www.mccully.co.nz - 23 May 2008

A Weekly Report from the Keyboard of Murray McCully, MP for East Coast Bays

Too Little and Far Too Late

The debate about the need for tax cuts was won and lost many months ago. The only person who didn't know it was Michael Cullen. Now he is going to pretend to support tax cuts, not because he believes they will be good for the economy, or even because he understands that overtaxed New Zealanders need a break in the prevailing economic climate, but simply because it is Election Year. So two weeks before the 2008 election we will get a fistfull of dollars. Then we must wait for two years. And Michael Cullen knows that regardless of the election outcome, he will be long gone by then.

The debate over the need for tax cuts having now been won, the focus shifts to the more important question: what are we trying to achieve by them? For Cullen it is a simple exercise in nabbing a few votes on the eve of an election. For John Key and the National Party it is a very different picture.

This week the Government Statistician told us that over 79,000 New Zealanders left for good last year - over 44,000 of them to Australia. Competitive taxes, alongside a substantial investment in infrastructure, improvements to our education system, and some serious focus on science, technology and research are all part of the package that this country needs if it is to be turned around. The alternative is truly bleak. Yet that is the course that Clark, Cullen and co. have taken.

The 2008 Budget was a lose/lose outcome for Cullen. Being forced into implementing the tax cuts he so despises served to emphasise that he has well and truly lost the tax cuts argument. Worse, the supercilious and grudging nature of their delivery will ensure he receives no credit for the outcome. In 2008 New Zealanders don't just want a tax break; they want hope. And that too is a commodity Dr Cullen has been determined to deny them.

Lobbyists Scam Health Budget

Amongst the apparent beneficiaries of yesterday’s Budget was an outfit called the Health Research Council, originally established to award grants for valuable scientific research in the health sector. In the last financial year it received nearly $70million from the nation’s taxpayers. And yesterday Dr Cullen announced that health research would be boosted by $4 million. The Council is part of a wider portfolio of science funding totalling $550 million, accorded critical review in previous editions of this newsletter. And this week it is the turn of the Health Research Council to receive such constructive scrutiny.

Members of the Health Research Council are appointed on the advice of the Minister of Health. The primary function of the Council, according to S6 of the Health Research Council Act is “to advise the Minister on national health research policy…” So the Council is, through the Minister, responsible to Parliament and it is funded through an appropriation granted by Parliament.

Last year the Health Research Council decided to approve a grant of $701,000 to a group of researchers from the Wellington School of Medicine, a branch of Otago University, to study “policymaking to reduce smoking around children.” The fact that said group of researchers might accurately be described as anti-tobacco activists is underlined by the fact that the application discloses over $1.8 million in grants to members of the group for tobacco-related research over the previous three years.

The summary makes clear what the research will actually involve: “Smokefree policies can be expanded by government policies,” we are told. “So as to help advocates, this research aims to determine obstacles/opportunities within policy processes, for interventions appropriate to specific population groups.”

The subsequent detail makes it clear what the thrust of the research involves: “recorded face to face anonymous transcribed interviews will be conducted with at least 55 past/current politicians…” In addition to researching “policy statements, official advice and party policies,” the project will include “searches for relevant voting records and statements by politicians during the period from 1996 to the present.” All of this, a bargain at $701,000.

So it works like this: a Research Council that is being funded by Parliament to provide quality research for Parliament in the area of health science is instead spending that money researching the Members of Parliament themselves, their speeches, their advisors and their voting records. And the purpose of this exercise is not to come up with new scientific discoveries that might benefit the health sector, but, in their own words, “to help advocates.”

So taxpayers’ money that should be advancing the health of New Zealanders by funding new scientific breakthroughs is instead funding the preparation of resource material for lobbyists about the Members of Parliament who gave them the money in the first place. Which will presumably be useful because those same lobbyists will also be able to lobby for increased health science funding which can then be diverted into further lobbying. Which of course, is what our foolish Government has just done to the tune of $4 million a year. Isn’t that just the scam of the century?

Red Faces at Crown Law

What on Earth is going on at Crown Law? The Crown Law office, headed by the Solicitor-General, is the official legal advisor to Ministers and to the public service. Short of getting a judgment from the courts, a Crown Law opinion has always been considered a weighty and influential document. But events this week have seen new questions being asked about the competence and impartiality of the Office.

The Electoral Finance Act now places firm restrictions on campaign expenditure by political parties for the whole of Election Year. It also requires third parties that intend to place more than $12,000 worth of election advertising to register their intentions and provide relevant details. After registration by the Electoral Commission, they may then spend up to $120,000 on election-related advertising. But the Act is clear that a person that is “involved in the administration of the affairs of a party” may not register as a third party. Otherwise it would be simple to rort the expenditure restrictions simply by registering, for example, the John Key for Prime Minister Society as a third party and spending $120,000 promoting the National Party cause. Then repeating the exercise as many times as the budget permits.

Last month, the nation’s largest union, the EPMU, applied to the Commission for registration. Yet the EPMU is affiliated to the Labour Party, and its Secretary Andrew Little sits on the Labour Executive. The Electoral Commission sought advice from Crown Law. And Crown Law advised that the restrictions in the EFA (S13(2)(f)(i)) did not apply to the union because the Act restricted “persons” and an organisation like the EPMU could not therefore fall within the definition.

The Commission, headed by former Justice McGeechan, followed the Crown Law advice, but, clearly apprehensive as to its quality, very sensibly left a period for legal challenges to play out before giving the EPMU registration. And this week the High Court very predictably overturned the Commission’s decision, and exposed the Crown Law advice for the shonky piece of work it was.

Now, there will be red faces over at Crown Law. Justice McKenzie’s “declaration” that the word “person” “has the meaning given to it by S29 of the Interpretation Act 1999” rather served to underline the fact that the legal definition of “person” was hardly in doubt from the outset. Quite how Crown Law had managed to come up with an interpretation that would have rendered the expenditure caps in the EFA totally meaningless boggles the mind.

But this is not the first time Crown Law has had difficulty with the EFA. Readers may recall that Crown Law provided the EFA with certification as compliant with the Bill of Rights Act – a decision that left the New Zealand Law Society gob-smacked. The fact that the Crown Law solicitor responsible for that advice, one Val Sim, was rapidly elevated to the Law Commission (and has now also been appointed to the Criminal Justice Advisory Board) left legal eyebrows raised.

The EFA is arguably the shabbiest episode in the history of a truly shabby government. The fact that Crown Law was acquiescent over the Bill of Rights certification was bad enough. The delivery of advice to the Electoral Commission that was so convenient to the Labour Party and its union mates is even worse. And the clear, emphatic decision of the High Court this week should require some people at Crown Law to have a serious look at themselves.

ENDS

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