Heartless government

A few stories of recent weeks which show exactly what kind of government we have.

Last August, Emma-Lita Bourne died of pneumonia because the state house her family lived in was cold and damp. Soesa Tovo died after being admitted to hospital with heart and lung problems and pnuemonia. His house was so cold and damp they had to wipe down the ceiling every morning.

The response from Minister of Housing Nick Smith?

“People dying in winter of pneumonia and other illnesses is not new.”

Because people who expect state houses to not be so cold they kill people are clearly confused about the concept of mortality.

Marnia Heke and her children are living in their car because they can’t find stable accommodation. She doesn’t want to go to a motel for a night because it’ll get the kids’ hopes up.

The response from WINZ?

“We have told her that the Ministry would help her to cover the financial cost of temporary accommodation. We wouldn’t be paying for all of the accommodation as it would be reasonable to expect her to contribute.”

Because when a woman and her three kids are sleeping in their car what’s really important is making sure we spend the absolute minimum amount required to put a roof over their heads.

Peter Talley is given a knighthood for “services to business”. His business involves locking out workers, paying women less because they’re women, and trying to force workers to sign individual employment agreements which deny them the right to hold workplace meetings, criticise Peter Talley and his mates publicly, or deny their boss access to their entire medical history.

The response from the Deputy Prime Minister?

“It’s a big complicated business and I’m sure there’s been things go wrong over time, but I think the contribution he has made over the years has been beneficial.”

Because systematically, repeatedly exploiting your workers is just a boo-boo.

This is heartless government. A government that literally does not care about people. Not about providing warm safe housing (it might cost too much). Not about making sure they can come home every day after work (it might cost too much). Not about protecting workers’ right to freedom of speech and forming unions (it would definitely cost too much).

New Zealand is surely a better country than this.

The surplus lie

Andrew Little delivered his pre-Budget speech in Wellington yesterday, and the pullquote everyone’s talking about was some seriously no-nonsense stuff:

…[National’s] promise was clear. Their good economic stewardship would see us in surplus.

And now they’ve abandoned their promise.

National’s talk now is about how achieving surplus was an “artificial target” and that getting a surplus is “like landing a 747 on the head of a pin.” A lot of effort has gone into glossing over the broken promise. But I see it for what it is – one of the biggest political deceptions in a lifetime.

You can quibble the semantics, of course – is it not really a lie if Treasury figures predicted we’d be in surplus? Or is it still a lie because Treasury’s predictions are often laughably optimistic and wrong (when National is in power, anyway)? But come on, whose word can we rely on regarding the Budget if not Treasury’s?

The room to quibble is what makes it a lie.

Balancing a government budget is nothing like balancing a chequebook, and not just because ordinary citizens can’t print their own money at will. There are so many moving parts, so many tricks, so many points which can be manipulated ever so slightly

That’s why it was ridiculous for Bill English to say even a $1 surplus would count as “significant“. When you’re managing nearly $100 billion in revenue and spending, there’s infinite room to tinker. You can make all kinds of assumptions about how much tax will be collected. And we’ve seen the tinkering: the delay in lowering ACC levies. The interest-free “loan” to the NZTA which conveniently counts as an asset, not spending. The assumed cuts to EQC’s insurance liabilities.

The lie isn’t really about whether-we-achieve-surplus or whether-we-don’t. The lie is everything that National’s constant promises of surplus implies: that a surplus is objectively good; that a surplus proves their superior economic management abilities (but a deficit is all Labour’s fault; they had nine long years to deliver surpluses for Bill English); that a surplus proves things are back on track, the economy is doing fine, things can’t be that bad – so obviously inequality’s a myth, there’s no housing bubble, Christchurch is hunky-dory, we don’t need state houses or workers’ rights or any of that rubbish, and if you’re very, very good you’ll get jam tax cuts tomorrow.

A surplus proves National are right about everything.

That’s the lie we’ve been sold, time and time again, by this government. And given the harm it has done and is doing to the New Zealanders who can’t afford a first home, much less an investment property, who can’t find secure employment or buy the kids a new pair of winter shoes, who are living in cars and queuing for foodbanks at 3am – I don’t think it’s too strong to call it one of the biggest political deceptions of our lifetime.

QOTD: Gordon Campbell on SkyCity

At Scoop:

For the record, we started out last week with (a) Prime Minister John Key telling the public that a $402 million convention centre would be only an ‘eyesore’ in downtown Auckland with the clear signaling that (b) the extra $128 million was probably necessary and justified under the contract. Within 24 hours and driven by the potential risk to his own credibility, Finance Minister Bill English became (c) the first Cabinet heavy hitter to break ranks and question the extra spending which led to (d) Key suddenly agreeing that he’d need a lot of convincing to spend the extra millions which led to (e) SkyCity agreeing to go back to the drawing board and (f) design and build a new convention centre for the original price that would (g) somehow be just as good. Yeah, right. Clearly, the screeching U-turns were being driven by nothing other than the public’s outrage at gifting SkyCity with $128 million on top of its other goodies.

There’s been some great campaigning by Labour and even the Taxpayers’ “Union” on this issue – essentially coordinating the increasing concerns people have felt about the SkyCity deal ever since it was first announced.

You can spin any number of theories out of the Government’s, and its Ministers’, behaviour. Is this yet another move by English to set himself apart from his Dirty-Politics-stained colleagues? Is Key afflicted with third term arrogance, unable to recognise that many people are tiring of the “actually quite relaxed” approach he takes to governing the country? Has Joyce’s bungling of SkyCity opened up a new path to career redemption for Judith Collins? Will everything be forgotten as soon as the flag referendum gets a definite date?

Whichever’s your favourite, 2015 is not shaping up to be a good year for National.

No fix for housing affordability as long as we ignore what’s actually affordable

Housing affordability has been a huge issue in New Zealand for a long time, but some extra fuel has been added to the fire by a recent survey which shows housing in Auckland is less affordable than in New York, Los Angeles, or Tokyo.

The survey ranked 378 cities in nine countries and considered the cities affordable if the median house price was a maximum of three times more than the median annual household income.

Auckland’s median house price is $613,000 – 8.2 times the median income of $75,100.

There are a lot of reasons for housing being unaffordable – property speculators driving the prices to ridiculous levels, a National-led government which would love to see wages drop – and a lot of different solutions, depending on whether you listen to the people who make money flipping property (open up more land to development, relax regulations on the building industry) or the people who care about people (a living wage, more stringent taxation on speculation).

Personally I think anyone who looks at Auckland and goes “you know what this city needs to do? Sprawl more!” needs to be banned from ever commenting on Auckland issues because they clearly don’t live/have never lived there (or at least, not in the sprawl they proclaim to love).

Principally I’m concerned by the relaxed attitude Mayor Len Brown seems to have:

He defines “affordable” as under $500,000, which is still more than six times the median household income, but insists more options are being developed.

“A good number of [new apartments] are high $200,000s to low $400,000 purchase prices, and what we’re seeing with those developments is they are selling out,” says Mr Brown.

“The most recent example I’ve got is that the St James apartment development, which is being built in conjunction with the renovating of the great old St James theatre. That’s only just come on for pre-sale, and it’s already pre-sold by half – and they haven’t even started the project.”

I immediately question whether the kinds of people who can pre-buy apartments which haven’t even started construction are the kind of hardworking/struggling/middle-New-Zealand families who find it impossible to get their first home – if only because banks demand a far higher deposit on apartments. Even if you’re talking only $280k for the place, you may need to find over $80k just to get your foot in the door.

And it brings to mind what I was saying just yesterday about taking numbers out of context: what use is it knowing that unbuilt apartments are selling like hotcakes unless we ask who is buying them? What proportion are first-home-buyers? New Zealand-based investors? Overseas-based investors? Corporate interests?

But the other problem is this: Brown defines “affordable” as “under $500k”. This is a common bit of silliness in the house-price debate, with even Labour under David Shearer declaring that “affordable” covered everything from $300,000 on-average-per-house to $550,000 for a single-family home.

The problem is, the Demographia survey defines “affordable housing” as a median price of no more than three times the median household income. Across New Zealand, for the year ending 30 June 2014, that was $72,394 – giving an “affordable” median price of $217,000. For Auckland, as quoted above, it’s $75,100 – a bit higher, but we’re still talking a median of $225,000.

Building a lot of apartments in the “high 200s to low 400s” might drag the current obscenely-high median lower, but it’s still not getting us anywhere near “affordable”.

There may be many reasons for housing unaffordability, and many possible solutions, but we’re never going to make progress on the issue as long as we can’t even be realistic about what “affordability” is – and acknowledging that it’s far less than those of us lucky enough to already own our homes would assume.

(Repost) The end of the inequality debate?

Originally posted at On The Left.

Inequality has become a central political issue in New Zealand and around the world. But there’s always been some argument, from the right, that inequality just happens, or provides an incentive for people to pull themselves up with their own bootstraps.

Now, a new OECD report is fairly straightforward about the issue:

New OECD research shows that when income inequality rises, economic growth falls. One reason is that poorer members of society are less able to invest in their education. Tackling inequality can make our societies fairer and our economies stronger.

New Zealand gets a specific mention:

Figure 2 shows by how much the GDP growth rate would have increased or decreased over the period 1990-2010 had inequality not changed between 1985 and 2005 (The most recent inequality trends since then are not taken into account as they affect future growth patterns).

Rising inequality is estimated to have knocked more than 10 percentage points off growth in Mexico and New Zealand…

As Grant Robertson put it on Morning Report, “This isn’t the Socialist International. This is the OECD – the conductor of the Trickle-Down Economics Choir – saying that the show’s over.”

So you might think that’s the end of it – surely this is an unequivocal explosion of the trickle-down economics theory, and we can all turn to finding actual solutions to reverse inequality and the real harm it causes in people’s lives.

But unfortunately, our Minister of Finance has taken the John Key line of saying he doesn’t accept the findings of the report. It’s one of the great strategies of this government, acting like there’s no such thing as objective fact and the only thing that matters is how you frame something.

We’re not going to see any kind of shift in their behaviour or policies (though I’m sure we’ll definitely hear them talk about inequality more, as we did in the lead-up to the election.) But what this report gives us is another tool to use against the National/ACT narrative – that the right are pro-growth, that tax cuts and penny-pinching will lead to prosperity, that there’s no alternative to their mean-spirited policies.