Ecuador’s New Deal: Reforming and Regulating the Financial Sector

Please hit the link. This should become the NZ Labour Party financial sector policy.
Ecuador’s New Deal: Reforming and Regulating the Financial Sector

The need for democracy

Instead of the mantra; “Discipline, discipline, discipline”, unions, parties and other political organisations of the left should march to the beat of; “Discussion, debate and democracy”.

 True united action by an organisation of people fighting for their rights can only be guaranteed by real agreement and understanding that what is decided is the best way for the organisation to further its aims. Such agreement and understanding cannot be assumed, or imposed from above. Discussion, debate and democratic decision-making are needed to ensure “buy in”.

Democracy is not an expensive overhead. It is essential to build progressive mass movements. It is the way an organisation establishes and maintains its links with the people it represents. Without the infusion of energy and enthusiasm from new members and the wider and wider politicisation of the mass of the people with a new vision of the future, left organisations ossify.

Without democratic participation, inspiration and enthusiasm are extinguished as the organisation degenerates into a bureaucratic nightmare; such organisations can wither and die.

Real strength comes from the support and participation of the mass of the people for and in the implementation of progressive policies. This is what must be fought for. Who is going to join, or build, an emancipating political movement that does not give its members the right to decide what that organisation does?

What is needed is a form of organisation where the leaders advise and the members decide.

 

Discipline or Debate? Centralism or Democracy?

Calls for "discipline" when a political party is caught up in a fractious debate about policy or organisational matters almost always come from the incumbent leadership. This is understandable as the leadership is charged with maintaining the proper functioning of the organisation. However, it clear that "discipline" means that opposing views (to those of the incumbent leadership) are conveniently left unexpressed in any meaningful way since the internal means of communication are largely monopolised by the ruling group.
So the conundrum exists: the public expression of differing views is seen as 'bad' for the party BUT the suppression of such views can only lead to pent up frustration that could eventually burst out in some destructive manner (and be even worse for the party).
The debate about centralism versus democracy, discipline or debate, is as old as democracy itself. The Social Democratic parties in Europe in the 19th and early 20th centuries were much exercised by this question.
The bureaucratisation of left parties was taken to its extreme by the Russian Social Democratic Party in its reincarnation as the Communist Party of the Soviet Union. Under Stalin, dissent meant death.
The original ethos of the RSDP was one of real democratic centralism: ie debate was tolerated and actually encouraged, decisions were made democratically about courses of action, and then discipline (centralism) kicked in during the carrying out of the action. However, except in times of extremis like during a civil war, on-going debate was not stamped out.
The fact is that the minority might be right and their input needs to be valued, not discounted as 'wrong'. If the action embarked upon goes badly, they might be just the people the party needs to get out of the doo doo.
Members should NOT have to eschew their strongly held views just because another view prevails at a certain time. It is the minority's duty to stand firm and defend their position until it is proven to them that they were wrong, or it is proven to be right (or a position in between two extremes is adopted).
Bureaucratic centralism is the worst and most destructive means of operating a progressive organisation. The Labour Party in NZ is now moving away from such ways of operating; that was the intent of the changes adopted at last weekend's conference. The sooner the dead-hand of bureaucracy (the enemy within) is lifted from our backs the sooner we can stand up proud and strong to fight the enemy without - those whose market-driven motives are wrecking the world economically, socially and environmentally. 

Historic Labour Conference Empowers Members

Labour Party members could not have come away from last weekend's Conference anything but elated and energised. Despite the best efforts of the 'dark forces' within the Labour Party caucus - those that ignored the clear wishes of the membership and installed a leader of their own choosing a year ago - party members passed the most democratic reforms the Labour Party has seen in its 96 years of existence.
Party members and union affiliates will now have the majority say in who will be the party leader. MPs will be bound to implement policy that is in line with the Party policy platform (still being developed).
This is a revolutionary development in a Party that has been written off by many as moribund and unable to shake-off the damage done by the betrayal of Labour values by the 1984-90 neo-liberal controlled Labour Government.
Last weekend's conference was historic - the conference that took the party back!
The sham caucus vote taken today under the pretext of clearing the leadership-contest decks will only inflame membership passions further - a blatant attempt to subvert the leadership confirmation/contest due next February.
 

A Storm in a T-blog?

A Labour stalwart is feeling quite confused and put-upon after querying (in an internal email newsletter) the breakfast speech made on 11 July by Labour Finance spokesperson, David Parker.  Parker’s speech revealed an apparent contradiction between the Labour stand against asset sales and the Labour overseas investment policy that allows for the sale of electricity generators. An explanation seemed warranted.
The fact that our Labour stalwart was alerted to the Parker speech by a newspaper column and blog post by a favourite bogey of many Labour MPs, Chris Trotter, did not help his/her case (or standing in the party).

The question posed by the T-man and referred in the internal email newsletter was this:

“Speaking to a group of corporate head-hunters on 11 July, Mr Parker spelled out the details of Labour’s policy on foreign investment. Concerned to prevent 'infrastructure assets with monopoly characteristics' from being sold to offshore buyers, Labour, in the run-up to last year’s election, drew up a 'closed list' – to keep a 'bright line' between 'what is to be sold and what is not.' Among the infrastructure that was not to be sold was any: electricity line, water storage or irrigation networks; no seaports or airports; and no public hospitals, schools, railway lines or roads.

"Not included in Labour’s 'closed list' were telecommunications networks and – amazingly – 'electricity generators'.
"According to Labour’s policy: 'While the electricity market is on the cusp of becoming uncompetitive and exhibits monopoly-like characteristics, generation assets are diverse in nature, location and ownership.'
"What this means is that although Labour went into the last general election on a policy of 'No Asset Sales'; and in spite of the fact that its campaign advertising showed a vast banner, displaying that very message, being draped over a hydro-electricity generating dam; the party was unwilling to include electricity generators on the list of state-owned infrastructure that 'ought to be run in the New Zealand interest' – and never be sold to foreigners.
"Am I alone in thinking that Labour’s foreign investment policy fatally compromises its current campaign against asset sales? If the generation of electricity is an activity which properly belongs to the market, and if New Zealand’s electricity generation assets are 'diverse in nature, location and ownership' and, therefore, able to be purchased by foreign interests, then I’m at a loss to know why the Labour Party is opposed to their partial privatisation.”

For Mr T. this is evidence that the Labour leadership (and caucus) is moving to the right and that a Shearer-led Labour Party could emulate the stalking-horse Rogernomics strategies of the Lange-led Labour Party of the 1980s.

Our Labour stalwart received a reply from David Parker’s office that managed to evade the central point of confusion and merely stated:

“The comments you refer to were not about this issue, but refer to the rest our policy to tighten up on controls on overseas investment in privately owned rural land and monopoly infrastructure.”

The key point that everybody seems to be missing is that Contact Energy, one of the four major electricity generators, is already totally in private ownership. In case anybody missed it, this happened under National in 1999. Here is the potted history from the Contact Energy website (written in 2007 I assume):

“The New Zealand electricity industry has undergone significant reform in the last 20 years. First, the Electricity Corporation of New Zealand (ECNZ) was established in 1987 as a state owned enterprise to operate as a commercial, profit-making organisation. ECNZ was the sole provider of electricity in New Zealand, including generation, transmission and retail. Electricity was distributed through local electricity supply authorities.
"Then, in 1994, Transpower was separated from ECNZ and created as a state owned enterprise. In 1996, ECNZ was split into two more state owned enterprises - ECNZ and Contact Energy - and a wholesale electricity market was established. Another major reform was the privatisation of Contact Energy in 1999.
"The last significant reform was the separation of the lines and energy businesses of the former Electricity Supply Companies and the split of ECNZ into three competing state owned enterprises: Meridian Energy Limited, Genesis Power Limited and Mighty River Power Limited. These reforms were designed to introduce a more dynamic and competitive environment into the generation, distribution and retailing of electricity.”

So where does that leave us with the Parker speech and the somewhat long-bowalley conclusions drawn by Chris Trotter?
The Labour asset-sales policy is “no sales” of existing state-owned assets. The foreign investment policy is no foreign ownership of monopoly infrastructure.
The electricity generator Contact is already privately owned, so it would be subject to Labour’s foreign investment rules. These are designed to put limits on foreign ownership, not private ownership. Contact is not a monopoly, therefore overseas investment is possible under Labour's policy. There is really no contradiction here.
The question that could be asked is; should energy generation be deemed too important to the economy and the environment to allow any form of private ownership of it, whether that be locally-based or foreign (is there a difference in a globalised world?)?
The re-nationalisation of all privatised energy generation infrastructure and the removal of the clumsy and artificial market mechanisms currently in place in the sector is a move that would have wide support amongst New Zealanders.
This is not (yet) Labour policy.
It is up to Labour members and affiliates to push for such a policy if they want to see it enacted by a Labour-led government.
The current democratic reforms of the Labour Party organisational structure and policy-setting mechanisms will make adoption and fulfilment of policies like this more likely.

Strong unions can be good for business

Strong unions have a definite place in making a better world. Not only do unions play a vital role in collectively bargaining for decent wage rates and conditions for workers, but they can be a vehicle for improving business performance. One of the most successful restaurant and hotel workers union is Local 6 in New York. This union was founded in 1938 and organises 23,000 restaurant and hotel workers. The union has created, with the Hotel Association, a hotel workers’ health plan that is a model for what a health care system should be – effective, humane and efficient. A healthy, efficient workforce is the result.
What business-owners can gain from a professional relationship with a strongly organised union is also shown in the New York hotels. Those that are non-union suffer from the continual, unmediated conflicts that plague all-too many New Zealand workplaces as well. The union-sites in New York are, in contrast, relatively conflict-free. In the hotel industry petty corruption and favouritism is rife. Organised workers have rights and these are respected by all when the union is known to be strong enough to enforce them. Demoralising disrespect of workers, and corruption, are ferreted out to the benefit of company and employees alike.
As a veteran waiter at one New York hotel put it: “The union takes jobs and turns them into professions. It makes better managers out of management. The good ones get better – the bad ones don’t survive.”
What’s more, the fact that all the good hotels have to pay the union-negotiated wage rates means that hotels are competing on an even playing field when it comes to labour costs – the union takes wages out of the equation. This means that the productivity benefits from better paid more contented workers are shared by all hotels. It also means that rapacious, profit-gouging REITs (real estate investment trusts) cannot wreak the havoc in the hotel industry that they do in other “less regulated” markets.
Thirty years of failed neoliberal policies have empowered the very-rich classes at the expense of the rest of us. It is time to try a new way to run our businesses, and our world.  

Equality is the new “big idea”

“Equality is better for everyone” is the “big idea” that has been sweeping through policy and political circles since the 2009 publication of the book The Spirit Level. The authors, Kate Pickett and Richard Wilkinson, are British health researchers who discovered that all the social and health measures they investigated are significantly better for everyone in societies that are the most equal.
Anti-social behaviour, crime, poor health, mental illness, lower life expectancy, child abuse, high imprisonment rates, high rates of infectious diseases; all these markers of a “broken society” and the “broken economy” are the results of the growth of inequality. Screeds of evidence from dozens of countries, particularly comparisons between the most equal rich countries (Japan, Sweden, Finland, Norway, Denmark) and those that are least equal (USA, UK, Australia, New Zealand), show that people are happier, healthier and live longer in the countries with greater equality.
Not only that, but greater equality means less cultural pressure for the rampant and wasteful consumerism that is likely to push economic activity beyond the environmental limits of our ailing planet earth.
So better wages make better businesses; a more equal society is a healthier society; and the environmental threat we all face can be better tackled when we realise we are all (equally) on the same space-ship together.

Better Wages are Better

Thirty years of pro-business, ‘neo-liberal’ economic policies have not created the gains in wealth and prosperity that were promised. Instead a financial meltdown of the scale not seen since the 1930s Great Depression has crippled the world (and New Zealand’s) economy for the last five years.
Even the institutions that led the free-market, deregulation crusade have had to admit that things are not what they were cracked up to be. The IMF, for example, now says that sluggish productivity growth and increasing income inequality is a result of multi-national companies taking advantage of deregulated trade and globalisation in a race-to-the bottom; chasing lower wage rates.
The loss of higher value-added production since the opening of the economy in the 1980s has been documented in New Zealand. So has the growing income inequality. The real average wage fell from a high point of $29.97 an hour (in June 2011 dollar terms) in March 1982, to $26.27 an hour in June 2011 – a drop of 14%. Wage and salary earners’ share of the economic income cake was slashed by a quarter between the early 1980s and 2002, from 60% down to 46%. In 2010 this share was still 15% down on the early 80s despite some improvement over the 2000s. Of the OECD countries, only Turkey and Mexico track lower.
The CTU Economic Bulletin (Oct.2011, from which these figures are taken, concludes that there would be “wider benefits across the whole economy as well as better social outcomes from a commitment to a high wage, high skill, high value society. The integration of innovation, higher wages and more investment in skills and technology are a sound underpinning for development that is sustainable both economically and socially. This is a stark contrast to the low wage pathway that competes on the basis of cost alone.”
This is not just trade union rhetoric. Increasingly, academic research is bearing out these conclusions. The International Labour Organisation, which is part of the United Nations, has recently published research showing that wage-led growth is the way to a sustainable recovery from the current economic depression. 

ILO says wage rises are compatible with better profits
The ILO research calls into question the prevailing wisdom derived from Milton Friedman’s theory that there is a natural rate of unemployment, below which inflation will rise. The Friedman theory justifies monetarist interest rate manipulation to keep the economy from growing fast enough to create full employment. When there is full employment, wages naturally tend to rise and profits supposedly fall.
Two Dutch economists, writing in the ILO International Journal of Labour Research, show that rising inequality due to the global wage squeeze in the 1980s and 1990s is at the root of the current economic crisis. Credit inflation replaced wage inflation and led to the huge increases in household and corporate debt that crashed the financial system in 2007-8.
When alternative policies are adopted to strengthen the bargaining position of wage earners, wages rise and society becomes more egalitarian. In the simplistic, zero-sum world of the Philips curve that has dominated economic thinking since the 1980s, profit rates automatically go down as wages go up. This is the direct effect. More than offsetting this, though, are indirect results that will increase profits as wages go up.
First there are the gains in labour productivity that come from higher wages and more contented workers. In a co-operative industrial relations system, workers will share their tacit knowledge about how best to do things to make production and services run smoothly. They will more readily contribute their learned-on-the-job knowledge in an atmosphere where they feel secure and unthreatened by possible job losses as a result of helping to raise productivity.  Workers and firms will invest more in training and up-skilling when employment protection is stricter and average job tenure is long. The resulting higher labour productivity increases the profit rate.
Secondly, as wages increase, demand for goods increases. Firms are able to run at fuller capacity to meet the demand, utilising more (or all) of their productive capital investment to generate profits. New investment spurred on by greater demand and higher profits will lead to improved technologies and even greater labour productivity, and again, higher profits.
The authors conclude that profitability need not fall, and indeed can rise (counter-intuitive though this may seem), as the wage share rises and distribution becomes more egalitarian. The resulting society is better for everyone.

Defending public services

First Published in SFWU magazine Our Voice

Water and electricity provision; road, rail, air and sea transport; hospitals and schools; facilities for sports, leisure and cultural activities; communications networks; police stations, courts and prisons; council and parliament buildings – these are all what is called “public infrastructure”.

These facilities and services are crucial for the well-being and proper functioning of a civilised society and they have mainly been provided by the state in the past.

However, since the 1980s, much of the public infrastructure has been privatised around the world. A global infrastructure market has emerged through which huge private trans-national companies (TNCs) can make massive profits – companies like Macquarie Bank and Goldman Sachs.

In April, the SFWU hosted a visit from Dexter Whitfield, a UK expert on the privatisation of public assets. He has written about, and fights against, the latest version of privatisation that goes under the name of “Public-Private Partnership” (PPP). A PPP can also go under other names like “Private Finance Initiative” (PFI) and “Strategic Service-delivery Partnership” (SSP).

While he was here, Dexter spoke to trade unionists in Auckland, Hamilton and Wellington. His talks were based on his latest book called Global Auction of Public Assets.

PPPs are the latest way finance companies and private equity and pension funds are investing in public infrastructure. The private sector provides finance and management; it designs, builds and operates projects like roads and hospitals. They expect a very healthy return on these investments of 15%-plus profit.

Dexter says the excuse governments make is that the private sector can do things more efficiently and cheaper than the state (i.e. the government). But when you add in the profit margin it is clear that money that could be spent on hospitals and schools is instead going to line the pockets of the super-rich.

It’s not even true that the private sector more often build projects on time and in budget. Dexter’s research shows their record is no better than the public sector. And when private sector projects fail, the public sector has to pick up the tab. He has identified $US500 billion worth of PPP failures internationally.

Helen Clark’s Labour Government had to buy back Air New Zealand and Tranz Rail because the private sector operators were going broke and we could not allow our national air and rail transport infrastructure to collapse.

But this National Government is going to use a PPP model to build the new men’s prison in South Auckland. It is talking about doing the same for school buildings and other public infrastructure here in New Zealand.

Dexter talks about the crazy situation in the UK where a school built and operated under a PPP closed down because no one would go to it, and yet the 35-year contract still has to be paid out to the private investor.

He points out that tax-cutting, low-spending governments can never properly fund infrastructure development. Those promoting PPPs manipulate the figures to make the private option look better and cheaper.

PPPs are funded by raising money against the security of future income streams from service users who, Dexter says, “are saddled with ever-increasing tolls and charges”. The illusion is created that the financing is privately provided when it is only a loan against future spending from taxes and service charges.

Private companies also pick up lucrative consultant contracts to provide analysis and planning of provisions of public needs: analysis that inevitably maximises private profits and minimises private risk. PriceWaterHouseCooper is a good example of these consulting firms.

Workers in the public sector suffer as private contracting replaces secure employment. Pay and conditions come under attack, Dexter says.

Worst of all is the creation of a market in the buying in selling of the public infrastructure loans and shares, in which Dexter says schools and hospitals are sold like commodities to infrastructure and private equity funds and companies.

Infratil is one such company that operates here in New Zealand. It owns the majority of the public-transport bus services in Auckland and Wellington. It owns Wellington Airport and it also recently purchased the chain of Shell service stations. As a private company it can be bought and sold. The Act-National super-city plans for Auckland will open up the Port of Auckland, Auckland Airport and probably Auckland’s water and waste-water services to private investment and ownership.

Dexter argues that vital public needs should be provided for transparently and democratically. There is a public sector alternative to private-profit-making methods of infrastructure development. Public provision needs to be publicly planned, designed, built, financed and operated.

Our union should insist that a public or in-house option is put up whenever a contract comes up for renewal in the public sector, for example for cleaning services in a school or hospital.

He urges unions and other civil and community organisations to mobilise the widespread opposition to PPPs and privatisation.

Dexter works for a non-profit organisation that contracts its services to trade unions and community groups who are fighting against the PPP form of privatisation of public infrastructure. Its website has more information at www.european-services-strategy.org.uk/outsourcing-library .

Seats a Supercity Smokescreen

The furore about Maori seats on the new Auckland 'supercity' council, while a vital issue in its own right, has served to create a smokescreen around many other equally or even more important issues.
The prime one is the make-up, size and election of councillors overall. If a system of councillors elected from wards based on electorates or areas of even larger size, plus a number of at large councillors elected across the whole supercity is instituted this will lock in a regime of the business and wealthy elite who will rule a third of the country from a virtually unchallengeable position.
The politics of local bodies is well-known with the richer suburbs always turning out in greater numbers than those in the poorer areas. This was recognised with all the councils facing abolition having an existing system of election of councillors by ward and no at large councillors.
The supercity, if it goes ahead in the form that seems likely, will turn the clock back decades with its inherently undemocratic consititution.
This is the issue on which we should be concentrating our political fire. This, and the issue of privatising of the present council-owned assets like the shares in the airport and the port itself, were the main concerns expressed at the public meetings I attended when the supercity was first mooted. These issues have been subsumed under the Maori seats controversy.
In the end the council can decided to incude Maori seats under the existing local-body legislation. The wider questions of the make-up of the council and the sucurity of publicly-owned assets is the one we need to urgently address now.

Long live the commons!

Tariana Turia believes that Labour’s seabedandforeshore legislation was the "the single biggest land nationalisation statute enacted in New Zealand history". Would that the last Labour government had travelled the nationalisation road even further. Re-nationalisation of ACC, Air New Zealand and the railways could have fruitfully been complemented with full government ownership and/or regulation of the vital telecommunication and energy industries.

But the seabedandforeshore legislation was no nationalisation measure. It was the enshrinement of that which already existed; namely it retained the seabedandforeshore, the beaches and the coastal waters of AotearoaNewZealand, as part of the commons of this country. Our town and city open spaces, the National Parks and marine parks, the rivers, the lakes, our coastal waters and our beaches belong to nobody; that is they belong to us all. The seabedandforeshore legislation passed by the New Zealand parliament ensured that particular part of the commons remained in common ownership. Repeal of that law will be huge step towards the private ownership and commercial exploitation of our beaches and coastal waters.

Maori claim customary rights over the seabedandforeshore. Despite all the declamations and protests about “confiscation”, Labour’s controversial legislation preserved customary rights to the seabedandforeshore. East Coast Maori have already had theirs recognised under the law. What will happen to these rights if the law is repealed?

Despite all the assurances that Maori do not seek private property rights over the seabedandforeshore, the Maori Party and the Ministerial Review Committee that has just reported to the government clearly take the term “customary rights” to mean property rights i.e. privatisation: Or, in lieu of that, massive compensation payments.

Corporate Maoridom cannot wait to get its hands on this potentially lucrative asset. The ramifications of a private-ownership precedent in this arena of the remaining commons will quickly become clear. Other corporate interests will soon get in on the act. The example of the destruction of the New Zealand fishing industry, now largely in those very same hands, provides a stark example. Ask the workers made redundant at Sealords in Nelson as jobs are transferred to cheap-labour, off-shore factory ships what they think of tribal capitalism. Money is no respecter of good intentions. It knows no tribal boundaries.

Long live the public ownership (“nationalisation”, if you will) of the essential economic, social and recreational assets of AotearoaNewZealand!

Skyla - born earlier today

Skyla - 9lb 8ozs of joy (or trouble) - born 9.15am, March 13, 2009.
First child of my eldest daughter Carissa - 2nd grandchild of Len (proud grandfather).

Join the Internet Blackout - Protest Against Guilt Upon Accusation Laws in NZ — Creative Freedom Foundation (creativefreedom.org.nz)

Join the Internet Blackout - Protest Against Guilt Upon Accusation Laws in NZ — Creative Freedom Foundation (creativefreedom.org.nz)

Oil company rip-off

The four major oil companies who jointly own New Zealand’s only oil refinery at Marsden Point use their ‘monopolistic’ position to screw the minority shareholders of the refinery out of half the profits they would otherwise be due.

BP, Mobil, Shell and Caltex own nearly 75% of the shares of the NZ Refining Company. They siphon off millions of dollars from the company in a “discount” arrangement which means last year they paid $286 million in processing fees instead of the "gross fee" of $430 million they should have been liable for: a discount of $144 million or 33%.

Up to August this year they have jointly paid only $US149 million instead of the “gross” amount of $US311.8 million they should have coughed up: that is an even greater discount of 48%.

The gross fee is calculated as the amount it would cost to refine the oil into petrol and diesel in Singapore and ship it to New Zealand from there. The costs of refining in New Zealand would undoubtedly be higher than those in Singapore, with its economies of scale, so even the so-called gross fee would be a cheap rate.

Those that lose out from the oil companies' sweetheart deal for themselves are the minority owners of the refinery shares. The 3,000 small shareholders have found a voice in retired banker Dom Kloosterman who calculated the figures above to quantify the “great injustice” done to them by this siphoning off of profits by the oil companies.

Kloosterman calculated that last year’s pre-tax profits should have been $293 million instead of the $149 million that was actually recorded. The $144 million difference was pocketed by the oil companies.

The processing discount arrangement has been in place since 1995. The oil companies have the refinery literally over a barrel because there are no other customers. Annual reviews to the arrangement have brought no real change.

The anti-competitive, oligarchal behaviour of the oil companies is legendary as witnessed by us all with the convenient price setting mechanisms in operation at the petrol pump. New Zealand once had an independent oil company owned by Todd Brothers which, from the 1930s, imported petrol from Russia. This was marketed under the Europa brand until the 1970s when BP bought the company and shut it down.

SFWU in South Auckland - Election 08

The election turnout in Mangere was down 3614 from the 2005 figure (which was 3945 up from 2002). Similar results occurred in Manurewa and Manukau East, with the turnout dropping back to the 2002 levels. It was the turnout drop that cost Labour votes. The National vote hardly increased at all in Mangere (3984 in 2005 to 4120 in 2008 - up a mere 226).

In Manurewa the National vote was also static while the drop in turnout of 4669 was reflected in the drop in the Labour party vote (down 4581). Philip Field's Pacific Party took 909 party votes in Manurewa which otherwise would probably gone to Labour (or maybe other 'Christian' Parties).

In Manukau East, boundary changes brought the strong Labour area of Otahuhu into the electorate which ameliorated the Labour drop. Turnout was down 5707 but the Labour vote was only down 1963 votes. The boundary change was also reflected in the drop in National's vote from 10219 to 6579 (down 3640). Most of this difference went to Labour. The Pacific Party scored 1219 party votes.

It is not really worth looking at comparisons of the Maungakiekie vote because of its change in boundary. The vote was up 3822 in 2005 and up again 4591 in 2008, reflecting the greater National territory now included. Carol Beaumont did well to limit National to a 1030-vote win on the party vote. She had a lot of help from the unions.

The biggest drop in the number of party votes for Labour in any electorate was in Mangere. While maintaining the top percentage for Labour of 61%, the number of party votes was down 5,454. This was because the turnout was down by 3614, and on top of that the Pacific Party took 2683 party-votes. Mangere was Field's HQ and his party had a strong presence in the electorate (aided by large amounts of campaign regalia and many hoardings and signs that would have cost a fortune).

If it had not been for the intervention of the SFWU in the Mangere campaign the result could have been much worse. The local Labour Party was having difficulty making an impact in the electorate. The SFWU supported and initiated street actions and cavalcades. It also helped with targeted-mail delivery and leafleting, as did other unions.

The SFWU gave the campaign a visibility to match that of the flags and flea-market presence of Field's supporters. SFWU red flags, as well as campaign signs and red t-shirts, alongside Labour's and Sio's, became the face of Labour in Mangere.

There is a need strengthen the Labour Party in the South Auckland seats. There is an urgent need to organise an effective network of union member volunteers in these seats.

It is apparent from the extensive election phone-survey and work-site visits conducted by the SFWU during its election campaign, that, while its members are by and large instinctively pro-Labour, their level of political consciousness is generally not well developed.

Unions should not “talk politics” with their members only at Election time. The members deserve more respect. Education and participation in the political process should be on-going.

Election result - lesson for Labour

The problem was two-fold: 5-6% of the middle-ground voters swung back to National, and the Labour message (and record) did not inspire a greater turnout from the working class.

Unsatisfactory Labour Party organisation in many of the working class seats was at least partly responsible for the latter factor.

The 74.7% turnout of all eligible voters in 2008 was down from 76.5% in 2005. This 1.8% drop in turnout represented 56,500 less votes. (The equivalent figures for turnout of enrolled voters were 78.4% in 2008 compared with 80.3% in 2005 - a drop of 1.9%.)

In 2005 it was the extra turnout in the safe Labour seats (like those in South Auckland) that was the difference between winning and losing for Labour. In November's election the slump back to 2002 levels of turnout, combined with the swing to National, meant the end of nine-years of Labour-led government.

Jack Vowles, New Zealand’s pre-eminent election expert, concluded in a 2002 article that the decline in voter turnout evident since the heyday of the 1938-45 period (when over 90% of all eligible voters would get to the polling booths), and the brief revival in 1984 (over 85% turnout), is a result of “weaker party identifications and reduced party campaign contact”.

Political parties, and particularly the Labour Party, have lost their organic connection with the people who make up the electorate that votes them in or out. They no longer have as much direct personal contact with the voters as used to be the case.

The statistical and survey data presented by Vowles revealed that better “organisational mobilisation” by political parties results in higher voter turnout. The “recovery of party organisations and the revival of individual loyalties to political parties” is the key.

I was working on the election campaign as the Political Co-ordinator for the Service and Food Workers Union (SFWU) during the months leading up to the election. Our campaign showed that over 80% of SFWU members supported Labour. The SFWU has maintained a sense of loyalty to the Labour Party among its members that is not mirrored elsewhere in society, possibly not even in other Labour-affiliated unions.

The Labour Party needs to revive itself as a grass-roots mass working class party if it wants to increase its voter turnout in its heartland seats. The Party Branch and other organisational structures have to become the means of reaching tens of thousands, if not hundreds of thousands of people, who need to be brought up to a level of party loyalty and identification that matches that already attained in the SFWU. Unions like the SFWU can be the crucial catalyst that enables this to begin to happen.

What's your bet on the election result?

I say:
39% Labour (48 seats)
6% Greens (7 seats)
5% NZ1st (6 seats)
1% Progressives (1 seat)
43% National (53 seats)
1.2% Act (1 seat)
0.5% Dunne (1 seat)
2% Maori Party (5 seats)
2.3% Others:
Making a 122 seat Parliament.
Make a government out of that!
Someone will.
Labour could if the Greens and NZ 1st come to the party.

Jill Ovens - speech to combined union rally Manukau - 27 August 2008

It's great to see so many workers - members of the SFWU and EPMU as well as other unions. We have shown today that when we stand together, when we fight alongside each other, we will be heard!
We're experiencing today the power of workers united; the power of the union and isn't it great?
In the next few weeks the future of New Zealand will be decided by you and all those others who take the time to cast their vote.
The Election this year will be closely fought - much closer than the polls predict, much closer than the media suggests. This is because they represent the interests of big business and they underestimate the power we hold as workers, as family members and as members of our communities.
The choice is stark.
Do we continue with a worker-friendly Government that works for us?
OR do they take control?
Do we entrust John Key with our future, our kids' welfare, our health care, our education system?
Is that what we want?
(NO)
Can we stop that?
(YES WE CAN)
Under Labour we have Kiwi Bank, KiwiSaver, and Kiwi Rail: all owned by us Kiwis, all run for our benefit.
Under National, instead of Kiwi, we will get the "Key Way" which means ALL these will be sold off. They will all end up in the hands of Key's rich mates; to make them even richer.
Is that what we want?
(NO)
Can we stop that?
(YES WE CAN)
This Government works for us. This Government put in $16 million to pay every cleaner, every kitchen worker, every orderly, from Invercargill to Kaitaia at least $14.62 an hour.
That's why when we asked SFWU members at AGMs held all round the country, "Do you want our Union to actively campaign to return a Labour-led Government?", 84% of them said "Yes!"
The Labour Party was built by the trade unions. It is the only mass workers' party in New Zealand. It is our party and it is up to us to make sure it remains our party ... in Government.
That's because, while this Government has delivered much for workers, there is more work to be done.
We need stronger collective bargaining rights across whole industries; like the old Awards.
We need a minimum wage of $15 an hour.
We need to deal with freeloaders.
And we need the right to strike when a Collective Agreement is in force and the employer uses restructuring or the threat of outsourcing to force cuts in conditions, like Air NZ did.
Will National extend our right to strike? Will they stop freeloaders? Will they get us $15 an hour? Will they strengthen collective bargaining?
NO WAY.
National is the party of big business. They want to cut workers' rights, especially the rights of new workers. That's what their 90 Day Bill was about and they still plan to do it.
We have an important duty to do over the next eight or nine weeks. We need to make sure our workmates and our whanau are on the Roll.
We need to talk to everyone we know about why it's important to defend our rights at work and all the gains of this Government. That way you don't just have your vote; you get to multiply your influence. If 5000 workers here today talk to 5 people each, that's 25,000 and if those people speak to 5 each, that's 150,000 votes - and that's an extra 6 MPs in Parliament working for us.
That will make the difference in the election
It is our job to mobilise everyone who wants to keep what we have won in the last nine years, everyone who wants to go forward.
We have to turn out on Election Day in numbers never seen before; in Mangere, in Manukau East, in Manurewa, Maungakiekie, Papakura and Botany; to be there in our hundreds of thousands, to vote for "Fairness at Work", to vote for "Workers' Rights", to vote for OUR Government.
Then this country will see the power of the workers; the power of the people.
Who's got the power?
[We've got the power.]
What kind of power?
[Union power!]
It's in our hands.
When you cast your vote on Election Day, vote for workers' rights!

Which side are the Greens on?

After the Green Party conference last weekend, workers are entitled to ask: Which side are the Greens on?
The Green conference decided not to decide until later which of the two main parties, Labour and National, they would support in a coalition government after this year’s general election. In other words, they have not ruled-out that they may support National instead of Labour.
Union members, and workers in general, would not agree that this is an issue you can be neutral or undecided about. They want to know which side the Greens are on: the side of the workers and their party, Labour; or the side of the bosses and their party, National.

Labour “disgusting”, says Norman
Russell Norman, the Green Party co-leader, lumped both Labour and National into the same basket and said they were both “disgusting” and working together in a Grand Coalition, at least on the issue of climate change.
Norman told the Green conference that Labour had backed-down on measures to stop global warming “merely to save their skin come election time.” He was referring to the Government’s decision to delay introducing the Emission Trading Scheme (ETS) for transport and not increase petrol tax at this point in time.
When she announced this, Helen Clark made it clear that the delay in including petrol in the ETS was due to the financial pressures on households and businesses and that rising oil prices were reducing petrol use without the need for further petrol-tax increases.
She said the Government had always said it would do something to assist "vulnerable consumers" when they were hit with higher energy bills due to the ETS.
Russell Norman said that he was “particularly disgusted at Labour, the party that was courageous last century in creating the welfare state, in opposing playing sport with whites-only teams and in standing up to the United States to make New Zealand nuclear free. … Now, with the biggest moral issue of our time, Labour has lost its guts. Principle has surrendered to politics.”
Workers might say that rather than losing “its guts”, Labour has done the right thing by them in not increasing petrol prices any further than they already are. I know of people who are being forced to walk many kilometres to work because they cannot afford petrol for their cars. Their bosses, of course, can still afford to drive.

Oil company profits
A recent article on the internet by Greg Palast, the author of a book on war and oil, showed how the big oil companies have deliberately restricted the flow of oil from Iraq since 1928 in order to keep the world price of oil as high as possible. The American war on Iraq is just another rung in the ladder of this on-going policy.
Oil companies have reaped huge windfall profits from the recent price-hikes. Chevron, America’s second biggest oil company, announced a $US18.7 billion profit for 2007 while Exxon Mobil scored the biggest corporate profit in US history, $US40.6 billion.
In New Zealand, the Automobile Association says the profits made by oil companies BP and Shell are “almost obscene”. BP posted a 48 percent increase in the first quarter of 2008, with a profit of $8.5 billion, while Shell's profit jumped 12 percent to $10.1 billion dollars.
AA spokesman Mike Noon said it does not sit well with motorists to see profits that are bigger than telephone numbers, particularly when motorists in New Zealand are hurting so much.
Are the Greens “disgusted” at this sort of profit-gouging by oil companies? They should be!

Need to see policies before deciding?
Norman said the Greens had decided to assess other parties polices and programmes before determining which parties they will work with after the election to form a government. The Greens say they have not seen all the parties’ policies, so they cannot decide yet.
But this is a cop out!
Labour bought back the railways. Do the Greens support that? Of course they do. Would National have done it? No they would not have: they support private ownership of key economic assets.
Under Labour’s leadership, the government brought in a 4th week of annual leave, time-and-a-half pay and a day-in-lieu for working public holidays, cheaper doctors visits and prescription charges, 14-weeks paid parental leave, zero-interest on student loans, 20-hours free child care for 3 and 4 year-olds, extra sick leave, Kiwi Bank, and Kiwi Saver.
They have also legislated for compulsory meal breaks, protected vulnerable workers when there is a change of employer, and before the recent budget tax-cuts had already given tax-cuts for families with children through the “Working for families” package.
And without Labour in government, would SFWU hospital workers have won their big pay increase? No they would not.
Under Labour, the minimum wage has increased every year and is now $12 an hour. This is a 70% increase in eight years.
Crucial for those of us in the trade union movement, Labour repealed the Employment Contracts Act and gave unions the right to organise and bargain collectively.
Would National have done any of these things? The answer is; “No”.
Are these gains safe under a future National government? The answer is again: “No”.
The Greens have supported most, if not all of the good things Labour-led governments have done for workers over the last nine years. Why would they not continue to support Labour? Why don’t they say they will?

Stand together to defeat National
It is clear that for workers (the poor, and the low-paid especially) there is a big difference between Labour and National.
The Greens say they stand for social justice; if that is true then they cannot support National.
On the environment, it is Labour, not National, that has taken up the global warming issue and done something about reducing carbon emissions; in the face of vehement opposition from National.
The Greens should stop posturing and give Labour the support it deserves and needs. The Greens should take a strong stand against National and its big-business, anti-worker, anti-environment agenda.
We have to stand together to defeat National.

SEIU - Centralism trumps Democracy by Herman Benson

From Benson's Union Democracy Blog

On "democratic" centralism: Stern's illusion and democracy's nightmare
By Herman Benson
Andy Stern, president of the Service Employees International Union and labor's latest celebrity, seems to be resurrecting a neglected ideology: the concept of a militarized "democratic" centralism. For him and his followers, the hope of imposing it upon a newly invigorated labor movement may be a utopian illusion. For union democracy, it is a nightmare. Hints, but only hints, of his underlying philosophy were implicit in his schemes for reorganizing his own SEIU and the whole labor movement. But its trend has become manifest as he is apparently moving to crush critics on the west coast, impose a repressive trusteeship over the 140,000-member United Healthcare Workers-West, and cut down Sal Rosselli, its president.

In February this year, Rosselli resigned from the SEIU International Executive Committee so that he could feel free to criticize what he charged was the "undemocratic practices we have experienced first hand." The SEIU convention was coming up at the end of May. "In good conscience," he wrote, "I can longer allow simple majorities of the Executive Committee to outweigh my responsibility to our members to act out of principle on these critically important matters. I say this with no ill will, but with a deep sense of conviction." [Rosselli to Stern 2/9/08]

They differ over bargaining strategy, over the role of the international and locals, over the right of the membership to veto the merger and dissolution of local unions, over whether to go easy on employers to get a foot in the door for unionism. The issues in dispute are not trivial, and the charges and countercharges are correspondingly harsh. Rosselli accuses the Stern people of "company unionism" and "top-down organizing" to beef up membership statistics by any means whatsoever. They denounce him for sabotaging the SEIU drive to organize, for falsifying the record, for hypocritically benefiting from policies he now derogates.

This is no idle talk at a cocktail party; it is a serious difference over policy. He attacks vigorously; they reply in kind. So far, routine. That's what democracy is for, to allow an outlet even for the bitterest of debates. But the problem is that Rosselli's critics go beyond denouncing him for criticizing. They would make his very right to criticize illicit. And, because they are armed with organizational power, they would resolve the dispute not simply by democratic decision but by suppression. The irony is that they wrap autocratic intentions in the flag of a democratic "majority". Rosselli, they insist, must go along with the "majority." But a majority in power can always take care of itself. The essence of democracy is to preserve an orderly means of opposing a majority.

In replying to its self-posed question, "What is real union democracy?" The SEIU's anti-Rosselli web site, "Fact Checker," pandering to the bias against any genuine spirit of democracy asks, "Is democracy abiding by majority rule just when you like the outcome but ignoring it when you don't?" But democracy, as we practice it in America, cherishes precisely the right of a minority to oppose the majority. "Fact Checker" continues in line with what has become official SEIU ideology, "Is it democracy when 11 out of 12 workers in an industry are not even at the table?" What they mean by this muddle is what they have suggested before more clearly: members must abstain from exercising their union democracy until most workers, now nonunion, are organized. By that standard, union democracy must wait patiently for a long time, perhaps forever.

They use the boilerplate language available to any overbearing union official annoyed anytime by any critical dissident. Mary Kay Henry, international executive SEIU vice president, writes in the course of a long attack on Rosselli [Calitics.com website 3/25/08], "he is giving employers ammunition to use against workers..."

Three members of the SEIU international executive committee found Rosselli's decision to speak out impermissible. "Just as we expect members of our local unions to unite behind a common strategy after there has been a full debate," they wrote, "and a majority has reached a democratic decision, we as leaders must do the same." There it is. Once a "democratic decision" is reached everyone, members and leaders, must swallow their opinions, keep quiet, and toe the line. We discuss, we decide, we unite, you shut up, we remain a fighting force. If you open your mouth against the line we discipline you. (How some might love to apply this principle to the Iraq War! The irony in this case is that, as they wrote, the SEIU was on the eve of an international convention to open in three months. If now is not the time for that democratic discussion, when?) [Regan et al to Rosselli 2/11/08]

That same tone now permeates life in the SEIU. In 2006, as the SEIU was about to run a membership referendum on creating those huge California megalocals, Stern turned the union into one advocacy monolith to guarantee a favorable outcome. He ordered, "All local unions, union officers, and assigned staff must fully cooperate in the implementation and transition process to assure that this decision is carried out in an orderly fashion... No union funds, resources or staff may be used to oppose, interfere or undermine in any way the IEB determination in this matter." (The referendum carried, but according to one report, only 16% of the membership voted.)

In the same spirit, applicants for appointment to the executive board of the new 45,000-member Local 521 had to sign an oath of loyalty to the union administration, including these assurances: "I will not ... engage in personal attacks on other members, staff, or leaders at unions meetings, in the press, or other literature, or venues". Once a decision has been made, I will support that decision to members and others... I will not ... take ... legal action against the union for actions they take in their legal role as leaders as long as I remain a member of this appointed board or committee." Come weal, come woe; high or low, no one can remain in any official union position and ever ever act against any misdeeds by other officials.

Here then is how the labor movement would operate if the system being implanted by Stern could take root and flourish: A policy is adopted, say at the international convention, the union's highest constitutional authority --- for the sake of argument we make the generous assumption that it has been a "democratic" decision. Then for the next five years until the next convention (four years for the SEIU) every union institution and representative, must fall in line. No criticism permitted: every hired staff employee, every elected officer in every local and in the international, every steward appointed or elected, every editor and PR spokesperson, every executive board member of every local must propagate the vaunted "democratic" decision. None can oppose it or publicly express misgivings on pain of swift dismissal. Stern envisions a monolithic disciplined army of thousands, all spouting the politically correct official line. After five years, during which everyone sang the same notes in harmony, comes the next convention; and at last, presumably, democracy's brief moment has arrived.

Proceedings at the convention, as always, are carefully manipulated by the administration. Under the Stern regimen, those in power will already have been safely protected against criticism for the previous five years. If, at the convention, venturesome critics are unusually resilient, if they are not demoralized by five years of deadly uniformity, if they are lucky enough to get the floor and keep it before the question is called, they might get five minutes in the sun, maybe even seven or ten. Then it is all over. The delegates, people who knew how to stay on top during those five silent years, adopt the new official policy. The period for "democratic" debate is over. Time to unite and fight and bite your tongue. Five new silent years loom.

But is this bureaucrat's dream likely to come alive? Perhaps in part, but never in full panoply. By now, websites and the Internet afford too many ways for members and officers alike to evade the proscriptions on democracy. Federal law offers some protection for civil liberties for members in their unions. Stern will never have full scope for the fulfillment of his dream; nevertheless, as we see in California, federal law and the union constitution still provide ample means for chilling dissent.

More resources on Change to Win and SEIU:
See Benson's Union Democracy Blog for several articles
Healthcare leader raps Stern; quits SEIU board
SEIU rearranges 600,000 into mega locals
Debate on Union Democracy and Change to Win
If you can't woo 'em, sue 'em! An ingenious twist in punishing dissent in the SEIU
SEIU's Unite to Win blog reviewed.
Local 509 asks questions about democracy in the SEIU
New Unity Partnership:Sweeney Critics would bureaucratize to organize.
Service Employees: Mass. merger in Local 888.
Benson's Union Democracy blog.
Student Labor Activists support union democracy.
Articles on the Labor Notes site on NUP from various sources.
See UDR articles on the Carpenters (UBCJA) for case studies in merger and bureaucratization.
Several articles on the New Unity Partnership are available on the BC Carpenters website.
Find articles on the consolidation of power in the Carpenters union on the main UDR page.
An exchange on union democracy between Herman Benson and Steve Fraser, on the Laborers.org website (click on Fraser's name for a link to his article)
Links to rank-and-file websites in the NUP unions: Carpenters, Hotel and Restaurant Employees, Laborers, Needle Trades (UNITE), Service Employees (building services, public employees).