Domestic Executive» Soapbox

Stop Press – National wins election

Him Indoors — Sat, 08 Nov 2008 10:53:49 +0000

We have a new prime minister. Helen Clark has conceeded defeat (not a dry eye in the house – why are concession speeches often a politician’s best ?) and John Key is the new PM.

Provisional result: National 59 seats, Labour 43, Green 8, Maori 5, ACT 5, Others 2. We are likely to have a National-ACT coalition.

2.3 million votes cast which I think is a record.

Our electorate, Rimutaka, stayed Labour.

The dogs that didn’t bark

Him Indoors — Wed, 05 Nov 2008 18:57:23 +0000

As Kiwis brace themselves to do their democratic duty this weekend (polling day is Saturday), it’s worth reflecting on two big issues that haven’t been discussed during the campaign. In other words the dogs that haven’t barked.

First up is NZ’s declining place in the world. A nation’s wealth can be crudely expressed in terms of GDP per capita, and back in 1950 NZ was the 6th wealthiest nation on earth – for the record, back then:

1. Qatar
2. Kuwait
3. United Arab Emirates
4. United States
5. Switzerland
6. New Zealand
7. Luxembourg
8. Venezuela
9. Australia
10.Canada

(Arguably, in 1900 NZ actually was the wealthiest nation on earth, but economic data was a bit patchy back then).

But fast forward to 2007 and the picture is very different. NZ has declined to 32nd place:

1. Qatar
2. Luxembourg
3. Norway
4. Brunei Darussalam
5. Singapore
6. United States
7. Ireland
8. Hong Kong SAR
9. Switzerland
10.Kuwait
…
32.New Zealand

And it may well get worse. As former eastern European countries join the EU and begin to catch up, it is projected that by 2025 NZ will have fallen to 47th place.

So what happened ? Well the price of wool collapsed in 1966 and has never really recovered. Per capita measurements are more volatile for small countries, after all adding a million to the population reduces NZ’s GDP per capita by 25%. The UK joining the EEC meant trade with former colonies became less important. Other nations have recovered from exceptional historical circumstances – western Europe in the 1950s after the war and eastern Europe after the fall of communism.

But underpinning all this is the fact that NZ’s long term growth rate has been a measely 1.5% per year, against an average for developed nations of 2%. Compounded over decades that makes a huge difference. The root cause has been an inability to diversify much beyond an agricultural, commodity based economy, whilst failing to use technology effectively to shrink the distance between NZ and world markets.

Belatedly, this issue of long term competitiveness is starting to get some attention, mainly from think tanks and universities, but it’s not an issue that you will find Helen Clark and John Key debating. The electoral lifecycle is three years and that tends to set the terms for speculation about the future.

The second big issue is the environment. We have all seen the tourism adverts and everybody knows that NZ is clean and green, right ? Except, erm, it isn’t. To be more precise, NZ is environmentally friendly to the extent that there are only 4 million of us to do any damage.

The WWF released a report last week that rated countries on their environmental footprint per capita and NZ came in as sixth worst. Kiwis apparently require 7.7 ‘global hectares’ each to sustain our lifestyle, the average is 2.7 ha, but the world has only 2.1 hectares per person actually available.

The reasons ? Well New Zealand is now second only to the United States both in the number of cars owned per person and in the number of kilometres travelled in those cars. Meantime, farming has switched massively from sheep farming to dairy (the Chinese are developing a taste for dairy products and NZ sees an opportunity). Cows produce an inordinate amount of methane which is a greenhouse gas and they pollute rivers and streams.

But do not expect to see any election candidates offering to restrict Kiwi’s God given right to car ownership or to challenge the entrenched interestes of agri-business (an honourable exception being the Greens).

Poll News: National still leads decisively, but only by a hair’s breadth when compared to a combined Labour-Green vote. I will be blogging on the election results as they happen on Saturday night. The best general coverage of the election I’ve found is in Time magazine – an excellent feature: click here to read it.

I fear we have somewhat lost out for global attention against other elections elsewhere. Go Obama !!

A Great Debate

Him Indoors — Mon, 27 Oct 2008 08:59:27 +0000

As voting day draws close, attention focuses on our leaders debating the vital issues of the day. In America this has seen millions of people tuning in to watch the presidential candidates arguing back and forth the challenges that await the next leader of the free world. Wars overseas, the economic crash, climate change, all finely argued with points made passionately and with intellectual rigour. Well, maybe not……..

“I wants it…..IT’S MINE…….my precioussss…….” John McCain has apparently been watching Lord of the Rings DVDs on the campaign bus.

However at this end of world, political debate tends to be a whole lot more pragmatic, partisan, and not to put too fine a point on it, earthy. Helen Clark and John Key recently debated on live TV, a spectacle thought to have been watched by literally thousands. To be fair, a level of decorum was maintained during the opening remarks. But this was not a place for soaring oratory and soon enough, true to form, they were rowing like a pair of drunks at closing time. The ancient Greeks must somewhere be wondering what has happened to their democratic ideals. It all kicks off about 50 seconds into this clip……

[youtube]http://www.youtube.com/watch?v=bJXtcg3HuW4[/youtube]

I suspect part of the reason why political discussion in NZ is so down to earth and understated, is that it reflects the idealised Kiwi attributes of hard work, practicality and being a team player. After all the nation’s founding myth is that the country was settled in the mid-19th century by doughty, laconic, rugged farmers, probably from the highlands of Scotland. This view has even survived recent academic research that has shown that the archetypal immigrant back then was more likely to have been, ahem, a shop keeper from Surrey.

Guildford haberdashers depart for the New World.

Election fever has even reached Kaitoke and we were actually canvassed last week. Those of you know how remote we are will appreciate that this was candidate fighting for every vote. He even dealt reasonably well with that bane of a canvasser’s life, being assault by two large over friendly hounds (I speak from personal experience).

But what really impressed me, given the candidate was in fact Ron Mark, a NZ First MP, was that he didn’t whilst talking to us refer to his party’s main policy being to limit immigration.

Now this on the surface appears to be a tough sell in NZ. Firstly, Kiwis are great travellers. There are more New Zealanders living in London than in Wellington. There are so many Kiwis living in Australia we’ve had to rename it the West Island.

Secondly, how to put this delicately, there are large open expanses in NZ where we could actually use a few more folk. NZ has a slightly greater land mass than the UK and there are only 4.2 million of us, 2.5 million of whom live in the three main cities.

NZ: over-run by immigrants. Allegedly.

But NZ First are a small party who won’t win any electorates, so their hope is to get over the magic 5% of party votes that lead to proportional seats being allocated. So they play on the fears of a small sector of the electorate, particularly older voters. A downside of PR is that it can reward more extremist parties with undue influence. (I’m being generous here, I don’t think NZ First have a problem with white, middle class, migrants. Much of their rhetoric is also about why free trade with China is a bad idea. )

Finally, to finish on an uplifting note, here’s a demonstration that words really can still change the world. Here’s why this man is going to be elected as POTUS next week – whether you agree with Obama’s policies or not, this is oratory of a high order:

[youtube]http://uk.youtube.com/watch?v=_9OhVMHIuO4[/youtube]

Poll watch: Kiwi opinion polling is still in it’s infancy and polls are fluctuating wildly. The only conclusions to be drawn are that National still has a handy lead but Labour are closing, whilst the Greens are polling strongly (over 10% in most polls). I think it’s still 50/50 whether we end up with a National or a Labour/Green led coalition. 10 days to polling day.

The kiwi is melting too

Domestic Executive — Sun, 12 Oct 2008 23:52:17 +0000

Posted by MT from his Soapbox

Another week and the headlines have been dominated by the financial woes of a small, remote storm-swept island….yep NZ and Iceland have more in common than most Kiwis would like to acknowledge. It’s a little known fact that NZ actually led the world into recession at the end of June (GDP has already fallen 0.5% in the first half of this year). Well we do like to be first.

The reason why is painfully simple; the average Kiwi is spending a dollar and twelve cents for every dollar they have earned. As students of the Micawber principle will know, this inevitably leads to an unhappy ending.

So what has the money been spent on ? Houses. NZ has no stamp duty, no capital gains tax and loses incurred on property rented out can be written off against income tax. End result – what the IMF reckons is the third most over valued housing market in the world (behind Spain and Ireland).

There is something of a correction underway, house prices are now tanking (down over 5% in the last three months), but it still has a way to go I suspect.

This all wrecks havoc with the currency. Since the advent of the euro and other countries pegging currencies to the US dollar, the poor Kiwi dollar is now one of the smallest major currencies traded globally. Ripples in the exchange markets in London and New York are huge waves by the time they hit NZ.

Last week alone the Kiwi dollar bought anything between 55 and 65 US cents, a huge range in five days. This makes it very difficult for small to medium companies to trade off-shore. It also means more $100M a year is spent on foreign exchange costs, much of it for trade with Australia. And it plays havoc with the tourism industry.

There is a very strong case for currency union with Australia, which comes up for debate from time to time. After all, Sydney is closer to Auckland than it is to Perth. Whether the global meltdown is finally the trigger to make it happen, we’ll have to wait and see.

You may not be entirely surprised to learn that little of this has come up in the election campaign, though John Key is finding out that making a fortune as an investment banker for Merrill Lynch is maybe not the best CV just at the moment.

The polls which were showing a National lead of over 10% at the start of the campaign have narrowed to between 3 – 6 %. 26 days to polling day.

Soap box – it takes all sorts

Domestic Executive — Sat, 04 Oct 2008 17:28:44 +0000

OK, I give in. After a close interest in my blog it’s time to let him indoors to have a spot where he can do his thing. It’s only fair, we share pretty much everything else so why not this blog.

He’s been a real supporter to me since I started this blog, checking stats, offering feedback and making suggestions. But no more. He can have a slot to get on his own soapbox and tell you all the things he’d wish I’d tell you. I’m sure you’ll enjoy this excursion and it will stop him nagging me all the time!

Hi MT here, delighted to finally get a spot on this Domestic Executive blog. I can’t wait to share with you all my views on life here in New Zealand. Now friends and family, don’t switch off. I know you miss me really!

I thought I’d start my first Soapbox spot with my favourite subject.

Excitement over whether O’Bama can be the latest Irishman to sit in the Oval Office, not to mention speculation around Sarah Palin’s ability to complete a grammatically correct sentence, have overshadowed the fact that the USA is not the only former colony going to the polls. For the record the Canadians vote on 14^th October and down here in NZ we make our triennial trip to the local polling station on 8^th November.

The state of play here in New Zealand may feel eerily familiar to UK readers of this blog – a struggling third term Labour government is getting stick from voters concerned about a slowing economy and a tanking housing market. The right of centre opposition, National, have been riding high in the polls by the simple expedient of not announcing any policies and watching the government dig itself into deeper holes.

The Prime Minister, Helen Clark, has been around for a long time and is perceived as dour but good in a crisis. The opposition leader, John Key, is wealthy, charming and totally inexperienced in government. Sound familiar?

But here’s where the comparison ends because NZ, the first county in the world that gave women the vote, has also blazed a trail when it comes to proportional representation. We have a voting system that is gloriously, barmily convoluted – so much so it can take weeks to divine a winner. It is Byzantine in its complexity.

Deep breath, here goes – we have 63 constituencies or ‘electorates’ where people vote for a candidate on a first past the post basis. So far, so simple.

But then things take a detour down a very long and winding road. People have a second vote for a party and these votes are used to proportionately allocate a further 51 seats. This uses the legendary Sainte-Lague allocation formula, derived as it is from d’Hondt quotients and predicated upon a 5% threshold. It is really that simple. These MPs are referred to as list MPs and are nominated by political parties – so it’s a bit like being a constituency MP but without any troublesome constituents to worry about.

To add a layer of icing on the electoral cake there are a further seven Maori electorates, which date back to the 1860s. There is a separate electoral roll for these electorates which people of Maori descent can choose to sign up to instead of the general roll.

So what does all this mean? Well, coalition is the name of the game. Whilst Labour and National are overwhelmingly the biggest parties, the smaller parties have a large say in putting together a workable majority. The Green party normally clears the 5% hurdle to be allocated some proportional seats (but a narrow squeak last time) and the Maori party will take a majority of the seven Maori seats. There are then a plethora of smaller parties, many of which don’t amount to much more than vanity projects for their leaders.

Helen Clark, the prime minister, has proven hugely adept at building and managing coalitions, a trick that National has still to master. A good example is that the current government relies on the support of NZ First and its maverick leader Winston Peters. They are not natural allies to put it mildly, but Clark in a touch of political genius assigned Peters to Foreign Affairs and hence he has spent the greater part of the last three years overseas. This has not, though, prevented Peters from getting embroiled in a party funding scandal.

So whilst National has held large (though now narrowing) leads over Labour , the eventual shape of the next government is just as dependent on which smaller parties can get over 5% of the vote or can hang onto their electorates.

Watch this space for next week’s update as election fever grips the nation……