The Letter

THE BUDGET
This year’s phrase is “smart growth”. It’s cargo cult economics – the idea that governments can pick some easy way to achieve prosperity. Cullen has been, as finance ministers always do, lowering expectations. But with a massive $4 billion surplus the budget has room for significant giveaways. ACT is pressing for a reduction in the tax rate. The IRD has been doing work on small business tax compliance costs. The average small business “works” for the government many hours a week just on compliance. There are rumours that Cullen may announce measures that would reduce small business tax compliance costs. As NZ has an imputation system, tax on companies is just a withholding tax. To really reduce the cost of investing and growing the country, the individual income tax must be lower.

WHAT WE WOULD LIKE
Not only is there enough money to reduce company and personal tax to 23 cents there are many measures that cost nothing: Open ACC to competition; RMA reform; Slash red tape; Reintroduce external exams; More labour market flexibility; More private sector in energy. Cost – virtually zero. Benefit – enormous.

TAX SURVEY
ACT has surveyed 80,000 businesses and 400, 000 households. The result shows that the one third of the community who pay significant income tax strongly believe their tax is excessive and unfair. ACT is presenting the case for a tax cut on Wednesday and will post the results on the website
www.act.org.nz/budget.

AMERICA’S CUP
72% of all surveyed opposed paying $5 million to the America’s Cup campaign. Just 17.5% were in favour. $35 million is now the cost. The government having got involved now finds it can’t get out, as ACT predicted. Why would a sponsor put in money if the government will do it for you?

PARLIAMENT
Helen Clark boasted to the press gallery that she would not be easy meat in parliament last week but collapsed into babble on the first question. Labour Ministers cannot handle repeat questioning. Trevor Mallard, acting Minister of Energy, got so confused he forgot that Labour is blaming Max Bradford for the energy crisis and blamed Richard Prebble – who has not been a minister for 12 years and has never been energy minister.

LOBBYING MMP STYLE
In urgency on Wednesday Parliament the government increased the tax on alcoholic beverages between 14 and 23% proof. It was to stop youth drinking said Jim Anderton. The opposition pointed out that the alcopops the young like are only 5% proof. United’s Judy Turner and Green’s Rod Donald told the house they had pressed Labour for the tax increase. The Liquor Lobby had told the MPs that 14 yr olds were drinking gin at 23% alcohol, ie just below the tax rate for gin. No proof of this claim was made. The real situation is that NZ firms have been producing local spirits like “Mississippi Moonshine” at 23% proof that have taken significant market share off the imported scotch, London gin and Jamaica rum. All the tax increase achieved was to protect the sales of imported spirits. Labour Ministers were incredulous when the minor parties supporting the government, United, Greens and Jim Anderton’s Progressive asked for the tax increase – but they took the extra tax (Labour needs the tax on sherry to pay for the next America’s Cup campaign).
 
MINISTER TARIANA?
MPs feel great sympathy for Mark Gosche who resigned from cabinet because of his wife’s illness. Lobbying is now intense for his job. Under Labour’s rules Helen Clark nominates a replacement. Gosche was Labour’s only Pacific Island minister. That could see either Phillip Field or Winnie Laban promoted. Both MPs do not belong to Labour’s important factions – the Women’s or the Maori Caucus. The smart money is on Tariana Turia, and Judith Tizard – both women Clark likes. The vote could be tomorrow, as Clark does not want another week of lobbying. By appointing an associate minister Clark creates an opening. The Labour whips want Clark to make Deputy Speaker Ann Hartley a minister to remove an embarrassment.

LAVS
Questioning from ACT’s Ken Shirley has shown that the army’s new LAVs do not fit into a Hercules aircraft unless the armour is removed! A recent article in the The American Spectator completely vindicates ACT’s concern about the $800 million purchase. It’s worth reading:
www.act.org.nz/heavymetal.

FAMILY COMMISSION
In the Dominion Post 7 Oct 2002 Jona-than Milne reported ”United is looking for something between the Law Commis-sion (at $4 m pa) and a small ministry (starting price $6 m pa)”. This item led Peter Dunne to write a testy letter to the paper (14 Oct): “What he (Jonathan Milne) writes is incorrect…He dredges up figures of millions of dollars to fund the commission, figures of which I am unaware…After many years in political life, I do not expect columnists to write only admiringly about politicians, but I do expect honesty, integrity and the abil-ity to stick to the facts”. In a pre-budget announcement it’s now revealed that the Commission for the Family will receive $28m, $7m a year! Silly us. We thought Peter Dunne was com-plaining because Jonathan Milne’s figures were too high. (An apology is called for Mr Milne.)

BUDGET POSTSCRIPT
Russia adopted in 2001 flat tax at 13%. Since then the Russian economy has grown at 10% a year and interest-ingly, inflation-adjusted income tax revenue has grown 50%. (See
www.act.org.nz/flattaxwworks)

 

THe Letter

THE BUDGET
This year’s phrase is “smart growth”. It’s cargo cult economics – the idea that governments can pick some easy way to achieve prosperity. Cullen has been, as finance ministers always do, lowering expectations. But with a massive $4 billion surplus the budget has room for significant giveaways. ACT is pressing for a reduction in the tax rate. The IRD has been doing work on small business tax compliance costs. The average small business “works” for the government many hours a week just on compliance. There are rumours that Cullen may announce measures that would reduce small business tax compliance costs. As NZ has an imputation system, tax on companies is just a withholding tax. To really reduce the cost of investing and growing the country, the individual income tax must be lower.

WHAT WE WOULD LIKE
Not only is there enough money to reduce company and personal tax to 23 cents there are many measures that cost nothing: Open ACC to competition; RMA reform; Slash red tape; Reintroduce external exams; More labour market flexibility; More private sector in energy. Cost – virtually zero. Benefit – enormous.

TAX SURVEY
ACT has surveyed 80,000 businesses and 400, 000 households. The result shows that the one third of the community who pay significant income tax strongly believe their tax is excessive and unfair. ACT is presenting the case for a tax cut on Wednesday and will post the results on the website
www.act.org.nz/budget.

AMERICA’S CUP
72% of all surveyed opposed paying $5 million to the America’s Cup campaign. Just 17.5% were in favour. $35 million is now the cost. The government having got involved now finds it can’t get out, as ACT predicted. Why would a sponsor put in money if the government will do it for you?

PARLIAMENT
Helen Clark boasted to the press gallery that she would not be easy meat in parliament last week but collapsed into babble on the first question. Labour Ministers cannot handle repeat questioning. Trevor Mallard, acting Minister of Energy, got so confused he forgot that Labour is blaming Max Bradford for the energy crisis and blamed Richard Prebble – who has not been a minister for 12 years and has never been energy minister.

LOBBYING MMP STYLE
In urgency on Wednesday Parliament the government increased the tax on alcoholic beverages between 14 and 23% proof. It was to stop youth drinking said Jim Anderton. The opposition pointed out that the alcopops the young like are only 5% proof. United’s Judy Turner and Green’s Rod Donald told the house they had pressed Labour for the tax increase. The Liquor Lobby had told the MPs that 14 yr olds were drinking gin at 23% alcohol, ie just below the tax rate for gin. No proof of this claim was made. The real situation is that NZ firms have been producing local spirits like “Mississippi Moonshine” at 23% proof that have taken significant market share off the imported scotch, London gin and Jamaica rum. All the tax increase achieved was to protect the sales of imported spirits. Labour Ministers were incredulous when the minor parties supporting the government, United, Greens and Jim Anderton’s Progressive asked for the tax increase – but they took the extra tax (Labour needs the tax on sherry to pay for the next America’s Cup campaign).
 
MINISTER TARIANA?
MPs feel great sympathy for Mark Gosche who resigned from cabinet because of his wife’s illness. Lobbying is now intense for his job. Under Labour’s rules Helen Clark nominates a replacement. Gosche was Labour’s only Pacific Island minister. That could see either Phillip Field or Winnie Laban promoted. Both MPs do not belong to Labour’s important factions – the Women’s or the Maori Caucus. The smart money is on Tariana Turia, and Judith Tizard – both women Clark likes. The vote could be tomorrow, as Clark does not want another week of lobbying. By appointing an associate minister Clark creates an opening. The Labour whips want Clark to make Deputy Speaker Ann Hartley a minister to remove an embarrassment.

LAVS
Questioning from ACT’s Ken Shirley has shown that the army’s new LAVs do not fit into a Hercules aircraft unless the armour is removed! A recent article in the The American Spectator completely vindicates ACT’s concern about the $800 million purchase. It’s worth reading:
www.act.org.nz/heavymetal.

FAMILY COMMISSION
In the Dominion Post 7 Oct 2002 Jona-than Milne reported ”United is looking for something between the Law Commis-sion (at $4 m pa) and a small ministry (starting price $6 m pa)”. This item led Peter Dunne to write a testy letter to the paper (14 Oct): “What he (Jonathan Milne) writes is incorrect…He dredges up figures of millions of dollars to fund the commission, figures of which I am unaware…After many years in political life, I do not expect columnists to write only admiringly about politicians, but I do expect honesty, integrity and the abil-ity to stick to the facts”. In a pre-budget announcement it’s now revealed that the Commission for the Family will receive $28m, $7m a year! Silly us. We thought Peter Dunne was com-plaining because Jonathan Milne’s figures were too high. (An apology is called for Mr Milne.)

BUDGET POSTSCRIPT
Russia adopted in 2001 flat tax at 13%. Since then the Russian economy has grown at 10% a year and interest-ingly, inflation-adjusted income tax revenue has grown 50%. (See
www.act.org.nz/flattaxwworks)

 

The Letter

ELECTRICITY FARCE
Labour’s solution is to bring huge pressure to get those who hold Maui Gas contracts to sell. Maui Gas “take or pay” contracts supply gas at a price that’s about half the world price. Pressure is going on to the owners of the methanex plant that converts gas into methanol. The plant provides 3% of the world’s supply of methanol, enough to affect world prices. The company has already cut production so driving up methanol prices, and is very reluctant to close the plant. The Todd companies that have gas will not sell at less than proper market prices. It adds up to an increase in your electricity bill.

SHORTAGE – LABOUR-MADE
Bogus environment and Waitangi claims have made the energy crisis worse. The Tongariro Hydro scheme that takes water from the Whanganui Headwaters through to Waikato stations is idle. Why? Labour put pressure on Genesis (state owned) to increase Wanganui river flows to settle a Maori Treaty claim. The river, for environmental reasons, needs regular flushes of water, but there are no environmental reasons for this year’s continuous flush level water flows.

OVER-TAXED
KPMG’s tax survey shows that NZ ‘s corporate tax rate is now out of line with the OECD. Dr Cullen’s response – no tax cut. ACT’s tax questions and Dr Cullen’s responses are at
www.act.org.nz/taxquestions and KPMG’s survey at www.act.org.nz/kpmg.     

HARTLEY IN WONDERLAND
Deputy Speaker, Ann Hartley, causes
Parliamentary chaos by jumping to her tiny feet and making absurd rulings. Two weeks ago she ruled that the government could pass legislation in Maori, without it being translated! Last Thursday she ruled that she could terminate a debate without giving the opposition a chance to speak and then, that Parliament could meet past the official sitting time. Parliament continued sitting until 6:15 pm – most MPs would have gone home. She ruled that this illegal sitting could suspend Richard Prebble who was vainly trying to explain that she must follow the rules. As MPs cannot speak while the Speaker is standing, and Ms Hartley never sits down, she ends up throwing MPs out who are just trying to object to her bizarre rulings.  On Tuesday, Parliament must decide what to do about Thursday’s illegal sitting. If Parliament can pass measures when no MPs know the House is sitting – it’s a frightening constitutional precedent.
 
LEGAL THREATS
The mayor of Waitakere City and former President of the Labour Party, Bob Harvey, sent us an email saying, “I am now asking the Chief Executive to take legal action against the ACT Party.” He also said our story about a Chinese woman and her two children being thrown out of the Henderson pool was “bulls..t”. We emailed back and said we had a written statement, we had contacted the management before publication, and which of our facts are wrong? Bob’s next email reveals he threatened legal action before he had “a chance to talk to pool staff” – then says, “you say the individual felt genuinely (and understandably) that the result was because of a SARS scare. My god…they must feel this in the street, in restaurant (sic), and on buses…what you claim in your newsletter. It is simply an emotive and untrue statement.” The Letter stands by its story. We think the family is owed an apology. Read the emails at
www.act.org.nz/bobsars  

SOMETHING FISHY
MPs on the Primary Production Select Committee have readily accepted Mr Ewen-Street’s assurance that he has not been influenced by his new housemate, Barine Development’s lawyer, Ms Grey. The Letter is not so sure. This is an inquiry into the allocation of Scampi quota worth over $100 million. The rules of natural justice apply and parties must be given an opportunity to respond. MPs who have shown bias must not serve. Mr Ewen-Street has defended himself by saying (NZ Herald, 2 May 2003), “My understanding is that Sue (Ms Grey) offered to brief everybody and she spent time with me, Phil Heatley, David Carter (National MPs), Damian O’Connor (Labour MP,) the majority of people (the committee), just in a lobbying sense.  If she supplied everybody in the committee with information to use, that’s our choice”. Not so. It’s like the judge meeting in secret with one of the lawyers.  Ewen-Street has been using the committee to make allegations of criminal wrongdoing without revealing who his source is. Judge for yourself.
www.act.org.nz/scampi.

SHE FAILED
Helen Clark’s European trip was a failure.  Clark’s claim that she managed to rewrite the communiqué is nonsense. NZ’s request for specific references to agriculture were rejected and replaced with the meaningless phrase “balanced outcome”. More humiliating - Clark was ignored. The real talks were informal between the US and the EC and Clark was excluded except for the formal sessions as chair. In fact, the closest Clark got to speaking to US Trade Official Zoellick was when she announced, “The chair now recognises the distinguished trade representative from the United States…”.  To top it all off, Clark’s press conference had been scheduled by OECD officials for the graveyard shift, 6pm on Thursday. After some coercion, Clark’s press talk was rescheduled to take place at the close of the OECD meeting the next day. The OECD officials’ estimates of foreign press interest were accurate. If NZ television crews and media had not been present, it would have been a complete debacle.  In a major setback Bob Zoellick refused to meet Helen Clark and in his press conference, which was well attended, he made it clear that a NZ/US Free Trade Agreement was not on the agenda. A transcript of his press conference is at
www.act.org.nz/zoellick .

 

The Letter

ECONOMIC SCARS
The Letter strongly supports Reserve Bank Governor Alan Bollard’s surprise move to cut interest rates - a signal to the market that the Bank will respond to the coming slow-down. In the last slow-down caused by the Asian crisis, both Treasury and the Reserve Bank underestimated the impact on the NZ economy. They refused to lower interest rates and the economy stalled.

RESPONSE UNBALANCED
To keep the economy growing requires more than an interest rate cut. Monetary policy needs to be assisted by fiscal policy. The latest Treasury report shows the tax take is 1.9% above projections. The overall increase in taxes of 10.3% in one year shows how Labour’s stealth taxes are really biting.

WHY CULLEN WON’T CUT TAXES
Michael Cullen, as is his habit when Clark is away, has been making leadership speeches. The first to Grey Power sets out Labour’s economic strategy.  He states, “We are predicting some tough times ahead for the economy, with the drop in world prices for agricultural commodities, and the severe flow-on effects of the Iraqi war and the SARS virus on tourism and other export industries.” He then complacently states, “Through prudent management we have given ourselves sufficient headroom to see the economy through the next 12 to 15 months, after which most economists forecast the world economy will start to recover.” What do you mean “we”, Doctor?

ELECTORAL AGENDA
The speech sets out Labour’s electoral agenda which is to take working families for granted, win over students (250,000 votes), social welfare beneficiaries (400,000) and superannuitants (450,000). The bribes – student loans, state houses, increasing super $15 a week, and Labour’s next election’s agenda - removing asset testing. Dr Cullen admits that the asset testing pledge is a big one -“huge costs [are] involved – starting at more than $100 million in the first year and rising to $345 million by 2020/21” - but omits to explain why the elderly should be exempt from the responsibility of paying for their residential costs – something that all other adults are expected to pay.
 
GOVERNMENT PRIORITIES

Dr Cullen outlines the challenges facing Labour. Health: “We need to get smarter at providing health care”.  Energy: “The very real prospect of a dry winter and the lowered estimates of the Maui Gas reserves.” Transport: “A long term solution to Auckland traffic woes, finding a stable future for Air NZ.”.
See
www.act.org.nz/greypower  .

WHILE THE PM’S AWAY…
His second speech was to Labour’s regional conference and contains an extraordinary defence of Maori sovereignty. He purports to be replying to Bill English but it’s a transparent bid to Labour’s influential Maori caucus, in which he rewrites history and performs remarkable intellectual flips. Cullen states that “However one tries to translate into English the Maori version” of the Treaty, sovereignty was not ceded.  “That is particularly so since a reference to mana does not exist in Article 1 despite the fact that whatever notion of sovereignty existed for Maori in 1840 it must have included mana.” He then says, “It will soon be subject to judicial interpretation entirely by New Zealanders, thanks to Margaret Wilson.” Scary stuff. 
www.act.org.nz/gisborne.

TRANSPORT WOES
The business sector is worried that the country’s traffic problems are damaging the economy and Labour’s Transport Bill will exacerbate them.  The transport problems: not enough roads, too much lengthy planning, a funding gap (a decent roading network will cost $4 - 5 billion, leaving a gap of about $2 billion to find), and rail. Labour’s transport strategy does not fix any of these problems. The Bill requires more consultation (Maori etc). Labour believes the public private partnerships (PPPs) will solve the funding gap. The commercial terms are so tough The Letter believes no PPPs will eventuate.

POWER CRISIS
The government has no idea what to do about the double whammy of no rain and no gas. A 10% power shortage will impact greatly on the economy.

FOREIGN POLICY ADVENTURISM
The announcement by North Korea, that, contrary to its obligation to the Non-Nuclear Proliferation Treaty, it has developed a nuclear bomb, is very disturbing. North Korea has tested missiles showing it can deliver them to Japan. Our part of the world has become much more dangerous. The Clark government in 2000 decided to recognize North Korea and has been giving the country aid. Yet another example of the folly of NZ’s “independent” foreign policy.

SARS PANIC 1
The French have scored a coup as their PM courageously continued his trip to Beijing. Our Speaker in contrast cancelled a long planned trip to China, citing the SARS outbreak. NZ may never have the chance to show, at such little cost, solidarity with China. We can always get another Speaker.

SARS PANIC 2
We have been contacted by a long time NZ resident of Chinese descent saying that last week she was at the Waitakere City Council’s Henderson Wave pool when a staff member came up to her and said, “You go away”. “Why?” she asked, “I have done nothing wrong!”  He then warned her if she didn’t leave in three minutes they would call the police. He began disinfecting everywhere she’d been. Naturally she felt humiliated and tells us she hasn’t been to China in years. We rang the Waitakere pool who said they had no record of the incident and claimed their reception area was their “main filtering station” for SARS!

The Letter

Easter Recess

Parliament is in a two-week recess. Labour is relieved. Helen Clark was failing to perform under pressure. Clark is not good in parliament.

This year she has joined parliamentary debates just three times. She delivered the Prime Ministerial Statement (she bemoaned having to give one) and two speeches in the debate on Iraq. Since the elec-tion, she has never spoken in the evening.

Fastest Lawmakers in the West

Labour does have one reason to be very pleased with the 47th parliament. Legislation is being passed as fast as Ministers can introduce it.

Last term the minority government had difficulty passing its anti-business programme. Welfare, OSH and RMA changes, and Green transport laws were log jammed. United’s willingness to support urgency without question time has created a Soviet-style Parliament: new laws without questions. So far this year 17 new laws have been passed. At this time in 2002: just nine new laws.

Helen Clark’s Travel Diary

Clark has visited Europe at someone else’s expense nearly every year for over 20 years. As a teenager, she was Labour’s delegate to a meeting of Europe’s Social Democratic parties. This group is remarkably smug, inwardly focussed and eco-nomically illiterate. They support 1% of GDP for aid while creating barriers to Third World agricultural exports. Anti-Americanism is a ‘principle’. Clark loves it and they love her.

This year her excuse is chairing the OECD Ministerial meeting in Paris (once every 20 years it is our turn). This is a meeting of finance ministers. Clark will be the only PM there. She says she will bring Europe and the US together. Complete nonsense. Finance ministers do not waste time on UN politics. They are interested in how to keep the world economy from slipping into recession, about which our PM knows nothing. Michael Cullen should have gone.

European Visas

The Ninth Floor claims Clark’s trip is a crusade to “fight plans to severely restrict New Zealanders' travel in Europe”. Why would Spain and the UK believe they owe NZ any favours?

New Europe

The admission of ten new countries to the EC, mainly from the old Soviet bloc, is far more significant long term than the war in Iraq. The larger EC will have more than 400 million residents. The NZ Government has belatedly realised it has no diplomatic post in the ‘new’ Europe.

Clark is not visiting the ex-Soviet bloc nations, but then those countries have experienced tyranny and have no time for her anti-Americanism. She is visiting the Belgian PM - the most anti-American in the EC.

Our PM is wasting her time – and that of Foreign Affairs officials – trying to build a coalition of ‘like-minded nations’: Chile, Mexico, Canada, Norway and New Zealand. We do almost no trade with these nations. We do not have shared interests and only agree on opposition to the war in Iraq.

Iraq

During the looting of Baghdad, the French and German embassies were specifically targeted for damage. Iraqis were aware these countries led international efforts against the removal of their dictator.

SARS

It seems only a matter of time before our first SARS case. The Government should be telling the public to keep the panic in perspective. Compared with malaria, HIV/AIDS and even ordinary pneumonia, SARS is not particularly infectious, nor fatal.

Instead of joining the beat-up, the Government should tell the public what precautions they can take to reduce risk.

As well as being the most honest approach, this would have a positive effect on our relationship with China and Singapore.

Within 20 years the Chinese economy will be the same size as the US’.

Thanks to Labour, a free trade deal with the US is off the table. The Doha Round is going nowhere. China is where NZ must look for new trading opportunities. Now is a good time.

National and Winston

The media ran a non-story that National had approached Winston Peters to rejoin the party. No National MP or senior office holder made any approach. The story came from Mr Peters. When it broke, the media was told he had been recovering from the flu and would not comment. But he was well enough that day to attend a select committee and issue two press statements. The real significance of the story is that Winston is keen to be again identified on the centre right.

Mallard Interferes with Preschool

The cost of preschool is rising rapidly: Mallard has started an ideological attack on the preschool sector.

This sector is everything the school sector is not. It is voluntary, independent, user-pays, non-union, and it has a large level of parental choice.

Labour is requiring all teachers to obtain a three-year qualification. There is no grand parenting. A real example: an Auckland deputy head teacher aged 47 must complete a three-year course to carry on teaching. Some 3,500 teachers are affected and more than 2,000 are expected to leave. At the present rate of graduate entry, it would take 70 years to replace the lost teachers.

The immediate effect of the teacher shortage is to drive up salaries. So preschool fees are rising rapidly.

Low-income families are being priced out. The children who benefit most from preschool can no longer attend.

Billion Dollar Cost

Labour’s proposed dog laws include the bizarre requirement that every dog owner fence off a pathway that allows burglars free access to their front door.

There are 478,915 New Zealand households with dogs. The cost of fencing will range from $400 for a small gate to $5,000 for a large property. Using an average cost of $2,500, the total cost to the country will be $1.2 billion..

Time for a Tax Cut

ACT MPs are continuing with the campaign for a Tax Cut in the Budget. Richard Prebble has written to Dr Cullen offering ACT’s parliamentary support for a tax cut (Labour and ACT have a majority). A copy of the letter and economic case for a tax cut are at http://www.act.org.nz/taxsurvey

Vacancy

ACT Electorate offices in Auckland and Wellington have vacancies for temporary electorate agents: computer literate people with a good phone manner and data entry skills.

In Auckland, contact Karen Smith at karen@actnz.org.nz.  In Wellington, email Sandy Grove: sandy.grove@parliament.govt.nz.

The Letter

First you beat them in the House

Helen Clark took a battering in Parliament last week – her worst week since Paintergate. MPs who have been ministers saw through Clark’s untruthful claim she had given just a “verbal” instruction to Ambassador John Wood to convey an apology to the US. No civil servant would ever rely on a verbal instruction to give an apology on behalf of a minister.  Labour won’t reveal the instructions or the apology, so there has to be more – and there is.

How to save the FTA

Ambassador Wood’s advice was blunt. First: Unless Clark apologised to President Bush, we could forget any deal with the world’s only superpower (apology delivered). Second: New Zealand must get out of the French-led Coalition of the Losers that insists post-war Iraq be administered by the UN (we’re out). And third: New Zealand could get back US favour by offering aid now to US-administered Iraq (we’re going to).   

Nineteen fewer friends

Nineteen US senators signed a letter to the President pushing the case for a free trade deal with New Zealand.  Then Clark bad-mouthed George Bush.  The senators feel let-down. 

The good news

The US still needs international support.  Both Clark and Goff are on record saying New Zealand would only give aid when the UN authorised it.  Last week, that policy was abandoned. A strong statement by New Zealand at the UN using Helen Clark’s favourite saying – “it is time to move on” – plus some aid, could repair much of the damage. 

Trade and foreign policy

Labour refuses to admit that this US administration links trade and foreign policy. Last week, US Trade Representative Bob Zoellick announced he was putting on hold the implementation of Chile's (already negotiated) free trade agreement.  Chile, a member of the Security Council, would not vote to enforce resolution 1441.  "People are disappointed," Zoellick said.  "We worked very closely with our Chilean partners. We hoped for their support at a time we thought was very important.” (http://www.act.org.nz/chile)
 
And in the letter by the nineteen senators advocating a trade deal with NZ, one reason cited was New Zealand's "major contribution to the campaign against terrorism".  

We were warned

In March 1999, our allies in Nato responded to the proven cases of genocide in former Yugoslavia by launching a bombing raid to rattle brutal leader Slobodan Milosevic’s hold on power.  Helen Clark – in Opposition at the time – attacked the US and UK.  She called the raid a “complete disaster” with “no coherent strategy”.  She claimed “the West would end up looking stupid”, and “Slobodan Milosevic will become further entrenched in power”.  Richard Prebble said at the time: "For Helen Clark to decide there are votes in attacking the US and UK displays a dangerous antipathy towards our traditional allies.  It's fortunate that Ms Clark is not Prime Minister, otherwise her statements would be causing New Zealand real damage.” 

The non-apology apology

While New Zealand media still accepts that Helen Clark’s apology was ‘sincere’, media in the US are hearing otherwise from their administration.  The influential, “inside-the-Beltway” Washington Times reported last Friday that Helen Clark’s apology was “a non-apology sort of apology”. Clark’s apology is now her most famous statement, having been printed around the world. See http://www.act.org.nz/apology 

Parliament has changed

The Opposition has developed new tactics at Question Time. 

Each day there are 12 oral questions to Ministers – six from the Opposition and six patsy questions from Labour.  The Speaker allows each questioner a further question, and then one question from each political party.

Even if the Minister misinterprets the question or gives an absurd answer, Speakers’ rulings accept this as “addressing the question”. So Helen Clark’s technique has been to give as short a reply as possible, knowing she has just a few Opposition questions to get through.

Labour lobbied the Speaker, saying under MMP the third parties (like ACT) get too many questions.  So this year the Speaker ruled each party would get a strictly proportional number of questions.  ACT receives just eight – after the one original question and supplementary, ACT is left with just six follow-up questions to each day’s twelve oral questions.  The Speaker has ruled these questions can be used as the parties wish.  “Including using more than one on a question?”  Answer: “yes”.  This is the major change. 

Three weeks ago, ACT began using most of its supplementary questions to follow the best question of the day.  It is like introducing the tank into parliamentary trench warfare.  Suddenly, all force can be applied to the Government’s weakest link.  Every other party has adopted ACT’s tactic.  Opposition Parties can and are ignoring the patsy questions.

Last week was the first time that the Government’s chief minister was in trouble. The Opposition’s best questioners Winston Peters and Richard Prebble, took enough questions to be able to push evasive Clark.  Example: on question number two on Thursday, Helen Clark faced eight supplementaries: four from English, three from Peters, and two from Prebble: an unprecedented grilling. 

Prime ministerial question time

What Ministers are now wondering is if Prebble, Peters and English can give Clark a going-over, what will happen if they all have a go at, say, Booboo (aka Marian Hobbs) – or for that matter, any Minister? 

Tax survey

The Letter has already received a strong response from our survey asking readers what Government should do with the $4 billion surplus.  Just 12% want an across-the-board, $50 tax cut, 86% want a McLeod-style tax cut (25 cents for the top two individual rates and company rate, 18 cents bottom rate – a tax cut for every worker). And we were looking to cancel the subscription of eight Letter readers who claim to like being overtaxed $4 billion a year – but then we realised at least one must be from Michael Cullen’s office!  ACT has launched its Five Point Tax Campaign.  You can read the case for a tax cut and complete the two-minute online survey (with extra questions) which will be forwarded to Cullen in time for the Budget (15 May) at http://www.act.org.nz/taxsurvey.

The Letter


IT’S THE ECONOMY
The Letter believes the economy has slowed. Since February, new home consents are down; the America’s Cup (an estimated gain of $1 billion) is lost; Fonterra’s payment is down and Air NZ has joined the other air-lines in cutting overseas flights. 

WHAT TO DO
Dr Cullen believes the way to stimulate the economy is government spending (more state houses, etc). The Letter believes this is counter-productive. There is a way to stimulate the economy: cut taxes. 

ACT MPs Richard Prebble and Rodney Hide will present ACT’s Tax Plan for the 2003 Budget in the Beehive Theatrette at 11 am this Thursday, and on Sunday in Auckland at a brunch at the Novotel, Ellerslie. Phone 09 523 0470 or fax 09 523 0472 for tickets.

CULLEN’S CHOICE
Dr Cullen has three choices: He can go on over-taxing New Zealanders and putting $2 billion in the Cullen Fund, investing most of it overseas, he could return it all pro-rata to every working taxpayer - that’s $50 per week, or, he could give it back to the people who paid the tax, and implement the McLeod Report suggestions – lower company tax and the top personal rate, and give every tax-payer a tax cut by lowering the bottom personal tax rate.

WHAT DO YOU THINK?
We are running a poll on tax. Have your say on the ACT website - www.act.org.nz/tax and we will present the results to Dr Cullen.
 
GENERAL CLARK
Clark says, “Perception is reality”. Well last week was a reality check.

Monday:  The war is not going to plan; would not have happened if Al Gore was president.
Tuesday:  Statements are “bleedingly obvious”.
Wednesday:  “No regrets over the comments.”
Thursday:  “Other leaders have made similar comments” (eg Syria).
Friday:  NZ’s Ambassador to the USA instructed to apologise.
Saturday:  Yanks in Baghdad
Sunday:  Clark not available.
Today:  “I’m not going there.”
Tomorrow:  “We have moved on.”

A FOREIGN POLICY DISASTER
Helen Clark’s misjudgment of the US military is second only to Saddam Hussein’s. The Labour government has also misread US foreign policy. On Monday Phil Goff told TVNZ “NZ is keen for that free trade agreement but we do not draw any parallels between the issues of free trade and the issues of commitment of troops to Iraq.”

What do you mean we? Goff maintains that because the US took no economic measures over NZ going nuclear free, the US splits trade from foreign policy. President Bush, Robert Zoellich, the US Trade representative and the US embassy in Wellington have all said that the US does package issues. After last week’s statements, NZ can forget any free trade agreement while General Clark is Prime Minister.

NO QUESTIONS ASKED
Last week the government did not have to answer questions about Helen Clark’s generalship because United supports government urgency motions that cancel question time. United has made the House of Representatives into a Soviet Parliament – all laws and no questions asked.

NATIONAL’S WOES
The Letter does not seek to advise National on its internal politics, but instead to point out the real problem. No conservative party has won office without winning a majority of the over-65 year old vote. National had a lock on this vote for most of its history. The foundation of Labour’s 1999 and 2002 victory was its appeal to the elderly. Last election, 56% of the over-65 voters said they voted Labour and 31% indicated they were National voters. Winning back the ‘greys’ is not going to be easy. Labour has just announced it will phase out asset testing for the elderly, starting in election year 2005. It is a huge election bribe costing $252 million and, as the baby boomers retire, $507 million a year. National’s problem: Clark’s willingness to make Muldoon-like promises to the elderly.

A PARLIAMENTARY FIRST
The first vote on legislation, “Title of the Bill” is a vote on the principle of the bill. On Tuesday, NZ First voted for the title of the Motor Vehicle Sales Bill and then against every other clause!

BURIED FIGURES
At 4pm on Friday night Education Minister Trevor Mallard (with none of the usual press announcements) had posted onto his Ministry website the Stand Down and Suspension Report giving the annual school suspension figures. Could it be he was embarrassed about the results: 22,000 pupils were suspended last year. At risk and Maori suspensions are up again. What with Parliament in urgency and Americans in Baghdad, it’s hard luck that ACT has taken to checking the website on Fridays and thinks Trevor should not hide his record. It’s on www.act.org.nz/mallardfails.

NZ LESS COMPETITIVE
Another little known set of figures is from the World Economic Forum in its Global Competitiveness Report. NZ has slipped from 10th in 2001 (we were 5th in 1997) to 16th. Microeco-nomic competitiveness sees NZ slip to 22nd. On technology we are 27th. Published last week is a survey of NZ by the Hoover Institute. It’s a damning document raising questions over NZ’s political will to tackle structural issues. Both are on ACT’s website: www.act.org.nz/wef and www.act.org.nz/hoover

ANDERTONISM
Jim Anderton’s job machine gave international computer giant EDS $1.5 million for “…the creation of much desired new…jobs”.  The result so far – one job less. This week’s Computerworld reports that EDS NZ boss, Dick Brown, has quit his job for stock and cash valued at $US36 million.

Who would have thought that Jim could Sovereign Yacht EDS?

The Letter

UNDER COVER OF WAR
It is not just Mugabe who is using the world’s preoccupation with the war in Iraq to achieve his agenda. Here in NZ Labour is pushing its own unpopular policies:
- ABOLITION OF THE PRIVY COUNCIL
Blanket media coverage of the war has meant papers like the Herald did not even report the 85% vote by Auckland law practitioners against the Supreme Court Bill.
- NEW LAND TRANSPORT BILL
It is the near unanimous view that this law will make new roads harder to build.
- THE RMA AMENDMENT BILL
Another measure that is being reported as pro-growth is a huge step towards a centrally controlled economy.  Under the bill local councils can declare land to have heritage status. The effect of such a declaration is that the landowner cannot make use of his land – it becomes, in reality, a park.

ELECTRICITY
Officials now believe that NZ will have a severe power shortage this winter. Labour’s answer  - more regulations. It is a direct result of NZ being the only country in the Southern Hemisphere to sign the Kyoto treaty.

OVERTAXED
Government surplus is now on track to be $4 billion. That’s 3.1% of GDP! In other words, if government gave back all the over-taxing it would be more than $2,000 per household.

WAITANGI SETTLEMENTS
Last week’s Ngati Awa settlement broke a long-standing pledge not to settle Waitangi claims with private property. The forestry companies when they purchased cutting rights also purchased the road access. The Crown has agreed that Maori can charge the forestry companies a market rent to use their own roads! The international banks regard it as nationalisation without compensation.

A NEW THINK TANK
The Republican triumph not just in the Presidency but also in Congress is put down in part to the right’s triumph in the battle of ideas. About 20 years ago, the right started to found their own think tanks. In Australia there is the Centre for Independent Studies. Here in NZ the closest we have is the Business Roundtable that commissions independent research of a very high standard.  18 months ago a conservative think tank, the Maxim Institute, was started. Its speciality is the family. The Institute is already producing researched alternatives. If the Prostitution Bill fails it will be because of research from the Institute into how similar Bills have had unintended consequences.  The website is worth a look -
www.maxim.org.nz . Last week the Institute held its first conference, In Search of Civil Society. An American speaker, Larry Reed, put forward:
- THE SEVEN PRINCIPLES OF SOUND PUBLIC POLICY
1. Free people are not equal and equal people are not free.
2. What belongs to you, you tend to take care of; what belongs to no one or everyone tends to fall into disrepair.
3. Sound policy requires that we consider long run effects and all people, not simply short run effects and a few people.
4. If you encourage something you get more of it. If you discourage something you get less of it.
5. Nobody spends somebody else’s money as carefully as he spends his own.
6. Government has nothing to give anybody except what it first takes from somebody, and a Government that’s big enough to give you everything you want is big enough to take everything you’ve got.
7. Liberty makes all the difference in the world.
(Larry Reed’s articles can be read at
www.mackinac.org)

DONNA UPDATE
Donna Awatere Huata has formally advised Parliamentary Services that she is now administering her own parliamentary resources. In effect she is an independent. Her first purchase? A state-of-the-art paper shredder.  And who would work for Mrs Huata? She’s just employed her daughter as an electorate agent. 

CRIME UPDATE
Since Labour took office, crime has increased. Police statistics show:
 Robbery up     15.8% 
 Grievous assaults up   20.8%
 Violence up    13.3%
 Homicides up    23.2%
 Kidnapping up    36.1%
 Intimidation up    26.3%

ACT CONFERENCE VIDEOS
Due to popular demand, the major presentations of the ACT conference, can be viewed at
www.act.org.nz/conference.

LIBERAL THINKING
ACT MPs have just completed a new book, Liberal Thinking, that is to be published in May.

BAGGING THE BAGHDAD HERALD
The Herald believes that one line on page six is balance for four front page attacks on ACT which is no doubt why the paper has not told readers that the Serious Fraud Office has dismissed the complaints against the Party. But then it could be that the Paper’s just too full of headlines like, "Herald correspondent a scourge of US foreign policy" - the paper obviously considers it a mark of honour when its writers are less than balanced. 

REFUGEES WE’D LIKE TO SEE
Clark has refused to give refugee status to white farmers from Zimbabwe saying they’re not refugees. Well what about the cricketers Andy Flower and Henry Olonga. The media reports that the two cricketers who wore armbands are now in hiding because Mugabe’s thugs have threatened them. They’re real refugees and wouldn’t they go well in the Black Caps?

The Letter


24 MARCH 2003

ISOLATED
On Thursday in parliament Richard Prebble asked Dr Cullen, “When is the PM going to make her statement to parliament?”  The answer: “Helen has got to wait to see Bush’s statement on TV to confirm whether the war has started”.  On Tuesday Clark boasted that she had been in telephone contact with the Prime Minister of Chile! Truly NZ has never been so isolated.

FOREIGN POLICY IN TATTERS
Labour’s foreign policy based on “multilateralism” and “support for the Security Council” is in tatters. Clark continues to describe an action backed by over 40 countries as unilateral, but supports France’s (unilateral) veto. New Zealand finds itself isolated from our traditional allies, Australia, UK and USA, and from our trading partners, Japan and South Korea, but supporting France, Germany and Russia, nations that we do little trade with, and do not agree with our stance on issues like GATT.

POST SADDAM HUSSEIN
Clark’s repeated claim that NZ’s opposition to Australia, UK and USA won’t hurt our future relationships is just not credible. The media fails to point out that the status of “friend”, diplomatically, is a country with which another does not have a dispute. NZ now has the status of Singapore but with much less influence.  Once NZ had access to decision makers of Continental Europe because it was known we had influence in Washington. Now our ambassadors report they can’t even get appointments because our views are irrelevant.

PARLIAMENT
Last week ACT demonstrated MMP in action. Neither Labour nor National has been keen to debate Iraq. Labour, because the government has three policies: in NZ, crude anti-Americanism; in the Persian Gulf, our frigate is escorting allied shipping; and in the UN, NZ is fence sitting. National, looking at the public opinion polls, has been reluctant to criticise. United and NZ First have been hoping no one would ask them for a view.  Only the Greens (strongly anti-American) and ACT (strongly pro-USA) have been willing to debate. Last week ACT, by taking the Iraq issue to the Business Committee, forced a debate where Labour had to set out its position. Richard Prebble then moved a notice of motion which required all the Parties to vote – United and NZ First against the US and National to vote with ACT. Without ACT, the NZ parliament could well have never debated what is the biggest issue facing the world.

VERY HIGH STAKES
It is not just John Howard’s career that is on the line. NZ MPs, Clark, English, Dunne, Peters and Prebble have much at stake. Helen Clark has bet her career (and NZ) that the war will be a humanitarian catastrophe, and her opposition will not affect NZ’s relationships. Peter Dunne and Winston Peters now hope she is correct. ACT’s decision to dismiss the UN as an empty debating chamber and strongly endorse our allies’ position means ACT has as much riding on the war as John Howard. While it’s safe to predict that Saddam Hussein’s career is over, it’s also safe to predict he’s only the first politician whose career the war will claim.

BURQA OF SILENCE?
What does NZ’s only Muslim MP think about the war in Iraq? We don’t know, as Labour has not let Ashraf Choudhary speak.

GOVT LAWYER VS GOVT LAWYER VS LAWYER...
Winz has launched a High Court case using Crown Law against the Ombudsman. The story so far: under the Official Information Act the Bailiff of the High Court sought the addresses of welfare beneficiaries who have absconded owing rent. The landlord has judgement orders, knows that the debtors are on welfare but does not have present addresses. The Ombudsman ruled the court orders should be upheld and ordered Winz to supply the addresses. Politically correct Winz is now going to court to fight.  Oh, who is the landlord? The Ministry of Housing. The court case is estimated to cost  $200,000 in legal fees alone.

REVENUE GRAB
Sports clubs have been double whammied by Labour. First, the total ban on smoking. But coming up is a revenue grab. Sport in NZ is financed from gambling. Many clubs have pokie machines and the proceeds pay for things like the national soccer and netball competitions. Trevor Mallard has told sports organisations that the government has decided “in principle” to take an extra 5% in tax. Depending how it is levied, that could be 28% of sports clubs’ revenue. Labour also wants to administer it. Helen Clark told Rugby League administrators that the money was going to “too blokey” causes.

POWER SURGE
The huge spike in power prices is the market working. NZ needs more power stations. The private sector is willing to build them. DOC is stopping a hydro station on the West Coast. Venture Southland wants to build a coal-fired station to assist Tiwai Point – our biggest single manufacturing export earner, but Labour is the only government in the Southern Hemisphere to have signed Kyoto. The government’s regulations are turning off the lights.
  
WWW.ACT.ORG.NZ/CONFERENCE
From tomorrow the video of ACT’s conference may be viewed on the website, http://www.act.org.nz/conference.

HERALD: “WE GOT IT WRONG”
The Herald, which has devoted six whole pages to ACT’s management of its parliamentary office, reported that the parliamentary commission has written a report, but edited out the Speaker’s statement that “there are no adverse reflections on any MP or Party.”

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