Football Football Football!!!

It has been a little while between posts so I thought I would start back with the European Championships currently on in Poland and Ukraine.

The Euros are often considered to be a better tournament than the World Cup. With the exception of Brazil and Argentina the sixteen teams competing are generally the best teams in the world. You don't have any of the rubbish teams from Asia or North America (or the All Whites). There are few dud matches and it throws up amazing groups like Germany, Portugal, the Netherlands and Denmark.

For some inexplicable reason UEFA have decided to increase the number of teams competing to twenty after this years tournament, so it is one to be cherished. Another reason to cherish this tournament is the participation of a Spanish side right up there with the greatest sides in history and a young German side going from strength to strength.

So far things have been going to plan. The Spanish have been passing their opponents into submission while the Germans have been beating teams with speed and vigor. Not wanting to disappoint the English went out on penalties this morning with Wayne Rooney again failing to perform in the knock-out stages of a major tournament.

This first tournament in Eastern Europe was littered with potential problems and apart from a few instances of racism (and the expectedly weak response from UEFA) it has gone well. Human Rights campaigners who have tried to draw attention to their cause by exposing their breasts may have picked the wrong tactic for the alcohol fueled mainly male fans.

On Thursday (NZ time) Portugal take on Spain in the first semi-final followed by Germany versus Italy the following day. And all things being right in the world we can hopefully look forward to a European classic between Spain and Germany on Monday morning.

New Monbiot

Our countryside has once again become a playground for the rich Anything that can't be shot and eaten is shot and hung from a gibbet. The aristocracy is back in charge, destroying Britain's wildlife

The Week That Was

It has been a wee while between posts and plenty has happened in that time.

- Elizabeth Windsor celebrated sixty years as the head of state of the United Kindgom over the weekend. I have decided to refer to her as Elizabeth Windsor in the future as hereditary titles are disgusting and have no place in the 21st century. Some people want New Zealand to wait until Elizabeth Windsor passes before moving to a republic, but I say bugger that, it's time to remove this archaic institution. It would have been a great moment to start when...

- John Key met with Elizabeth Windsor this week. He gave her some Kapiti Cheese and she asked for a status update on the ChristChurch Cathedral, but didn't care to ask about the 200,000 children living in poverty in New Zealand ,the thousands deciding life is greener on the other side of the Tasman or the changes to the welfare system (You might think the world's largest welfare beneficiary would be interested in that sort of thing but I guess not).

- The Green Party had their AGM and celebrated the 40th anniversary of the Values Party. As they go from strength to strength in the polls they are preparing for a future in which they will be part of the government and not on the outside and how this will effect the consensus decision-making the have practiced.

- Education Minister Hekia Parata has been forced to back down over planned class size changes after practically every man and his dog came out against them. It has been one big embarrassment for the government and the questions now is will she stay or will she go?

There were some other small bits and pieces going on:
- Bronwyn Pullar was cleared of blackmail by the police and now ACC has some serious questions to answer.
- Philip Mountbatten was appointed to the Order of New Zealand. WTF???
- Robyn Malcolm tested over the legal limit at a random breath test.
- Vodafone wants to buy TelstraClear.
- In an attempt to deflect attention away from Hekia Parata, Paula Bennett announced the sterilisation of abusive parents (That may be a slight exaggeration).
- Christchurch got snowed on.
- and my man Julian Savea got named in the All Blacks' starting line-up for the first test against Ireland.

Lastly, its economy might be going to hell in a handbag but it's good to see Greek politicians are not letting that get in the way of an open and reasoned discourse:

Crap Journalism

The state of news journalism in New Zealand can be pretty damn poor at times and today we have this rubbish article from the NZ Herald, titled Govt cool on insulation extension. It says

The Government has not committed any new money to a housing insulation scheme despite reports showing it had provided $1.2 billion in health benefits - a four-fold return on its funding.

This seems incredible, how could the government be so short sighted on this issue! However the article continues

Housing Minister Phil Heatley announced last Thursday that the scheme had been so cost-effective that the Government could extend it for a year and help insulate 41,000 extra homes with the original budget. The funding was now expected to run out in July 2014.

Oh right! So the scheme will not run out until July 2014. The Government has over two years to decide if it wants to extend it.

Mr Heatley said through a spokesman that National would make any considerations on its future "in due course".

So rather than being "cool" on an extension to the scheme, the Government will look at in the two years it has until the scheme runs out. This article would have been better titled "Average Journalist writes crap article."

A little risk would pay off for KiwiSaver

The NZ Herald Editorial today is on KiwiSaver. It looks at number of aspects starting with the deferral of auto-enrolment:

A boost to New Zealand's savings culture has been put on hold with the Budget announcement that automatic enrolment in KiwiSaver in 2014-15 is no longer possible .... The deferral is unfortunate. Auto enrolment, which would place all employees, not just the newly hired, in KiwiSaver, has been strongly recommended by the OECD. Now, it will not be considered until there are sufficient surpluses to pay for it.

I mentioned this in my Budget blogpost yesterday and I feel it will keep cropping over the next wee while. The poor personal savings rate of New Zealanders is of real concern to the Credit Rating Agencies and I can't help but feel that the government has missed a trick in deferring auto-enrolment in its quest for a budget surplus.

The KiwiSaver default-provider arrangements have proved even more a bone of contention, and more damaging to the creation of a significant national savings pool that would propel economic growth. This is because they are not working in the best interests of young and young-ish KiwiSaver members .... Within those default schemes, their money is, by default, put into conservative funds. These are comprised mainly of low-risk, low-return assets, such as fixed interest .... But it makes no sense now for 25-year-olds with 40 years of KiwiSaver ahead of them to be in a conservative fund. History shows that, over time, growth assets provide by far the better returns, whatever the short-term fluctuations.

Four or so years ago when first signing up to KiwiSaver I was going to let my money go to one of the default scheme providers and not worry about it. Luckily enough my father, who is much more financially literate than I am, advised me to put it into a growth fund. When the market went down it lost money, but it was also able to buy plenty of shares at these low rates and when the market rebounded it made back what it lost and them some to the point where it now has a lot more in it than I have invested.

A lot of other young New Zealanders will not be as lucky as I was so it is fantastic to see the Herald arguing for a change in the default-provider scheme to more pro-growth funds.

"It's clearly a budget. It's got a lot of numbers in it."

"It's clearly a budget. It's got a lot of numbers in it."
      - George W. Bush

The news this week has been dominated by Bill English's second Zero Budget.

The Budget's main aim is to get the government's books back in surplus by 2014/15, which has taken on something of a holy grail importance in the government's eyes and that of the public, whether it actually is or not. See Low hanging rotten fruit for some potential alternative aims.

Unfortunately that means it is not a particularly inspiring budget and anyone hoping for news to encourage economic growth will be sorely disappointed.

Stuff.co.nz has a summary of the main points here, but I would like to focus on a few of them.

Closing a tax loophole for those who rent out their bach and boat, saving $109m over four years

This appears to be the Government's vaunted plan to broaden the tax base and while you can't rarely argue against it, it is a pretty week effort at broadening the tax base (Anyone for a capital gains tax?).

Three tax credits abolished, saving $117 million over four years.

This appears to be part of the broader tax base as well and while I'm not opposed to the removal of any of them, it suggests a government really scraping the barrel, devoid of any big ideas.

An excise tax hike on tobacco, taking the price of a pack of 20 cigarettes to more than $20 by 2016

My only problem with this is that it should have been more. A 10% increase each year seems like nothing, 25% would have really said something.

Deferring KiwiSaver auto enrolment

This policy would have cost a lot of money so it does make some sense to defer until the government is running a surplus. However on the other hand the Credit Rating Agencies have been a lot more concerned with our low rate of personal savings than Government debt or deficits, so wouldn't the benefits of increased KiwiSaver participation have outweighed the negatives?

Increasing student loan repayment rate to 12 per cent

I have already blogged that I don't have a problem with this policy. The changes to the Student Allowance entitlements are concerning however, especially the potential impact on post graduate students.

The aim of the Government is to ensure a return to surplus in 2014/15 on that level it succeeds. Unfortunately New Zealand needs something more than that, a budget that encourages economic growth and adresses the major issues facing it, the ticking time bomb of superannuation and interest free student loans.

Unfortunately for New Zealand this Government doesn't want to face it and I have serious doubts that the alternative have the ability to face them.

New Monbiot

A little bit of a change of pace from George Monbiot this week, with some left-wing intellectual infighting.