Who'd have thunk it?

So, it turns out that the New Zealand Taxpayer's Union are simply a paid front for the cancer industry:

A right-wing lobbying group which has railed against cigarette tax increases and plain packaging laws in New Zealand counts a tobacco giant among its corporate funders.

The NZ Taxpayers’ Union has not disclosed its financial support from tobacco companies in its reports or press releases, with one public health academic calling on it to be more transparent about its donors.

The Guardian identified the relationship between the Taxpayers’ Union and British American Tobacco as part of its series on “the huge damage of the tobacco epidemic ... and the industry behind it”.

In an investigation into the ties between “free-market thinktanks” and the tobacco industry, the Taxpayers’ Union was identified as being supported by multinational firm British American Tobacco.

A British American Tobacco spokesman told Newsroom the company had been financially supporting the Taxpayers’ Union for three years, paying “a standard annual corporate membership fee”.

This is a basic conflict of interest, which could have been resolved by simply saying where their money was coming from. But that would have defeated the purpose: what British American Tobacco is paying for is "independence", the illusion that people who aren't paid by them advocate for their interests. And of course if they'd said "we take money from the cancer industry" on the bottom of a piece defending that industry's interests, everyone would have dismissed it for the hackery it is.

Meanwhile, I'm wondering: now that they've been exposed as intellectual mercenaries, will the New Zealand media continue to print the Taxpayer's Onion's PR? It will be an important test of whether they have even basic journalistic standards.

Dirty politics continues as usual

Two of the central allegations of Nicky Hager's Dirty Politics were that the National Party was using a "two track" strategy of using "independent" bloggers such as Cameron Slater and David Farrar to deniably smear its opponents and intimidate its critics while keeping John Key's hands clean, and that it exercised a two tier system of access to official information, whereby it was withheld from critics but provided freely to its friends (including those deniable attack bloggers) to scoop or discredit the former.

We had a great example of the former before the election. Anne Tolley released an anti-gang strategy, but the numbers in it were deeply dubious. When sociologist Jarrod Gilbert pointed this out, he was repeatedly smeared by Farrar in an effort to silence him.

And now we have an example of the second. Because it turned out the Minister's figures were wrong. And news of this was leaked to Farrar early, so he could premptively apologise and forestall criticism.

In other words, despite a book detailing National's dirty tactics, they're still using them. And they'll keep doing it until voters start punishing them for it.

(Someone is looking into this, but no doubt they'll be told that the Minister was wearign her "MP" hat, even though she was providing official information which she does not legally hold or have access to in that role).

DPF on slave-fishing

While National drags its feet on slave-fishing, DPF gets it. The problem is real. And its not just an employment issue:

A failure to pay minimum wages under NZ law (which the FCVs have agreed to do) is the least of the abuses. They get told they will lose the little pay they do get unless they lie to the NZ authorities about how much they are paid. Any complaints can see them lose bonds worth more than their earnings. They are forced to work long and dangerous hours with no regard for safety.

But even worse than there, there are several documented cases of physical violence, sexual abuse and even rape of the (mainly Indonesian) staff who work on these vessels. They are basically treated as slaves during their incarceration on the vessels. Actually many slaves in the Roman republic were treated better, than what has happened to these workers in our territorial waters.

These abuses have gone on for far too long. New Zealand has even ended up on the watch list of the US State Department whose annual Trafficking in Persons Report mentions fishing in New Zealand as a problem area.

This is not something our government can turn a blind eye to or whitewash for the benefit of its rich mates. DPF gets that too, and recognises that the eventual solution may have to be requiring all vessels fishing in our EEZ to be flagged here so as to be fully subject to New Zealand law. As for the economic consequences, bugger them; as DPF says,

we can't allow these abuses to continue in our waters, by ships fishing New Zealand quota.

If only the government would take that line...

The perils of pollwatching

DPF has a blog up on Stuff today, breathlessly asking whether National is now the underdog, based on the results of the latest Roy Morgan poll (which shows a slight uptick in support for Labour and the Greens). Its a perfect example of the pollster's fallacy, the imbuing of monthly statistical noise with meaning. As the pollsters always tell us, what matters in polls is the long-term trend, not today's results. And yet pollster DPF seems quite happy to ignore this when he has a deadline to meet - even though he presumably knows better.

(This, BTW, is why I don't blog about polls: because I'm not interested in pretending that noise - as opposed to broad levels of support - is meaningful).

What this poll does show us however is how tight things are for National. With no significant coalition partners left, they need to practically win a majority themselves in order to be able to govern easily. They almost did that this time, with 47% of the vote (which wasn't enough to save them from John Banks). But as a second-term government, they've got nowhere to go but down. Which gives them problems not just at the next election, but in the longer term as well. Under MMP, parties need friends - and National has none. No wonder they wanted to get rid of it!

Inequality and social mobility

Bill English isn't the only one bullshitting on inequality. Over on Kiwiblog, DPF spouts the old right-wing meme that inequality doesn't matter provided you have social mobility. This of course assumes that there is social mobility in New Zealand. And the evidence on that isn't very good.

The Standard looked at this last year, using Statistics New Zealand data on the movement of people between income deciles between 2002 and 2007. The short version:

most people are in the same decile five years later or very close to it. There’s some mobility among the lower deciles and some mobility among the higher deciles but very few people (only 18%) who were in the 10th (richest) decile in 2002 were below the 8th five years later. Only 10% of people who started off in the lower five deciles made it into the top two or three.

In fact, the mobility you can see is largely a factor of life-cycle – students moving into high paid jobs etc. The study breaks down the age groups and income mobility is very low with life-cycle movement taken out.

(Emphasis added).

That's just a five year period. I'd like to see more, but social class and inequality is largely unstudied in New Zealand because of our myth of being a "middle class society". That's something we need to change. Just as we can't talk about discrimination without facts, we can't talk about inequality either.

To add to the picture: the OECD looked at social mobility earlier in the year. While they didn't have direct data from New Zealand, they did have a good causal model, in which education policies play a key role. Unfortunately, New Zealand has a very strong relationship between parental socioeconomic background and educational achievement, which suggests lower than average social mobility. And the government seems intent on making that problem worse.

But apart from the evidence, DPF is just wrong. Inequality does matter, regardless of social mobility. The level of inequality in a society affects rates of physical and mental health. Societies with greater inequality have poorer educational outcomes and greater rates of violent crime and imprisonment (they also have low social mobility as well). This is not DPF-style ideological bullshit; it is a proven empirical fact. Inequality is bad for everyone. And social mobility doesn't solve that.

More spin on Schedule 4

Over on KiwiBlog, DPF produces a list of mining permits granted for schedule 4 land, given in answer to a Parliamentary question by David Garrett:

Mining activity of a modest nature is currently taking place in three areas listed in Schedule 4 of the Crown Minerals Act. The details of the permits are as follows:

Mining Permit 41870: Granted to Peter Fielding on 17 March 2005 to undertake small scale alluvial gold and gemstone mining in the Hart Creek catchment within the Paparoa National Park.Special Purpose

Mining Permit 42024: Granted to the Broken Hills Gold Company Limited on 2 August 2000 to undertake underground mining for gold, silver, quartz and clay by traditional mining methods at Broken Hills within the Coromandel Forest Park.Waiho River Gold Fossicking Area:

Gazetted by the Crown on 19 September 1996, under section 98 of the Crown Minerals Act 1991, to allow for public recreational gold mining (using hand held non motorised equipment) without the need for a permit in the Waiho River within the Westland Tai Poutini National Park. Gold fossicking areas are administered by the Department of Conservation.

DPF concludes:

So mining is now okay on Section 4 land, so long as it is small scale?

Well, yes - that's what the law (which National passed) says. Section 61(1A) of the Crown Minerals Act allows mining permits to be granted in Schedule 4 land for limited purposes, including

(d) Gold fossicking carried out in an area designated as a gold fossicking area under section 98 of the Crown Minerals Act 1991

(e) Any activity carried out in accordance with a special purpose mining permit for demonstrating historic mining methods as provided for in the relevant minerals programme required under section 13 of the Crown Minerals Act 1991.

And this is appropriate. Gold fossicking is a zero-impact activity and does not affect the local environment. Demonstrations of historical mining methods are also highly unlikely to affect the local environment, since they are conducted on a small scale, while enhancing the recreational value of the conservation area. And all three permits are granted under these clauses.

The Minister certainly knows this, so if DPF has reproduced his full answer (which is not on the Parliamentary website yet - interesting that National's web spindoctor gets it before Parliament does), then he is being deliberately disingenuous in an effort to spin his way out of trouble. And so, almost certainly, is DPF. He's read the law. But as usual, he'd rather lie and spin.

Update: And here's what Mining Permit 42024 is used for: tourism

DPF doesn't care about democracy

A couple of years ago, DPF went apeshit about the then-Labour government's Electoral Finance Act. While intended to protect democracy from the unequal influence of the rich, DPF saw it as an attack on democracy. So he vented online, raised funds, even launched billboards comparing the government to Mao Zedong, Kim Jong-Il, and Frank Bainimarama. So you'd think that when the present government announced plans to sack an elected council and strip 560,000 people of their vote in regional council elections for four years, as a "defender of democracy", he'd be similarly outraged about it, right?

Yeah, right. He supports it. Taking people's votes off them is fine if you take them from people who vote the "wrong" way.

So much for DPF's commitment to democracy.

DPF on asset forfeiture

Over on Kiwiblog, DPF responds to a piece by Jordan Carter on asset forfeiture, and voices his opposition to the government's Criminal Proceeds (Recovery) Bill:

I largely agree with [Jordan Carter]. I empathise with the desire to stop gangs living off the proceeds of illegal activity, but having the state able to confiscate assets not on the basis of convictions beyond a reasonable doubt, but suspicion of wrong doing by people not charged or even found not guilty is wrong.

Yes under this law one can be found not guilty of (for example) selling drugs yet the Government could take your house away all the same if it can make a case on balance of probabilities that you funded it from selling such drugs. And they could even take the house away before they even try you on the criminal issue.

DPF's opposition is commendable, but he leaves out one very significant fact: that the National Party supported the bill at its first reading. Jordan criticised his party where criticism was due; it would be nice if DPF showed enough intellectual integrity to do the same.

Typically misleading

DPF is up to his usual tricks again, this time with a graph of government revenue over the past six years being used as a rhetorical prop to argue for (what else?) tax cuts for the rich. But as usual, he's being more than a little misleading - and quite deliberately so.

Firstly, there is the use of nominal (dollar) figures and total crown revenue and expenditure statistics. But as I've pointed out before, this is grossly misleading. Nominal figures inflate the difference between past and present expenditure by failing to correct for inflation or GDP growth. Because of this, the proper way to compare government spending and revenue over time is as a percentage of GDP growth, rather than in nominal dollars. "Total crown" figures include not only government spending and revenue, but also every dollar earned and spent by SOEs and crown entities. As much as the right would like to pretend, growth in this statistic (or at least the SOE and Crown Entity component) is not a sign of expanding government, and it does not represent government spending which could be "returned to taxpayers" as tax cuts. Instead, it is the result of growth in government-owned businesses - which to the extent it represents an increase in the government's wealth, and in its dividend income, is something we should welcome.

(I should add that a large part in the growth in total revenue in 2006 is due to exactly this reason. In its fiscal outlook [PDF], the December 2006 Half Year Economic & Fiscal Update noted that SOEs and Crown Entities made "large investment gains, resulting from strong global equity markets and one-off gains on sale of physical assets". These amounted to about 1.3% of GDP).

So, DPF is being misleading. As a former spindoctor, it was his job to mislead, and I guess old habits die hard. But he has included some valid statistics in the form of taxation revenue as a percentage of GDP, which does show an increase, both over time, and over the last year. Does this alone prove his point?

No. As the table below shows, the increase in 2006 DPF relies upon to prove his point was a one-off:

(Stolen from the December 2006 HYEFU Forecast Financial Statements [PDF])

The 2006 Budget Forecast Financial Statements [PDF] predicted 2006 tax revenue to be 31.7% of GDP. It turned out to be much higher, but is expected to decline thereafter to a long-term average of about 31% of GDP. This is an increase since 2000, but not as much as DPF makes out. Part of that increase (about 1% of GDP) is due to fiscal drag (which the government is finally moving to eliminate); the rest is due to a policy decision to make the tax system more progressive by taxing the rich more to fund public services for all - something I don't think anyone should be apologising for.

As for the source of this windfall, comparing the budget and half-yearly fiscal updates is informative. Essentially, it came about to due a far stronger economy than expected. Higher growth in wages due to the tight labour market and unions pushing for increases resulted in individual taxes being $746 million more than expected. But the real surprise is in corporate taxation: this was up by $1.36 billion - 15%! - due to strong economic growth and higher corporate profits. This won't last - corporate taxes follow the business cycle and have already returned to forecast levels, but in the meantime its a nice little windfall - and all the more startling when you remember that corporate taxes amount to on average 18% of tax revenues - compared to 48% for personal taxes.

As for DPF, when you dig into it, his argument boils down to two claims, that a) a one-off (but not enormous compared to the size of the overall budget) windfall justifies a significant permanent reduction in revenue; and b) that the rich need a tax cut because they're doing so well at the moment. Needless to say, I don't think either argument holds water. But then, I'm not a member of the National Party...

Getting involved

DPF has an interesting post on how the Keep It 18 campaign came into existence, with the aim of

actually encourag[ing] more people to get involved with politics and campaigning on issues. The drinking age debate showed that a few people can make a difference. Now I do not mean to imply that MPs made up their mind on the lobbying alone, or even that other lobbying from industry groups such as BWSC (which ironically and sadly has just been closed) and HANZ wasn’t also influential. But feedback from both media and MPs has been that the efforts of KI18 did help to a significant degree.

Of course, the people involved were all politically well-conected, with excellent access to media and politicians for lobbying, and this made their job immensely easier. But these skills can be learned, and you'd be surprised how many politicians will respond to a well thouht-out email. As I keep saying, democracy is fundamentally a clash of interests, and its a matter of participate or perish. And if you don't stand up for your interests, then they willnot be taken into account. So, to echo DPF, next time you see an issue you feel strongly about, speak up about it, let the politicians know what you think, and (if you're keen) get together with some friends and try and organise a campaign around it. Otherwise, when you get walked all over by people who do do these things, you will have no-one to blame but yourself.

A public service

DPF has begun a major series of posts delving into the records of the police investigation into Labour's overspending last election and their baffling decision not to lay charges, despite finding a prima facie case. I've said so before, but just to repeat myself, I think that decision was wrong. Given the nature of the offence, a prima facie case is a conclusive one, and while there would have been a lot of legal argument over exactly what did and did not count as election spending, Labour should have been forced to make that argument, rather than being given a free pass. Unfortunately, the police don't seem to regard electoral offences as "real" crimes (unlike burglaries or pot-smoking), and (according to Fran O'Sullivan) thought that a prosecution would undermine the integrity of the election. But protecting the integrity of elections is exactly why we have such laws in the first place, and refusing to use them in such a clear-cut case undermines that integrity far more than prosecution would have.

Unfortunately, given the six month time-limit on prosecutions, it is too late to legally do anything about it now. But what can be done is to put the information before the public, so that we can a) pressure the politicians into reforming the law and ensuring that this never happens again; and b) punish Labour at the ballot box for its corruption if we so choose. DPF is doing all of us a service by doing this.