will be small towns and those who...
    Labour
  • Reducing inequality creates a stronger economy
    An OECD report finding New Zealand has one of the fast growing rates of income inequality shows “trickle down” economics has failed and that everyone is better off under a stronger economy, Labour Leader Andrew Little says. “The Government should...
    Labour
  • Government surplus target turning sour
    The Government’s golden surplus target is under threat with today’s Crown accounts showing the deficit is $260 million worse than expected, says Labour’s Finance spokesperson Grant Robertson. “It is two blows in one morning for the Government’s economic credibility after...
    Labour
  • Greens call for end to cruelty of factory farming
    The Government must end the legalised cruelty of factory farming, the Green Party said today.Footage shown on Campbell Live this week revealed yet again the appalling, but legal, conditions pigs are routinely kept in on factory farms. The conditions the...
    Greens
  • Milk price plunge creates $6b economic black hole
    The plunge in Fonterra’s forecast dairy payout to a seven-year low for farmers will create a $6 billion economic black hole, showing yet again that National’s failure to diversify is hurting the economy, Labour’s Finance spokesperson Grant Robertson says. “The...
    Labour
  • Gender Pay Gap: It’s a Matter of Leadership
    The State Services Commission’s annual Human Resource Capability report for the public sector shows the gender pay gap has not decreased since at least 2010. The gap is 14% across all management roles – a slightly bigger gap than for...
    Greens
  • Pardon me Minister, but the cracks are showing
    Cracks are appearing in Cabinet ranks with the Minister of Pacific Peoples, Peseta Sam Lotu-Iiga, throwing his predecessor under the bus over a huge spike in spending by advisers, Labour's State Services spokesman Kris Faafoi says. "Spending to 'staff the...
    Labour
  • Confirmation of no confidence in schools plan
    That just 90 of the country’s 2500 schools have signed up to the Government's one-size-fits all performance pay scheme confirms a wide-spread lack of confidence in it, Labour’s Education spokesperson Chris Hipkins says. “The scheme, which creates ‘executive’ and ‘lead...
    Labour
  • John Key’s secret foreign buyers register
    John Key has been secretly planning a register for foreign buyers without telling New Zealanders, says Labour’s Housing spokesperson Phil Twyford. “Last week Andrew Little called on John Key to adopt the Australian policy on foreign buyers....
    Labour
  • Another kick in the guts for Christchurch
    The government has walked away from the people of Christchurch with Cabinet’s decision today to cut funding available through local Members of Parliament offices to assist people with their earthquake related issues, says Labour’s Earthquake Recovery Spokesperson, Ruth Dyson.  “Over the...
    Labour
  • State house sell off will make transience worse
    The National Government’s plans to sell off state housing will increase the rate of transience among the poorest families, says Labour’s housing spokesperson Phil Twyford. The Growing Up in New Zealand study released today reveals families with children under two...
    Labour
  • Report shows need for independent food safety agency
    The inquiry into the botulism botch-up shows the decision to merge the food safety authority into the Ministry of Primary Industries was a failure, Labour’s Primary Industries spokesperson Damien O’Connor says. “MPI has been severely criticised in this report for...
    Labour
  • National needs to pull their head out of the sand on climate change
    Green MPs were out across the country attending Heads in the Sand events this weekend. I spoke at the Christchurch event where a couple of hundred people mimicked the Government’s climate policy by burying their heads in the sand. It...
    Greens
  • Claims of pumping up the volume all noise
    New manufacturing figures from Statistics NZ reveal a further decline in New Zealand's export performance, highlighting the Government's ongoing failure to rebalance the economy, Labour's Economic Development spokesperson David Clark says."The National Government has adopted a volume-based approach in an...
    Labour
  • Mediation Between Lyttelton Port and Union Fails
    The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining.   “There was no substantial shift in LPC’s position today so the...
    The Daily Blog
  • Letter from Pakistan
    I was in Peshawar last week. It is a vibrant city with a real energy to it. It is my favourite place to be in Pakistan. You feel the energy as you drive around the city. I am in an...
    The Daily Blog
  • Lyttelton Port workers begin overtime ban
    Media Release: Rail & Maritime Transport Union Lyttelton Port workers begin overtime ban Workers of Christchurch Rail and Lyttelton Port have begun an indefinite ban on overtime, according to the Rail and Maritime Transport Union. The ban was announced at...
    The Daily Blog
  • So the United States of Torture is the ally we are supporting to re-invade ...
    How easy is it to con the sleepy hobbits of muddle Nu Zilind? Very. The despicable means by which this corrupt dirty politics Government have gone about trying to use the fear and anger caused by the Sydney hostage situation...
    The Daily Blog
  • A tale of two gunmen – how the media spins
    A tale of two gunmen – how the media spins...
    The Daily Blog
  • GUEST BLOG: Jill Ovens – Auckland Hospital worker cuts – Democracy the ...
    Auckland Hospital kitchen workers tell CEO Ailsa Claire (far right) a week ago that they did not want to be contracted out. Such was the arrogance that no contingency plans were made in the event that these workers would be...
    The Daily Blog
  • Political opportunists out in force over Sydney hostage crisis
    It hasn’t taken long for supporters of New Zealand’s so-called “anti-terror” legislation passed last week through parliament to try and justify it in the wake of the Sydney hostage crisis. Before we even knew much about the gunman or hostage...
    The Daily Blog
  • NZs new hobby – hating the poor
    Last week people queued at the doors of the Auckland City Mission. They are people that are living without enough income to afford the basics let alone the extras we as a society have come to expect at Christmas. Extras...
    The Daily Blog
  • The only people who believed National’s surplus illusion were voters
    Sigh – the sleepy hobbits of muddle Nu Zilind are pretty easy to con aren’t they? National’s surplus was always a joke that would never happen, but in every single focus group, voters believed by overwhelming numbers that National were...
    The Daily Blog
  • Key’s crocodile tears over dirty politics
    John Key: Bloggers ‘not big part of my day’ Prime Minister John Key says bloggers are not a “big part of his day” but he lives in a world where he can’t ignore them. Speaking on TVNZ’s Breakfast programme today,...
    The Daily Blog
  • Why we are in inequality denial and climate change denial
        We are a country in denial over our inequality and climate change. Both issues have the same thread that runs through them. 30 years of neoliberalism has generated its own cultural narratives and myths. We have been taught that...
    The Daily Blog
  • This weeks Waatea news column – Why proclaiming Key as the Politician of ...
      This weeks Waatea news column – Why proclaiming Key as the Politician of the Year is ethically bankrupt...
    The Daily Blog
  • Britomart violence raises questions over rail staff safety
    Media Release: Rail and Maritime Transport Union   Britomart violence raises questions over rail staff safety   The Rail and Maritime Transport Union is raising serious questions over the safety of the staff on Auckland’s train network after violent incidents on...
    The Daily Blog
  • Australia stares down Siege – National Party politicise tragedy
    The Sydney siege has finished, from the reports that are breaking the gunman, Man Haron Monis is dead and one of the hostages has also been killed. The Australian Police seem to have acted incredibly professionally and the real Australian...
    The Daily Blog
  • The termination of the Internet Mana alliance
    Last week the Mana Movement and Internet Party wrote to the Electoral Commission to cancel the registration of the Internet-Mana political party. It was a decision which brought the arrangement between the parties to a natural end after failing to...
    The Daily Blog
  • Peace breaks out between Greens and Labour
    Finally some good news for the Left. Peace has broken out between the Greens and Labour. One of the greatest barriers to a real relationship between the Greens and Labour has been the uncompromising arrogance of the Labour Party Caucus...
    The Daily Blog
  • Little keeps it stupid, simple
    Labour MP drops euthanasia billA bill which would legalise voluntary euthanasia has been dropped by Labour MP Iain Lees-Galloway at the request of his leader Andrew Little. Mr Lees-Galloway had been canvassing support for his End of Life Choice Bill...
    The Daily Blog
  • Dear Ministry for Social Development,
    Dear Ministry for Social Development, I realise you probably already know this, but just a wee reminder of REALITY. You know – the reality of the vast majority of us who aren’t making ends meet and are struggling to live...
    The Daily Blog
  • Social Policy still in the dark ages when it comes to relationships
    Two years ago I became aware of the work of two very able barristers who defend low income women accused of relationship fraud. CPAG then began collecting cases and stories of horrendous misery and victimisation. Then penny was slow to...
    The Daily Blog
  • The truth about inequality
      The truth about inequality...
    The Daily Blog
  • Rather Than Sending Troops To Iraq … Brownlee May Wish To Consider Better...
    There’s something a little unsettling going on at the moment. Ok, many somethings. Of particular concern is the fact that right now, New Zealand troops are training at Waiouru for deployment to Iraq – and, assumedly, the ongoing war against ISIS. Brownlee,...
    The Daily Blog
  • West Papua’s Saralana Declaration most vital unity development for 52 yea...
    Newly elected spokesman for the unified West Papuan movement Benny Wenda is treated to a chiefly welcome at the opening ceremony of the “unity” meeting in Port Vila. Photo: © Ben Bohane/wakaphotos.com David Robie also blogs at Café Pacific. A...
    The Daily Blog
  • Helen says it all
    Helen says it all...
    The Daily Blog
  • When Fran O’Sullivan, John Armstrong and Cameron Slater are singing Andre...
    The mainstream media of NZ will never allow a Labour leader who threatens the bastions of neoliberalism from ever taking power. David Cunliffe found that out. So when the mainstream media establishment from Fran O’Sullivan to John Armstrong to even...
    The Daily Blog
  • Wisdom’s Mirror: Can Grant Robertson Slay the Neoliberal Gorgon?
    HOW TO ELIMINATE one’s rival without getting one’s hands dirty? It’s a problem with a prodigious political pedigree. King David’s lust for Bathsheba drove him to order Uriah, her unfortunate husband, placed in the front line of battle – where...
    The Daily Blog
  • GUEST BLOG: Miriam Pierard – Sweet Sixteen and able to vote?
    The level of voter participation in elections is an indication of the health of a democracy. Declining turnout across the democratic world, particularly among young people, has led to questions about the legitimacy of our governing institutions. It is time...
    The Daily Blog
  • Public Equity and Progressive Politics
    We heard from the OECD on Wednesday morning (10 Dec) [Focus on Inequality and Growth] that inequality suppresses economic growth. (Here are Radio New Zealand’s morning reports on this.) This is hardly a surprise to many economists and non-economists alike. The key point in...
    The Daily Blog
  • Analysis: Final Across The Ditch Bulletin for 2014 – Lorde Help Us!
    Analysis (Text & Audio): Across The Ditch – Selwyn Manning & Peter Godfrey Headline: Final Across The Ditch Bulletin for 2014 – Lorde Help Us! 5AA’s Peter Godfrey and Selwyn Manning.FiveAA’s Peter Godfrey and MIL’s Selwyn Manning present their last...
    The Daily Blog
  • Sharing intelligence with CIA torturers
    New Zealand’s spy agencies have long presented intelligence sharing with their US counterparts as mutually beneficial and benign. That stance has always lacked credibility and is now its impossible to justify. The just-released US Senate Intelligence Committee report shows that...
    The Daily Blog
  • Labour votes for Surveillance State. NZ First Opposes!
    A few weeks before the election, the New Zealand Labour Party decided to cash in on simmering popular discontent with the state of the surveillance state that National’s set up. Never mind their own previous and well-publicized brushes with egregious state-surveillance … they wanted people to know that...
    The Daily Blog
  • Economic ideology destroys us all
    The OECD’s latest report says “The biggest factor for the impact of inequality on growth is the gap between lower income households and the rest of the population. The negative effect is not just for the poorest income decile but...
    The Daily Blog
  • 3 simple words for the Labour Party
    I have 3 very simple words for all those Labour Party apologists who are trying to rinse Labour clean here. Get. A. Warrant. You can all try and spin this any way you want, but Labour voted for 24 hour...
    The Daily Blog
  • 2014 – Year of the angry white knuckle
    I knew Internet/MANA would have to fight National, ACT, Conservative Party, United Future, Maori Party and the mainstream media. I didn’t think they would also have to fight Labour, the Greens and NZ First as well. Apparently feeding hungry kids in...
    The Daily Blog
  • Chris Rock on cop shootings
    Chris Rock on cop shootings...
    The Daily Blog
  • Bank Lending: Restrictions and Favourites
    An important story in 2014 has been the Reserve Bank’s ‘loan-to-value ratio’ restrictions, which have made it extremely hard for first-time house buyers to get sufficient finance to buy a house. Corran Dann in TVNZ’s  Q+A (7 Dec) suggested that...
    The Daily Blog
  • This weeks Waatea news column – How should Waitangi Tribunal ruling on S...
      This weeks Waatea news column - How should  Waitangi Tribunal ruling on Sovereignty be implemented?...
    The Daily Blog
  • Labour sell us out on warrantless surveillance
    Isn’t it depressing that Labour are selling us out by voting for warrantless spying by an agency caught out smearing them? Last night Labour do what they always do, over compensate on Security issues. So terrified are Labour at being...
    The Daily Blog
  • This Is The Headline For Test Post
    This Is The Headline For Test Post Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut eget neque facilisis sapien laoreet volutpat. Nulla vel nisl nec purus interdum tincidunt. Phasellus orci sapien, vestibulum et pulvinar non, pellentesque eget leo. Sed...
    The Daily Blog
  • Question Time in Parliament Today – National Party MPs cheer graph that s...
    This is the graph the National Party were shown by Russel Norman in Parliament today and they all cheered…     …they cheered?!?!?!? That’s beyond denial, that’s just gleefully suicidal....
    The Daily Blog
  • NZ Pastor Prays For Homosexual Author To Kill Himself
    By Jayden Jameson and Jessie Hume If we ever needed a reminder that homophobia is alive and kicking in New Zealand we have Pastor Logan Robertson from the Westcity Baptist Church. The Westcity Baptist ministry could apparently be described as New...
    The Daily Blog
  • Political Journalism in the South-Pacific – a new direction for NZ influe...
    Last week, the incredible Pacific Journalism Review celebrated 20 years of promoting and supporting and standing up for Journalism in the South-Pacific. The conference at AUT featured journalists from around the pacific who have battled and fought and been punished...
    The Daily Blog
  • Antarctica minus the ice – welcome to your future
    Antarctica minus the ice – welcome to your future...
    The Daily Blog
  • REAL LIFE GUEST BLOG: Lou – 15 shifts in 12 months……permanently homel...
    This is Key’s real life – other NZers aren’t so privileged    15 shifts in 12 months……permanently homeless since May. I went to the Salvation Army yesterday on advice for emergency housing as my temporary accomodation had turned volatile. Just...
    The Daily Blog
  • Labour Party Members should be furious at reviews findings
    Let’s see The Standard use this image Well, well, well… Labour’s election review: What went wrongLabour’s review panel has reported its findings back about the party’s election campaign and the reasons for the low 25 per cent result, identifying problems...
    The Daily Blog
  • Judith Collins joins the Sunday Star Times and cements the Rights dominance...
    “I am not a Monster”, hissed Judith Collins   I don’t read the Sunday Star Times, so had no idea that they had just decided to make Judith Collins of all people a new columnist. Her appointment cements into place...
    The Daily Blog
  • Grey Lynn Festival – very Grey – Art in the Dark – very Dark
    The battle of Helm’s Deep from the Two Towers would have had better OSH conditions than Art in the Dark   Grey Lynn Festival – 2 stars So the Grey Lynn Festival happened last weekend. It’s a day where the good liberal...
    The Daily Blog
  • ‘Stalking’ Ede
      Tau Henare accuses TV3 of stalkingA former National MP has accused TV3 of stalking after one of its journalists attempted to question a former Beehive spin doctor. Today’s episode of The Nation featured an unsuccessful attempt to question former...
    The Daily Blog
  • Taxpayer Union, the NZ Herald and Len Brown’s secret hidden love den
    I love the way the NZ Herald introduced the discredited Taxpayer Union in their bullshit story about Len Brown’s secret hidden love den… ‘Secret room’ spending shows need for recall electionsA lobby group says revelations Auckland Council spent $30,000 on...
    The Daily Blog
  • Eric Garner killed by NYPD original footage
    The horror of a ultra militarised and racist American Police Force who can kill with impunity. Obama claims cameras on every office would stop this type of brutality, these cops knew they were being filmed and killed him anyway. In...
    The Daily Blog
  • Unjust to imprison us for crimes we haven’t yet committed
    Once again National and Labour have succumbed to the “law and order” brigade enabling the passage of a Bill imprisoning people for crimes they might commit in the future. The Public Safety (Public Protection Orders) Bill allows the Court to...
    The Daily Blog
  • SPCA welcomes glueboard traps ban
    The Royal New Zealand SPCA applauds the ban on the sale and use ofglueboard traps in New Zealand....
    Scoop politics
  • Mediation Between Lyttelton Port and Union Fails
    The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. “There was no substantial shift in LPC’s position today...
    Scoop politics
  • Review into Phillip Smith’s escape submitted to Government
    A multi-agency review on the escape of Phillip Smith to South America has submitted its initial report to the Government today....
    Scoop politics
  • Len Brown gets haybales from giant chicken and Ms. Santa Cla
    Today at 10.30am, Ms. Santa Claus and a giant chicken delivered haybales to Len Brown’s office, urging Auckland City Council to decline a resource consent application sought by cage egg producer Craddock Farms....
    Scoop politics
  • Increased Abuse of Parents A Predicted Outcome
    Family First NZ says that the increasing level of parental abuse , especially towards mothers, is an unfortunate but expected outcome of the rise of children’s ‘rights’ and the undermining of parental authority....
    Scoop politics
  • Brownlee’s Misplaced War on Acronyms
    The beleaguered Minister of Defence who reportedly cannot tell an RFL (required fitness level) from an AWQ (annual weapons qualification) has declared war on military acronyms while proving the proverb about those in glass houses....
    Scoop politics
  • Fluoride risks whitewashed in rushed consultation
    Ministry of Health propose to exempt toxic industrial waste products used in water fluoridation from the Medicines Act 1981...
    Scoop politics
  • Practical Tips on Working and Living in New Zealand
    JUANderful Juan” in 7-Minute Migrante Video Project Shares Practical Tips on Working and Living in New Zealand...
    Scoop politics
  • Christmas Day in Prison
    Christmas Day in prison this year will involve swapping the main meal of the day, so that dinner will be served at lunchtime, leaving the evening meal to be sandwiches. This is standard practice for this day....
    Scoop politics
  • Alcohol advertising bans need stronger evidence
    Wellington (18 December 2014): The New Zealand Initiative’s Head of Research, Dr Eric Crampton, today urged Cabinet to look to the evidence before banning alcohol advertising and sponsorship. The Ministerial Forum on Advertising and Sponsorship...
    Scoop politics
  • EPA grants marine consent to OMV NZ Ltd
    The Environmental Protection Authority (EPA) has granted a marine consent to OMV NZ Ltd to continue its development drilling programme in the Maari oil field in the South Taranaki Bight....
    Scoop politics
  • DHB puts staff and patients at risk in order to save money
    The Public Service Association (PSA) is alarmed that the Waikato District Health Board (WDHB) is proposing to cut the 4 and 2 roster system, established nationally, for mental health nurses. The PSA represents more than 210 mental health nurses working...
    Scoop politics
  • Ambivilence about alcohol marketing recommendations
    Ministers Adams and Dunn issued a media release yesterday nearly two months after receiving a final report from their Ministerial Forum on Alcohol Advertising and Sponsorship, and four years following an original announcement to review alcohol...
    Scoop politics
  • Alcohol forum recommendations: a step in the right direction
    The Forum has stated clearly that that it accepts alcohol marketing plays a role in heavy alcohol consumption and subsequent harm, and that young people need to be protected from it by regulation....
    Scoop politics
  • Court Judgment: Nicky Hager v Police on Dirty Politics Raids
    Mr Hager alleges that steps taken by the second respondent (the Police): first, in deciding to apply for a search warrant in respect of Mr Hager’s premises; secondly, in applying for the warrant; and thirdly, executing the warrant at his...
    Scoop politics
  • Holiday home hazards revealed
    Common sense ways to look after your property this summer Auckland, 18 December 2014 – Burglars aren’t the only threat to your home during the holiday season, says AA Insurance. It’s more likely to be broken water pipes, burst hot...
    Scoop politics
  • Grieving families should be able to scatter ashes in peace
    Grieving families should be able to scatter ashes in peace 18 December 2014 Funeral directors are relieved that Wellington City Council has finally dropped plans to charge families for permits to scatter ashes in public places. Funeral Directors...
    Scoop politics
  • RSA Offers Condolences To Victims Of Sydney Siege
    As an organisation representing over 100,000 New Zealanders, the RSA has today condemned the actions taken by Man Haron Monis during his siege in a Sydney café, and offered their deepest sympathies to the friends and family of Tori Johnson...
    Scoop politics
  • Kiwi activists crowdfund billboard for Simon Bridges
    Almost seven thousand New Zealanders have taken part in a crowdfunding campaign, and have raised enough money to put a billboard up in Tauranga that is directed at Simon Bridges, the Minister of Energy and Resources....
    Scoop politics
  • Leaked TISA text exposes US threat to privacy, data security
    ‘The US is demanding that New Zealand and other countries accept sweeping rules that would override privacy protections for digitised personal and other data’, according to Professor Jane Kelsey from the University of Auckland....
    Scoop politics
  • Lyttelton Port workers begin overtime ban
    Workers of Christchurch Rail and Lyttelton Port have begun an indefinite ban on overtime, according to the Rail and Maritime Transport Union. The ban was announced at a mass meeting at the Port after negotiations between Lyttelton Port of Christchurch...
    Scoop politics
  • Ban on Alcohol Advertising Could Cost Taxpayer
    Responding to yesterday's release of the report of the Ministerial Forum on Alcohol Advertising and Sponsorship, Jordan Williams, the Executive Director of the Taxpayers’ Union says:...
    Scoop politics
  • Farm safety isn’t helped by punitive fines
    Federated Farmers Health and Safety spokesperson, Katie Milne says she is concerned about the impact of the $40,000 fine for a Marlborough farm couple, who weren’t wearing helmets and carrying children as passengers. The Court case, and subsequent...
    Scoop politics
  • New online guide to NZ’s environment goes live
    The Environment Foundation* has launched a new web-based guide to the management of New Zealand’s natural environment....
    Scoop politics
  • Ban On Alcohol Advertising Just One Step
    Family First NZ says that a proposed ban on alcohol advertising at sports events as recommended by a ministerial forum is an important move, but will not solve the binge drinking and alcohol abuse issue on its own....
    Scoop politics
  • CLANZ scholarship winner to examine legal services to Crown
    Wellington in-house lawyer Tania Warburton is the inaugural winner of the research scholarship established by the Corporate Lawyers Association of New Zealand (CLANZ)....
    Scoop politics
  • Joint Australasian operation dismantles drug syndicate
    The Joint Organised Crime Task Force (JOCTF), leading a multi-agency team, has smashed a multi-million dollar international organised crime network following raids across Melbourne this morning....
    Scoop politics
  • Video: Meet Mark Gilbert, U.S. Ambassador-Designate to NZ
    Join us in welcoming Ambassador-Designate Mark Gilbert and his wife Nancy. They are arriving in New Zealand shortly and wanted to introduce themselves. Watch this video to learn about his connections with Aotearoa, and why he thinks the partnership between...
    Scoop politics
  • MIA Welcomes Review Findings
    The MIA welcomes the findings of the Health Quality & Safety Commission into child and youth mortality arising from the use of motorcycles, quads and other agricultural vehicles....
    Scoop politics
  • Quads Bikes Not for Under 16s
    Safekids Aotearoa strongly supports recommendations made in a report released today highlighting the dangers posed by quad bikes when ridden or controlled by children who are under 16 years of age....
    Scoop politics
  • Inquiry on Parliament’s legislative response to emergencies
    Public submissions are being invited on Regulations Review Committee’s Inquiry into Parliament’s legislative response to future national emergencies. The closing date for submissions is Sunday, 1 March 2015....
    Scoop politics
  • Switch off on the beach NOT at level crossings
    KiwiRail and TrackSAFE NZ have launched a new summer rail safety campaign with a message to motorists to stay focused and always look for trains at level crossings over the holidays. December is known as the month for family, festivity...
    Scoop politics
  • Report on child and youth deaths from vehicle use
    Quad bike and other off-road vehicle accidents second largest cause of child recreational deaths...
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  • Inspector-General accepts apology for leak of report
    The Inspector-General of Intelligence and Security, Cheryl Gwyn, has accepted an unreserved apology from Hon Phil Goff MP for disclosing some of the contents of her recent Report into the Release of Information by the NZSIS in July and August...
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  • Santa’s naughty list shows NZPork in trouble
    Santa has provided animal advocacy organisation SAFE with an early copy of this year’s naughty list , as it prominently features many animal-abusing industries and businesses, with NZPork topping the list....
    Scoop politics
  • WWI veterans had persisting higher risk of early death
    New research on the impact of the First World War on participating New Zealand soldiers shows they typically lost around eight years of life and had an increased risk of early death in the post-war period....
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  • Rainbow Wellington urges further change from Blood Service
    This week the New Zealand Blood Service (NZBS) announced the implementation of the agreed changes to blood donor deferral. For men who have sex with men (MSM) this primarily involves a reduction of the deferral period from five years to...
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  • New Zealand Government signals reversal of fortune
    The Government’s robust $372 million forecast surplus from Budget 2014 will turn into a $572 million deficit, according to the 2015 Half-Yearly Economic and Fiscal Update and the Budget Policy Statement. Imports are cheaper and good export prices...
    Scoop politics
  • Time for Jobs that Count in the Meat Industry
    The NZ Meat Workers Union will launch a new national campaign to highlight job insecurity in the Meat Industry this afternoon in Palmerston North....
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  • Protest at killing of schoolboys – Vigil 17/12/14
    A peaceful vigil will be held in Downtown Square opposite Britomart station – cnr of Queen and Customs St from 11-45 am: Wednesday 17 December 2014....
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  • Social housing provider opens development in Johnsonvillle
    Social housing provider, Accessible Properties, will be opening eight new social housing units in a new housing development in Johnsonville tomorrow....
    Scoop politics
  • NCWNZ Wins Court Case
    ComVoices welcomes and celebrates the news that the National Council of Women of New Zealand (NCWNZ) has won its High Court case against Inland Revenue and the Charities Registration Board....
    Scoop politics
  • Cut Taxes + Cut Waste = Surplus
    Responding to the Treasury's Half Year Fiscal and Economic Update, Taxpayers’ Union Executive Director, Jordan Williams, says:...
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  • Cuts in public services likely fromBudget Policy Statement
    The horizon for workers looks gloomy with the release today of the Budget Policy statement. “Continuing real cuts in Government funding of public services are inevitable as a result of today’s Budget Policy Statement. The policy ignores the social,...
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  • Half Year Economic and Fiscal Update 2014
    The Half Year Economic and Fiscal Update (HYEFU) 2014 provides the Treasury's latest economic forecasts and the forecast financial statements of the Government, including the implications of Government financial decisions....
    Scoop politics
  • Half Year Economic and Fiscal Update 2014
    The Half Year Economic and Fiscal Update (HYEFU) 2014 provides the Treasury's latest economic forecasts and the forecast financial statements of the Government, including the implications of Government financial decisions....
    Scoop politics
  • Chief Ombudsman launches major review of OIA practices
    The Chief Ombudsman, Dame Beverley Wakem, has today begun a wide ranging review of Official Information Act (OIA) practices in the public sector....
    Scoop politics
  • The Tasman Sea got a little smaller this morning
    “Our hearts and minds are with the people of Sydney: the Tasman Sea got a little smaller this morning,” said Race Relations Commissioner Dame Susan Devoy....
    Scoop politics
  • A safety message for the festive season from Housing NZ
    Batteries may be required for some of the best toys under the tree this year, but they are just as essential to enjoying the greatest gift of all, says Housing New Zealand General Manager of Property Services, Marcus Bosch. “Smoke...
    Scoop politics
  • Charity Wins in the High Court
    The National Council of Women of New Zealand (NCWNZ) is delighted that the High Court has found in its favour in its case against Inland Revenue and the Charities Registration Board....
    Scoop politics
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