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Tuesday's Top 10: Could Fletcher become a mega-builder of affordable homes?; Jason Box and the Dark Snow project; What a 3% Chinese growth rate would look like; MOOC madness; Dilbert

Tuesday's Top 10: Could Fletcher become a mega-builder of affordable homes?; Jason Box and the Dark Snow project; What a 3% Chinese growth rate would look like; MOOC madness; Dilbert
This daily collection of links and comment was previously sponsored by NZ Mint. We'd welcome a new sponsor.

Here's my Top 10 links from around the Internet at midday today.

As always, we welcome your additions in the comments below or via email to bernard.hickey@interest.co.nz.

See all previous Top 10s here.

My must read today is #2 on the ice melting in Greenland. A cracking read in Rolling Stone. 

1. Could Fletcher go really big on housing? - Marta Steeman at The Press has an important interview with Fletcher's new CEO Mark Adamson in which he says Fletcher is reviewing why it isn't building thousands of affordable houses a year, rather than the current 300 or so.

New Zealand needs home builders on a large scale.

Fletcher's history as one of the major builders of state houses from the 1930s onwards is important.

The government and the Productivity Commission have wondered and worried for some time about why our house building industry is so poor at producing affordable houses at scale. We have lots of piddly little bespoke builders, but very few factory-style builders.

If Adamson can make it happen at Fletcher then all power to him.

Here are the key quotes:

"My first question is why aren't we making more. And we're a New Zealand company, why aren't we building more throughout the country and not just Auckland."

Adamson was in Christchurch looking at the several roles the firm has in the rebuild.

"So what I've instigated is a wholesale review as to how we can be far, far bigger, orders of magnitude, not 300 becomes 400, but hundreds become thousands over a period of time. And not just the houses we currently build."

2. Greenland is melting - This is a fantastic Rolling Stone piece on why the ice in Greenland is melting faster than it ever has. It profiles glaciologist Jason Box and his 'Dark Snow' project.

Though Box had predicted the severity of last summer’s melt, he struggled to understand why so much ice disappeared so quickly. Some climate modelers pointed to changes in atmospheric circulation patterns that pushed up temperatures across the Arctic. Others attributed it to the heat-trapping properties of low clouds.

But Box decided to return to Greenland this summer – his 24th trip here in the past 20 years – to test a more startling hypothesis, part of what he calls “a unified theory” of glaciology: that tundra fires in Canada, massive wildfires in Colorado and pollution from coal-fired power plants in Europe and China had sent an unexpectedly thick layer of soot over the Arctic region last summer, which settled onto Greenland’s vast frozen interior, increasing the amount of sunlight the snow and ice absorbed, which in turn accelerated the melting. 
 

3. Some good news - Especially for Gummy Bear. FT reports China and Europe have agreed to suspend their big trade dispute over solar panel subsidies.

4. Chinese growth at 3% - Bloomberg reports Barclays has forecast a scenario where China's economic growth rate falls to 3%. The fallout is not pretty, particularly for Australia. 

A copper price collapse of more than 60 percent, zinc cut by up to a half and oil down to $70 a barrel. That’s the fate facing world commodity markets should China’s growth dip to 3 percent in the next three years -- a scenario economists at Barclays Plc (BARC) are now examining.

They’re not the only ones building models based on a steep decline in growth in the world’s second-biggest economy. Nomura Holdings Inc. (8604) estimates a one-in-three chance of a sharp drop by the end of 2014, and Societe Generale SA sees a “non-negligible risk” of less than 6 percent growth this year and an outside chance of 3 percent average expansion for this half and next.

5. The Cypriot mess - WSJ has a look at the festering pile left in Cyprus after its 'bail in' gutted depositors. One unintended consequence is that the Russian mafia might end up in control Cyprus' banking system through a debt for equity swap. That will give the Russian mafia the right to borrow from the European Central Bank.... ooops...

The economy is forecast by consultancies such as Ernst & Young to shrink by more than 10% this year, which would be more than the 8.7% forecast by the troika in March, and to continue contracting through 2016.

These are the predictable consequences of the experiment its lenders are imposing on Cyprus. But there are some unpredictable ones too.

6. Chinese default? - Bloomberg reports China's Local Government Financing Vehicles face rollover cliffs amounting to US$21 billion this year. Keep an eye on this one.

“With bonds approaching maturity, the weaker ones will have some problems as cash flows that they generate are very weak,” said Christine Kuo, a Moody’s analyst in Hong Kong. “I wouldn’t rule out the possibility of the government showcasing some companies to go under.”

Refinancing will be a challenge after corporate bond sales slumped to a two-year low in the second quarter and policy makers cracked down on shadow banking activities that bypass regulatory limits on lending. Premier Li is seeking to shift the focus of the world’s second-largest economy away from government-led investment and China this month cut taxes for small businesses and eased controls on bank lending rates.

Local governments set up more than 10,000 LGFVs to fund the construction of roads, sewage plants and subways after they were barred from directly issuing bonds under a 1994 budget law. A 4 trillion yuan stimulus plan during the 2008-09 financial crisis swelled loans to the companies, which they have been rolling over or refinancing with new note sales.

LGFVs may hold more than 20 trillion yuan of debt, former Finance Minister Xiang Huaicheng said in April. That’s double the figure given by the National Audit Office in 2011. The government must be on “high alert” to the dangers of their rising borrowings, Vice Finance Minister Zhu Guangyao warned on July 5, after central bank Governor Zhou Xiaochuan said in March that about 20 percent of the debt is risky.

7. Why isn't the money circulating? - One of the great mysteries of the post-GFC world is why isn't all the money printing creating inflation. Maybe it's because it's only just offsetting the deleveraging happening in the shadow banking sector. This chart courtesy of Zerohedge is worth looking at. The red line is shadow credit and the black line is traditional credit. 

While the Fed needs to slow QE modestly due to the slower rate of Treasury issuance due to a momentary contraction in deficit funding needs it can't possibly halt it, at least not until the private sector picks up "leveraging" where the Fed leaves off. This would likely entail an even more epic housing bubble than in 2006 to restart the RMBS and HELOC monetary conduits.

8. Obama focused on income inequality - It may not be the same problem here, but Barack Obama is now banging the drum via this NYT interview about the problems of growing income and wealth inequality in the world's largest economy. 

“If we don’t do anything, then growth will be slower than it should be. Unemployment will not go down as fast as it should. Income inequality will continue to rise,” he said. “That’s not a future that we should accept.”

9. MOOC madness? - Massive Open Online Courses (MOOC) are all the rage in the world of tertiary education. But are they any good? This piece in Slate questions the conventional wisdom.

While MOOCs may serve a purpose as nerdy edu-tainment for people who are so inclined, a workforce trained without close contact with professors of any kind might as well not attend college at all. Going to the library and reading a bunch of books would be equally effective, and probably a whole lot cheaper.

10. Totally John Oliver on Goldman Sachs' metals warehousing techiques.

 

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41 Comments

#1 - [ factually inaccurate comment deleted. Ed]  No wonder they win so much NZTA work these days.

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Thought-provoking list.

 

#1 - they haven't the time left, probably have no clue about what is needed (sustainable housing is unlikely to be in a growth-psyche brain)

#2 - The required remedial action is well understood.

#3 - Good news? Surely the stoush gave us the chance of 'cheaper' panels? My latest column looks at the price of PV, and the fact that it's now cheaper than solar/water for HW.

#4 - Even 3% is unsustainable. Some folk catch on slow. If you deal only in the real, factor in proper depreciation and entropy and depletion of natural capital, we're already going backwards.

#7 - good article.

#8 - Obama clearly has the problem of not being able to announce the end of real growth. Not alone there, nor alone in blame-shifting.

#9 - That's where education will go. No youngsters can afford to upkeep the bricks and mortar, they'll go the way of physical retailing and newspapers.

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#3, yeah, they wont be dumping them on us now

:(

#9, yep, in scale what we have is just to large, need to consider how big universities v population were in the 1800s v today and all the "media studies" rubbish they spew out. 

regards

 

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I would like my doctor better trainined than the 1800s, and for that matter most of the sciences have moved on a bit. But I can see universities becoming focused on the things requiring "supervision of experts in the field". The question tends to then become how much expert supervision are we as a society willing to support, and in a pool of limited supervision to what degree should gaining such supervision be a function of an individuals merit vs. inherited wealth (I lean strongly on the side of merit myself).

Moocs (for which there is still no viable business model, just venture capital optimistically pumping in funds) will be for those that want to learn stuff with getting qualifications, much like books are.

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I didnt mean it that way as such.  Doctors in the 1800s would have been, indeed from what Im reading at present were trained to the limits of knowledge of the day.  Im not suggesting we train them to 1800s knowledge, but that a doctor is an essential degree as a course....ie society only had the spare energy to train some ppl in some areas, we'll see the same again.  Media study degrees? uh no bye bye on that one, pull carrots.  One thing though a lot of medical proceedure requires high levels of energy, and parts eg hip replacements, heart transplants.  Various other general surgery does not but saves a life ie removing appendix fairly low tech and good outcome.  Expert supervison and support, indeed, the more you see and have the more energy is needed to do so, wont last, cant.

regards

 

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My house is a ex-state design, its simple, low maintenance and efficient. I really cant fathom why we cant have say 10 or 20 standard designs that already have stamps of approval etc so can be built without huge planning delays, even roll them off assembly lines.  Maybe its the unreaslitic expectations of ppl? 

regards

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Dead right Steven

There is no reason why they can't sort out a dozen designs that can be pumped out en masse.

Off the top of my head I'd say some of the features should be: use of local materials, highly energy efficient, easy to extend later....

 

Perhaps the govt could promote a national competition for such deisgns?

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Oh god no, we'd have every half wit of want to be architect student...it would take years and they would look awful and many preform badly, just look at the leaky homes fiasco for that end result.

Just take the old designs to start with, add solar hot water, 3kw PV grid linked and heavy insulation. Otherwise std power and water layouts, energy efficient lighting.  After 40 years you have examples to check over for problems in the new design.   If I recall right the military camp at Waioru has a street of 4 or 5 std houses.

regards

 

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You'd have to modernise things a bit Steven but I agreee with your broad principles - serious insulation, PV/solar, and efficient services

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"modernise a bit"  Leaky homes are a direct result of bad "modernising" IMHO. My 1960s house is simple and pretty much leak proof by design, no internal gutters, gulleys, patios or exposed tops of walls and its clading flexs in an EQ.  Consider a principle of "stand the test of time".

regards

 

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You're right here Steven.  Keith Hay and Initial Lockwood have been doing it for years but women, largely (pardon the pun), don't want them - they want flash, and flasher! Kiwi men don't care so much about  status houses on credit; they just want a fridge with beer in it.

Regards, Ergophobia

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Strange. Lockwood Homes. Years ago they promoted their houses for the promotable benefit and feature that they were earthquake proof and hurricane proof and were exporting them into natural disaster areas overseas. What happened? Why aren't they the house of choice?

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LOL, yes. Im currently planning/making an under window bench seat for the dining room. My design, simple straight, $800~1k in bamboo panel. Her design long sweeping curves, uses more x2 panels a plus requires a new dining table to be made, cost more like $2k, huge headache for me.  Ah well I think the curves will look better and hold more. 

;]

regards

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Don't forget rain capture for grey water use.

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Yes that is quite possible.  For some scenarios something like the earthship.com solution is very eco friendly and I think could be done economically, however there is a huge cultural / expectation that needs to change, everyone right now expects to live in a "good" area and have a "palace".  Even the starter homes really are a stretch to meet ppls expectations which seem quite un-reasonable at times.

I suppose we need to look at additionall costing items that offer substantial returns on the investment.  For instance PV cells could be owned and operated by a third party they wouldnt necessarily need to be owned by the owner, aka Germany.  Solar hot water in a new build however is a no brainer....adds a few K, pays back under 5 years, similar to insulation. Grey water? not sure on the payback unless potable is metered.

regards

 

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" The Affordable Housing Party " ..... Hugh P. for the mayoralty of Christchurch ...

 

...c'mon Hugh , Lianne Dalziel's begging for a mayoral opponent , fling yer cap into the ring ...

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yep he should, that way everyone gets to see whats what as it were...

 

 

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It is very heartening to see New Zealand is the international leader on these housing and local government reform.

............

we'll that's Big News ... roll back NIMBy's ("only those standing" have a say);  don't have a plan; just let it "self organise"... (the privitisation of politics) and run it all on new arrivals . The development industry is Go!

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stand for mayor? - political influence? - will never happen - better off outside the tent

While you have been in holed up in South Australia you should have been following the NSW ICAC investigation about the skull-duggery and corruption involving politicians and property developers - you might ask if you ever get the sense it is happening in Christchurch and Auckland - I do - particularly irrigation schemes and downstream benefits

It's about to blow its lid tomorrow

See overview
http://media.smh.com.au/news/national-news/icac-report-looms-4605397.html

And here Kevin Rudd is to execute 42 faceless men and ban property developers from standing for parliament and postions of power in the party
http://www.dailytelegraph.com.au/news/nsw/prime-minister-kevin-rudd-to-execute-faceless-42-hacks/story-fni0cx12-1226687810982

Some more of it
http://www.theage.com.au/nsw/involvement-of-obeids-in-company-was-hushed-up-20130729-2qv2g.html

 

Worth the trawl through

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There already is such a party: http://www.affordable.org.nz/

No Christchurch candidate yet though!

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Is that the bunch with the airhead that used to be an ACT MP, standing for Dn Mayor?

 

Heaven help us. Are they all like that?

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And with few zoning rules and a diverse economy, Houston is, in a sense, "the great growing region of the Sunbelt on steroids," Glaeser says.

Noting the addition of a million people in 10 years, Glaeser says the city succeeds "by providing middle-income Americans with a really astonishingly high quality of life."

Among the town's advantages are an average work commute of less than 30 minutes and low housing costs. The National Association of Realtors puts the city's average home price at around $150,000, Glaeser says. Other perks include a lack of state income tax and a vibrant restaurant scene.

All of that taken together means that Houston has weathered the nation's economic crisis fairly well, he says.

But Glaeser notes that there are problems with Houston's sprawl: It takes a large amount of energy to make the area's humid, hot climate comfortable, and the city is built around the use of cars.

"Houston is among the five worst American metropolitan areas, in terms of its carbon emissions," he says.

And he acknowledges that for people who are concerned with environmental issues, Houston presents a picture that is beyond dismaying.

"I think horrendous wouldn't be too strong a word," Glaeser says.

"I got a tremendous amount of heat every time I've said anything positive about Houston."

Still, when compared to places like New York City, which has a limited amount of land, or California and Massachusetts, which have much more regulations, Houston enjoys an inherent advantage, Glaeser says, thanks to its lack of rules.

"It's a funny chronicle, where often well-meaning people in the coastal states of this country, often thinking that they're doing environmental good, have actually enacted a set of rules that have made it enormously difficult for middle-income people to live in their areas, and as a result, have pushed people toward less environmentally attractive places, like Texas," Glaeser says.

http://www.npr.org/templates/story/story.php?storyId=112896915

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#6 - Chinese "data" strikes again - ebb tide running, no speedos...

#1 - yes of course they can.  Only foundations need to be site-specific:  what goes on top can be factory-done, large-3D-printed, CNC'ed up the wazoo, and QC'ed properly.  Punch enough volume through and watch them unit costs fall.  Then kit it all up, truck the lot out to the site and Erect.  So to speak.  (Or, if yer Normal Russian, haul it in a fleet of cycle trailers).

#9 - pause and consider what would be necessary to administer a knock-out blow to the guilds and time-servers in tertiary ed.   Why, that's right, a low-unit-cost, high-volume model which delivers much the same practical effect for perhaps 80% of the avid learners amongst us.

What's left after the dust settles will be the bits that were always worth saving.  The increase in the Body of Knowledge (Uni's original purpose before the Yarts and Cultcha crewz overran things), the learning-how-to-learn schtick, and of course the mentors and wise if not wizened old types who gave many a youngster some sage advice.

What's not to like?

 

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If our car market operated in the same way as our Housing market?

Hundreds of bespoke car makers, New Zealand made steel would have preference over imported.

There are very large barriers to New Zealand accessing factory built houses from the rest of the world.

Timber requirements seem central to this

 

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Dalziel has no more idea than Hughey - and I could add; than most folk, Left and Right.

 

Cheap housing is easy, but is not something HughP has actually addressed (he really seems to be about land price and planning impediments to something his ilk see as 'personal freedoms', but which cumulatively stuff both the planet and our offspring's chances at life at all).

 

That said, he's right about needing to localise; I just don't think he understands why the need.

http://www.transitiontowns.org.nz/

 

 

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I must admit im surprised that so many who want to be in power, some so short sighted...

Not just Daziel, the entire party...

Whats disappointing is the greens have gone the same way, yet they started from a point that was open minded.

regards

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That's why the 'Texas model' which allows developers to build and maintain the infrastructure in their developments (for an annual fee to residents) is essential.  If councils are left solely in charge of infrastructure we're stuffed. 

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Is anything stopping a MUD being a less hippie but just as greenie version of this http://earthship.com/ ?

 

And I mean less hippie in the sense of mainstreaming a hippie idea.

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What sort of criteria would a MUD or other small new community need to be classified as a Earthship?

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Thats one hell of an interesting Q...I suspect not much will happen for 5 or maybe 10 years until the councils are bankrupt and out of business.  Of course ratepayers I understand are liable for the debt....so there could be a lot of seriously broke ppl say ten years from now.  That speaks of huge social issues to say the least.

regards

 

 

 

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I am of the opinion we should allow new public structures to exist now. Not wait for disasters like bankruptcies to force our hand.

 

But what I wanted to ask is what practical criteria a Earthship community needs. Thinking in terms of energy, sewage, food production, water, farmers market etc.

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o get change and real change the existing has to be swept away IMHO.  Watching the Green's recently apparently sell out and buy votes I dont see any sign of leadership in central govn at all.  Local? cant see much signs either, they all work on status quo of BAU.

You ask some ard qs because its just so complex.  Each earthship should be or according to the US info independent, ie catches its own rainwater, own power and deals with its own waste, so the services it needs is minimal.  Hence the so called contributib levey should rally be all but zero, bet teh council wont go with that one....it will be a std charge, tough.

Earthships are  self-heating from sun, stable from mass and shade in summer, very low energy to build and run. I dont know what you would need in m2 to grow your own food, 1000m2?   Meat from animals needs a lot of area, so not much, chickens, eggs, yes.   Work from home telecommute?  yes, but how much work will there be?  Houses like my one need maintenance, if only new tin every 50 years....some paint I suppose, how to raise that capital?

Interesting looking at some videos on youtube cuba who went through their own peak oil when the soviets collapsed and they had no oil. Hints that we really have to get real on cutting energy use. 

Big examples of success would of course be the old village layout...lots of villages an occasional town and a rare city....we have farmers markets now. They I assume will re-grow to the size they once were.

Hence why im reading history....trying to find out what worked and why.

Just where do we go with democracy? Id certianly hope we dont lose that, that and opportunity to advance based on ability and merit and not birth.

http://www.youtube.com/watch?v=LQaw2fix3q0

regards

 

 

 

 

 

 

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Im not sure if its hippie, alternative maybe....read the background...and watch the video of the architect and his legal battles.

I assume you would have to do the same here...which is sad as an earthship would actually need little in the way of services.

regards

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MUDs are not essential, what would be is a verifiable and true charge.  ie if the council is price gouging to feed its other "problems".  If the central govn was serious for small developments then I think they should allow ppl/developers to sue the councils to determine a proper charge...

To get 10,000 homes built per year you really need to open up large scale developments to my mind, so 2000~4000 houses with ammenities. 

I dont see why that cannot be done via competitive tender and a turn key solution.  ie the contractor builds it and hands it over to the council compete, tested and functional.

You are of course assuming the concils are the problem and not the costs which will be across the board....doing large sites by competitive tender would show that up.

regards

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This will be interesting to keep an eye on, a direct challenge to the financial system. http://www.openureyes.org.nz/blog/?q=node%2F4650#.UfV8maxrjIU

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Re #1 Fletchers Building affordable houses.

The best way that Fletchers can can contributing to affordable houses would be for them plus their so called compeditors to loosen their monopolistic grip on the building material market.

Here are some comparisons of building materials at Bunnings in Australia and New Zealand.  They speak for themselves.

 

*/

Australian Price

New Zealand Price

Insulation

$5.73/m2 (R3.5)

$13.57/m2 (R3.2)

10 mm Gib Board

$10.90

$23.90

4.5 mm Fibre Cement Board

$21.36

$35.40

6 mm Fibre Cement Board

$25.36

$55.51

16 mm MDF Board

$29.93

$58.22

19 mm Flooring

$11.27/m2

$34.26/m2

Cement

$0.27/kg

$0.42/kg

Glass Pool Panel

$111.00

$249.00

Aluminium Garden fence

$86.80

$130

55 mm Plaster Cornice

$5.46

$9.80

Paint Grade Door

$26.90

$51.00

 

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I wish interest.co.nz would make a graph of this data.

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I wish that ComCom would grow a pair, don the Black Cap, and after a show trial, commercially hang these duopolists out to dry.

 

Pour encourageur les autres....mais naturellement

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Would the Commerce Commission have some balls if they were appointed by a neutral Speaker?

 

Would this be a better system of appointing our key Public Servants.

 

The power for the ruling party and hence their leader to appoint the Speaker needs to be curbed. The Speaker and Parliamentary Service should be neutral parties in Parliament.

 

This could be easily changed by switching the appointment of the Speaker from the simple majority vote to a unanimous or near unanimous vote.

 

In sport we do not accept partisan referees but that is what we have in Parliament.

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Sorry about the terrible format.  I had it neatly set out in a word table but it all turned to custard when I pasted it in to my post.

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