Communications Line Number 61 of 28 March 2008

Douglas: asset or liability?

Is Roger Douglas an asset or a liability, and to whom? Those are the questions underlying the debate over the impact of his re-appearance in the party he founded and then seemed to repudiate. Will he make the difference – that is, take a party polling around one percent to its target of six, eight or even ten percent? Or is he a “has been”that half the electorate has never even heard of, and the rest either don’t care about, or are frightened of? The commentators were divided, and my initial thought was that he was now irrelevant. Having now seen him and the other ACT presentations material I think that was rushed and simplistic judgement. The party is repositioning itself. There is renewed enthusiasm and former National Party advertising John Ansell’s joining the team is already making a difference.

Back to Sir Roger; he was certainly an asset to ACT in gaining publicity in the last couple of weeks – first the conference speech, then standing for Parliament, then the furore over wanting a Cabinet position. Publicity isn’t votes. He and we all recognise that, but it’s a start.

He was certainly an asset to Labour Ministers who could hardly believe their good luck that the demon they most treasure should re-emerge to say nasty things about them. They said nasty things back and it was all right in line with Labour’s strategy of scaring the voters with the spectre of National cutting services and selling assets.

And he’s a liability for National while he and ACT keep up the talk about stiffening National’s resolve and filling seats of influence (whether in Cabinet or not). John Key doesn’t need a scary dragon out to his right, and now has the difficult choice of embracing or repudiating ACT (see later story).

Underneath the return of Douglas, who at 70 has had a fresh attack of enthusiasm, is the subtle repositioning of ACT as a party.(see below.) They are not about perk busting and welfare abuse. (Rodney’s moved on and Muriel Newman isn’t in Parliament anymore). Nor is it about radical reform (although Roger still uses the phrase “unfinished business”, the title of his book that lead to the founding of ACT). And it’s not about redneck conservatism. (Bashing the Treaty industry and harping on about criminals having life too easy aren’t quite the formula any more).

It’s now about choice– “Choosing Success” as MP Heather Roy puts it.

It’s a greener, nicer ACT now

While the media focused on Roger Douglas and his spats with Michael Cullen and others in the past fortnight, the story of ACT’s subtle repositioning has gone largely unnoticed. I wasn’t at ACT’s annual conference (I have never attended any of their conferences), but I did join more than a hundred others at a meeting in Wellington this week where Heather Roy and Roger Douglas repeated their conference presentations.

ACT is now about being free, prosperous and green, and it’s out to capture voters’ minds. Already one can see the impact of the advertising thinking coming from John Ansell. Rational thinking, as in Roger Douglas often repeated statement in the late 1990s, “it’s all in my book (Unfinished Business). All we have to do is get people to read it,” is out. Emotional connections with people’s feelings are in. The language says that the “false and old” have been replaced by “true and new”.

Less government is good government, Roy tells her audience, but education and training, health and social services and the provision of superannuation are now among the “core roles” of the state for ACT. It isn’t just defence of the realm and enforcement of contracts, the minimalist view of the state any more. The thinking is much more conventional, mainstream, even centrist, and therefore much closer to the views of the voters. But ACT is still radical: the Swedish socialist model of education gets an endorsement. The state pays, but parents choose the school for their children.

National has partner options

There is an assumption in ACT’s rhetoric that National both needs and wants ACT as a coalition partner. Both parts are questionable. If National can form a government in its own right, (and it could on current polling) then it will. United and NZF have always said they would support the party with the most votes, so a supply and confidence agreement with them would give National some additional support if that were thought necessary. No Cabinet seats for ACT in that scenario.

If National turns out to be the single largest party, but is short of a majority, it has options. Under John Key, it will look first to United and NZF for coalition partners. It might even manage a deal with the Maori Party if it has to. ACT would be well down the list.

National could choose to govern as Labour has done– as a minority coalition government for the last six years, with supply and confidence agreements with other parties. What’s ACT going to do if it is not offered a coalition; refuse to support a National led government? Vote to bring them down and have another election? Ally with Labour and the Greens?

National will do as little as possible with ACT, which doesn’t mean it will do nothing, but there is no way ACT is going to be first into National’s bedchamber. Why is this? Two reasons: first John Key is more centrist than Don Brash and will turn left not right in his search for partners and supporters. Secondly, because ACT has always been an embarrassment to National. Under Bolger and particularly under Shipley, ACT was bolder, more imaginative and sharper than National. ACT generated more ideas and sharper debate than National, which completely lost its way after losing power in 1999.

In 2001 there was even talk among (a few) National MPs of a merger so that Richard Prebble could lead a combined party. That came to nothing but the Brash experiment didn’t work either, and National is now determinedly centrist. If National does win power, John Key will be loath to have ACT MPs any closer than the adjacent seats in the debating chamber.

John Ansell - distiller

John Ansell, the man behind the 2005 National Party ads but now working for ACT, describes himself as a distiller – a distiller of differences. ”I distill ideas, people, and policies into morsels that ordinary people can digest.”

“For example, the return of the 400 000 Kiwis in Australia will be possible when we have reversed the slide in our living standards and gone past Australia again.” This is distilled into ‘bring(ing) your children back home”.

The slogan promises a benefit. It connects with the emotions as well as the rational mind, which the party believes is necessary in order to connect with women, a constituency it has previously neglected.

“Keep your loved ones safe”, and “teach your children well”, are examples of policy commitments on law and order and education, distilled into language that voters can understand easily.

It also takes ACT away from the positioning the left has given it as ruthless slashers of services and sellers of the family silver. Ironically, John told me in an interview, he could have worked for both National and ACT.

“ACT was comfortable about my doing work for both them and National, but the Nats weren’t comfortable about my working on both brands. ACT needs me more and I love working for the underdog.”

Fiscal Drag

Fiscal drag is the economists’ term for the effect of inflation on taxation. In a progressive tax system, as money incomes increase, wage earners move into higher tax brackets and therefore pay the higher marginal rates of taxation on their extra income. Governments can choose to allow this to happen or they can periodically adjust the dollar amount of each threshold to reverse the effect of inflation.

They could even index the threshold so it rises automatically. Mostly they don’t do anything, because governments benefit from the extra revenue without having to put up tax rates and attracting all the political criticism that follows from that. It’s a passive path to more revenue, and most taxpayers don’t really even notice that their tax has gone up, and if they do notice, they expect it because they are earning more, and if they both notice and accept it, they don’t complain very much.

In New Zealand neither personal income tax rates nor the thresholds have changed since 2000 when the then Labour/Alliance government introduced a new top rate of tax of 39 cents in the dollars for those earning over $60 000 pa. In 2001 that was 7% of tax payers according to Treasury’s figures at the time: in 2007 it was 14% (Treasury Tax Reckoner).

Whatever else happens in the tax debate this year (and there will be plenty) I say all parties should promise to compensate taxpayers for the effect of fiscal drag – that money has leaked into government coffers because there is no indexation of tax brackets.

It’s not tax we have consented to pay or that a government has legislated to take. It’s a secret, stealth like tax. It is dishonest to allow it to occur and hypocritical to keep it. That’s not a partisan view; just a principled one, because no party has been good about doing this.

By all means let’s debate taxes vs services; state vs private provision; compulsory vs voluntary savings and all the rest. But let’s also start by giving back to taxpayers the extra money that inflation has transferred from our pockets to the government’s coffers.

Energy sector campaigns against thermal ban

The report released yesterday predicting that electricity prices will rise sharply if the ban on thermal generation is carried through is only the latest in a series of doom and gloom scenarios that the energy sector is trotting out to try and get the ear of government.

Some in the sector believe Energy Minister David Parker is obsessed with the idea that abandoning the ten year moratorium on new thermal plant (or allowing any significant exemptions) will undermine the credibility of the Emissions Trading System.

The industry’s concerns were highlighted at a seminar convened by Kensington Swan where energy partner Bryan Gundersen and Ralph Matthes of the Major Energy Users Group both spoke.

Matthes said there would be no new investment in exploration and a loss of confidence in the gas industry because one use for gas (electricity generation) would be blocked off.

Matthes was asked if his group had considered any options to help the government climb down instead of simply continuing to attack the government. Matthes said the group had not considered any such options, noting that communications between his group and the office of the Minister of Energy David Parker were not particularly good at the moment.

Stiglitz criticises emissions trading

World renowned economist Joseph Stiglitz bagged one of the government’s most treasured policies when he spoke to a large Arts Festival audience in Wellington. He made clear his opposition to the government’s cap and trade system for tackling greenhouse gases, and backed a carbon tax and a world wide auction of emissions rights instead.

He was applauded for saying “we have to change the way we live’, although he stopped well short of saying that the goal of economic growth should be abandoned. He backed a redefinition of growth that subtracted negative impacts like pollution from growth rates. On climate change he said “the debate is about how to share the burden of saving the planet.”

He opposed the government’s policy of bringing in a cap and trade system where emission rights are allocated to existing emitters.
“A system of allocation is an invitation to corruption where governments give rights to the big campaign contributors. Governments and companies get together to write the rules about how to give permits and emission rights to themselves.”

Trudeau; duller than Doonesbury

Garry Trudeau, the creator of cartoon strip Doonesbury is an intense, committed and brilliant commentator. He is not a compellingly interesting person in his own right being rather dull and quite self conscious.

One story illustrates his current obsession: amputees in the Iraq war. He told a tale about an African American woman solider on post on the roof top of a police station in Iraq. There is a rocket attack and she is wounded. Her colleagues rescue her and find her blown off hand. Later they also retrieve her engagement ring and place it in the palm of her good hand while she is waiting for the helicopter to go to field hospital.

Trudeau met the woman at Walter Reed Army Hospital and he tells of her attitude to the tragedy as a tale of gratitude for what her pals did, not of regret about what had happened to her or recrimination about what had caused her to suffer this way. It touched him and his audience felt it too.

I got the impression that Trudeau had a burden and sometimes it seemed self imposed. “I have to be an entertainer. The audience is saying, show me the horrible stuff but make it bearable for me. That‘s what black humour is all about. It’s the MASH membrane. That’s the agreement with the audience.”

Arise the Integrated Finance Organisation

A study of finance professionals by IBM’s Global Business Services team has pronounced the Integrated Finance Organisation as the way of the future for global enterprises seeking to outperform their competitors.

The study found that fewer than one in seven enterprises are currently managed by the criteria of an integrated finance organisation (IFO) , but those enterprises were outperforming their counterparts in revenue growth and share prices.

Integrated Finance Organisations have globally mandated standards and a standard chart of accounts, common data definitions and standard common processes applied across the enterprise.

“IFOs in our sample have revenue growth rates nearly double those of non IFOs: 18 percent versus 10% over the past five years,” the study says. Growth in the share prices for IFOs was also nearly double that of non IFOs over the same period.

David Fincher, IBM Global Business Services Financial Management Leader told me enterprises with an IFO were also “more effective in executing finance activities, and more effective in supporting risk management, including (being) more responsive to risk and better prepared to address major risk events.”

CFOs themselves were also coming under more pressure. David Fincher: “The CEOs are saying, come out of the back office, stop just crunching numbers and drive the integration of financial data into the organisation’s practices. Win the trust and respect of the rest of the team and drive change in your own discipline.”

Domain names war in US

Election preparations these days include setting up lots of websites. The Republicans have registered nearly two thousand names which could be used to attack candidates Hillary Clinton, Barack Obama and also their own nominee John McCain, according to The New York Times blog The Caucus. The blog linked dozens of Internet domain names with derogatory references to Democratic presidential candidates Hillary Clinton and Barack Obama to the Republican National Committee

The names include: canttrustclinton.com, clintoniscorrupt.com, clintoniswrong.com, hillaryspendometer.com, thetwohillarys.com. Names related to Obama include amateurobama.com, baracknotready.com, norealexperience.com, barackthebeginner.com, and yeswecandowhat.com.

Domains that could be used to attack John McCain, include flipflopmccain.com and hatemccain.com. More than 1,000 Clinton domain names have been registered, along with 635 related to Obama and 269 for McCain.

NYT Leads news websites

Te latest figures on news websites make interesting reading. The five biggest sites get massive numbers, headed by the New York Times with 19 million unique visitors a month, and ABC News with 12.3 million, Google just behind on 12.1 million. Fox News on 10.2 million heads CBS on 10 million.

After that there is a sharp drop in volume to National Public Radio on 4.6 million, the New York Post on 4.2 million and the conservative NewsMax on 4.1 million, the liberal Huffington Post on 3.7 million and the iconoclastic Drudge Report on 3.4 million unique visitors per month. The figures are compiled by the Nielsen research company.

Hillary under fire

In the United States Hillary Clinton is being savaged for her claim that she was under sniper fire when she visited US troops in Bosnia in 1996. The TV networks have aired footage of her arrival showing no such thing happened.

“There was supposed to be some kind of a greeting ceremony at the airport, but instead we just ran with our heads down to get into the vehicles to get to our base,” she said in a speech. Didn’t happen. The footage has her walking calmly with Chelsea, hugging a little girl who gave her a poem and then calmly meeting soldiers and chatting away.

Many critics have bagged her, but Ed Bernstein, the reporter of Watergate fame, and a biographer of Hillary Clinton, openly dissed her altogether. This is Bernstein writing on the CNN website yesterday.

“ Hillary Clinton has many admirable qualities, but candor and openness and transparency and a commitment to well-established fact have not been notable among them. The indisputable elements of her Bosnian adventure affirm (again) the reluctant conclusion I reached in the final chapter of A Woman In Charge, my biography of her published last June: “Since her Arkansas years [I wrote], Hillary Rodham Clinton has always had a difficult relationship with the truth… [J]udged against the facts, she has often chosen to obfuscate, omit, and avoid.

“The Bosnian episode is a watershed event, because it indelibly brings to mind so many examples of this tendency– from the White House years and, worse, from Hillary Clinton’s take-no-prisoners presidential campaign. Her record as a public person is replete with “misstatements” and elisions and retracted and redacted and revoked assertions.”

As a judgement it could hardly be worst for her, but already the (very) conservative right is praying for her to recover as their partisans reckon she will be easier to beat than Obama.

Productivity – always a problem

New Zealand has one of the worst rates of productivity growth in the developed world and the actions of successive governments haven’t changed the record much. Two unions – the EPMU and the Dairy Workers – are taking action. They are setting up a centre to share the intellectual property of productivity improvements - how to get them and share the gains. See. http://www.johnbishop.co.nz/writer/articles/art200308.shtml

It’s a tooting good thing

It’s amazing what gets people going. Recently I made some lighthearted comments on “The Panel” on Jim Mora’s programme on Radio NZ National about the Wellington practice of tooting in the Mt Victoria tunnel.

I would have had more comment and reaction on this single subject than on any other in the time that I have been writing these commentaries or being provocative on the radio.

One can deliver insightful analysis of Clinton vs Obama, opine about political leadership in New Zealand, draw attention to quirky language and poor communications practices, and what do people remember, some throwaway comments about tooting?

This is absolutely positively not a complaint or a lament, just a wry observation about how the small things matter (and there are only small things).

Manglish

In the lift at Kenepuru hospital there is a white metal sign with indented black type. It reads: ”Copy’s of annual compliance certificate’s are held with technical service’s Extn 6000.”

Someone has obligingly tried to write ‘copies’over ‘Copy’s’ and has taken a sharp object to remove the black paint from each of the misplaced apostrophes. Hail to the grammar guerillas and the punctuation revolution army (PRA).

In Sydney there are outdoor bill boards asking “Does my brand look big in this?, and one can buy a T Shirt that asks “Does my penis look big in this? (I let the opportunity pass.)

My personal favourite is “My Wili” being the number plate on a brand new yellow Toyota Will Cypha. As the car is smaller than a VW Beetle, is it owned by a man or a woman? Is the man secure in his sexual identity, or is it a woman taking aim at the notion that the size of cars reflect the size of male anatomy.

A true encounter

Finally….a woman in a parking building left a note on her car because the pay machines weren’t working. As she departed she passed the note on to my wife who was just arriving. The note in full reads, Tryed to Pay Machines not excepting the money.! “many thanks”

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John Bishop is a commentator, professional speaker, communications consultant, writer and trainer who publishes a free electronic newsletter on media, marketing and management matters. This can be found at www.johnbishop.co.nz. Feedback to saymoretojb@yahoo.com

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