This column’s name is a secret

If NZ First can have secret trust funds no-one knows the name of, then I think I am entitled to keep the name of this column a secret.

We’ll look at NZ First’s problem shortly, but first off is Best Play of the Week.

Best Play of the Week

The runner up is National’s Employment & Workplace Relations Policy. Their commitment to reintroduce voluntary union membership for employees on a collective contract is excellent, as is the 90 day trial period for new employees and the flexibility for employees to cash in their fourth week of annual leave. It does not represent a major change in employment law, but is a series of useful steps in the right direction of choice and flexibility.

But the winner is the EMA Northern for their gutsy campaign against the Government’s law which will make it illegal to include KiwiSaver subsidies in a total remuneration package.

The EMA campaign, consisting of advertisements in major newspapers, points out that means employees who can not afford to go into KiwiSaver lose out to those who can, as they are not able to be compensated for not taking up the employer subsidy.

Of course the EMA is also concerned that this is just another law which makes it harder for businesses to budget. Total remuneration packages allow an employer to estimate their costs very accurately. This law change will hinder their ability to do so.

The irony is that employers will just assume in future that every employee will go into KiwiSaver and set a total remuneration package which includes that assumption. So if an employee can not or will not join KiwiSaver they will get paid less than might otherwise be the case. It is bad policy and well done to the EMA Northern to stand up and say so. They get an A- for their campaign.

Worst Play of the Week

Sadly this goes to Reserve Bank Governor Allan Bollard who gets a C- for dropping the official cash rate at a time when non-tradeables inflation is over 3 per cent and overall inflation is predicted to hit 5 per cent.

Home owners are the winner, but all consumers risk being the loser with inflation above 3 per cent becoming an accepted part of the economy. Once upon a time the target inflation rate was 1 per cent (the mid range of 0 per cent to 2 per cent) and over the years it has got higher and higher.

If Bill English becomes Finance Minister later this year, he is likely to inherit stagflation – high inflation and negative economic growth.

Scandal of the Week

Can there be any debate? The NZ First funding scandal goes from an A- scandal to an A+ scandal with the extra revelations in the last seven days that Owen Glenn did donate $100,000 to Winston Peters’ legal fees, the publishing of a cheque from the Vela Family to NZ First in the Dominion and finally the revelations from Sir Bob Jones that he has given $175,000 to NZ First over the years and that at least the latest $25,000 went into a secret trust fund.

The combination of these revelations has destroyed NZ First’s decade of rhetoric against secret trusts and anonymous donations. In fact their alleged practice of using the secret Spencer Trust to pay bills on behalf of NZ First is less transparent than National’s much criticized Waitemata Trust and is arguably illegal. The only saving grace may be the deadline for prosecutions on the 2005 donations return has expired.

However Peters will face a firestorm when he returns to New Zealand. He was planning to take the offensive against the Dominion Post for their Vela Family allegations, but Sir Bob’s allegations will very much put him on the back foot. Especially damaging is the statement that Peters personally solicited the money which went into The Spencer Trust, which is controlled by Winston’s brother.

The question I have, is how many more secret trusts does NZ First have? We’ve learnt of two in the last seven days – there could be more to emerge.

Patsy of the Week

Patsy of the Week will appear in weeks the House is in session. This week the entire NZ First Caucus shares a straight A grade for the most sycophantic questions in recent times. Some examples:

Peter Brown: Can the Prime Minister confirm that the Minister being referred to in the principal question is the same Minister of Foreign Affairs who has worked hard to improve our relationship with the USA, so much so that its Secretary of State, Condoleezza Rice, has accepted a personal invitation from the Minister to visit New Zealand and has also accepted his invitation that she return home via Samoa in order to meet with Pacific Foreign Ministers; and is that the Minister of Foreign Affairs who is being referred to?

Ron Mark: Can the Prime Minister confirm that in 2007 the Minister of Foreign Affairs brokered a deal with the Minister of Finance to boost New Zealand’s level of overseas aid by $70 million—an increase of over 20 percent, and the biggest such increase in decades—and is that not the foreign Minister that she continues to have total confidence in?

R Doug Woolerton: Can the Prime Minister confirm that this year the Minister of Foreign Affairs announced the Pacific Development Strategy, which will deliver $2 billion in aid over 8 years, allowing New Zealand to make a sustainable impact on improving health and education in the Pacific, addressing infrastructure gaps, promoting economic growth, and improving governance and leadership?

Barbara Stewart: Can the Prime Minister confirm that the Minister of Foreign Affairs was last year afforded an invitation to visit North Korea; that later that year he visited that country to explain our longstanding wish to see denuclearisation, peace, and security on the Korean peninsula, and to convey our strong support for the six-party talks process; and that at the conclusion of that visit he travelled to the United States for talks with the Secretary of State, Condoleezza Rice, at her request?

Pita Paraone: Tēnā koe, Madam Speaker. Can the Prime Minister confirm that the Minister of Foreign Affairs this year brokered a deal with the Minister of Finance to boost the operating funding of the Ministry of Foreign Affairs and Trade by $523 million, and to provide a capital injection of $98 million over 5 years, which will allow an increase in ministry staff of around 50 percent?

I apologise for forcing these quotes on squeamish readers. Normally one only gets such gushing affection in a Mills & Boon novel.

Electoral Finance Act Breach of the Week

Steve Pierson, the alias for a blogger at The Standard, suggests the EMA Northern campaign against the KiwiSaver law changes may breach the Electoral Finance Act as they have spent more than $12,000 on the campaign without registering as a third party. He labels it a deliberate attempt to breach electoral law.

Personally I don’t think the advertisements breach the law, so it is a D- grade for the alleged breach. However it does highlight the potential chilling effect the law can have when organizations like the EMA Northern face potential prosecution simply for campaigning against a law change they don’t like.

The various NZ First funding allegations all are dated prior to the passing of the Electoral Finance Act. Some have asserted that they could not happen today. However the secret donations paying off Winston Peter’s legal bills are not affected by the Electoral Finance Act and could continue without consequence under the EFA.

Blog Analysis of the Week

Idiot/Savant at No Right Turn scores a B+ as he cuts to the chase with his call for Winston Peters to be sacked:

They [Ministers]can accept political party donations, but it must be made clear that the donation is accepted on behalf of the party, not on behalf of the Minister. In any case, Peters has denied adamantly that Glenn's $100K was a party donation, which means it was covered under the general gifts clause. He should have declared it, and then relinquished it. He did neither. And this is something no Prime Minister should accept. The Cabinet rules on gifts are there for a real purpose: to prevent corruption, and the perception of corruption. Peters has blatantly violated those rules, and for that he must either offer his resignation or be sacked.

Rather than sack Peters, the Prime Minister has declared he can keep the $100,000 as his electoral petition in Tauranga was in the public interest. Funny that – I always thought an electoral petition, if successful, mainly benefited the losing candidate.

David Farrar writes his weekly Dispatch from Helengrad exclusively for the National Business Review. His background is here.