aect

Handing my cheque to the teller last weekend made me reflect on the good things about living in central Auckland. In particular,

• There are banks that open on Sundays
• Once a year, the people who run the company that takes my money year round gives some of it back.

And the teller got to add to her growing pile my cheque from the Auckland Energy Consumer's Trust. Well, I'm sure she wasn't that thrilled - it was a big pile, and apparently was even larger the previous weekend. I hope she got one too, and didn't get it stolen.

Also, it's another good reason not to live on the Shore - you don't get a cheque on the Shore. Add that to the list... the roads are laid out in an incredibly stupid way... nobody can drive properly (about as bad as Ponsonby Road drivers) .... peak traffic in Albany South...

I quite like the AECT/Vector model. It's public ownership of a key asset without the political landmines that SOEs can bring, combined with a corporate model that is that maximises the return and value of assets to the owners. This year the trustees of the AECT are up for election.

Matt McCarten writing in the HoS, gives his personal precis of the three candidate blocks. It's unsurprising that he favours the left candidates over the current right wing bloc who sold a quarter of the company. McCarten notes the hypocrisy of those candidates who promised to keep the company in the Trust's hands, before doing the opposite. He predicts that

if the right-wing politicians grab control in this election, it won't be long before Vector assets of nearly $6 billion go on the international auction block. Of course, the corporation that buys Vector then ups the price to a captive customer base to pay off the loan raised to buy it. The new foreign owner makes a bomb, the foreign bank makes a bomb, and the local people pay the bill.

I don't think the decision to sell a quarter of the company was necessarily incorrect - at least from a corporate point of view. Vector is the best placed power company in the country, having the best market helps with that, but also having as your only shareholder a Trust - asking only for a consistent level of profit - has enabled Vector to leverage its revenue to grow. But to grow past a certain point needs money - and the AECT isn't in a position to demand cash from it's beneficiaries. The float helped Vector expand, and that move paid off. The fact that the dividend was significantly larger than what it had been in previous years is testament to that.

However, I don't think more should be sold off. Having more than a quarter of your shares floating in the market is a risk from governance point of view. In fact, I think it folly for the dividend to be so large. The AECT not only has a responsibility to deliver short term dividends to its beneficiaries, but a long term obligation to retain the company in public ownership and grow its profitability over time. Part of that money could have been used to reinvest in the company, in exchange for more shares, or to buy back some of the shares in the market to increase its asset base.

McCarten's article is a must read for everyone in who is eligible to vote for the trustee election - even if you are on the right of the spectrum. I don't think we're going to see another article that summarises what's at stake. Most importantly, everyone who can vote should. You can't whinge if you didn't.

wage inflation

After calling for employers to exercise moderation in giving wage and salary increases, the Reserve Bank's wage bill has grown by 18% in the last year. The Herald points out that the rise

takes into account a rise in staff numbers to 223 full-time equivalents from 218 in 2004/5, it still represents a 15.4 per cent average rise in remuneration per employee to $96,860 from $83,944.

Which, compared to the NZ Income Survey is well above the 4% pay rise given to the average worker this year. In real terms, the average wage is only just keeping in line with inflation, the CPI for the year to June 06 was 4%.

That the RBNZ isn't keeping inflating between 1-3% - missing it's targets - clearly doesn't have any relation to how the reward their staff. It demonstrates that workers at the top end of the wage spectrum are treated spectacularly differently from those at the bottom. As the RBNZ forks out 15% extra for their staff without blinking, those wanting just over half that are punished for daring to suggest it.

Interesting to note also, from the Income Survey that while females still lag behind their men on average incomes ($473 for women vs $754 for men av p/w), they are closing the gap faster than they have for many years (up 7.1% for women vs 2.1% for men). Let's hope it's even closer next year.

exclusive nonsesnse

What I don't get about the the Exclusive Brethren's exemption to labour laws is this:

If you run a business in New Zealand, it's safe to assume that you're going to have contact with people who you disagree with politically and religiously. Some of your employees and contractors will hold different beliefs, the employees of your suppliers are bound to be of different faiths - especially if you source raw materials offshore (i.e. China) - AND they're going to change as people leave. Customers in particular - regardless of whether you are a wholesaler or retailer - are going to be varied to a very strong degree.

So it's fine for the Church to insist that it's members not associate with outsiders, that they lobby (to outsiders) for laws allow for them to be treated above the law, but if they need to make money, all that doesn't matter. Preventing your followers from accessing modern civilisation while engaging in capitalist behaviour for the benefit of the Church is on par with with the plight of North Korea's citizens and the indulgences of Kim Jong-il.

I don't believe that the EB's pleas to get Union officials off their workplaces is about remaining separated from others. Sue Bradford quoted someone from the EB in her speech in favour of the law (Hat tip: RB):

Separation is maintained from all groups, unions or associations of a business, shareholding, property, political, pleasure, social, medical, or superannuational (sic) nature. We have found in Jesus a satisfaction nothing in this passing world can compare with. Additionally, we are also governed by the scriptures as to employing or being employed. There is special concern to maintain inviolate the direct employer to employee relationship.

Which is to say: our employee's aren't allowed to join unions, which of course would be illegal even for the EB. But for employees of small and medium businesses, it's extremely difficult to join a union. Mostly because unions don't have the resource to bargain collective agreements for a handfull of employees - compare Progressive stores (one company, unions are involved) to Foodstuffs stores (many owner operated companies, little union involvement) .

The EB isn't an organisation that has the betterment of it's members at it's core (see RB again), it's an organisation devoted to power, money and control of it's members. They're not in the politics game to protect their right to practice their religion. They're in it to advance their cult.

Section 24 of the ERA needs to be repealed - not becuase Labour wants to hit back at the EB - but because no group should be exempt from the law because of their beleifs.

easter trading

In his post on Easter trading hours, DPF suggested removing all trading hours upon retailers, above and beyond two private member's bills to allow Easter Trading for tourist towns- one from Labour's Steve Chadwick the other from National's Jacqui Dean. The law, as it currently stands, allows only essential services and garden centres to open on Good Friday and Easter Sunday, and essential services only on Anzac Day and Christmas Day.

Nobody cares about not bing able to trade Christmas Day, nobody would turn up to buy anything. On Anzac Day shoppers simply delay their dollars to later in the afternoon, besides it's the only one of these holidays that has firm roots in NZ - allowing trading is a risky move politically.

But everyone is on holiday over Easter. It's generally fair weather, and people are off work for 4 days desperate to do things. Retailers want to cash in - and fair enough. The only problem is that Easter Sunday isn't a public holiday. Nobody's entitled to time-and-a-half. No day in lieu if you work on Easter Sunday. Employers - some garden centres are an example - may choose to give these benefits.

The options for the government are:
- The status quo
- Allow trade on Easter Sunday, making it like an ordinary Sunday. This would upset a lot of Retail workers, missing a day off.
- Allow trade on Easter Sunday and make it a public holiday.

The problem with the latter options is that it adds a public holiday that most worker's won't get. It could be a public holiday for all, with it transferring to Tuesday if you don't work on Sunday - but most employers wont be keen on that.

Whatever the outcome - the nobody-works-on-Sunday hangover we have in our legislation is outdated and needs to reflect the real world. It also needs to reward workers with time off for working over 4 day weekend - meaning time and a half and a day in lieu for Easter Sunday.

(Updated: 15 Oct 06(!). Links to DPF and Shop Trading Hours Act corrected)

to be in the city

As always, something that went wrong in Auckland was blamed on the RMA, which as the PM points out isn't fair. It's also not fair to place incredibly large power pylons near peoples homes, no matter how rich they are. I live nowhere near South Auckland, but every time I drive along the southern motorway, I see the massive plylons flanking residential houses and - after I'm over the shock of their ugliness - wonder about cancer rates in those areas, and others near pylons and substations. I agree that we need to spend money, but let's not blame the RMA on doing what it was supposed to do - protect the citizens of this country from harm. I'm sure if the government was to decide the quickest and cheapest way to ensure power supply into Auckland's CBD was to plonk 100KV lines through Remuera, those braying over the last few day's wouldn't be happy.

Though all of this, I had the misfortune to both be subject to diving without traffic lights, and a full days work - the power was still on in the North Shore. Relief, however, came when the generators went down at the company that hosts all of our data (that is, public drives and network applications reliant on databases) , there was nothing to do but surf the net, despite DSL being down in parts of the city with power.

employment relations

In the last few days there has been a solid push against current employment law from the right. The Herald Wednesday lead with a Tauranga employer feeling aggrieved at a Employment Relations Authority decision against him, alongside a Employers & Manufactures Association (EMA) survey reporting that employment grievances are on the rise. The article gave Nat MP Wayne Mapp a chance to plug his 90-day worker probation bill (currently before Parliament), endorsed by the EMA in it's press release

The figures add solid support for the type of probationary period of employment currently before Parliament.

$2400 is a lot of money to have to shell out, especially considering the sacked worker Daniel Paterson wasn't a very good employee. But, he wasn't fired for anything the Herald implied with the headline

$2400 worker's payout for filthy graffiti.

He was fired for being late. Specifically, he was fired for being late once. Paterson was probably tardy more than that, but his boss Bruce Debenham didn't give Paterson adequate notice that he was close to being dismissed. On Thursday, he admitted that he did things badly in the Herald.

Further whining from the EMA here, claiming Labour's 2004 employment law amendment is unfair because New Zealand has more than one Judge deciding on employment matters. Sorry? That logic wouldn't get far in a murder case. This case involved a Air New Zealand Employee who was given warnings in 2002 and 2003, once for a fracas with another staff member, another time for getting snotty with customers (details of which Air NZ was unable to provide). Then she was given a promotion. Then she was fired 14 months after her last warning (PDF, page 61). The Employment Relations Authority(ERA) decision was appealed to the Employment Court by Air New Zealand The reason the EMA was upset was because presiding Judge Coral Shaw reaffirmed the ERA's assertion that Air New Zealand's actions were

not what a fair and reasonable employer would have done in the circumstances

I don't think it's too much to expect that of employers, and if the opposite - unfair and unreasonable - was to be committed to policy, it'd be laughed down.

There are some truly shocking workers out there, and most of them get moved on quickly by savvy employers. It's not hard to get rid of a truly bad employee, provided you put everything down on paper. Five sheets of paper to print out a customised employment agreement from the Dept of Labour, and another six to warn and fire the employee. Total cost 10 cents, if you're using the posh stuff.

That, and being fair.

new enterprise

The Government's decision to encourage new business activity from SOEs drew a decidedly knee-jerk reaction from ACT leader Rodney Hide, who labeled the move a tragedy. Predictably tax cuts were Rodney's answer. Business NZ claimed that SOEs would muscle in on businesses areas already occupied by the private sector, citing ACC as an example. I'm not convinced that TVNZ and OnTrack are about to pose much competition to the SME's that Business NZ represents - although Paul Henry would do a roaring trade running a dairy. National's response was more measured, with John Key issuing a warning shot about cronyism, and Katherine Rich suggesting offshore activities may be more effective, which may work for NZ Post and the Energy Companies, but not for OnTrack or TVNZ. She misses the point slightly, with overseas expansion being only good for revenue gathering, rather than providing new services that New Zealanders can not access.

This is a good policy provided that new areas meet the stated objective of having

a demonstrated potential to enhance the competitive competencies of other firms and industries.

Which may not go far enough. For this to work, SOEs need to have profit and dividend objectives clarified - the state shouldn't enter into areas that the private sector can provide at a high quality. SOEs now need the flexibility to utilize their profits from some areas to provide new services that run close to breaking even (i.e. unpalatable for private enterprise). As the TVNZ charter has proved, running dual model businesses are tough. If and when SOEs come up with new areas to provide public or business-to-business services, the SOE's board should be obliged to present a new business model that provides a structure to cope with a different style of operation. The government will in term need to accept no/low dividends.

I can't foresee what these companies will come up with, but if done properly they can provide enormous benefit, not only in direct job creating, but in improving the productivity for the NZ business community.

trouble in the suburbs

I've always regarded Howick and Pakuranga as oddities compared to the rest of Manakau city, given its relative wealth and different ethnic mix. City councilor for Howick Sharon Stewart seems to think so too, along with many of her constituents, pushing for transparency around the rate take from each ward. With the council instituting confusing and bizarre changes to it's revenue gathering, as well as proposing an increase, the citizen's in the east are feeling that they're unfairly propping up other areas of the city community.

They may well be paying more, but any rates breakdown is meaningless without comparison to ward spending breakdowns and civic infrastructure spending figures. Cr Stewart and her supporters on the council need to tread carefully in this area, especially given the Councils desire to boost revenue. City rates must be uniformly applied to all wards, even if some areas pay proportionally more than others for the benefit of all. Equally the city's bureaucracy has to make sure any planned increases are done with full consultation, and without dramatic changes to individual ratepayers.

making auckland more expensive

The Residential Tenancies Act of 2004 doesn't exist. It should. It was going to happen. But it didn't. For whatever reason, the government isn't interested in passing their own laws. Which is why the Auckland Property Investors Association is calling for all landlords to force tenants to foot the entire Metrowater bill. If the Residential Tenancies Bill, introduced in 2001, has been passed this wouldn't happen.

This was made possible by a 2003 ruling allowing landlords to charge for wastewater, along with standard water.

I don't believe that the District Court Ruling was actually good law. Neither was the 1986 act, although legislators of the time couldn't have foreseen the current situation. The case law is on shaky grounds mainly because the legislation specifically enables

water provided to the premises on the basis of metered usage

which, by logic, excludes water leaving the premises on estimated (unmetered) outflow (non-use). But Judge Graham Hubble chose to allow a specific landlord to charge wastewater to his tenant.

The Association isn't being fair either. Despite the 2003 ruling, landlords can't force tenants to pay the whole bill. There are parts of the bill that are clearly the landlords responsibility, namely charges related to pipe maintenance for the Auckland area. While these are charged (erroneously) according to the amount of water used, it's doesn't count as 'water'. Landlords can't force tenants to pay the annual account charge either - although if Metrowater decided to charge separately for meter reading, tenants could be charged for that.

Labour desperately needs to sort this out. It isn't a sexy issue, and it isn't a populist one, but it does affect many people financially in their core constituency, including those on the lowest wages.

Metrowater also needs to sort it's own house out. It can't continue with dubious wastewater meterage, and it can't justify pipe upkeep against m3 used.

[update: it seems that the whole act is up for review, most likely leading to an entire rewrite of the act. An announcement about the review is expect later this year. Which means that tennants are likely to have to put up with three or four more years of harassment by landlords over water rates, that is if Labour wins the next election. Not good enough]

oh, deb

Just when you thought it was safe to read the newspaper, Deborah Coddington comes out this this bunch of trash. Coddington blunt analysis of the Telecom leak centres around her belief that

Thanks to the State Services Commission conducting its inquiry in secret, we don't really know what led to this extraordinary leak.

Well, we do. In fact, we know extraordinary detail about how the document got into Michael Ryan's hands, how he went about providing that information to his friend. Plus, given that the whole affair had to be balanced against the finer provisions of employment law, it's hardly reasonable to expect that a public trial take place before any facts are established.

Coddington continues with demands to know if

Telecom [was] asked if it received this information from any other sources? Were the phone logs of staff in the offices of Communications Minister David Cunliffe and other ministers examined?

Well - no and no. Telecom was only asked about the document and no forensic evidence was gathered, both answers from the State Services Commission Report into the affair. The next question borders on bizarre

Was there something the Prime Minister did not want to find? ... Which makes you wonder whether the Prime Minister wasn't quite as upset as she appeared to be at the inquiry's result. We still don't know the extent of Telecom's relationship with the Government.

Such as? Give me an example of how the PM benefited from the leak, how the leak changed the facts in substance or any reason anyone within the government would have reason to inform Telecom early. Considering that the Government had been actively showing it's frustration with Telecom in the past months and that the leak only shifted events by two weeks, I fail to see how there is a even a small conspiracy floating around this issue, which makes Coddington's accusation that the PM/the Cabinet/ministerial staffers are being blackmailed/bribed/bullied/fornicated by Telecom seem like she's complaining for the sake of it.

checkpoint budget casts

From NatRad's checkpoint, Acting Polictial Editor Brent Edwards has interesting comments regarding taking political language back from the right in his anaylsis of the budget. Worth a listen.

Budget 06

The biggest little shallow secret in the Dr Cullen's 7th Budget is the $1.3 billion boost in roading funing to plug the gap left in transit's ten-year plan, paid in part through a one-off $800m divided from Meridian Energy. The remainder will be picked up though a $400m slice of a billion dollar commitment by the government of infrstructure bonds (full budget speech). A special announcement of more dosh for the Waikato is due tommorow. Transit will be issuing key deliverables on the extra spending shortly.

The Budget was otherwise on mesage and unsupprising. On message also was Don Brash, in contrast to his pitiful reply to the 05 budget. In his response, Dr Brash called the Budget the 'Bondi Budget', banging on and on about tax cuts, not unlike some in the media, and failing to address anything of substance in the budget. Which in iteself isn't bad politics. The fact he stayed on message, keeping to a well vetted speech no doubt, really outlines National's key policy focus for the next 2 years: tax cuts, tax cuts and tax cuts. This is what'll run in the news tonight, and the papers tommorow. But Brash failed to capitalise on Cullen's inattention to waiting lists - not mentioned at all in his speech. He read his pre-prepared rebuttal on the issue, but could have sustained much more damage to the Government with a more decisive attack on this issue. Most Labour supporters won't really care about what Brash has to say about tax cuts - they'll see it for idealogical posturing - but they will care about hospital waiting lists. While National can be fingered for Ruthanasing the health system, Labour isn't doing so well in the fixing on it. I'm picking this to be the achilles heel for Labour for the rest of the term, it's up to both parties to muster their ranks for a battle before the other makes a fatal blow.

Telecom

So, with more puns than you can shake a stick at, the leaker has been revealed. And what an anti-climax it was after the rumblings throughout the blogosphere and around Wellington water-coolers and newsrooms. Not wanting to be mean, but (now-unemployed) Michael Ryan must be a special kind of stupid to not realise that Telecom's Group Financial Controller wasn't going to be wise on the implications of having such a document, and that he had to do something with it. Not to mention the fact that it's not that too much of a strain on the brains logic systems to figure that stealing the document is illegal, trading with insider knowledge is illegal, and that his friend, Peter Garty, would arise suspicion if he suddenly sold his shares.

It's all over, boys and girls, but try telling that to Gerry Brownlee with his rather pointless calls for a wider inquiry. The reason bureaucracy goes mad, especially at this level, is because too many chiefs have their say into the details. It's over Gerry - time to move onto something important. Like a policy or two.

Donations

Good news with the Tasmania miners - they're free. What a drama. Hope they are well.

Idiot/Savant moots electoral donation reform here - should make for interesting discussion. Much needed area for change - pity Labour cocked up with their spending last year, any changes they might want to address will no doubt be stimied by their dirty feet.

Like a grown up

In a way, the leaking of the government's decision to require Telecom to unbundle it's local loop may work in its advantage, if only for keeping the stakes high and the issue alive. Inquiries, and calls for more inquiries, possibly followed by more inquires into the lead will reign upon news cycles for months. Telecom will continued to be painted as the big bad wolf, and the other players will have a chance to breathe and create battle plans to for a post-inquiry New Zealand.

The road is going to be rough for the likes of Slingshot and ihug, not only do will they have the task of planning their rollout, but they have the unenviable task of keeping Telecom on notice that they won't be taking any BS from the giant.

The temptation will be there for Telecom to not place nice, as it has done in the past(see David Slack's blog for a satire of the defense of hegemony) . It has to realsie that, even though they won't be retaining monopoly rights, they can deliver to shareholders profit.

How?

By doing it better. By delivering on price and value and keeping customers happy. The internet has fantastic potential for content and services, not to mention the existing ones that Telecom is (unsurprisingly ) eroding to lift its bottom line. I'll bet that its competitors will use "Full Service Internet" as a competitive point of difference. Contention ratios will, hopefully, become another.

I remember being with ihug back in, ooh, must have been 96/97, and always getting an engaged tone on my all-you-can-eat dialup account. I was told my someone, or read somewhere, that it was never a problem on paradise.net so I switched and was better off for it.

Ihug, was the first to offer a flat rate all-you-can-eat plan, before that it was per hour or megabyte and it was expensive. Before Telecom followed ihug's move, they somehow managed to gain customers on their unworldly $6.95/hr plan. They didn't have any particular unfair advantage over others. They didn't constrain dialup in the way they now constrain broadband. What they did have was a name everyone knew and dollars.

They'll still have that no matter what happens to them over the next few years. It'll keep them in the black for many years to come. But only if they're smart and start acting like a grown up company and adapt to their customers needs instead of throwing the toys out of the cot every time it's suggested they do.

News frenzy

I don't think I've actually had a genuine sense of excitement and anticipation at reading a newspaper before, but this morning ducking down from my cube for a smoko the Herald in hand, I was very much looking forward to what the paper had to say about last night's LLU announcement.

Followed by a tinge of disappointment. There's still a lot to happen before we, as a nation, get to experience faster cheaper broadband. Computerworld has a timeline, showing likely progress, and analysis - most telling of which is

Due to Telecom's delays in delivering on the government's targets, Cunliffe has been forced to lower the goal that New Zealand will be in the top quarter by 2010, to the top half only.

While the likes of Maurice Williamson can bleat on all he likes, it doesn't change the fact that Telecom is a monopolist, and that action needed to be taken.

Sir Humphrey's carries news from NZX/Telecom that the leak came before the cabinet decision, and rightly points out why didn't the government act sooner in releasing the information.

And good on Campbell Live for getting David Cunliffe (video) on Wednesday over CloseUp (RB with the inside scoop, and his own views on the news) and also for getting Teresa Gattung (video) tonight. Goes to show that a new player can play alongside, if not beat, the incumbent given time. Imagine what state we'd be in if our airwaves weren't open to competition. Now look at broadband. If you're not watching JC, then you should.

Speaking of Russell Brown, following the links to the rushed interview(video) he did with CloseUp I was appalled to have defaulted to the tiny tiny version of the video. I switched to the broadband, but it's wasn't reliable enough on my Xtra "3.5mbs" connection.

Amongst a day of news about regulation, government, business and technology it was almost nice to get this curious, if not slightly worrying, piece of news. The BBC turns out either to be putting a strong case in outsourcing the Civil Defense, or reporting events with hysteria. In any case, the Civil Defense have a lot of face-saving to do on this one. It's not like we didn't know ourselves.

Decision time.

Well. It actually happened. Communications Minister David Cunliffe was forced this evening to announce that the Government will be taking action to get Telecom to open up access to the local loop for broadband connections.

Story links: Press release, NZHerald, Stuff, Wiki on Local Loop Unbundling(LLU)

Always first off the post David Farrar said that the Cabinet decision (pdf) (update: pdf link seems to have disappeared, 4 hours later) "looks to be very good. Maybe even excellent". It is. It's wonderful. Well, it's got potential at least.

Details are a little sketchy since Telecom managed to get hold of the decision, supposed to be a Budget Secret, hours after the Cabinet Committee signed off. There's no time frame, no real "blueprint" as Anette Presley of Slingshot said on Campbell Live tonight. Unfortunately for Cunliffe, there'll be a lot of pressure on him to outline the timeframe and details of the unbundling. Less importantly to the public, but probably top of his mind, is how the damn thing got into Telecom's hands in the first place. Good on them for owning up straight away, but Telecom has a lot of power in Wellington and it would be hard for whoever who did it to argue they were doing it for reasons other than to give chums at Telecom the quick heads up, and to deny the Labour government of an opportunity to deliver a real juicy morsel in its budget.

Will be interesting to watch.

On a slightly more "*sigh*, the right-wing always finds a way to complain" sort of way, was some of the blog feedback. Michael Ellis firstly at KiwiBlog, then on his own site, is demanding on behalf of Telecom compensation for the LLU.

To the tune of $500 million.

Excuse me?

Firstly, Telecom is a monopoly. A monopoly that has been dragging it's heels on broadband speed and price, and that has at the very least been obsfucating the public wanting to connect via another isp. Plus their online services, websites especially, are eternally frustrating.

Secondly, their propertly isn't being confiscated. It isn't being blocked by the government.

And finally, it's not about Telecom. It's about New Zealand. I know that sounds like a load of toss, but its true. The sale of the corporation was a mistake, done badly. Now someones got to fix it if we want to stop being compared to Mexico as an equivalent first world country.

Somebody is fixing it, or at least starting to. Let's hope they pull it off.