Archive for the ‘Thoughts’ Category

New branding, but same old tories

Prime Minister John Key just squeezed himself into the New Zealand Rich list. With an entry requirement of NZ$50 million, John Key has just made it with $55 million personal worth. Compared with world standards, this can hardly be called very rich. However, among the world's leaders, he's ranking is quite high above - 18th.

What this reveals is that he must be quite clever to gain that amount of wealth, and succeed in both economic and political arena.  As a banker, you can also safely assume that he is highly financially literate. So lack of knowledge can hardly used to explained Key's comparison of wage gap between Australia and New Zealand:

Loyalty dictated John Key take the support option. To loud guffaws from the Labour benches, Key told Parliament that he had been advised that the gap between gross average weekly earnings in Australia and New Zealand, adjusted for purchasing power parity, was $160.25. "That is certainly a lot less than it was in 2005, when it was $187.60."

Indeed it is. But National did not win the 2005 election. It was elected in 2008 when - according to Key's own figures - the income gap had narrowed to $138.

There are two things that I definitely did not expect - 1. how did he become a millionaire? 2. I am actually very surprised to find out that the wage gap actually decreased - at a quite considerable rate, at the time when Labour was at the helm until the recession. I guess this is just another example of misconception that the right-wing biased media has created.  You thought you know the very essence of politics, but in fact you only know the facts as being digested and manipulated by others.

A shiny example of how ETS should not be done

New Zealand has started its emission trading scheme (ETS) from 1 July (yesterday). The country is one of the handful countries that have such scheme in place. Once again, New Zealand has become an experiential ground of a new concept for the world to observe.

New Zealand’s has experienced serious changes even before it is implemented. As the centre-right wing national government gets elected in 2009, the scheme has undergone a hasty review, and several changes were resulted.

One of the major issues that will eventually topple this ETS is the removal of caps on total amount of emissions allowed nationally, and by sector. Government is responsible to supply unlimited amount of emission units at a fixed price of $25 per unit until 2012.

Now this is a very weird thing to do by a government which proclaims itself as “pro-market”. The reason for a cap isn’t just limiting the country’s total emission, but providing a market mechanism that provides financial incentive for cleaner sectors to emerge.   By removing such cap the scheme becomes no more than a new type of tax, since there is no limit on the amount of emissions, businesses can go on as usual, and the cost of this new “tax” is conveniently  transferred to end users – i.e. every day consumers.

And this appears just like what has happened.

The effects of ETS are further reduced by not having agriculture sector included in the scheme until 2015. As the country’s largest polluter, agriculture accounts for nearly half of the total greenhouse gas emissions.  This isn’t a sign that such issue is being treated seriously in New Zealand.

No wonder this ETS receives very little support – consumers absolutely hate it, even  politicians don’t agree. From the very right wing Act Party, which highly doubts the existence of global warming, to the very left environmentalist Green Party, all voted down for such scheme.

But such scheme does provide a good example to rest of the world though – how it should not be done. I highly doubt the ETS will last as its current shape for long - a major overhaul might just be an election away.

Is tertiary education really worth it?

Despite the general mood of anti-intellectualism, New Zealand has a relatively high rate of participation in tertiary education. However, for many, they attend university for reasons rather than enrich themselves or get a higher paid job. I once heard that a female university student said the sole incentive for her to attend university is the higher chance to find the "man" with "potential", financial potential that is.

So what kind of financial potential a university graduate may possess? In a recently published OECD report (PDF) on education, it is suggested in New Zealand, on average, a male university graduate would earn about NZ$ 170,000 more in his lifetime than those with only high school qualifications.

It may sounds like a lot but it's the earning increased in lifetime. Put that in context of a typical working life of a Kiwi (age 22 - 65), the average increase in wage works out like $80 a week, about 10% - 15% percent increase from the average wage in New Zealand.

Furthermore unless you are lucky enough to have rich parents,  you'll have to pay for your tertiary education nowadays. In my situation, I estimated that I need at least 12 years (4 years university and 8 years full time working) before I can reclaim the amount I invested in education. This estimation is actually too optimistic, as you are less experienced and earn less in first few years.

Inflation would make the repayment a bit faster, thanks to the interest-free student loan.  However, that does not help in the long run as your other costs would also increase.

The return rate for your investment in tertiary education varies, largely depends on how much financial support you get from your parents and the government, but 10% - 20% in the long run should be a pretty accurate estimate. It does not sounds too bad, but there are also risks. It depends the wider economic environment is tied up to your employment status, if you don't work, you no longer receive the return on your investment.

From a pure monetary sense, I would rather invest my money in real estate market than education. However according to MasterCard, there are things in life you just cannot put them in  monetary value. The report suggested three: people with tertiary qualification are generally more healthy, has more interpersonal trust, and are fairly interested in politics.

Provocation defence

One of the things I don't quite like about this society, is the trend to give over and knee-jerk reactions to a high profile but a single inccident/court case etc, and media are very good at creating a storm out of pretty much nothing.

The Weatherston case is likely to be one of such cases. There is clearly a logical fallacy here, Weatherston used, or abused the availability of  provocation as a defense, doesn't necessarily mean provocation defence  is flawed - in fact, I could argue this in the exactly opposite way, it has  proved that the defense is very reasonable and not accessible to people who want to get away with what they have done - therefore Weatherston failed.

There is no doubt to me that provocation is a geniune defence, I consider myself a pretty quiet and calm person all the time, but just like everyone else, I sometimes can lose my mind too.  Current law requires jury to assess whether the evidence could prove a "reasonable man" could be provoked, I think that's pretty much about right - no person at his/her right mind yell to others "come and kill me", however, imagine if one constantly abuses both physically and verbally, overpowered you,  and protection order does not work, are you still feeling confident that you won't lose your mind?

The defence in the Weatherston case, did not only argue the provocation, but also by paint Weatherston as a person with mental problems. This could be a even stronger arguement, however, 200+ cuts clearly do not qualify as a man who  temporarily lost self control, and that did not pass the jury.

Employing "foreigners"

Many Asians cannot be more familiar with the following situation: they are well or over qualified for a job, but were still turned down by employers because they either lack local experience or their qualification was attained from a university in their country of origin.

This has happened to generations of immigrants, even if they are already a proud NZ citizen - this is one of the things that makes you feel not that proud of your choice.

I don't really want to label it racism, but look at what happens when the tide is turned:  The new "Kiwi first" employment policy means a Japanese restaurant owner cannot recruit chefs from Japan because there already are people with "appropriate" skills available in NZ.  According to the report,  people with "appropriate skills" meaning they need to learn the difference between sushi and sashimi on job.

And yet many "Kiwis" are moaning in the discussion forum, saying people deserve a chance to learn, asking why don't they train kiwis on job?

The rumours that Asian people only employ Asian employees are totally untrue, at least in the Chinese community I know of. There is golden rule for any Chinese entrepreneur who wants to start a business here - a Kiwi receptionist is a must.  This is not because Chinese entrepreneurs cannot pass NCEA leavel 1 English, but people out there just don't want to deal with businesses that are not owned by "one of them".

Any employer would prefer people with local experience and knowledge while having suitable skills, however, if they cannot find any here, they ought to be allowed to employ from oversea. If my memory serves me right, it was this government which wants NZ to increase its productivity and become a global economy - not.

Napier Shooting

I am quite busy this month so I expect more time between updates in this blog. However, I still had enough time to watch the incident in Napier unfold.

Unlike a lot of backseat drivers who have never been to the site, I have no problem with how the police handled the inccident.  It is more than obvious that police wanted the gunman Jan Molenaar alive, otherwise AOS would storm the house before we know it. Unlike the Aramoana massacre, Molenaar snapped, but he poses no immediate threat to the public, therefore it's best to talk it out rather than end it with another life lost and put the Police in further danger.

The real problem of this tragedy, I think is the internal police procedures. I still prefer the polic to not carry any guns in daily patrols, but this incident was to carry out a search warrent, but the police failed to foresee the danger of such activity so failed to carry guns. It's the police authority failed to protect the safety of police force.

This was also the case in the death of Don Wilkinson. His fate was sealed when they decided not to carry guns.