Bye Casey!

Hard-pressed Chapman Tripp lawyer Casey Plunket has laid the smack-down on Labour’s plans for a capital gains tax by announcing that “high earners” – presumably Chapman Tripp lawyers – will desert the country in droves as they seek lower tax rates elsewhere:

Lawyer Casey Plunket, whose personal tax rate would increase from 33 to 39 cents in the dollar under Labour as someone who earns more than $150,000 a year, says it would lead to more high earners heading overseas.

It’s difficult to know where to begin with a statement this stupid. He presumably lives in New Zealand because of family connections, because he can get a job he enjoys working with people he likes, because it’s a great place to bring up his kids, because it has some of the best quality of life in the world …. but no, apparently he lives here because we have lower marginal tax rates than Australia.

You can imagine the scene: at the beginning of every quarter he sits down with his Significant Other and their children, and systematically reviews the total tax burden imposed by an uncaring government on his family unit. After an in-depth assessment they decide where they will live for the upcoming quarterly period, and revise their contingency plans for instantly abandoning their lives in New Zealand if the PAYE rate rises above some critical threshold.

After all, Casey’s a highly-paid lawyer who’s not pulling down a greater-than-$150K income for shits and giggles. He expects to live and work in a society where he has both high status and low taxes. Apparently another few percentage points on the tax he pays over $150K will pretty much tear up the social contract and cause him to flee the country, effectively becoming a highly-paid economic refugee from an oppressive regime. There’s no way lawyers should be expected to pay more tax – the government will only waste it on keeping kids out of poverty!

Or maybe he’s just a dickhead.

Either way, we think there’s a simple solution: he should piss off now. Why should those of us who aren’t partners at top-draw law firms put up with his pouting and petulant outcries in the national media when we can simply wave him goodbye from the airport?

But we’ll leave the final word to the late Auberon Waugh:

Generally speaking, the best people nowadays go into journalism, the second best into business, the rubbish into politics and the shits into law.


Why are business lobbyists such utter dickheads?

First there was Ken Harris, the head of the Wellington Chamber of Commerce, who couldn’t count. Now there’s Employers and Manufacturers Association chief executive Alasdair Thompson, who’s insisted that women are paid 12% less because they have periods.

According to Stuff:

[Thompson] today admitted there was a gender pay gap – 12 percent according to figures – but said women took the most sick days. “Why? Because once a month they have sick problems. Not all women, but some do, they have children they have to take time off to go home and take leave,” he told NewstalkZB. Therefore their productivity was lower. “I don’t like saying these things because it sounds like I’m sexist, but it’s a fact of life.”

The issue isn’t that he sounds “sexist” – the issue is that he sounds like a brainless moron. Leaving aside his demeaning and insulting view of the world, the facts aren’t exactly on his side.


It’s apparently never occurred to Thompson that if his idiot theory was correct, post-menopausal women or those without children would be paid as much as their male colleagues. Obviously they aren’t, otherwise the statistics – gathered over 40 years, remember – would reflect this. But expecting business lobbyists to use their brains is apparently a bit much to ask. We’ll leave the last word to CTU head Helen Kelly:

CTU boss Helen Kelly said the comments showed Mr Thompson needs to retire. “He passed his best when he stopped being the Mayor of Thames.” Mr Thompson’s ideas showed the latent sexism of those advising the business community, Ms Kelly said. She said the gap between women’s and men’s pay was mainly due to workplace discrimination. “Look at the EMA board. It’s all white men.”

Stupid white men, going by the evidence.


These two assholes deserve one another, international edition

The Guardian is reporting that Goldman Sachs, fresh from the difficult task of looting the US economy, has taken the next step in cementing its reputation as the pre-eminent investment house for incompetent morons masquerading as fund managers:

A bitter rift has opened up between the world’s most powerful bank and one of its most fearsome dictators after Goldman Sachs invested $1.3bn (£790m) of Colonel Gaddafi’s money – and lost virtually all of it.

Yup, a big chunk of Libya’s sovereign wealth fund has been pissed against the wall by Goldman, apparently because those high-powered investment advisors bet that asset values were on a tear:

Goldman lost the money – which it invested between January and June of 2008 in a range of options to buy currencies and shares at a future date for a stipulated price – after the collapse of Lehman Brothers panicked the markets and caused the underlying securities to crash in value. The investments, in a basket of currencies and the shares of six energy, utility and banking companies including Citigroup, amounted to a bet on a rise in the underlying value of the assets. However, since their values plummeted they became virtually worthless.

And given Gaddafi’s penchant for shelling his own citizens, it couldn’t have happened to a nicer chap. As Shakespeare so eloquently put it, a plague on both your houses.

But there does seem one unanswered question: who was on the other side of those options contracts? Was it another of Goldman’s gilt-edged clients? Wouldn’t that be interesting to know …


That back-office bullshit

So the budget is out and the stupidity is now apparent for all to see. The entirely venal National Party approach to facts, projections and actual numbers is summed up nicely over at The Standard:

I have never, for instance, seen a budget in which cash raised from yet-to-be-sold assets was put on the books as if it already existed. They’ve basically bet our health system on being able to flog our assets for an imaginary price. Nor have I ever seen a New Zealand government make a billion dollars worth of cuts without being able to say what they are cutting. I don’t believe they actually know where these cuts will come from or how sustainable they will be.

One of the sources of these public sector savings cuts is in the mythical back office, the allegedly unproductive part of the sector that accounts for the money, runs the computers, keeps the lights on, runs the payroll and all the rest of those inessential services. National has long pursued the line that there is plenty of wasted cash sloshing around, being consumed by unproductive “pen-pushers”. Thankfully someone did some actual research on the numbers:

The 33 agencies measured in the report spend an annual $1.85 billion on back-office functions, or about 9.8% of their total operational costs, of which $1.05 billion is spent on ICT.

The report came from Treasury and the Department of Internal Affairs, so the expenditure numbers are likely to be reasonably robust. There are probably some savings possible through rationalising IT systems and the like, but it’s also likely that at least some of this low-hanging fruit has already been plucked in response to the belt-tightening of the last three years.

So the myth that there is lots of money that can be redirected from the public service’s back office to the front office looks like a piece of ideological cant, rather than anything attributable to rational analysis – what a surprise. English was pushing the party line this morning:

“We want government administration to be as efficient and well organised as it can be. At present the costs of running government are too high and there is too much duplication and waste.”

What’s missing from this statement is anything that resembles numbers, so it’s a matter of wild-assed conjecture whether a single dollar will be saved. The reality is that “too much duplication and waste” is really a coded phrase for more job cuts in the public sector.


Favourable market conditions for dummies

The problem with being the Economic Illiteracy Support Group is that New Zealand politics is a target-rich environment right now. There are so many stupid comments from so many stupid people that it’s hard to know where to begin.

Thankfully there are other high-quality commentators to do some of the heavy lifting, so we don’t need to intervene everywhere – for instance both No Right Turn and the inimitable Gordon Campbell pilloried the Minister of Dirty Dairying, David Carter, for his announcement of up to $400 million in subsidies for his farmer mates to dump effluent in New Zealand’s rivers. Their posts avoided us having to point out that it was yet another dumb-assed move from a Minister who makes Rob Muldoon look like an economic rationalist.

The other challenge is not turning this site into a continual Bill-and-John show. The dynamic duo in charge of the National Party have the sort of turns of phrase which stand-up comedians can only envy – like this pearler from John Key (thanks, Danyl):

“For the most part we are 100% pure.”

John Key defending New Zealand’s environmental record during a BBC interview.

The big challenge: how can we possibly maintain our hip post-modern ironic stance when the politicians are saying this kind of shit in real life? It’s a problem.

And then there was today’s contribution from the Prime Minister, part of the justification for slashing Kiwsaver:

The Government would borrow $20b this year. That is more than needed, but Key said the Government was taking advantage of favourable market conditions. “On a weekly basis, that averages out to new debt of $380m a week. That … increase in debt is absolutely unaffordable,” he said.

Umm … let’s analyse this one for a moment. The logic – such as it is – seems to go something like this:

1. We’re going to borrow more than we need this year because the market conditions are good.

2. We can’t afford to keep borrowing like this.

Every credit card user in the country can see the obvious error. The bank has lowered the interest rate we pay, so we go out and load up the credit card because the money is a bit cheaper, even though we don’t really have a use for the money, and now we’re moaning and complaining because paying the interest bill costs so much that we can no longer afford to go to the doctor. And the credit card is now full – how on earth did that happen?!

Irony is lost on these clowns. And the results can easily be seen in the government’s books – from surplus to the largest deficit in the country’s history in less than three years. Some commentators are suggesting that National is engaged in some form of class warfare, deliberately looting the country for the benefit of the rich. But that requires a level of intelligence that is nowhere on display with the Bill-and-John show. It could simply be that they are the sort of brainless idiots that borrow money they don’t need, and then bitch about how expensive it will be to pay it back.

The Dinosaurs are stirring …

Our beautiful Office Manager breathlessly rushed into our offices this morning (always a good sight) holding aloft a copy of the Dominion Post, the capital’s rag of record, where our recent intervention with some Wellington City Council councillors had become news. Apparently the dinosaurs down south are complaining that having their idiocy pointed out was some kind of attack on the very foundation of our democracy!

The council’s governance portfolio leader, Deputy Mayor Ian McKinnon, didn’t receive a letter but was outraged that his colleagues had. “The debate was in the open and, while there were differences of opinion, no-one tried to hide them. This is really an attack on the democratic process.”


He was probably jealous that he didn’t get the kiddie counting book and calculator with the big buttons we sent to some of his colleagues. We’ll see if we can do better next time, our tightly-constrained budget notwithstanding. However the actual recipients were all faux moral outrage and old-man harrumphing:

Councillor John Morrison was among at least three councillors to receive one of the packages last week. “It is totally derogatory, offensive and pathetic in so many ways,” he said.

A kiddie book is “derogatory, offensive and pathetic”? Really?

Of course the one thing he didn’t say was that we were wrong. Presumably he didn’t want to mess up a good media opportunity with any actual facts – or at least none that the Dominion Post printed – and so nowhere in the story is it mentioned that he supports roading projects with a cost/benefit of only 0.4. Thats right – Mr Outrage seems to stand ready to hose away 60 cents for every taxpayer dollar that’s spent on his pet projects, but it’s somehow offensive when we point it out to him.

In the letter we included with the kiddie book and the calculator we advised that “… it’s never good to look like a dick in public. So avoid making stupid statements about how roads are an investment in the future or how they create jobs, because all the people who’ve already read the book and mastered the calculator will think you’re a moron.”

I know it’s going to feel like tough love, councillor, but we stand by that advice.


Ken screws up – again

Fresh from his star turn of failing to understand cost/benefit ratios, Wellington Chamber of Commerce head Ken Harris has now demonstrated his failure to understand basic inflation calculations.

Our attention was drawn to this particular pearl of wisdom falling from Ken’s mouth when he took issue with the Wellington council raising the parking charges from $4 to $5. Outrage! Here’s Ken doing battle for the hard-pressed retailers in the capital!

Not only are car park vacancy rates too high to warrant such a fee hike but this 25% jump, coming on top of previous increases over the years, more than outstrips the inflation rate. It is difficult to see this proposed increase as anything more than a revenue raising exercise.

Yeah! That’s the champion of free enterprise laying the smack-down on those lilly-livered public servants that want to deny him $4/hour parking for his SUV! The increase “more than outstrips the inflation rate”!

Only it doesn’t – probably because the hard-working Ken didn’t bother checking what inflation amounted to since 2004, when the council last raised the parking charges. Or maybe he’s just a dickhead, it’s sometimes hard to tell with lobbyists. A quick tour around the Reserve Bank’s inflation calculator revealed that there’s been a 23.5% increase in the CPI from the beginning of 2004 to the beginning of 2011, so that $4 fee in 2004 is now the equivalent of $4.94 in 2011 – completely in line with the council’s new parking charges.

In other words, Ken’s utterly wrong, economically illiterate, and incapable of using Google to obtain the answers to basic questions. In other words, he’s perfectly qualified to be the CEO of a business lobby organisation, which aren’t exactly the pinnacles of intellectual achievement.

Luckily there was one person who was making economic sense in this debate – the bloke who works for the Wellington council. The unlikely-named Stavros Michael (presumably related to George) said that “”Businesses that are open during the day in the CBD benefit from paid parking through higher turnover, while those businesses that operate in the evening do not benefit because people hog the limited number of spaces all night.”

It’s a worry when the public servants make more economic sense than the private sector lobbyists.