Yesterday’s council meeting was well attended by both elected members and members of the public, several of whom spoke about this issue.

Unfortunately, Mayor Gurunathan decided to cut the speaking time for members of the public from the usual 3 minutes to 2 minutes each. All had prepared speeches based on 3 minutes, meaning that they had to omit paragraphs, and speed up their delivery.  Because of that it is dubious that much of what they had to say was taken in — accordingly we intend to transcribe them and post them later next week. —Eds

Guy Burns, Deputy Chair, Paraparaumu Raumati Community Board welcomes the news that an independent review of Kapiti Coast District Council will be carried out soon.

“I’ve been calling for an independent review for several years, but I’m sceptical of the timing; just weeks before the 2019 election cycle begins. Some are calling this review an electioneering stunt designed to attract votes. I wonder why such a review was not called earlier in the triennium.

“Parts of the Council’s organisation are inefficient and poorly structured, particularly within head office. The cost of staff is excessive; one of the highest cost ratios to revenue, for a comparative sized council in the lower North Island.

“It’s important the review is not rushed and that plenty of time is spent developing smart and robust terms of reference. The review must be organised and managed by the sub-committee formed to develop the review, to ensure independence and impartiality.

“Let the review begin and may it form the basis for a comprehensive restructuring of Kapiti Coast District Council.”

The little hill in the background used to be a good vantage point for taking photos looking north, but is vegetation-covered now.  The bridge now has the overhead catenary masts for the electric units and the sides are painted green.

Not an official description, but effectively what it is; the lagoons are behind the camera and to the right.

Morning and afternoon views of the same tree. Magnolia trees’ big, bright blooms give much needed colour at this time of year. They also provide a feast for Tui birds which love magnolia nectar.

With the Waikanae River, looking west towards Kapiti Island which has the sun shining on it at sunrise.  Painted by artist Wilson Lattey in 2006.  Presumably those are meant to be willow trees along the banks, but this is sure to be ‘artistic licence’ in this part of the river.

by Roger Childs

corruption = dishonest or fraudulent conduct by those in power / the misuse of entrusted power for private gain.

The arrogance of top bankers and financiers

About ten years ago it was revealed that the Westpac CEO was earning over $4 million a year (this didn’t include stock issues, shares, expenses etc.). The Dominion Post ran a front page story about it and calculated that he was earning 48 times more than a front-line teller. 

Historically, the banking industry world-wide has not had a great reputation. Self interest, dishonesty and greed have often been hallmarks of their operations (and those of mortgage and insurance companies), and the devastating 2007 – 2009 Global Financial Crisis (GFC), occurred because of their fraudulent and risky activities.  

Trading in toxic bonds; excessive risk taking in property investments and futures; reckless borrowing on housing when the institutions knew the borrowers would be unlikely to be able pay to back the loans; a lack of government or institutional regulation – these were all factors in the crisis which led to a recession.  Many companies here and world-wide went down the gurgler and others were bailed out by governments.

The David Hisco fiasco

The details of the recently “retired” ANZ Bank Chief Executive’s massive salary and extravagant lifestyle, and the “cheap” purchase of an Auckland luxury home owned by a bank subsidary, have been a major talking point. Obviously, Hisco’s excessive expenses were well known to the bank’s senior management and its ethics committee. 

David Hisco had done well for ANZ. He had piloted through the absorption of the National Bank into the ANZ; repaid clients who had been misled over the Diversified Yield Fund and Regular Income Funds, and has overseen an annual profit presently reported as over $2 billion annually during his time at the helm. However, he had been extremely well rewarded with a salary of over $3 million and benefits in excess of $400,000. 

The latter are unprecedented in the bank’s history.

Did he jump or was he pushed?

It was probably the latter. Despite Hisco’s successes in the CE’s role, in the end his extravagance became an embarrassment to the bank and the unions were furious. ANZ Chairman, John Key, called a press conference and his message was that like any errant bank employee, David Hisco was accountable and had to go.

Really?

Key was his usual smooth, relaxed self, but was unconvincing. As DominionPost columnist Phil Quin remarked:  “How stupid do these people think we are?”  Financial commentator Janine Starks summed up the view of many: “To say his ethics didn’t match a newly minted teller was more than a little twisted on a big picture view.”

 Will lessons be learned?

The banking industry needs regulation, restraint and sound ethics. The last 300 years has been littered with financial disasters which resulted from unwise investments, reckless lending, unjustified speculation, lack of financial reserves or borrowing safeguards, and a greedy desire for profits. 

Some examples — 

• The South Sea Bubble in Britain in the early 18th century
• The collapse of banks in the late 1870s – early 1880s leading to the Long Depression
• The frantic lending in the U.S. in the late 1920s on stocks and shares which led to the Great Depression
• The stock market crashes in 1987 and 1997
• The 2007 – 2009 GFC mentioned above.

All of these were followed by attempts at regulation, often by way of legislation. But with good times returning, the temptation to reduce the oversight of banking and stock markets has often been too great.

The repeal of the 1933 Glass – Steagall Act in the U.S. in 1999 was a catalyst for the Global Financial Crisis

The Act had wisely separated commercial from investment banking after the Great Depression, however, President Clinton couldn’t resist the pressure from financial institutions to get rid of it.

In New Zealand the Reserve Bank technically oversees the operations of the trading banks and they are obliged to keep the regulator informed about their policies related to lending and reserves among other things. Sadly, this doesn’t always happen. 

The Hisco Affair has not caused a financial crisis, but it has shown up how bank bosses can get away with a lack of ethics and enjoy hyper-extravagant expense accounts.  In the case of the ANZ Chief Executives’ behaviour, there has been the misuse of entrusted power for private gain: in other words, corrupt practises. 

There are two issues which come out of this sorry saga – whether banks can act as a law unto themselves, and whether the leaders of big companies can get away with dishonesty, exploitation and extravagant spending.

Is it time for a Royal Commission into the industry as in Australia?

This is another exception to our non-commercial stance, but it could be a local interim solution to the homeless crisis the country now has, which Kapiti isn’t exempt from.

Perhaps a 19.3 metre² floor area could, with bedding, house four or five homeless people?  Better than them sleeping rough or in cars at this time of year, surely.  An outside tap and a long drop dunny nearby would meet two other needs.   Webpage

by Cathy Strong

On analysis it appears KCDC staff are actually balking at a review of their efficiency, or lack of it.   

The independent review of council’s organisation was apparently requested by elected members, who are the ones meant to oversee the governance of council and how it spends our rates.

It is on the agenda for tomorrow’s 27 June Council Meeting. 

But the background document is written in a way to put a negative spin on an independent overview of how the council is run. 

The background document spends 97 words outlining why there should be a review, and 220 words pointing out why the review should be scrapped.   That is more than double the space arguing against a review.  

The review would assess “the capacity and capability of the organisation to deliver the Council’s objectives in a cost effective and efficient manner” according to the meeting agenda document [reproduced in full in Monday’s post]. 

The Council’s Corporate Advisor, Ian Clements, who wrote the paper, lists in the reasons to oppose a review that it might harm council’s reputation and be extra work for staff.  

What the paper neglected to state was that KCDC already has a tarnished reputation — the NZ Auditor-General’s Office confirmed it has the second-highest debt of all councils in the country. 

In addition, it has the highest staff expenses per capita of 11 councils in the lower North Island.   

Its spending $28 million a year on staff expenses is high for a council this size.

These seem pretty compelling reasons to review council’s organisational efficiency.

The staff-prepared backgrounder estimates a review of its efficiency would take almost two months just to find someone to do it, and could cost up to half-a-million dollars, although admits it is hard to estimate the cost.  [Cr Cootes stated in a Facebook post he has been told an accurate figure is $75-$100 K, which seems a lot more realistic. —Eds]

However, the challenge for the public would be how committed are KCDC to a transparent and accountable review which would go a long way to preventing more rates increases for individual homeowners. 

New Zealand’s gun lobby has promised to launch court action against firearm law reform.

The Council of Licensed Firearm Owners (Colfo) has informed its members it will challenge changes to gun law and a Government buyback of semi-automatics, which came after the March 15 terror attack.

Firearm owners are being asked to support and donate to a court challenge expected to cost “hundreds of thousands”.

Colfo lobbies Government and police on behalf of its member organisations, which include the Sporting Shooters Association, Pistol New Zealand and New Zealand Deerstalkers Association.

Full article

Which it is around Park Avenue where it flows through a few private properties.