The government has produced a “Making Tax Easier for Small Businesses” discussion document - yet more talk. Proposed is a tax concession to use PAYE agents. As there are good, cheap software programs, paying PAYE is not a problem. There is a risky proposal that small businesses use their GST to calculate their provisional tax. What about zero rated services and items exempt from GST? If the IRD demands ‘use of money’ interest on the difference between the provisional tax paid and the tax owed, small businesses will be worse off. There is also provision to allow more frequent payments of provisional tax and a measure to encourage new businesses to pay provisional tax in their first year – useful but minor.
BE VERY AFRAID
What causes small businesses to fear the IRD is not PAYE or provisional tax calculations; it is the IRD’s inflexible savage penalties. The imposition of ‘use of money’ interest rates and penalties on innocent mistakes and the strain and the compliance costs of an IRD audit that goes back three years. It gives state power new meaning. The IRD is the No. 1 risk in business. The No. 1 reason for bankruptcy and the No. 1 reason people leave business. An audit that lasts over 18 months is an experience many decide they just do not want to repeat.
A government that really wants to cut compliance costs would look at the real issues: employment law, OSH, ACC, RMA, and local body regulations. Real tax reform needs the assistance of the country’s accountants who do the IRD’s work. There is something rotten about a tax system that can ruin an honest hard-working taxpayer for an innocent mistake. The IRD’s discussion document is on ACT’s site:
IT’S THE TYPE OF TAXES
Dr Arthur Grimes, Waikato University and Motu Research economist, has written an important paper on tax for the Ministry of Economic Development. The paper has just been published in the latest issue of New Zealand Economic Papers. His analysis questions the view that it’s the size of government that matters for growth and instead points to the design of the tax system. Then he says NZ’s reliance on income tax may be damaging growth. Grimes finds that the size of the NZ government may be lowering annual growth by up to half a percent - actually that’s a lot. NZ collects 18% of tax revenue from income tax; the OECD average is 14%. Grimes says that lifting the ratio of direct taxes to indirect by 10% decreases per capita income by 3.3%. He points out that what government spends tax revenue on affects growth; on welfare; it’s negative, on infrastructure and education, it’s positive. The paper is at:
THE SPEAKER’S WOES
Speaker Jonathan Hunt is off on a Speaker’s trip to China where the Speaker is held in proper respect. Previous Speaker’s trips are famous for their state progression around the globe but this trip is just two weeks. This is because Hunt has promised Helen Clark that he will always preside over question time.
HELEN CLARK’S ROLE
“The curious incident of the dog in the night-time” – “The dog did nothing in the night-time”, “That was the curious incident”(Sherlock Holmes). Helen Clark has no respect for Westminster parliamentary democracy. Ann Hartley’s appointment as Deputy Speaker showed the same contempt for parliament as Caligula appointing his horse a consul in the Roman senate. When Winston Peters made his over-the-top and completely out-of-order attack on Hunt on Wednesday, curiously, Helen Clark sat immobile in her chair. Any other PM would have vigorously defended the Speaker. Clark either can’t or won’t put up a fight in the House.
Ministers this week were refused speaking rights at the Northland hui, but on the same day Ministers refused to attend the Foreshore, Law and Politics Conference at parliament. The difference? The Conference at the Beehive is not just for Maori. Another difference is that there are speakers of international renown able to intellectually challenge Labour’s proposals. Brian Lee Crowley from North America will challenge the whole concept of the ‘public domain’. Crowley says if an asset has no owner, then wasteful use is the result. “…the owner has a powerful reason to devote considerable time and attention to finding these more valued uses…society gets its natural resources efficiently…ill-defined or unenforceable property rights allow people to divert the resources to less valued uses”. Register at
REPUBLIC HERE WE COME
Labour pushed its Supreme Court Bill through committee. It’s a big step to the Wilson vision of the Socialist Republic of Aotearoa. You can download the petition forms for a citizens’ initiated referendum at
WHAT PLAN B?
No country is more affected by the failure of the world trade talks at Cancun. Significant concessions on agriculture, worth much to NZ and the third world, were offered. The round may yet succeed, but maybe not for years. ACT moved for a special parliamentary debate asking what is the government’s Plan B. Every other Cairns group country that has not joined the G21 group has either a free trade agreement or its promised prospect from the USA. Neither of the two old parties has a Plan B because neither will face up to telling the public that the ban on nuclear ships is very expensive ‘gesture politics’. Labour has also failed to explain why NZ turned down the chance to join the G21. The Cairns group with only six countries out of 140 is now irrelevant. Labour says – “We could not abandon the Aussies”. Didn’t the Aussies abandon NZ in their free trade talks with the US? When have we ever been more isolated?
The big concern facing the government is how to resolve the foreshore issue that has the potential to bring down the government and split race relations.
ACT’s Stephen Franks has brought down on himself the wrath of the establishment by asking why Chief Justice Sian Elias did not disqualify herself from the foreshore case. It transpires that the Chief Justice as a lawyer acted in a Maori claim for the bed of the Manukau harbour. She lost that case when the Waitangi Tribunal ruled that the Crown’s ownership of the seabed was well-established law. As Chief Justice she has basically rerun her earlier case, overturned a 40-year-old Court of Appeal case decision and rewritten the law, ignoring the effects on parliamentary statute law that had relied on the earlier decision. It is very rare for the Court of Appeal to overturn a previous Court of Appeal decision. The convention is that it is for parliament to rewrite the law not the court. It may well be that the 1963 decision was wrong.
There are many court decisions that if heard today would be differently decided. Judges leave that to parliament. If unelected judges are going to overturn accepted law, NZ is ungovernable. Maori, as any politician could have told the court, have not heard the Chief Justice’s comment that the Maori claim was likely to fail. All they have heard is that they own the foreshore. The Attorney-General Margaret Wilson has admitted the Crown did not expect this decision.
Stephen Franks raises a good point; the Crown could ask for a retrial on the grounds of possible bias. He raises an even better point; what will a Sian Elias Supreme Court be like? Are we wise to abandon the Privy Council? See Stephen Franks’ statements on
HUI HOPPING EXHAUSTION
Labour now wishes it had not agreed to eleven hui with Maori. The time taken is enormous. The marae are rural. Michael Cullen is grossly overworked. At the same time as he spends four hours travelling and four hours hui-ing he must tackle urgent issues like the Air NZ/Qantas decision.
There is no dialogue at the hui. The government view is the foreshore and seabed are owned by the nation for everyone and the government has the right to determine the issue. Maori view is quite different. In essence – that in 1840 Maori owned the entire foreshore and the entire seabed. Treaty Article II guarantees Maori its undisturbed ownership. The Crown role is to protect Maori ownership. Maori claim not to be interested in co-management saying that they are quite capable of managing the foreshore themselves. They see the government proposals as another land grab.
FORESHORE, LAW AND POLITICS
Two more top quality speakers will present at ACT’s conference on the foreshore issue:
1) Owen McShane, a leading thinker in property rights, environmental issues, and regulation. Owen will analyse Labour’s proposals.
2) Hon Michael Bassett, NZ’s greatest local body reformer and historian on the issues for local government.
ACT expects this conference to be a sell out. Register at
WINNIE FOR GG
Labour’s own polling indicates that Winston Peters is even more of a threat to Labour’s hold on the Maori seats than the recent resurge in Maori support shows. Helen Clark offered Derek Fox the top job in Maori TV to buy off his party. The Letter has heard Labour Ministers wondering what it would take to buy off Peters – Governor-General?
IT’S A FLUTTER
On Sunday the United party took a pounding from its base in the fundamentalist churches - the Gambling Bill that legalised Internet gambling and note-taking poker machines passed on vote from United’s “pro-family” MPs. United’s MPs, leaderless, as Peter Dunne has vamoosed to Mexico with Jim Sutton, looked shaken and confused as to how they came to be supporting extending gambling.
ALL A MISTAKE?
As MPs like United’s Judy Turner tell it, it’s all a mistake. The United party put up, as a price of their support, a series of unacceptable amendments. To United’s surprise the Labour government accepted all of their amendments so the party found itself supporting gambling.
PETER DUNNE’S INTRIGUE
The Gambling Bill illustrates the real split in the party between Peter Dunne’s United and the Christian Democrats’ Future party. Peter Dunne, a Catholic, has no moral objection to gambling. The Future MPs do believe gambling is a sin. Peter Dunne, being ex-Labour was well aware that George Hawkins would welcome United’s proposed amendments. The Left and the Greens want the proceeds of gambling to go to “social” causes under the control of civil servants. George Hawkins wants the proceeds of poker machines to continue to go to support local sports teams etc. Dunne and Hawkins colluded on the amendments but it appears that Peter Dunne failed to tell his MPs.
HOW LONG UNITED?
MPs who know Peter Dunne do not believe he can hold his party together. United MPs like Marc Alexander have views closer to ACT than Labour. The caucus, with the exception of the ever-flexible Dunne, are parliament’s most conservative. It is really astonishing that the pro-family, pro-God party is supporting the anti-family, godless Labour government. Labour strategists do not expect it to last and believe that Labour’s long-term coalition partner is the Greens.
The Treaty, Maori, and what sover-eignty means, are going to be the defining issues for a generation. The four Ministers who attended the first of government funded hui on Labour’s proposals for the fore-shore and seabed have come away stunned by the highly organised and virtually unanimous opposi-tion to the government’s proposal. The unspoken message - Labour faces electoral defeat in the seven Maori seats.
THE TREATY INDUSTRY
Political power comes from money and votes and the Treaty industry has both. Iwi like Ngai Tahu, who have received hundreds of millions in Treaty settlements, are bankrolling the foreshore claim. The Treaty lawyers and consultants who have earned millions in fees are contributing their skills to widen the Treaty industry to include marine farming, oil, minerals and both sea and fresh water.
While mainstream media report the $70 million spent on Maori TV and not one picture, Maori radio receives over $10 million a year plus spectrum worth many more millions. There are now 22 Iwi radio stations on both FM and AM broadcasting 24 hours a day. Iwi radio stations now have their own parliamentary press gallery office – in effect their own news service. Some iwi stations have 50% of the Maori audience. Labour has found that in Maoridom it cannot compete with the better-funded Treaty industry and its radio network.
A MISSION IMPOSSIBLE
There was no way Labour Ministers could succeed at the hui. First, the powhiri. Everyone had to be formally welcomed. Then, marae culture requires everyone is fed – another hour. Each speech requires a song. Complaints from the government about shortage of time resulted in much longer songs. Maori complained the four hours had gone before any meaningful debate could be had. But if Parekura Horomia had four hours or 40 hours, he would be no more able to explain the concept of public domain on the marae than he is in parliament.
A RADICAL GENERATION
At the hui Ministers faced a well educated new generation of Maori who speak the language well, have attended full emersion language schools and then been radicalised by university departments like Margaret Wilson’s Waikato law school. It’s ironical that it’s Margaret Wilson’s own graduates who lead the opposition to Wilson’s proposed legislation.
WHAT MAORI WANT
The Maori who brought the Court of Appeal case have put forward the Te Ope Mana a Tai principles saying the entire foreshore and seabed was held by Maori and the Treaty guarantees customary rights that include governance, economic development and access. “It is not for the Crown to determine the nature and extent of customary rights but rather it must respect those rights.” While government was formulating its response, iwi was endorsing what is a full on challenge to the sovereignty of parliament.
THE FOX HAS ESCAPED
Derek Fox went within 695 votes of taking Parekura Horomia’s seat. Clark cynically offered him Maori TV to close down his party but now he is out and keen to restore his mana. Peters, after his experience with Maori constituency MPs, is not keen to have NZ First MPs from the Maori seats (Peters genuinely believes separate Maori seats are divisive and bad for Maori and followed ACT’s lead in refusing to stand in the Maori seats). But Peters wants the Maori list vote. This week a new possibility occurred – a Derek Fox Maori party that wins the seven Maori seats giving the list vote to NZ First. Such a tactic creates what is called an overhang – more than 120 MPs. For Labour it’s an electoral nightmare but only fair - the Electoral Royal Commission recommended abolishing the Maori seats and it was Labour that insisted on their retention.
FORESHORE, LAW AND POLITICS CONFERENCE
The government plans no hui for the general public so ACT has stepped in. ACT is sponsoring a top quality conference on the foreshore issue. The conference intends to explore the current law, the government’s proposals and what the centre-right’s response should be. ACT is flying in Brian Lee Crowley, President of the Atlantic Institute for Market Studies – a North American think tank – and world authority on this issue. Speakers include Briony Davies from Chapman Tripp, Tahu Potiki and John McEnteer to present what Maori want, Paul Cavanagh QC, Doug Gordon, Roger Beattie, Owen McShane and Bruce Mason. ACT MPs will be facilitators and also participate in a panel discussion with Dr Wayne Mapp (National MP and former law lecturer). The government has been asked for a speaker, as has NZ First. The conference is on Saturday 4 October, 10 a.m. to 4:30 pm, in the Beehive Banquet Hall, Parliament Buildings. The cost is $65. For details, programme and registration see
The establishment was taken by surprise by the farmer’s tractor protest over the flatulence tax. There are so few fulltime farmers as MPs that parliament is out of touch with rural opinion. It’s noteworthy that the two real farmers, ACT’s Gerry Eckhoff and National’s Shane Ardern, figured so prominently. It was Gerry Eckhoff who organised the petition that the farmers came to deliver with 64,000 signatures! It was Shane who took the tractor up parliament’s front steps – a good piece of driving.
John Tamihere who has been attending, but not speaking at the hui, is now floating the concept that customary rights do indicate development rights, e.g., a right to fish must include a right to develop fishing such as marine farming.
Helen Clark, during the last election said: Labour had a “zero tolerance” GE policy; “There was no GE contamination”; John Campbell’s TV3 interview was “unethical ambush journalism”; “I believe in total disclosure on this. The government has nothing to hide. All government advice will be made public”; and the government had released “all the documents” 10 days before the election. Last week we learnt that Ruth Wilkie, an adviser in the PM’s department, told Helen Clark in a memo dated 8 December 2000 -
1 Officials did not know if the corn was contaminated or not;
2 The official zero tolerance to GE policy “runs counter to reality”;
3 “There will need to be close attention paid to managing the communication of this issue”.
4 Then Ms Wilkie said in a memo 10 days before the election,” I wish to register formally the concern I expressed to you… about the decision to withhold from public release DPMC notes to the PM on the management of potentially contaminated corn seed in December 2000.”
THE REAL ISSUES
The real issues are these:
1 Helen Clark has publicly claimed until last week that all documents were released.
2 That claim is false.
3 Helen Clark knew it was false.
No doubt Helen Clark and Dr Prebble were careful never to discuss his decision but there is no way the PM would not have realised this damaging document had not been released.
CLARK’S TV3 COMPLAINT
Helen Clark even had the nerve to ask that TV3 be taken off the air for twelve hours. The Broadcasting Standards Authority’s upholding of Helen Clark’s claim that the John Campbell interview was “unfair” because the PM was not told of “specific allegations” during the interview now looks very foolish. They completely swallowed the government’s line that Helen Clark knew nothing and now they look ridiculous in light of the Wilkie memos. A credible Broadcasting Standards Authority would reopen the issue and ask the PM why she didn’t tell the tribunal or John Campbell about the Wilkie memo.
CLARK’S NO SHOW
The Authority also ruled it was unlikely that Clark “would have declined an interview had she been appraised of the allegations contained in the book”. But Helen Clark’s strategy is to run away – she rarely shows in parliament and thanks to the United party’s vote won’t appear as a witness to the Corngate Select Committee. (We know she won’t front to her government’s Maori hui. She’s prepared to climb any mountain to avoid the foreshore.) Last week PM Tony Blair voluntarily fronted up to a commission of inquiry in Britain. Blair said that if he had misled the nation he would have to resign. In NZ Clark takes no ministerial responsibilities for her own department or for misleading the nation for over a year. Both Wilkie memos are at
THE EDWARDS SHOW
There were 100,000 extra hits on ACT’s website this month, meaning more people watched Edward’s interview with Rodney Hide on the ACT website than saw the original broadcast. Journalist schools are downloading it. See
MAORI TV SCORECARD
Two chief executives (fraud and personal issues!), $55 million, flash Newmarket office, expensive stuff and no TV. Clark vowed the channel would be on air by June 2002. Maori TV’s latest problem is the discovery that its allocated UHF band will interfere with thousands of home videos and SKY UHF machines requiring an expensive tuning. Today cabinet must decide whether to proceed with the original channel or switch to SKY at a cost of $4 million.
AN UNCERTAIN SHORE
Government speeches to parliament did not clarify what is meant by “public domain”. All that became clear is the ever-subservient United party looks like providing the votes for the legislation. Labour proposed consultation. It seems only Maori will be consulted. ACT wrote asking for a briefing from officials, which Cullen refused.
The latest Pacific Island to be bankrupt is Niue. The Island owes Shell Oil $500,000. The lights are about to go out – literally! Niue is an anomaly. The people are NZ citizens. Niue has internal self-government but NZ is responsible for international relations. Helen Clark’s solution was to send failed Alliance MP Sandra Lee as High Commissioner – not what a friend would do.
THE COST OF KYOTO
The Letter has learnt of a serious cabinet row over Kyoto. Officials have begun outlining the real cost of the Treaty – carbon taxes and impossible to meet restrictions on manufacturing and agriculture. The two Jims, Anderton and Sutton, responsible for manufacturing and agriculture, have asked Pete Hodgson why NZ ratified So much cost and erosion in living standards for so little gain to the environment. Hodgson is now pressing Fonterra and the Meat Board to agree ‘voluntarily’ to fund methane research so he can call off the FART Tax before Gerry Eckhoff and the farmers arrive with their tractors.
The government has announced that it is to drop the income tax paid by employer subsidised super schemes from 33 cents to the rate paid by emplyees. An employee earning $9,500 (if there exists such a person belonging to this sort of scheme) pays 15 percent tax but 33 percent on the employer contributions to the scheme. It won’t work. There are now just 520 employer-subsidised schemes in NZ. Compliance costs are killing them, and the cost to employers of adjusting for each employee’s tax is crippling.
The answer is of course a low flat tax!
Labour does not have a parliamentary majority for its proposal to declare the foreshore and seabed “public domain”. The Greens have said they will not support legislation reducing Maori customary title and United, that they will not support preserving Maori customary rights. The press gallery view is that United will again fold and provide the votes. But, will they? United has been worried about its sub-2% polling. Dunne’s speech in Nelson saw his party’s vote double to 4%. To vote for the legislation United has to show the bill does extinguish Maori customary rights. But if the legislation does, not only will the Greens not support it, but the Labour Maori caucus will also revolt. NZ First’s support in the Maori seats is rising rapidly. Peters’ winning all the Maori seats in 1996 shows he can do it again.
ACT’s lawyers Stephen Franks and Richard Prebble believe the Crown’s surrendering of ownership of the foreshore creates a legal vacuum. It’s an invitation to the Maori Land Court to create customary rights that grant Maori de facto ownership. Richard Prebble has written to Dr Cullen seeking clarification – so far no reply or denial of ACT’s interpretation.
GE = NO GREENS
The Greens are pledged to oppose Labour when the GE moratorium is lifted in October. Despite the bizarre decision by the NZ Herald to campaign for the GE moratorium (it makes the case against having a foreign owned media) Labour is committed to lifting it. The Greens voting against supply recently has been ignored as their amendment was framed so that no other party would support it. But as October gets closer the Greens will need to review their support for Labour or abandon their GE stand.
A NEW ELECTION?
This government has never been as secure as the media presents it. Labour is a minority government. Neither the Greens nor United are in formal coalition. The support from United on procedural issues has let Labour clear the legislative log jam, re-elect Harry Duynhoven in urgency, etc. But the cost has been a collapse in United’s support. United cannot afford to be a lion on the beach and a lamb in parliament. Labour ministers are already spinning that if they have not got the vote for the foreshore legislation then the government will seek to join the Privy Council appeal. But what does this do to the credibility of Labour’s proposal to abolish the Privy Council?
WON’T GO THREE YEARS
No MMP government has gone three years. It is unlikely the Clark/Cullen government will. Labour does not want an election on the foreshore but ministers also know that the authority of government will be weakened if it cannot solve the issue.
The government has concluded that a free trade agreement with the USA is impossible. The visit of China’s new president Hu Jintao is causing officials to promote a NZ/China FTA. Clark has been caught by surprise by the President’s visit. NZ extended an invitation but never expected Hu, who rarely makes overseas visits, to accept. President Hu accepted because he is also going to Australia and NZ is seen as a safe place to visit. Chinese leaders visiting the USA or Europe face huge demonstrations. Clark is downplaying any FTA saying the “work has not been done”. Nonsense! The benefits of free trade are one of economics most studied issues. China is already NZ’s 4th largest trading partner. Over the next 20 years the Chinese economy will grow to be larger than the US. There are significant Chinese tariffs on agricultural and forestry products. ACT is pushing for the government to initiate a free trade agreement with President Hu.
CRIME KEEPS RISING
Latest statistics show violent crime keeps rising. Labour says society is to blame so the criminal is also a victim, hence laws to let offenders out of jail early. ACT believes individuals make their own choices and should be responsible for those choices, hence the tough stance on crime. ACT as a party of influence is campaigning for a fundamental change in policy. ACT’s message is optimistic; good policy can reduce crime substantially. In August ACT is delivering 300,000 direct mail and email messages. ACT’s 5-point plan: zero tolerance policing, abolish parole, close supervision of releasees, DNA profiling and a sex offender register.
DE FACTO COMPULSORY UNIONISM
Deborah Coddington, who still has her journalist sources, has been told cabinet has approved legislation to amend the Employment Relations Act - that employers can agree to deduct union fees from non-union members who receive the same benefits as members (trade union paradise, fees and no members), extending unjustified dismissal to “unfair” dismissals, introducing multi-employee contracts, provision to force a company taking over a contract to take on the unsuccessful company’s employees, their terms and conditions, compulsory arbitration (but not binding), and allowing unions to name classes of workers to be covered in collective contracts. Margaret Wilson has issued a statement accusing Deborah of fear mongering but not denying cabinet did agree to a new package. For details of the proposal see
It’s very expensive – but some other government will pay! Labour believes the public does not care about telephone number Maori settlements as long as the public still has access to the beaches. ACT will look very closely at any proposals the government puts up on the issue.
Labour must get either United or the Greens to back their legislation. The United party is willing to do so if Labour puts a Queen’s Chain claim through every coastal property! Citizens have paid top dollar for coastal properties only to find that they now have no privacy.
The Pacific Forum was a triumph for John Howard. He not only got his candidate as secretary but also a review of the Forum secretariat that’s been ineffective. The voting was 9 – 7. Interestingly, the Solomons, Vanuatu and Fiji – often anti-Australia – went with Australia. So did NZ. It was Micronesian countries threatened with climate change – which John Howard dismisses - that voted against. John Howard succeeded by agreeing to support more aid for sport, especially rugby, and to support a Pacific Island team in the Super 12!
ANOTHER TOP JOB
Commonwealth secretary Don McKinnon wants another term and now he knows he has got it. The Forum has enough Commonwealth countries to ensure McKinnon another term.}
The former Christian Democrats, then Future NZ party, then partner of Peter Dunne’s United party, has dissolved. Many of the party’s activists are disillusioned and some have already joined the new Destiny party.
ACT’s “No FART TAX” campaign with Federated Farmers is developing real momentum. Audiences of 250 – 300 are turning out on weekdays in tiny rural communities. Over 550 farmers have joined Federated Farmers in just three weeks. ACT’s Gerry Eckhoff is becoming a rural folk hero. Record prices and good weather, National’s passing of the Resource Management Act and support of Kyoto, had turned farmers off politics. Record numbers did not vote. But ACC levies, local body rates, the OSH Act, and now the flatulence tax has got farmers angry. And ACT is the beneficiary as the party has a 100% voting record on issues of importance to farmers.
RATES AND ROADS
Aucklanders are incensed by the ARC’s rates and road chaos. Both are going to get worse. Aucklanders who tried the Britomart station tell stories of train delays, breakdowns and no trains. The cost of new locomotives is huge and will fall on the ratepayer. Air NZ’s new discount fares will result in perhaps an extra million more trans-Tasman passengers and most arrive at Auckland. The Mangere bridge is already over its design capacity. Only a small accident can have a catastrophic effect on citywide traffic. Transit is predicting gridlock next March when the tertiary institutions insist on personal enrolment of students. Even if Transit receives more funding, it cannot spend it. The problem is in planning delays. The new transport bill with its politically correct extra consultations and Maori spiritual values will increase the problems.
ACT has led on the transport issue. There needs to be legislation to enable the motorways to be finished. Like Sydney and Melbourne, Auckland needs the capacity to toll to fund its roads. Rates should be capped at the rate of inflation and local bodies required to stick to roads, rates and rubbish.
The folly of the state saving for us is illustrated by the announcement that the government’s super scheme will invest the bulk of its funds overseas. The NZ sharemarket will receive just 7%, less than half what the stock exchange expected. The growth of NZ enterprises remains dependent on foreign capital. The issue illustrates the problem. The long-term affordability of superannuation depends on the wealth of the NZ economy.
Now for some good news. One of the reasons that the NZ economy has outperformed the OECD average for a decade with low inflation is the independence of the Reserve Bank. Over the nineties, while in opposition, politicians like Jim Anderton, Michael Cullen, and Winston Peters and the Greens, have criticised the Reserve Bank, its focus on inflation and its independence. This week in parliament, the Reserve Bank Amendment Bill – which restates the Bank’s independence -was unanimously supported by every political party. There would not be a parliament in the world where such a symbol of capitalism and the global economy as an independent Reserve Bank - with the sole target of low inflation - would receive support across the spectrum.
THE RODNEY HIDE SHOW
Critics say it was the most comprehensive demolition of the TV host in living memory. Rodney Hide took charge of the Brian Edwards show and had the host admitting he works for Helen Clark, has been paid $190,000 but says he does not know if he is paid by the Prime Minister’s dept, parliament or the Labour party. The All Blacks were demolishing the Wallabies so no one has seen this example of charter TV. As taxpayers you’ve paid via NZ on Air for the series so we are posting it on our website -http://www.act.org.nz/hideshow- so you can judge for yourself. Is it not classic TV?
FORESHORE AND SEABED
Any government that interferes with New Zealanders' right to walk along the beach faces certain electoral defeat.
Labour's 9th floor spin-doctors believe they can turn the issue into an electoral winner. Labour wants to turn the issue from "ownership" into one of "public access". Labour intends to release Sir John Acland's report into public access to private property, at the same time as its response to the foreshore issue. Labour Ministers are claiming one third of all beaches are closed to the public, and that the Queen's Chain has been eroded. They believe they will soon have National saying "No deals. The beaches belong to everyone" (except those owned by Europeans). National is fighting back - less than 1% of all beaches are in private property.
Uniting against a minority is a favourite popularist tactic. In Britain the Blair government, with the ban against fox hunting, reform of the House of Lords and "right to roam" legislation, has campaigned against rural landowners. While rural NZ now has little political influence - just two working farmer MPs - intelligent New Zealanders realise farming is still economically vital. Labour has failed to win urban support for the "fart tax" and a right to roam law that damages working farms may not gain popular support.
IWI OR URBAN MAORI?
For Labour to convert the issue to one of "access" not "ownership" it must persuade Maori to drop its claim. John Tamihere, who identifies with tribeless, landless urban Maori, is pointing out that customary title needs to have been exercised continuously. Most of Labour's Maori MPs identify with iwi who (thanks to multi-million dollar Treaty settlements) have the money to fund a legal and political campaign.
NEW ZEALAND FIRST
With half his caucus Maori and having run second to Labour in the Maori vote, Winston Peters believes (and so does the Labour Maori caucus) he can again win the Maori seats on the foreshore issue.
THE ACT STAND
Even Helen Clark has conceded that ACT's defence of private property rights has been consistent. ACT believes that far from closing the courts to Maori, Maori claimants should have to go to court to prove their case. No one should lose property rights without full compensation.
A GRAND COALITION
The Letter says the foreshore issue is one that the centre-right should seek a grand coalition common strategy. Rather than billboards - what about organising centre-right hui and winning the intellectual case against the government's land grasp?
DAMAGING TO PARLIAMENT
Labour's credibility was damaged over the retrospective law change to, in effect, re-elect Minister Duynhoven. Even Labour's allies, United and the Greens, agree with the Solicitor-General that Duynhoven's act in taking out Dutch citizenship caused the New Plymouth seat to be vacant on 11 June. It damaged the integrity of the Attorney-General, Margaret Wilson, the leader of the House, Dr Cullen, and the Minister of Immigration, for those Ministers to claim the law is not clear. The reputation of every Labour MP was besmirched by the law being written so wide as to retrospectively clear any other MP who has pledged allegiance to a foreign state (which is why United and NZ First would not support the bill). The Speaker was most damaged. The Electoral Act says the Speaker must act "without delay". Helen Clark took 12 hours to remove Duynhoven's Ministerial warrant on 23 July. On 8 August, Jonathan Hunt told parliament he was still waiting for advice on what to do.
THE CULLEN GOVERNMENT
Labour MPs are angry that they were prohibited by the whip from answering questions over whether they had ever taken out foreign passports, but the PM Helen Clark put out a press statement clearing herself. Clark didn't once come into parliament to defend Duynhoven or the bill and left it to Cullen (who made the only reasonable defence of Duynhoven) and Wilson and Dalziel (who were hopeless). Clark is now avoiding parliament to such a degree that in the House it's now the Cullen government.
THE PACIFIC FORUM
The leaders of the Pacific gather at Auckland this week. The Pacific is in crisis - failing states, failing economies, exploding birth rates. NZ aid in the Pacific has not worked and nor has the forum. Helen Clark has no intention of supporting John Howard's call for a reality check. Instead Clark will seek personal popularity by espousing "the Pacific way", an excuse not to confront issues.
The 15 nations of the Pacific may be small but in most international organisations bankrupt Nauru has the same vote as the USA. Support from Pacific nations has seen ex-NZ MPs elected to a wide range of jobs - Secretary to the Commonwealth, the WTO, etc. Clark's not going to endanger her plans for a UN job by giving real leadership at the forum.
Any 55 year old worried about Labour's 'Job Jolt' requiring them to work can relax. The rules are those that apply today to those aged under-55. Questions by ACT MP, Dr Muriel Newman, have yet to reveal anyone who has been stripped of their unemployment benefit for refusing to work. Some individuals, who, the sight of work makes them feel ill, have been transferred to the sickness benefit, and for those where it's a chronic complaint are now resting comfortably on the invalids' benefit. There is also no possibility of being asked to move - you just claim you're Maori and that you need to be with your whakapapa.
Immigration Minister Dalziel is in trouble. After an editorial criticising the Immigration spokesman Ian Smith for failing to provide information about the Algerian suspected terrorist, Ahmed Zaoui, he sent his colleagues this email explanation:
“I was let down badly. Everyone had agreed to lie in unison, but all the others caved in and I was the only one left singing the original song.”
Smith’s email can only refer to the Minister who made the original statements to the media. The Service denied to the Ombudsman that the email ever existed. Dalziel has asked the head of the Labour Department, under who the Immigration Service operates, to hold an inquiry. It is a whitewash, as a civil servant will never criticise the Minister or their own administration. Immigration officials leaked the email to get back at Dalziel for saying in parliament (11 October 2000)
“I cannot take responsibility for something about which I have been misinformed. I was misinformed by the Immigration Service.”
What goes around comes around.
WHAT’S LABOUR HIDING?
ACT, National and the Greens have all carefully checked the citizenship status of their MPs and are confident none has broken the electoral law. Duynhoven was asked to name the MPs he claims may have breached the Electoral Act. He refused. The suspicion is there is a Labour MP who has, contrary to the Electoral Act, applied for a foreign passport. If it is only Mr Duynhoven then the government’s retrospective bill to declare him still an MP will only refer to him. If there are other MPs who should be expelled from parliament, the amendment will suspend section 55 of the Act for this parliament. While being expelled from parliament would be embarrassing for Duynhoven, as a constituency MP he can stand again in a by-election. Not so for a list MP. Such an MP is out, and replaced by the next person on the list. So if the MP concerned was Dr Cullen (who firmly claims he has let his British passport lapse) then his career would be over.
NICK SMITH’S CASE
MPs across parliament are concerned over Nick Smith’s case. The Solicitor-General is prosecuting the MP and TV3 over comments Smith made about a Family Court case concerning a constituent. Family Court cases are secret. In this case Smith attempted to get around the secrecy by withholding details and it was the Chief Family Court judge who issued the details. If convicted, Smith will be expelled from parliament.
National notes how Labour is willing to pass retrospective legislation for one of its own MPs who did an act to help himself but has done nothing for Nick Smith who was helping a constituent.
Auckland - Local body politicians have complained for years that ratepayers were blaming councils for rate rises that were the responsibility of the ARC whose levies had to be passed on in the rates. The new local body legislation means for the first time the ARC is rating independently and some face 600% rate increases. The ARC is in the grip of politically correct planners who have committed the ARC to a passenger rail scheme. The rail scheme will cost billions and carry no more than 6% of all transport journeys.
A private member’s bill by Rodney Hide, proposes that where a council intends a rate increase greater than the rate of inflation, the ratepayers can request a poll. If Labour fails to support ACT’s bill, then it can no longer say, “Rate increases are for the local people to decide.”
Mr Peters cannot believe his luck. He has said nothing about the foreshore and seabed issue for fear of alienating his Maori constituency yet sees his poll rating raise him into second position. National has made a huge effort on the issue only to remain stationary.
The answer is to be found in Prof John Vowles exit poll of 5,000 voters last election. Prof Vowles asked them which party has the best policies on certain issues. Voters, for example, agree ACT has the best policies on tax and law and order. On Maori issues, 82% of all voters think Peters has the best policies. Voters don’t know what NZ First’s policies are on the foreshore but they are sure that Peters “could fix it”.
The economy continues to grow. While the forestry sector has fallen out of bed - too much wood and too low prices - even at the lower milk price, dairying is profitable.
The Kiwi has appreciated 18% against the US dollar in the last year whereas the rise against the Aussie is only 2% and the Kiwi has fallen against the Euro by 3%. Annual GDP growth to March was 4.3%. Lower interest rates have seen confidence restoring. But a note of caution: the Aussie economy seems to have stalled and the jury is out on whether the US economy is about to grow again.
At ACT’s Wellington Regional conference, National MP Murray McCully made a thoughtful speech about the need for the centre-right to have expressed to the voters a clear coalition strategy. He pointed out “First we need to win more constituency seats… The centre-left parties hold 46 constituencies and the centre-right, 21…we must substantially increase our hold on regional NZ…Co-operation between National and ACT in this regard has, in the past been too little, and almost irresponsibly late.”
ACT’s President, Catherine Judd, in her speech floated the idea of all the parties on the centre-right agreeing in marginal seats to endorse a single candidate. The speeches are on
Since Labour took office the number of minor offence notices being issued, from parking to speeding fines, has increased by 66% to $300 million a year that’s a fine of $78.50 per person.
HEAVE HO DUYNHOVEN
Harry Duynhoven has broken the electoral law and should be expelled from parliament this week. MPs are expelled if they act to become a “citizen of any foreign state”. Duynhoven has admitted that this year he “filled in forms” to get Dutch citizenship. (This lets him travel passport free in the EC and gives him a possible financial benefit, as Dutch pensions are very generous.) Geoffrey Palmer’s argument is that Dutch law is retrospective so Harry always had dual citizenship. But it is the act of applying that triggers expulsion. The government spin that this is an anachronistic 1852 law is also wrong. Parliament reviewed and reaffirmed the law, with Duynhoven voting for it, in 1993. Without the provision an MP could legally be a foreign agent. While Harry is a popular MP, partly because Helen does not like him and MPs are sympathetic, he has been incredibly foolish. Officials are advising government not to pass a retrospective law.
A NEW PLYMOUTH BY-ELECTION
Duynhoven has the biggest majority in parliament – a 14,930 majority. The list vote is a better guide - Labour 41.5%, National 21.8%, NZF 11.9%, United 7.8%, Greens 6.7% and ACT 4.9% New Plymouth illustrates National’s challenge. It once was a National seat and now is Labour’s safest. National must win provincial NZ to govern. A by-election over the seabed issue would be a good start. A copy of ACT’s legal opinion is on
The government continues with its strategy of saying one thing to the public and a separate message to Maori. To the public, that full, unimpeded access to the country’s beaches will be upheld and to Maori, that Maori customary rights will be preserved and claiming the distinction is “rights, not title”. Legally this is nonsense. The Court of Appeal used the words “customary property”, “customary land, and “customary interest” interchangeably. The position of government Ministers, such as Tariana Turia, that Tangata Whenua are in an equal partnership with the Crown under the Treaty, is incompatible with the sovereignty of parliament. Labour’s engaged in a high wire balancing act and at some point they must fall.
Labour has continued the policy of successive governments in believing that there is little to be done about rising crime, that prisons don’t work, and crime is society’s responsibility. ACT strongly disputes all these assumptions. Rising crime is not inevitable. While the causes of crime are complex, active policing and deterrent sentencing can and will reduce crime. Zero tolerance policing, or the broken window approach, does work, not just in New York but also in Britain. In Hartlepool and Middlesbrough active policing saw immediate dramatic falls in crime. In Hartlepool between 1994 and 1996 theft of vehicles fell 56% and burglaries 31% and in Middlesbrough all crime fell by 20% in six months. Prisons work for the simple reason it is hard to do crime when in jail and most crime is committed by a small percentage of the population. Today ACT launches a campaign on zero tolerance for crime. See
Constitutionally the PM is the MP enjoying the confidence of the House. Helen Clark has lost her self-confidence in parliament. Having humiliatingly failed to answer questions on whether she did apologise to President Bush, what she did say in Europe or whether it was her as Minister of Culture who requested the loopy changes to the RMA, Clark has decided to avoid question time. The Standing Orders allow for any question to be transferred to another minister. The opposition has been reduced to asking: “Does she have confidence in X as a minister?” to ensure Clark has to answer. No one can remember a PM who was scared in parliament! Most have commanded the House and relished the opportunity. MPs noticed the difference on Thursday when Cullen instead of Clark answered questions – he had transferred none and made clear his willingness to answer. In parliament Dr Cullen is the de facto PM and as Clark spends time overseas visiting war memorials.
On Wednesday, 24 hours before the committee stage of the State Sector Amendment Bill (to reorganise Social Welfare), the government introduced a Supplementary Order Paper to abolish the Department of Courts, with no consultation or select committee hearing. No Minister participated in the debate to explain the measure. The courts are a vital part of our constitution. Under the Bill the Ministry of Justice resumes administrative responsibility. The Department of Courts was set up because it was felt it was wrong for a policy department to administer the courts. What’s changed? Did it fail? Perhaps the fourth estate would like to ask.
Figures from DTZ Darroch show that government departments now dominate the Wellington CBD as they use to prior to the Douglas/Richardson slimming down. Government departments now account for 45% of all Wellington inner city office space, up 18% since Labour took office. DTZ also report departments are not stinting themselves and are demanding “better quality buildings”.
Rick Neville, former INL number two, temporarily out of work, is said to be interested in the top job at Radio NZ.
The Letter believes Bill English has the votes to suspend Maurice
Williamson on Tuesday. There is no support for the Pakuranga MP who has been badmouthing not just Bill English, but also the caucus, all year. Few National MPs think the suspension is good politics. National MPs can suspend Williamson from the caucus, and the Board, under National’s new post-Peters constitution, can under rule 12(a), ”cancel or suspend the membership of the party if any person whose actions, in their opinion prejudice the interests of the party.” Under rule 83 adopted this year, “Should at any time a member of the Parliamentary Section cease to be a member of the party he or she shall cease to be a member of the Parliamentary Section.” It’s a hard sell – sacking an MP for saying what National’s supporters believe – the party should be doing better. While Williamson has been very provocative, why not do what everyone else was doing and just ignore him?
The government’s new initiative on red tape is a website for business setting out all compliance regulations. The response? ‘Useful, but lower taxes would be better’. The cost? $300,000 to set up and an estimated $250,000 a year to run.
The Americans on the diplomatic circuit have been quietly raising the nuke ship issue. The US Navy is increasingly powered by nuclear energy and Americans hope that this country will reconsider the issue. ACT’s Ken Shirley in his contribution to Liberal Thinking quotes the Somers Committee investigation that found, as a side effect of routine hospital care, Auckland hospitals “release everyday more than twice as much radioactivity into local waters as does the extensive US nuclear fleet and its support facilities annually into all harbours and coastal waters worldwide.” You can get a copy of Liberal Thinking at
Since 2000 the Russian tax burden has fallen from 34% of GDP to a projected 28% in 2004 and economic growth is clipping along at 7.2%. Labour’s Michael Cullen has progressively ratcheted our tax burden up to over 40% of GDP and our projected growth over the next five years is around 2% per annum see
ACT’s Dr Muriel Newman has revealed that under-staffed, under-resourced police can take more than 19 hours to respond to a burglary callout. In a recent United Nations (OECD) survey on crime, NZ was ranked 27th out of 28 countries for police numbers per capita. With 35 officers heading to the Solomon Islands, the delays will increase.
Helen Clark has returned home from her European jaunt praising Tony Blair and his Government. If Helen decides to adopt some of Blair’s policies the trip will be worth the cost. To reform health and education Blair advocates: “Opportunity for all, not the privileged few” and "This means opening up the monolithic, ‘one size fits all’ service. It means a diversity of supply - different types of schools, different types of health providers. It means flexibility of working. It means choice is in the hands of the parent or patient. It means, in other words, taking that search for quality and for a consumer oriented service and putting it in the hands of the many not the few.”
The failure of the ‘one size fits all’ service in health, education and policing in the UK is leading to active debate over alternative solutions. At the forefront is a Commission on the Reform of Public Services “to assess, with authority and non-party political objectivity, the best way to provide and find high quality public services in a modern, prosperous society.” The Commission members are ACT’s Sir Roger Douglas and Ruth Richardson. (We have always said we are above politics.) The report advocates health insurance, vouchers for education and the New York approach to policing. It’s a well-researched paper -
Clive Nelson, editor of the brash tabloid Sunday News, is rumoured to be heading for the editorship of the upmarket Sunday Star Times. Former British tabloid man, Nelson, looks ready to take the slot left by controversial Suzanne Chetwin. It’s taken a while but Nelson, a great networker, has turned the struggling Sunday News around. At the Herald, Auckland news people are saying senior journalist Ewan MacDonald is beavering away on a top-secret project on a free evening daily newspaper similar to the popular metro editions published overseas. Seems The NZ Herald sees gridlock-stressed Auckland drivers abandoning their cars to become public transport users – the people who read commuter-style free metro papers.
There is a real revolt by farmers against the flatulence tax. Farmers see the tax as part of a long line of government imposed costs: ACC increases, fuel taxes, increased Animal Health Board levies, etc. It’s inequable in that other methane sources such as landfills are exempt. The tax has high admin costs. ACT’s voice of the land, Gerry Eckhoff, is leading the fight and has launched a petition. To download see
ACT’s annual regional conferences begin in Wellington on 2 August at the Museum Hotel, and Ruth Richardson is speaking on the UK Public Service Reform project. Details and registration for the regional conferences can be found at