Defend SOEs from ravages of corporate capitalism

If we ever wanted a measure of the failure of the free markets we could use last week’s release of the Capital Markets Development Taskforce report.

The taskforce had its genesis under the previous Labour government following the economic carnage from the collapse of half New Zealand’s finance companies leaving investors hundreds of millions out of pocket. One of the highest profile collapses was of Bridgecorp whose senior executives  appeared in court last week for a depositions hearing on charges of issuing false prospectuses. The company collapsed in 2007 owing 14,500 investors a total of $459 million.

One staff member responsible for answering calls from irate shareholders told the court her supervisor emerged from a meeting with company director Rod Petricevich to say “OK, ladies, here’s the line.”  The “lines” were variously given as “computer problems” or “banking glitches” to explain why payments to investors were late. When the case comes to court we will hear the full tawdry reality behind the glossy brochures and rich resonant voices reassuring prospective investors their money would be in a rock solid investment.

It’s not surprising investment in property continues to be the preferred place for the middle class to put their money while avoiding investment in the financial sector.

Stock Exchange executive and taskforce member Mark Weldon laments the lack of investment in the sharemarket. He argues we need more kiwi money invested to boost the value of shares. Another commentator bemoaned the fact “we are buying our homes but leaving foreigners to buy our companies.”

Hence the taskforce proposals aimed at restoring public confidence in private investment and arguing for the government to provide more opportunities for such investment.

To improve confidence their report suggests regulations insisting on “plain English” in investment statements and prospectuses; warnings on risky or complex products; improving New Zealanders’ financial literacy; providing clarity and enforcement for the duties of fund managers and supervisors and the creation of a new market regulator to police financial markets.

To provide new investment opportunities for “mum and dad” investors the taskforce predictably wants partial privatisation of our remaining state assets. Prime Minister John Key has ruled this out “in National’s first term of government” but we can be assured this will be on the agenda after the 2011 election.

Translating this it means New Zealanders as a whole giving up our shareholding in State Owned Enterprises so wealthy “mums and dads” in Fendalton and Remuera can get a government guaranteed, unearned financial return. Confidence in the private sector is so low the taskforce wants taxpayer guaranteed returns to bolster the confidence of nervous investors.

Remember these champions of private enterprise are from the same group which has already trashed so many of our privatised SOEs. Think Air New Zealand and New Zealand Rail which have needed repeated government bailouts and Telecom which seems headed in the same direction.

What the taskforce has turned its blind eye towards is the spectacular failure of deregulated capitalism which has been at the heart of our national economy and politics for 26 years. They should concentrate on cleaning up their own messes and leave our public assets alone.

We need to ringfence our public institutions from such reckless privateers which have led to so much economic woe and social breakdown. And yet successive governments stumble on in the same direction clearing away the corpses with taxpayer dollars as they go.

Also aiming to bolster the private sector at the expense of the state was Finance Minister Bill English who last week said a decision would be made mid-year about the use of so-called public-private partnerships for the building of new schools.

Again more opportunities for government guaranteed income streams so loved by the private sector. Think early childhood education, private tertiary education, the retirement industry and upcoming private prisons.

Capping it off in the last few days we’re seen the debacle over the privatisation of retirement savings through the shenanigans at Huljich. The company which topped the list for the best returns in 2008 – 2009 is revealed to have artificially bolstered its returns and misled investors. Auckland Mayor John Banks, an executive director of Huljich, is desperately trying to distance himself from the debacle.

Do we want to let private sector values, which have delivered so much misery these past 26 years in particular, anywhere near our remaining state assets?

Just as dairy farmers have so far successfully defended their industry from the perils of the sharemarket so we must defend our remaining SOEs from the ravages of corporate capitalism.

ENDS

Advertisements

Name suppression for the few

I have little in common with Cameron Slater but I have sympathy for his campaign to have the law changed to make it harder for those convicted to avoid the public glare from their offending.

There has been a long history of name suppression given for high-profile pillars of the community and public humiliation for everyone else. The justification usually given by judges is that because a person has a high profile the negative effect of public exposure would outweigh the gravity of the offence. The other common reason given is to protect the victim or the family members of the offender.

Arguing these points of course is much easier for the community pillars who can usually afford an experienced barrister to present their case for them.

Two weeks ago Judge Grant Fraser awarded permanent name suppression to a Manawatu man convicted after 300,000 pornographic images, including child pornography and pictures of sexual abuse, were found on his computer. He had been charged with possession and distribution of illegal images after a criminal investigation in the US found one of the trails led to Palmerston North.

One of the reasons the judge gave for granting permanent name suppression was because he felt the man was not a threat in New Zealand because the pictures were of abuse victims from overseas. How the judge made that illogical connection is unclear but he evidently saw it as offending on the light side. So it was permanent name suppression and four months home detention as the penalty.

But in December the same judge refused name suppression to a 25-year-old convicted of having objectionable images of child pornography in his possession. At that time the judge said the images “invite the abuse and exploitation of children, who are defenceless, for the gratification of you and other like-minded people”.

Is there a double standard here? Of course.

The bulk of our judges come from a small coterie who attended private schools or state schools in high income areas. Their empathy extends more easily to their own while less well connected offenders get the full force of community contempt expressed through the judiciary. So often it smacks of the boys club looking after each other.

Justifications for suppression are understandable but usually unjustified. If a person has a high profile there will be a greater impact on them and their family but isn’t this justice being seen to be done? If they suffer more as a result then tough.

Adding to the problem is that name suppression in a country as small as New Zealand for high-profile offenders is close to meaningless.

Recently it was reported a former MP from the top half of the South Island was charged with sexual assault on a teenager. I wasn’t particularly interested to know who but a couple of nights ago the man’s name emerged in a dinner conversation with a visitor. Anyone wanting to find out has surely done so by now.

When a person charged doesn’t have a high profile another insidious effect can occur. Name suppression can cast a pall over an entire group such as recently when a teacher on Auckland’s North Shore appeared in court on sexual offences. Most male teachers in the area will feel uncomfortable till name suppression is lifted.

So what is the point of suppression anyway? High profile offenders such as sportspeople or celebrities these days hire public relations agents who advise the staging of a fulsome public apology, preferably with a few tears or at least a choking voice, and public absolution will follow – as it does. Witness Tony Veitch.

If I had a reservation about removing name suppression for high-profile offenders it would be that important news would be further subverted by tabloid trivia. Just look at the braindead decision at Television New Zealand to cancel an interview with the Prime Minister on Close Up last week in favour of a fulsome televised apology by a former All Black for groping a teenager in Fiji. This was despite John Key’s major announcement to parliament of far-reaching tax reforms.

Name suppression to protect the victims or family members of an offender are more worthy of consideration and can only be judged on their individual merits. Convictions for incest without name suppression for example would inevitably rebound heavily on the victim.  It is surely cases such as these that the suppression guidelines were designed to fit rather than protecting sensitivities in an old boys network.

Most of the Manawatu will now know the name of the Palmerston North community pillar. His wife and family are already suffering. Name suppression will not save them hurt and embarrassment. They too are victims of crime and deserve support and assistance to help cope.

ENDS

Government fails national standards in honesty

We all expect politicians to bend the truth as they spin their policies to the public but Prime Minister John Key and Education Minister Anne Tolley went a step further last week when they defended the policy of national standards. They told some porkies.

Emeritus Professor of Education from Massey University Ivan Snook has drawn attention to a government release which he politely described as containing “four major errors, and a serious dishonesty”.

It’s worth recording the Professor’s points because the media, which has been strongly supportive of national standards, has reported the government at its word rather than the reality. Professor Snook says:

“The (government) statement claims that the ERO report (2009) found that (1) “two thirds of school leaders were not properly managing assessment.” It did not: it found that “some” leaders “trusted their junior school teachers or leaders who knew the students well.” This is perfectly reasonable. (2) “30% of teachers were not doing a good job of teaching reading and writing.” It did not: it found that 10% of teachers were less than adequate. (3) “Many principals aren’t adequately sharing their school’s achievement information with their communities.” It did not: it found that they reported to the school community about their own school but did not always give comparative data from other schools: why should they if the point is to inform parents as to how their children are performing? (4) ERO gave 30% of teachers a “pretty damning” verdict on their performance. It did not: it found that 90% of teachers were performing adequately or better. (5) “The ERO report found in 2007 that more than half of schools were not using assessment data well.” It did. BUT the 2009 report found that two-thirds are now using it well and mentions this as an enormous improvement (without any national standards!)”

While misuse of statistics and reports is nothing new it’s a dereliction of public duty that the media have not held the government to account for this misinformation – which Education Minister Anne Tolley repeated on TVNZ’s Q & A programme on Sunday morning.

The public and parents in particular are the losers in this important debate.

For the first time since the election John Key is not charming his way through a difficult problem. He ploughed into a direct attack on teachers and principals last week as he picked up the pieces from widespread concern from principals, teachers and educational professionals that the national standards policy has dangerous pitfalls.

Instead of emphasising the supposed aim of improving student achievement, the gloves came off. John Key assailed the teacher unions saying they were defending poor teachers and did not want to face public accountability for themselves or their schools. It was back to what National does well – teacher bashing – and in this case the blatant misuse of an ERO report to promote unpopular policy.

We are in a battle for the hearts and minds of parents who are largely confused about the policy. A New Zealand Herald readers’ poll backed the idea of national standards but most said they knew very little about what it was and the effects it would have on their kids.

The group which has been largely invisible in the debate are educational academics and this is a serious lacking. These are the people with no axe to grind but who know the most about what works and what doesn’t in assessing children. They also have widespread knowledge of successful and unsuccessful assessment policies from around the world. Almost to a person they are strongly opposed to the government plans for national standards. They say that not only will the objective of raising educational achievement not be realised but that the collateral damage to children and schools makes it unacceptable.

There is no disagreement that every parent has a right to know how their child is progressing and how they compare to other children of the same age. This information also needs to be presented plainly and honestly to parents. In reality this is what most schools are doing well and ERO can bring others up to the mark.

Schools already know which students are struggling. These kids don’t deserve being labelled failures at the age of five. Instead they need resources so practical help can give them their best chance at education. As national standards become more important for schools with the publication of league tables the focus of teachers will shift to “teaching to the tests” with other areas of the curriculum neglected. Schools will more resemble sausage factories than inspiring beacons of educational achievement.

This unfortunate impact of similar policies overseas is being ignored by the government which is pursuing another agenda altogether. John Key and Anne Tolley want to create a “market” in schooling where parents can move their children between private and state schools and where the quality of education will depend on how much a parent can afford to top up what the government provides. Then we will see the gaps widen even further as the children of the poor pay more heavily for the selfishness of others.

Shortly to arrive in our letterboxes, at a taxpayer cost of $200,000, will be a government leaflet promoting national standards. It’s appropriate John Key has put the National Party logo on every page because this is an ideological political programme, not a policy to improve our kids’ education.

ENDS