OnPoint by Keith Ng


AIA and Maori Seats

Overseas investment rules: decent intentions, terrible goddamn timing.

Everyone seems to be ignoring the fact that Auckland Airport really *is* strategically vital infrastructure. It's the only airport going into Auckland, the only real international link in the North Island (Wellington hardly counts), and New Zealand's primary gateway internationally.

Not only is it vital, it's has near monopoly status, too. What's the alternative? Drive down to Hamilton then fly down to Christchurch? Unlike the banking system, or even telecommunications, where some degree of competition exist, the tyranny of geography and demography means that AIA is the sole link of two-thirds of the country to the rest of the world.

And international travel is vital to international trade, international trade is vital to our economy, ergo, AIA is vital to our economy.

It's a bit old school, in our “strategically benign environment”, to be thinking that ownership of vital infrastructure should remain in the country, but it's strong argument for domestic ownership of the country's biggest airport (as opposed to, say, beaches or lifestyle blocks), and this should trump any private-sector efficiency gains argument.

But there's no denying the fact that the Bitchslapping Hand of Government (that may or may not be the technical term) will make foreign investment feel more uncertain, and therefore, pay less. That part is pretty straightforward, but the argument about its importance is somewhat bizarre. From the Herald's editorial:

This country's alarming current account deficit means foreign investment is imperative.”

Does it? I'd kinda thought that reducing the current account deficit meant that *reducing* the country's reliance on foreign investment was imperative, especially given that the investment income deficit for the last recorded quarter (Sep 2007) was $3,255m – that's nearly 90% of the $3,628m current account deficit.

The editorial doesn't really explain that point, but Bernard Hickey – bless his cold capitalist heart – is more direct:

This is a plainly dumb thing to do when we need foreign investors to keep funding our way of life and building up our infrastructure. We spend more than we earn. We need to borrow from foreigners to do that or we need to encourage foreign investment.”



The Marae poll, if correct, could mean an ugly, ugly scenario this year. Obviously, if the Maori Party wins all 7 Maori seats, they could well hold the balance of power. But if they only have – as they do now – 2-3% of the party votes, then they could well be holding the balance of power with overhang seats.

Imagine this scenario:

Anderton, Dunne and Hide gets <2% party vote between them. Maori Party gets all 7 Maori seats, with 3% of the party vote. We get a Parliament of 125 MPs. National + Hide + Dunne have 62 seats. Labour + Greens + Anderton have 56 seats.

In this scenario, the Maori Party could reverse a 6-seat gap with 3% of party votes.

That would be a fundamental slap in the face of proportional representation, and the scale of it would be made possible because of the Maori seats. 10-20% of voters who did not vote for Labour or the Maori Party would have, by going on the Maori roll, have given the Maori Party an extra seat.

The arguments against the Maori seats haven't changed since I last wrote about it in 2005 (with a follow-up here). It is still, in my mind, a distortionary FPP hangover which has no place in an MMP system, and it amounts to DIY gerrymandering. That's bad, but now, it looks like it could be one of the key deciding factors of our election.


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