NZ POLITICS DAILY: Partially privatised power co.s to escape Official Information Act, Ombudsman

The principle of transparency about how public money is spent is under threat, according to the Chief Ombudsman and the Green Party.

The Government’s plan to block public scrutiny of the soon-to-be partially-privatised power companies has come under attack from Chief Ombudsman Beverley Wakem, according to Adam Bennett’s Ombudsman warns on power selldown.

Proposed legislation would remove the SOEs’ obligations under the Official Information and Ombudsman’s Act, but Wakem argues that, with the Crown having the controlling stake in these large companies, the need for oversight and accountability remains.

She says there are plenty of existing safeguards to deal with commercial sensitivities and that many partially privatised council-owned businesses have proven that public scrutiny does not create commercial disadvantages.

Similarly, the Greens’ education spokesperson Catherine Delahunty is asking why taxpayers aren’t being told the details of the first contract for two Charter Schools in West Auckland – see RNZ’s Contract details wanted by Greens.

Gordon Campbell also looks at the need for public scrutiny of Public Private Partnerships, using an evaluation by the OECD of recent experience in Melbourne and London – see: On the government’s new PPP deal in education. Campbell concludes: ‘if you monitor a PPP franchise operation properly, its alleged cost savings tend to vanish’.

He says PPP’s ‘routinely invite “beauty contest” tendering – where unrealistically low bids win the contracts, allowing politicians to brag about cost savings. Then the same politicians prove incapable of ensuring the contractors were held to account for subsequent cost “over-runs” and extortionate lease conditions and debt financing that can end up pushing overall costs through the roof’.

The flow of money and influence into the political process is also attracting attention as a Green MP’s bill to regulating lobbying has been drawn from the ballot. Both the Herald and Dominion Post support some regulation, saying it is inevitable, even if the level of lobbyist influence is considered to be far less than in other nations – see the Herald’s The time has come for more transparency and the Dominion Post’s Shine a little light on lobbyists. It’s also worth noting some potential problems with such regulation of political activity – outlined today in David Farrar’s blogpost on The Lobbying Disclosure Bill.

Political donations have always been a key lobbyist tool and the examination of candidate donations for the last election continues with today’s No Right Turn blogpost Who is buying our politicians?, which lists the big donors, including Talleys who gave $5000 each to eight National backbenchers. David Farrar looks at third party campaign disclosures and argues ‘the spending by unions is a magnitude greater than that by business groups’ – see: Union spending in the campaign.

One simple, but unlikely, way to make political donations transparent would be to adopt a tongue-in-cheek proposal that has been floating around the US for a new dress code for politicians. They would be required to wear the corporate logos of their sponsors, in the same way that NASCAR drivers do – see a mockup here.

Australia’s hardline stance on asylum seekers and enthusiasm to pass them onto New Zealand is causing some concern. Tracy Watkins reports that John Key has previously taken his own hard line on the issue when a boat load of Sri Lankan refugees was intercepted in Indonesia on their way to New Zealand – see: Aussie to let refugees sail for NZ. While the Greens are urging compassion (see TVNZ’s Asylum seeker: We'd rather risk our lives), Labour’s spokesperson Darien Fenton is saying she hopes the Australian Government does not encourage them to come to New Zealand – see: Asylum seekers given temp visas. But the most interesting comment and analysis on the issue comes from rightwing libertarian blogger Peter Cresswell, who lashes out against the ‘xenophobes’ that are ‘so mean’ that they ‘would begrudge ten human beings the new life they seek in our land’ – see: Refugees: What’s the problem?. Cresswell’s particular anti-welfare, libertarian solution is to allow anyone into the country, as long as they can find private welfare and non-state care.

The extension of Paid Parental Leave appears to have the votes to pass but it could be vetoed by the Government because of its fiscal impact, reports Danya Levy in Veto hangs over parental leave support. The ‘problem’ with the Moroney bill is that it is not a cost-neutral, which is a major weakness for private members bills. Labour could have looked at making it cost-neutral by funding the expansion out of employer’s pockets. The original paid parental leave scheme pushed by Alliance MP Laila Harre was designed to be funded by business, and it was only the Labour Party’s fears of losing business support that led it to give employers taxpayer funding for what is, in many countries, an employer obligation.

Labour Minister Kate Wilkinson says the $150 million to extend the scheme is simply unaffordable, but The Standard queries whether it goes far enough given that ‘it doesn’t extend eligibility to the nearly 60% of mothers who don’t meet the rules currently (only 26,000 of 60,000 mums per year get it)’ – see: Choices, choices: paternal leave too expensive?.

Other important or interesting political items today include the following:

• For the first time since the US imposed a ban on military training with NZ armed forces in 1984, Audrey Young reports, Military combat exercise with US first for 27 years. This is a significant development in NZ-US military relations as it is ‘the first traditional military exercise since the reprisals against New Zealand for its anti-nuclear legislation included a ban on joint exercises, without a special waiver’. Expect a lot of fanfare.

• Business writer, Tim Hunter, suggests that Power prices are heading one way – up. This is a must-read discussion for anyone concerned about competition in the electricity sector and the potential effects of partial privatisation on power prices.

• In his blogpost, Electorate Seats for the Greens, David Farrar explores the possibility of the Greens winning an electorate seat. He picks Grant Robertson’s Wellington Central as the most likely option for capture, but flags a Rongotai by-election as a perfect opportunity for the minor party to pull off an upset.

• Isaac Davison reports on what seems to be an almost immutable law whereby Government spending on consultants increases irrespective of the party or policies of Government – see: Spending on consultants rises under National.

• Political scientists, Ramesh Thakur and William Maley argue that given New Zealand’s limited ability to bribe its way internationally, it’s senior managers not diplomats that should be facing the chop – see: Chop the managers, save the diplomats. See also Gerald McGhie’s A simplistic reduction of Mfat will solve nothing.

• Fran O’Sullivan continues her crusade to make foreign investors feel welcome in New Zealand, but wonders why she is one of only a few public voices taking a strong stand – see: Dusting off welcome mat for foreign cash.

Bryce Edwards

NZPD Editor (bryce.edwards@nzpoliticsdaily.co.nz)