Welcome
On this site you'll find posts and pages from recent years. The site began as part of my public law practice after leaving Parliament in 2005. Accordingly it records my opinions, not necessarily those of Franks & Ogilvie of which I am a principal, or any client, or the National Party for which I contested the Wellington Central electorate in November 2008.
From the Wellington Writers’ Walk:
“It’s true you can’t live here by chance, you have to do and be, not simply watch or even describe. This is the city of action,the world headquarters of the verb”
– Lauris Edmond, from The Active Voice
Car rental company insurance is a rip off. Its cost is wildly disproportionate to the risk.
Divide the premium you pay for your normal insurance (usually for the car’s full value less a small excess, and third party liability) by 365 to get a daily rate. $3-4 per day would be typical.
Then compare that with the daily rate for the extra charge rental companies make to cover only the “excess” on your rental.
I’ve just booked a car for three days with Thrifty. The contract came thru Rentalcars.com. The Thrifty contract has an excess of $3000 + GST. If the car is returned damaged I’m liable for up to that amount before the rental insurance cuts in.
Thrifty offered to cover that excess as an extra for over $30 per day. Ten times the daily cost of my current insurance to cover a maximum risk amount of less than a quarter of the value covered by my usual policy. In other words the “extra” cover is up to 40 times more expensive than the policy covering my personal car.
But now I’m being pestered by phone and email to buy extra cover from Rentalcars.com. They are offering me a real deal – 3 days cover for only $60. That works out at only twenty times the cost of my personal policy per day.
Ah, but sir, that “$60 is a one off payment, not a daily rate”.
And it “also covers glass, mirrors, tyres, wheels, the roof, the undercarriage and breakdown charges and the vat (presumably they mean GST)”. Should I be suspicious that they do not mention the paint?
And even better “this price is discounted from the original online price of $101.98”.
Sadly – Thrifty has bought Apex, from which I previously got personal service.
But I’m hoping in future to avoid using “The World’s Number 1 Online Car Rental Service” – Rentalcars.com. I want to find a company that does not insult me and waste my time with offers that insult intelligence, and batten on the failure of most people to do risk/return calculations.
Thrifty might continue as it always has, but by avoiding Rentalcars.com at least I should avoid the hard sell insurance sales follow-up.
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The New York Times reports on research suggesting there is something mutually reinforcing about sport and drinking (beer). It seems the connection could be more beneficial than just liquor industry commercial opportunism.
“When the researchers collated and compared the data from their volunteers, they found, for the first time, an unequivocal correlation between exercising on any given day and subsequently drinking, especially if someone exercised more than usual. As the scientists write in their study, which was published recently in Health Psychology, “people drank more than usual on the same days that they engaged in more physical activity than usual.””
Lobbyist Bruce Robertson of Hospitality NZ has had a lonely battle recently. The Police have abandoned political neutrality. They are always in favour of new fences at the top of cliffs they excavate in his territory, by wanting prohibitions instead of law against drunk pests. The prudes of main stream media seek stories aligned with the political Mrs Grundies always looking for new bans to impose, to signal their virtue.
Lately however, Bruce must have felt some comfort as the modern clerics of health politics have divided their attentions. Tobacco has always engaged them. For decades there’s been fat to fight. But now there’s sugar. Sugar is perfect. Those who’ve hated fat vendors McDonalds and KFC (as their grandparents hated Satan and page 3 girls) can neatly segue into hating sugar and the same fast food chains as satanic sugar agents. Alcohol has had mates in its Coventry.
Still Bruce will surely be glad to get something good about beer. Many of us don’t much like red wine despite its (dodgy) claim to health benefits. We’ve probably stopped reading or listening to bad news stories on beer. So we won’t be surprised by this report. For example:
“The camaraderie created on the practice field or among workout partners can nudge exercisers to reconvene convivially at the local bar, and those gatherings may motivate reluctant exercisers to stick with their routines, because they feel rewarded afterward”
Of course.
This will get plenty of (social) media circulation. That should be a nice accompaniment to Bruce’s retirement, especially if he has some vigorous excercise in mind.
Disclaimer – I hate what sugar is doing to us (and what tobacco has done). But that does not mean government should have power to stop adults making their own choices on how they want to harm themselves (or not).
Cycling Action Network’s bulletin today reports a major Canadian study showing no link between helmet laws and head injury rates. Yet again.
Has New Zealand a politician brave enough to repeal the law that lets police prosecute non-wearers of helmets? The Green’s Julie Anne Genter should be on to this. So many people would like to cycle but find the helmet too irritating to store when shopping etc. Others worry about “hat hair” from the helmet.
I’d be surprised if the number of cycling injuries even after removal of helmet compulsion would exceed the numbers whose fat, strokes, and other disabilities would be avoided if they had the habit of cycling.
The bulletin reports that the:
“Canadian study has found no link between cycle helmet legislation and head injuries, and has recommended governments focus on providing bike infrastructure to protect cyclists instead.
Between 2006 – 2011 the study recorded hospitalisation data from different Canadian jurisdictions, some with mandatory helmet laws, some without. Of an average 3690 hospital administrations per year in riders aged 12 and over there were 622 hospitalisations per 100 million bike trips in Canada.
The study found helmet legislation did not reduce head injury rates, while female riders were injured less, and areas with a greater proportion of cycling trips saw lower injury rates. The CTC’s Roger Geffen says the study provides further evidence cycle helmets aren’t a panacea for cycle safety.”
I’d still wear my helmet most of my cycling time, to reduce the odds of a ‘no-brainer’. But I’d like to be able to stop worrying when I forget.
We have advised a public spirited group called Democracy Action on the unlawfulness of Auckland Council’s ‘Mana Whenua’ provisions.
We have lately been investigating the prospects for a class action against the Council. In our opinion there are strong grounds for liability, but so far there may not have been enough evidence of realised loss to justify the costs of action. Today’s Herald reports that the Council will shortly vote on a proposal to remove 1,373 of the 3,600 ‘sites of value’:
That removal could delay the time when it would be economic to launch a class action.
For those who have not been following the issues, Auckland now requires ‘Cultural Impact Assessments’ for resource consent processes for the private land of thousands of Aucklanders. There is evidence that some iwi “representatives” are cashing in on that requirement, and that the Council knew, or ought to have known that when they imposed the rule. They are effectively enabling or even abetting corruption.
The Aucklanders concerned had their land suddenly identified as being culturally significant to iwi, without warning, without consultation and mostly without Council inspection or verification of often ludicrous claims.
The Taxpayers’ Union called the consequent costs to property owners the ‘Taniwha Tax’ in the report it published after investigating the scheme.
CIAs can be expensive, contain ineffable waffle with nothing tangible to add to sustainable land use, cause delay, and be used by Council to make owners change their plans without any additional value to anyone, including ordinary iwi members (if they even know about the claimed ‘values’).
If your application triggers a CIA provision, iwi decide if you need a CIA – despite their clear (pecuniary) conflict of interest. Multiple iwi can claim a cultural interest in the same property. Sensible iwi that respect property rights might quickly say ‘no’ but still be tarred by the extortion of other iwi.
This is wrong. Auckland Council should refund the costs to the affected landowners.
The Resource Management Act, section 36A says no one has a duty to consult any person in respect of a resource consent application.
The CIA requirements as designed by Auckland Council violate the rule of law (the provisions triggering CIAs are uncertain, especially subjective ‘values’). They conflict with the NZ Bill of Rights Act 1990 and natural justice (iwi make the decision while affected by bias).
CIA requirements breach Treaty Article 2 which assured New Zealanders of classical property rights (undisturbed exclusive use and enjoyment).
We think the High Court could declare the CIA provisions largely unlawful but it would be reluctant to intervene until after the report and recommendations of the Panel considering the Proposed Auckland Unitary Plan. Unfortunately for the affected Aucklanders, the CIA provisions were unnecessarily declared to be operative as soon as the PAUP was announced.
Auckland Council may be negligent for failing to implement the Unitary Plan with due care for the rights of those affected.
But just because there is a wrong it does not mean a remedy is affordable. The amounts the Council should be liable to repay so far may still be less than the costs of getting a court to right the wrong.
Today’s news that over a thousand properties will no longer be caught could mean those left in the CIA extortion net will be even further from being able to fund justice.
Nevertheless, we congratulate Lee Short’s group Democracy Action. We think that without his public courage, and the work of his volunteers (and without false modesty our work) this partial victory would never have come.
Yesterday’s post complained that MSM reporting doesn’t mention the consumer’s great win from internet disintermediation in accomodation and taxi markets. This morning’s DomPost seemed to prove my point with a sorry beat up from the Taxi Federation of the Uber passenger safety risk.
The risk is real but we consumers properly dismiss it. Like my risk of being knocked off my bike, or a heart attack from what I eat, there are many consequences a free society leaves us to choose individually according to our feeling whether the benefits outweigh the risks. The Federation does not want to accept the lessons of TradeMe, Uber, AirBnB and so on, that reputation feedback mechanisms are beating regulatory precautionary prohibitions in both efficiency and effectiveness.
Then I found on Stuff Jessy Edwards’ engaging survey of the issues. She has explored the consumer benefit, psychic as well as financial, and the delight of drivers freed to work for themselves under the Uber contracting model.
Our dreary employment lawyers and the Ministers who feed them ambiguous law could yet put a stop to this. But for the present I back the infectious enthusiasm of Transport Minister Simon Bridges for keeping regulators away from this incredible improvement in consumer welfare. He’s a consolation in this government.
I hope he can spare time to suggest to Paula Bennett as Minister of Local Government, that she fire a warning shot in her portfolio. Local government should be told that the law changes in the offing could include one requiring them to reduce or remove barriers to competition that benefits consumers. So Councils looking to dong people who let their baches privately or through TradeMe and its competitors should first have to prove that the ratepayers who rent baches are costing the Council more than permanent residents. Better yet would be rigorous cost benefit evaluation, taking into account the revenue to the district from the visitors.
And moteliers should not be paying more just because they are commercial. They should pay more only as a reflection of extra cost to the Council, if any.
Where is the interest of consumers in this stuff story of a Motelier Association call for nationwide local government regulations to nobble private bach rental competition with moteliers?
The story approaches the issue as one of competition – moteliers facing commercial rates and zoning and other unspecified unfair disadvantages, against bach owners (represented by Trade Me) taking their trade.
No one in this story reflects on the real losers should councils follow the lead of:
The Thames-Coromandel District Council [which] proposed a $200 “bach tax” for anyone renting a home as short-term accommodation, which was then put on hold after a backlash from property owners and booking services.
The losers will be the hundreds of thousands of New Zealanders who miss out on the experience of ‘going to the bach’ if owners decide instead to withhold their baches from the market.
In typical balanced reporting the story cites two sides – what the bach owners get, and what moteliers don’t like. But there is no mention of the primary losers when regulators reduce supply of something people choose to pay for – the experience itself.
The real loss in being forced back to motels and family friends is the lost right to share in the privileges of being a New Zealander without being a member of the bach owning caste. Instead of it being a privilege, most of us can taste bach experience without tugging forelocks. A couple of families can be the temporary exclusive occupiers of some of that magic space. We can delight in someone else’s decor, check their books, be amused by their home handywork, imagine them enjoying the wind protected corner, the swing under the tree, the grape vine’s last bunch just ahead of the wasps, and many others, all unique, unlike the row of motel rooms in their arid car-park commons .
The Stuff report’s absence of instinctive respect for choice and the consumer is sadly not an astonishing omission – most reports of taxi industry unhappiness with Uber suffer similarly. The issue is reported as a fight by an incumbent business for survival against an interloper able to ‘cut corners’ or otherwise unfairly take advantage of a gap in law that ‘protects’ consumers.
Until I tried it I had no idea of how much better the Uber service is. Price is only a fraction of the Uber advantage. Being able to see the car coming on my phone, to know the driver’s name, his car type and number plate, his phone number are all new ‘privileges’. Getting out at the destination without payment is a further joy.
I gladly trade the spurious quality assurance and safety ‘protection’ of the taxi licencing system, for the reputation based rating service offered by wonderful Uber.
But the regulators will be sure they are doing God’s work when they interfere. The poor moteliers are probably the realists. They should have been calling for freedoms equal to those of bach owners. Fat chance. Instead they see their only choice as to ask for equally damaging burdens on the competition. Why should they care about consumers – goverment only pretends to.
The slow take-up of the NXT market opportunity does not surprise me.
It may yet take off. But the listing rules turn too many aspirational principles into minimum conduct obligations enforceable with savage penalties. They make it rational for entrepreneurial companies to stay clear of listing.
The NXT market needed a clean break. It should have offered a persuasive promise that dishonesty would be pursued implacably, but not mis-judgment. Low quality decision-making in bad luck is hard to distinguish from current lawyer views of negligence. So entrepreneurial companies which must make decisions under high uncertainty and with information that could always be improved by spending more or waiting longer, are often best to stay private if they can. So the public are deprived of the opportunity to invest in them.
Even the modified continual disclosure obligations create too much risk of harsh and very expensive hindsight judgment as to what should have been appreciated and disclosed. They do not exclude the risk of being forced into premature disclosure that can damage the business, or damage reputations as events unfold unexpectedly. At the least the compliance burden of listing will distract board and management. It sits beside another risk of being listed – that some management become addicted to public attention, and invest too much in managing perceptions and not enough on managing the business.
Nevertheless the NXT market has pioneered some great new features. I’m impressed by the KOMs (Key Operating Measures) in the post float reporting, after identifying them in the offer docs. They may differ for each company. It seems to be a sensible mechanism to substitute for the clutter and irrelevance of much IFRS material.
I imagine that it is helpful in the preparation of offer documents, and in guiding management after listing, to focus the company hard on the factors most relevant to its real prospects.
I hope the NXT market develops enough momentum to cement into market expectations generally that investors should be looking for KOMs particular to each company.
Ron Mark MP in Parliament today excoriated the recent performance of the Local Government Commission. I’m hopeful that it will improve under Sir Wira Gardiner. It has much ground to make up. The LGC should be extremely humble after obvious failure to produce any valuable reform over the past few years, and after voters showed no respect for its recommendations.
Ron urged the government to read my firm’s submission in May this year to the Local Government Select Committee. This post notes a few conclusions set out in that submission based on some years of dealing with the Commission.
First, we argued that there is a vital role for a Local Government Commission committed to intellectual quality. We submitted that:
“…the Commission should be a stimulating centre of knowledge, research and excitement about local government excellence. It should be promoting rigour and wide thinking about the possibilities and the problems, drawing from experience across New Zealand and around the world. It should help protect local councillors and local democracy from temporary fashions in reform enthusiasm, misinformation and unreasonable expectations of local government. It should be ready for those purposes with sober, objective and clearly independent and neutrally authoritative comparative information. It should be trusted by government and parliamentarians as being unbiased and expert in its role. Its contributions should be so inherently compelling they would be sought. It should be respected enough by local authorities that they refer disputes voluntarily. It should have a reputation for independent excellence sufficient to lead local authorities to welcome it as a nominator for positions on CCOs or other multi-authority bodies.”
We went on:
It currently offers none of the above. Some of that could be remedied with suitable changes to its governing statute. But it does not presently deserve confidence that it would not abuse, or fail to deliver with, such powers.
This submission sets out circumstances that lead us to that assessment, including the Commission’s;
a) odd interpretations of its governing statute, including a bizarre attempt to persuade us that legal white is black;
a) false presentation of important provisions of its governing statute in public information, with an apparent intention to persuade citizens that the Commission’s decision criteria were both lawful and satisfied;
b) lack of research (or curiosity) about important reform decision factors it is legally required to evaluate;
c) obvious bias;
d) origination of misleading description used in propaganda to the public;
e) use of unsupported emotive language in reports that should have been objective and research based;
f) indifference to delay in correcting established material errors in published material while citizens were being encouraged to make submissions in reliance on it;
g) seeming lack of interest in obtaining objective appraisal of the Auckland experience;
h) commitment to the “single voice” objective for local government without any critical appraisal or research, or even intuitive reflection on pros and cons;
i) failure to reflect on or to research the relative performance and experience of councils of differing sizes, including the contribution of small Councils in the response to the Canterbury earthquakes.”
We described instances of the Commission making up “statutory” language to support its view of what its objectives should be because the actual statute was inconveniently different. When we drew this astonishing deceit to the attention of Wellington Fairfax reporters, unbelievably it was not reported. The DomPost evidently agreed with the great and the good of Wellington that the outlier peasantry would be better off ruled from the centre, and a little thing like a statutory commission lying about the law was an inconvenient truth not worth exposing.
Our submission to the Select Committee set out chapter and verse:
Missed out the ‘local’ from democratic local decision-making
The purpose of local government is (s 10):
j) to enable democratic local decision-making and action by, and on behalf of, communities; and
k) to meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.
In explaining the legislative requirements [in its published assessment of proposals for amalgamation], the Commission misquoted the LGA, saying:
“(8) The purpose of the local government is to enable democratic decision-making by, and on behalf of, communities”.
The LGA [conveniently omitted the words “local” and “and action”].
There are three mistakes in this misquote of the legislation. The legislation is critical and directly affects the decision the Commission is evaluating. To alter key criteria from “democratic local decision-making” to simply “democratic decision-making” materially changes the meaning of the criterion. Similar mistakes are made elsewhere in the proposal with “local” being left out in key considerations . This is contrary to the purpose of the LGA. As Justice Collins in the NAG decision said “communities [must]be the focal point of the way local government is organised” and “Parliament’s intention [is] that communities be more empowered to influence the basis upon which local government is reorganised”.
Instead of concentrating on “local” decision-making the draft proposal focuses on the need for a stronger and more effective regional leadership and a strong voice with local government . This example shows a misapplication of the law.
We expanded on the Commission’s invented (and illegal) ‘strong voice’ criterion
We think the mistakes may be due to the Commission focusing on the need for a “strong voice” or “single voice”. This is not a legislative criterion. Nor is it a criterion that is subject to any disciplined analysis. They seem to have given no consideration whatsoever to:
1) the enhanced risk for a community if the “single voice” is discredited and not widely respected;
2) mechanisms to reduce the “all our eggs in one basket” risk of single voice suppression of dissenting voices;
3) ways to [improve] the quality of the voices contending for local leadership.
This “single voice” mistake was at the heart of the Draft Proposals for Reorganisation of Local Government in [Hawkes Bay and Northland]. Both proposals referred to the need to have a “single voice to advocate to central government”.
On 18 July 2014 we wrote to the Commission requesting information on the “single voice” references. Their reply of 18 June 2014 [enclosed] said:
“The Commission sees this as closely relating to effective representation of communities of interest, a criterion under clause 11(5) of Schedule 3 of the Local Government Act 2002. Effective representation of communities of interest is an important contributor to enabling democratic local decisions-making by and on behalf of communities, being part of the purpose of local government and a criterion under clause 12. The Commission will be taking such matters into account in determining how it will proceed with the current proposals.”
But in fact as we explained to the Commission:
“Clause 11(5) requires the Commission to be satisfied that the local authority proposed will “contain within its district or region 1 or more communities of interest, but only if they are distinct communities of interest”. There is no mention of “effective representation of communities of interest” in clause 11(5). The first purpose in section 10 is “to enable democratic local decision-making and action by, and on behalf of, communities”. The statutory purposes make no reference to representation; rightly, as representation of voters is a condition of legitimacy, but representation of a territorial area would be among the least important functions of local government.
The only use of the phrase “effective representation” in Schedule 3 is in sub clauses 15(5)(b) and (7). The first is to ensure enough local board members to “provide effective representation of communities of interest within the district”. The second has a similar purpose.
Clause 15 is a strong direction to ensure that particular communities are not left without effective representation. Far from being authority to promote a “single voice”, by reducing the likelihood of multiple views being expressed, it is an instruction to protect one of the fundamental purposes of representative democracy. In brief, it is about local voices, not single voice.
Furthermore, even if it had not been an attempt to mislead us and others, with a patently false claim to statutory legitimacy, the Commission should have been sufficiently expert, analytical and well informed to ask itself whether having one strong regional voice to central government is as important as ensuring representation of competing views.
They should have been examining the Auckland experience to see whether having a single voice means that voice will be a sensible or representative voice.”
Misleading advertising
The Commission distributed propaganda for the Wellington amalgamation instead of objective description. It included passages very similar to those which the Advertising Standards Authority Complaints Board ruled, when used in GWRC propaganda:
“represented its own assumptions and opinions as fact which was misleading and was likely to exploit the lack of knowledge of the readers”. The Board found statements in the advertisement were in breach of Basic Principle 3, and Rules 2 or 11 of the Code of Ethics. Consequently, the Complaints Board ruled these parts of the advertisement had not been prepared with a due sense of social responsibility, breaching Basic Principle 4.”
On the now failed Hawkes Bay proposal the Commission said:
“One council and one Mayor, supported by a Maori Advisory Board, would work to advance the interests of the entire region and would provide strategic leadership across Hawkes Bay as a whole. One Council would also address concerns that Hawkes Bay is being held back by rivalry and a lack of cooperation between existing councils”.
This press release was a subjective promotion of amalgamation despite overwhelming feedback against it. The Commission produced nothing to substantiate the contention that rivalry and a lack of cooperation was “holding back” Hawkes Bay. There was no apparent awareness of the research literature which evaluates the benefits of “regulatory competition” to discipline bodies susceptible to abuses of power. There appears to have been no interest in the vital contribution of small local authorities Waimakariri and Selwyn, given the poor performance of Christchurch City Council and Environment Canterbury before the appointment of Commissioners.
Lawrence Yule, Mayor of Hastings and LGNZ head, has shown how to take a lesson in his response to losing the amalgamation vote in Hawkes Bay. I’m reasonably confident that the Gardiner LGC will be a similarly good learner.
But the acid test will be whether the Commission and LGNZ now turn to investigate ways to improve local democracy. See here, and here for some suggestions.
Different regions should be set free to experiment (given that this government is already experimenting with tailor-made models in Auckland and Canterbury). We will need law changes to secure better Councils. They must eliminate some of the perverse incentives and unfair liabilities that distort decisions. They could reduce the trend toward elections being name-recognition exercises even for avid followers of public affairs. And they could reduce the time frustrations that steer high calibre people away from local government.
I’m looking forward to hearing Prof Keith Woodford of Lincoln University, at this evening’s Wellington LEANZ session.
The fate of Fonterra and the dairy industry remain of intense interest to me though I have not worked in that industry for some time.
It is interesting to gather all the digestible data and views offered when there is so little consensus on the level of risk facing our biggest single industry (and NZ with it).
A neighbour economist tells me the risks of a Bank mortgagee sale collapse are very low, because the NZ currency is so tied to world dairy prices, albeit with a 6 month or so lag. In other words our currency will ensure we all share the misery and dairying will remain viable for all but the most over-stretched.
I’m sure Keith Woodford’s opinions will be similarly challenging. And I owe him as a contrarian more than I do any economist. His book on A2 milk lead directly to what has been a profitable investment for my family after Cathy told me he would be worth heeding. So he deserves some loud applause, whatever I end up thinking of his views this evening.
In a wonderful New Criterion obituary of Robert Conquest, John O’Sullivan reminds us of the courage it took to be among the few in the intelligentsia willing to expose the tyranny of Stalinism and to support freedom’s champions like Margaret Thatcher, despite a previous lifetime of voting Labour.
But on a day when that bouyant spirit Maurice Williamson is forced to pretend regret for upsetting some lemonsuckers, it was comforting to read of Conquest’s joy in offending the clerisy.
The obituary offers this memorable verse aimed at the education elite.
“Those teach who can’t do” runs the dictum,
But for some even that’s out of reach:
They can’t even teach—so they’ve picked ’em
To teach other people to teach.
Then alas for the next generation,
For the pots fairly crackle with thorn.
Where psychology meets education
A terrible bullshit is born.”
But Maurice might like this comfort for this dark day:
My demands upon life are quite modest,
They’re just to be decently goddessed.
Astarte or Isis
Would do in a crisis,
But the best’s Aphrodite, unbodiced.
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