This is a guest post by Franks & Ogilvie colleague Pam McMillan

Here’s another council with a debt problem, protesting ratepayers, and operating without a valid long term plan . Rosanne Jollands, a candidate, found out the Council had been excluding the public on the topic. Now there’s a  story in the Taupo Times  The Council has been meeting behind closed doors and wants the government legislative wand to fix the LTP problem retrospectively.

The LTP problem started last year when they adopted the LTP prior to receiving an audit report from Audit New Zealand. They must have it before the LTP can be adopted. So it is not valid. Under section 93 of the Local Government Act 2002 a local council must at all times have a long term plan. The LTP was controversial as it planned to change rating  from land value to capital value, and assumed rate increases of more than 7 per cent over the following three years.

Unless there is some unforeseen and urgent need for revenue, rates must be set in accordance with the LTP and funding impact statement of the financial year (s 23 Local Government (Rating) Act 2002). So there is a good argument that without a valid LTP rates levied since July 2012 are not valid.

It appears the Council has been advised to formally re-adopt the LTP and then ask the Minister of Local Government for a validating Order in Council. An Order in Council is usually confined to matters of form or procedure rather than major issues of substance (s 261 of the Local Government Act 2002). There may be a question whether the LTP would have been adopted if there had been consultation on it with the benefit of the Audit Report.

Taupo ratepayers were consulted on the LTP in early 2012 without it. There was major protest against the change in valuation basis, and the increases.

Alternatively the council could seek a local bill validating the LTP and the possibly invalid rates. That is how the Kaipara District Council Commissioners plan to fix some of the legal problems for Kaipara (Kaipara District Council (Validation of Rates and Other Matters) Bill).

[SLF comment – this highlights again the uselessness of secrecy, and the mess created by thinking that participatory democracy (formal public planning and seemingly endless consultation processes) could replace the protections abolished when councils were given powers of general competence. Successive governments will whittle away the unproductive consultation nonsense, but probably without putting in place effective alternative protections against arrogant uses of the local coercive and taxing powers.]

So when will the boat go faster?

Unfair I know but irresistible. Thankfully New Zealanders can claim much of the credit whichever side wins.

How many others have wondered, with me, for how long we can stay at elite levels in anything with an employment law that drives a culture hostile to single-minded pursuit of excellence. Fortunately the employment lawyers have yet to sabotage the All Blacks the way they've sabotaged our attempts to value excellence above all else, in so many other spheres.

 For those who want more on how to vote under STV, and a different view  from mine posted yesterday, see Graeme Edgeler's guide to STV.

Of the many illuminating comments on Graeme's post one from Steve Todd stands out for interest to Wellingtonians

Wellingtonians are remarkably confused by their STV voting system. I’ve heard few who are confident they know how to maximise the chances of  getting what they want with their vote.  Perhaps some are quietly confident – they know how, and are happy that others will mess up their voting and have less impact.

The working rule is really simple, but before telling you – a bit of history.

Nigel Roberts on Stuff over the weekend sang the praises of STV, calling it “fair”. That premise about what we need most from a voting system also opens the the Royal Commission report that gave us MMP. It is dopey. The test should be what is most likely to deliver decisive government which can nevertheless be easily tossed out. That is democracy's vital work, tossing out the passengers after we've seen they're useless, and those we're sick of. Its only clear advantage is getting rid of leaders who should go.  "Fairness’ systems fudge and negate that advantage.

As always I’m interested in how systems work in practice, not in how they look to those who use self-referential slogans like “fairness”.

I sat on the Select Committee that gave local government the choice of voting systems. I’m sure that few of us understood how it all worked even after multiple explanations. There was particular mystery for those who found ‘maths’ hard at school. The Sainte Lague vote counting method was eventually approved by the majority on trust, with open admission that that they did not have a clue how it worked.  Rod Donald was the major influence. I was intrigued by his conviction that  Green voters would be best at working voting tactically. He said they would make sure they educated their supporters, the way Aussie parties do.  I suspect that he was actually counting on the ‘sounds nicer’ bias among young voters, and expecting to get more dopey second, third and fourth preferences.

He may have been right. Neil Harrap in a letter in today’s DomPost summed up STV as “ending up with whoever the fewest voters dislike”. When most voters don’t understand that any vote rank, however low, is treated as some degree of  liking for the candidate, ninnies who say nice things are more likely to succeed than those who say what they mean, even if a majority agree with them. The passenger types will get more second and third preferences.

Now – the simple rule.

Vote only for people you would be happy to see winning. Stop there. Do not rank candidates just to show who you least prefer. Do not rank candidates to help make sure that at least a dog beats the genuine idiot.

Remember – all vote rankings are positive. It is a no brainer. Your vote will be transferred if your favoured candidate does not win. Only vote as far down the sequence as you actually prefer. Stop so that you do not give any votes to candidates who should not be elected at all, even if they’re better than the worst.

Having been an Alliance Party candidate disqualifies Jack Yan, and somewhat surprisingly I have too little information on John Morrison, to vote for him first, after he supported the damaging ‘living wage’. Though the incumbent is a decent person, she has dithered too much to deserve the leadership.

So I’ll vote first for Nicola Young, then Morrison, then no more.

In ward voting the same approach will maximise the impact of your vote. For example, do not list Helene Ritchie at all, even last. Her graceless stupidity got a fresh outing against one of my colleagues supporting personal responsibility for offensive drunkenness last week, but even without that reminder I’d have thought of her as one of the main beneficiaries of ignorant voting on name recognition.

Some in the Labour caucus are talking already about the "Ruddliffe" era just starting. They may be right. We'll see within a year whether David Cunliffe has the understanding Rudd lacked, that people will only be lead and inspired, long term, by a leader who shows frequently that he would sacrifice himself for their cause if necessary, and for them collectively, instead of the other way round. But even if he has it, the nature of his party may mean it is not rewarded with loyalty. Selflessness may be treated as the weakness of a political mug.

Young Labour may have made traditional virtue so  risible that it would now take a prodigy to resurrect it among them. All politics attracts misfits. But the left has been for too long a  more comfortable berth for envious, unhappy people who project their own blackness onto others and despise personal responsibility. The nobility that could emerge from the solidarity of hard working under-valued manual and trade workers is now just a memory, invoked by people with no legitimate claim. Shane Jones has been warning of this.

Labour here should be looking closely at how hard it has been for Australian Labor to overcome their internal culture. It is not possible to build an inspring party out of people without bottom lines in behaviour, even to their opponents. They've all been reared on ends justifying means, so it is not surprising that it is now applied to competition within the team.

Australian Labor's years of self blinding loathing for new Australian PM Tony Abbott were mentioned in the wall-to-wall post election analysis, but the main theme was awe at Abbott's discipline, and mockery of Labor strategists for expecting that discipline to falter while they indulged in civil war without the excuse of doctrinal division.

There was a chorus of  awe that Abbott could climb away from being bracketed in unpopularity with two detested Labor leaders despite having been a principal author of that unpopularity, given the political wisdom that negativity hurts the author as much as, or more than the target.

I expect to see now in New Zealand similar sanctimony from the left media establishment as Cunliffe is urged to re-earn the trust of their flock. No one I saw from the Australian left had the self awareness or humility to wonder whether the flock could summon the qualities of character to make them worth leading. None asked whether a party composed of young professional identity politicians with no genuine connection with real workers or real business leaders could draw on the experiences of self-sacrifice that generats men and women with the selflessness needed to lead.

The Spectator has identified the nastiness of the Australian left's supporters as their achilles heel.

To see lack of self knowledge try David Marr's short biography "Political Animal – the making of Tony Abott" . At A$20 from the airport bookshop it  makes clear much was previously inexplicable. Abbott simply does not share most of the trivial modern pieties of the cultural elite. To Marr this is sinister though Abbott's passions and temptations would have seemed natural to the leading elements of the Christian Anglo world during its heroic age of expansion, late 19th century.

Marr may have  tried to be objective according to his lights. But the book reflects a thin intellect and tight lipped anxiety outside his class. He describes but cannot empathise with what he sees as an enigma. I see in what Marr describes the simplicity of a genuine man in a world of intellectual cowards. Marr can't, for example, describe Abbott's reflection of the popular anxiety about unauthorised boat people immigration, without fashionable revulsion at the peoples' fears. Marr blames those fears on the low cunning of Howard and Abbott even though it came to be shared in spades by both Rudd and Gillard.

I think his book nevertheless captures the essence of the reasons for Abbott's success even if Marr paints them in dark colours. Intelligence, wide curiousity, courage, seriousness of purpose, ambition and persistence, the capacity to inspire, to build loyal teams, good relations with bureaucrats when a Minister are all acknowledged, and must play a part.

But my impression from all the coverage, exultant from his supporters and ruefully impressed from those who will dedicate themselves to destroying him after the shock wears off, is that Abbott now provides something he himself worshipped in his heroes, as described.  The Anglo democracies may be craving it, having partially destroyed their capacity to cultivate it, and to respect it where it still emerges.

It is a quality partly innate. But our forebears believed it needed nurturing. They considered that it could flower as a virtue only with self conscious long preparation and practice.

Abbott is cited in the book referring to it as he saw it in John Hewson. Abbott is unabashed about identifying and cultivating qualities he describes as manliness.  .

The disastrous reign of Tony Marryatt is over, years after it would have ended in any country with less hypocrisy than NZ about "excellence" and leadership on merit. The $400k he takes away is the least of the damage. Far more expensive has been the culture of dithering incompetence sustained by the inability to sack him, and Christchurch's loss of civic pride and can-do spirit.

In 1999 Clark's Labour won an election promising to end golden parachutes for overpaid top managers. I thought it was good policy. Shortly before entering Parliament I'd acted for a company that had to pay many millions to exit a CEO. He'd played hard ball, knowing that paralysis and reinstatement by a stupid employment court would cost the company far more.

When Margaret Wilson was pushing through her Employment Relations Bill I noticed that it did nothing to deliver on the promise. Instead the law went in the opposite direction. It needed to end the so-called "unfair dismissal" rort that enables people getting exhorbitant salaries to hold their companies to ransom even when the board has lost all confidence in them, and they are destroying morale amongst their subordinates.

I tried to find out why she'd dropped the policy. She was uncommunicative.

I asked my friend Ross Wilson, head of the CTU, whether they had some objection to the change. "No" he said, provided it did not affect lower income workers who did not have the bargaining power and market value of the managerial classes.

So I drafted amendments to the Bill along the lines approved by Ross. They would have assimilated our law to the uncontroversial Australian law, stll supported by Aussie Labor and Coalition politicians. It says that employees over a salary bar only have unfair dismissal rights if they negotiate for them. Their market value is assumed to reflect bargaining power. So most senior Australian managers are employed with 'at will' dismissal terms, usually providing for payment in lieu of notice of between 3 and 12 months.

Minister Wilson would not entertain the amendment, despite the CTU support. Astonishingly the IOD and other establishment bodies took no interest. Only Roger Kerr of the Business Roundtable (comprised of CEOs) endorsed my amendment.

I've advanced that simple change to the current National government several times. It should have been a no brainer for them. But genuine reform was just too hard for Kate Wilkinson. I should have tried Gerry Brownlee. He must have found infuriating in Christchurch the waste of money, time, loyalty and trust associated with the New Zealand inability to get rid of people who can no longer lead.

With senior management the rights and wrongs are irrelevant. The interests of the organisations they lead (and serve) come first. When they no longer have the confidence of their boards, or those they lead, for whatever reason, they must go without delay.

One of the few justifications for their exorbitant pay is that it is also high risk.

Minister Bridges – I could probably find those draft amendments, or recreate them in a few hours, if you want to do something to make all New Zealanders very happy.

As a (former) wind-surfer who now feels every muscle after a day of hauling on the wing, I'd looked at kite-surfing enviously but assumed I was past picking it up now. I'd imagined every sinew and tendon and muscle screaming as I hung off the kite.

Over the weekend former Nelsonians Andrew and Luke Bamford at Kiteboarding Cairns showed me I was wrong.

I've got a long way to go to master a board and kite, but the light touch needed to control the wing was a revelation. The instruction was just the right mix of caution and 'go-for-it' encouragement. It was fun just learning to fly that wing. They reckon that reasonably instinctive competence with it comes after 20 hours.

I'm hooked (or should I say harnessed).

Tony Abbott is refreshing. His many truisms deeply offend the cultural elite.

Among them was the observation that it is ridiculous to suggest that you could have free speech so long as it doesn't hurt people's feelings.

So the change of government in Australia will see amendment of section 18C of their Racial Discrimination Act which prohibits remarks that offend others on grounds of race or ethnicity. At least until the clerical left next take power, Austrailia may be spared the spectacle of their government spending millions to prosecute people for exercising a  right as fundamental as quoting from the Koran in support of their argument that Islam is pernicious.

But that advance does not  outweigh the risk to free speech represented by the British Establishment's siezure of the opportunity presented by the division and hypocrisy in the media response to the hacking 'scandal'. If Britain muzzles it's media, the world's longest standing media freedom "light on a hill" will be obscured.

The following excerpts from comment by the UK Libertarian Alliance on the Proposed Royal Charter to Regulate the Press (2013) remind us of the significance of the current trends:

Since the expiry of the Licensing Act in 1695, there has been no statutory regulation of the press in England. Instead, the press has been regulated by private or public actions through the ordinary courts of law. This is not to say that we have enjoyed complete freedom of the press during the past three hundred years. The laws of seditious and blasphemous libel were, until about the middle of the 19th century, serious curbs. Since then, the various Obscene Publications Acts, and the Official Secrets Acts, and the modern laws against “hate speech,” have continued to keep the press imperfectly free. Throughout the entire period, until this year’s Defamation Act, there has also been the law of common libel. The Libertarian Alliance deplores all of these constraints.

What the absence of direct regulation means, however, is that no one has needed any kind of registration to start a print publication, or to submit to any jurisdiction over its contents except that of the ordinary courts of law. Therefore, if they have wanted to close down any publication, or simply to determine its contents or tone, the authorities have had to take action in open court, in front of judges and juries over whom they have had little control, and proceeding by a reasonably impartial rule of law.

The Royal Charter currently proposed will bring the press under the same formal control as the broadcast media. Unless they want to risk discriminatory libel awards, newspapers will have to register themselves. They will have to submit to various extra-legal codes of conduct. There will be review and complaints procedures from articles already published. The whole process will be managed by an organisation run by trusted members of the Establishment and staffed by reliable clients of the Establishment. Vast salaries will be paid to those at the top. These will be funded by what amounts to a tax payable – as is presently the case with the BBC licences fee – disproportionately by the poorest buyers of newspapers.

This organisation will, by formal adjudications – though more often by secret pressure – ensure compliance of the press with the current ruling class ideology. Today, this is political correctness. Thirty years ago, it would have prevented rational discussions of homosexuality and other alternative lifestyles. No one can say what might be the ruling class ideology a generation from now. All we can say for sure is that the press will be forced to bow to that ideology, whatever it is.

A further effect of the proposed scheme of regulation is that it will enable the rich and well-connected to avoid public discussion of their wrong-doings. A regulated press might not have been able to reveal the nature and extent of the abuse of expenses by Members of Parliament, or to entrap senior politicians into promises of corrupt service behind the scenes, or to reveal as lies most of the claims that propelled us into the Iraq War. We have a right to know how those exercising power over us behave in private. This obviously means their breaches of the criminal law. It also means their hypocrisies and general breaches of the moral law.

We are told the current proposals are justified by the scandals revealed in the Leveson Inquiry – telephone hacking, leaking of confidential information by the police and so forth. However, all the abuses revealed were already crimes. Without any change in the law, there have been prosecutions, and people have been sent to prison. Rather than a new law, capable of achieving far more than we are assured is needed, we simply need the existing laws to be properly enforced. At least since the 1980s, the custom has emerged of responding to every scandal or misfortune with new laws. This is a bad custom that has led us far towards a police state. Where freedom of the press is concerned, the time has surely come to stop and consider how the undoubted abuses of certain newspapers can be corrected without a Royal Charter that will, sooner or later, become the warrant for a general scheme of press censorship.

For me its been an Australian morning of happy indulgence in politics-for-grown-ups. Here voters are trusted to withstand the perils of campaigning right up to close of polling. That includes button holing voters on their way into polling places, handing out detailed 'how to vote' example ballot papers.

All Aus major dailies except the Age have come out editorially for Abbott. Some have been blunt. Yesterday's Courier Mail (I'm in Queensland till Monday) covered almost the entire front page with a headline (ostensibly quoting Abbott) reading "Make Queensland a Rudd Free Zone".

 The ABC seemed at first to be scrupulously balanced this morning, showing us the happy tradition of sausage sizzles outside election booths all over the country. We've seen  live  leaders statements for the day, including superbly disciplined message repetition by Abbott  as he and his wife (and beautiful daughters) vote. The retrospectives are nicely digested for us outsiders though perhaps getting tiresome for those who saw them first time around.

However, after a few hours of repetition of bloopers I think I'm detecting the early stages of the beginning of the ABC's campaign against Abbott for the next election. I can't count how often I've heard of his 'blunder' in referring to the sex appeal of one of his candidates.

The ABC would be oblivious to this betrayal of their cultural bias. From my 'taxi driver survey' ordinary voters retain a healthy indifference to the no go zones of the broadcasting Miss Manners.

I struck gold with yesterday's driver. He is a founder of a newly registered party. It is aiming for the next election on a campaign of 'sovereignty' – I think that means competition for the Pauline Hanson party and the Palmer Party.

I'm trying to read three papers whle channel surfing the Aussie breakfast round-ups. The ad breaks are all too short. The morning will be over before I've got into more than a fraction of the wide range of perspectives in each paper. That includes full page party electoral ads.

If you don't like sport or the election campaign there is little for you here today.

Wellington is a city of trade associations. Current law changes may help them, though increasing the risks for their executives. They’ll certainly keep busy the Wellington lawyers who look after them.

Trade associations have always lived dangerously in competition law terms. They exist for collaboration among competitors. If members can act as a cartel there may be the prize of monopoly profits at customer expense.

Accordingly they’ve been suspect for hundreds of years. Members claim (and often believe) that their personal good is the public good, but Adam Smith famously summarised their incentives in 1776 in The Wealth of Nations:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices….

So trade associations will be paying close attention when Commerce (Cartels and Other Matters) Amendment Bill gets through Parliament within the next few months[1]. It criminalises ‘cartel behaviour’ but also makes safer what the government calls “pro-competitive collaboration” defined as “cooperation [that] is not carried on for the dominant purpose of lessening competition…”.

That sounds contradictory, and in practice it could be. The result could be a few sacrificial convicts, and more comfortably colluding competitors.

Prosecutors will have to establish beyond reasonable doubt that ‘lessening competition’ was the dominant purpose of ‘collaborative activity”. Plenty of other dominant purposes can disguise a collateral intention to nobble competitors, or to raise barriers to competitor entry. Standard setting to increase efficiency, or to ‘protect the public’ from cheap and shoddy service, and promoting health and safety, all sound like worthy purposes, and often are.

 On the other hand trade associations will lose some defences they may have relied on in the past. Wrongly intentioned arrangements will remain unenforceable and illegal without. the current Commerce Act exception (s.32) which protects non-binding price recommendations by trade associations with more than 50 members. Folklore has converted that exception into a belief by some that having 50 members is a get-out-of-jail-free card for trade associations. Understandings and arrangements for price fixing, market sharing, output restrictions, and bid rigging are illegal, and will remain so.[2]

The penalties for getting it wrong could be up to seven years in prison, and up to $10m in fines. Civil penalties (not needing the criminal standard of proof beyond reasonable doubt) of the greater of $10m and three times the gain, can be awarded for restrictive trade practices. The defendant will have the onus of proof of a defence in civil penalty proceedings. A company may not indemnify officers or employees for fine or penalty liability (s 80A).

New sections 65A to 65D provide for Commission clearances of cartel provisions.

So trade associations and their advisers should soon be considering whether to seek that Commerce Commission blessing.  The Commission must grant the clearance if the cartel provision is “reasonably” necessary for the collaborative activity and will not be likely to substantially lessen competition.

There will be nine months grace after the law change to review existing arrangements and decide if a clearance application is wise. Even if there is a good defence, remember the huge legal cost of being caught in a test case while new law beds down.

The Commerce Commission has kept a careful eye on trade associations. That is unlikely to change.[3]

In September 2010 the Commission issued Guidelines for Trade Associations, reminding them that their members can be liable if the association acts anti-competitively. It is unlikely to need much amendment in spite of the pending law change. That liability extends to members who do not take any part in the association’s conduct, or even do not know about it. The Guidelines are realistic, up to a point.  Practical Tips recommend, for example, that “if pricing discussion occurs…members should raise an objection straight away, leave the meeting if the discussion continues and write a letter dissociating themselves from the pricing discussion immediately afterwards”.

The risk is obvious in pricing discussions. It may be less obvious when the topic is, for example, a debateable new health and safety stipulation that also happens to be hard for new entrant competitors to satisfy.

If you are a member of an association and become seriously concerned, there is a substantial gain in being the whistle blower to the Commission. The first person to use the Commission’s Leniency Policy in a particular instance may be the only person safe. In effect the Commission says it will protect absolutely from its legal proceedings the first comprehensive nark. It will try to protect others whose narking is less useful, but still helpful.

Think about it.

(I wrote that for the DomPost  and it was published last month but it does not come up for linking in a Stuff search)