We fought the law, and we won (with the help of some other laws and good lawyers)

Twelve years ago I was arrested on New Zealand Parliament Grounds during a protest, along with 74 others. It was my first year of uni. A bunch of us later sued the government for arbitrary arrest and false imprisonment. This year Beggs v Attorney General finally reached a conclusion with a settlement offer. (It’s in my name by accident of alphabetical order.) I banked the cheque today. A formal apology is apparently on the way. Cheers to Tony Ellis who saw it all through, after defending us for free, for this and for generally inspiring fear and loathing in the hearts of cops and Crown prosecutors over the years. Also to Tony Shaw and everyone else who worked on the case.

It was in the news back in July. This post at Public Address gives the history of the case, and its headline is a hilarious pun.

Advertisements
Published in: on 10 November, 2009 at 7:51 pm  Comments (4)  

Independent monetary policy

What is interesting about the banks raising their mortgage rates independently of the Reserve Bank moving the cash rate? It’s a symptom of a shift that could ultimately be more important than the immediate cause, the global credit crunch.

It’s the first time such a rise has happened in ten years. But movements the other way have been more common, narrowing the gap between the cash rate baseline and the banks’ lending rates. The reason was the entry of all the new mortgage broking firms. These firms started the securitisation trend we now hear so much about. They lent to home-buyers, but offloaded the loans as soon as possible onto third parties. They did this by issuing securities (i.e. bonds) tied to the payments from the mortgages. This meant that their own money was tied up for only the short period between signing the mortgage and selling the mortgage-backed security. So smaller companies could muscle in on the banks’ business. Of course the banks got in on the action and issued their own asset-backed securities. This competition lowered the margin between the cash rate and the rate mortgage borrowers pay.

Another effect was to change the nature of mortgages. Previously, a mortgage tied up a single organisation’s funds for decades. The availability of mortgages was thus limited by the amount of funds that could be tied up like that. But with a market for mortgage-backed securities, no individual organisation’s funds were committed for so long. If they needed cash, they could sell the securities. Now mortgages could be funded out of a broader pool of funds – they could sit alongside bonds and shares in portfolios of instruments that can be sold at will. They were more liquid than old-school mortgages, in other words. I imagine this development was partly responsible for the housing binge and bubble of the 2000s.

But there’s another thing. These markets were quite international. Mortgages in Sydney, Auckand, Perth, etc, could be funded by securities sold on markets in New York, London, Tokyo – at the interest rates prevailing on those markets, exchange rate risks hedged off with derivatives. The fact that interest rates were lower there than in this part of world for the whole decade so far made it profitable for firms to do this. But of course the Reserve Banks of Australia and New Zealand had no influence on those interest rates. In fact a couple of years ago in New Zealand the central bank was extremely frustrated that its hikes of the base rate did not flow through into mortgage rates. It wanted to cool the housing market, but the gears of the monetary policy machine were slipping.

Now things have gone into reverse in the credit markets. Pressure is going the other way. But the point is the same – that bank interest rates are less closely tied to the national central bank. Although central banks have been forced to bail out the markets, they are less in control than they seemed to be – in fact the forced pumping of liquidity into the market is itself a loss of control.

Australia did not have the same issue as New Zealand in the housing boom, probably because it is that much larger. But New Zealand could be a sign of things to come. The point is not obvious now, because it just so happens that the private banks’ de facto policy tightening is moving in the same direction the central bank wants to go. The private tightening may in fact take the place of a public tightening. But there is no particular reason why the effect will always go the way the central bank wants.

Most of the story above about securitisation is in the past tense, because the crunch has stopped it almost dead for now. But chances are, once this all blows over – even if that’s on the other side of a major recession – securitisation will be back to stay, and continue to grow. Plenty of once-novel instruments – like commercial paper – have been implicated in financial crises and then come back as part of the wallpaper. Central banks being forced to intervene to stop a meltdown in fact reassures the markets in the long run that such instruments, and the institutions that issue or hold them, will not be allowed to fail. New markets make themselves indispensable.

Who benefits from the doubt?

Sydneysiders: there will be a rally this Thursday, 25 October, 5.30pm at the New Zealand consulate, 55 Hunter St, against the continued detention of those arrested in terrorism raids last week. 

The first ray of light today: Rongomai Bailey is out on bail.

Everyone else could be in for quite a while before anything comes to trial. This is why I find it so hard to just wait until the evidence plays out in court.

If you read nothing else about the case right now, read this excellent piece by Wellington journalist Alistair Thompson. It’s long, but straightforward. It summarises the facts as are allowed to be revealed to the public.

Best of all it expresses so well something that makes this case so surreal, quoting Matt McCarten: “The only problem is that New Zealand is such a small country, everybody knows everybody else.”

The evidence is entirely suppressed, so few facts can be reported in the media except the existing charges (“collective possession of an illegal weapon”) and that the police are considering applying to the government to lay terrorism charges.

Then there are the rumours, anonymous interviews, unnamed sources.

Then there are the people connected to the case at one remove – to police or to the accused – each assuring the public that if they could see the evidence which was being suppressed, they would have no doubt as to guilt or innocence.

Then you have long-time lefties saying they trust the police on this, and old-school police hardmen saying the cops have fucked up big time.

It is understandable that a lot of people’s judgement is to wait and see. Even people who are not naive about the police and are very sceptical about ‘terrorism’.

But on the other hand, there are not many degrees of separation in New Zealand. So it’s not surprising either that this incident has immediately launched a movement. For activists it is personal, knowing the accused and knowing that talk of terrorism is bullshit. It is scary that the police still hold a sword of Damocles over so many heads, brandishing phone-tap transcripts, searching homes and offices and threatening more arrests. There is no sense that those who did nothing wrong have nothing to fear. There is a sense of arbitrariness, that anyone could be next. In Tuhoe country a whole community is under threat (again), and has generated the strongest show of resistance.

So the question that Thompson answers so well is, who benefits from the doubt?

An alternative to simply breathing through the nose and waiting would be to survey the evidence that is in the public domain already, talk to family members and lawyers of the accused (and those caught up in the police raids) and then attempt to come to a position on the wisdom of allowing this case to continue.

There is a brief window of opportunity in the next few weeks – before charges under the TSA are decided upon – during which political influence over the course of this case will be possible.

After charges are laid under the Terrorist Suppression Act the course of events will likely be dictated by the courts alone, and as everybody has learned through the case of Ahmed Zaoui, that can be a very frustrating process…

If evidence remains suppressed – as it most probably will – then in the absence of an organised effort to put the other side of the story – to tell people who the accused really are – public ignorance about the real nature of the evidence and the accused is likely to compound…

There is a window of opportunity in the next two or three weeks which needs to be taken advantage of.

Before the Attorney General decides whether to grant leave for charges under the Terrorist Suppression Act the public need to be assisted to understand as best they can what actually happened in the Ureweras over the past year.

At this point it is hard to imagine how the truth could be any more damaging that what has to date made it into the newspapers.

If you are sitting on the fence, go read Thompson’s piece.

Update 24/10

There will be a solidarity demo in Mebourne also this Saturday, 27/10, at noon in Federation Square. I’m assuming any Kiwis reading this are already well aware of the actions over there.

I should also admit I was wrong to say you can get away with reading nothing else about this affair than the Thompson piece. Check out the reportage and history from our friend and correspondent Reading the Maps, who spent last week in Tuhoe Country and around the East Coast.

Published in: on 23 October, 2007 at 9:44 pm  Leave a Comment  

Free NZ!

So there’s going to be a Sydney solidarity demo with those activists arrested under NZ anti-terror laws tomorrow morning, Wednesday, 8.45am, New Zealand Consulate-General, 55 Hunter Street.

The lawyer for the Tuhoe activists, Annette Sykes, did well in interviews last night and on morning TV this morning – check these out if you want to get a better sense for what is going on. The second interview also includes John Minto, veteran of the Springbok protests of the 1980s, who talks about the situation of the city activists. Warning: second presenter may induce teeth-grinding.

Published in: on 16 October, 2007 at 3:13 pm  Comments (2)  

WTF?

Today a bunch of people around New Zealand, some of whom I know, were arrested under the Terrorism Suppression Act. This is insane. Things seemed to be centred around an armed raid on a Maori community south of Whakatane. Also raids on anarchist and environmentalist groups’ offices and activists’ houses in Auckland, Wellington, Christchurch, Hamilton and Palmerston North. Lots of them are being denied bail.

It’s hard to work out what is happening, but it is pretty bloody shocking. The NZ Herald has some facts but not much else. Also see Aotearoa Indymedia and Reading the Maps.

Looks like there is a demo in Melbourne outside the New Zealand Consulate-General’s office, 11am, Suite 2, North, Level 3, 350 Collins Street. Haven’t heard about anything happening in Sydney.

Update:

This footage of a Wellington raid is pretty chilling. I’ve been in that house plenty of times!

And Scoop looks like a good place for updates.

Update: 16 October

Alright. The more I hear the angrier I get. There’s the urge to tell people whose only source is the newspapers and TV. But at the same time gossip helps no-one. And everything I have heard is basically gossip. So I won’t comment on this anymore for the moment. I’m sure anyone reading this blog knows to suspend judgement on this kind of thing. Just wait until it all comes out. Until then, I would direct people’s attention to this: Please remember security culture

Published in: on 15 October, 2007 at 3:56 pm  Comments (6)  

They don’t know how lucky they are

There’s something deeply Australian about being born in New Zealand. It’s as Australian as the Anzacs, pavlova, Crowded House, John Clarke, Russell Crowe, etc. The number of New Zealand citizens living in Australia equals more than a tenth of the home country’s population. Every now and then we get guilt-tripped and/or budget-incentivised to go back.

New Zealand culture suffers from an especially virulent strain of ‘banal nationalism’. The ‘overseas experience’ is as Kiwi as pavlova, the Anzacs, Crowded House and Fred Dagg (I’ll leave Russell out of this one). Permanent emigration, on the other hand, is terribly un-Kiwi. It used to be, though, that leaving New Zealand – especially for Australia – said more about the emigrant than the country, kind of like if a visiting international celebrity was asked, “What do you think of New Zealand?” and they responded by criticising the weather. Robert Muldoon said he wasn’t too worried about the drift across the Tasman because it raised the average IQ of both countries.

Nowadays, though,  the emigration rate is treated in the media and in politics as an affront to the nation, and not the kind of affront to which you respond caustically, but the kind that you know, deep down, you deserve. The emigration rate is now Something Which Must Make New Zealanders as a Whole Search Their Souls and Find a Way to Restructure the Tax System to Favour Entrepreneurs, Marketing Professionals, and Lawyers. “It’s not you, emigrants, we realise that, it’s us.”

Former Labour prime minister Mike Moore (he lasted a record-breaking eight weeks) has a piece in the Australian Financial Review today revisiting this time-worn trope. His financial adviser suggested he live abroad for six months of the year so as to avoid liability for New Zealand tax. This unpatriotic suggestion provoked a round of the aforementioned soul-searching.

The main reason so many New Zealanders move to Australia is obvious. Moore would like to put it down to tax rates, but in fact it’s income. Wages are higher at every income level, significantly higher. Partly that reflects the vestiges of the arbitration system and more powerful unions, but it also depends on the fact that per-capita GDP is a third higher.

Aha! The Moores will say. That proves the point. Microeconomic reform! Tax reform! Decisive political leadership! Catch up with Australia!

But that is a far too optimistic view of the difference policy can make economically. New Zealand has already out-micro-reformed Australia. The Employment Contracts Act was a fifteen-year head start over WorkChoices. Inflation has been fought more tenaciously than anywhere in the world. Fat lot of good it has done. The sad reality is that Australia has things New Zealand will never have – massive mineral resources, critical mass as a global financial centre, and even some residual manufacturing industries. Tax reform ain’t going to do anything about that. It’s called uneven geographical development and it comes with capitalism.

At any rate, though, I think most Kiwis still take the Muldoon line about average IQs. Everyone knows that regardless of the comparative economics, a lot of New Zealanders will always leave to see the world simply because New Zealand is so small. No offence intended, and none taken. Many of them will drift back eventually, anyway. When a few years ago “patriotic 27-year-old marketer Richard Poole” launched an ad campaign with signatures from 700 young urban professional expatriates, informing the home country that they wouldn’t be likely to return without some serious tax breaks to encourage entrepreneurialism, the healthy reaction was a resounding: “You absolute cocks. We didn’t realise you had left.”

Published in: on 24 May, 2007 at 11:40 am  Leave a Comment  

The home country

Back in the home country (New Zealand), with a fair amount of regularity a media firestorm erupts over some tragic incident, normally involving a child’s death, and it is gradually transformed into Something that Must Make Maori as a Whole, and Especially Their Political Representatives, Look Deeply into Their Souls and Change. This time it’s a Wanganui drive-by shooting that killed a two-year-old. Greenie Eugenie has a fascinating post from the eye of the storm.

Published in: on 10 May, 2007 at 11:44 am  Comments (1)