If ever there was a dangerously inappropriate political football, it is the potential sale of Crafar farms to the Chinese company, Shanghai Pengxin and the hysterical xenophobia it has induced. While the furor has managed successfully to paint National into a very uncomfortable corner, it has also made all future overseas purchases significantly more difficult. Like the sale of airport shares to Canada during the Labour administration, the entire debacle has been driven by the typical isolationist xenophobia of Kiwis in general (the consequence of living on an island miles from anywhere). Unlike the airport saga, though, the Crafar sale has the added complication of an about-turn instituted by a legal judgement.

Let me be clear that I have no issue, on the surface, with the Justice Miller’s legal finding that the OIO have overestimated the additional benefits to New Zealand of an overseas sale. The problem here is with the word “additional” which the Judge correctly points out can be interpreted to mean “additional to the reasonable  improvements expect to incur from a New Zealand sale”. While this is a reasonable lay interpretation of the words, it is clear that the OIO and, I suspect, many economists would disagree with it.

The problem lies in the fact that the idea of reasonable improvements is extremely nebulous. Take the Crafar farms, for instance, (and John Key is probably thinking “please do”). Fay and his consortium could simply sell the farms, without improvements, individually, to make a reasonable profit. Or, more likely, they can spend the bare minimum to make them a going concern again and make a killing. Absurdly, if they sold them individually, I think all the farms are small enough to escape the level of scrutiny being given to the current deal. It is therefore quite possible for Fay to sell the farms individually to Pengxin over a period of a few years (I am just guessing here, but it is possible, owing to the way the current law is structured, that a deal like this could be made)

The thing is that Fay, and any other New Zealand bidder can offer as many improvements and jobs as their imagination can provide. Unlike the Chinese and other foreign bidders, the OIO has no power to compel them to provide these improvements. Fran O’Sullivan points out in her column today that Fay has an extra $30 million dollars to play with and so can make his offer of improvements seem very plausible. It would be hard to establish that his offer, bogus or not, was “unreasonable”.

Effectively, this makes it virtually impossible for an overseas investor to beat a homegrown offer, even if that offer is much lower (in fact, especially if it is lower). As O’Sullivan points out, this essentially reduces the sale price of all farms in New Zealand.

Ridiculously, the Left are crowing about National’s discomfiture without any apparent appreciation for the damage they are doing to New Zealand investment. This is made doubly absurd by the fact that Labour accepted many, many farm sales during their last administration based on exactly the same OIO analysis as the Crafar one, now rejected by Justice Miller.

There are no good options left for National. Appealing Justice Miller’s ruling would merely prolong the issue and there is no guarantee that it would be overturned. Approving the sale based on a new OIO recommendation will see Fay taking it to court again. The damage to National would be very large if he was successful. Key might even have to demote his ministers.

Rejecting the sale is also a poor option, sending all the wrong signals to overseas investors, but at least it can be done in the context of reviewing the OIO criteria and making the selection process clearer and more defined. The MacDoctors advice, FWIW, would be to scotch the sale and purchase the farms via Landcorp (at a bid somewhere between Fay’s and Pengxin’s). Get them up and running again and sell them individually ( if Fay can make money out of this I see no reason for the government not to be able to). At least Fay will not profit from his machinations (and that would send a clear signal to the Chinese that the New Zealand government is less than impressed with the situation and will act to remedy it). Then the OIO criteria can be revised and made unambiguous at leisure.

Of course Pengxin will be put out, but even that would be a valuable lesson for them. Next time you want a piece of New Zealand, get a New Zealand company to front the bid and loan them the money. We have to do the same when buying into China.

After all, xenophobia is the bed-pan of socialism. You just have to hide it under the bed.

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Thanks, Trevor, for inspiring not one, but two neologisms:

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The media feeding frenzy that is whirling around regarding Mojo Mathers and her request for an electronic note-taker has to be the most meaningless of this weeks media beat ups. Here is the reality:

1. Ms. Mathers will need the note-taker in order to function in parliament.
2. It is the cheapest option
3. I (the taxpayer) will be paying for it whichever budget it falls under (i.e. I don’t care “who” pays).
4. The amount required is utterly trivial (in terms of Parliamentary Services total budget).

It beggars belief that this is a news-worthy item. It is obvious that parliamentary services will work out some compromise out of its budget of $137 million. That is what we pay them to do, for goodness’ sake – run parliament. That would include making sure that MPs can take part in the debates.

The question that should be asked is not where the funding should be coming from (who really cares?), but whose responsibility was it to go and ask Ms Mathers, in a civilised fashion, what her requirements would be? Not Lockwood Smith’s, I’ll warrant. This is something that should have been up and running by the start of parliament.

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Public submissions for changes to the MMP system are now open until the 31st May but the MacDoctor will not be bothering to make one. Besides my general laziness, there are two other reasons for this. The first is that the two most worthwhile changes – altering the number of seats in parliament and the provision of the Maori seats have been left out of the review. The former means that we can make no more than cosmetic changes to most aspects of MMP because reducing or expanding the number of MPs makes a great deal of difference to the argument around thresholds and ties the number of electorates to close to the current number. It would be difficult to increase the number of electorates, for instance, without reducing the proportionality of MMP.

The other obstruction, the inability to remove the Maori seats, means that increases to the threshold and scrapping the electorate lifeboat rule unfairly disadvantages those small parties not on the Maori roll. It also means that there will be a perpetual overhang in parliament.

Be that as it may, the second reason that the MacDoctor will not be bothering with a submission is that the outcome is already fairly certain. Sadly, for those advocating an increased threshold; this is not going to happen. The minor parties all have a vested interest in lowering the threshold. Left wingers will all want the threshold lowered, ostensibly because it makes MMP more democratic, but really because a lower threshold favours left wing politics. Witness that fact that National’s margin is quite tight despite having nearly a 20% lead on Labour.

I predict the final figure will either be a bland, do-nothing 4% or, possibly, 3% – giving the Conservatives a chance to be in parliament and ensuring Winston’s longevity.

I doubt that the electorate lifeboat will disappear, but there may be some rules around overt agreements between parties. As I have said, one can’t successfully argue the cessation of the electoral lifeboat rule while retaining the Maori seats, which are fought, essentially, on an FPP basis. This gives the Maori roll-based parties a greatly increased chance of gaining electorates compared to the other minor parties.

There is some move afoot to try to prevent candidates who fail to gain an electorate from coming in via the list. While this may be popular with the public, who mistakenly see it as some form of cheating, this is actually a monumentally stupid idea. All it will mean is that minor parties will cease to stand candidates at all and major parties will run the risk of losing decent candidates just because they lost a marginal seat. Bearing in mind the rather shallow political talent pool in this country, the result will be that parliament will become progressively dumber (hard to conceive, I know).

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So the traffic cops are extending their 4km-only tolerance limit until the end of the month and are looking at making it permanent. This has a feeling of pre-concieved inevitability about it. Although Acting Superintendent Rob Morgan assures us that the permanent adoption “will really be an evidence-based decision”, we all know that this is complete nonsense. There is absolutely no evidence that a reduced tolerance limit will do anything except increase police ticket revenue.

Let’s face it, whether a driver is doing 104 or 110 kph will make no real difference to accident statistics. While there is good evidence in controlled accident situations (with crash test dummies) that increased speed increases the risk of fatality, there is no reliable evidence that this is true on the open road. Empirical tests such as these are done at relatively low speeds using a test bed and a solid wall. The results are then extrapolated to high speeds, an extrapolation that is not necessarily valid, given that there are a great many other factors at play in a real traffic accident.

There is also some epidemiological evidence that increasing road speed limits increases fatalities. The repeal of the national road speed limits in the US allowed states to increase limits as they saw fit. The resulting increases did see a rise in road fatalities with a 4% average increase in speed purported to produce as much as an 17% rise in fatalities. However, most of this fatality data does not take into account traffic volume. When traffic volume increases are factored in a 10mph increase in speed limits may produce a 1.3% increase in fatalities. Not insignificant, but small potatoes compared to the enormous gains made through better, safe vehicles and roads.

I am not arguing here that speeding does not cause an increase in accident fatalities, but that speed limit enforcement at the margin makes little or no difference to the accident rate. Where speed is a significant factor in an accident, it is almost certainly excessive for the conditions. I strongly suspect that the accident rate (and, probably the fatality rate) of a late-model BMW cruising at 120kph down the (very straight) N1 freeway south of Auckland is going to be much lower that the accident rate of the jalopy with marginal tyres and shocks trying to navigate the Coromandel at the posted speed limit. Similarly, the logging truck doing 95Kph between Tokoroa and Taupo is considerably more dangerous than the MacDoctor doing 110 in his 4-year-old Hyundai Sonata on the same road. Of course the idiot doing 140Kph on that road would be more dangerous than both of us, regardless of his vehicle.

I would submit that it is not particularly useful policing speed limits, in road safety terms, when it is clear that our police ignore most careless driving incidents in favour of writing out speeding tickets. From a policing point of view speeding tickets are a whole lot less paperwork than dangerous driving tickets. Most speeders pay their fine and the case is closed. Some go to court but usually the cop in question just has to provide the written proof that the camera was calibrated and that the vehicle was properly identified.  Dangerous driving, however, carries stiffer penalties and often requires the personal presence in court of the policeman who wrote the ticket. It is small wonder than, that the police prefer the simplicity of the speeding ticket, despite the fact that it contributes little to road safety.

This preoccupation with speed may well be a contributor to the reputation of Kiwis for aggressive, discourteous driving. After all, it is very rare to see anyone being pulled over for changing lanes dangerously on the freeway or even overtaking on a corner or blind rise. In fact, I cannot recall seeing anyone being issued a ticket in this country for anything other than speeding, parking or, that other favourite revenue-gathering exercise, failing to come to a complete stop at a stop sign. Anecdotally, a friend of a friend once told me they were ticketed for running a red traffic light – the only ticket I can recall ever hearing about that had something to do with genuinely dangerous driving.

If the police really wish to make further inroads on road safety, they need to stop mucking around at the margins of the speed limit and determinedly go after those few drivers who drive in a genuinely careless and dangerous manner.

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