CEOs, the PM, and the degraded state of the public sector

What do you think of when you think of a CEO of a large or prominent New Zealand entity?   Mostly, I think of a highly-paid confident political operator and virtue-signaller.

I’m sure there are exceptions (many of them will be the ones who consciously choose to kept a modest profile).  There will even be some hugely-impressive people who’ve created and built businesses that have made them and society as a whole better off.  Sadly –  marker of our long-term economic failure –  there aren’t many of them, at least among that “large or prominent” grouping.

But apparently I don’t really know what I’m thinking at all.   At least according to a bunch of highly-paid corporate bureaucrats (private and public).

I opened the Dominion-Post newspaper this morning to find a full page advert, half of it in Labour Party red, screaming “What does a CEO look like?”.   Well-dressed, highly paid, and scared of upsetting anyone was my first thought?

But I was wrong (at least according to this advert)

“Admit it. You pictured a white middle-aged male didn’t you.”

Well, no, I didn’t actually.  Of course, the majority of (big private business) CEOs in New Zealand probably are white, middle-aged, and male, but (conservative as I am) I try to view people on their merits, not their sex, skin colour, age, religion or whatever.  In passing one might note that most people in New Zealand are “white”, and mostly I’d expect heads of big and powerful agencies to be middle-aged (that loose label than can encompass anything from about 37 to 67 – although at least one 12 year old reader of the paper tells me 35 is really the starting point).

Ah, but really age has nothing to do with.  It is all about sex.

Could it be because every time we see a female CEO we still refer to her as a “female CEO”?

Speak for yourself, because I know I don’t.  Incompetence (and no doubt competence) knows no bounds of sex.

But apparently it is “indefensible”, this crime that the advertisers have convicted us –  the (overwhelmingly) liberal readers of the Dom-Post –  of, the more so

in a country where a mother in her late thirties is up there on the world stage being a pretty excellent Prime Minister

I guess advertisers are welcome to their opinion.  Personally, I view our current Prime Minister as proof that we have now reached the generally welcome stage in public life where a woman leader can be as useless and ineffectual as any man (Elizabeth I, Catherine the Great, Margaret Thatcher, and Golda Meir may well have been in days when a woman had to be markedly better to excel).

They go on, strangely, to describe the Prime Minister as “the CEO of New Zealand”, which is wrong both in law and in substance.  The government is not the country.  The “CEO of New Zealand” is invoked in support of their cause –  “ask her and she’ll tell you”.

And who is behind this advert?  Given the Labour Party colour and the slathering praise of the Prime Minister you might have assumed it was paid for by the Labour Party, or some front body.

But it wasn’t the Labour Party.  It was a group called Champions for Change.  When you look them up you find that they are a bunch of CEOs and board chairs (one was a chair until very recently when a High Court judgment against her saw her ousted), who also seem to have forgotten the name of the country (it isn’t called Aotearoa New Zealand).  There are 52 of them, about 30 per cent female and the rest male.   They represent (note the word –  these people aren’t here as individuals) 45 organisations (their logos bedeck the front page of the website).

If people in the private sector want to spend their money, or that of their shareholders, on praise of the Prime Minister –  a party political figure –  that is, of course, their choice.

But who is on this list of leaders?  Among them is

Gabs Makhlouf, Secretary to the Treasury

Mike Bush, Commissioner of Police

Peter Chrisp, Chief Executive of New Zealand Trade and Enterprise

and the Ministry for Women (CEO not pictured) is also a sponsor.

These people have clear responsibilities to be neutral public servants, not putting public money under their control into full-page adverts championing the Prime Minister personally.   There are State Services Commission guidelines around the political involvement of public servants, and if involvement in an advert like this doesn’t breach those standards, there is something very wrong with how the guidelines are written.    Among the key points of those guidelines

Very senior State servants, and those who have regular, direct contact with Ministers, or represent a public face of their agency should exercise careful judgement when considering involvement in political activities.

Judgement that seems to have been sorely lacking in this case.

These aren’t the only public sector people involved (although they are the clearest breaches of acceptable conduct).

We also have the CEO of Auckland Council (note the Labour mayor) and the chairs and chief executives of various SOEs (wholly state-owned) and majority Crown (or council)-owned companies.  That list includes New Zealand Post, Air New Zealand, Genesis Energy, Ports of Auckland, and Transpower.    You could add in a couple of a university senior managers as well, one of whom (Massey) must be very grateful to the Prime Minister for giving her cover in her little spot of bother last year.

I get that these individuals, and even their organisations, might want to bash the public around the ears and do their virtue-signalling, but they simply shouldn’t be using their office (and public resources) to champion the Prime Minister.  It is the sort of thing one expects in degraded semi-authoritarian states, not in New Zealand.  It should be totally unacceptable.

One other thing that was striking about the advert was that looking through the organisations these people represent there were (see above) lots of public sector agencies, government bodies, and Crown-owned businesses. There were plenty of local bosses for big overseas businesses.  There were people from really highly-regulated entities (looking at you banks), really quite dependent on government favour, and professional services firms –  dead keen on government contracts – likewise.  There wasn’t, as far as I could see, a single representative of a successful outward-oriented New Zealand business that had developed in the last 30 years (and, actually, only a couple of inward focused ones).

It was not a confidence-inducing sign that these people really had any idea how to build and lead a top-performing business in a genuinely competitive environment. But I guess they know how to keep on the right side of the Prime Minister.

As I say, private sector people can do or say (“get with the project peasants”) whatever their board and shareholders are happy with.  Public sector figures –  particularly the heads of such important agencies as the Police and The Treasury – need to get out, and stay out, of partisan political projects.  They need to called to order, but in the degraded state of modern New Zealand (isn’t Shane Jones still a senior minister?) you’d have to wonder who would actually do that.

(UPDATE: And I almost forgot to mention that the CEO of Stuff –  publishers of the Dominion-Post – is also part of the slathering praise of the Prime Minister.)

virtue

 

 

Foreign interference and deference to foreign powers

On Monday evening, the Australian ABC network broadcast its Four Corners current affairs show, with a feature slot (the link will take you to the video or to a full transcript) on what they describe as the PRC’s “covert political influence campaign in Australia”.

Somewhat corrupted as the system might be, they seem to take this stuff quite seriously in Australia: just this week, there have stories expressing concern about the Opposition leader attending the wedding of the daughter of a PRC billionaire (and donor) who was then a resident of Australia but has subsequently been stripped of his residency and right of return on security grounds.   And, around issues raised in the ABC programme, former Prime Minister Malcolm Turnbull has been out calling for action around claims that a Liberal minister had allowed preferential access to this same billionaire.   Sure, it is election time (and Turnbull no doubt wants his revenge on Peter Dutton) but the contrast to New Zealand is pretty stark.   As Turnbull put it, “this is the national security of Australia”.   The programme including comments from the former ALP senator forced to resign over his too-close ties to PRC-linked interests.

The programme has clips from Andrew Hastie, the chair of the federal parliament’s intelligence and security committee, and from Christian Porter, Australia’s Attorney-General, responsible for the foreign interference laws.

ANDREW HASTIE, MP: In Australia it is clear that the Chinese Communist Party is working to covertly interfere with our media and universities and also to influence our political processes and public debates.

and

ANDREW HASTIE, MP: We’ve had multiple briefings at the top secret level from ASIO and other agencies that foreign interference is being conducted in Australia at an unprecedented level.

and

ANDREW HASTIE, MP, CHAIR, COMMITTEE FOR INTELLIFENCE & SECURITY: There are several authoritarian states who are involved in foreign influence across the globe. But in Australia the Chinese Communist Party is probably the most active. China is seeking to influence our elites, particularly our political and business elites, in order to achieve their strategic objectives.

There is chapter and verse –  including emails –  on one particular episode of the PRC embassy/consulate pressuring a local council to decline sponsorship from one of the few Chinese-langugage media outlets that won’t bend to PRC pressure.

Or accounts of an ethnic Chinese radio host –  himself too scared to talk to the ABC –  whose programme was stopped because he wouldn’t bend to the demand to not say anything negative on air about the PRC or the CCP.

We had comments from John Garnaut, previously Fairfax’s correspondent in Beijing, and then senior adviser to Malcolm Turnbull (and author of a classified report on PRC influence/interference in Australia).

Of the aforementioned billionaire

JOHN GARNAUT, FMR ADVISOR PM, MALCOLM TURNBULL: There is a lot of well documented evidence, to use your word, of Huang Xiangmo’s umbilical connection to political organizations which were guided, if not controlled, by Beijing. He was the president of the most important United Front work department platform in Australia.

JOHN GARNAUT, FMR ADVISOR PM, MALCOLM TURNBULL: Well, it tells us how cheap our political systems are. I mean, it’s extraordinary that nobody did any due diligence, any serious background checks for so long. In fact, it was the case also, people weren’t even reading the newspaper. So, political systems and parties just took what they could for as long as they could get away with it. And the danger was, that they were becoming financially dependent on a foreign political system. And that is a precarious place to be.

SAM DASTYARI, FMR ALP SENATOR: I’ve been very upfront and honest. I was too close to the big donors like Huang Xiangmo, I paid a very, very high price for that, I resigned from Parliament because that was the most appropriate thing that I could do.

Dastyari goes on to note his (successful) efforts to get approval from Peter Dutton for an (almost unprecedented) private citizenship ceremony for the wife and children of the billionaire.

Of the billionaire, Andrew Hastie observes

ANDREW HASTIE, CHAIR, COMMITTEE FOR INTELLIFENCE & SECURITY: He did have a lot of access. Um, he was photographed with a lot of senior figures. undeniably, he had a lot of influence. And, um, you know, you can make the connection between his donations and that influence.

Later in the programme it turns to the situation of Professor Anne-Marie Brady, whose house was broken into the day before she was due to testify before Hastie’s committee.

PROF. ANNE-MARIE BRADY, UNIVERSITY OF CANTERBURY: There are many indications that from the start, from what was taken and what was left behind, that make it look like it was not your normal burglary, for example, targeting of a broken laptop. Of no value to anybody, unless you wanted to know who my contacts are or get other evidence off my laptop. Taking a burner phone that I’d last taken to China, but not taking cash, not taking other valuables that are of great re-saleable value. That’s unusual.

ANDREW HASTIE, MP, CHAIR, COMMITTEE FOR INTELLIFENCE & SECURITY: We were very disturbed. We had an esteemed academic from New Zealand, telling us that she’d had her, ah, home broken into, her laptops taken from her, and she was suggesting foreign interference. We took it very seriously.

The presenter goes on to report that

Government sources [NB, presumably Australian government sources] have confirmed to Four Corners that intelligence assessments identified China’s spy service, the Ministry of State Security, as the prime suspect behind the intimidation of Brady. Just after she was called before the Australian parliament, Chinese intelligence agents interrogated her academic collaborators in China about her testimony, which had been published on the parliamentary Hansard record.

PROF. ANNE-MARIE BRADY, UNIVERSITY OF CANTERBURY: There was a visit to the university who had hosted me in November 2017, also from the Ministry of State Security, and they were upset that I had spoken to Hansard about that evidence. All these kind of factors told me that I was of interest to the Ministry of State Security in China.

There is more on the intimidation and imprisonment of a couple of Chinese-born Australians.  Well worth watching and reading.

Perhaps the other bits worth quoting relate to the question of political donations.  Here is Hastie

ANDREW HASTIE, MP, CHAIR, COMMITTEE FOR INTELLIFENCE & SECURITY: When it comes to donations, particularly, politicians should be naturally circumspect about who they receive donations from. Particularly if donors have connections to overseas, and particularly to foreign governments who are seeking to influence our political processes.

Would that we heard anything of the sort from any New Zealand MP.  The programme goes on from there to focus on one particular donation

Jack Lam is a member of three organisations involved in the Chinese Communist Party’s united front overseas influence network. He also a fugitive. In 2017, Lam was charged with paying a 1.3 million dollar bribe to senior immigration officials in the Philippines.
After fleeing the Philippines, Jack Lam visited his Australian golf club, twin creeks. It was there in February 2018 that Lam and fellow director Tommy Jiang hosted a golf day. Their special guest was Tony Abbott, who as prime minister had been warned by ASIO about foreign influence and donations. A fortnight later, Tony Abbott was again hosted by Twin Creeks, this time for an event supporting his local liberal party branch. Mr Abbott told the fundraiser he was no friend of communism, while the liberal party later declared $40,000 in services donated by Twin Creeks.

JOHN GARNAUT, FMR ADVISOR PM, MALCOLM TURNBULL: Look, if I was a politician, I wouldn’t be taking money from somebody who is involved in a foreign propaganda outlet.
NICK MCKENZIE: Why not?
JOHN GARNAUT, FMR ADVISOR PM, MALCOLM TURNBULL: Because there’s at least the risk of the perception of conflict of interest, of being tainted.

That’s all Australia, of course.  But why, given what we know about Australia, and the work of people like Anne-Marie Brady on New Zealand, why would anyone suppose that the situation here would be any less serious?  The names, laws, and precise details will differ, but the interests – on both sides of those corrupted exchanges – won’t be.

But what do we have here?  Take those Four Corners comments about the Brady break-ins.  The Prime Minister has shown a longstanding preference for nothing uncomfortable to be discovered about those break-ins, never once making a robust public defence of Brady’s position and the appropriateness of her work. It all seemed embarrassing and potentially awkward for the government.

The Herald had an article on Tuesday following the Four Corners programme, which included this (with, incidentally, a Huawei advert appearing between the second and third paragraphs when I downloaded the article)

But last night Australia’s Four Corners current affairs TV show said conclusions had been reached behind closed doors in Canberra.

“Government sources have confirmed to Four Corners that intelligence assessments identified China’s spy service as the prime suspect behind the intimidation of Brady,” the programme said.

The claims were rejected last night by Ardern, the minister responsible for national security, who said she had seen no such assessment.

“This claim is completely wrong. I have received no advice identifying the Ministry of State Security as the prime suspect.”

It is a strange comment, because the transcript suggests that the comment was about Australian government sources.  What would our Prime Minister know about the views of the Australian security services on such issues?    Perhaps the ABC meant New Zealand government sources, but even if so, given her clear lack of interest in any embarrassing outcome to the Brady case, why would she even necessarily know who  the New Zealand Police and security services regarded as the prime suspect?    Perhaps it would be constitutionally appropriate for her to be told if she asked, but if her office made clear that she didn’t want to know any potentially embarrassing (but not beyond reasonable doubt) stuff I doubt they would be rushing to tell her.  After all, Andrew Little, not her, is Minister for the SIS, and Stuart Nash, not her, is Minister of Police.  It might be quite convenient for her not to know, given her apparent desire to keep firmly on the right side of Beijing.

Ah, but of course we have the inquiry into potential foreign interference being conducted by Parliament’s Justice Committee.  Under pressure –  after attempting to block Anne-Marie Brady from appearing –  the committee finally opened public submissions.  But who chairs the committee?  Why, the same person who (a) tried to block Brady, and who (b) has strong connections to various United Front bodies, and is on record as supporting, for example, PRC perspectives on Tibet.  I don’t suppose he will be fronting for any current affairs programme any time soon on PRC interference in New Zealand, or that he would have much credibility if he did.

This morning, the heads of the GCSB and the SIS appeared to testify to this inquiry.  The text of their public remarks is here.  It was all pretty tame and, mostly, quite convenient stuff.   They claimed they would give more material in a classified briefing to the committee –  of the sort which, if disclosed, would “be likely to affect New Zealand’s national interests in an adverse manner”.  You mean like naming names (countries or individuals), which would no doubt be uncomfortable for our politicians, but might well be in the interests of our country?

There were a few interesting snippets nonetheless.

NZSIS and GCSB therefore use “foreign interference” only to describe an act by a foreign state, or its proxy, that is intended to influence, disrupt or subvert a New Zealand national interest by covert, deceptive or threatening means.

That must be frightfully convenient.  So if, for example, someone who had served in a foreign state’s military intelligence and had close ongoing ties with, including business interests in –  all of which had been widely known for some time – was sitting in the New Zealand Parliament that wouldn’t count as “foreign interference”?  I guess not, it is more like “domestically-chosen subservience”.

Offering well-paid jobs to former members of Parliament and ministers in entities owned or controlled by foreign state wouldn’t count as “foreign interference” either on this definition.  The incentives in those arrangements are quite obvious.

Much of the GCSB/SIS commentary seems very concerned with material along a spectrum of what they label “misinformation”, “disinformation” or “malinformation” (you can look up their definitions for themselves).  As they note, there wasn’t much sign of this stuff in the 2017 election.  On the other hand, there is a very major media outlet that runs People’s Daily articles, has a Chinese-language outlet, which is alleged to select stories for their acceptability to Beijing, translate articles in similar directions, and where the parent outlet allows one its staff –  who serves on the Advisory Board of the government-funded smooth-the-Beijing-waters propaganda body  –  to write about PRC issues (at all, let alone with no disclosure of that potential conflict).

Is there some good stuff?  Sure.

Motivated state actors will work assiduously over many years, including in New Zealand, to covertly garner influence, access and leverage.

But there is also quite a bit that reads as if the GCSB/SIS would really preferable the great unwashed were not even aware of the issue (emphasis added)

I would also note, given public commentary on these issues, that interference efforts do not need to be successful to cause damage to our democracy. Trust in the institutions of government and democracy can easily be eroded.

and

Whether or not interference activities are effective, growing awareness of them creates room for the perception, domestically and internationally, that foreign states wield improper influence in New Zealand. This perception may be concerning to New Zealand’s partners and may degrade confidence in our values and democratic institutions;

Perhaps you didn’t intend to convey a sense that it would be better if only all this were kept under wraps, but that is how it read to me.

What about some other good stuff?

Manipulation of expatriate communities is a vector for interference. Some states engage overtly or covertly with their diaspora as a means to achieve strategic aims. NZSIS is aware of efforts by foreign states to covertly monitor or obtain influence over expatriate communities in New Zealand. Shared culture, language or familial connections can facilitate this. Ongoing family ties in the foreign state can be leveraged to suppress unwelcome political or religious activity.

Foreign language media is another way through which expatriate communities or diaspora populations can be influenced or mobilised towards particular issues, including issues relevant to elections.

Which country has a large diaspora here, where such issues might be relevant? North Korea?  No.  Russia? No.   Iran?  No.   (Not even what is left of ISIS).  So I guess that leaves the PRC.  But haven’t people in a position to know suggested that the chair of the committee hearing this evidence is close to the PRC embassy?

On political donations, they pull their punches.

….political donations are a legally sanctioned form of participation in New Zealand politics. However, NZSIS becomes concerned when some aspect of the donation is obscured or is channelled in a way that prevents scrutiny of the origin of the donation.

One of the main reasons we become concerned about these activities is because as relationships of influence, or a sense of reciprocity is established, they may be used as leverage to facilitate future interference or espionage activity.

I have already commented on the constraints we face in talking about specific intelligence. However, in broad terms, I can say that we have seen activities by state actors that concern us.

So it wouldn’t raise concerns with the SIS if a New Zealand citizen with close ties to the PRC /CCP authorities arranged for fully-disclosed and lawful substantial donations to a political party?

Or if such donors –  often photographed with New Zealand political figures –  were being given royal honours?

I guess not, because after all whatever motivations the PRC might have, in the end it is willed deference, and deliberate looking the other way, by New Zealand politicians.    Remember that Andrew Hastie quote from the Four Corners programme

ANDREW HASTIE, MP, CHAIR, COMMITTEE FOR INTELLIFENCE & SECURITY: When it comes to donations, particularly, politicians should be naturally circumspect about who they receive donations from. Particularly if donors have connections to overseas, and particularly to foreign governments who are seeking to influence our political processes.

Would that they were, would that they were.

Quite probably the heads of the SIS and GCSB are well-intentioned people, but when I got to the final page of their testimony there was a line that highlighted the kabuki-theatre nature of this inquiry.

We also need to equip those on the front line of our democracy – Members of Parliament, Ministers, political parties and relevant government agencies – with the capability to identify and protect themselves from foreign interference risks.

It is our political parties, members of Parliament, and ministers who are the real problem here (enabling most –  but not all –  of what probably should be of real concern), and yet Kitteridge and Hampton have to go through the motions of pretending they are the solution.

This is a Parliament where not one member, from the Prime Minister down, will express the slightest concern that Jian Yang –  acknowledged former member of the PLA intelligence system, someone who acknowledges misrepresenting his past on his residence/citizenship firms, someone who was a CCP member (and experts tell us no one leaves voluntarily) –  sits today –  as he has for eight years now –  in the New Zealand Parliament.  One where the presidents of the National and Labour Party compete in their gushing praise of Xi Jinping and the CCP.  One where the government refuses to say anything about gross human rights abuses, and the Opposition foreign affairs spokesperson channels CCP propaganda.  And where close to these things know that there is a significant issue around political donations, and yet no party is willing to take a lead, acting in a “circumspect” way, even around transactions that may be lawful but are not proper.

There was one last story out of this morning’s select committee hearing, reporting Jami-Lee Ross

The now-independent MP followed up his question by asking if Bridges had been basing his comments on a briefing from her when, in an alleged conversation between Ross and Bridges on May 14 last year, Bridges said the Chinese community were keen on a Chinese minister in a future Government.

“He said to me ‘I can’t do it because basically the spooks are telling me he’s a Chinese spy’,” Ross said.

Can’t imagine who he was referrring to…..

Wouldn’t it be pretty dreadful if such a person were still sitting in the National Party caucus?

Surely such a thing couldn’t happen?

But in New Zealand it seems to.

 

 

 

Not happening (at least under this government)

I’ve had a couple of posts (here and here) this week prompted by Phil Twyford’s generally encouraging recent speech about fixing the market in urban land, in ways that might –  in his own words –  flood the market with development opportunities, and thus materially lower land prices in and around our cities.

My bottom line: I see no reason to believe that far-reaching reform –  in ways that might make a real difference, as distinct perhaps from just some rewritten laws – is actually likely to be implemented under this government.   We have a weak government, united on relatively little, and there is no sign that serious reform in this area is a prime ministerial priority.  A mere fifteeen months from now the election campaign will be in full swing.

More importantly, market prices suggest that people transacting in the urban land market don’t believe it either.

There was another excellent illustration in this morning Dominion-Post as to why one would be foolish to put a high probability on such reform happening.   It appeared in the form of two articles, one with the (hard copy) headline of “Where will Wellington grow?”  and the other with the hard copy headline “Tough Choices”.  I’ll set to on side for now the point that with a sensible immigration policy, the abolition of corporate welfare and longstanding New Zealand birth rates the city probably wouldn’t be growing at all –  as I pointed out recently, it is not as if stellar productivity growth is some irresistible lure.     Wellington City Council can’t be held responsible for New Zealand population growth, so lets grant for the sake of argument that the population probably will keep on rising.

There are Labour mayors in all three of our largest cities. But it is worth recalling that the Wellington City Council is one the most woke-lefty outfits in the country –  if any council is well-aligned with the government it must be them.  It has a Labour mayor who surely has national political ambitions, several Green councillors, and deputy mayor who if she had her way would strip out all reminders of the Anglo heritage and culture of the bulk of the population, and even the councillors who are not from Labour or the Greens are mostly only a softer shade of pinky-green.  The same issue of the newspaper reports council officers questioning the “appropriateness and relevance” of street names in my own suburb, mostly named for various British and European rivers.  As I’ve noted previously, it must stick in the craw of councillors and their staff to have their offices on (Edward Gibbon) Wakefield St and (Queen) Victoria St and their (well, our) city named for the Duke of Wellington.

This is the opening of the article

City councillors are bracing themselves for a “nimby” backlash as a major plan to find space for 80,000 more Wellingtonians to live goes out for public consultation.

Councillors voted unanimously this week for their spatial plan to go out for feedback.

and goes on to note

The council’s spatial plan posits four scenarios that people will be able to provide feedback on: one centred on high-rises in the CBD, another focused on building upward in suburban townships, a third creating a new suburb in Ohariu Valley and a fourth scenario extending developments at some existing greenfield sites.

No sense anywhere of letting the market work, in response to the revealed preferences of prospective purchasers. No sense of getting the pricing right (for infrastructure connections etc) and then letting things develop in an evolutionary way. No, it is all a matter for councillors to choose, for councillors to “make space”.   And, of course, all led by the Council’s (Australian) Chief Planner.

One councillor notes that

councils were required by law to have a plan for expected growth and Wellington had “no choice” but to come up with a plan to accommodate the extra 80,000 people expected in the city over the next 30 years.

Perhaps, but why couldn’t that plan be, we will get the pricing right, we will allow for appropriate differential rating, we will build (or allow to be built) connections pretty much as required, we will facilitate intensification where local property owners are agreeable, and then let people and the market take it from there?  An abundance of competitive development opportunities – a superfluity –  is what keeps prices down.

That sort of approach might look something like the fine words from Phil Twyford. But not a single comment, from councillors or council staff, in the article suggests anything like that sort of mindset.

If the government were really serious about thoroughgoing reform, wouldn’t it have been an ideal opportunity to have sought to work with their ideological allies on the Wellington City Council to make it happen here – to actually lead the way and bring land prices back to something more like the value in the best alternative use?

Instead, we have the right-on Labour mayor, emphasising not choice, not facilitation, but his own ideological preferences, all supported by the bizarre rhetoric of having to “squeeze people in”, when Wellington City (let alone the greater Wellington region has abundant land).

When mayor Justin Lester is asked for the scenario he wants he just points up

As I understand it, he himself lives in a low-rise family home in a quiet suburb.  But apparently he thinks it is up to him to determine that many fewer of the next generation would have that opportunity.  His Chief Planner is clearly right behind him –  his distaste for a physical expansion of the city seeps through in almost every comment in the article.

It is a democracy, and too much power in such matters rests with councillors and their staff.  My point here isn’t so much to champion an alternative model –  much as I would support one –  as to make the point that anyone who doubts the government is serious about thoroughgoing reforms and significantly reducing land prices in and around our cities, need only look to the lead being provided by the government’s close ideological allies at the Wellington City Council.

As the Dominion-Post articles suggest, there is likely to be lots of blowback against the options preferred by the council (intensification and more intensification) and so in the end whatever gets approved will be some sort of lowest common denominator.  There will be more houses built over time –  as there have been in fast-growing cities around the country in the last 30 years –  but never enough land-liberalisation to ever create a sustainable rational expectation that future land prices in and around our cities will be materially lower than they are today.

Perhaps one day reform will really happen, and prices really will sustainably adjust.  But, as yet, there is nothing in the wind –  whether from the Prime Minister, or Labour mayors or Labour/Greens councils – to suggest it will occur on this government’s watch.  And the young and the poor  (especially the young poor) will be the ones who pay the price, in lost opportunities.

Xinjiang: an opportunity for Ardern and Bridges

On my way home this afternoon I listened to an interview, in the Sinica podcast series (on all sorts of matters Chinese), with Nury Turkel, chairman and founder of the Uyghur Human Rights Project.  For anyone at all interested in the subject it is well worth listening to.

As the interviewer himself put it, he is someone who is not generally seen as anti-PRC, and indeed regards himself as still being listened to to some extent by some of the more strongly nationalistic/pro-PRC people.  But he is clearly appalled at what is going on in Xinjiang, initiated and executed by the regime in Beijing.

In the programme notes there is this summary

6:44: Nury calls for a larger international coalition to decry the horrors in Xinjiang, and highlight the shadow that Uyghur internment will cast on the longer history of China, stating, “In the end, we want two things. One, we want the camps to be shut down. It’s an embarrassment to the Chinese people, even in their history. It needs to be shut down. And, two, we want to be able to restore the Uyghur people’s basic dignity. Give them their dignity and respect back.”

In the course of the discussion it was noted that while Beijing is not generally that receptive to international criticism and pressure at all,  some people are more likely to be listened to –  or be awkward for the regime – than others. Hardline permanent anti-Beijing hawks are easily brushed off.

But people, institutions, and countries that have toadied to Beijing at every turn are a different matter.  Much as I am critical of Jacinda Ardern and Simon Bridges I don’t believe either of them is likely to be comfortable with the atrocity that is Xinjiang.    Fairly or rationally or not, the Prime Minister now seems to carry with her  –  perhaps internationally even more than at home – some sort of halo of kindness, decency etc.  That image etc surely carries some responsibility.

New Zealand doesn’t matter much in the scheme of things, but precisely because our main political parties and successive governments have been such toadies, it would not be nothing –  in Beijing or in the rest of the world – if Jacinda Ardern and Simon Bridges rediscovered some moral core, some courage, some decency, and were willing (together perhaps) to openly and publicly deplore what is going on in Xinjiang.   (They might add in the plight of Falun Gong, Christian believers, and so on too).  To call it as it is: a moral stain, and one that blights the reputation of any leaders who just walk past quietly, or make excuses  (Todd McClay) for the atrocity.

Fairly or not, it often isn’t the people who strongly opposed evil from the start whom history remembers most favourably, but those who once walked with the perpetrators of evil and then stepped away and spoke up early enough.   The evil in Xinjiang has gone on quite long enough, that no decent person should any longer be able to turn a blind eye.  That includes New Zealand’s sycophantic officeholders.

For anyone interested in learning more, Sinica has a monthly article on the situation in Xinjiang.

 

Three totally unrelated items

Rather than clutter in-boxes with three separate shortish emails.

First, a follow-on from yesterday’s post about house prices. I noted that the absence of any real sign of falling land prices in and around our cities suggests that the (admirable) words around possible reform from the Minister of Housing are not being treated as credible. Asset markets typically incorporate expectations about future changes in factors that might affect prices in the relevant market.

I had a brief exchange in the comments to that post with Eric Crampton of the New Zealand Initiative, and I see that Eric has now set out comments along those lines in a post on his own blog.

Eric’s key point is that it is hard to short houses. That is quite true, but not (I reckon) determinative. There is no traded derivatives market (eg a futures contract on the QV index, whether nationally or regionally), and although someone who would naturally own one house can sell that house and rent for a few years, it isn’t easy or cheap to do so (actual transactions costs are non-trivial, it is often hard to get a secure long-term rentals, many people have ties to specific neighbourhoods etc). Of course, many holders in other markets are pretty passive too – you can short US equities (say) but a huge proportion of holders are either in passive index-following funds, or in funds that allow only small deviations from benchmark.

But, to get back to the land (and housing) market in New Zealand. If hardly any suburban owner-occupiers (like Eric or me) are going to sell and rent, even if we believed – as Eric seems to – that substantial reform really is coming, there are plenty of other market participants, and it is the marginal choice that will drive the price. Young people starting out can make a choice to hold off buying for a few more years (they are already renting, so have no new transactions costs). Older people looking at trading down can bring forward that move by a year or two. And probably more importantly still, marginal players often aren’t owner-occupiers (actual or potential at all).

If, as someone owning rental properties, you believe the government is really serious, and change is really coming (in fact, even if you only believe it with a 50 per cent probability), you face a high chance of a large fall in the price of your asset over the next few years. A rational response to that expectation would be to sell now – to get out while the going is still good. If you had a bought a few sections in the outer suburbs thinking you might develop them a few years from now, if you believe the government is serious and change is coming, you would want to offload your land exposure now. And – for the really serious players – if you hold pockets of land, large or small, on the periphery of major cities, and have seen the value of that land sky-rocket as population growth and regulatory scarcity rewarded you, any serious prospect of a change in regime, in which peripheral land might once again go for something like its best alternative (farming) use, would surely see you reassessing now.

None of these effects are as instantaneous as (say) the fx market’s response to a Reserve Bank OCR announcement, or even the stock market’s response to possible corporate tax cuts, but they are real and efficacious mechanisms which we should expect to see already at work if the Minister’s plans are likely to be the real deal. Sure, if his speech to the New Zealand Initiative two weeks ago changed expectations – and it certainly impressed some people, including me – we won’t yet see the results in the data (house price data is at best available monthly, and decent land price data is even harder to come by). But that won’t be a credible story as the months roll by.

Of course, in any such experiments with non-instantaneous effects, it is hard to untangle precisely what part of any price movement is due to the specific factor one is trying to isolate. But if these reforms are really the big event the Minister suggests (recall that the aim was to “flood” the urban land market), the effects should be pretty apparent pretty soon (especially with a slowing economy, easing migration, extended brightline tests, ringfencing, talk of CGTs, tighter credit conditions and so on). I remain pretty sceptical, less (as I noted yesterday) because I doubt Phil Twyford’s intentions, than because I doubt the commitment of the government as a whole (the PM in particular), or its interest in actually seeing land and house prices fall materially.

My second item related to the Reserve Bank.  Yesterday, there were two emails from the Bank.

The first was this press release

pac c banksThis from an organisation that claims it is underfunded.  “Fostering investment in green technology” simply is no part of the Reserve Bank of New Zealand’s mandate.  Nor, to be blunt, does the Reserve Bank have any obvious expertise.

Perhaps I should be encouraged to learn that the Governor is going to focus on lowering the cost of capital in New Zealand (bearing in mind that our real risk-free interest rates have long averaged the highest in the advanced world), but I don’t suppose that is what he meant.

And the second email from the Reserve Bank was this

capital

I guess it is better than not publishing the material at all, but this new 65 page document is finally released more than 3.5 months since the consultation document, setting out the Governor’s plans, was published, and with only a month until submissions close.  I haven’t yet read it, but someone who has tells me that it still doesn’t deliver a proper cost-benefit analysis, and only promises that they will do one one day –  probably after the final decision has been taken, to provide support for whatever the Governor settles on.

This is no way to make policy on serious matters.  Meanwhile the Governor cavorts with his tree gods and dabbles in things –  green technology just the most recent example –  that are no responsibility of his.

Thirdly, and finally, why is the case of Shane Jones (Associate Minister of Transport), the Northland trucking company (owner by a donor and distant relative), the NZTA, and the prosecution, not leading all media outlets?  Why is the Prime Minister not fronting up and facing hard questions about acceptable conduct in her Cabinet?   Appearances of impropriety should not be tolerated, let alone substance.

Matthew Hooton’s tweet seemed apt

Reminding ourselves that Transparency International is itself largely government-funded.

Raymond Huo’s creative reimagining

In my post yesterday afternoon I mentioned that Labour MP Raymond Huo (he of various United Front affiliations and apparently regarded as close to the PRC Embassy) had an op-ed in yesterday’s Herald (strangely not apparently available on-line, although there is a photo of the article here). [UPDATE: Herald link working again.] As I noted, the article is welcome for Huo’s overdue indication that he will recuse himself from involvement in bits of the Justice Committee’s deliberations on the foreign interference aspects of the election inquiry “to avoid any perceived conflict of interest”.   Huo chairs that committee.

But the centrepiece of Huo’s article is a creative reimagining of history in which he tries to pretend that he (and his colleagues) had never opposed hearing from Professor Anne-Marie Brady.    There had never been any intention of blocking Brady, and they had just been waiting to consult the GCSB and the SIS before deciding whether to re-open submissions.  The whole thing was, he claims, a beat-up by National’s Nick Smith.

I doubt anyone really believes him, probably not even the other Labour MPs he persuaded to vote for blocking Brady (not then recusing himself), but in case there is any doubt, here is his own tweet from 6 March

The clear implication is that it was simply Professor Brady’s fault that she had not got on and submitted earlier (even though the deadline was before Andrew Little extended the scope of the inquiry).

Here is his quote from the article he himself links to:

Justice committee chairman Labour MP Raymond Huo said the decision to decline Brady’s late request was purely procedural.

The closing date for submissions was over five months ago on 23 September 2018 and the date was widely publicised by committee staff in the usual way, he said in a statement.

The Committee had asked the Security Intelligence Service, the Government Communications and Security Bureau and the National Assessments Bureau to appear.

“As committee chair, I am satisfied that the correct procedure has been followed and that the agencies will keep the committee well informed about any issues of foreign interference that may arise,” Huo said in a statement.

No hint there of someone who really wanted to hear all the evidence, all perspectives.

And, at the time, Huo was backed by the Prime Minister’s office

A spokesman for Ardern echoed Huo’s comments, saying: “Our position would be that this is a procedural matter for the committee and that the various agencies presenting are well placed to provide information on foreign interference and the threat of it.”

At the time, even some cheerleaders for the see–no-evil hear-no-evil approach to the PRC came out and stated that they thought Huo had overreached.  And, of course, a few hours later he was in full backdown mode, and is now trying to rewrite history to put himself in a less unfavourable light.  He doesn’t seem to have considered that actually fessing up and saying “yes, I made a mistake, I regret it” would be more likely to generate a favourable response.

Huo concluded his op-ed noting that “robust debate, not stereotyping or sweeping generalisations, will help examine the real issues”.  That is exactly what Professor Brady has been promoting, and what Raymond Huo (supported by his bosses and colleagues) seems, until now, to have been trying to avoid.   (To his credit, he actually wrote an op-ed.  National’s Jian Yang – he of the Communist Party membership, misrepresentations on official documents, and long service in the PLA military intelligence system –  just refuses to face English language media, protected in doing so by Simon Bridges.)

UPDATE: A reader writes to share the text of a letter of protest sent to Labour members of the committee after the initial blocking, and to the Prime Minister, and news of one Labour MP’s decent response.

Pandering to the PRC

The capital’s daily newspaper the Dominion-Post had an editorial that must have warmed hearts in the Beehive and MFAT.   “Fawning” would not be too strong a word for it.

The handshakes appeared warm, the smiles generous. Prime Minister Jacinda Ardern described the talks as constructive.  China’s President Xi Jinping said New Zealand was a “sincere friend and co-operative partner”, one of his country’s closest relationships with the developed West.

Job done. Trust restored. Many billions of dollars in trade secured

Trust?  In a regime responsible for so much evil at home and intimidation abroad (wasn’t it only this week PRC fighters were intimidating free and democratic Taiwan)?  Surely not even the PM and MFAT take that line seriously?  But I guess “trust” was more about what the CCP rulers were supposed to feel towards the New Zealand government, the Prime Minister having abased herself, and joined the principle-less ranks of New Zealand politicians dealing with the PRC and eager for some deals and donations.

Then there was a little lesson to dear readers not to expect governments to speak up on the abuses of the PRC.  There is “a great deal of money at stake” don’t you know, and it isn’t the done thing to speak up.  Know your place peasants, we act for the business community.

The newspaper channels the convenient, but false, line about how much power the PRC wields over New Zealand, oblivious to the fact that countries make their own prosperity. Individual firms who over-expose themselves to thugs shouldn’t expect backing from the rest of the community, let alone from our government.  Unless, of course, our government –  once known for rhetoric about “kindness” – thinks the thugs are just fine.

And then the fawning editorial departs completely from reality, trotting out the weird line touted by David Parker a few months back that somehow we could be a conduit between “two competing superpowers” as if (a) either side would be interested, and (b) the United States and the PRC were really much the same, moral equivalents.

But it was the NZME stable of media that was really all in with Beijing today.  In no particular order I noted these pieces:

First, John Key was back, talking about how “critical” the PRC relationship was and that nothing should be allowed to get in the way.    The government is told to mind its words, and there was the bizarre assertion that

“China is the only country effectively where have unfettered access to all parts…If we treat that relationship properly we will continue to prosper off the back of that.”

Setting aside the more general claimed that New Zealand “prospers” –  when it actually languishes and has closed no productivity gaps in the last decade, or two, or three –  ask services exporters about “unfettered access to the PRC” or potential foreign investors about “technology transfers”.

He goes on

The Former Prime Minister said people don’t need to be concerned by China’s involvement in New Zealand.

I guess he would say that wouldn’t he? He works for companies trying to do business in China, he worked closely with former PLA intelligence official, Jian Yang, in his caucus, and seemed totally content with the fawning adulation his party president Peter Goodfellow has given to  Xi Jinping and the regime.   And all those party donations must have come very much in handy.

The article ends

He said our relationship with China needs to be treated really carefully.

Even John Key seems to know this is a subservient relationship he champions, about deals and donations, not about any natural friendship or commonality of values.  Values are simply of no account, it seems, in a Key view of the PRC.

And then there was the Wednesday column from NZME’s columnist Fran O’Sullivan, who travelled to Beijing, courtesy of Air New Zealand –  a big corporate very keen to keep on good terms with Beijing.  That travel support was disclosed, but not the fact that O’Sullivan –  along with Jian Yang and Raymond Huo and others –  sits on the Advisory Board of the (largely government-funded) propaganda outfit the New Zealand China Council, or that she is head of something called the China Business Summit.   It wasn’t particularly fawning, but it was framed around conveying PRC messages, and a sense that New Zealand governments owed something to Beijing.  Certainly no sense of Beijing as something of a rogue actor, at home and abroad.  More gushy was O’Sullivan’s piece in the big “China Business” supplement to today’s paper.   It isn’t so much that O’Sullivan’s views are necessarily wrong –  appeasement will always have its defenders, in 1938 and now – as the total absence of any alternative perspective in the nation’s largest paper.

The Herald was back to its fawning, if patronising to the PM, self in its editorial on the Prime Minister’s visit to Beijing.  The online title “PM makes a good start on China repair” casts her as some naughty schoolgirl who has now come to herself and made amends, as if there was ever anything to make amends for.   The Herald also did not like, one bit, the idea that the government might have dared to think that the PRC was not always a force for good, whether in the Pacific or the wider world.  As if it was channelling the People’s Daily –  then again, Beijing is reported to substantially influence the Herald’s Chinese language offshoot –  we read

In Beijing on Monday President Xi Jinping told the Prime Minister, “Our two sides must trust each other”. That is a message we must take to heart. Trust does not mean closing our eyes to possible risks but it means we should look for evidence of a threat rather than assume one is there.

No evidence of the PRC being an untrustworthy partner?  No, of course not.  Forget, shall we, small things like the GCSB joining other countries in calling out PRC state-sponsored intellectual property theft?  Or Beijing’s actions in pressuring Chinese language media here and in other western countries?  Or the intimidation of ethnic Chinese who speak up about the regime?  Let alone, the way Beijing operates around Taiwan, the South China Sea, or as regards it own people –  despite being party to all manner of international human rights covenants.  A trustworthy lot, the Herald reckons.  Yeah right.

They do get briefly descriptive

China is a monolithic state where ruling Communist Party controls every level of government and every sector of the economy. It is a nuclear-armed superpower and makes many of the world’s consumer goods.

I presume it was accidental that that first sentence was so all-encompassing that it must have included Huawei?

And then we get back to the cravenly creative.

Xi is more autocratic than any leader of China since Mao Tse Tung and is asserting China’s external interests more strongly. But he is doing so in proper ways, through diplomacy and development aid, notably the “belt and road” infrastructure schemes.

“Proper ways”!   None so blind as those who choose to look the other way.  If Taiwan or the South China Sea, or ethnic Chinese in New Zealand and other countries, don’t bother you, if state-sponsored intellectual property theft bothers you not at all, if widely-recognised attempts at economic coercion don’t bother you, then perhaps the Herald is quite right.  Most people will wonder if the text was just lifted from the People’s Daily.   And wasn’t “economic coercion” precisely what the China-panderers would have us worry about?

The first half of the very final paragraph might also have been lifted from a CCP propaganda sheet

China has been a superpower for a long time and it has not flexed its muscle much further than the South China Sea to which it has an historic claim.

“Historic claim” indeed –  a proposition for which there is very little evidence.  And might it be too much to have pointed readers to aggressive PRC activity in the East China Sea, its invasion of Vietnam in 1979, its confrontations with India –  as well as all that other interference and pressure touched on earlier.  Not the stuff friendly powers do.

But, channelling Beijing to the end, the Herald tells us that the PRC had “earned” trust (precisely how, they don’t attempt to explain) and that

Our Government now needs to show the Prime Minister’s one-day visit was not a one-day wonder.

Just stay flat on your face Prime Minister and the Herald and its business advertisers will be happy.

As I noted a bit earlier, there is a full 28 page China Business supplement to today’s paper.  It is pretty fawning from start (the front page leads with “Jacinda Ardern: Mission Accomplished”) to the end (the full page advert from Huawei).  There is the odd interesting piece in the supplement but not a word that might upset Beijing (or probably even MFAT and their front, the China Council).    The only bits I really wanted to highlights were two columns suggesting that it was simply illegitimate for New Zealand to express any serious unease about one of the most awful regimes on the planet.

There was a column by Todd McClay, National’s foreign affairs spokesman, who nailed his colours firmly to the mast last year talking of the Xinjiang “vocational training camps” (a million or more people in concentration and indoctrination camps) being no business of anyone’s but the PRC.   This time

Where we have differences, like the death penalty or South China Sea, we have learnt to raise them respectfully and diplomatically, directly between officials, leaders and ministers, and not via the media.   This is a respect that must be maintained.

Mr McClay and his party can choose to respect the butchers of Beijing if they choose, but don’t come asking for my vote while they do.  To him/them, it is all about deals and donations, and nothing else.  If he’d been the trade spokesman in December 1938 perhaps he’d have stressed how important it was to be respectful of Adolf Hitler and his henchmen and not let some local disturbance like Kristallnacht colour any sort of relationship.  It is sickening, and there is no evidence that the current Prime Minister is any different.   I thought this New Zealander studying matters Chinese at ANU put it well

(As it happens, I don’t think the PM should have been speaking out in Beijing,  She simply shouldn’t have been there, like some supplicant indifferent to the evil prepetrated daily by her hosts.)

And then there was the egregious but revealing column by a senior lawyer who is also involved in the China Council, repeating the myth that somehow the PRC is “critically important to our economic security” and offering a lecture concerned that New Zealand is “driving away” PRC investment in New Zealand –  and all that advisory work I suppose.

In business, we typically seek to avoid getting offside with a major customer.  If we have differences we tend to try to deal with those with great care with a view to preserving the business relationship beyond the immediate issue. Politicians may well disagree with me but I’d argue that fundamentally the approach should not be much different when we have a divergence of views or concerns with a major trading partner.

I guess if Ms Quinn wants to deal with thugs we probably shouldn’t prevent her from doing so.  But if you sup with the devil, or provide advisory services for the Mafia or its affiliates, don’t expect to be looked on favourably.  It is private firms that deal with Chinese companies, the New Zealand government – supposedly representing all New Zealanders, not just a few business interests – does not having a “trading partner”.  It is a government, not a business.  Private firms –  and the individuals involved –  must make their own calls about morality, but from reading article after article like this, it is almost as if they’ve chosen not to care.  Care or not, they make themselves complicit in what the regime does.   Private businesses, pursuing personal economic interests, shouldn’t be allowed to skew our foreign policy to their private ends.

It is all relentless.  Earlier today someone emailed me wondering how long it would be before the Herald was emulating papers like the Washington Post in publishing paid PRC propaganda inserts.   In the Herald’s case, why would the PRC waste money when they can get the one-sided propaganda for free?

[UPDATE: A reader points to People’s Daily material that the Herald is already running.]

But I guess it was a good day for the China Council, MFAT, and the Beehive –  unless, that is, readers actually stopped to think about the pap they are expected to swallow.

The Herald also made room today for a column from Labour MP, and chair of the Justice committee, in which he presents what can only be called a “creative reimagining” of the way in which he had led his Labour colleagues to block Anne-Marie Brady from appearing to discuss foreign interference, was backed in that stance by the Prime Minister’s office, until the blowback was just too great and he had to backdown and agree to open the inquiry to public submissions.  Amid the creativity, it was encouraging to read –  very belatedly – that Huo will recuse himself from involvement in the foreign interference bit of the inquiry (or does he just mean the Brady bits?) “to avoid any perceived conflict of interest”.