web analytics

Making it up as he goes along

Written By: - Date published: 7:10 am, July 25th, 2012 - 48 comments
Categories: privatisation - Tags:

In the cartoon Calvin and Hobbes, they play a game called Calvinball. “The only consistent rule states that Calvinball may never be played with the same rules twice”. It’s a bit like that trying to call this government to account. One day they have legal authority to give away shares, next they don’t. One day they don’t know the cost, then they do, then they don’t again. Like Calvin, I’m getting the impression that Key is just making it up as he goes along.

I particularly liked this nonsense from Key yesterday:

David Shearer: Did he announce the loyalty scheme to the National Party conference without being aware of the cost?

Rt Hon JOHN KEY: I announced the intention to have a loyalty scheme. I do not know the exact cost at this point, but what I do know is that there may be no cost.

What’s Key’s logic for saying there may be no cost? Well, apparently investors will be so overjoyed at the prospect of receiving a free ‘bonus’ share after three years that they will bump up the price they are willing to pay for their shares by more than the value of the free share.

It’s utter bullshit and Key, as a moneytrader, knows it. The option to get a free share in three years time has value but it is not the face value of that share – it has to be discounted for the fact that its three years in the future (at about 8% per year) and it has to be discounted for the fact that requires the shareholder to keep ownership of the shares, denying them the opportunity to do other things with that money if the choice comes along.

Besides, the price mum and dad will have to pay for shares isn’t going to be determined by anything as fancy as the discounted, risk-adjusted cost of a share option – it’s going to be the price that National reckons it can charge to a) not undershoot its revenue targets too much, b) not look like it’s giving these things away, c) get enough ‘mum and dad’ investors that it can label the float a success, and d) not get so many ‘mums and dads’ that it ends up paying out a fortune in covering their brokerage fees at about $40 a pop.

——————————————————————————

Danyl at Dimpost (who came up with the Calvinball comparison) adds:

Before the election Key insisted that the energy companies and Air New Zealand would be sold to ‘Kiwi mums and dads’, and said:

. . . given New Zealanders have $300 billion worth of investments, they will buy and keep the shares.

“We could say one hundred percent of shares to New Zealanders, obviously we could say less, but we are targeting that eighty five to ninety percent and I’m confident we’ll reach it,” Key said.

Here’s Key today on the possible cost of the loyalty scheme:

“If you think about the entire float that could be in the order of $5 billion to $7 billion. Let’s argue that it’s $5 billion for a moment if you then turned around and said about 20 per cent of that could be for mum and dad, it could be more it could be less – but just for the purposes of maths that’s a billion.

Key also adds:

These numbers that the Labour Party are coming up with and the Greens are farcical.

 

——————————————————————————

A guest poster, Twippy, adds what many Kiwis must be thinking every time Key grumpily snaps out insults at people who oppose asset sales:

John Key’s is losing his composure on the government’s widely abhorred asset sales policy, and he is now effectively insulting the vast majority of New Zealanders who oppose it.
John Key called Clayton Cosgrove an ‘idiot’ for articulating the overwhelming public opposition against asset sales. As such, if you agree with Clayton Cosgrove that selling our country’s assets makes zero economic sense, then your prime minister quite likely thinks you are an idiot.
A better definition of idiocy might be selling well-performing strategic national assets that provide dividends that are several times the cost of borrowing.
Of selling your children’s future for the benefit of the wealthy and the few.
Of letting the private sector pillage New Zealand’s strategic assets and raise power prices.
Of giving up the requirement our state owned enterprises have towards social and environmental responsibility, and openign up the taxpayer to lawsuits from overseas shareholders if those responsibilities are exercised at the cost of their profits.
Of hurtling towards selling a national asset without even a basic understanding of indigenous water rights.
Of forcing New Zealanders to subsidise the rich through a loyalty bonus that you admit isn’t even going to work.
Key’s claims that the looters bonus on NZ asset sales shares is an admission that it won’t work.
If only $60m of extra shares are granted, then that means only $600m, 10%, of the shares sold are in ‘mom and pop’ investors’ hands after 3 years.
The thing about the loyalty bonus is that for it to work, it has to cost a lot of money. Otherwise it wouldn’t be much of an incentive. If it isn’t costing us money, that means isn’t being used. And if the incentive isn’t being used that means it’s too late – that Moms and Pops have already sold their assets offshore.
The loyalty bonus is a terrible idea whichever way Key plays it – if it only costs $50m then that’s because Kiwis have largely ignored it and chosen to sell their shares overseas or not bought in in the first place, and if it costs $500m, that means ordinary Kiwis, people who are struggling to make ends meet let alone buy shares, are subsidising those who are wealthy enough to buy shares themselves.
The problem with the looters bonus is that if it’s not a massive expense then it is, by definition, a failure.
Key is forgetting that we are all shareholders in these assets. We benefit from the dividends every year to pay for our education, our health, our law and order, our welfare. Now this source of wellbeing is not only being sold, but you and I are being asked to pay for the privilege of being stripped of something that belongs to all of us. This isn’t an opportunity. It’s a burglary, and we’re being asked to pay the burglar for his services.
This isn’t about providing shares to Kiwis; it’s taking these shares away- and with it their dividends .
But who are we to oppose it. We’re just idiots, after all.

48 comments on “Making it up as he goes along”

  1. Labour and the Greens only need to say that they will not honour the “bonus” scheme if they are in power to stuff this latest stupid idea from our leader.

    Has anyone thought of the deeper reasons for the asset sales  – the asset sales are merely a symptoms of a far worse waste of our resources and our future.

    http://howdaft.blogspot.co.nz/2012/07/kiwisaver-conned-confirmed.html 

    • but, but, but, darkhorse, surely all the mums and dads (or is it everyday New Zealanders) that buy the shares would have to vote National, in that case, to ensure they get the shares? And since everyone can afford the minimum parcel of $1,000, National are pretty much guaranteed 75%+ of the vote, because that’s how widely the shares will be taken up?

      • darkhorse 1.1.1

        Maybe a really courageous Labour Party could promise as an alternative to put the old Electricorp back together and manage the country’s electricity supply as a single network providing power to the people.

        And it could put the old lines companies back together in some form of regional community trust and the savings would be immense and far outweigh the value of Our Foolish Leader’s bribe.

        Plus maybe Labour could link that to a wider energy strategy that used our total energy resource wisely and for the benefit of the whole economy.

        I know that flying pigs come into this vision but I live in hope. 

        • Georgecom 1.1.1.1

          The next Labour-Greens govt has a couple more options that are worth exploring.

          1. They consider running the electricity corp on a non-profit basis. Costs are covered but no dividend is returned to the Govt. The Govt would lose out on money however the cost of power will increase at the rate of meeting costs, not a cost plus dividend basis.

          A variant of this might be to demand a dividend but then return that to all electricity users the following years as a % rebate of their power usage. The ‘fiscal disciplines’ of a deividend are maintained year on year however it is also rebated to power users.

          2. The Govt could look at locking up a certain % of the annual dividend given to the state as funding for local bodies. Lets say 10% of the dividend from electricity Corp is distributed evenly and on an annual basis to local body councils. There is a powerful incentive to keep the assets in state control as part of the dividend flows back to councils to pay for their operations. Rate payers wallets and Councils funding are linked to retention of the assets in state control.

    • ghostwhowalksnz 1.2

      Doesnt work that way, once its a listed company the directors control the allocation of new shares.

      • Lanthanide 1.2.1

        This isn’t an allocation of new shares.

        There are 1.4b existing shares in MRP, and they intend to sell at most 49% of them. More likely they’ll sell about 40%, and then will have to give away a further 1-2% as free bonus shares.

    • Lanthanide 1.3

      Someone else made the point that the bonus shares will be in the prospectus, which makes it a contract, and if the a future government welches on it they could be sued.

      I didn’t get any answer as to why it must be in the prospectus, though.

      • felix 1.3.1

        Parliament is sovereign. It can legislate that any particular contract or other can be broken if that’s what it wants to do.

        Whether that’s a good way to make legislation is another question, but the same could be argued about legislation to sell this or that energy company.

    • Draco T Bastard 1.4

      The asset sales are symptoms of failing capitalism and declining profits. To “fix” this the capitalists are reaching for the necessities that they know they can get an unearned income from.

      BTW, your link is 404

      • Draco T Bastard 1.4.1

        Actually, that link being 404 is weird as I can get to it from your site but I can’t get it from that link.

        hmmm… seems it’s got an extra character in it.

  2. Craig Glen Eden 2

    Key talks bullshit constantly but the Journos dont take him to task. A good example is he keeps saying that floating these shares allows for investment in these companies which will allow them to grow, but he knows its the Government that gets this money and they are going to spend it on ???Schools and other badly needed infrastructure.

    • Tom Gould 2.1

      The media has let the people down badly over the asset sales. Only a fool would swap an asset returning 18 percent for debt costing 5 percent. And the media swallow it. Only a fool would tax people to give away free shares. And the media swallow it. That’s what I call farcical.

      • glg 2.1.1

        The media are complicit and should be ashamed of themselves. How much in the pay of the NAts are they, they cannot be so stupid as to believe them, so they must be corrupt.

        • Fortran 2.1.1.1

          At least you do not have to consult a Registered Financial Planner – just read the Herald – they know the answers.
          Should save me planner fees when I buy.

    • Draco T Bastard 2.2

      Key talks bullshit constantly but the Journos dont take him to task.

      That’s because they’re too uneducated and unthinking to be able to do so.

  3. Tracey 3

    I too have found it fascinating that a man who admits he doesn’t know what it will cost (lie number one) can definitively say that other people’s figures are wrong (ie number 2). His reduction of mums and dads to 20% could account for why he thinks the loyalty scheme will “only” cost $60m as opposed to $300m which is probably based on his original lie of the 80% uptake by mum’s and dads.

    • Tom Gould 3.1

      Isn’t the Finance and Expenditure committee that came up with the $360m cost chaired and dominated by his own people? So are they all fools and idiots too?

  4. marsman 4

    One way or another we must do our utmost to SABOTAGE Key’s Asset Sales Scam.

  5. Tom 5

    Key is probably following the advice of his media team which knows that the news cycle is very short
    (news editors having a notoriously short span of attention), a policy Margaret Thatcher called “feeding the chooks”.

  6. Tracey 6

    What are the implications for both the share floats and the future of the Greens and Labour IF they came out today and announced they will nationalise any company sold by this government and will pay back mums and dads the amount they spent (not adjusted) when they next get into government (whenever that might be) unless a binding referendum is held?

    • Tom 6.1

      Tracey: re-election ?

      • Tracey 6.1.1

        Tom – but which party?

        • Tom Gould 6.1.1.1

          Tracey, or maybe put the referendum first, once elected they could ask the people to decide if they want to spend $5b of their money on buying back the assets that Key and Joyce have sold? At least that would be a genuine mandate, one way or the other.

  7. tsmithfield 7

    “it has to be discounted for the fact that its three years in the future (at about 8% per year) and it has to be discounted for the fact that requires the shareholder to keep ownership of the shares, denying them the opportunity to do other things with that money if the choice comes along.”

    That is true. Shareholders will make those assessments when valuing the shares. But from the governments (the sellers) point of view, the present value of any extra money paid for the bonus shares also needs to be factored in (the extra money for bonus shares is received now, but the bonus shares are not issued for 3 years).

    The other point is that if NZers are willing to pay more for the shares due to the prospect of bonus shares in the future, then overseas investors will be forced to pay the increased price if they want a slice of the action, even though they don’t qualify for the bonus shares. So, this will result in either overseas investors paying more, more NZ investors participating, or a combination of both. Either way, it has to be a good thing.

    • marsman 7.1

      tsmithfield. ‘Either way, it has to be a good thing’ But over-all it is a total SCAM. Everyone knows the sale of these State Assets will leave us worse off so there is nothing good about any of it.

    • DH 7.2

      “But from the governments (the sellers) point of view, the present value of any extra money paid for the bonus shares also needs to be factored in (the extra money for bonus shares is received now, but the bonus shares are not issued for 3 years). ”

      The point about bonus ‘loyalty’ shares is that there is no extra money paid for them so your argument looks a little silly.

      NZers won’t be willing to pay more because the shares will be offered at a fixed price, it’s hardly a bonus if the loyalty shares are more expensive than the other shares is it.

      The likely result is the bonus will be for the bigger share traders. Some 20% of shares will be tied up as non-tradeable. That supply-side shortage will push up the price of traded shares until the bonus shares are issued. More shares will come on the market after that & reduce the demand which will depress the share price for a time.

  8. felix 8

    Of course with Key’s history of broken promises – even promises to his hardcore fanclub – there’s a bloody good chance that there’ll never be any bonus shares.

    (A hypothesis supported by the observations that they haven’t been legislated for, haven’t been budgeted for, and no one in govt has any idea how they’ll work or what they’ll cost)

    • lostinsuburbia 8.1

      Well when being PM is a hobby and you can bugger off to Hawaii why bother thinking anything through properly.

  9. fabregas4 9

    I hate the idea of asset sales but what is one to do? I think the only hedge against the inevitable rise in power prices is to buy these shares which in the case of Mighty River Power will certainly be both a bargain and very profitable.

    • ghostwhowalksnz 9.1

      Dividends are only paid out of profits AFTER they keep a big portion for reinvestment. Its a capital intensive business and there is a lot of money spent on ‘buying’ new customers door to door . Imagine the incentives for big power users

  10. Draco T Bastard 10

    It’s a burglary, and we’re being asked to pay the burglar for his services.

    That’s it in a nutshell. Now just need the opposition parties to realise that and say that they will renationalise without compensation. They won’t though – they’re too damn chickenshit.

  11. prism 11

    John Key called Clayton Cosgrove an ‘idiot’ in Twippy comment.

    I think he was commenting on Cosgrove’s use of the term ponzi scheme. Key knows exactly what that is, and knows that partial privatising isn’t it. So haha Cosgrove you’re ignorant Key says. But strangely enough Key keeps reassuring us that having 51% will give our government all the decision making options, when he must know that will not be the case and a small percentage holder can gain surprising power. Nothing is simple in business – Key is smirking inside when he offers certainties and reassurances. What a con artist, and he’s done NZ like a dinner.

  12. captain hook 12

    this a government of manques and upstarts who think that because they WON then they can do what they like.
    They have no idea of process and the rule of law because they think that they ARE the law.
    throw them out.

  13. powershift 13

    Hydro power prices rise. Cost of solar is decreasing. Shift to solar by income stretched (and sensible) for heating, hotwater etc and make income from feedback to grid. Shares not really such a good deal I think in view of future trends with climate change, water disputes with farming etc climate change and general uncertainty. Trend towards self sufficiency I think!

  14. Sanctuary 14

    Damn right wing neo-lib bastards want to start a class war.

    • Draco T Bastard 14.1

      Start it? It’s been going on for at least 5000 years. The upper class is, ATM, winning.

  15. Karl Sinclair 15

    Although the below link is a document on the true cost of public private partnerships, this also highlights the problems with Asset Sales in NZ…… + charter schools etc etc etc…..

    Revolution Anyone?

    http://www.policyalternatives.ca/sites/default/files/uploads/publications/Popular_Primers/bottom_line_p3.pdf

    INTERNATIONAL TRADE AGREEMENT
    VULNERABILITY: P3s open the door to
    serious trade consequences under NAFTA
    and other trade deals, risking complex
    lawsuits and massive fines for the Canadian
    public.

    LOWER CORPORATE TAXES: Corporations get tax breaks
    on public assets they own; individual taxpayers are
    forced to make up for the lost tax revenue.

    MONEY LEAVES THE COMMUNITY: And sometimes the
    country. Profits often head overseas, while local
    suppliers lose contracts. Lower wages
    and lost jobs mean less money spent in
    local communities.

    PROFITS BEFORE SERVICE AND SAFETY:
    Profit is a strong incentive to cut costs –
    even when service or safety are compromised.
    When a problem arises, the
    company often blames the politicians.

    PRIORITIES ARE CHANGED: Decision-making on where
    to build schools, bridges or hospitals may become
    focused on profit potential, rather than public need.

    NO ESCAPE CLAUSE: Communities can find themselves
    stuck with unacceptable arrangements for decades.

  16. Karl Sinclair 16

    Privatization Myths Debunked (article from: In the Public Interest

    http://www.inthepublicinterest.org/node/457

    Myth #1: Privatization saves money.

    The Truth: Privatization often raises costs for the public and governments.

    Proponents of privatization promise to fix budget woes by saving the government money. But numerous examples in a variety of sectors show that projected savings don’t always materialize. Cost overruns combined with hidden and indirect costs, such as contract monitoring and administration, can make privatization more expensive than in-house services for governments. In fact, the Government Finance Officers Association estimates that hidden and indirect costs can add up to 25% to the contract price.[i]

    The Government Accountability Office has found that methods by which agencies and privatization consultants conduct projections and report contract costs can make cost savings appear greater than they actually are.[ii] According to a 2007 survey by the International City/County Management Association, 52% of governments that brought services back in-house reported that the primary reason was insufficient cost savings.[iii]
    An audit report from the Wisconsin Legislative Audit Bureau revealed that the state’s department of transportation wasted more than $1 million by outsourcing almost half its engineering work to private contractors over the past five years. The audit found that about 60% of these outsourced jobs could have been done at a lower cost by state workers, which would have saved the state $1.2 million.[iv]
    In February 2009, Chicago and Chicago Parking Meters LLC signed a 75-year concession agreement for the operation of Chicago’s 36,000 parking meters. Along with many problems related to malfunctioning meters, rates have significantly increased, causing many residents to think twice before parking in the city. Many stores and merchants in the area complain that the rates have decreased business. In some parts of the city, rates increased in the first months to 28 quarters ($7) for 2 hours of parking time. The parking charges also have been extended to 7 days a week and for more hours during the day.[v]

    Myth #2: Private companies do a better job than the public sector.

    The Truth: Many examples show declines in service quality under private contractors.

    Faith in the private sector to outperform government agencies is deeply ingrained in the American psyche. However, the facts disproving that belief are steadily mounting. In many cases, private contractors have failed to deliver, leaving communities without vital services and assets. Private companies naturally seek to maximize profits, which can incentivize cutting corners to reduce costs. This can greatly impair service quality and maintenance of vital assets. The most popular reason for in-sourcing, according to the International City/County Management Association survey mentioned above, was a decline in service quality. Over 60% of governments that brought functions back in-house reported this as their primary motivation.[vi]
    In 2009, Indiana cancelled its $1.34 billion contract with IBM to provide public benefit eligibility services. For two years, vulnerable families failed to receive benefits for which they qualified, including food stamps, health coverage, and cash assistance, due to the company’s poor provision of these services. The privatized system led to high error rates and poor timeliness, among many other problems.[vii]
    In 2010, Gary, Indiana cancelled its 10 year contract with United Water. In May 2008, a state inspection found that the district, under United Water’s management, had violated discharge limits 84 times between 2005 to 2007; had at least 25 pieces of broken equipment; filed inadequate monitoring reports; and failed to meet mandated deadlines.[viii] By cancelling the contract and bringing water service back in-house, the city expects costs to decrease from $16 million to $8 million a year.

    Myth #3: Privatization allows governmental entities to better anticipate and control budgetary costs.

    The Truth: Cost estimates are extremely unreliable and privatization can cause result in unforeseen budgetary consequences.

    Some believe that privatization allows for more precise budgeting, since the inflow or outflow of money appears fixed once a contract with a private entity is signed. But hidden costs and cost overruns can significantly distort these figures, market circumstances can reverse the estimates, and ripple effects of privatization can increase unexpected areas of governmental budgets.

    Governments cannot anticipate the cost of privatization failures, from the overtime expenses of sending city work crews to correct sloppy work by private road maintenance companies to the massive ordeal of rebuilding entire outsourced departments when a contractor’s costs, delays or service breakdowns become unsustainable.
    In 2009, the Pew Center on the States analyzed Pennsylvania’s failed attempt to sell the Pennsylvania Turnpike. The Governor predicted that the lease income would generate about $1 billion a year for the state’s transportation budget. But this rosy figure assumed a 12% annual return on the state’s investment. According to the Pew report, with the stock market decline the previous year, the state would have actually lost money on its investment.[ix]
    Sometimes perceived cost savings in one area can increase the cost in another area of the budget. According to the Economic Policy Institute, in 2006, nearly 20% of all federal contract workers earned less than the federal poverty level of $9.91 an hour, while 40% earned less than a living wage. Many of these workers do not receive employer-sponsored health benefits[x]. As a result, these workers must rely on public benefit programs, such as Medicaid and the Earned Income Tax Credit (EITC) program to make ends meet. Lower wages and benefits, while making contracts appear cost-efficient, lead to increases in other parts of the federal and state budgets.

    Myth #4: Privatization allows governmental entities more administrative flexibility.

    The Truth: Privatization requires substantial administrative resources for monitoring and oversight.

    Substantial time and personnel are necessary to adequately monitor contracts, especially those involving essential governmental functions. If governments don’t dedicate sufficient personnel and time to monitoring contracts, they run a high risk of poor contractor performance and wasting large amounts of money.
    In a Cincinnati Enquirer investigation, the newspaper concluded that the State of Ohio and many local governments engaged in “casually administered” contracts with “lax controls.” From 2000-2003, 116 state audits found that contactors misspent $97.7 million tax dollars.[xi]
    Texas entered into a contract with Convergys to administer human resources functions for the Health and Human Services Commission. An audit in 2006 revealed numerous problems related to contract oversight. As a result of the minimal oversight, the state was unable to be fully involved in the development, testing, and validation of contractor’s system. The agency relied on the contractor to both develop and perform the testing and then to assess the system and report the results of those tests.[xii] As a result, the agency did not have the working knowledge of the system to hold the contractor accountable for technical performance issues.

    Myth #5: The public still maintains control over a privatized asset or service and the government retains the ultimate ability to make related public policy decisions.

    The Truth: Privatization can bind the hands of policymakers for years, allowing private companies significant control of a privatized asset or service and the ability to dictate important policy decisions.

    Non-compete and “make-whole” clauses are just a few of the ways that private companies control privatized assets and dictate important public policy decisions. Non-compete clauses forbid competition and prohibit the government from making policy and planning decisions that may affect the contractor’s revenues. These contract terms have prevented numerous cities and states from improving public transportation or implementing other planning or environmental initiatives that may have threatened contractor revenues. Asset privatization contracts also frequently stipulate that the government must reimburse or “make whole” the contractor if an event, such as a parade or sudden natural disaster, occurs. Often the true ramifications of these types of provisions, which help reduce risk and guarantee profits for contractors, come as a surprise to policymakers.
    In September 2008, Indiana was required to reimburse the private Indiana Toll Road operator $447,000 for tolls that were waived for people being evacuated during a severe flood. This requirement in the contract forced the state to pay money to a private contractor in order to ensure the public’s safety.[xiii]
    In 2008, the private contractors that operated the Northwest Parkway in Denver, Colorado, objected to improvements on W. 160th Avenue. The 99-year privatization contract allowed the private company to prevent improvements on city-owned and maintained roads, since the improvements “might hurt the parkway financially,” by providing an alternative route for travelers, thus potentially reducing toll revenue.[xiv]

    Myth #6: If anything goes wrong, the government can easily fire the contractor or adjust the contract.

    The Truth: Reversing privatization involves huge costs and service interruptions.

    When governments turn over core services to private contractors, it can be very expensive and time-consuming to alter contract terms or cancel a contract. Taxpayers can be stuck with legal expenses when companies file lawsuits seeking greater payment. Additionally, contract cancellation can lead to service interruptions or loss of access to public assets during the transition period.
    Virginia sought to end its contract with Northrop Grumman for statewide information technology services because of numerous instances of missed deadlines, cost overruns, and technical problems. The state’s auditors calculated that cancelling the contract during fiscal 2010 would cost Virginia $400 million, which auditors said the state can’t afford.[xv] As of 2010, the state may be forced to remain in the contractual relationship because it cannot afford the cancellation.
    In 2007, when Texas cancelled its contract with Accenture for public benefits eligibility services, it took 20 months for both parties to settle issues related to the contract cancellation. In the meantime, many families continued to have problems accessing food stamps, welfare, and health insurance because the state had fired a large portion of its case workers at the beginning of the privatization effort. Nearly three years later, Texas is still struggling to rebuild its public workforce.[xvi]

    Myth #7: Companies are chosen for privatization contracts on the merits, not based on political or financial connections.

    The Truth: Government for profit opens doors to unscrupulous behavior by politicians and businesses.

    As many examples illustrate, the companies that receive lucrative contracts may not be the best company for the job, but instead may have the most insider connections.
    Two judges in Pennsylvania received $2.6 million over seven years from Pennsylvania Child Care LLC, a private company that operated a juvenile detention center. The judges helped secure the company a 20-year, $58 million contract with the county and aggressively sentenced children for minor infractions to ensure that the detention center remained at capacity. In early 2009, the two judges were charged with racketeering, extortion, bribery, money laundering, and fraud, among other crimes.[xvii]
    In 2009, the former president of the Jefferson County, Alabama county commission was convicted of taking bribes to steer government business to J.P. Morgan. The county commissioners followed advice of a J.P. Morgan consultant and set up an unorthodox financing scheme to refinance the debt on its sewer system. The county paid $120 million in fees — six times the prevailing rate – to buy interest-rate swaps from J.P. Morgan and several other financial institutions. Within five years, the bad advice had increased the county’s debt by $277 million. Low-income residents bore the consequences as the county raised sewer rates again and again to stave off bankruptcy.[xviii]

    • xtasy 16.1

      Simple answer – whatever you write:

      This far too complicated for the average mind and brain of a NZer.

      It is too complicated and too complex, whether it may have some meaning or not, in part or in whole.

      So hardly anybody, yes I bet, nobody, will read it, take it serious and simply continue to get out of bed every morning to head to her or his master, fulfil the days work, do anything against her or his conscience, as that is supposed to be expected of a “servant” or worker, and suck the rest in faked facial pride.

      The mass in NZ is totally divided, illiterate about true information, indifferent, as pre-occupied with survival, distracted by stupid social and other media, sex, drugs and alcohol, and desperately clinging onto some vague hope that one day things may get better, so they can also be able to be “rich”, afford their own home and have a great life, at some vague time and place in the future.

      The true global picture is totally out of favour for that to happen and for those daydreamers to get what they want. The technical revolution and new media is tying people into narcissitic relationships and self delusion, so many, or rather most have lost the ability to communicate and relate, and too many are afraid to even talk to their neighbours or work mates.

      I see this even at “protests”, where people gather, but are too afraid to openly talk to each other in normal, natural ways. Too many stand and wait for “the happening’ and to be “guided” or “motivated”. And lack of trust is everywhere. So they run around also taking photos or videos of each other, as a desperate effort to find affirmation that they are in the right place, with the right people at the right kind of event. In reality, there is little or NO cohesion. Social activism is DEAD.

      People have lost ability to interact, relate and be social.

      That is also the reason for protests and actions fading away. And the perpetrators, the manipulators that run the show, they want it that way!

      John Key and this government love this happening, it gives them all the easy means to go ahead and divide this country more, sell assets, enslave more into low wage jobs and cater for the interests of themselves and their lobbyist supporters.

      Think about all this for a moment, and you may learn something.

      The challenge is huge, and people need to wake up, otherwise NZ and the world will be lost for good.

      • darkhorse 16.1.1

        You are right xtasy but not just Our Current Foolish Leader has been guilty of this Helen was as bad.  Possibly worse becasue she was so much more intelligent and focussed.

        Helen was a Statist – John a Corporatist – the family and community are seen as the enemy to control by the state/corporation.  That is why we have local government and school amalgamations and the slow destruction of the other mechanisms and focii of community by the state.  It is just a continuation of the highland clearance and the destruction of tribalism.  Community is economically inefficient – or it appears to be so and it is inherently anti-statist/anti-corporatist because it is communalist (NOT communist!).  
        yet community is the primary unit/driver of society and the economy- the resulting anomie – the lack of belonging is behind much of the negative stuff in society. 

  17. xtasy 17

    Interesting stuff and enlightenment, Evo Morales, etc. see for yourselfes, Socialism is the ONLY solution:

Recent Comments

Recent Posts

  • Rental reforms progress to select committee stage
    The Government continues to make progress on a fairer and more secure rental market for renters and landlords with the First Reading of the Residential Tenancies Amendment Bill and its referral to the Social Services and Community Select Committee.  “Now is the opportunity for landlords, tenants and others who want ...
    BeehiveBy beehive.govt.nz
    14 hours ago
  • Papua New Guinea Prime Minister to visit New Zealand
    Papua New Guinea’s Prime Minister Hon James Marape will visit New Zealand from 21-25 February, Prime Minister Jacinda Ardern announced today. “New Zealand and Papua New Guinea have a warm and friendly relationship. I look forward to welcoming Prime Minister Marape here and strengthening the relationship between our two countries,” ...
    BeehiveBy beehive.govt.nz
    17 hours ago
  • Free school lunches served up to thousands
    Thousands of children have begun receiving a free lunch on every day of the school week, Prime Minister Jacinda Ardern said. The Government’s free and healthy school lunch programme is under way for 7,000 students at 31 schools in Hawke’s Bay / Tairāwhiti and Bay of Plenty / Waiariki, extending ...
    BeehiveBy beehive.govt.nz
    17 hours ago
  • Social Wellbeing Agency replaces Social Investment Agency with new approach
    The Minister for Social Development Carmel Sepuloni today announced a new approach that continues to broaden the Government’s social sector focus from a narrow, investment approach to one centred on people and wellbeing. Minister Sepuloni said redefining the previous approach to social investment by combining science, data and lived experience ...
    BeehiveBy beehive.govt.nz
    17 hours ago
  • Government to strengthen protections for whistleblowers
    The Government is strengthening the Protected Disclosures Act to provide better protection for whistle blowers, Minister of State Services Chris Hipkins said today. “The Protected Disclosures Act is meant to encourage people to speak up about serious wrongdoing in the workplace and protect them from losing their jobs or being ...
    BeehiveBy beehive.govt.nz
    17 hours ago
  • PM speech at Parliamentary Chinese New Year celebration 2020
    Nǐn hǎo (Hello in Mandarin). Xīn Nián Kuài Lè (Happy New Year in Mandarin) Néi Hóu (Hello in Cantonese). Sun Nin Fai Lok (Happy New Year in Cantonese) Tēnā koutou, tēnā koutou, tēnā koutou katoa. Thank you for your invitation to attend this celebration today. I would like to acknowledge ...
    BeehiveBy beehive.govt.nz
    21 hours ago
  • Tougher penalties for gun crime a step closer
    Tougher penalties for gun crime are a step closer with the passage of firearms reform legislation through another stage in Parliament. The Arms Legislation Bill has tonight passed its Second Reading. “The changes have one objective - to prevent firearms falling into the wrong hands,” said Police Minister Stuart Nash. ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Arms Legislation Bill: Second Reading
    Introduction Mr Speaker We all know why we are here today. It has been a long journey. The journey did not actually begin on 15 March 2019. It began on 30 June 1997. Almost 23 years ago, Justice Sir Thomas Thorp told us what was wrong with our firearms legislation. ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • New era for vocational education
    The Government’s work to put trades and vocational education back on the agenda took another major step forward today with the passing of the Education (Vocational Education and Training Reform) Amendment Bill, Education Minister Chris Hipkins said. “This is a watershed day for trades and vocational education. These law changes formalise ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Bill to Amend the Greater Christchurch Regeneration Act
    Speeding up the return of Christchurch regeneration activities to local leadership is behind the Greater Christchurch Regeneration Amendment Bill introduced to Parliament today by Minister Megan Woods. “As we approach nine years since the February 2011 earthquake in Canterbury, and with the transition to local leadership well underway, the time ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Milford Track to partly reopen after storm damage
    Hundreds of New Zealanders and international visitors will be able to get back out into nature with the Milford Track partially reopening next week, after extensive assessments and repairs, the Minister of Conservation Eugenie Sage announced today. The popular Great Walk has been closed since 3 February after an extreme ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government drives low-emissions transport momentum
    Up to 110 new EV chargers nationwide in cities and regions 50 electric vehicles for ride-sharing The Government is helping deliver more infrastructure and options for low emissions transport through new projects, Energy and Resources Minister Dr Megan Woods says. Tauranga, Nelson, Levin, New Plymouth and Oamaru are just some ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Kiwis better off under Coalition Government
    New Zealanders are increasingly better off under this Government as wages rise and families have more disposable income, Finance Minister Grant Robertson says. Stats NZ reported today that average household disposable incomes after housing costs rose 4.9% in 2019. This was the highest rise in four years and came as ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Another step towards restoring rights for screen production workers
    All New Zealanders need to have their voices heard at work to ensure we have an inclusive and productive economy. Today we introduce a Bill to do this for workers in the New Zealand screen industry, Workplace Relations and Safety Minister Iain Lees-Galloway says. “The Screen Industry Workers Bill will ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Enhanced Taskforce Green for Southland and South Otago
    The Government has announced further help for the Southland and Otago regions to speed up recovery efforts from the floods.  “I’ve approved Enhanced Taskforce Green (ETFG), making $500,000 available to help with the clean-up in Fiordland, Southland, and the Clutha district in Otago,” Minister for Social Development Carmel Sepuloni said.  ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Employers and Industry take the lead to connect students to vocational education
    Following the announcement that more than 340 schools will be funded to run events promoting vocational education, the Government has announced it will fund a further 257 events to be run by employers and industry. “These industry-run events will allow more than 30,000 students to connect with more than 2,000 ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Rental reforms a step closer with the introduction of the Residential Tenancies Amendment Bill
    Today the Government is making progress on a fairer and more secure rental market for renters and landlords with the introduction of the Residential Tenancies Amendment Bill in Parliament.  “This Bill includes a series of reforms to improve the wellbeing of the 609,700 households that live in rented homes, and ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Biosecurity Minister announces world first eradication of pea weevil
    A Government programme to wipe out pea weevil has achieved a world first, with Biosecurity Minister Damien O’Connor today announcing the successful eradication of the noxious pest from Wairarapa. This means the nearly four-year ban on pea plants and pea straw was lifted today. Commercial and home gardeners can again grow ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Temporary Accommodation Service activated for Southland flooding
    Southland residents hit by flooding caused by heavy rainfall can now access help finding temporary accommodation with the Government activating the Temporary Accommodation Service, Minister of Civil Defence Peeni Henare announced today. “The Temporary Accommodation Service (TAS) has been activated by the Ministry of Business, Innovation and Employment to help ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Bridges: Over-hyped and under-delivered
    “Is that it?” That’s Finance Minister Grant Robertson’s response to Simon Bridges’ much-hyped economic speech today. “Simon Bridges just gave the most over-hyped and under-delivered speech that I can remember during my time in politics,” Grant Robertson said. “It’s not surprising. Simon Bridges literally said on the radio this morning ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Police to trial eye in the sky in Christchurch
    A trial deployment of the Police Eagle helicopter in Christchurch will test whether the aircraft would make a significant difference to crime prevention and community safety. “The Bell 429 helicopter will be based in Christchurch for five weeks, from 17 February to 20 March,” said Police Minister Stuart Nash. “The ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Momentum of trade talks continues with visits to promote Pacific and Middle East links
    The Government has kept up the pace of its work to promote New Zealand’s trade interests and diversify our export markets, with visits to Fiji and the United Arab Emirates (UAE) by Trade and Export Growth Minister David Parker. Building momentum to bring the PACER Plus trade and development agreement ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Coalition Govt’s investment in Customs nets record drugs haul: 3 tonnes stopped at borders in 2019
    The Coalition Government’s investment in a strong border and disrupting transnational organised crime produced record results for stopping drugs in 2019, says Minister of Customs Jenny Salesa. The illegal drugs were seized at the New Zealand border by Customs, and overseas by Customs’ international border partners before the drugs could ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Separated scenic cycleway starts
    Transport Minister Phil Twyford today kicked off construction of a separated cycleway alongside Tamaki Drive. A two-way separated cycleway will be built along the northern side of Tamaki Drive, between the Quay Street Cycleway extension and Ngapipi Road. There will be a separate walking path alongside. Phil Twyford said giving ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Earthquake-Prone Building loan scheme: eligibility criteria announced
    Owner-occupiers of unit and apartments living in earthquake-prone buildings will have certainty about the financial support they’ll be eligible for with the release of criteria for an upcoming assistance scheme, Minister for Building and Construction Jenny Salesa says. The Residential Earthquake-Prone Building Financial Assistance Scheme will help unit owners facing ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Travel restrictions to remain in place as coronavirus precaution
    Temporary restrictions on travel from China will remain in place as a precautionary measure to protect against the spread of the COVID-19 coronavirus. The restrictions which prevent foreign nationals travelling from, or transiting through, mainland China from entering New Zealand have been extended for a further 8 days. This position ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Over $1 million to help Tairāwhiti youth into employment
    Employment Minister Willie Jackson announced today that Tairāwhiti rangatahi will benefit from an investment made by the Government’s He Poutama Rangatahi (HPR) scheme. The funding will go to the Tautua Village, Kauneke programme and the Matapuna Supported Employment Programme which will fund 120 rangatahi over two years. “Both programmes work ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • School attendance has to improve
    All parents and caregivers need to ensure that their children go to school unless they are sick, Associate Education Minister Tracey Martin said today. “The school attendance results for 2019 show, across the board, a drop in the number of students going to school regularly,” the Minister says. “Apart from ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Crown and Moriori sign a Deed of Settlement
    A Deed of Settlement agreeing redress for historical Treaty claims has been signed by the Crown and Moriori at Kōpinga Marae on Rēkohu (Chatham Islands) today, Minister for Treaty of Waitangi Negotiations Andrew Little has announced. Moriori have a tradition of peace that extends back over 600 years. This settlement ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Waikato Expressway driving towards completion
    Transport Minister Phil Twyford today with Māori King Tuheitia Pōtatau Te Wherowhero VII officially opened the country’s newest road, the $384 million Huntly section of the Waikato Expressway. The 15km four-lane highway with side and central safety barriers takes State Highway 1 east of Huntly town, across lowlands and streams ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • 3400 New Zealanders treated in first year of new hepatitis C treatment
    The rapid uptake of life-saving new hepatitis C medicine Maviret since it was funded by PHARMAC a year ago means the elimination of the deadly disease from this country is a realistic goal, Health Minister David Clark says. Hepatitis C is a blood-borne virus which attacks the liver, proving fatal ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Kaupapa Māori approach for homelessness
      Kaupapa Māori will underpin the Government’s new plan to deal with homelessness announced by the Prime Minister in Auckland this morning. “Māori are massively overrepresented among people experiencing homelessness, so, to achieve different outcomes for Māori, we have to do things very differently,” says the Minister of Māori Development ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government steps up action to prevent homelessness
    1000 new transitional housing places delivered by end of year to reduce demand for emergency motel accommodation. Introduce 25% of income payment, after 7 days, for those in emergency motel accommodation to bring in line with other forms of accommodation support. Over $70m extra to programmes that prevents those at ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Important step for new financial conduct regime
    Clear requirements for ensuring customers are treated fairly by banks, insurers and other financial service providers are included in new financial conduct legislation that passed its first reading today. “The recent reviews, by the Financial Markets Authority (FMA) and Reserve Bank of New Zealand, into the conduct of banks and ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Applications invited for $7 million Regional Culture and Heritage Fund
    Applications are now open for the fifth round of the Regional Culture and Heritage Fund Associate Minister for Arts, Culture and Heritage Grant Robertson announced today.   “I am delighted to open this year’s fund which has some $7 million available to support performing arts venues, galleries, museums and whare ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Law Commission appointment celebrates Māori and women
    The Minister of Māori Development, Hon Nanaia Mahuta today congratulated Associate Professor Amokura Kawharu on her appointment as the next President of the Law Commission.  “Amokura Kawharu will be a standout in her new role, leading in an innovative and forward looking approach to the law reform process. She will ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Associate Professor Amokura Kawharu Appointed Law Commission President
    Auckland University legal academic Amokura Kawharu has been appointed as the next President of the Law Commission, Justice Minister Andrew Little announced today.    Associate Professor Kawharu will take up her new appointment on 11 May 2020.   “I would like to congratulate Associate Professor Kawharu on her appointment,” Andrew ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Minister of Employment launches Youth Ready Employer Programme
    A programme for employers to help them engage effectively with younger employees was launched today by Minister of Employment, Willie Jackson. The Youth Ready Employer Programme contains a range of on-line templates that employers can easily access to help with employing and retaining young people in their businesses. The programme ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Budget 2020 date announced
    Budget 2020 will be delivered on Thursday 14 May, Finance Minister Grant Robertson announced today. “This year’s Budget will continue the Coalition Government’s focus on tackling the long-term challenges facing New Zealand while also preparing the economy for the future. “Those challenges and opportunities cannot be resolved in one budget, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Prime Minister’s tribute to former Prime Minister Mike Moore
    I move, That this House place on record its appreciation and thanks for the devoted and distinguished service to New Zealand by the late Rt Hon Michael Kenneth Moore, member of the Order of New Zealand, a member of Her Majesty's Most Honourable Privy Council, an Honorary Member of the ...
    BeehiveBy beehive.govt.nz
    1 week ago