RICHARD PREBBLE’S
Letter from Wellington
Monday, 30 October 2000

The business forum is an implicit acknowledgement by the coalition that it is the economy that will determine its electoral fate.
The difficulty now, is that after ad-mitting the vital importance of busi-ness confidence to economic pros-perity, the government is on a slip-pery slope.
The measures announced at the fo-rum are of no assistance to 90% of New Zealand’s 250,000 business. Three government policies affect all businesses – the income tax increase, the ACC re-nationalisation and the Employment Relations Act.
If government wants to gain business confidence it must reverse its anti-business policies.
Social democrat governments in both France and Germany, after running into the same economic cul de sac, successfully U-turned. The Letter does not rule out a similar U-turn.
The increase in income tax was not fiscally necessary – it was politically driven. ACC re-nationalisation was not on the credit card list and senior Labour Ministers have admitted pri-vately the measure is a mistake.
Is the government strong enough to U-turn? The Letter doubts it .

Bring On Cullen’s PR Machine
The Government’s economic woes are compounding. The Consolidated Tax Receipts for the month of September show net GST is down 13.1 per cent or $165 million less than forecast. Michael Cullen's envy taxes are strangling the economy. The Letter predicts the December Economic Forecast Update will see Treasury expect the economy to be on a lower track. The government PR machine will start downplaying the impor-tance of short term growth statistics.

How Many Unemployed Are There?
In opposition Steve Maharey re-peatedly used WINZ Registered Unemployed figures to attack the Government. ACT MP Muriel New-man continued Mr Maharey's focus only to have the figures dismissed by the Minister as an ‘administrative tool’. The correct measure, according to Mr Maharey, is the Household La-bour Force Survey (HLFS).
The HLFS is used for international comparisons, whereas the Unem-ployed Register is designed, admin-istered and unique to New Zealand. The HLFS strangely excludes from the unemployed those who have not actively sought work in the last week or those who work one or two hours a week. The difference between the two methods is remarkable. The lat-est HLFS figures show 18,300 people unemployed for a year or more in New Zealand. WINZ figures say 108,511 real people with real needs are in this group.

The Real Goal Of A Treaty Clause
The Letter believes the Health and Disability Bill, with its controversial Treaty clause, was designed to test the water. The real goal can be found in Professor Margaret Wilson’s writings in 1995, ‘the whole issue of Maori sovereignty to be debated in the Courts in a variety of circum-stances…[to] give the Courts an op-portunity to judge all legislation against the provisions of the Treaty to see if it conformed with its terms’. If you’re unsure of the Treaty’s terms, Margaret Wilson is organising a na-tionwide Treaty (re)education tour.

Solomon Islands
ACT leader Richard Prebble visited the Solomons last week where New Zealand has agreed to commit peacekeepers and police. There does appear to have been spontaneous acts of reconciliation. On hearing of the peace agreement the militias laid down their guns and embraced each other. Young men who have fought each other for the two years celebrated peace together.
Real problems remain. The economy is shattered. The police force that sided with one of the militias has been compromised, while law and order has broken down. As the mili-tias celebrated, roving criminal gangs - the prison has been emptied – looted homes and businesses. Re-storing order will not be easy. Like East Timor it appears committing peace keepers to the Solomons will be much easier than working out how to get them back out.

The People’s Bank
Ever wondered why the banks are so quiet about Jim Anderton’s People’s Bank? The media have constantly run customer dissatisfaction polls, but if a poll was run of banks it would show banks do not like many of their customers either. Over ten per cent of customers are not profitable to banks, while five per cent cost them money e.g. cheque bouncers. There are still too many unprofitable branches. Jim Anderton’s People’s Bank will allow banks to close these branches and an excuse to exit cheque bouncers and others they’d rather not have.

ACT Three Day Caucus
ACT MPs hold regular three day Caucuses. These meetings enable the MPs to think through policy and strategy and are an important reason for ACT’s cohesiveness.
The ACT Caucus has given consider-able and careful consideration to the coalition’s pre-funding superannua-tion proposal. The Caucus is con-cerned such a large fund – peaking at $50 billion - will be under govern-ment control. It is enough money to nationalise every company on the stock exchange. ACT also has con-stitutional objections to attempting to bind future governments for 50 years.
But the problem of an ageing popu-lation is real. The issue needs to be faced and there is a need for less par-tisan politics. ACT does favour a multi-party solution.

Branding
ACT has found, like the Alliance, that its separate brand is being swamped. Joint campaigns with National against ACC and the ERA– even though led by ACT, have tended to advantage National. ACT will em-phasise issues that reflect ACT’s stronger commitment to freedom, choice and personal responsibility.
ACT holds positions on red tape is-sues like the Resource Management Act – passed by National – that Na-tional cannot match. ACT is critical of the open-ended and basically du-plicate National and Labour policies on the Treaty, law and order, and welfare. As ACT believes the coali-tion is now a one term government, ACT’s focus is on setting the agenda for the next centre-right government. New Zealand does not want to go back to the drift of the Bolger years.

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