Andrew Dickens Afternoons

Dodgy building products are back in the headlines.
One News has exposed a building supplies company that has been selling faulty material that has seen two homes have to be demolished.
Andrew Dickens received an email from a listener who had discovered that they have the infamous DuxQuest piping in their house
e pipes were used in buildings in the seventies and eighties as people moved away from copper pipes. However, the pipes are known to split in the walls and cause leaks.
Caller Tyson, who has worked in the construction industry, says that the industry has not learned since incidents like this.
“You can walk in with the amazing product, and tell them ‘your building’s not going to fall down’, and they do not care. They just want cheap.”
LISTEN TO CALLER TYSON ABOVE

Dodgy building products are back in the headlines.
One News has exposed a building supplies company that has been selling faulty material that has seen two homes have to be demolished.
Andrew Dickens received an email from a listener who had discovered that they have the infamous DuxQuest piping in their house
e pipes were used in buildings in the seventies and eighties as people moved away from copper pipes. However, the pipes are known to split in the walls and cause leaks.
Caller Tyson, who has worked in the construction industry, says that the industry has not learned since incidents like this.
“You can walk in with the amazing product, and tell them ‘your building’s not going to fall down’, and they do not care. They just want cheap.”
LISTEN TO CALLER TYSON ABOVE

So do you trust your banks?
With Australia staging a Royal Commission into the behaviour of their banks and insurance companies and a raft of dodgy practices being unearthed, attention has turned to the New Zealand market.
With 4 of our major banks Australian owned and a number of our insurance companies having strong links across the Tasman the suggestion exists that the industry here may not be as squeaky clean as we imagine.
It’s a suspicion I share.  I have done talkback on it and interviewed financial experts.  While most think that there is a Chinese wall between the trans Tasman operations, I’m still not convinced.
For instance one CEO of a New Zealand operation has recently been transferred from Australia so why wouldn’t she bring operating practice with her.
Sam Stubbs is the Managing Director of Simplicity a low cost Kiwisaver fund manager. Sam was most recently the CEO Of Tower Investments, a KiwiSaver default provider. Before that he was Managing Director of Hanover Group, and spent 10 years working for Goldman Sachs in London and Hong Kong.
Sam has just come out with a list of 24 questions that he thinks the finance industry has to answer.
He says  the two biggest areas of concern for him were the pressure on bank staff to meet sales targets and whether that meant people were being sold inappropriate products and life insurance commissions which can be as high as 230 per cent of the first year's premium. Australia has taken steps to reduce commission levels but we haven’t.
Even just a cursory glance at his questions raises questions I’ve been asking myself for a while.
Are sales staff of financial institutions incentivised to do the right thing, or to sell more products?
Are sales staff being paid a commission to sell their own products while representing themselves as 'advisers'?
With so few NZ adults insured, how can the industry deliver such high profits and shareholder returns?
Why are the average Kiwisaver fees so high on a global level and do these high fees mean better performance?
I’ve posted Sam’s 24 questions on my Facebook page.  Go and have a read and see how many circumstances you’ve experienced.
It strengthens my opinion that a commission of inquiry would be a good thing.  Our Australian owned finance companies are tainted by association with their parent companies and the Australian inquiry.
I don’t have confidence that the finance industry is operating in the client’s best interests rather than their own.
We’ve had a history of finance company failure so the mindset amongst the industry is already ingrained.
To set all our minds at rest and to re-establish confidence I believe an inquiry is necessary.

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Long time listeners to this programme will know that I’m not a major fan of the governments funding of the tertiary system.
It’s not that I’m not a fan of education it’s more that I’m not convinced it’s an efficient use of money and that it will not necessarily be the best way to get more tertiary students from disadvantaged homes.
The new regime seems overly generous, especially when you realise how many advantaged families will now be getting free tertiary education.  The sons and daughters of Kelburn or Remuera or Fendalton lawyers can continue the family’s advantage at very little cost.
Meanwhile, the disadvantaged of Opotiki or Kaitaia still face barriers in terms of travelling to the big smokes and finding and paying for accommodation.
This year the policy costs nearly $400 million and I wonder whether we’d extend education to more socioeconomic groups if the money had been targeted to the disadvantaged, say in the form of bursaries or scholarships.
But in saying that I raise the spectre of means testing.  A phrase that strikes fear in many New Zealanders.  Mainly because it’s been mentioned in regards to the pension, which it’s fair to say New Zealanders consider an entitlement.  A thank you for a lifetime of effort and taxpaying that is granted to all whether rich or poor, or whether you need it or not.
This is a government that also has an aversion to means testing.
We now learn that people wanting to buy one of the Government's affordably priced homes will not be income-tested.
That means high-income earners will not be blocked from purchasing one of the 100,000 planned houses to be built over 10 years, which will be priced at up to $650,000.
The only limit will be that purchasers are first home-buyers and permanent residents.
This strikes me as self-defeating.  Affordable housing is for those who struggle to afford it rather than those who already can.  I also wonder with the stock having a lifetime through generations just how affordable they will stay in future years especially if a band of affluent with free education and now affordable houses get their hands on them.
I often wondered why Labour, in particular, seem averse to targeting.  I asked a prominent commentator this a while back and he said that it’s Jacinda’s thing.  She is a big believer in universality. It reduces the resentment that the rich can form if they feel they are paying for the poor time and time again. We all benefit even if most of us don’t need it.
Unless we significantly increase the tax take this is something we can least afford.
It feels like wasted money.  It dilutes the benefits for the disadvantaged and deprives other areas of much needed and hard earned capital

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One of the highlights for me this week came on the Mike Hosking Breakfast.
Mike was interviewing a construction lecturer from AUT and the guy said something very profound.  He quoted the desert fox himself, Field Marshall Bernard Montgomery.
He said, “Amateurs talk of strategy. Professionals talk of logistics”
That phrase was ringing in my head through all the coverage of yesterday’s budget. A lot of money was thrown at issues but there’s was very little talk of how the money was to be used.
For instance the funding of free gp visits for under 14s. On the face of it you can’t quibble except you have to ask yourself how we can provide that care.  All this year we’ve had headlines about a shortage of GPs particularly in rural areas.  So the money may be there to get all these kids in front of doctors but what’s the point when we don’t have any doctors for them to see.
It takes 7 years of study to make a GP so it’s not like we’re going to rustle up a whole bunch of them in July.
I guess we’re going to have to import some from overseas.  But hold on a moment the budget sets an immigration target of 30,000 immigrants when we currently have 70,000 arriving each year.
It’s the same with the funding of 1500 extra teachers when the real problem is that we can’t find any right now.  There’s also the issue of finding 900 extra policemen when we’re already importing coppers now.
Then there’s the announcement of 6400 more State Houses by 2022.  Who’s going to build these?
This one dovetails with a report from Treasury which got a little buried this week.  The money counters said the bottlenecks in the construction industry means they had to halve the forecast rate of progress of Kiwbuild. They believe we might achieve 2.5 billion worth of more residential investment in the next 5 years instead of the 5 billion Phil Twyford boasted of.
My worry is that these sectors like health, education and housing will welcome a tidal surge of cash and have nowhere or no way to actually use it.
The concern then is that the money will be used on more clipboard holders. Mid level bureaucrats who take the money but never work on solving the problem the money has been given for.
There’s a fascinating story in the Herald today about a book called Bulls**t Jobs. The author highlights many workers we all know including the box tickers. The ones who sit round thinking, measuring performance and then writing reports that no-one ever reads.
I worry that this Budget has been a good one for the boxtickers of this government and we may see a whole lot more bulls**t jobs.

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In the last year's election, all parties signalled that the police were in line for significantly more numbers. New Zealand First had police numbers as a central plank of its election promises. Meanwhile, Labour stated that its aim was for 1800 more cops on the beat.
But there are now allegations that the number will be significantly reduced. Simon Bridges told Newshub last night that he believes that the number will more like 1100 and that this represents another broken promise.
That it may be, but it may also be that 1800 will be spread over the next 3 years. We’ll see.
But whatever the case is, you have to say it can’t come soon enough. As we realise the impact of our growing population on houses and infrastructure we seem to be blind to the fact that more people demands more police.
I think it’s fair to say that the numbers have been too low for too long and with the rise of methamphetamine and violence it spawns, the police are crying out for reinforcement because they’re getting hammered
In the last three and a half years, there have been more than 6000 recorded assaults on police.
Nearly 1000 of those recorded as involving police resulted in injury, and 244 involved a firearm or other weapon.
Meanwhile, Ministry of Justice figures show the number of people jailed for failing to stop for police jumped from 17 to 79 between 2012 and 2017, and 500 more people were convicted of failing to stop last year than five years earlier.
Police Association President Chris Cahill believes a falling respect for the force is to blame – an issue exaggerated by a long period of falling numbers of police compared to the population. He’s bang on. Our criminals are on jungle juice and they vastly outnumber the police and they’re loving it.
Our lack of investment in the police is another in the long line of lessons we seem incapable of learning. You can’t keep underinvesting on the basics pillars of society in a growing country.
Schools are falling apart. 70 percent of them are over 50 years old and the ones built in the 90s are leaking. Our hospitals are rickety and our defence spending has shrunk to such a low level that we’re a laughing stock on the world stage.
It’s about time we realise that doing the basic things on the cheap is no way to run a country

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Why is it that when it comes to our so-called housing crisis, no politicians seem to get it?
It’s not hard to grasp.  For half a century we have consistently failed to build enough houses for our growing population and so the basic rule of supply and demand comes in.  Desperate purchasers fight amongst themselves for too few houses and then pay above the odds or give up and sulk.
It’s like two hermit crabs fighting to the death for one shell.
Meanwhile, people with a bit of spare cash stick it into investment housing instead of a bank or equity in a business. And because interest rates have been so low for so long it’s a money tree of capital growth.
The factors are simple to see.  Natural population growth.  High immigration.  Low levels of construction.  Poor forward planning.
At the heart of it all is one simple fact.  This country doesn’t have enough houses.
You know this. I know this. So why don’t they know it.
I say this because the latest grand idea to get first home buyers into an affordable house ignores that fact completely.  In fact it will only add to the problem on the demand side.
Phil Twyford is investigating a government-backed shared equity scheme.
The scheme would allow a third party such as the government to co-own a property by taking on a share of the mortgage. That would reduce the owner's deposit and weekly mortgage payments.
It can get quite complex with conditions on prices and who gets the capital gain but basically, you can view it like the government providing a cheap second mortgage.
And that’s where the wheels start coming off. Because if you can’t afford to borrow the whole lot from one lender in the first place why would anyone think you were able to afford a second lender, especially in these days of single-digit interest rates
And as it enables a low earning family to borrow more than they were originally able to it has a few echoes of the subprime mortgage scenario that caused so many problems in the States and sparked the GFC
But the biggest problem is that it extends a whole new line of cheap credit to another sector of the market who will then compete against each other to by the few affordable houses around and that will push those prices up again. Back to the hermit crab analogy.
The big problem is at the end of the day this scheme doesn’t build a single new house.
And that’s what Phil Twyford promised.  To build 100,000 houses.  Recently he’s changed that to facilitate building houses and now he’s suggesting not building a house and becoming a bank.  It’s a slow descent towards the realisation that the government hasn’t got a clue what to do.

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One caller who rang Andrew Dickens afternoon today, says dealing with his mother's dementia has split the family because those who live in Auckland wanted to put her into a home, while the family members who lived with her in Christchurch said no to that. 
He says his mother really loves conversation and talking to people, and he fears if she is in a care facility then she will be forgotten about and she will deteriorate quickly. 
LISTEN ABOVE AS CALLER JOHN SPEAKS WITH ANDREW DICKENS

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So I was listening to Mike Hosking this morning, thinking to myself how nice it would be to be in London on a sunny spring day. And then he said something that set me thinking
He was talking about the budget and what not to expect in terms of radical change.  He then warned that the coalition’s caution may continue at the next budget because it’s only a year away from the election.
I thought to myself, hold on, this mob is only half a year into their term and we’re already talking about an election.
It brought back into relief the length of the parliamentary term in New Zealand.
At just three years it’s one of the shortest in the world shared with El Salvador, Jordan and Australia’s house of representatives. But in Australia, the Senate's term is six years.  In Brazil, their upper house has an eight-year term.
Most countries go for five years. A handful go for four years and a few go for a mind-blowing six years.
I’ve long had concerns about New Zealand’s short term.  While of course opponents of any given government favour it because it gives you a chance to throw out the hated winner, the problem is all the consequences it has for policy.
It results in short-termism and policies designed more for political ends than for the long-term health of the country.
It either means things happen too quickly or too slowly and often not at all.
And perversely the three-year term means we end out with longer government tenure.  If a government gains confidence in it’s first term then they’re often voted back in, resulting in a de facto six-year term.
We can see that in the last two governments that actually ended out with three terms each or nine long years.
Personally, I favour four years giving any government a two-year breathing space between elections to quietly achieve the things they were given a mandate to achieve. But it’s also not too long to wait to throw out the incompetent if we wish.

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Caller Brian talks about his concerns surrounding facial recognition and the data gathering of peoples private information.
LISTEN TO THE FULL CALL WITH ANDREW DICKENS ABOVE

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