Wednesday, June 27, 2007

Political shenanigans,

Thanks to Tim Pankhurst, in his position as Chairman of the Commonwealth Media Freedom Committee and as Editor of the DomPost one of the more ridiculous political stories of this year has not gone unnoticed, has not been snuck under the radar.

Politicians are defending their right to ban the media from using pictures taken in Parliament to poke fun, saying they need protection from being misrepresented.

They have become embroiled in a fight with media representatives over their plan to change the rules for televising Parliament, including a new offence if footage is used for "satire, ridicule or denigration".

Newspapers are also challenging changes that would allow television cameras to take shots that still photographers would continue to be banned from shooting.

The rule change for television cameras came only after MPs decided to set up their own multimillion-dollar taxpayer-funded service broadcasting Parliament when it is in session.

The multi-party committee of MPs that came up with the changes appeared to suggest that still photographers would make too much noise if the rules were also changed in their favour - but different reasons were given yesterday when it was raised with MPs.

Leader of the House Michael Cullen suggested it was too easy for photographers to take photographs that were out of context.

"Stills can show all kinds of things which may or may not be actually representative. I could go like that (Dr Cullen raised two fingers in the air) and you could take a still photograph and say I was showing the fingers. Which I wasn't actually."

Only Green MP Nandor Tanczos, a member of the committee of MPs that came up with the change, was prepared yesterday to speak out against it, saying he had not been aware at the time that the rule about satire was something new and he considered it unenforceable. The Green Party would now be discussing their position on the changes, he said.

But other MPs were right behind the move.

NZ First leader Winston Peters said journalists were supposed to be reporting what went on in Parliament, not become involved in satire.

Maori Party leaders Tariana Turia and Pita Sharples said they hoped the new rules would "assist the media in resisting the urge" to satirise, ridicule or denigrate MPs.

In 2005, TV3 had its cameras banned for a week after it showed then associate education minister David Benson-Pope sleeping. In 2000, The Evening Post suffered the same penalty after it printed a photograph of former National MP Annabel Young yawning.

In 2006, TV3 was banned for three days after showing a picture of NZ First MP Ron Mark making an obscene gesture.

Press gallery chairman Vernon Small said yesterday that MPs wanted the media to "protect them from themselves".

The gallery has sought an urgent meeting with Parliament's Speaker Margaret Wilson.

The Commonwealth Press Union's media freedom committee chairman, Tim Pankhurst, said he endorsed the press gallery stand.

Pankhurst, who is also editor of The Dominion Post, said the new rules were "absurd and must be challenged".

Still cameras "make to much noise"? I have one the shutter of which is so quiet it can not be heard at the next cafe table.

Naah! There was an interview on my wake-up radio news programme this morning featuring Tim Pankhurst and Tom Scott. The final comment came from Scott (I have mentioned him previously. He is famous for being the thorn in the side of past PM Robert Muldoon, culminating in Mouldy refusing to start a press conference until Scott had left the room.)

Scott -
For goodness sake please do not suggest that they [our politicians] might behave themselves. I would be out of a job in a flash.

That aside, it is a sad measure of the way that our nation does business when the Board of Directors have to "protect themselves" from satire, ridicule or denigration.

Again, from DomPost, an illustration... I would love to have the photo in here but I am unable to extract it. It shows MP Helen Roy on her feet and speaking, and in the next chair is Tariana Turia fast asleep. Or is she?
Mrs Turia said through a spokeswoman that she was not asleep and she had seen the photographer taking pictures of her. However, she had a headache, and may have briefly closed her eyes.

The article makes the point that the part of the photo showing Roy, MP would under the new rule be "legal" whereas the right-hand side showing Turia would not.

Is that being a bit precious? Decide for yourselves. As the article reports -
In a 24-minute period yesterday, Dominion Post photographers took shots of various MPs yawning, checking their cellphone messages and reading newspapers or glossy magazines.

That was on their first day back from a four-day break and just 15 minutes after Parliament started sitting.
I can vouch, from personal observation, that there is nothing out of the ordinary nor inaccurate in that statement. It is not a criticism of the current Parliament.

It has always been so...

... an MP giving the bird to a member on the other side of the House.
... reading the newspaper.
... asleep - probably the most common.

While on the topic of sleeping, I must relate a quick story concerning the late (and sadly missed) "Mayor Robbie". Robbie, Sir Dove-Meyer Robinson, is one of the true fathers of Auckland City. He once boasted to a member of the Royal Family that a letter adressed "Robbie, New Zealand" would reach him without delay. He was right. But to the sleeping...

I have seen Robbie in action at a meeting, one which was dragging somewhat and as usual getting bogged in trivia. Robbie dozed off after about 15 minutes, quietly snoring to himself in his front row seat. About an hour later, the agenda had progressed to an item (of some significance) that was likely Robbie's main reason for being there. The item was called by the Chairman and the first person on his feet was Robbie. I could swear that 5 seconds earlier he was fast asleep.

Tuesday, June 26, 2007

Needs vs want - 2

I have dribbled on from time to time about the middle class disease of "buy at all costs". It surfaces from time to time in the form of my desire (at some stage after I retire) to teach money related topics at a school down the road (where-ever that might be...).

It is a theme that the Herald has picked up with a series of articles starting yesterday with this -

Matt Standing and Jenna Clark might be in their own house today if they hadn't bought a car on credit four years ago.

They were both 17 at the time and both had good jobs in Whangarei. They didn't have the $9000 they needed for a Mazda 323, but Oxford Finance was happy to lend them the money with repayments of $90 a week for three years - meaning that they ended up paying just over $14,000 for the vehicle.

It was the start of what became a pattern. Standing, a trained mechanic, borrowed another $6500 from Five Star Finance and others to transform the car with new mag wheels and a body kit.

He can't recall the interest rates but they were "very high". He agreed to repay $55 a week for three years.

Shortly afterwards, the young couple moved back to their home town of Auckland and had to borrow $2000 from the Money Shop to put down a bond for a flat.

They spent another $6000 on furnishing the flat with a bed and a fridge from Harvey Norman, a washing machine and drier from Hill and Stewart and other items. They used a Q card, a credit card run by Fisher and Paykel Finance that can be used at more than 100 retail chains, offering no interest for the first three months.

After those first three months, the card charges interest on the unpaid balance on a daily basis, but allows customers to set their own repayment rates.

Clark was given a $4500 limit on her card and Standing $1500.
"We both used all the money on our cards," Standing says.

They got a flatmate in to help pay the rent, but found the flat too small so moved to a bigger one. They couldn't get their bond back because of "pet problems" and had to borrow another $2000 for the new bond.

They moved back to Whangarei where Standing got a job in a quarry and borrowed $5000 from Geneva Finance to buy a Mini for Clark, paying back $60 a week.
The new job earned him $1000 a week in the hand and they started to plan an engagement. He took a Visa card to buy a ring, but instead used it to spend $1500 on new brakes and shock absorbers for the Mazda. He let his overdraft at the ASB run up to another $1500.

Then he lost his job. The income stopped. But they owed a total of $47,000, including student loans for Standing's mechanics course and a flight attendant's course for Clark. Their repayment obligations carried on.

"When the crunch came I was paying out about $400 a week if not more," Standing says.

That is the thread that runs through a very large part of NZ society. It is the illustration of the "want, not need" driver that I referred to in my earlier post. It is the reason why we have a "foot spa" that was a birthday present from me to my wife sitting in the spare bathroom, used once, never again I suspect. Why did I buy it? Well, debate but my excuse is that it was written down three times on the "birthday request list" I was given that year. It is why we must replace the car every four or five years; at least before the old one has its tenth birthday.
On average, all of New Zealand is in much the same position. We have slid in a single lifetime from saving 14.6 per cent of our household incomes in 1960 to last year spending 14 per cent more than we earned.

Our profligacy has been offset by the Government, which has switched from regular deficits to mounting surpluses, and by business, which banked ever-increasing retained profits for investment from the early 1990s through to 2004, although these have fallen in the past two years.

The result is that our total national savings have fluctuated mostly between zero and 5 per cent of our national income without any clear trend.

But this has been consistently less than the average saving in rich countries and has not been enough to fund investment, so as a nation we have also been net borrowers in every year since 1974.

Our household debts have ballooned from 50 per cent of our after-tax annual incomes in the early 1980s to 140 per cent in 2004.

Most of us have our debts under control. But in a 2000 survey, between 8 and 12 per cent of people said they had been unable to keep up payments for their mortgage or rent, power, gas or phone bill or payments for goods such as cars and appliances.

That last para combines a series of unfortunate, tragic events involving the death of a lady from a Samoan family some short hours after their electricity had been disconnected for non-payment of their account with today's article in this series. Some of the causes of financial hardship, especially within but not limited to the Pacific Island communities as the above quote testifies, are well set out including the pressure to tithe to the church and the availability of credit at a cost.

...this is a world where people borrow simply because they have to.

Most have children. In 2000, 27 per cent of Pacific people, 23 per cent of Maori and just 8 per cent of Pakeha were unable to keep up payments for goods on credit in the previous year. Similarly, 24 per cent of Pacific people, 16 per cent of Maori and 5 per cent of Pakeha had got into arrears on their mortgages or rent, and 28 per cent of Pacific people, 23 per cent of Maori and 8 per cent of Pakeha had got behind on power, gas or water bills.

In the past five years, debts owed on goods such as cars, furniture and appliances have displaced rent and power bills as the biggest amounts owed, accounting for 38 per cent of all arrears owed by clients of the Federation of Family Budgeting Services last year. Rent and mortgage arrears were next with 32 per cent.

"The top two used to be accommodation and utilities. Four or five years ago they were by far the top categories," says the federation's executive officer Raewyn Fox.

"For the last two years the greatest percentage of debt has been in the category of retail goods providers including hire purchase and credit cards. We believe that is a direct result of the aggressive marketing of retailers, such as low deposits and six months before you have to start payments on a hire purchase."

Moneylenders have multiplied to meet the demand. South Auckland budget advisers report interest rates commonly around 30 per cent, plus fees, on items such as cars and appliances.

For shorter-term loans, corner shops such as Lelei Finance in the Mangere Town Centre lend money on the security of chattels such as a TV set or tapa cloth at interest rates of 20 to 25 per cent a month. For a six-month loan, Lelei owner Lelei Ufi says the interest would total 120 to 150 per cent.

"That is the rate that most of the pawnbroking business charges to the clients," he says.

An extreme case which bills itself as "New Zealand's largest payday advance company", online lender, charges 10 per cent every seven days for money lent until your next pay day - the equivalent of at least 520 per cent on an annual basis.

This is very much a cultural thing, but it is cultural at two levels.

The first is the want vs need aspect that formed the previous post on the topic.

The second is the pressure applied to an individual; by peers, by church, by society itelf. That pressure, to buy this, to have that, to own two cars, to have the Playstation... comes from every direction. It is all pervading. Visit friends - "Oh! You don't have a widescreen digital tv!!" Watch tv and the "you must have..." message is never ending. As suggested in today's Herald article it is now accompanied by "Here is the money...".

Now, to be honest, we have recently dipped our toe into the murky waters of financed buying. Most recently was when we decided to replace the single bed and truckle with a double bed for visiting offspring. Total bill for the bed? About $900 all up. OK, so we signed up for "six months interest free" finance. Yep, it got paid off in the six months. But there were interesting things that happened along the way; like the statement of account which recorded the payments we had made but instead of having a balance owing, ended up with a "Balance Available". Say what? It is the difference between the original advance and the current amount owing. The obvious implication, that I could go out and spend that amount on something else, is not "misleading" but totally immoral in my view.

But the universal availability of credit - at whatever cost - does nothing to alleviate the problem.

So, it is sad to read of the problems that others have - others far less fortunate than I because they also have no concept of "value" or of need vs want. They are in the polar opposite camp to those I have been writing about for reasons that will become apparent.

Thanks to Arts and Letters for the link to -
At 7.30am at the University of California–Irvine campus, a stream of Land Rovers, BMWs and Mercedes pulls into a car park. A collection of tired-looking twentysomethings shuffle out of their cars, file into a class-room and introduce themselves over Diet Cokes and doughnuts...

Television is filled with images of young wealth gone wild, with pouty heiresses demanding new Mercedes and $200,000 birthday parties. Paris Hilton kicked off the trend with The Simple Life, a reality show where the doe-eyed sex symbol slums it on an Arkansas farm. MTV’s Rich Girls chronicled the shopping expeditions of Tommy Hilfiger’s teenage daughter Ally and her friend Jaime Gleicher, while the channel’s other teen-spend-ing fantasy My Super Sweet 16 shows the sons and daughters (mostly daughters) of the newly rich vying for the title of most profligate birthday party.

All that extravagance has created new parenting problems – and new industries to solve them. A spate of recent research studies is shedding more light on how wealth, in addition to giving kids advantages, can become a family curse. Without the need to work, children develop little sense of motivation or drive. They have trouble developing basic life skills – cleaning up, managing money, working with other people – since they’re used to relying on house staff and parents.

“You don’t learn basic skills that are fundamental building blocks for the rest of your life,” says Ellen Perry, founder of Wealthbridge Partners, a training organisation that caters to families worth $100m or more. “The privilege gets in the way of healthy maturation.

“Money gives people the ability to buy their way out of life experiences. The parents may think they’re helping their child, but they’re actually robbing them.”

Mmm, about says it all...

Thursday, June 14, 2007

Health Update...

One month since the carve-up and heart-valve replacement.

Had one very hard weekend which saw me back in hospital with bad AF.

Have started a series of one-hour seminars on post-cardiac surgery care. Last week was on medication. This week was stress and stress management. Both helpful and thought-provoking. Today's session produced "Nine Commandments" for the minimisation of stress. Good stuff - will post up soon.

Allowed back driving - short distance only.

Thinking about a bit of building (see the prob photo for an idea of what he builds... :) ) including finishing off a model which has been 75% complete for the past year, and drawing up plans for another scale model of a FW189 Uhu.

Still have occasional difficulty sleeping. See below.

Still have major problem with gout in right knee - went to the doc this am for the third time on same topic. New (not approved by Pharmac) drug has worked almost instant wonders. Now I can walk again!!

For those who enjoy splatter movies, blood and gore and guts and veins in their teeth, this is the prob's bod as it was 23 May...

The invasion continues...

On 17 June, 10.30 pm and following Sundays HBO is showing an off-the-wall example of NZ comedy - otherwise known as the Conchords.

Flight of the Conchords follows the trials and tribulations of a two man, digi-folk band from New Zealand as they try to make a name for themselves in their adopted home of New York City. The band is made up of Bret McKenzie on guitar and vocals, and Jemaine Clement on guitar and vocals.

Bret and Jemaine have moved to New York in the hope of forging a successful music career. So far they've managed to find a manager (whose "other" job is at the New Zealand Consulate), one fan (a married obsessive) and one friend (who owns the local pawn shop) -- but not much else.

Wednesday, June 13, 2007

Keep an ear open for...

a very recent signing by Blue Note Records.

Hollie Smith, something of a unique voice and one destined to make an international impact...

Myspace link on title.

Wednesday, June 06, 2007

Need vs Want

In a world ruled by the might of the dollar, a mantra is being heard: I don't need it, I don't want it. Claire Harvey tries going without spending power"That", says my brother Adam, "is the most middle-class thing I've ever heard". We are sitting in an Italian cafe eating expensive peasant food, and I've just told Adam about my plan to go for a month without spending money. He rolls his eyes and bites into his pizza.

That is the opening to a fairly lengthy op-ed-confess column published last Saturday in the Herald. And, before going any further let me make my own admission that I have been and am still occasionally guilty of the indiscrete, spur of the moment, “Why DID I buy that” purchase.

In some ways Claire Harvey’s article disappoints as it trundles its way through the middle class angst of self denial and sacrifice. It skims ever so briefly over many of the real issues of the modern consumer society. The author agonises endlessly over the minutiae of not being able to have a coffee at the local with her friends, of making her lunch at home rather than spur of the moment buying from the local cafe, takeaway or sandwich bar. Her wardrobe gets a quick and slightly embarrassed glance with the self-consolation of it being perhaps one of the justifications for her decision to “not spend money”. So the parameters are set...
When I say "without spending", I mean I am allowed to buy basic groceries and fill up the car with petrol, but nothing else. No takeaway food, no barista coffee, no taxis, no visits to restaurants, bars or cafes, no tickets for movies or the theatre, and no buying books, clothes, shoes, magazines or cosmetics. No buying presents for anyone. No haircuts or massages or facials. No fancy booze in bars, no tobacco, no non-essential drugs (pharmaceutical or otherwise). The supermarket is it, but that doesn't mean all supermarket items are OK - there'll be no DVDs or home-laminating machines in my trolley.

But to give credit, Claire Harvey’s conclusion does get close.
Time for my own confession: I've cheated six times during this month by buying that cup of tea, two packets of chewing gum when I was desperate, accepting two cafe freebies, and getting my winter coat drycleaned. The coat was musty and had grubby marks all over the cuffs - real, dedicated misers probably don't buy cream-coloured garments for this very reason.

When it's over, I practically knock over chairs in my rush to get into a cafe. But I can't think of any solid consumer item I really want to buy. In fact, I'd quite like to keep up the frugality for a while if I can - the bank balance is looking satisfyingly healthy. I've saved about $600. Not bad.

So what have I learnt from this? That I like spending money on things that matter but I'd like to be a little more miserly on a permanent basis. From now on, bought coffee should be a treat, not a thrice-daily habit. I've learnt that bringing my lunch from home really is cheaper, and that saving a few dollars really can make a difference. I've also discovered cooking at home can be really cheap but only if cuisine is heavy on the starch and light on the luxuries. Rice and toast might be cheap, but if you enjoy chicken breasts and fresh pomegranates, it's hard to budget under $10 per head, which really isn't any cheaper than takeaway.

But most importantly, this month has reminded me to be a little more mindful of money; saving my cents for the important stuff. I don't just mean mortgages and superannuation - I mean the experiences and items that make everyday life a little sparkly. I don't care how frivolous it sounds, but for me, the joy of life is at least partly in visiting cafes with friends, flying across the Tasman to see my family, seeing movies, going to galleries, buying the occasional gorgeous dress - these are the reasons I work for a living.

I like being part of a society where delightful food and beautiful locally designed clothes are available on every corner, and I'm happy to pay for that privilege. If we all stopped spending to start Compacting, this would be a much less interesting place to be. It's just a matter of finding the point where "I need" meets "I want". As long as the general flavour of life is more Italian parmesan than wet turmeric, I'll be happy.

Now that highlighted second-last sentence really is the nub. For someone like myself, and I suspect Harvey as well, the self satisfaction of middle class security with most if not all of the “modern necessities” such as house, private transport and children paid off would make the denial of luxury an attainable goal compared with the struggle of “the poor” to provide the very basics.
But the point of this exercise is not to save money, not really. The point is to get out of the habit of constantly thinking about buying, spending, having. If I were trying to live on the dole ($178.49 a week for a childless beneficiary, since you asked), I'd be constantly wondering, "What can I afford to get today?" This way, I just have to accept I can't afford to get anything. Money is no object, as Hugh Hefner might say. The difference is he gets to put his arm around a very expensive rabbit while he says it.

For the first time, I understand what it must be like to be significantly poorer than your friends. Being poor (or frugal) is fine if everyone in your social circle is doing the same, but how tedious it must be if your friends accelerate to ludicrous new levels of lucre. Oh, I'd love to come out to dinner, but I might just have the garlic bread ... sorry, I can't get away to come skiing that weekend.

... really does miss the point by more than just a little.

Perhaps had she been looking at the decision to pay a utility account – let’s say for electricity – so that one week’s food must last for the next three weeks, it would have had a greater impact. That is the reality that a goodly proportion of people have to face.

For while that is the side of Harvey’s piece that is missing, it is quite coincidentally an aspect that has been extremely prominent in local (and apparently international) news over the past week.

It has been (for as long as I can remember) standard practice for supply utilities – the obvious ones being water, electricity and gas – to disconnect supply if a customer has not paid outstanding accounts. My first direct involvement was with water supply, through the Borough Council where I was head of finance. Reasons for non-payment ranged from the bloody-minded landlord who would disconnect the supply himself (to get rid of unwanted tenants) were it not illegal for him to do it, to the little old grandmother who was getting a bit muddly and had no one to take care of her money for her, to the struggling family of six (very likely the unwanted tenants) with the parents working a 60 to 80 hour week between them on minimum adult wage rates to survive.

It is into this last category that the quite tragic case of Folole Muliaga falls. She, her husband, her family, owed something like $170 for electricity. The supply was disconnected by the utility company. Mrs Muliaga died some short while later.

Those are the very bare, non-judgemental, dispassionate bones of what happened. There is a very great deal more that can be added; some conflicting, some disputed, some just downright wrong. With there being at least three enquiries, including police, under way there is some prospect that the truth might emerge in the future.

Everyone, from Auntie Helen on down to the ol’ probligo, seems to have an opinion on the rights and wrongs of what has happened. I am not going to discuss this aspect here as I prefer to have fact rather than speculation to hand. Certainly there seems to have been failure at just about every point in the “system” where humans are involved. Pointing bones at any individual involved is meaningless at this stage. Even Auntie Helen’s undertaking to “make the current guidelines as set down, mandatory” rings about as tunefully as my gout ridden knee when I collide with the end of the coffee table.

So now we have the whole country (other than those who are busy stuffing books in the seat of their trousers) giving all of the good advice they can think of. Contributions range from Mother Jeanette proposing “graduated pricing” for electricity – the poor pay less than the rich - to Jonkey and his cohorts suggesting that the true solution to expensive power is to build a number of very expensive power stations to create an oversupply in the market hence forcing down prices.

The very big pity amongst all of which is that it is going to make very little difference in the long run. Auntie Helen has this morning been mouthpiecing the latest variation on her theme of “mandatory guidelines”; this time the tune is along the lines of utility companies having to refer “people who are having difficulty paying their bills” to one or another of the various social agencies that like to be so involved. That might help. The emphasis is on the “might”. Having been involved in providing budgeting advice to people in financial strife I know just how difficult it can be to get across the idea that this week’s wage packet has to pay for more than smokes, some food and perhaps an afternoon in the boozer. It is even more frustrating when you get a client with $150 in the bank at the end of the month for electricity and school fees. The next week it has disappeared – “Oh, we got this special deal...”.

In the meantime, my mailbox this morning is jammed with a half inch thick wad of paper. All of it is advertising from three retailers offering me “special deals” on everything from 42” tv screens at $5,000, dishwashers at $1,200 upward, and cooking pots at $19.99. Any purchase over $500 qualifies me for 12 month interest-free credit; “approval guaranteed”.

Yeah, right!