Union Orcs escape Mordor to attack Hobbits

Tackling the elephant in the (state house) room

The government’s proposal to end the concept of a “state house for life” is a welcome move that will hopefully be a precursor to more radical change in the housing sector.

Housing Minister Phil Heatley has put forward a plan to review state house tenancies every three, five or ten years to make sure they are still the right people for that home.

Almost a third of state house tenants (22,000 people) have been in their houses for at least 10 years and Mr Heatley said the circumstances of tenants may have changed over that time.

For example, their incomes may have increased or their children may have moved out of home, meaning they could downsize to a smaller state house if not move out of state housing altogether.

Unlike some of the National-led government’s more controversial policies, this one is unlikely to generate massive street protests.

After all, who can really argue against ensuring state houses go to those who are most in need, or that five-bedroom state houses aren’t wasted on families with only two people?

More work to do

While they represent a move in the right direction, these proposed changes are only the first step and more still needs to be done.

One part of the proposal, that some state houses be transferred to the non-profit sector such as the Salvation Army, is a start towards what should be the government’s ultimate goal: to get out of housing provision altogether.

The government is a naturally bad landlord because it has no financial incentive to improve the quality of the accommodation it provides, hence thousands of state houses being left in shocking quality.

It also needs to eliminate or at least radically alter the accommodation supplement (also known as the landlord supplement), which is provided to more than half of the 480,000 households in private rental accommodation at a cost of $1.2 billion per year.

To reduce demand for state-provided or subsidised housing the government needs to address cripplingly unaffordable housing in our big cities by abolishing urban land limits that push up land prices and zoning laws that hinder the natural densification process.

Many people conflate opposition to the government providing a good with opposition to the good itself, leading to misplaced accusations of cruelty and heartlessness.

What is really cruel and heartless is leaving thousands of people totally reliant on the state to provide them with one of the few basic necessities of life: a roof over their heads.

Backwater stock exchange

The proposed merger between the Singaporean and Australian stock exchanges has left New Zealand’s stock exchange operator, the NZX, looking irrelevant.

The Singapore Exchange’s (SGX) plan to buy the Australian Stock Exchange (ASX) may struggle to get through Australia’s parliament.

But whether it succeeds or not, the fact is that the NZX has been left on the outside looking in, stuck with a bunch of small and insignificant stocks.

 It's not a good sign that a large chunk of the daily trading on the NZX is in the two Australian owned banks Westpac and ANZ National.

Meanwhile, the ASC has a handful of companies that are bigger than the NZX's entire market cap.

Not content with niche

Instead of being a niche operator or as chief executive Mark Weldon described it, a "specialist", the NZX should be doing all it can to get big businesses on board.

He told the NBR this week that consolidation hadn't been ruled out but it's hard to see why bigger exchanges would bother with the NZX.

Companies that make scented candles are all very well but to get investors' attention the NZX needs a couple of behemoths on board.

The problem is that most of New Zealand's largest companies are either privately owned (Carter Holt), state owned (Mighty River Power) or co-operatively owned (Fonterra, Foodstuffs).

If the government goes ahead with an asset sale programme in its second term like many in the business world are hoping the Singapore Exchange may decide to make an attractive offer to NZX investors.

Mordor-dwelling unions infiltrate middle earth

The filming of The Hobbit will take place in New Zealand as planned but the sour taste left by the actions of the unions involved in the saga continues to linger.

After negotiating with Warner Bros the government made a deal this week to keep the filming of the two parts of the JRR Tolkien classic in New Zealand.

As well as giving out bigger tax breaks the government has also made a law change clarifying that, for the purposes of the film industry, a person who signs a deal saying they are an independent contractor is, well, an independent contractor and not an employee.

This doesn’t seem a particularly hard concept to grasp and wouldn’t have required a law change had it not been for the threat of industrial action hampering the films.

By having independent contractors instead of employees, film companies can go about their business without having to worry about unions putting a gun to their heads.

Living in fantasy land

The Media, Entertainment & Artists’ Alliance, in concert with the New Zealand-based Actors’ Equity, had pushed for a collective agreement setting out minimum pay and conditions for the Hobbit films.

Their motive was the same as any union pushing for collective bargaining agreements: protectionism for its members.

If the filmmakers had to pay actors $20 an hour this would prevent people who would do the job for less from undercutting the union members’ labour.

What they don’t seem to grasp is that cheap labour is one of the main competitive advantages New Zealand has in getting movies made here.

Removing the ability of Kiwi wannabe-hobbits and orcs to charge less for their labour would have the predictable consequence of the movies going somewhere cheaper.

The prospect of New Zealand losing these and other films has riled film workers so much that some of the main faces in the dispute are reportedly receiving abuse and threats.

This is very unfortunate but not surprising because few things get people angrier than the prospect of a bunch of busybodies costing them their livelihoods.