New Political Party for New Zealand: Land and Money Reform

Thank you to Owen McCaffrey for this new political party for NZ focused on money and land reform. Recently born, it focuses on bringing in a land tax and money reform, issues that have been discussed widely on this blog.

Added to that is a citizens income, disestablishment of welfare, better infrastructure and importantly a compulsory health insurance.

It will be interesting to discuss these issues further. I may invite Owen to expand on them here. The name is a bit of a mouthful but that can be worked on.

It’s a very good start though.

Emission Trading Schemes

A couple of weeks ago I attended a PM forum in Christchurch. It was a chance to hear Helen Clark and her Ministers talk about the new Emissions Trading Scheme that they had just put out. I’ve tried to wean myself off climate change conferences because in the end they are all pretty boring and generally say the same thing: the world may end in a flood of seawater and we need to get cracking by x% right now.

What always surprises me is that no matter how many calls for action there are very little has been done to really restrain emissions. Why is this? Well quite simply this is a very tricky issue. Economic growth is not going to be sacrificed on the altar of environmentalism or, more to the point, an outcome where there is uncertainty. So it drags on. China continues to expand its economy at a fierce pace and shows little interest in reining in its emissions insisting that it’s full steam ahead.

So in come emissions trading schemes: carry on as normal but buy your way to heaven via a piece of paper saying “1 tonne of carbon”. If it sounds like a papal remission that’s because it’s pretty close.  It’s a piece of paper you get for money which blesses your wins away.

The problem is quantifying and packaging a tonne of carbon or equivalent. How can we be sure that people will get what they pay for. This is where certification comes in. We need an agreed international standard and a single market. After all there’s only one type of carbon just like there is one type of gold. Its not like crude oil where there are different prices for different types.

Another issue is the changing science. For example, if forests are used as credit generators because of their ability to sequestrate carbon, there is a possibility that the amount the sequestrate may change over time either due to ecological reasons or a change in the understanding of how and how much they actually lock up and over what time period.

As a business having to purchase carbon credits on paper I would be crossing my fingers and hoping it all works out otherwise i might be out of business.

There is also a concern about the over issuance of paper credits. As readers will know they fractional reserve money system we have started life in a similar fashion: an underlying quantity of a commodity on which paper bills were issued. We know the outcome of that, a money system with no control.

From what i have seen this issues haven’t been covered in enough detail. I can still envisage a scenario where the carbon credit market takes off but overall emissions are not reduced. The goal of all this is to reduce emissions not create a huge market in carbon. But for now its the easy way out and politically more acceptable. Trees can take the slack for now and maybe technology can takeover at a later date.

Ethical Foreign Policy: Get Realpolitik

The recent visit of the Saudi Arabian King Abudullah has caused no end of consternation amongst activists of all hue. Let’s face it the Kingdom is not exactly progressive when it comes to human rights or gender equality.

The famous “ethical foreign policy” of the Blair years, a deception like most other announcements of that time, is clearly is misnomer. The real question is can there ever be ethics in foreign policy?

Foreign policy is all about making sure ones national interest is enhanced, or at least not set back, by international events. As Mick Hume notes realpolitik is still the name of the game. Yes we will be enraged at hideous regimes but we have to consider our trade interests blah blah blah.

New Zealand tends to take the higher moral ground where possible but of course people would argue NZ is too small for anyone to notice. The stance of our neighbours across the ditch is somewhat different and maybe its because they have more to worry about with Indonesia to the North and as a bigger economy they interact more competitively with other interests in the region.

It’s an interesting dilemma. The Great Game continues and its hard to see when its going to stop. Until then expect ethics and morals to be trotted out only around election time.

Land Tax rears its head at last

Yesterday Arthur Grimes, the Reserve Bank Chairman, raised the possibility of a Land Tax to help lower Income Tax as well as a rise on GST.

I’m stunned. It’s rare that proposals like these ever see the light of day and even then receive due merit and attention. It’s a fabulous idea as those who have been advocating this for many years an attest to. It’s good to see it has been picked up on some local blogs.

The concept of taxing resources and consumption as opposed to labour is extremely sound and progressive. This approach has major benefits in several areas: social, economic and environmental.

It does not penalise work, it promotes it.

It is easy to collect and probably easier to monitor.

It focuses attention on consumption and management of resources which we know will be a challenge in the future.

It promotes the efficient allocation of land. A common tactic in many cities has been to sit on vacant land in order to drive rents higher. A Land Tax may deter this type of hoarding.

Whilst it is unlikely to make much headway now it is hopefully the start of a bigger debate on how we should raise revenue for the government.

Sooner or later people may realise that the government can simply raise revenue by issuing interest free money but that’s probably for another day

Any land tax reformers out there please make yourself known.

Remember remember the 5th of November

I finally got round to watching the film “V for Vendetta“. Shades of 1984 and more recently Children of Men. It’s quite topical given the current issue of domestic terrorism and how to deal with it.

In New Zealand we are still experiencing protests against the mass raid on people suspected of unlawful activities under the Supression of Terrorism Act. What constitutes terrorism on a domestic scale? And more to the point how far can the authorities go in their protective capacities?

This is not an easy question to answer. Intelligence services are meant to forewarn and forestall any action against the State. This will always lead to a presumption of guilt even though an act may not have been carried out. This leaves a bit of a vacuum in the traditional legal process of innocent until proven guilty.

The authorities are stuck in a tight spot here. Blamed for not preventing an attack and blamed for arresting innocent people.

For activists of a more moderate nature this presents potential pitfalls. How far can you go? Certainly for activists with a bent for civil non-violent disobedience this can put them squarely in the firing line.

It seems to me that New Zealand is better than most. At least the media, with their general liberal bias, have no problem in reporting openly what takes place. In the US this may not be so easy. There is considerable concern over the loss of civil liberties and privacy for even the average citizen.

There’s no easy answer. That’s why governance and participation in the democratic process is so important. As long as there are clear sanctions against governments and those in power, through the ballot box, and freedom to air grievances then there is a balance.

However, when fear takes over then there is a big problem. If this is really happening in the US then one can only hope for some change and for the issue to be aired openly in the electoral debate.

Fear and freedom have a lot in common. You cannot be free if you live in fear.  Whilst I think we are still fortunate in NZ in our openness we still need to keep an watchful eye.

Meanwhile be careful out there on the 5th November

Another Day, Another Finance Company Busts

You have to feel sorry for Kiwi investors as another finance company goes bust. Today it’s the turn of Nathans Finance to declare itself out of the game. They used to send me stuff through the mail every month. Who knows how many were seduced by the slightly higher interest rates on offer.

It may sound like i’m enjoying this but i’m not. I wrote several letters to the powers that be well over 3 years ago exhorting them to sort out the non-bank financial sector but to no avail.

Ultimately it’s a case of caveat emptor. Before you invest in anything understand the risks. I am amazed how many financial “advisors” have put their clients into these flaky companies. I use the term advisor loosely here.  I seriously doubt whether many of them actually understand how the products they sell actually work and how to stress test them.

If you want higher yields then invest in a decent fund that buys the whole spectrum of bonds and therefore diversifies the risk. A couple of decent Kiwi funds are Fisher Funds and of course the self styled people’s champion, Gareth Morgan.

Check the fees and check what you are getting. Don’t listen too much to the experts. Learn about it yourself. There really is no free lunch out there except at the City Mission and if you’re down there the chances are you’ve blown your dough already.

It’s your money and your responsibility.