Sunday the 18th October 2009

Q+A’s Panel Discussions with Paul Holmes, Dr Therese Arseneau, Stephen Franks and Derek Fox.

The full length video interviews and panel discussions from this morning’s Q+A can be seen on tvnz.co.nz at, http://tvnz.co.nz/q-and-a-news

PANEL DISCUSSIONS led by PAUL HOLMES

Response to TARIANA TURIA interview

PAUL So we've heard from the Maori Party Co-Leader Tariana Turia, what did you panel think? Fault on both sides she said with this business this week of the Maori TV Rugby World Cup bit.

DEREK FOX – Former Maori Television Chair
I think she's being diplomatic. I think that by and large the greatest fault is on the government's side. The government was told, the Ministry of Finance no less, who is the shareholding minister for MTS was told on June 23rd about the bid. For them to be saying late in September we didn’t know is completely incorrect.

PAUL Yeah but the issue here is that three million dollars from Te Puni Kokere, when did the government know about that?

DEREK It knew in advance of the bid going in, the bid went in on the 4th or 5th of September, it was told before that, there are letters Paul, there's a paper trail, there's an exchange of information on this, there's a whole list of meetings on this, that show that elements of the government were told, the fact that they chose not to listen, didn’t believe in it...

PAUL Well that’s it isn't it, they didn’t believe that the Maori Party could actually put together a bid which would probably win.

DEREK So Hori's are no good then eh, is that the basic line that you can't do anything and therefore oh we can't possibly have you showing ...

PAUL What the government really seems genuinely concerned about is that if TVNZ and TV3 did not get the rights they wouldn’t bother to do much promotion which wouldn’t help bums on seats at the World Cup, Stephen what do you think, was it racist?

STEPHEN FRANKS – Former ACT MP
I would imagine it was much more about the purpose of funding, I don’t think anyone passing the vote for Te Puni Kokere thought that it was going to go into rugby rights, and it is relevant. I mean the question is – or the argument I guess is – does this advance the cause of Te Reo. Te Puni Kokere has got other responsibilities....

DEREK There's a whole range of things there's a whole business case around this.

STEPHEN Hang on a minute, there maybe a business case around it but the question is the money that was given for the improvement of the statistics for Maori and of Maori lives, does rugby do it, and that’s the question that’s hardly been debated. I mean it may be that it does, but I haven't seen any research that says people won't feel irritated.

PAUL Let's talk about what it all meant this week for the sinews if you like of the coalition, here's how Mrs Turia responds to a question about is there tension in the government.

Tariana Turia: 'there's always tension between a cultural political party and a mainstream political party, there's a natural tension between us because of the votes, there's no doubt about that.'

PAUL And that’s what intrigued you about the week really was the political management which you keep talking about of course.

THERESE ARSENEAU – Political Analyst
Yes, and there's no doubt, it's always difficult for a smaller party who becomes involved in government, but I think it's particularly difficult for the Maori Party, and I say that for a couple of reasons, first of all they are essentially a grass roots movement, and a movement based around consensus building, so you try to pop that into the sort of discipline of a government system and it can be quite difficult, but let's face it the other issue is they're working with National, and potentially that is not what their voters wanted, I mean a lot of polling during the election indicated it would not have been their first choice, but what's made it work so far is very good personal relationships, because that is the glue that holds this whole thing together, and the scary thing in this case was that seemed to break down.

PAUL Well yes, I mean for some days the government looked like a headless chook.

THERESE For some days? For most of the week actually.

PAUL Yes, until John Key of course tidied it up at the end of the week which he had to do.

THERESE But the fact that we saw that at all showed that there's a real dysfunction in this government, we should not have seen that played out in public.

PAUL Has this week damaged the sinews of this coalition, of this partnership between the Maori Party and National?

DEREK There's always little tensions going on, yes it has damaged it, it has damaged it, and I mean the rubber's hit the road now you know there was damage with the Super City seats, there's debate around the ETS, there will be debate around ACC and so there's all of those things which have now sort of sharpened the point a bit I think.

PAUL Another thing Mrs Turia was talking about, in fact she started to lean forward in her seat, becomes quite animated and positive about and authoritative about is Whanauora which she's determined and she's looking at possibly a billion dollars of access there, because she says a billion dollars is probably being wasted, what do you make of that?

STEPHEN Well she said a billion's being wasted, I mean I think it could be the most significant thing for the country in the long term to have the Maori Party leading the charge on reform of welfare would be fantastic. A right wing party can't do it because it turns to class war, it should have been Labour in the ten best years we've had in this country they just threw more and more money into the pit that’s created this morass, and she is saying quite interesting stuff you know, families are gonna have to learn not to be dependent on the state, we want a billion dollars. My puzzle though was how you spend a billion dollars to make people less dependent.

PAUL Do you know exactly what Whanauora is?

STEPHEN Oh I'd love to know, I mean Guyon was asking her but perhaps she decided that it was not enough time to explain.

DEREK I've got a clue. Whanauora is an holistic approach to dealing with these woes, rather than saying this is a health problem here and this is a something here and this is a something here, and a something here, and this all benefits – Whanauora means a well family, what do you need for a well family Paul? You need a decent wage for starters, you need a decent place to live with a dry house, so the kids aren't getting crook all the time, and so they're well fed, they get to go to school, they learn well, and they contribute positively to this community, that’s Whanauora. At the moment each of those little things – the other thing is because they're better educated they're getting better jobs, they may not get so much involved in petty crime, which in turn leads to other things. At the moment we just go here, we deal with these little silos, somebody pinched the money for this, right that’s a justice matter, it's a this matter, it's a that matter, it's a that matter. Whanauora combines those things and works at getting those families well.

THERESE And I think what's pretty clear from the interview is that now is one of the major focuses for the Maori Party, and at the end of three years when they're ticking off the successes this is going to be something that they really want to gain on, the other is the Foreshore and Seabed I think.

PAUL And that’s pretty obvious that we're heading for repeal isn't it, from what she was saying?

THERESE She wasn’t being pushed on it but yeah.

PAUL They're keeping close, have you got repeal?

DEREK I think repeal will occur, what happens next is another issue, and it's another one of the problems – excuse me – having to try and teach fellas like Stephen, we've gotta try and educate them on things and so it's a matter just like Whanauora we've gotta teach em.

STEPHEN I'm looking forward to that one.

DEREK Well it could take a while you can see the difficulties we're up against when you look at Stephen. The thing is with Foreshore and Seabed, repeal the Act, it was clearly unfair, even Stephen's party said it was unfair.

Response to BOB BUCKLE interview

PAUL What do we make of some of those ideas Bob Buckle was talking about and what is likely really politically to be picked up by the government? Capital gains tax first of all Stephen Franks, they’ll come to you on taxation cos you’ve got glasses.

STEPHEN The issue really is – this is a good exercise, they want the debate, the government has spent a year making sure people don’t panic so we fall into recession, but what they are all struggling with is that we're borrowing the equivalent of a new hospital every week, you know the Chinese are opening a power station every four days, we're spending on maintaining our lifestyle the equivalent of a hospital every week, or a university every two weeks, or the entire Correction system every month.

PAUL That’s what we're borrowing?

STEPHEN That’s what we're borrowing, because we're spending more than we earn, and we've been doing it for 40 years, we've been living off the savings of poorer people, now fixing the tax system is a nice thing to do, but it's trivial compared to fixing the spending problem.

PAUL Still it gets them more revenue I suppose and of course the government's aim is to get more revenue to broaden the tax base, to increase the revenue without distorting and impeding productivity.

STEPHEN Absolutely but their worry is that as soon as the tax goes up in a way that affects income earners we lose our radiologists, our doctors, our plumbers, our electricians, anyone who can earn more in Australia we lose, and we're left with the less productive.

PAUL Well capital gains tax starts to become attractive doesn’t it, I mean I don’t particularly think I want it, but it starts to become attractive when you think that it might be able to enable them to reduce corporate tax and income tax.

THERESE And to try to dampen the housing boom.

PAUL Well John Key of course will say that capital gains tax doesn’t do that, because they have capital gains tax in the States and the UK and they’ve still got that.

THERESE There's a fair bit of consensus I think around the problem right, one of the problems as we've all talked about is that there's too much emphasis on taxing income, personal income and corporate income, and those assets capital and labour are mobile, so we're taxing the very assets that can leave, and the other side of the problem is we're investing too much in housing. In New Zealand I've seen figures where about three quarters of our capital investment is in housing compared to 50% in Australia, 37% in the US. So the problem then becomes what do we do about it, and on capital gains I mean some people say it's a good way or maybe a land tax would be a good way to sort of burst that bubble, as you said John Key doesn’t agree with that.

PAUL I mean they're talking possibly what do he say eight or nine billion dollars possible from a comprehensive capital gains tax. Of course Michael Cullen, a shrewd political operator once said capital gains tax is suicide in New Zealand for a government.

DEREK Yes possibly, but especially if you look at the voters who are involved and they're the ones that are going around borrowing money in order to buy multiple houses and whatnot. The sort of people I'd be concerned about are the ones who would be affected by an increase in GST, because they're clearly the bottom – you know they're the lower income ones who'll be badly affected, they’ve gotta eat, so they’ve gotta buy more food and so you know that affects them.

PAUL Of course a part of the tax review also is increasing – doing it in such a way that we do not impede productivity, and Bob Buckle was talking about the corporate tax rate which I think is what 30 – 33?

STEPHEN It's coming down.

PAUL It's coming down, but he said it's 30. Internationally he says the corporate rates are coming, this is very important for investment coming into the country, here's what he said.

Bob Buckle: 'We had a relatively low corporate tax rate in the early 90s, we no longer have a relatively low corporate tax rate, so we do have to be wary of that.'

PAUL Relatively low is the point, us versus the international community. Should that come down?

STEPHEN Our problem is that we're too close to Australia, in Australia Henry is looking at it, they're probably going to go even lower, we should be prudently targeting it, bringing all of those top rates down to a common flat from around 25, if we're not going to again see people exporting themselves.

PAUL We have got to be at the level of Australia always on corporate rate don’t we?

DEREK Yeah but what are the corporates that are left. You know 1980 when they said we had this great tax system in the 80s, look at the companies, the top 20 companies that were back then in the 80s, none of them are here now, they're all gone.

STEPHEN No no there's 500,000 companies, the companies that matter are all the little businesses, the top corporates are just the decoration on the cake.

PAUL I mean the point is if we can go lower than Australia, if we can be relatively low on corporate tax it might just encourage firms to come and set up here and employ people.

STEPHEN Well that’s international experience, Ireland was the poorest in Europe and now it's not, I mean tax matters, tax really matters.

THERESE Politically we're talking about taxes, always tend to be a hot political issue, especially for a government that was elected on a platform of cutting taxes, but I would argue they’ve made a more important promise to us and that is one that doesn’t fit neatly into the three year cycle, and it is a promise that they're gonna grow the economy and that I think has to be to the forefront at all times.

PAUL Now let us consider what we might be talking about in a week's time, what do you think's going to be the story of the week coming up?

STEPHEN I think it'll be ACC, there's a huge roar, if you’ve read Matthew Hooton, there ought to be people charged with the lies that were told about ACC in the last year, we've got a system that’s being justified essentially as part of the welfare system, the attack on Nick Smith for his comment about the suicide was really saying we think it's okay for someone who dies of cancer for their family to get nothing, but somebody who dies of suicide to get the ACC in behind them.

THERESE No the attack was really because it showed an ignorance about the reality of why people commit suicide I think was the problem with the comment.

STEPHEN No, he was illustrating the fact that the consequences are so hugely different between one cause and another.

PAUL Story next week.

THERESE The story should be for everybody on either side of the ETS should be concerned about the process being used currently in parliament I think, the rush through the finance and expenditure committee, I think it should raise concerns for people no matter what side of the divide.

DEREK Well I think that both those stories are extraordinarily important and they should be there, and someone needs to check Nick Smith's medication.

PAUL Thank you very much Mr Fox for this advice.

ENDS

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