Upton-on-line
May 26th

Don’t be Dumb: Keep Mum

Readers whose memories stretch back to wartime will remember warnings to be alert for the enemy within. “Loose lips sink ships” was the exhortation to those in danger of blabbing at the nation’s expense.

Government members are starting to reflect on the old adages with some alarm as government ministers have started to enjoy their own verbal brilliance in public. The thought starting to dawn in more cautious quarters is – “loose reflections lose elections”.

This is no case of feet in the mouths of ordinary mortals. Rather, it’s a case of cleverness in over-drive by ministers with the highest octane IQs. They just can’t help themselves.

The key offender is Michael Cullen who is finding it impossible to live with the reality that financial markets find ministerial silence more reassuring than loquaciously knowledgeable analysis. It was this Sphinx-like approach that made Bill Birch iconic and which Cullen finds so aggravating. How could markets be so perverse in not wanting to hear his laser-sharp diagnosis.

His discourse on the dollar, for instance, has had him urging people “not to over-react” to its fall, expecting its “weakness to continue” and soliloquising on his “sentiment .. that the current account deficit will hang over the currency, keeping downward pressure on the dollar”.

With a gratuitous and garrulous commentary like this, where else could the kiwi go?

That on its own would be enough to demolish his reputation in the market place. But the clever patter runs on in other areas. In the same week that the Minister sounded vaguely wounded about business sentiment he couldn’t restrain himself - two days in a row - from gleefully making fun of those hit by his tax hike.

When Rod Donald asked what he was intending to do to stop exporters spending their higher returns from a lower dollar on imports he noted that they would make their own decisions. Sir William would have been proud of him. But he couldn’t resist adding that “if they have increased their income to above $60,000 a year we will be grateful for their contributions as will be the New Zealand Symphony Orchestra, the ballet, Te Papa, and various others”.

The very next day, in response to Rodney Hide’s query about whether he had considered not raising the top marginal rate given the larger than predicted budget surplus, he replied: “no, but I am sure the member will enjoy the New Zealand Symphony Orchestra concerts now that he is paying his extra tax.”

Such a pity he and Helen Clark hadn’t thought to explain to low income voters prior to the election that soaking the rich had nothing to do with fairness but was just a way of making sure we kept the temples of High Culture in good trim!

Notes from the Employment Law Seminar (continued)

This week the class was asked to study clause 245 of the Bill. Readers of last week’s edition will not be surprised to learn that those of us on space ship earth again had difficulty making contact with the Minister’s universe.

Max Bradford enquired whether a competing scholar in employment law, Robyn Leeming, had amongst other things correctly predicted heavier liabilities for directors.

The ionosphere quietened long enough for members to hear the Minister denounce Ms Leeming as a former National Party candidate (some 20 years ago –Ed) and offer this stunning explanation of the section:

“This clause is aimed at those employers and directors who knowingly breach statutory requirements, such as sweatshop owners who knowingly fail to pay wages in accordance with the Minimum Wage Act and refuse to pay statutory entitlements to holidays, and others who deliberately put their businesses into liquidation as a way of avoiding their obligations to their employees. Only under these circumstances will directors be liable to pay amounts lawfully owing, and even then they will be required to pay only what is owing under the relevant legislation. Good employers and directors obviously have nothing to fear.”

For which read employers and directors resident in the Minister’s universe (sorry, no news of a wormhole yet – Ed). Now have a look at what clause 245 actually says:

245 Liability of directors, etc, of body corporate
Where a body corporate that is an employer fails to pay to any employee of that body corporate any wages or holiday pay or other money payable by the body corporate to the employee under the Minimum Wage Act 1983 or the Holidays Act 1981, any of its officers, directors, or agents who directed, authorised, assented to, or acquiesced in the failure to pay are, with the body corporate, jointly and severally liable to pay to the employee the wages, holiday pay, or other money that the body corporate has failed to pay.

Try as he may, Upton-on-line just can’t find any reference to people “knowingly” doing these dastardly things in the clause. It talks of officers, directors, or agents who direct, authorise, assent to or acquiesce in the failure to pay. The reason why no payment is made or the sweatiness of the workplace doesn’t seem to be relevant. If there is no payment made, liability follows.

So you would think it not unreasonable for submitters to note that one reason these wages mightn’t get paid is that there isn’t any money left because the business, despite best endeavours, has gone under – a not unheard-of occurrence in our universe.

Similarly, you would think it not unreasonable to question whether the Government really intended to cut dramatically across the principle of limited liability in a way that goes far beyond the Companies Act protections against directors who trade recklessly and incur liabilities when there is no reasonable basis for believing that those liabilities will be able to be met.

Not unreasonable? Well apparently it is, because the Minister next pronounced herself to be of the view that “the clause in particular is well drafted, for those who can read”.

This will be music to the ears of the Law Society, the Institute of Directors and many others who apparently suffer a literacy problem in reading the Minister’s bill.

Upton-on-line thinks the explanation is a good deal simpler. In our universe businesses go out of business because people pick the market wrong – their ship doesn’t come home. It’s all part of a phenomenon called capitalism and many books have been written about why it is that risk taking is a good way of sifting the alternative ideas, inventions and services people dream up. It’s also a good idea to limit the individual liability of owners and those who have stewardship of the venture. Daringly, in our universe, it is possible for things to fail.

In the Minister’s universe, by contrast, businesses only fail because directors and company officers are bad people. Good people always succeed. That’s why they’re safe in the Minister’s universe.

Footnote: As one learned correspondent has reflected to upton-on-line, the likely logical consequence of the Minister’s clause is that employees will be dismissed sooner than later given the onerous new liabilities that are created. Furthermore, this will raise the potential for redundancy costs so fewer people will be employed in the first place. Upton-on-line’s correspondent confesses to 'mild hysteria' in contemplating the consequences. Do others share this reaction?

Important new observations about the half life of grazing herbivores were revealed in the Valley this week following a spectacular mauling of Corrections Minister, Matt Robson.

The Minister revealed himself not only to be lacking the normal 'fight or flee' reflexes but also showing signs of one of those syndromes that disables the normal ability to read everyday things like body language and emotion.

It all started with his innocent suggestion that prisoners might be granted 'conjugal' visits and their children allowed to live with them, particularly if they were of tender years.

For some unaccountable reason the Valley erupted. Even normally docile beasts like Tony Steel smelt an early feed in the air. “How is his policy to allow conjugal visits to prisoners consistent with the 91.8% “Yes” vote in the referendum resulting from Mr Norm Withers’ petition?” he asked.

Like some amiable, slow-moving hippopotamus, Mr Robson replied that it wasn’t a policy but part of “a practice of looking at international research and literature” to see what might reduce the rate of re-offending. Apparently, a spot of hanky panky in the cells can do wonders for recidivism.

Pandemonium broke out as every predator in the pack went wild. Ron Mark wanted to know whether the Minister included same-sex partners in his 'sex in prison' philosophy and whether we could expect to end up with “two men and their adopted children sharing the confines of a private room, in prison, having sex?”

Richard Prebble, noting the Minister’s comment that some prisoners might simply have a cuddle and a glass of milk in mind, wanted to know whether “cuddles, milk, and sex are to be part of New Zealand’s prison policy” and if so, “what happened to punishment for crime?”

A number of members helpfully suggested that the punishment probably had something to do with the milk not being warmed.

Not even the Minister’s friends could awaken the stubborn sleeping neurons that refused to recognise the incoming attack. Grant Gillon rather desperately asked whether the issue of conjugal visits to prisoners was Alliance or Government policy? Cringing Labour members couldn’t work out which alternative would be worse.

But it didn’t matter – the Minister calmly explained again that it was all part of his on-going research. In fact he couldn’t be shaken and he was going to stand on a pile of text books and doctoral theses while he was eaten alive. There were overtones of early Christendom with martyrs being fed to hungry lions. This is how the socialist pantheon acquires its new busts. It will already have been ordered.

The pack couldn’t resist carrying the attack to the Minister of Justice, Phil Goff, as well. Goff’s ability to interpret incoming data on voter perception is wholly unimpaired. Indeed, he has spent the last six years cultivating a 'get tough with crims' persona. Never in his wildest dreams did he think he would find himself being asked by Tony Ryall whether he supported “sex in prisons or toddlers behind bars”.

Only Nandor Tanczos rushed to the side of the gory corpse. Fortunately for him, the carnivores weren’t particularly aroused by talk of `genuinely victim-centred restorative justice’ and `dysfunctional adversarial systems’. The banquet was quite tasty enough without him. But he too can become irresistible if he can talk about it all in terms of some good old-fashioned pheromones.

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