Dunne makes chickens suffer

Peter Dunne is pooh-poohing the $180 million compensation package for households that will form part of the Emissions Trading Scheme, which NZ First is claiming from it’s negotiations with Labour.  Dunne’s back of the napkin calculations are that each household will receive $2.15 a week. He then further calculates $2,15 to be about 7 eggs.

Well, what I have learnt from that is that Peter Dunne doesn’t buy free range eggs.

As the Dominion Post notes it’s dangerous to take that number and divide it equally among all households because that’s not how the money will be actually divvied out, with the package split between the universal and targeted payments.

Dunne’s correct that $180 million is not a huge amount of money in the context of the Emissions Trading Scheme.  However, the $1 billion insulation package that the Greens negotiated for energy efficient, warmer, dryer kiwi homes is.  Dunne could buy more than a few battery hen eggs for that. In fact, for every dollar spent on the insulation programme, the return will be about $5. Not a bad return on investment.

40 thoughts on “Dunne makes chickens suffer

  1. Kevyn,

    if you want to live in Otara I believe you should be permitted to do so, and build/buy whatever type of home/dwelling/hovel you can afford to, even if it is nothing more tan a garage to live in.

    If you should then choose to slowly improve it over the years (adding insulation if you wish) then the government should not stop you doing so, but neither should they money from me to pay for your insulation, simply because we have an ETS to please.

  2. When will you droll trolls get that tax is not the problem, it’s what you do with it that matters?

    Oh, very amusing. Tax is a problem to the person paying it, just as interest rates are. And what you do with tax does indeed matter. Which is why tax payers are interested to see how it is spent. How it is spent is debatable, which is why we have these discussions.

    With regard to insulation – great idea. I advocated a long time ago we resign from Kyoto and spend the equivalent dollars on energy efficiency (bowing to the inevitability of a socialist government, then we should at least try to keep the spending sensible).

    However, I’m not in favour of simply making stuff free – that’s unfair to the people that pay taxes and pay full price to insulate their homes in advance. Providing the programme is a rebate/offset offer, covers all initiatives for home energy efficiency (double glazing, ceiling insulation, solar panels, water tanks, waste recycling systems etc) then it’s a good idea.

    I’m also not against State Homes being improved in this way, should be good for the health of low income families.

    However, I’m against trading this for signing the ETS. We (NZ) are being screwed with this ETS legislation, and rushing it through as was the EFB is a mistake.

  3. Greengeek, But if I want to live in Otara rather than Otira how much will an uninsulated house cost me?

    I can fully insulate my home (1930’s bungalow) for less than $10,000 DIY. Double glazing might cost a lot more than that since we’ve got sash windows. I think that is probably a fairly typical cost for older homes. About what a newish Jap import will cost. :idea:

  4. Imagine for a moment that you are a twenty year old male, planning to be married and having a family within ten years.

    Imagine you see two choices:

    1) Get a HUGE mortgage and buy a $400,000 insulated house.

    2) Build (yourself) a $20,000 motorhome, or a $50,000 uninsulated house, and live in it for 8 years while you save.

    Which of those two options is genuinely better for your health???

    In most cases it will be option 2.

    Our pioneers/ancestors were not hamstrung by the tax burdens, by-law constraints and social guilt-trips that face our young people today.

    The ETS (no matter how many chickens you buy, or how much insulation you pay for) puts the lives of our young people in the hands of money traders.

    Shylock WILL take his pound of flesh.

    It is time to look backwards at the way our pioneers lived and realise that it is foolish to try and regulate for perfection, when it actually takes many years effort to build the ideal lifestyle.

    If your own kids get a payout that buys them some insulation, that means someone else is going without, in order to pay for it.

    Eventually the chickens will all come home to roost.

  5. Heaps of these houses were mass produced and you’d only have to do a few to work out a pretty accurate costing.
    With any scenario you would have to kick the tenants out and eventually rotate through the entire housing stock. Would tenants really complain about moving into a better house? Some people are hard to please.

  6. Samiam,

    The problem then is one of cost. You cannot accurately cost any house repair until the cladding, roof and gib has been removed and the “guts” is exposed.

    Replacing all old with new means your costs are accurate and fixed. In fact a bonus might exist when the timber, copper, etc is recovered and sold.

    You also inconvenience the tenant the least. Having a tenant moving out for three months while their house is totally renovated is not good for those getting to work, school, etc. Means a double shift.

    Extra costs will be incurred for property storage, temporary accomadation, extra transport costs,etc. if the tenant has to wait 3 months for the refurbishment to be completed.

    Unless off course you permananetly move tenants out of their old into a newly refurbished (or new) house. Can see a lot of tenants kicking up a fuss as they may have to move out of their area permanently.

  7. Gerrit, I’d say a combination of refurbish and renew would be the reality, plenty of old state houses were well built and would respond to a decent massage, plenty would not. Nothing could be as bad as those built in the nineties!

  8. # dbuckley Says:
    September 3rd, 2008 at 1:38 pm

    > “for every dollar spent on the insulation programme, the return will be about $5″

    > If thats a reasonable statement, then why the heck hasn’t the government had a programme going for years to reap the rewards available of that investment…

    because it’s not a return to the government, it’s a return to the householder. Governments fund roading projects with government money based on a private-sector return like that because the road funding system is set up to grant funding to projects based on their private return. But they won’t take into account private gain for public expenditure if they don’t have a bureaucracy set up to make investments on that basis.

  9. Samian,

    “By the way, the way to NOT do the job properly is to rip the lining out and insulate etc from the inside. To achieve best practice you need to take the cladding off the outside and to fix up wiring, plumbing (esp water heating) etc while you are in there. Then insulate, reclad, double glaze (non aluminium joinery) etc.
    Do it once,do it right.
    Same applies at re-roof time, take off old roof, do everything that needs doing in the ceiling space, re-roof.”

    Totally agree but you are going to have to rip the gig of INTeRIOR walls to insulate/sound prood those.

    Commented on another tread that it would be cheaper to demolish these old houses (some most be over 70 years old) and install new ones. Modular construction, all the bells and whistles.

    That way you also inconvenience the tenant the least. Move the tenant out to temp accomadation (possibly a furnished house so that the tenants proporty simply goes into storage for a week)

    Monday the truck removes the old house, Tuesday site works, Wednesday new house dropped on the section, Services are hooked up on Thursday, Tidy up Friday, tenants shift back Saturday.

    All new houses are built in a factory to modular construction.

  10. dbuckley – yours is a question the Green Party has been asking for years. The evidence is in now, better than it ever was, so we are starting to get some traction from government.

    The 5:1 is the gross return in 2025 when the programme ends. If we went very, very conservative, discounted all the dollars and assumed that most of the energy saved would be clawed back by other uses, we still estimate a 2:1 return as the worst case scenario.

    Why the hell haven’t we done it before, indeed!!!

  11. “for every dollar spent on the insulation programme, the return will be about $5″

    If thats a reasonable statement, then why the heck hasn’t the government had a programme going for years to reap the rewards available of that investment…

  12. Paradox, The state’s involvement is the point. It was the state that built cheap uninsulated houses and gave cheap mortgages to people who bought uninsulated houses from capitalist property developers and subsidised coal, gas and electricity. It did that for long enough for generations of New Zealanders to believe that insulation is an unimportant luxury. The state has been doing exactly the opposite of what was required of the state – to show leadership and wisdom.

    Business attempts to mould the will of the public in order to make a profit, the state follows the will of the public to get re-elected. Fortunately there are still many businesses, run by many people, selling many solutions. Thus there are likely to be as many good solutions as there are bad solutions. That hasn’t been the case where the state muscles in and becomes the monopply supplier of solutions.

  13. By the way, the way to NOT do the job properly is to rip the lining out and insulate etc from the inside. To achieve best practice you need to take the cladding off the outside and to fix up wiring, plumbing (esp water heating) etc while you are in there. Then insulate, reclad, double glaze (non aluminium joinery) etc.
    Do it once,do it right.
    Same applies at re-roof time, take off old roof, do everything that needs doing in the ceiling space, re-roof.
    Underfloor is more problematic, in that the old houses were put on short piles. Why?? I suspect poor underfloor performance and rising damp is responsible for more woes than we realise. I’d suggest that if a house is lower than can allow for correct installation of underfloor insulation, then it should be put on a truck and taken away to be completely refurbished in a yard and the re-sited correctly or maybe demolished if it isn’t worth it.

  14. John-ston, you understate it: there are many, many instances of the market’s total inability to provide important things. From the olympics, to broadcasting, to health, to transport …

    And much as I’d like to agree that state involvement shold be “small and discrete”, actually, that’s a red herring. The state’s involvement is not the point. Well insulated housing is the point. The state’s involvement should be no less and no more that what’s required to get the most insulation possible into the most houses as possible. An effective state gets involved wherever and whenever it needs to. That’s the point. Business is fussy and will only go where the money is. States serve public interests.

  15. Samiam: bingo.

    Liberty scott: u benefit from my welfare. And yes, incredible as it may seem, I benefit from your welfare.

    Like many selfish people, you need to understand that “investment” can work at many levels, social & national, not just individual.

  16. “Yes but it is every dollar taken from people, including those wise enough to already have insulation and the return is to those who aren’t. When you spend $1 and get nothing back it isn’t an investment, it is a government programme.”

    The problem with your idea Liberty Scott is that this is one of those instances where people are not logical and wouldn’t go for the most logical option. While insulation may have those financial benefits, it also has large upfront costs, and it can cause massive disruption (imagine having to rip out the walls in your house, one room at a time). Of course, people in rented accommodation do not have a choice, and usually, landlords don’t spend money on insulation as they do not benefit.

    That is actually the one issue I have with the pure market ideology – people are not always logical and do not always work in their best interests. That is why we need the state in places, although I do agree, it should be small and discrete.

  17. Zen Tiger: so middle class debt is due to taxes?

    Bollocks. Middle class debt is due to a petulant and peculiarly NZ middle class expectation that owning a house is an automatic short cut to having everything you want right now, all “leveraged” (how I feel for that poor mis-used word) off a single capital assett.

    Retailers, banks, and what’s left of the finance companies don’t exactly do much to help the situation either.

    When will you droll trolls get that tax is not the problem, it’s what you do with it that matters?

  18. Liberty, we are talking about upgrading state houses. Now I agree they (the government of the day) were not wise enough to build them properly back then, but I can’t agree that fixing them isn’t in investment. True it does save the tenants money directly, but it saves us taxpayers in $health and $infrastructure to not build more generation/transmission capacity to name just two. I’d call it a bargain.

  19. “for every dollar spent on the insulation programme, the return will be about $5″

    Yes but it is every dollar taken from people, including those wise enough to already have insulation and the return is to those who aren’t. When you spend $1 and get nothing back it isn’t an investment, it is a government programme.

  20. icehawk, you didn’t answer BluePeter’s question. He asked what happens when the tax pool shrinks. All you reminded us of was that when it grows, Labour does not reduce taxes – keeping the government in surplus by putting the middle class in debt.

    When the tax pool shrinks, and the economy tanks, what would they do? It’s a fair question, because people can get by in times of growth, but in times of hardship bad economic management will hurt families even more. A $2/week rebate is not going to offset rising costs.

    PS: I also headed here to support the chickens. The post title proved disappointing, although I do learn that I am now in the “Big Bro” demographic. That’s not a bad thing.

  21. $180 million is a lot of money. For Dunne to say otherwise is very odd. I’ll happily take $180 million off his hands if he think’s it’s a meagre amount to hand out…

    BluePeter: “What happens when that tax pool starts shrinking, Frog? It has started already, and it will be getting progressively worse. What services will you cut first?”

    That’s really, really funny. This 3-term Labour government has presided over the greatest growth in the tax base NZ has seen since we became independent from Britain. Of course it goes up and down with the business cycle, but you can hardly treat a cyclic downturn this year as if it were a long-term trend.

  22. Are we not all over the chewing gum/block of cheese/eggs analogies? Are we not supposed to be able to figure out that a small amount of money is a small amount of money?

  23. Frog, Thanks for the quick response. The BRANZ housing condition study provides info on the amount of insulation for houses built in various periods. The least well insulated houses are those most likely to have open fires. If one-third of the 900,000 use their fireplaces that could reduce winter smog just as much as the 30,000 who go the whole way to clean heat.

    I think you are being twice as conservative than you need to be.

  24. Heh, sorry, I meant upon seeing ‘Dunne make chickens suffer’ you’d be sure to click into the post, what with your oft-stated position on animal welfare and all. *You’re* the big bro demographic!

  25. StephenR

    What is the “big bro” demographic anyway?

    I am genuinely interested to see if you are simply going to use the usual old and boring stereotypes or if you have the “big bro” demographic worked out.

  26. Frog are you able to advise how many of the Gren MPs are to read all of theamendmants – via SOP – to the bill before voting for it?

  27. Kevyn – the BCR includes all the quantifiable co-benefits, including those from winter smog reduction, although at a small rate as we just don’t know what the final ratio of retrofits/clean heat will be. We took a stab that clean heat installations would expand in proportion to insulation, but not by much.

    The truth is that it is a conservative estimate of quantifiable benefits, assuming 900,000 home get some retrofit help and about 30,000 get some clean heat help. This would be the return in 2025, just after the programme wound up. the benefits would continue for another 30 years or so after that, increasing the ultimate BCR much more.

  28. The point that Dunne, and our other critics forget, is that householders are going to be encouraged to use less energy which will have the dual effect of lessening emissions and saving their money.

    They talk as if it is every New Zealander’s right to continue wasting energy as much as we do now without any consequences at all. I know some of you commenters think that is true, but I disagree with you.

    I haven’t had a very good opinion of Peter Dunne since I heard him say in a 2005 election debate that the Greens wanted us all to be taking cold showers. Quite funny, since in a power crisis it would only be those with solar water heating (GP policy) who would be avoiding that fate.

  29. >>that’s not how the money will be actually divvied out

    Here we go again: higher taxes, funding losers.

    What happens when that tax pool starts shrinking, Frog? It has started already, and it will be getting progressively worse. What services will you cut first?

  30. “with the package split between the universal and targeted payments”

    So once again middle NZ is to have money stolen from them and handed over to other Kiwi’s as a form of wealth redistribution.

    All in the name of the con that is climate change.

    As time goes on more and more of lefts hidden agenda begins to see the light of day, the funny thing is that I do not remember Clark or the Greens campaigning on higher taxes.

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