OnPoint by Keith Ng

It was a bracing kind of meeting, and I should've ordered something harder than orange juice. I wanted – needed – to hear it, to get that bucket of cold water thrown at my face. And bless him, he was happy to give it to me.

This was a few months back, at the beginning of “Phase I” of my conspiracy for numeracy. I was meeting with a senior parliamentary press secretary at Dog and Bone to pitch my idea: a wiki-styled website which fact-checked politicians and promoted transparency by hosting source data. It was at once an open offer (“if you know the other side is making shit up, we can be a platform for that information”) and a thinly-veiled, but generally wholesome, threat.

He wasn't exactly trying to disuade me, but as an ex-gallery journalist (aren't they all?), he was very skeptical of my aims and my assumptions. He argued that politicians know that everything they say will be under scrutiny, and are therefore scrupulous about their facts; that political parties are transparent as a matter of course; that journalists never take a press release from a political party at face value, without checking the facts for themselves.

I am pleased to report that I hit this trifacta with Mr Gerry Brownlee.

Brownlee said in a press release:

National Party Energy spokesman Gerry Brownlee says he understands that Labour's emergency stand-by power generator at Whirinaki is running flat out burning up to one million litres of diesel every 24 hours."

That's not true. 93.5% not true, actually, if we take "running flat out" as meaning "operating at 100%". According to Contact Energy, operators of the Whirinaki power plant, it was running at 6.5% of its maximum output in February. In January, it ran at 2.3%. When questioned about his claim, Brownlee said:

I think you'll find, when you see the figures, that it's running at something like 16 hours a day at full speed."

So "16 hours a day" means "16 hours every day"? Not the way Brownlee is using it. The figures show that it ran for 16 hours on a day - on one single day, that is - and only at full speed for 11 hours. When presented with the figures, Brownlee backed down further. Kinda.

With all due respect – we can terminate this interview if you want – but you've got to sharpen up a bit here. These people are trying to put a bit of gloss on a very big turd. The deal here is that yes, across a month, it might have only run for 3% of that month. But there were days, there were hours, and there were other batches of time during that month where it had to run otherwise the lights would go out. It's an emergency plant. It doesn't run unless we're deeply in the shit. I can't put it more clearly to you than that.”

Pure. Gold.

According to Kieran Devine, General Manager of System Operations at Transpower, Whirinaki kicked in because the hyrdo generators were trying to conserve water for winter. That's to say, if the demand for power went up further than it did, or if Whirinaki didn't run, the hydros would have kicked in again. The lights would not have gone out.

But the system was also tighter than usual at that time, said Devine, because power plants were taken down for maintenance to ensure that they were ready for winter, and the Huntly power station couldn't operate at full capacity because the river (which it uses for cooling) was too hot. During winter, when power usage is highest, these problems will disappear.

Then he says that:

Genesis boss Murray Jackson told the [Select] Committee that at winter peak the North Island would be 1000 M/Ws short of supply."

No, no he didn't. According to the Genesis Energy spokesperson, the 1000MW figure refered to the capacity that went when the Pole 1 interisland cable was taken down for maintenance and the New Plymouth power plant was closed. These were things that everyone in the industry and everyone on the Select Committee already knew about, and didn't mean that the North Island was 1000MW short of supply.

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Brownlee's mistake could be excused if the National Winter Group – a group of industry experts that includes members from Genesis Energy – didn't release a report earlier in the month outlining the situation. They looked at a worst case scenario, in which we experienced a one-in-twenty-year high demand, a one-in-ten-year low in generation, with Pole 1 remaining completely useless. If this happened, they expect that we would still have 348MW of reserve capacity left, but we would be vulnerable to major faults. Since Transpower brought Pole 1 back at half capacity last month, we could survive the worse case scenario plus a major failure without industrial users having to cut back.

But even under a worse-than-worst-case-scenario, with the biggest power generator failing and Pole 2 going down as well, it still wouldn't get close to 1000MW. Not only did Brownlee misunderstand Jackson and demand government action without checking the facts, but he claimed something that flew in the face of common sense.

As for the Whirinaki claim, that's even more preposterous. If, as he says, Whirinaki was the emergency, last resort power plant, and it was running flat-out, that would mean that we're constantly at maximum capacity, and that one more lightbulb would send the system crashing and burning.

That's clearly a completely unreasonable claim, given that the lights are still on. Someone who didn't get that should not be trusted to become the Minister of Energy.

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This was, by no stretch of the imagination, a big story. Brownlee didn't get a heck of a lot of traction with the original story. It did, however, get onto NZPA, the NewsTalkZB wires, and (I think) Radio New Zealand. Each of those stories were pulled straight off the press release, and none of them had comment from Contact Energy (or anyone else, for that matter).

This is the degree to which politicians can get away with making shit up – as long as the story is not major, they can make a claim and get it through to readers unscrutinised and uncontested.

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On Saturday, I hung out with the new student media crowd at the Aotearoa Student Press Association conference, where Nicky Hager spoke about, among other things, the political PR machine. He spoke about the difference between tactical PR (getting individual stories out or responding to events) vs strategic PR (framing specific issues or whole elections; e.g. making an election about tax).

I've been thinking about the kind of “aggregate PR” campaigns that we've been seeing, most clearly, in the “slippery Key” campaign.

It's obvious that the whole point of the campaign is to use the words “slippery” and “Key” together as many times as possible. The individual instances where it's used are usually inane, occasionally ridiculous. But it doesn't matter. This kind of tag-cloud politics relies on repetition and repetition alone. Therefore, each individual claim has far less value, the quality of the claim has less relevance, and there's little point in rebutting the claims, since it's only the culmulative effect that matters.

It's fucking stupid. But hey, it's what the spin-doctors ordered.

It begs the question: Is debating actual facts completely pointless when, according to our learned spin-doctors, it's all about the frequency of keywords?

We'll see.

“The percentage of Ministry of Social Development clients who owe debts is 19.8% of their total current clients – this is a very small increase since 2000, when 18.8% of Ministry clients had debts with the Ministry. The percentage is not 70% as Judith Collins says.” - Ruth Dyson

It's a good comeback – shame that she took 6 months to come up with it.

During Question Time at Parliament in September last year, Judith Collins grilled Dyson about why “70% of beneficiaries are in debt to Work and Income”. Dyson avoided the point, but now, six months later, has discovered that Collins came up with the 70% figure only because she failed to count superannuitants as part of the equation.

Dyson is right to point out that the debt figures includes superannuitants, and so the total number of MSD clients should, too. But because superannuation isn't income tested, accidental overpayment are less likely to happen and they are less likely to owe money to Work and Income. With half a million superannuitants in New Zealand – compared with 270,000 on benefits – the final numbers draw attention away from the genuinely large number of beneficiaries who owe money to Work and Income.

In 2007, 178,359 beneficiaries and 129,775 former beneficiaries owed money to Work and Income. Whether you divide that by 270,000 beneficiaries or by 770,000 MSD clients, these are still big numbers.

More importantly though, Dyson's focus on the number of debtors neglects the size of the debt. Current and former beneficiaries owe a total of $763.8m – that's up from $450m in 1999. And in 2006/07, even after 15,000 in-person client check-ups and 39,000 investigations and reviews, Work and Income still overpaid $150m worth of benefits, further adding to beneficiary debt. This is down from $190m of overpayments in 2001/02.

But what does a high level of beneficiary debt actually mean? Overpayment by Work and Income is a significant part of it, in addition to benefit fraud. These are avoidable elements that the government is trying to reduce – with limited success. More than a quarter of the debt, however, is “recoverable assistance”, interest-free loans that help beneficiaries cover unexpected costs, so this element of debt is due to Work and Income loaning – rather than giving – money to beneficiaries.

“I support advances of payment to beneficiaries when they meet the criterion, which is that that person or his or her family has an immediate and essential need,” Dyson said in Parliament. “I would prefer that to be the way to remedy the situation, rather than the alternative of their having to pay high interest to a loan shark.”

“This House will decide on whether there is a free-trade agreement with China at the end of the day.” - Annette King (answering on behalf of Phil Goff)

When a significant treaty between two countries is signed, the treaty and an accompanying National Interest Analysis is brought before Parliament to be reviewed by a Select Committee. Then the Select Committee decides on... well, not a lot. Under Parliament's Standing Orders, they have to “consider whether the treaty ought to be drawn to the attention of the House”.

Why is it so watered-down? “Parliament does not have the right to say no [to the treaty],” says Victoria University international law lecturer Joanna Mossop. “The power to enter into treaties rests solely with the executive, which is cabinet.”

“Before this process was introduced, there was no requirement for the government to report to Parliament about what treaties it was entering into. This process raises the profile of important, significant treaties and [give] the opportunity for Parliament to debate these treaties. [It] was designed to improve democratic discussion and debate, but ultimately, Parliament cannot refuse.”

Parliament still decides on whether or not to pass legislation that will implement the treaty in New Zealand, but that, along with the Select Committee consideration of the treaty, both happen after the treaty is already signed. But the treaty still has to be ratified after that – something the government won't do unless Parliament passes the legislation.

“Historically, it was the monarch who bore the obligation to other monarchs,” says Mossop. “In our system, we have the separation between the executive, legislature and judiciary, and that the power of the monarch has generally been absorbed by cabinet [the executive]. New Zealand is represented on an international level by the executive, so it makes sense that it's the executive or cabinet that has the power to enter into those international obligations.”

“It's not necessary that that's the way it's always going to be, but that's the way it's worked out as a result of our constitutional history and the way we run thing.”

“Over the past eight years the bureaucracy has grown out of proportion to those parts of the state sector that actually serve the public... Since 2000, the number of bureaucrats has grown from 26,200 to 36,000.” - John Key

Sieving out (as Key put it) the “paper-shuffling and report-writing” bureaucrats from the civil servants who “make a real difference in people's lives” is tricky business.

According to StatsNZ's Quarterly Employment Survey (QES), there are 35,950 civil servants who are “mainly engaged in formulating and administering Central Government policy”. Treasury, on the other hand, says that there are 8,495 equivalent full-time staff working for “policy departments”.

Which figure tells us how many bureaucrats there are? Well, neither. They count different departments, but both lump everyone in a department into the same category, telling us very little about who does what.

The detailed breakdown of selected sectors provided by National actually show that the number of bureaucrats is likely to quite small. Even in the Ministry of Social Development, one of the government's largest departments, there were only 359 policy staff and 855 corporate and governance staff, compared with 8,291 service delivery staff, including those from Child, Youth and Families.

But the breakdown also proved Key's main point – though small, the number of these bureaucrats have grown faster than the rest of the government and faster than the rest of the economy since 2000. That means that the proportion of bureaucrats has increased.

So if there are more bureaucrats in 2006 than in 2000, does that mean there're too many? Only if the civil service was fine in 2000. And it wasn't, according to Deputy Director of the Institute of Policy Studies, Professor Jonathan Boston.

“There was a widespread view that the cutbacks during the 1990s had been such that many departments were struggling. Many were employing large numbers of consultants because they didn't have the core staff that they needed, and there were various activities that were at risk because of limited capability. Even members of the National Party at the time accepted that there were some real issues facing the core public service in the late 1990s that would need to be addressed.”

Now that Labour has brought them back, how do we know if our paper-shuffling, reporting-writing bureaucrats are earning their keep?

“With difficulty, to be blunt,” says Boston. “Although we have a very elaborate system of specifying performance in advance, of monitoring performance, and then reporting on how well the performance has been, at the end of the day the non-financial stuff is not actually very useful in telling people whether or not you've got value for money.”

Just two weeks ago, Secretary of the Treasury John Whitehead voiced his concerns over the ability of government agencies in “achieving results and value for money”.

“I think it is fair to say our current level of connection and citizen focus is well short of where we can be,” says Whitehead. “We still don’t provide the performance information to drive that focus and we don’t measure and assess value for money in public service provision in ways that we could. There is a sense that performance measurement and assessment is treated by some as a compliance exercise or a risk to be avoided or minimised.”

But while these accountability measures are failing, the public service is not, according to the World Bank. Their Worldwide Governance Indicators collates survey data on governments around the world and ranks them on six key dimensions, including “Government Effectiveness”. This measures “the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies.”

The indicator took a dive in the late 90s when the civil servants thinned out, hitting rock bottom in 2000, but recovered when the bureaucrats started coming back. The bureaucracy, it seems, might have made a difference to the health of the whole public service.

In 2006, New Zealand ranked 8th out of 212 countries for Government Effectiveness.

Overseas investment rules: decent intentions, terrible goddamn timing.

Everyone seems to be ignoring the fact that Auckland Airport really *is* strategically vital infrastructure. It's the only airport going into Auckland, the only real international link in the North Island (Wellington hardly counts), and New Zealand's primary gateway internationally.

Not only is it vital, it's has near monopoly status, too. What's the alternative? Drive down to Hamilton then fly down to Christchurch? Unlike the banking system, or even telecommunications, where some degree of competition exist, the tyranny of geography and demography means that AIA is the sole link of two-thirds of the country to the rest of the world.

And international travel is vital to international trade, international trade is vital to our economy, ergo, AIA is vital to our economy.

It's a bit old school, in our “strategically benign environment”, to be thinking that ownership of vital infrastructure should remain in the country, but it's strong argument for domestic ownership of the country's biggest airport (as opposed to, say, beaches or lifestyle blocks), and this should trump any private-sector efficiency gains argument.

But there's no denying the fact that the Bitchslapping Hand of Government (that may or may not be the technical term) will make foreign investment feel more uncertain, and therefore, pay less. That part is pretty straightforward, but the argument about its importance is somewhat bizarre. From the Herald's editorial:

This country's alarming current account deficit means foreign investment is imperative.”

Does it? I'd kinda thought that reducing the current account deficit meant that *reducing* the country's reliance on foreign investment was imperative, especially given that the investment income deficit for the last recorded quarter (Sep 2007) was $3,255m – that's nearly 90% of the $3,628m current account deficit.

The editorial doesn't really explain that point, but Bernard Hickey – bless his cold capitalist heart – is more direct:

This is a plainly dumb thing to do when we need foreign investors to keep funding our way of life and building up our infrastructure. We spend more than we earn. We need to borrow from foreigners to do that or we need to encourage foreign investment.”

Yikes.

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The Marae poll, if correct, could mean an ugly, ugly scenario this year. Obviously, if the Maori Party wins all 7 Maori seats, they could well hold the balance of power. But if they only have – as they do now – 2-3% of the party votes, then they could well be holding the balance of power with overhang seats.

Imagine this scenario:

Anderton, Dunne and Hide gets <2% party vote between them. Maori Party gets all 7 Maori seats, with 3% of the party vote. We get a Parliament of 125 MPs. National + Hide + Dunne have 62 seats. Labour + Greens + Anderton have 56 seats.

In this scenario, the Maori Party could reverse a 6-seat gap with 3% of party votes.

That would be a fundamental slap in the face of proportional representation, and the scale of it would be made possible because of the Maori seats. 10-20% of voters who did not vote for Labour or the Maori Party would have, by going on the Maori roll, have given the Maori Party an extra seat.

The arguments against the Maori seats haven't changed since I last wrote about it in 2005 (with a follow-up here). It is still, in my mind, a distortionary FPP hangover which has no place in an MMP system, and it amounts to DIY gerrymandering. That's bad, but now, it looks like it could be one of the key deciding factors of our election.

Yikes.

"The Housing Minister all but confirmed that first home buyers will have to earn at least $70,000 a year to get into one of Labour's 'affordable homes'. Of course the average household income is less than $70,000." - National Housing Spokesperson, Phil Heatley

Heatley got the house prices right - Minister of Housing Maryan Street confirms that the 500 houses in the Hobsonville project allocated as "affordable housing" are going to have a price tag "in the low $300,000s", and banks would generally require a household income over $70,000 to approve such a loan.

The debate took a strange turn, though, when one survey said that the average household could borrow enough for the Hobsonville house, but according to another, they couldn't. Street quoted the 2007 NZ Income Survey, which said it was $75,140, while Heatley looked at the 2007 Household Economic Survey, which showed the median household income to be $67,973.

Aucklanders have the second highest level of income in the country, and young couples generally have a higher-than-average household income. This suggests that the kind of people who would buy one of the affordable house in Hobsonville - young couples working in Auckland - probably earn more than $70,000.

Just because they can get a mortgage doesn't mean it's affordable, though. One of the key indicator of housing affordability looks at how much of the household income is being spent servicing their mortgage. If it's over 40%, a household is defined as being in "mortgage stress". A $320,000 mortgage would cost over $600 each week to service, which is more than 45% of a $70,000 per year income. That's tough going for any household.

Street acknowledges that Auckland is a tough market for housing, but points out that there's plenty of government help available. The government will match Kiwisaver contributions for deposits on first homes, the Welcome Home Loan scheme can also help with deposits, and the new Shared Equity scheme can reduce the borrowing amount.

But Heatley says that these schemes don't address the core issue that housing is too expensive. He says that National will reduce taxes and bring down interest rates to increase what households can afford to borrow, and streamline the RMA to lower the cost of development.

Another point of conflict is the Metropolitan Urban Limit (MUL), which restricts the land available for development. Street says that it's needed because "the prospect of urban sprawl, particularly with the traffic problems that that would create, is just too horrible to contemplate." National, on the other hand, supports extending or abolishing the limit, which would reduce land prices.

"If the MUL shifts," says Heatley, "and more money has to go into infrastructure, we're well aware that we have to do that. Infrastructure investment does not scare us."

"Labour’s failure to future-proof our energy infrastructure is to blame for looming electricity shortfalls this winter. They should admit there’s a problem and plan to get through it, avoiding public shock at cold showers, industrial shut-downs, and dimmed street lighting." - National Energy Spokesperson, Gerry Brownlee

Electricity shortfalls are not looming. There is concern about the capacity to meet peak demand, but this is a normal part of the system functioning.

A lot of things would have to go wrong simultaneously for the emergency measures to take effect, says Stephen Gale, an energy sector specialist at strategic consultancy firm Castalia. "You'd have to have the [inter-island] cable be unusuable, unusually calm weather so that the wind generating capacity we have was of no use, and then you'd have to have some other [power] plant fall down."

"But you'd know it's happening, and you get on the phone and do something about it." Power-intensive industrial users get the call and a deal is made. When peak supply is tapped out, some of these major users cease operations for a short time. Normal users are unaffected.

Why don't we just build more peak capacity? Because it would sit around doing nothing for the other 362 days of the year. "It's unhealthy for the system to have so much spare capacity that you never even have the sniff of a problem," says Gale, "it's vastly expensive to do that, and it's a hidden cost that everyone would be carrying."