Richard Prebble’s Letter From Wellington

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 airlines in cutting overseas flights.

WHAT TO DO

Dr Cullen believes the way to stimulate the economy is government spending (more state houses, etc). The Letter believes this is counter-productive. There is a way to stimulate the economy: cut taxes. ACT MPs Richard Prebble and Rodney Hide will present ACT's Tax Plan for the 2003 Budget in the Beehive Theatrette at 11 am this Thursday, and on Sunday in Auckland at a brunch at the Novotel, Ellerslie. Phone 09 523 0470 or fax 09 523 0472 for tickets.

CULLEN'S CHOICE

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

WHAT DO YOU THINK?

We are running a poll on tax. Have your say on the ACT website - http://www.act.org.nz/tax - and we will present the results to Dr Cullen.

GENERAL CLARK

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

A FOREIGN POLICY DISASTER

Helen Clark's misjudgment of the US military is second only to Saddam Hussein's. The Labour government has also misread US foreign policy. On Monday Phil Goff told TVNZ "NZ is keen for that free trade agreement but we do not draw any parallels between the issues of free trade and the issues of commitment of troops to Iraq." What do you mean we? Goff maintains that because the US took no economic measures over NZ going nuclear free, the US splits trade from foreign policy. President Bush, Robert Zoellich, the US Trade representative and the US embassy in Wellington have all said that the US does package issues. After last week's statements, NZ can forget any free trade agreement while General Clark is prime minister.

NO QUESTIONS ASKED

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

NATIONAL'S WOES

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

A PARLIAMENTARY FIRST

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

BURIED FIGURES

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

NZ LESS COMPETITIVE

Another little known set of figures is from the World Economic Forum in its Global Competitiveness Report. NZ has slipped from 10th in 2001 (we were 5th in 1997) to 16th. Microeconomic 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: http://www.act.org.nz/wef and http://www.act.org.nz/hoover.

ANDERTONISM

Jim Anderton's job machine gave international computer giant EDS $1.5 million for "...the creation of much desired new…jobs". The result so far – one job less. This week's Computerworld reports that EDS NZ boss, Dick Brown, has quit his job for stock and cash valued at $US36 million. Who would have thought that Jim could Sovereign Yacht EDS?

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