Clicking Fingers
At first glance, Aaron Gilmore has paid a heavy price for what seem to have been pretty minor misdemeanours. He isn’t the first person to make a fool of himself after a few too many.
But on closer scrutiny, the episode might appear in a different light. It was not so much what he did, but what he revealed himself to be that attracted such unfavourable attention. Here was a man who was ready to treat with contempt those whom he clearly regarded as mere minions, and who was misguided enough to believe that his imagined power and influence meant that he could demand and get whatever he wanted. Is someone who will so arrogantly ride roughshod over others the kind of person we want running the country – even if only in the most minor of minor roles?
It was that question that meant that Aaron Gilmore lost the support of his colleagues, and particularly of the Prime Minister. They could not afford to have the National government tarred with the Gilmore brush.
Within a few days of the Gilmore episode, however, the government has found that a new issue has dominated the headlines. The long-heralded deal with Sky City over a convention centre in Auckland has been announced. No one would dispute that Auckland would benefit from such a facility, but the way it has been arranged raises a number of questions that are in their own way not so far removed from the Gilmore saga.
There is of course no reason that a convention centre should have anything to do with a casino. Sky City’s involvement is something cooked up by the government. If it were a commercially viable project, Sky City should pursue it on their own account without demanding the concessions they have obtained. If it is not commercially viable, then the government should face that fact and fund the project from its own resources, rather than sell concessions to a gambling interest that is careless about the welfare of our fellow citizens.
There are other peculiarities of the deal. The government has not only sold its power to make laws, but has purported to do so in a way that will bind future governments and make it impossible to unpick the deal. Even its supporters must have been brought up short by the realisation that the arrangement will last till 2048 and that any attempt to change it will involve future taxpayers in hefty annual penalty payments to Sky City.
This looks like an unconscionable attempt to use contract law to circumvent the generally accepted constitutional principle that one parliament cannot bind its successors. And that injury is exacerbated by Sky City’s further demand that the public should be denied any involvement in determining the shape of the project.
We have, it seems, in Sky City’s view, already endorsed the deal by voting in the National government in 2011 – in just the same way as we apparently supported asset sales. This attitude brings us perilously close to what Quinton Hogg, later Lord Hailsham, once famously described as “an elective dictatorship” – a government that, once elected, claims a democratic mandate to ignore the will of the people and do whatever it pleases. And what pleases this government, sadly, is carrying out the wishes of big business, even if that runs counter to the interests of ordinary people.
The Sky City deal is – in line with that solicitude for business interests and lack of concern for the common good – in line with the Warner Brothers deal (which reduced the rights at work of New Zealand employees, and cost the taxpayer $67 million). The keenness to promote asset sales is a further example. The case for selling assets cannot be an economic one, when the assets being sold generate an annual return of at least 7% and the government can borrow at less than half that rate; the outcome can only mean a greater burden for future taxpayers.
But the government will pursue asset sales because they provide another opportunity to reward their supporters; consumers might suffer, through higher prices, along with taxpayers, but stockbrokers and investors, accountants and receivers (if things go wrong) will (it is hoped) make a killing. We see a similar pattern in the government’s suggested solution to the problem of housing affordability; those who cannot afford decent housing and struggle to pay their rent are somehow to be helped by providing enlarged opportunities for property developers to pocket the increased development value of land.
Which brings us back to Aaron Gilmore. Do we see something of the departed MP in the ruthless use of power to get what the government and its supporters want? In the contempt with which the interests of ordinary people are dismissed? In the readiness to suck up to the rich and powerful?
When Aaron Gilmore clicked his fingers to the waiter, the sound reverberated round the whole country. When John Key, with a ready smile, does the same, hardly anyone notices.
Bryan Gould
14 May 2013
The Deal-maker
Our Prime Minister revels in his reputation as a deal-maker – and with good reason. His success in making a personal fortune as a foreign exchange dealer is, it seems, a major factor in establishing his claim to be an expert in how to run our economy.
It may not be immediately obvious that the short time horizon of the foreign exchange dealer – perhaps at times only a few hours or even minutes – is necessarily the best qualification for making good long-term strategic decisions about our economic future. But few would doubt John Key’s ability to close a deal.
It is only when we look closer at the deals that the Prime Minister concludes that doubts might arise. It seems that his negotiating stance in approaching a potential deal usually begins with, “The answer’s yes, now what’s the question?”
Those doubts might seem to be well-founded when we look at some of the deals he has concluded in recent times. The “negotiation” with Warner Brothers over The Hobbit seems to have been a process in which the Hollywood moguls dictated their requirements – $67 million in tax relief and a change to employment law that reduced the rights at work of actors and film crews – and John Key’s government “negotiated” by meekly complying, with the passage of overnight legislation.
We see a similar pattern in the “negotiation” with Sky City over a convention centre in Auckland. The Sky City offer was made conditional by the gambling bosses on the award of a significant number of new pokie machines – something strongly opposed on social and health grounds by those rightly concerned at the damage done by gambling to families who can ill afford it, but immediately conceded by John Key.
On this form, we can be confident that we will see the same pattern in future “negotiations” with, for example, overseas firms wishing to drill for oil, or mining companies wanting to operate in conservation areas, or foreign buyers proposing to purchase national assets. In all such cases, we can expect our “deal” maker to take whatever is offered and run.
“Show me the money” was John Key’s election campaign challenge to Phil Goff; in his mind, it seems, “showing the money” is the essential and only condition needed to settle any deal on offer.
Peter Dunne’s blog last week, in which he warned that there were real dangers in the Prime Minister’s propensity to “cut through” obstacles to a deal, was making a similar point. John Key, it seems, is quite ready to set aside legal safeguards, as well as commonsense considerations, if that is what is needed to close out a “deal”.
The defining characteristic of the Prime Minister’s big-ticket deals is that they typically involve large firms, preferably from overseas. He seems so impressed at being involved with such entities that any concern about whether or not a “deal” offers good value for New Zealand goes out the window.
The worry is that, in negotiations like those with the US and others over a Trans Pacific Partnership, the Prime Minister will take a similarly cavalier attitude to the protection of our national interests. We are already being softened up for what seems now to be an inevitable outcome – that, on a range of important matters, such as a continued and unchanged role for Pharmac, the “negotiations” will end up with an abject capitulation by our government. For John Key, the outcome that matters is putting the signature to the “deal” – not the practical (and possibly adverse) consequences thereafter for our economic wellbeing.
A similarly short time horizon is in evidence when it comes to asset sales. It is almost as though the Prime Minister is so dazzled by the potential price tag of billions of dollars that he is blind to any longer-term disadvantage. Yet, selling assets that generate a minimum return of 7% per annum at a time when the government can borrow at roughly half that rate is simply to put a short-term gain ahead of a much larger longer-term loss for future generations.
As on so many other issues, John Key seems not to understand that the sale of our income-producing assets into foreign hands is to deny future generations important (but dwindling) national income streams. Their loss makes us poorer, increases our need to borrow from overseas and weakens still further our power to decide our own future.
We have travelled a long way from the time when New Zealand was prepared to take a stand and stick to it, even in the face of condemnation from powerful overseas interests. Ask yourself a simple question. If John Key had come to power before our non-nuclear policy had been decided, would he have taken the initiative and introduced it on his own account, and then maintained it against all the odds? Or would keeping in with the Americans have been his first priority?
Bryan Gould
8 March 2013