A picture in continuity

Here is a summary chart of the real GDP outcomes for the June quarter (expenditure and production), the hours outcomes (QES and HLFS), and the implied change in labour productivity (real GDP per hour worked), taking the average change in hours worked from the average growth in real GDP.

GDP q2 1

There was quite a bit more activity all round, but it took a larger percentage increase in labour inputs (hours) to get the published percentage increase in output (GDP).  In other words, labour productivity fell: not just the growth rate, but the level.

Here is the same chart for the previous quarter.

GDP q2 2

It was worse: less GDP growth, but also an even larger fall in GDP per hour worked.   Productivity growth for the first half of the year was -0.65 per cent.  That isn’t an annualised number, but an absolute change; a significant fall.

Perhaps you think this just shows how dreadful the new government is.  Here is the same chart showing the cumulative growth rates for the last six months of last year (in blue) and the first half of this year (in orange).

GDP q2 3

To me, the similarities are (much) more striking than the differences.    Importantly, the level of labour productivity fell in both halves.

Looked at from a productivity perspective –  and that really is where one should focus, especially when the unemployment rate is not too far from the NAIRU – it is a pretty dreadful performance.    Of course, simply looking at two six month periods on their own doesn’t tell one much, but nothing in these data is inconsistent with the poor productivity record for some years now.

And neither the last government nor this one appears to have any serious ideas for, or any serious interest in, fixing this failure.

 

 

Is this what leadership looks like?

When the news broke earlier in the year that Canterbury University academic Anne-Marie Brady’s house and office had been broken into, and that the only things taken seemed to relate specifically to her longrunning research work on the People’s Republic of China, the initial response from the government didn’t seem too bad.

Ardern said at the post-Cabinet press conference on Monday that “everyone would be concerned” if Brady had been targeted because of her academic work.

“If there’s evidence of that, we should be taking stock and taking action,” Ardern said. “I will certainly ask some questions.

“I would certainly want to be informed if there was evidence that this was a targeted action against someone who was raising issues around foreign interference.”

Brady  herself was impressed (although I think I thought –  and perhaps wrote – at the time that these comments seemed more designed to encourage the Prime Minister, rather than accurately describing any evidence to date of taking foreign interference “very seriously’).

“I am very heartened to see the Prime Minister is taking the issue of foreign interference activities in New Zealand very seriously and that she has instructed the security agencies to look into the break-ins I have experienced,” Brady said.

The story has been back in the media again thanks to the persistent efforts of Matt Nippert of the Herald.  Last weekend there was his widely-viewed (and linked to abroad) article “The curious case of the burgled professor”, and this morning the front page of the Herald has the story “SIS sweeps prof’s office“.

Electronic surveillance specialists from the Security Intelligence Service have carried out a search for listening devices at the University of Canterbury office of the professor revealed to be a possible target of Chinese espionage.

News of the sweep, confirmed by several university staff, comes as academic colleagues of Anne-Marie Brady came out in support of the China specialist….

The Herald understands a similar search for bugs by the Security Intelligence Service (NZSIS) has also been conducted at Brady’s Christchurch home, the site of another suspicious burglary being investigated by authorities.

From what is reported in that story, and in Radio New Zealand’s interview this morning with Anne-Marie Brady, the Police and the SIS seem to be doing a pretty thorough job.  Brady herself praises what she has seen and heard of their efforts.

But what of the Prime Minister?  Remember that this is the “leader” of whom Matt Nippert has reported

She won’t talk about the general issue, and here she is (quoted in Nippert’s article this morning) on the specific one.

Prime Minister Jacinda Ardern, asked about the case on Monday at her post-Cabinet press briefing, said she had yet to be briefed on whether the episode could be attributed to China.

“I have not received any further advice on that, but nor have I sought it. As it were, nothing has since been raised with me to suggest that it was, or wasn’t,” she said.

“Speaking more generally, what the underlying suggestion here is of foreign interference. I’ve been very, very cautious around always stipulating that New Zealand needs to be live to general issues of interference, and that’s something we keep a watching brief on.”

She hasn’t asked.  How convenient.  If she were really concerned about the issue, and the potential, you’d have thought she –  and her office –  would be all over an issue of this sort (as a matter of sovereignty, national security, defence of academic freedom etc, not as “interfering” in a potential criminal prosecution).

And as for that final paragraph, if that is “leadership” we’ve lost all sense of how a leader might actually act or speak.   Of course she probably isn’t in a position to make specific accusations –  especially not having asked for the information –  but what would have been so wrong about a clear and strong statement that she, and New Zealanders, would deplore and push back strongly against any foreign interference in New Zealand, and in particular if agents of a foreign power were found to have been responsible for the Brady break-ins.  She could even have gone on to say that if such evidence were found then –  even if it were not possible to launch criminal prosecutions (after all, we don’t have an extradition treaty with China) –  the damage to our bilateral relationship with such a country would be severe.

Instead we get this vacuous waffle

I’ve been very, very cautious around always stipulating that New Zealand needs to be live to general issues of interference, and that’s something we keep a watching brief on.

saying precisely nothing, from someone who appears to desperately hopes to avoid the issue.  Her response here is much weaker than her February one.

Does the Prime Minister stand for academic freedom in New Zealand, for the rights and freedoms of New Zealanders to do research, to speak out, to challenge other countries here in New Zealand, the rights of New Zealanders to be secure in their homes?  “Stand for” in the sense of being willing to pay a price to protect and defend?  Or is she more interested in doing everything possible to be able to look the other way, prioritising party fundraising, trade agreements, the interests of a few big corporates (and universities) and visits to Beijing over the values and freedoms of New Zealanders, including those like Professor Brady who’ve done in-depth research on PRC efforts here?

She, her party president, and their peers in the National Party together.

Automation, future of work, and other distractions

The Labour Party, led by the now Minister of Finance, has made great play in recent years of the looming “threat” of automation, and the claimed need to think hard about the Future of Work.  There was a taskforce in Opposition, repeated references in ministerial speeches, and now even a Future of Work Forum.  I’ve always been a little sceptical: the application of new technology has been a key part of how living standards have improved over the last few hundred years, and I’m sure most people are hoping for further improvements for themselves and their children/grandchildren.   And employment rates seemed to be about as high as they’ve been for decades.

And so I was interested this afternoon flicking through today’s online Financial Times to find an article citing some new OECD work suggestiong that New Zealand is among the advanced countries with some of the lower propotions of jobs at significant risk of automation.  Here is the key chart from the OECD paper.

automation2

New Zealand fourth lowest share of jobs at high risk of being automated, and lowest in the OECD for the combined high and significant risks.

For the geeks, here is some text from the paper on how OECD researchers have been revising down their estimates.

automation 4

Automation will, no doubt, continue to happen.  It should.  We’ll generally be better off for it (even if some individuals will face difficult adjustments, as they did in every phase of activity –  indeed every business cycle – since the Industrial Revolution).  But particularly if this methodology is even approximately right, it reinforces my sense that the Labour Party – and now the government –  (probably with good intentions) use the Future of Work issue, and automation risks/possibilities, as a distraction from, and substitute for, their lack of interest/ideas in addressing the real economic elephant in the room: decades of underperforming productivity growth that mean we would now need a two-thirds lift in productivity (all else equal) to once again match the leading countries, most of whom we used to consistently outstrip.

As Morning Report reminded us today on the anniversary of women’s suffrage, we should celebrate the automatic washing machine, for all the time it freed up, and opportunities it allowed people (then largely women) to pursue.  It is only one of a myriad of such innnovations, past, present and future.

But New Zealanders get fewer of the gains than most advanced country citizens, as successive governments have done nothing to reverse the productivity failure.

 

An age of diminished expectations?

The Westpac McDermott Miller consumer confidence survey results are out this morning.  To the extent they get any media coverage, no doubt the focus will be on the headline result.  Here is the summary chart.

westpac 1

In Westpac’s words

Consumer confidence fell sharply in September, taking it to its lowest in six years.

There probably isn’t much predictive value in these results for actual economic data, but I find the results interesting in their own right: how people generally are feeling about their economic fortunes and the economy more broadly.  After all, respondents aren’t just the “ideological enemies” of the government.

The Westpac results don’t seem out of line with the most recent Colmar-Brunton poll (taken six weeks ago) in which respondents are asked a single question.

“And do you think during the next 12 months the economy will be in a better state than at present, or in a worse state?”

colmar brunton

The public no longer seem very optimistic at all.

But in some ways I was more interested in the longer-term trends in a couple of the sub-components of the Westpac index.   For example,

westpac 2.png

People are now less optimistic about improvements in their own personal position than at any time in the last 30 years outside periods when the economy was already in the midst of a recession (and materially lower than in the fairly shallow 1997/98 recession).  And look at the contrast between confidence levels from say 1994 to 2007 (across two different governments) and those now.  It looks a lot like a fairly steady trend decline.

And then there is the question about the longer-term prospects for the economy itself.  Respondents might not know much analytically about the issue, but their perceptions are interesting nonetheless.

westpac 3

The latest observation isn’t startlingly bad (and there was that sharp –  but brief – dip a couple of years ago) but look how diminished expectations are now (last three years or so) relative to the entire history of the series.  There are individual quarters that are weaker (though note, not in the 2008/09 or 1997/98 recessions) but in thirty years there has been no three year period where medium-term optimism has been weaker than over the last three years (under National and Labour governments).   And this pessimism isn’t tied to the last recession –  look how upbeat people briefly were in the couple of years after the recession ended.

(The medium-term picture is less bad in the ANZ’s consumer confidence survey, (which has a much shorter run of data) and it would interesting to know the precise question asked, to help understand that difference.)

Then again, in an economy that has managed very little labour productivity growth in the last five or six years, and none at all in the last three years, perhaps it shouldn’t surprise.

real GDP phw jul 18

In an economy where the promises of economic reform decades ago came to little  (for younger readers, that is the then Minister of Finance back in 1989/90)

caygill 1989 expectations

And where none of the political parties – especially not National or Labour that have led all our governments – seem to care much if at all, or have any serious proposals for turning around the continuing decades of underperformance, isn’t the public quite rational in being much less optimistic than they were?

A more interesting question is why they/we don’t find a way of demanding something better.

A bouquet for the Government

They don’t deserve many, but this announcement this morning is unambiguously positive.

Cabinet papers will be proactively released, Minister of State Services Chris Hipkins announced today.

The move is part of the Government’s wider plan to improve openness and reflects its commitment to the international Open Government Partnership.

The Cabinet papers will be released no later than 30 business days after a Cabinet decision. This process will be in place for Cabinet papers lodged from 1 January 2019, Chris Hipkins – who is also responsible for Open Government – said. ……

“Cabinet papers will be released within 30 business days of the Cabinet decision unless there is good reason not to publish. If we can publish it, we will.”

It will, almost certainly, end up less good than it sounds.  But it is a start.    The official papers upon which our governors make their official decisions should be open to public scrutiny, with only a short delay.  As the Minister’s press release notes

“This change is consistent with the spirit of the OIA which states that information should be made available unless a good reason exists for withholding it.

“Proactive release of official information promotes good government and transparency and fosters public trust and confidence in government and the public agencies.”

Of course, only time will tell how (a) this government chooses to run the system, and (b) whether future governments regard themselves bound by the newly-established practice (the law isn’t being amended to require pro-active release, but it probably should be).  I don’t suppose we will ever see any Cabinet papers that might deal with awkward issues around the relationship with the People’s Republic of China, or PRC interference in New Zealand public and commercial life.   Perhaps we shouldn’t either.  Some things – a few –  need to be not only deliberated in secret, but to able to have the relevant considerations and supporting evidence kept under wraps for a longer period.  And, reasonably enough in my view, they won’t be releasing papers relating to recommendations for honours (they say they will withhold papers relating to appointments as well, and that is more concerning).

What worries me a little more is that

Individual ministers will have responsibility for releasing Cabinet papers, which will be subject to an assessment to decide if there are good reasons to withhold any of the information.

If individual ministers are making the decision, how will we be confident that all ministers are applying more or less the same standard?  There is no suggestion of a central monitoring process, and there will be more or less ornery ministers, more or less politically uncomfortable issues, weaker and less confident ministers, and –  as our arrangements have developed –  ministers who hold ministerial warrants but aren’t part of Cabinet, or even of the government itself.  Will, for example, the Greens ministers be bound by this new Cabinet practice?

But if the principle is that the official papers upon which our governors make their official decisions should be open to public scrutiny, with only a short delay, shouldn’t this principle be extended –  either voluntarily, or mandatorily –  to other state agencies that make major policy decisions, that attract considerable public interest and scrutiny?

One could readily extend the principle to the boards of all Crown entities (subject to similar specific exclusions as the Cabinet will apply to itself).

But, of course, the entity I particularly had in mind was the Reserve Bank.   The Bank’s longstanding line has been that, even though they make vital economic decisions that can materially affect the short to medium term performance of the economy, it would be costly, damaging, and confusing to release the background papers that the Governor receives prior to making his or her decision.  After all, they tell us, there is the MPS or the press release, and the Governor holds a press conference once a quarter.  What more do we need to know, they argue?   They simply generally refuse to release background papers –  although I did once manage to get them to release some that were ten years old (to make the point that, at most, there is a time dimension to any decision on whether material can be released under the OIA).

But those arguments apply –  if at all –  just as much to decisions made by Cabinet, often on much more complex and sensitive issues than those the Reserve Bank deals with.  Cabinet decisions are announced by ministers, the PM holds press conferences, and ministers are generally pretty accessible to the media  (more so than most Governors).  But the Cabinet has rightly decided to release (most) Cabinet papers, and recognises that doing so is right and proper in a free and open society, and will over time enhance confidence.

The same should go for the Reserve Bank.  If the Governor is serious when he talks about being open and transparent –  as he seems to be on all matters that he isn’t responsible for –  he’d take the lead on this issue, and announce that in future the big folder of background papers prepared going into each Monetary Policy Statement, together with the (anonymised) written advice of his advisers on the OCR decision, would be routinely released (perhaps with a small number of redactions) six weeks after the OCR/MPS announcement to which they relate.  Six weeks is long enough that plenty of new data will have emerged since the papers were written (indeed, it will be close to the next OCR decision), and short enough to still be of use/interest to analysts in understanding the Bank’s thinking (recall that we still have no idea what analysis they used last year when they announced they were assuming half of the building associated with Kiwibuild houses would be offset by reduced other residential building activity).

And if the Governor won’t take the lead, the Minister of Finance should insist on this sort of approach as part of the legislation and procedures around the establishment of the new statutory Monetary Policy Committee.

Most likely the Bank will continue to fall back on spurious arguments about potential damage to the “substantial economic interests of New Zealand” (an OIA ground that hasn’t been well-tested), or risks of confusion.  Those arguments are just wrong, and risk sounding (or perhaps are) self-serving: powerful bureaucrats protecting their particular monopoly on information/advice.  Cabinet has been willing to step beyond those arguments, and we should expect the Reserve Bank Governor –  a very powerful unelected policymaker –  to be even more ready to do so (being, after all, unelected and thus with less legitimacy).  If he doesn’t do so willingly, he should be left with no choice.

 

Having read the Our Plan speech

The Prime Minister’s speech on Sunday has attracted quite a lot of, generally not very favourable, attention.  I was interested in a few things that were there, and a few others that weren’t, particularly when compared to the Speech from the Throne that inaugurated the government’s programme last November.

The first was the apparent lack of ambition around the economy.    The Prime Minister continues to repeat the meaningless claim that “we’ve enjoyed enviable GDP growth in recent years”, as if headline GDP – as distinct from GDP per capita or GDP per hour worked –  means anything at all.    Here’s the track record: it has been pretty poor over the last couple of years (we’ll get an update on Thursday).

gdp pc to mar 18

Productivity growth has been even worse, and for longer.  Here, for example, is the comparison with Australia.

aus nz rgdp phw

The Prime Minister seems to sort of know there is an issue.

We cannot continue to rely on an economy built on population growth, an overheated housing market and volatile commodity markets. It’s not sustainable, and it risks wasting our potential.

That’s why our first priority is to grow and share more fairly New Zealand’s prosperity.

That means being smarter in how we work. It means an economy that produces and exports higher value goods, and one that makes sure that all New Zealanders share in the rewards of economic growth.

So what will we do?

First, we need a concerted effort to lift the prosperity side of the ledger. Working alongside business, we will encourage innovation, productivity and build a skilled workforce better equipped for the 21st century.

But what Our Plan has to offer is slim pickings indeed.  The only specific is

We are doing that by bringing back significant support for businesses to expand their investment in research and development through the R&D tax incentive, a key component of building a new innovative economy.

Perhaps you think R&D subsidies are a good idea. I’m rather more sceptical, and worry that there is no sign the government has thought hard about why firms don’t regard it as being in their interests to spend more here on R&D.   But don’t just take it from me.  I was interested that in the Secretary to the Treasury’s speech about productivity a couple of weeks back, which I wrote about here , there was no mention at all of R&D subsidies/credits as any part of the answer to our sustained underperformance.  If R&D subsidies were the answer, it would have to be a pretty small question, and our economic underperformance is much worse than that.

It was also interesting that the tax system seemed to have disappeared from the list of answers to our economic underperformance.    In the Speech from the Throne this

The government will review the tax system, looking at all options to improve its structure, fairness and balance, including better supporting regions and exporters, addressing the capital gain associated with property speculation and ensuring that multinationals contribute their share. Penalties for corporate fraud and tax evasion will increase.

and in various speeches since the Minister of Finance has continued to talk up tax system changes,  but in Our Plan on Sunday the only reference I could see to the tax system was those R&D subsidies.

And then there was this

After all, we have always been inclined to do things differently. Or to do them first.

Whether it’s Kate Sheppard championing the right to vote, Michael Joseph Savage designing the welfare state, or Sir Edmund Hillary reaching brave new heights – we don’t mind if no one else has done something before we do.

But we do mind being left behind.

and

You asked us to make sure New Zealand wasn’t left behind.

But the problem is, Prime Minister, that we’ve fallen badly behind, and nothing you or your predecessors did seems to be stopping, let alone reversing that decline.  Nothing.

Here are a couple of productivity charts, comparing New Zealand and some other advanced countries in 1970 (when the OECD data start) and 2016 (the last year the OECD has data for all countries).

First the G7 countries.

G7 comparison

As recently as 1970, real GDP per hour worked in New Zealand was more or less that of the median G7 country (100 years ago, we would have been ahead of all but one, and basically level with the US).    Now it would take a 30 per cent lift in New Zealand productivity –  with no changes in the G7 countries –  to get us back to parity with these big advanced economies.

And here is the same comparison for the (small) Nordic countries.

nordic comparison

It would take a 50 per cent lift in New Zealand productivity –  all else equal –  to match the median of these countries.    Even in 1970 we’d fallen behind them, but 100 years ago  –  in fact even when Michael Joseph Savage was in office – we were richer and more productive than all of them.

We’ve been left behind, and our politicians show no sign of doing anything to remedy the failure.

One could say much the same about housing.  The Speech from the Throne –  only 10 months ago –  was actually quite encouraging.  There were hints –  nothing specific of course –  that the government might actually want to lower the real prices of houses, reversing at least some of the disgraceful lift in house and land prices that policy (various strands interacting) has helped deliver over the last 25 years or so.

But what about in Our Plan?  There is talk of warm dry homes, and of the Kiwibuild lottery for the lucky few (“I cannot tell you how exciting it was to open the ballot for those first homes this week”), but of the market generally only this

“But not everyone wants to own, or can right now.”

And nothing –  at all – about what the government might do to systematically transform the outlook for those –  all too many –  who can’t.  It might be terribly exciting for the Prime Minister that a few can win the lottery –  as no doubt it is in the weekly Lotto draw –  but in a serious government wouldn’t it be much more satisfying to have laid the ground work for systematic, across the board, affordability?  In a country with so much land (in particular), it is pure political choice that we fail to have better outcomes.

There were a couple of other bits that took my eye.  There was this, in prominent bold letters.

That’s why our first priority is to ensure that everyone who is able to, is either earning, learning, caring or volunteering.

Frankly, what business is it of the government’s.  We aren’t resources at their disposal.  Provided someone isn’t a financial burden on the state, why does the Prime Minister think it is for her to suggest –  nay propose to “ensure” – that a life of leisure is not an option?  The mindset is disconcerting to say the least.

And then there was the international dimension.

That brings me to our final priority area- creating an international reputation we can be proud of.

In this uncertain world, where long accepted positions have been met with fresh challenge – our response lies in the approach that we have historically taken.  Speaking up for what we believe in, pitching in when our values are challenged and working tirelessly to draw in partners with shared views.

This Government’s view is that we can pursue this with more vigor – across the Pacific through the Pacific reset, in disarmament and in climate change, and in our defence of important institutions.

Ultimately though, my hope is that New Zealanders recognise themselves in the approach this Government takes.

I’d be ashamed if I recognised myself in the approach this government –  and its predecessors – take.  A government that is slow and reluctant to condemn Russia’s involvement in the Skripal poisoning, a government that appears to say nothing about the situation in Burma, a government that says not a word about the Saudi-led US-supported abuses in Yemen (trade deals to pursue I suppose).  And then there is the People’s Republic of China.

The Prime Minister apparently won’t say a word (certainly not openly –  and yet she talks about “transparent” government) about:

  • the aggressive and illegal militarisation of the South China Sea,
  • the growing military threat to Taiwan, a free and independent democracy,
  • about the Xinjiang concentration camps, the similarly extreme measures used against Falun Gong, or the growing repression of Christian churches in China,
  • about new PRC efforts to ensure that all Chinese corporates are treated, and operate, as agents of the state (is the Prime Minister going to do anything about Huawei for example?)
  • about the activities of the PRC in attempting to subvert democracy and neutralise criticism in a growing list of countries.

And what is she going to do about the Belt and Road Initiative, which the previous government –  in the specific form of Simon Bridges – signed onto last year, enthusing about a “fusion of civilisations”?

But then, why would we be surprised by this indifference.  Her own party president, presumably with her imprimatur, praises Xi Jinping and the regime.  Her predecessor, Phil Goff, had his mayoral campaign heavily funded by a large donation from donors in the PRC.   And she won’t even criticise the fact that a former PRC intelligence official, a keen supporter of the PRC, sits in our Parliament, refusing to answer any substantive questions about his position.

If those are her values, they certainly aren’t mine. I hope they aren’t those of most New Zealanders.

If her “response lies in the approach that we have historically taken” it must seem pretty unrecognisable to the people, many on her side of politics, who protested French nuclear tests, or against apartheid in South Africa (and associated rugby tours).   And would surely be unrecognisable to the ministers and Prime Ministers of that first Labour government, who were among those (internationally) most willing to take a stand against Italian and German aggression and repression in the 1930s.

 

Orr on women, and himself

Six weeks or so ago, I wrote a couple of posts in quick succession on issues fitting under the loose heading “women in economics”.   I commented on a recent conference paper produced by a couple of senior Treasury officials (one of whom was male), and on the situation at the Reserve Bank prompted by some comments from the (male) Governor and the release of some statistics on the proportion of female applicants for various positions, including that of Governor.    My overall sense was something along the lines of “there seems to be a real and longstanding problem –  perhaps not easily fixed – at the Reserve Bank, but that it was less clear that there was a wider problem”.    Those posts were not universally well-received, and I received various comments, open and private, suggesting that as a mere male I had no right to comment on these issues, that any perspectives had –  by assumption –  no value, and (in the words of one particularly strident commenter) that I should withdraw quietly and “reflect on how your internal biases are harming women”.

And then a few weeks ago, there was a newsletter around from GEN (the Government Economics Network) advertising a launch event for a Women in Economics Network (for anyone interested, they have a LinkedIn group here), at which the speaker was to be Governor of the Reserve Bank, Adrian Orr.  It was advertised as open to anyone, and since I have an interest in the issues –  particularly as they affected the Reserve Bank (where I was manager for a long time), and the contrast between their experience and that of other entities – I signed up to go along.  I also attended because it must be a decade since I’d heard Adrian Orr speaking in the flesh, and as I’ve been quite critical of some aspects of his nascent governorship, including his speeches, I was interested to see how he now came across to a live audience.

It seemed like a fairly well-attended event, held at The Treasury.  The audience apparently included some high school students and teachers, as well as lots of public service types, and was (as one would probably expect) around 85 per cent female.

The event began a bit oddly, with some sort of introductory greeting or welcome from Gabs Makhlouf, the politically-correct British Secretary to the Treasury.  It was in Maori, and I’d be surprised if more than a handful of attendees had a clue what he was saying.

The Governor was introduced by Vicki Plater, chair of the new network and a senior manager at The Treasury.  She noted in her introduction how, particularly as a  macroeconomist (a sub-discipline of economics with a particularly preponderance of men), it was a common experience to be (or feel like) the only woman in the room.

That resonated.  And so it was strange, and rather tin-eared, for the Governor to stand up and say, in his best jesting style “you know Vicki, most male economists also think they are the only economist in the room”.   It was, no doubt, a self-deprecating dig at a tendency of smart opinionated people to think, or act as if, they have “the” right answer to whatever is being debated.  But it seemed oddly inappropriate, as if to –  no doubt unconsciously – minimise the perspective and experience of women in (macro)economics –  the subject he’d been invited to address.

(It was also a bit strange that in the course of his comments –  speech and later panel discussion – Orr’s only unscripted references to individuals in the audience were to men.)

It wasn’t a long speech, but it was also striking how little content there was.   It was a paean to diversity and inclusion, but only in the most general and unspecific form.  We were told about some project the Bank has underway to re-tell its own story in terms of some Maori metaphor or mythology (the connection to the issue at hand being less than clear).  He asserted that somewhere around the Industrial Revolution humans had lost “the talent of working together in teams”, and we heard a brief snippet of his own experience of perceived exclusion at the recent Jackson Hole seminar (for top central bankers and the like).  He owned up to not himself being a great listener.   It wasn’t necessarily off the subject, but it all seemed pretty tangentially relevant.  If I was looking for the consistent theme it would be something around having to make an effort and break out of the constraints of established, unquestioned, ways of doing things.   There wasn’t much to disagree with, but equally you wouldn’t know that he was head of (and formerly held other senior positions in) an institution that has never had a women in a senior management role in policy or core operational areas in its 84 year history.  Perhaps that wasn’t the point; perhaps the point just was that senior male leaders (Governor and Secretary) cared enough to turn up.

Following the Governor’s talk there was a panel discussion, involving the Governor and a senior academic economist and an MBIE principal advisor (both women).   The Governor was again on form.  The MBIE principal adviser (of a Pacific background) noted that Pacific people in economics had few role models, and that the Governor was the pre-eminent role model.  His response: “I don’t know about being a role model; perhaps a sausage roll.”

There was a great deal of (seemingly) unquestioning acceptance of the unconscious bias model, with quite a few (unexamined) claims of conscious bias thrown in.    There was no discussion at all of how some occupations, and academic disciplines, end up very heavily female and others very heavily male, no discussion of the apparent “gender equality paradox” , just an inchoate sense of something, generically, being wrong. Quite what, specifically, wasn’t clear.

The Governor was the most confident communicator of the three, and since he tends to wear his heart on his sleeve we heard a few interesting anecdotes.  One was, I think, designed to illustrate how those in power can be unaware of the impact they are having on others.  He noted that shortly after his appointment as Governor was announced he’d had an email from a former staff member, who lambasted Adrian for the severely adversely impact he had apparently had, in some past professional role, on this person’s life.  This had apparently come as total news to the Governor, and it sounded as if the searing email had shaken him at least momentarily.  But the effect of the anecdote was rather undermined when he rushed on noting “but I got over it”.   Perhaps the problem really was with the writer, but it seemed to be a strange way to end –  perhaps confirmation of Orr’s earlier acknowledgement that he isn’t a good listener.

There was some discussion on calling out actions or words that display –  or are perceived to display – bias (the senior academic noted that she how did so openly and straightaway –  although when a new graduate later asked about this, it was acknowledged that it was not necessarily an option prudently open to everyone).   Orr told us about coming back from an appearance at Parliament’s Finance and Expenditure Committee and noting that all the Reserve Bank team had been male, suggesting that needed to change.  Apparently –  as these things do –  word got out, and down the organisation, crystallising in an email from somone (a manager I gathered) that in future appearances only women were wanted.   The point of the anecdote was that apparently someone had called this to the attention of the Governor and he’d corrected the messaging.  But it actually sounded more like a warning about the risks of loose words, emoting without a proper framework, from a new CEO.

In fact, you wondered whether those people at the Reserve Bank had really got the wrong message.  There was a question from the floor about quotas and whether or not they were a good idea.  All three panellists seemed a bit ambivalent, but the Governor actually came back to elaborate his initial quick response and stated that “positive discrimination is needed sometimes”.   That such discrimination would almost certainly be against the law seemed not to concern this senior public servant, speaking in an open forum.

In some respects, the Governor was in fine form on Friday.   The phrase “consummate communicator” was running round in my head, but as I reflected further I realised that that isn’t an accurate description at all.  Orr has a great way with words, and can be very entertaining, but effective communication involves getting appropriate alignment between audience, subject matter, and occasion.  In a senior public servant, gravitas also matters (pompous and old-fashioned as it might sound to some).  And as some of the comments above suggest, he tends to be a bit tone-deaf.   At the time, Orr was appointed, I included this snippet (drawing on a Bernard Hickey story)

Only a few weeks ago – when he must already have known that he was likely to become Governor –  Orr gave a speech to the Institute of Directors, in which he reportedly dismissed the views of Deputy Prime Minister on the economy as “bollocks” and went on to suggest, in answer to a question about nuclear risks in North Korea, that perhaps two issues could be solved at once ‘because Winston is going to North Korea”.  Recall that at the time, Orr was not some independent market economist, but a senior public servant.     He might well have been right in his views on the economy, but is this how senior public servants should be operating?

In his talk on Friday –  mostly among public servants – he probably was more relaxed than he usually is in public; it was very similar to the way he used to be when we both worked at the Bank.  But listening to Orr again, I was reminded of David Lange, who also had a great way with words.  Lange’s way with words developed, as I think even he recognised, as a defence mechanism  –  the way an overweight child pushed back and held his own in the playground.  I’m not sure what it is with the Governor, but perhaps he hinted at it himself in his remarks on Friday, noting that having grown up far from the halls of, say, Christ’s College, Auckland Grammar (or the female equivalents) – although didn’t most people? –  he had felt that he was having to push to be accepted, and in turn had had to come to accept that people with other upbringings also have valid and useful perspectives, their own strengths and weaknesses.  It isn’t clear to me that he has yet fully got over that background and the associated insecurities.  Perhaps a lot of it is just shtick –  a comedy routine –  but it is striking how often one hears from the Governor, or sees in profiles, references to his friends and relatives in Taupo and Rotorua, particularly those who didn’t have much formal education or interest in book-learning.  Have I ever heard, I wonder, any senior figure –  not running for office –  reference his conversations with his mates at the TAB (or the Wellington Club, or the golf club, or the church, or….well anywhere)?

The Governor is a smart guy.  No one disputes that.  But there are questions about his depth, his seriousness, and his judgement (see, for example, my comments last week on his recent speech).  Add in a dominant personality and a self-acknowledged reluctance to listen –  although, of course, self-recognition is some small progress –  and it reinforces the doubts about vesting so much power in his hands, or of structuring a Monetary Policy Committee in a way that continues to ensure his total dominance.

Meanwhile, we are still waiting for a thoughtful on-the-record speech on monetary policy and/or the Bank’s financial stability responsibilities.  I’m still waiting for a response to my OIA request about his, apparently rather loose, speech to INFINZ a couple of weeks ago.

And the specific issues at the Reserve Bank, where women have rarely (well never) achieved really senior roles in the central areas of responsibility, await the Governor’s attention.   It is, in my view and my experience, a complex story, but if it isn’t addressed seriously and well over the next few years –  better management, better structures, better people –  it will be increasingly awkward for the Governor and the Board (around half female) paid to hold him to account.

 

Recycled rubbish

That’s the title of my former colleague Ian Harrison’s response to the government’s consultative document on getting rid of (some types of) plastic bags.  The consultation itself closed yesterday, but nobody supposes the consultation itself was remotely serious –  the irrational ban is going to happen anyway.  Having dug fairly deeply into the material used to support/underpin the consultative document, Ian illustrates just how little substance there is to the case.

Here are his key conclusions

Supermarket checkout bags do not materially contribute to littering.  Common sense and overseas evidence tells us that supermarket checkout bags are not littered frequently. There is more littering of very small bags, but mostly they will not be caught by a ban. Supermarket bags possibly contribute only around 0.1-0.2 percent of littered rubbish by weight. The Ministry has neglected to conduct a survey on the actual extent of supermarket bag littering.

Supermarket checkout bags are efficient and cheap.  Checkout bags cost about 2 cents, weigh between 4 and 7 grams, and are generally reused for other purposes. They are best described as ‘double-use’ bags. The amount of plastic in supermarket bags has fallen by 75 percent over the past 20 years. Compliant ‘emergency’ bags weigh around 6 times as much and reusable bags 20 times as much. Research shows that they are typically not reused frequently enough to offset the higher weight, so the use of plastic in shopping bags could actually go up.

Impacts can be perverse.  A shopper cannot be given a cheap lightweight plastic bag that is used to transport goods, and serve as a bin liner. But she can buy a much more expensive lightweight drawstring bin liner, which is used only once.

Supermarket bags likely to have a lower overall environmental impact than many alternatives. Alternatives bags have a much higher environmental impact that is unlikely to be offset by the higher number of times they are used.

Reusable bags are a health risk.   Research shows that reusable bags harbor dangerous bacteria and are not cleaned frequently. Supermarket double-use bags are safe.

A ban is unlikely to materially reduce marine littering.  The reduction in the small amount of plastic entering the marine environment of plastic checkout bags will tend to be offset by increased number of heavier bags littered.

The circular economy approach to environmental and economic management is often irrational.  The circular economy approach to the economy is centered in China and has been part of their 5-year plans. China has one of the worst marine pollution records in the world. The circular economy can be an empty slogan, but if taken seriously it can result in very inefficient decision making because it tends ignores the impact on people and the community when recycling is pursued at all costs.

A ban cannot be imposed by regulation.  Under the Waste Minimisation Act the Minister must be satisfied that the benefits of a ban exceed the costs. As there is no analysis of the cost and benefits in the consultation paper, the Minister cannot be satisfied, unless serious work is done to assess the costs and benefits.

Evaluation methodology rigged to generate the right answer.  The weights and evaluation criteria were set to bolster the score of the preferred option of a ban. The evaluation methodology has many flaws and is not a substitute for a proper cost benefit analysis.

A ban will have an economic cost of more than $75 million per year.  A cost of $75 million a year is our assessment from an illustrative costing model.

A minimum charge is a more efficient response than a ban.  The minimum charge that would reflect the costs of provision and associated environmental and social costs would be about 3 cents per bag.

Many of those points aren’t new in themselves (I made some myself in earlier posts on this issue), although I was interested to learn of the origins of the “circular economy” nonsense that now seems to appear in many government documents and even ministerial speeches.  Nonsense?  Well, here are Ian’s words

It is way of thinking, that comes out of the ‘limits to growth’ perspective (Boulding 1966). The earth is finite, resources are finite, so they must be recycled and not lost to the economy. While this finite resources proposition is literally true in the very, very long run, what the approach tends to downplay or ignore, is the role of the price system in allocating resources. As resources become scarcer, prices increases, resources are allocated to the most valuable uses, and innovation is encouraged that finds new ways of doing things. More natural resources are discovered because they are more valuable. The world economy does not suddenly collapse when the resources suddenly run out.

Prices simply don’t appear at all when the “circular economy” is being discussed.

For anyone interested in looking behind some of the material used to make up the case in support of eliminating supermarket shopping bags, Ian’s paper is useful because he made the effort to read the background papers (those cited and those that should have been), and to work through the logic of the case ministers and MfE are making.   It has its lighter moments, as when he suggests supplementary measures, banning Christmas (all those plastic toys) or

Ban on the sale of pianos.  Littering of pianos on beaches and dumping in the marine environment have been of historical concern in New Zealand (Campion 1993). Piano littering poses a threat to fish and marine mammals, and to human health. The enjoyment of piano playing is a colonial construct and has no place in a modern inclusive multicultural society.

And a much serious side in suggesting that if New Zealand governments really wanted to help make a difference, there are some obvious places to start.

Alternatively we could do something that actually makes a difference.

In 2009 Sustainable Coastlines did a cleanup, with wide community support, on a small Tongan island with a population of 4600. They removed 50 tonnes of rubbish, compared to around 80 tonnes for all their New Zealand opertions spanning seven years.
Below is a table taken from the report (Jambeck 2015) that provided the estimate of 8 million tonnes of plastics going into the oceans each year that has receivedwide spread attention. it shows annual total of mismanaged plastic waste, but this figure appears to be about four times larger than actual flows into oceans. While the individual country figures, the inputs and the methodology may be questionable in some respects, the data provides a reasobable representation of the scope for making improvement in the performance of our Pacific neigbours. Because New Zealand already has a robust refuse collection sytem and a reasonably good antilittering culture, the scope for large cost effective improvements here are limited. As we have demonstrated a plastic bag ban will make almost no difference, but has a large cost.

plastics

Our best strategy is to continue to build on voluntary efforts to clean up the coastal environment and to redirect, or supplement, our aid budget, to Pacific countries, where there will a much higher payoff in terms of reduced plastic pollution.

It is the sort of analysis one might do, or commission, if one were serious about looking at costs, benefits, and ways of maximising payoffs, as distinct from the sort of puff and rhetoric government agencies publish under the guise of analysis when they have a solution their masters want regardless and need to try to make some sort of case.

 

Electricity prices

I have fairly omnivorous interests but electricity, and the attendant policy issues, has never been among those interests.  When the sector was being reformed 20 years ago, it was one of the topics –  endlessly discussed on Radio New Zealand’s Morning Report – that I would simply zone out as I drove to work.  I don’t know how much our household pays each month for electricity and without looking it up couldn’t even name who our supplier is.

I hear the stories that appear each winter about the pressure some people face as regards electricity costs.  My (uninformed) presumption usually is that any issue is mostly about the shockingly poor rates of labour productivity in New Zealand, in turn reflected in the relatively low incomes the New Zealand economy supports, with some mix thrown in of changing tastes, poor disciplines, bad luck, and perhaps some issues at the margin around how the welfare system treats a handful of people.  Life is tough at the bottom.  Our “bottom” is so much worse than it need be, and successive generations of politicians should be held accountable for that.

But when the electricity review document was released the other day, I decided to dip into some numbers and see what I could find out.   As has been highlighted repeatedly, there has been a big shift over recent decades such that residential user (real) power prices have risen substantially while commercial and industrial (real) prices have been pretty flat or even falling.

electricity 1So the argument goes, there was previously considerable cross-subsidisation in favour of domestic users.  In particular, there has been a big change in how distribution costs are allocated.

electricity 2But how do New Zealand prices compare with those in other advanced countries?  The review report has some charts showing those numbers, using OECD data (all national data is converted into USD using PPP exchange rates).

Here are household charges

electricity 3

Just focusing on the blue bars, the basic (ex-tax) electricity prices New Zealand households face is around those of the median OECD country.   We are, of course, poorer and less productive than the median OECD country, so the burden of any of the necessities of life will tend to fall more heavily here than in many other advanced countries.

What about industrial prices?  Here is another chart from the review.

electricity prices

New Zealand prices for industrial users are among the lower in the OECD.

The OECD data MBIE reports goes back only to 2000, but here is how New Zealand prices have changed relative to those of the median OECD country over that period for both the residential and industrial series (using only the countries for which there is a complete series of data).

electricity 5

For what it is worth, there hasn’t been much change in the blue (residential) line over the last decade.

I was interested not just in the medians, but in the countries with the lowest power prices.  After all, it used to be something we boasted of here –  one of the great advantages of life (and business) in New Zealand: one of the arguments for the establishment of Comalco decades ago.   Norway, Canada, the US, Sweden, Finland, and Denmark (ex taxes) all have among the lowest electricity prices for both residential and industrial users.  In Norway, in particular, both lots of prices are far far lower than those in New Zealand.   And in Norway –  notwithstanding all that oil and gas –  something between 95 and 99 per cent (depending on which source you look up) of electricity generation is from hydro sources –  where the energy source itself comes, in effect, free.   The hydro+geothermal share in New Zealand also used to be above 90 per cent.

One reason why the hydro share of electricity production has dropped away in New Zealand is our relatively rapid population growth.  There are only so many rivers (and environmental/political constraints on using more anyway) and lots more people.

For a long time, the biggest factor driving electricity consumption/production wasn’t the number of people, but their (per capita) demands to use electricity.   I looked up an old yearbook.  Between about (I’m eyeballing a small chart) 1942 and 1955 electricity consumption per capita doubled.  Between about 1955 and 1971 it doubled again.  MBIE data show that by 1996 it had doubled again.   But here is the MBIE data on per capita electricity consumption since 1990 (sadly only updated to 2015).

electricity 6.png

Consumption per capita peaked in 2006, and in the most recent year was below the 10000 Kwh per capita first reached in 1996.  But our population now is almost a third larger than it was in 1996, and all of us (well, a few hermits aside perhaps) need/use electricity.

The new SNZ preferred (and genuinely better) measure of net migration only starts from 2001 and is only available up to early 2017.  But over just that period, net immigration of non New Zealand citizens –  with the most aggressive (per capita) immigration policy anywhere over most of that period – has contributed directly 741000 new people of a total population increase in that period of 936000.   All those people, natives and migrants, will have added to electricity demand.

Of course, the other factor that greatly influences the level of electricity production in New Zealand and, thus, the marginal price is the aluminium smelter at Tiwai Point, reported to consume perhaps 13 per cent of total electricity production.   The smelter was kept open a few years ago only as a result of new taxpayer subsidies (described by sceptics from the left and right as “corporate welfare”).

It is hard not to think that if our politicians had not been so determined to keep Tiwai Point open, and so determined to rapidly drive up our population in a unpropitious location (and despite the complete lack of evidence of resulting productivity gains), electricity prices for all other users would be rather lower.   Oh, and those with a renewables target in mind would have been able to rest easy too.

Then again, having adopted strategies that successfully lifted productivity –  clearly requiring something different in key areas to the approaches followed here for decades – would also have eased the burden on poor households of electricity prices.

 

 

On the anniversary of learning about Jian Yang

It was a year ago today that the Financial Times and Newsroom told us that we’d had a People’s Republic of China spy in our midst….well, in our Parliament actually.   Unknown to the voters – but presumably not to the National Party hierarchy, which must (presumably) have done its candidate vetting – for six years Jian Yang had sat in our Parliament, had sat each week in the governing party’s caucus, had spent several years on Parliament’s Foreign Affairs committee, and been part of official government delegations to the PRC.  And, so this joint FT/Newsroom investigation revealed, Jian Yang –  who had only moved to New Zealand in his 30s – had  (in the words of the FT article)

….spent more than 10 years training and teaching at elite facilities including China’s top linguistics academy for military intelligence officers, the Financial Times has learnt. Since being elected in 2011, Mr Yang has been a big fundraiser for the National party. He has consistently pushed for closer ties with Beijing and for international policies and positions echoing those of China’s Communist party.

He’d been a member of the military intelligence system of the People’s Republic of China….in colloquial terms, a spy.

The story sparked no action from the National Party –  other than the then Attorney General and minister for the intelligence services attempting to tar the stories as “racist” –  and Jian Yang was duly re-elected to Parliament ten days later, where he sits still.  Doing little (search Hansard, and you’ll find  – for example – that, despite being a third term Opposition MP, he has asked only two oral questions this Parliament).  And explaining less (he has refused all media comment to English language media for months, while apparently being quoted regularly in the PRC-dominated Chinese language media).  He has been fully backed by both the previous and current National Party leaders.

The story unfolded further.  Having initially claimed he’d been fully open about his past –  while explicitly asking the FT not to report it –  Jian Yang eventually acknowledged that he had withheld information about his PLA background when he had lodged residency and/or citizenship applications to New Zealand.  Extraordinarily, he told journalists that he had done this because the PRC authorities had told him to –  this even though by the time he was applying to New Zealand he hadn’t lived in China for some years.  But nothing seemed to happen as a result.   A few weeks earlier, the Green Party leader’s acknowledgement that in her youth she’d lied to claim welfare benefits, had (rightly in my view) cost her her job, and a full MSD investigation supposed to result in a refund.

It also emerged that Jian Yang had been a member of the Chinese Communist Party –  only a small minority of PRC citizens are members –  and although he claimed no longer to be a member, China experts say that from a CCP perspective no one leaves the Party unless they are expelled.   And Jian Yang had clearly been in favour with the Party, regarded as politically sound etc, or he’d never have been allowed  –  with his background in the PLA system  – to leave the country to study.

Various observers have noted the way in which Jian Yang prominently and frequently associates with the PRC embassy in New Zealand.  It was noted that in Jian Yang’s maiden speech –  where MPs often talk about the things that shaped them, their values etc –  he couldn’t bring himself to condemn the Tiananmen Square massacres.  In fact, in now seven years in Parliament it isn’t clear that he has ever said anything critical about the Party-state he chose to leave –  one of the most evil and repressive on the planet.

Even a doyen of the establishment –  former diplomat, current member of the board of the Contemporary China Research Centre, Charles Finny –  who claimed to have known for years of Jian Yang’s intelligence background was moved to comment in a TV interview that he knew that Jian Yang (and Labour MP Raymond Huo) was close to the PRC embassy, and that he was always careful what he said in front of either man.   The (unstated) implication was that he was worried that anything he said might well be passed back to the PRC Embassy.  It was an extraordinary admission, that he didn’t feel comfortable being fully open to people serving in New Zealand’s Parliament, who have sworn allegiance to New Zealand.

But then the whole situation is extraordinary:

  • we’d never have tolerated a former Gestapo official, who later acknowledged he’d lied about his background (on the instructions of his German masters) to get into the country, and who didn’t (once) have a bad word to say about the Nazi regime, to have served in our Parliament,
  • we’d never have tolerated a former KGB/GRU official who’d……..to have served in our Parliament, especially while the noxious Soviet regime was still in power,

And yet, even if Jian Yang won’t say so, that is the sort of regime the People’s Republic of China and its CCP rulers actually is.

In truth, there would probably be outrage (reasonably and understandably so) if someone with a background in US military intelligence lied about their background to get into New Zealand, and somehow got into our Parliament, refused ever to say anything critical about the US, and still spent lots of time close to the US Embassy.  And, for all its faults, the US is a long-term military and intelligence ally of New Zealand.

But about Jian Yang….nothing.  No investigation into those applications for residency/citizenship  –  by contrast, didn’t we turf out Indians on student visas who had (perhaps unknowingly) misrepresented their finances?   And not a word now from any member of Parliament, or any political party (there were a few comments suggesting unease from Winston Peters, but that was before he took office).

I’m sure there are decent people in Parliament, but none –  not one – seems to have any moral courage when it comes to this issue.   Don’t upset Beijing, don’t upset the donors, don’t upset that handful of big businesses that have chosen to make themselves highly exposed to the wrath of Beijing.

But then why would we really be surprised.  As Anne-Marie Brady’s paper –  released just a few days after the initial Jian Yang revelations – highlighted, the presence of someone like Jian Yang in a prominent place in New Zealand public life is just the tip of iceberg when it comes to the way in which the PRC has sought (successfully it seems) to seek influence in New Zealand (and a range of similar countries).  Little of it appears to be illegal, and perhaps little of it even should be (although tightening up, and closing some of the loopholes in, our electoral finance laws has merit, as would stronger rules on post-Parliament employment opportunities for former ministers).   The issue is more about political will.

And the political will is clearly to keep the New Zealand public in the dark as far as possible (did National advertise in 2011 their recruitment of an uncritical Communist Party member and former member of Chinese military intelligence?), play up spurious –  well, simply wrong –  arguments about New Zealand’s reliance on China for our economic fortunes, and do all they possibly can to play nice (and more) with Beijing.  Both National and Labour party presidents have been on record in the last year praising Xi Jinping and his regime, even as he has assumed more power, and the regime has become more repressive.  It is sickening.  But keep the money flowing, and simply set aside any values New Zealand governments once stood for seems to be the approach of all our political leaders, and their underlings.

Not a word, for example, has been heard from the Prime Minister or the leaders of the Green Party.   Given that Jian Yang is a member of an opposition party –  whom normally they would have no interest in protecting –  that suggests they think it is just fine to have a former member of Chinese military intelligence, who acknowledges he lied to get residency here, and who simply never says anything critical about Beijing, as a member of Parliament.   In my book, that makes them at least as bad as the current National Party leadership and MPs.

It is shameful.

A couple of weeks ago, ministers of the Five Eyes group issued a declaration about foreign interference in domestic politics, and wanting more surveillance powers etc.  Andrew Little, our justice minister and minister responsible for the intelligence services, was part of that grouping.   There were some fine words

We condemned foreign interference, being the coercive, deceptive and clandestine activities of foreign governments, actors, and their proxies, to sow discord, manipulate public discourse, bias the development of policy, or disrupt markets for the purpose of undermining our nations and our allies. Foreign interference threatens a nation’s sovereignty, values and national interests — it can limit or shape the polity’s ability to make independent judgements, erode public confidence in our political and government institutions, and interfere with private-sector decision making. We agreed the five countries would work collectively to counter foreign interference, protect our individual sovereignty, and ensure our values and interests are upheld.

But it is all a bit meaningless when successive New Zealand governments are so utterly supine around China, unbothered by the (plain as day) presence of Jian Yang in our Parliament.  Political leaders, cheered on by elements of big business, voluntarily assuming some sort of quasi-vassal status also sacrifices the nation’s values and the interests of its people.  It should erode public confidence in our leaders and our institutions.

Of course, the current government –  or at least elements of it – would have you believe that it is different.   And I was pleased to see them committing to purchase the P8 patrol planes-  even if the PRC threat to New Zealand isn’t really military, there is a military dimension to the threat to other free societies nearer the PRC.  And there are relationships to maintain with Australia (in particular) and the US, for non-PRC issues.  And they do seem rather worried about the activities of the PRC in the South Pacific and Melanesia –  potential debt-traps, potential military bases, and so on.

But they won’t name the evil.  They won’t speak openly about the character of the regime.  They won’t even call out the unacceptability of Jian Yang’s position.

There was a story on Newsroom the other day, clearly sourced directly from the Prime Minister, in which the message was supposed to be that the government was speaking up (“an increasingly frank New Zealand line on China”) –  including when a member of the Politburo came through Wellington last week.

“We acknowledged of course we are both countries on different development paths, that the nature of our political systems, but that we’ve always as our two countries found ways to discuss those differences in a way that works for our relationship, and I put human rights under that category,” Ardern said.

The detention of Uighur Muslims in Chinese “re-education camps”, the subject of concern by a United Nations panel, was raised under that banner, Ardern said.

 But that first paragraph is what all New Zealand politicians always say: we find ways to “discuss these differences”, but never actually mention them openly.  I’m sure the PRC leaders get used to those private ritualised conversations, which make no difference to anything.  Since they happen in private among “men or women of the world” they probably don’t even make anyone uncomfortable.  Couldn’t have that of course.

This time, it seems, there was some mention of the Xinjiang situation.  I guess that is better than no mention, but where is the moral leadership of the Prime Minister in shaping New Zealand perceptions of the regime she is dealing with?

Thus, having given lots of time to a New York Times columnist for a puff piece, a serious New Zealand journalist notes the continued refusal of the Prime Minister to engage seriously on issues around the PRC and New Zealand.

We hear nothing from our political leaders about:

  • the growing Chinese threat to a free and democratic Taiwan,
  • nothing about the ongoing militarisation of the South China Sea,
  • nothing about the debt traps associated with much of the PRC “aid”
  • nothing about the outrageous evil being perpetrated by the regime in Xinjiang (perhaps a million people in concentration camps),
  • nothing about new threats to religious liberty for Christian Chinese (“install surveillance cameras or close down”),
  • nothing about organ donor abuse,
  • nothing about new PRC laws to essentially require all Chinese companies to act as agents of the Party-state (including ones that operate here, notably Huawei),
  • nothing about the growing attempts to treat all ethnic Chinese abroad as forever part of the PRC

And, of course, nothing about that very visible tip of the iceberg Jian Yang.

The Xinjiang situation has been getting more attention internationally recently, including a searing report from Human Rights Watch.   One academic observer who read the report in full drew up a lengthy list, from the various interviews HRW did, about things that get you locked away.  Here are the first 10 –  the complete list is here.

Things which may cause you to detained without trial and locked away in an education camp indefinitely, in Xinjiang, China, 2018:

  • Owning a tent
  • Owning welding equipment
  • Owning extra food
  • Owning a compass
  • Owning multiple knives
  • Abstaining from alcohol
  • Abstaining from cigarettes
  • Wailing, publicly grieving, or otherwise acting sad when your parents die
  • Performing a traditional funeral
  • Inviting more than 5 people to your house without registering with the police department

But our political leaders show no sign of caring.  Actually caring, when you hold positions in government that enable you to do and say things, implies more than a quiet, and no doubt very very muted, pro forma word to your CCP peers when, at the same time, you are trying to negotiate new deals with them.

How about levelling with the New Zealand people about the nature of the regime – the Nazi Germany of our day, if (so far) with more staying power.   How about bringing even a modicum of a moral stance to politics, not subordinating everything to the business interests of a few firms, and the fundraising imperatives of the political parties?   Yes, it would require some courage, and some rare honesty.  But it would be much truer to the values most New Zealanders uphold.   Perhaps there would be a price –  there almost always is for things that matter, things that are worthwhile –  but if tiny Palau can stand up for itself (though for how long?) surely distant, diversified, New Zealand could?

Saying “enough” and refusing to any longer tolerate Jian Yang in our Parliament would be a (pretty modest but) telling start.  More likely, a shameful anniversary will pass in embarrassed silence…and again next year.