The Letter
MORE CONTROLS – THE SOCIALIST ANSWER
After cabinet the Government will announce its plans to regulate the electricity industry by levying each generator to provide dry winter capacity. All regulation produces unintended consequences. This regulation will remove the possibility of a market solution while distorting the energy sector further. What is wrong with the energy sector is there is not enough market.
The Government failed to adjust the tax brackets for inflation in the Budget. It’s nine years since the $9,500 bracket was established! Fiscal creep has increased income tax $500 million since Labour was elected. In contrast the government has decided to index the funeral benefit to the CPI. They are taxing us to death but at least they will bury us – its’ not for love they do it but to prevent the stink.
The Budget provided $6 million for Treaty education. The socialist engineers believe that if only we were educated about the Treaty we would see it their way. Labour’s problem is that they claim the principles of the Treaty are whatever the Waitangi Tribunal says. No $6 million campaign can alter the fact that the Treaty industry is cargo cult politics.
Want to let Michael Cullen know what you think about no tax relief for businesses and working New Zealanders? Your views on government spending on America’s Cup challenges, Maori TV, Treaty education, etc? Instant democracy. ACT MPs will deliver the results of an Internet petition tomorrow before the Budget is voted on. Log on now and sign the petition at
Helen Clark has had the worst performances in question time by any PM since Bill Rowling was unable to handle Muldoon. Each week it’s a new failure and last week was the most serious yet. The government had dropped from the Resource Management Amendment No. 2 Bill the term “ancestral landscape” when it was realised it covered any land once owned by Maori – i.e. every part of the country. [Readers will recall that The Letter pointed this out months ago.] Clark then told Paul Holmes and parliament that the select committee was to blame. Clark was forced to make a personal explanation that she as Minister of Culture had written to the Minister of Conservation requiring the term to be added to the RMA. Clark now excuses herself saying she signs hundreds of pieces of paper. Clark as Minister of Culture signs very few Ministerial legislative instructions. Clark was scathing on Jenny Shipley who could not remember what was said at a private dinner party. This week Clark has promised to release all the documents between herself and the Ministry of Culture regarding the RMA so there is more to come.
Clark walked off the stage and refused to answer any more questions at the traditional Auckland Chamber of Commerce post Budget lunch. Some 500 Auckland business people paid to hear Clark’s post Budget views – a dull, uninspired speech. Then came question time. The first two questions were innocuous. Question three: “My question is in two parts. The Labour government rightfully believes that tax cuts deliver prosperity…because you have given Maori enterprises a tax cut...Why not give all New Zealand enterprises the same opportunity to prosper? Part II: Do you and the Labour government subscribe to the basic principle that all New Zealanders are equal before the law…and one class of citizenship? ” Helen Clark waffled saying that would be the ideal. The questioner said, with respect you have not answered the question. The audience agreed and began heckling. Clark replied that he should refer the question to ACT! The next question asked what the government was going to do about consultation with Maori blocking needed energy projects and was government going to do anything about the energy crisis? Clark answered, “Yes,” and walked off. The business audience made very clear its disapproval of the PM’s performance.
Every year the Electoral Commission publishes political party donations. Usually the media write anti-ACT stories – this year, silence. Last election ACT donations over $10,000 totalled $88,971.24 ($50,000 anonymous.) National got $528,167.71 ($200,000 anonymous). Labour $671,719.00 ($446,681 anonymous). The Engineers’ Union gave $70,000 and received back a so-called trade union education grant of $482,000 (a real scandal). ACT is funded by many small donations. It’s Labour that’s the Party of wealthy lobbyists. See
MPs are complaining that they can no longer buy NZ-made apple juice from the lunch bar in parliament. Bellamy’s has signed a contract with a multinational soft drink company to provide only soft drinks like Coke. Not a word of protest from the useless Green Party.
The recent increase in the excise duty on sherry and port (to “save young people”) was a confidence motion where Labour needed the vote of the United Party. United voted one short. Rumour has it one United MP refused to vote for the measure saying it was just a tax grab.
The latest cabinet reshuffle has made the Clark Ministry the biggest in NZ’s history. Most Labour MPs now have an extra salary, car, etc. Three MPs have been named Ministers of State meaning they just get the money and no job description.
The ACT parliamentary unit has a vacancy for a press secretary. The job involves handling press and media for ACT MPs. Media experience is an advantage but we will consider an applicant with journalist school and life experience. Ability to write well is a requirement. Apply electronically with a copy of your CV
to ACT's Head of Staff at act@parliament.govt.nz
The Letter Budget Special
15 MAY 2003
The Budget reminds us of the Sherlock Holmes story -
Inspector Gregory: "Is there any point to which you would wish to draw my attention?"
Holmes: "To the curious incident of the dog in the night-time."
Inspector Gregory: "The dog did nothing in the night-time."
Holmes: "That was the curious incident."
What's curious about the Cullen Budget is there is nothing to revive economic growth, tackle Auckland's traffic, combat the energy crisis or the compliance costs for business, in fact any of the real issues. So if you're busy you need not read on.
Labour 's credit card pledge was "No rise in income tax for 95% of taxpayers". As the Budget did not adjust the income tax brackets, now 95% of all taxpayers pay more tax than when Labour came to office. The Parliamentary Library economists calculate that to fully adjust for inflation the $9,500 threshold should have been adjusted in the budget to $13,200 (a 38%) increase; the $38,000 threshold to $41,800 (a 10% increase) and the $60,000 threshold should be raised to $65,000 (10% increase). The failure to raise just the top threshold means that 270,000 workers are now in the 39-cent tax bracket - ie 18% of fulltime workers. Helen Clark can't have been conscious when she signed the pledge card.
A Labour strategy has been to repeatedly announce the same spending announcement. In December 2001 Annette King announced $400 million "new" money for health each year for the next three years. The budget re-announced it. The trickery is greater. In fact $120 million was never "new" money. Annette King lost out in Labour's first two budgets and health spending was cut - so it's just catch-up money. The crisis in hospitals' deficits will continue. $165 million of the $280 million is "ring-fenced" for primary health. Hospital boards will continue to cut waiting lists by simply taking thousands of patients off the waiting lists and putting them in "active review". It's NZ's greatest state secret how many patients are on active review. They are not counted. Any bureaucrat that did a count would be fired!
Another loser. Real police spending is falling. Real per capita spending on police under Labour has fallen from $216 per person to $214.
The motorist is a real loser under Labour. In 1999 petrol and road user charges raised $1517 million, $1194 million went to Transfund for roading and Government took the rest - $323 million. This year petrol and road users will raise $1910 million, Transfund gets $1464 and the government takes $446 million!
ACT New Zealand has managed to obtain a copy of the Treasury beneficiary number forecasts that this year for the first time have been omitted from the printed Budget Tables. But they forgot to take the numbers off the Treasury's website. When we look at the numbers, it is easy to see why Labour didn't want to publish them. The Budget claims that Labour's economic policies will create jobs but the Treasury doesn't believe it - as the unemployment benefit is predicted to rise by 6,000 over the next two years. What's even more disturbing is the rise in disguised unemployment. Unless Treasury's predicting that the SARS epidemic is going to sweep through New Zealand, it's not possible to account for the fact that Treasury says that within three years, the number of people on the sickness benefit will have risen 34 percent from when Labour came to power. When Labour took office, there were 32,800 on the sickness benefit. Now there are 38,000, and Treasury says that there will be 44,000 in 2006. A similar, inexplicable trend exists in the invalids' benefit. There were 52,700 New Zealanders on invalids' benefits when Labour was elected. There are now 68,000, and there will be 82,000 in 2006. That's a rise of 55 percent.
Perhaps the reason the Government didn't publish the benefit number predictions is because the Domestic Purposes Benefit numbers are due to rise by 3,000 over the next three years. This is despite - or perhaps because of - the United Party's Commission for the Family. The benefit table is on ACT's website:
Having spent $27 billion on education, Labour has just noticed kids can't read. No worries - help is at hand. Trevor Mallard, Minister of Education, has announced the Budget will spend $15 million over four years to appoint 15 new literary development officers.
Labour boasted that it had a spending cap. In Dr Cullen's first Budget he boasted, "The $5.9 billion spending cap we have imposed on ourselves remains in place." This Budget has no spending cap and in an obscure passage: "the likelihood of sufficient fiscal headroom in Budget 2004 for some significant initiative beyond the amount presently allowed." One has to go to page 21 of the Economic and Fiscal Update to find "would allow for policy changes of under ½% of GDP in each of the 2004, 2005, and 2006 Budgets." Enquiries in the Budget lock-up reveal that this is an extra $500 million new spending each year.
Treasury forecast average growth of 2.5% a year over the next ten years. Under what Helen Clark calls the "failed policies of the past" New Zealand grew 3.6% in the 1990s.
The Letter
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.
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.
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
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?
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.
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.
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:
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.)
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
THe Letter
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.
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.
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
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?
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.
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.
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:
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.)
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
The Letter
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.
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.
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
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
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.
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
The Letter
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.
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.
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?
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
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.
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.
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.
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.
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.
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
The Letter
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".
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.
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.
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.
We are running a poll on tax. Have your say on the ACT website -
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.”
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.
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.
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.
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!
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
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:
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
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.
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.
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.
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.
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 -
- 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
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.
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%
Due to popular demand, the major presentations of the ACT conference, can be viewed at
ACT MPs have just completed a new book, Liberal Thinking, that is to be published in May.
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.
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?
