17/11/11 - Heading for a slowdown

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The risk that the economy gets sideswiped by another global recession tops the list of international concerns in the survey of business leaders.

After all, it has not fully recovered from the last one.

In per capita terms, economic output is still nearly 4 per cent below its December 2007 peak.

Consensus forecasts of growth among New Zealand's main trading partners have been falling for months, and with these things it is the trend, rather than the most recent reading, that carries the information.

The Treasury, in its pre-election economic and fiscal update (Prefu) is relatively sanguine about the international outlook. Its forecasts have trading partner growth stronger next year than it has been this year.

That assumes an orderly resolution to the euro area debt crisis - which is survey respondents' second gravest concern.

But even if Europe's leaders manage to avert a second global financial crisis on the scale of the one three years ago, it is already too late to avoid a serious slowdown. The European Commission is forecasting growth of just 0.5 per cent for the European Union next year, as near to recession as makes no difference.

The European Union's single market is the largest in the world and was overtaken only this year by China as New Zealand's second largest trading partner after Australia.

If Europe becomes the epicentre of another global financial crisis, the last one showed that, as well as the real economy channels of trade and commodity prices, New Zealand is vulnerable to offshore credit markets freezing.

The Prefu acknowledges that the risks to its forecast are "skewed to the downside".

"A failure on the part of governments to contain the crisis in the euro area could, in particular, cause a severe disruption to global funding markets."

The same risk dominated last week's financial stability report from the Reserve Bank, and is front-of-mind for the business leaders surveyed, who ranked instability in global capital markets No. 4 among their international concerns.

The Prefu sketches a downside scenario in which European leaders fail to manage their sovereign debt issues, leading to carnage in the markets.

Compared with 2008, there would be little scope for monetary and fiscal policy to limit the fallout and a protracted global recession would ensue, severe enough to slow China's growth to 6 per cent, against an average of more than 10 per cent over the past decade.

The implications for New Zealand's growth, employment, external accounts and public finances are grim, but mitigated by a weaker dollar and the need to rebuild Christchurch.

Survey respondents recognise that the fiscal crisis offshore is something of a tag team affair.

Right now Europe is in the ring, but only a few months ago political brinkmanship in Washington took the United States to the edge of defaulting on its debt.

The level of US government debt ranks as the third highest international concern in the survey. The International Monetary Fund puts US gross general government debt (including the states) at 100 per cent of GDP and its deficit this year at 9.5 per cent.

Among developed countries only Japan, Greece, Italy, Ireland and Portugal have more public debt, relative to the size of their economies.

The US Government is borrowing around 40c in every dollar it spends.

Next week the Congressional "super committee" made up of six Republicans and six Democrats is due to report back on how to cut US$1.2 trillion from the Budget over the next 10 years. Otherwise automatic across-the-board cuts are triggered.

"The Republicans are reluctant to raise taxes and the Democrats are protective of domestic social programmes," AMP chief economist Bevan Graham says.

"$1.2 trillion is a mere drop in the bucket in terms of what needs to be achieved over the next few years in budget consolidation, but failure now would not bode well for the bigger job ahead."

Survey respondents ranked the strength of the US recovery as their fifth biggest offshore concern.

The Federal Reserve has revised down its growth forecasts for next year, though at 2.5 to 3 per cent it is a lot better than Europe's near-term outlook.

But four years after the sub-prime crisis blew up, the US housing market remains weak with foreclosures continuing apace and one mortgage in four under water.

That, combined with 9 per cent unemployment, is not good for consumer confidence, and puts a question mark over the durability of a recent pick-up in consumption - crucial for an economy where private consumption represents 70 per cent of aggregate demand.

And overshadowing it all is the entirely unresolved question of what Washington is going to do about its chasm of a deficit - larger, relative to GDP, than ours was in the past year when we had to book the costs of the Christchurch earthquakes.

With a year to go before the next US general election, that concern is unlikely to dissipate anytime soon.

Exchange rate concerns also feature prominently among business leaders' concerns - volatility even more than levels.

Fear and relief, risk off and risk on, alternate in the markets on almost a daily basis.

In the past year the kiwi dollar has averaged a historically elevated 79c against the US dollar and has swung around in a peak-to-trough range of nearly 15c or 20 per cent.

(Source NZ Herald, Brian Fallow)

15/11/11 - Basic income for all would free industry

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The minimum wage comes with a whole range of added costs.

Let's agree on what is a minimum income every adult should have in order to live a dignified life and then see what flows from that. One of the topics of debate during this election campaign has been whether the minimum wage should be $13 or $15 an hour.

That number is both arbitrary and irrelevant to the well-being of those paid the rate. One political reality of the minimum wage is that it is deemed inadequate for folk to live on. Hence it is topped up with all manner of special payments - the accommodation supplement, subsidies for childcare, special needs grants for those deemed in hardship and the sizeable top-ups available from Working for Families.

Looking at the extent of the top-ups now paid, even $15 an hour would be inadequate in isolation.

Welcome to the reality of 21st century wages. Apparently people cannot live on the minimum wage so taxpayers have to transfer to them increasingly larger top-ups. You may well ask whether we have an exaggerated opinion of what should be a minimal level of income, but certainly the market cannot support a wage rate that covers all the top-ups, otherwise it already would be paying it.

Even at $13 the supply of labour exceeds the demand.

If we raised the wage rate to make such top-ups unnecessary, jobs would go and taxpayers would have to fork out for those who could no longer find work. This is our dilemma - we have a minimum acceptable income in mind but it is higher than what the market can pay to support full employment. So we either legislate a minimum wage that needs no top-ups and put a whole lot more people out of work or we decree a somewhat lower minimum wage and pay top-ups to those working at that rate.

Or, heaven forbid, we change our mind and say full employment is the most important goal so we're going to allow the market to set whatever wage it likes. Now that would be a revolution.

But for now just accept that the debate about a $13 or $15 minimum wage reduces to one about how much taxpayers should transfer to these folk versus how much of their requirements should be funded by employers through payment of a higher legislated minimum wage (with the consequence that we would have to accept greater numbers of unemployed requiring a full taxpayer provision).

Surely not many would argue that we can set the minimum wage at whatever level we like without employment levels being affected. Believe me, such thinking does exist.

Let's turn the whole puzzle around. Rather than decreeing a minimum wage and discovering the consequences for jobs and top-up payments, let's agree on what is a minimum income every adult should have in order to live a dignified life and then see what flows from that.

We begin by specifying the income level below which we are not prepared to see anyone having to live.

From there we must design a tax regime that doesn't penalise people who work part time or in low-paid work - that means an end to the steep abatement rates of our current regime of targeted welfare, a feature which traps people in benefit dependency.

We must finally admit that with all the paternalistic will in the world there is no chance that public servants can adequately identify and monitor eligibility for a needs-based benefit regime.

We should save ourselves the torture of continuously getting it wrong and designing an endless stream of discriminatory "fixes" to cover our mistakes in finding targeted perfection.

The reality is that people's circumstances are dynamic and that they will change their behaviour to suit the design of the benefit regime making the chicken and egg nature of determining "needs" an exercise in futility.

The important thing is to be fair and to have a consensus on the level of income that we all have an unconditional entitlement to in order to live a dignified life.

In the book The Big Kahuna it was suggested that an unconditional basic income at $11,000 after tax would be a level that could be maintained in a fiscally neutral scenario.

If you think that's too stingy then be prepared to have a higher level of tax than 30 cents in every dollar earned. But at least if we decide on that as a human right we can then discuss what the role of the minimum wage might be. Let's do that.

Critics of the unconditional basic income suggest it will encourage legions of layabouts who will not work (either paid or unpaid) and just live an idle life, making no contribution to society whatsoever.

The logic of this argument goes that many of those who live on $23,000-plus now from their minimum wage full-time jobs will give up work altogether if they get a wage of half that. Yeah right. Ironically if they did we'd reduce unemployment. If the basic payment eradicated unemployment by destroying enough people's will to earn then of course you'd expect labour shortages to drive up wage rates. I'm not holding my breath.

With the $11,000 basic income in place, the rationale for needing a legislated minimum wage at all needs to be revisited.

While we would still want legislation about working conditions (sick and annual leave, safety, rights of redress and so on) with the burden of ensuring an adequate income for all resolved there is no need to rely on a legislated wage rate for paid work to deliver income adequacy.

As it happens the arithmetic tells us that a wage rate of $8 an hour would, in a world of a flat income tax rate of 30 per cent and an $11,000 basic income, deliver the same post-tax income as the $15 an hour minimum wage proposed by Labour.

There should be a lot more jobs if wage rates of $8 were kosher.

We do shoot ourselves in the foot trying to ensure income adequacy by dictating what wage rates in the market should be.

What you win on the per hour payment you can easily lose on the lack of jobs. We needn't fear a lower wage economy under a basic income regime, the money is already guaranteed. And imagine if we became more competitive, what that might do to overall incomes and the ability to pay an even higher basic income? Oh it's all too much.

Rather than making paternalistic judgments on people's needs, the unconditional basic income frees us as a society to set one income for all and then allow the market to set wage rates consistent with full employment beyond that.

The Kahuna revolution is not all bad is it?

(Gareth Morgan is a director of Gareth Morgan Investments)

(Source NZ Herald, G Morgan)

14/11/11 - Foreign film producers keen to tap into NZ talent

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Shogo Tomiyama is one of Japan's top film makers and producer of blockbuster movies like Godzilla: Final Wars, Ring and Seven Samurai.

But the studio veteran of 35 years wants to send budding Japanese producers to the land of the Hobbit to learn the art of film making.

Top producers from the Asia Pacific region gathered in Auckland over the weekend to network and discuss co-production opportunities.

Organisers of the Asia-Pacific Producers Network symposium, being hosted in New Zealand for the first time by Film Auckland, said the event was also an opportunity to showcase New Zealand as a film location and promote its wealth of creative talent.

Tomiyama, who was on his first visit to New Zealand, said he had been impressed by what the country could offer to the industry and would be looking to firm up an agreement to bring Japanese producers here.

"This country has everything, from location to very talented creative people, especially in special effects and post production," said Tomiyama, who is president of Toho Studios.

"Movies like Lord of the Rings are world class, and I want future Japanese producers to learn from the best."

About 30 delegates from nine countries, including China Film Bureau deputy director Mao Yu, leading Korean producer James Choi and James Liu, founder of Taiwan's Joint Entertainment, are attending the symposium.

"We are facing one big global market nowadays," said Mr Liu.

"Frankly, it [the symposium] is one of the most efficient ways to complete that mission."

The forum includes sessions with Film NZ chief executive Gisella Carr, South Pacific Pictures chief executive John Barnett and local producers Roseanne Liang (My Wedding and Other Secrets), Robin Scholes (Once Were Warriors), Toa Fraser (No. 2) and Trevor Haysom (In My Father's Den).

"Delegates are looking for New Zealand partners to make English language films that appeal to wider markets than their own," said network president Paul Carran.

Film Auckland manager Michael Brook said the symposium aimed to "explore key issues alongside the leaders of Asia's booming film industry" and make connections and generate new projects and partnerships across the region.

Delegates will also be taken to Wellington and Queenstown this week, to look at what opportunities the regions offer.

The local screen industry employs about 6700 people and is worth more than $2.8 billion annually.

This year's immigration law changes removing the requirement for guild or union referrals for foreign actors coming here for 14 days work or less and for those part of official co-production teams will make it easier for film makers to bring in foreign talent. .

Mr Brook said the world economic power had shifted to Asia in recent years, and New Zealand was well-placed to seize new opportunities the region offers.

China's box office grew 62 per cent last year, and the country is set to become the second-biggest movie market behind the United States.

(Source NZ Herald, Lincoln Tan)

13/11/11 - British woman immigrating to NZ at 102

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A British woman will immigrate to New Zealand, a month shy of her 103rd birthday.

Louise Sydes is leaving her rest home in Hawkhurst, after the Kent County Council decided to close it down.

Sydes will move 18,000km away to live with her daughter and son-in-law, Sue and Rex Reardon, in Manly, north of Auckland.

She will arrive on November 26 on a three-year visitor visa, approved by associate immigration minister Kate Wilkinson.

Sydes said she was "thrilled to bits" to be moving to New Zealand.

She likes the climate and food here but would miss friends. Sydes will still receive her British pension.

(Source NZ Herald, Cherie Howie)

10/11/11 - Debt or jobs - that's the big decision

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The central issue dividing the main parties in this election should be this: which is our bigger problem right now, too much debt or too few jobs?

The central issue dividing the main parties in this election should be this: which is our bigger problem right now, too much debt or too few jobs?

Instead Labour seems intent on showing - rather implausibly - that it will worship just as ardently as National at the altar of fiscal austerity.

Last week's labour market data told us that more than two years of recovery have made scant inroads into the unemployment rate.

The 157,000 people officially unemployed (a subset of the 254,000 counted as jobless) represent 6.6 per cent of the labour force. That compares with 6.5 per cent in September 2009 and an average of 6.5 per cent over the interval.

Certainly, Christchurch's travails have not helped; 27,000 jobs have been lost there over the past year. But on the other hand the unemployment rate would have been higher without the net loss of 33,000 people to Australia over the past year.

The employment rate is the proportion of the working age population (everyone 15 or older) actually working (for payment).

It is 63.9 per cent.

It has been around that level for the past two years, down from around 66 per cent during the last boom, but higher than the 60 per cent in the Asian crisis recession and 56 per cent of the early 1990s recession.

This is a high employment rate by international standards, Bank of New Zealand economist Craig Ebert says, which in turn reflects the fact that labour force participation has held up remarkably well during the recent economic downswing and is structurally far higher than in the past.

Well, good for us.

But the bottom line is that the rate at which the economy has been generating new jobs has been barely keeping pace with growth in the labour force, even with Australia as a safety valve.

Is that good enough? Is that the best we can do?

The unemployment rate peaked at 7 per cent in December 2009.

Goldman Sachs economist Philip Borkin points out that the improvement since then, at just 0.4 percentage points, is the slowest for any recovery since the 1970s.

Part of the explanation is cyclical - a weaker-than-normal recovery generally - but Borkin's analysis suggests there has also been a rise in the structural unemployment rate.

Structural unemployment reflects a mismatch between the supply and demand for labour. It therefore does not respond to monetary stimulus as cyclical unemployment would and is longer-lasting.

Borkin estimates the structural unemployment rate at 5.4 per cent, up from a pre-recession trough of 4.6 per cent.

Business surveys have been recording a rising proportion of firms saying they are finding it harder to find the skilled labour they need.

Unemployment rates are particularly high among the young - 28 per cent for those aged 15 to 19 and 11.2 per cent in the 20 to 24 group.

If that means there is an especially large mismatch between the skills they have and what employers are looking for, the fact that they are young also means they have more time and incentive to acquire the skills that are required.

But it will not happen by magic.

The challenge for the politicians contending for our votes is to explain what structural policy changes they offer to deal with this structural problem.

So the question about which is the more pressing issue, too much debt or not enough jobs, and whether the times call for austerity or more stimulus, is far from rhetorical.

Bill Gross is interesting on this point. He is the co-founder and chief investment officer of Pimco, one of the biggest fund managers in the world with more than $1 trillion entrusted to it.

The investment question of the day, he says in a recent commentary, should be: "Can you solve a debt crisis with more debt?"

Since 2008 policymakers have been proceeding on the basis that the answer is yes.

Central banks slashed interest rates to encourage more borrowing, and governments have resorted to deficit spending on a scale that has pushed public debt through the roof.

Such policies make sense if, and only if, they generate growth.

But Gross argues that the relative lack of growth of the past few years in developed economies is structural rather than cyclical and resistant to the traditional remedies of stimulative monetary and fiscal policy.

The factors he cites are globalisation, technological innovation and demographic change.

Consider how much the world economy has expanded over the past 20 years, with China and the Soviet bloc abandoning communism and India abandoning its post-colonial doctrine of autarky.

Globalisation has opened access to cheap labour elsewhere.

New Zealanders who have to compete with that are on a hiding to nothing.

The challenge for politicians is therefore: what are you doing or would you do to lift education and skills?

Twenty years ago, most people had not even heard of the internet. Now the revolution in information and communications technology, liberating as it may be in many respects, is challenging the traditional business models in all sorts of industries, from retailing and entertainment to newspapers.

The challenge for politicians is therefore: what are your policies to foster innovation and the commercialisation thereof?

Twenty years ago even the oldest of the babyboomers still had 20 years of their working lives ahead of them.

Now, as Gross puts it: "If boomers are starting to retire or at least plan more seriously for retirement, why will lower interest rates cause them to spend more?"

On the contrary, low interest rates may encourage them to save more to compensate for lower-yielding nest eggs.

The challenge for our politicians is therefore to explain what they would do to ensure a larger pool of savings gets to irrigate job-rich and export-focused investment in this country.

ASSET POLICY WON'T SHIFT BOTTOM LINE

The fishiest of the red herrings in this election's debate are the claims both major parties are making about the fiscal impact of their preferred policies on state asset sales.

National highlights the fact that every dollar it gets from selling down its stake in the four state-owned energy companies and Air New Zealand is a dollar less it has to borrow.

Labour highlights the fact that by maintaining the status quo it would not be diluting the Government's share of their future dividend streams.

What these shares are worth is the present value of the future income they will deliver, adjusted for risk.

If they are sold at a fair price and the Crown's borrowing requirement reduced by the same amount, it will shrink both sides of the balance sheet, assets and liabilities, by the same amount.

There is a world of difference between reducing debt that way and doing it the hard, old-fashioned way by curbing spending.

It will neither strengthen nor weaken the Crown's financial position.

Equally, retaining the assets and keeping the dividend flow intact entails correspondingly more debt and a higher interest bill. Both revenue and expenditure (which includes finance costs) will be higher.

Again, broadly, it is a wash.

There are, of course, all sorts of other reasons why you might want to partially sell, or to keep, the SOEs.

But the impact on the Government's finances is not one of them.

(Source NZ Herald, Brian Fallow)

09/11/11 - Rush to Oz hits record high under Key

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New Zealand's net loss of people to Australia has averaged almost 25,000 a year in the three years since Prime Minister John Key was elected - a higher net loss than the average under any previous government.

Almost 113,000 people moved to Australia on a permanent or long-term basis between the end of November 2008, when Mr Key was elected, to the end of September this year.

The number is offset by the 43,000 people who moved back to New Zealand.

The result is a net loss of 70,130 people - or 24,752 a year.

The previous record average net outflow was 21,492 a year under Helen Clark's Labour Government between 1999 and 2008.

The figures have been calculated by the Herald, based on Statistics NZ data from independent Wellington demographer Dr James Newell, to check election claims by Labour leader Phil Goff that "100,000 New Zealanders have left for Australia" under Mr Key.

Mr Goff repeated that claim yesterday as one of a "top 10 facts" on Mr Key's premiership.

His list also includes higher unemployment and prices, and a $32-a-week widening of the wage gap with Australia over the three years.

"The 10 key statistics I have released today will not improve until New Zealand has the leader who makes the tough calls and does what's right for the future, not what's easy for today," he said.

But Dr Newell's analysis, using rolling totals for the year up to each month, shows a long-term worsening trend in the net exodus to Australia since it last turned negative in December 1991.

Arrivals from Australia have been generally steady at around 10,000 to 15,000 a year throughout that period.

Departures to Australia rose gradually from around the same level to a peak of 42,000 in early 2001, plunged in the panic after the attack on New York's World Trade Centre that September, rose gradually again to another peak of 48,500 at the end of 2008, plunged again in the global financial crisis, and have climbed back steeply to a new peak of 48,800 in the year to September this year.

The departures are rising steadily, dropping to a low of 23,200 after 9/11 but only to 30,500 at the latest low point after the financial crisis, reached in April last year.

Throughout the period, the main reason has been that output and real wages have grown more quickly in Australia than in New Zealand.

"It's about the relationships between the New Zealand and Australian economies, and also about people's perceptions," Dr Newell said.
"It's almost like we talk up this whole thing about 'do you want to go to Australia' because it's every second thing on TV."

He said the outflow was partly just because New Zealanders had become more mobile. The outflow to Australia had been more than balanced by an inflow of migrants from other countries.

His research shows that New Zealand's losses are higher among low-skilled and semi-skilled workers, including tradespeople, than among professional people, who benefit from New Zealand's lower-than-Australia taxes on high incomes.

But almost half of the net loss in the past year was of people in their twenties and thirties, leaving a big hole in New Zealand's working-agedpopulation.

"The impact in terms of accelerated ageing of the NZ resident population and on supply of skilled labour and talent is likely to be a continuing issue," Dr Newell said.

He said only about 3000 of the net loss of 34,150 in the past year was caused by people leaving Canterbury after the earthquakes.

(Source NZ Herald, Simon Collins)

09/11/11 - Auckland first call Downunder for Dreamliner

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New Zealand will get its first look at Boeing's new high-tech aircraft, the 787 Dreamliner, on Saturday when it touches down for the first time in the Southern Hemisphere in Auckland.

Air New Zealand said its chief pilot, Captain David Morgan, would be on board the 787-8 test aircraft, joining more than 30 Boeing staff testing the aircraft's performance as it travelled non-stop from Seattle.

About half the Dreamliner, which has suffered from a number of production delays, is made from lightweight composites, such as carbon fibre.

Boeing has said the aircraft would be 20 per cent more fuel-efficient than similar-sized planes. Air New Zealand says it expects to have its version of the aircraft, originally due to arrive at the end of 2010, in service in 2014.

The aircraft's flight path over Auckland would depend on weather and wind conditions but it is expected to arrive at Auckland Airport about 10am on Saturday. Air New Zealand will host the aircraft at its engineering base at Auckland Airport for two days before it leaves for Sydney on Tuesday.

The aircraft is the first test aircraft produced and the cabin interior is fitted with test equipment.

(Source NZ Herald,  Owen Hembry)

09/11/11 - Woman: Police forced me to sign

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The Independent Police Conduct Authority is investigating a complaint that police officers assaulted a 41-year-old Indian woman during an Immigration New Zealand visit to her home.

A female police officer allegedly bent the finger of Pooja Kapila, and another male officer prised her hand open and forced a thumb on to an ink pad to get her fingerprints for forms required to deport her family.

Police yesterday said they had already started their own investigation, but the independent investigation would establish whether the matter was handled appropriately.

Supporting medical documents from Bayfair Doctors said Mrs Kapila had minor bruising and swelling, decreased sensation in her fingers and "marked decreased range of movements" of her hand and wrist.

Mrs Kapila said the family had been in New Zealand for about 10 years, and intended "to stay here with my children" even if her husband was deported.

Mrs Kapila said: "My fingers were pulled back ... I asked them to stop. I was crying because they were hurting me, but they didn't stop."

The complaint, lodged by her immigration agent Tuariki Delamere, said the two officers went to Mrs Kapila's home in Te Puke with an immigration officer three days after arresting her husband, Satinder Kapila, on October 18.

Immigration needed Mrs Kapila to sign applications for travel to India for herself, 13-year-old daughter Simran and a New Zealand passport application for her 9-year-old son Abhay, a New Zealand citizen, so they could be sent to India with Mr Kapila.

"One of the officers tried to get her to sign but Pooja made her hand into a fist," the complaint said.

"On instruction from Neil Fellows, the INZ officer, the female police officer then grabbed Pooja's right hand index finger and bent it back until she started crying with the pain."

"The male police officer, a Maori, then grabbed her thumb and prised that open, causing further pain and suffering and forced the thumb on to an ink pad so that a thumb print could be made into the application forms."

A separate complaint has also been lodged with Immigration New Zealand over its officers' involvement in the alleged assault.

Mr Delamere described it as "the tactics of a police state mentality".

Police spokeswoman Annie Coughlan said the immigration officer was one the police officers had worked with on several occasions.

"Police were asked to obtain fingerprints. There has been an allegation made," she said.

"We are disappointed about the use of such emotive language and the nature of the claim.

"However, such allegations are taken extremely seriously."

(Source NZ Herald, Lincoln Tan)

01/11/11 - THE REFERENDUM

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There’s a Referendum taking place at the same time as the 2011 General Election on 26th November.

The Referendum gives you the chance to have your say on the voting system we use to elect our Parliaments in the future.

It builds on the electoral referendum process that began back in 1992 and 1993 when New Zealanders chose the MMP voting system.
Holding the Referendum at the same time as the General Election makes it easy for you to take part.

What will I be asked?

There are two questions you will be asked. You can choose to answer both questions, or only the first one, or only the second one. You will be asked to tick the option you prefer.

• The first question asks whether you want to keep Mixed Member Proportional (MMP, which is the voting system we use at the moment) or whether you want to change to another voting system.
• The second question asks you which of four other voting systems you would choose if New Zealand decides to change from MMP. The four alternative voting systems you can choose from are called:
  • First Past the Post (FPP);
  • Preferential Voting (PV);
  • Single Transferable Vote (STV); and
  • Supplementary Member (SM).

You can find more information about MMP and the four alternative voting systems by clicking on the icons below.

• Mixed Member Proportional (MMP);
• First Past the Post (FPP);
• Preferential Voting (PV);
• Single Transferable Vote (STV);
• Supplementary Member (SM).

What will happen as a result?

If at least half of voters opt to keep MMP, there will be an independent review of MMP in 2012 to recommend any changes that should be made to the way it works. The Electoral Commission will conduct the review and the public will have the opportunity to give their views.

The Electoral Referendum Act specifies that the Electoral Commission must review:

• The 5 percent party vote threshold for a party to be eligible for allocation of list seats;
• The one electorate seat threshold for a party to be eligible for allocation of list seats;
• The effects of population change on the ratio of electorate seats to list seats;
• The effect of a party’s candidates winning more seats than the party would be entitled as a result of the party vote;
• The capacity of a person to be both a constituency candidate and a list candidate;
• A party’s ability to determine the order of candidates on its party list and the inability of voters to rank list candidates in order of preference;
• Other matters as referred to it by the Minister of Justice or the House of Representatives.

The size of Parliament and Maori representation will not be reviewed, but the Commission may consider any other aspects of the MMP voting system.

The Commission must report back to the Minister of Justice by 31 October 2012.

If more than half the voters opt to change the voting system, Parliament will decide if there will be another Referendum in 2014 to choose between MMP and the alternative voting system that gets the most support in the second question in the 2011 Referendum.

The 2011 Referendum on the Voting System is indicative. This means that nothing will change as a result of this Referendum alone.

(Source NZ Government)

22/10/11 - Migration at 10-year low after steep drop

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The net flow of migrants turned sharply negative again last month, dragging the annual gain down to just 770, its weakest for 10 years.

September's seasonally adjusted net outflow of 660, after a gain of 120 in August, means the flow of permanent and long-term migrants has been negative for six of the seven months since the February earthquake.

"Six hundred Christchurch residents moved overseas in September 2011, up from 400 in September 2010," Statistics New Zealand said.

"Since the devastating earthquake on February 22, there have been 5500 departures from Christchurch compared with 3300 in the same period in 2010."

Goldman Sachs economist Philip Borkin said given ongoing aftershocks, rebuilding delays and insurance uncertainties, the ouflow from Canterbury might continue.

But it explains only a fraction of the drop in the annual inflow of migrants; the net gain of 770 in the past year is just under half the 13,900 gain the year before, and well below the average gain of 12,000 over the past 20 years.

In the year to September, 48,800 people left for Australia (90 per cent of them Kiwis), offset by 14,700 coming the other way (63 per cent of them returning New Zealanders).

There was a net gain of 5700 from the United Kingdom, 5400 from India and 4600 from China.

ASB economist Jane Turner expects permanent departures to Australia to ease in coming months as employment growth there slows, while the labour market in New Zealand gradually recovers and skill shortages emerge, encouraging a pick-up in inward migration.

In the meantime, the weakness in net migration highlighted ongoing weakness in consumer demand and the lack of any urgency for the Reserve Bank to raise the official cash rate, she said.

(Source NZ Herald, B Fallow)