Richard Prebble's Letter from Wellington 18 March
Richard Prebble's
Letter from Wellington Monday, 18 March 2002
ACT Conference
The ACT Party held a successful conference at the weekend. Party manager Graham Watson reported membership is rising, candidates for every electorate will be selected by the end of May and fund-raising for the election has begun. Having risen in every poll this year, ACT is in good heart.
ACT Leads, Others Follow
ACT's conference last year set a goal for NZ of "10 by 2010" - 10th in the OECD economic rankings by 2010. Eleven months later the Labour/Alliance coalition has adopted the goal of being in the top half of the OECD - that is, 14th place. Having got the government to adopt ACT's goal, the election is now about how to achieve it. Being "innovative" is just a slogan, not a strategy.
ACT's Five-Point Plan
* lower taxes than Australia
* lift education standards
* tackle student debt, to keep the graduates we need in New Zealand
* replace bottomless social spending with smart programmes that use the private sector
* reduce crime with a zero tolerance approach
The McLeod Report
Rob McLeod, author of the Mcleod tax report, addressed the conference and confirmed that:
* a 25 cent flat tax would raise as much money as the current progressive tax system
* by cutting just $2b of government spending (the cost of the Cullen super scheme) the top personal and company rates could be lowered to 28 cents and the middle rate to 18 cents.
A Pay Rise for Every Worker
Richard Prebble in his speech called for the party to campaign to reach a flat rate of tax. But, as a first step, he advocated the Mcleod suggestion of a two-tier tax system - a top personal and company rate of 28 cents and a lower rate of 18 cents. This would give every working person a pay rise. Think of the boost to jobs and growth of a company tax rate below Australia's. If we keep the 15 cent tax rate, no one would be worse off. (His speech is video live-streamed at http://www.act.org.nz/prebblevideo.)
A Maximum Tax
In the workshops, McLeod raised an idea floated in the report - a maximum tax bill for any individual. That no one should have to pay more than $1m a year in tax.
McLeod cited evidence to show that NZ's tax system is driving the most successful entrepreneurs overseas, to countries such as Switzerland that have a cap on the maximum amount of tax any individual pays.
McLeod is convinced that such a system would attract home again some of our top entrepreneurs, with their capital and ideas. GST alone would ensure that such a move was revenue positive.
The Cost of Leaving ANZUS
Former Australian Deputy Prime Minister Peter Reith gave a thoughtful address. He said: "There was a time, not so long ago, when NZ was at the forefront of economic reform ... Today, Australians who come to NZ want to see if NZ looks like Tasmania." He pointed out that "countries such as Finland, Denmark and Austria, with populations only slightly smaller, have performed much better than NZ over the past quarter of a century....
"In Australia's case, our Productivity Commission attributes our improved economic performance in the 1990s more to economic reforms than to the application of information technology or the business cycle ... Australia thrived in the more competitive environment flowing from the reforms ... there seems no reason why NZ could not follow suit."
Defence
Peter Reith was forthright. "The United
nations will never defend New Zealand ... your international
reputation has suffered since you abandoned ANZUS ... you no
longer have the same clout on other issues such as trade
negotiations. New Zealand's strategic environment is not
benign ... governments need to fulfil their most basic
obligation to society, namely the defence of the nation's
sovereignty. This function is not peace-keeping for someone
else who can't manage their own affairs." Peter Reith's
speech is at Zero Tolerance
for Crime ACT has launched a nationwide billboard
campaign advocating the New York approach of zero tolerance
for crime - to coincide with Parliamentary debate on the
Sentencing and parole Reform Bill. ACT, as a party that
believes in personal responsibility, says offenders should
be held accountable for their actions and serve 100 percent
of their court-imposed sentence. That's Truth in
Sentencing. ACT's Polling ACT's campaign manager
surprised the media by revealing the results of ACT's
polling. It is very favourable to ACT, which voters see as
the effective Opposition. ACT is seen as plain speaking,
with fresh ideas. Forty percent of those leaning towards ACT
are women. ACT is on track for its best-ever election.
Conference speeches are at www.act.org.nz/conference2002
http://www.act.org.nz/conference2002. Budget
Policy Statement Every year under the Fiscal
Responsibility Act, Parliament's Finance and Expenditure
Committee must report on the government's fiscal position.
Parliament debated the report last week. Ruth Richardson had
hoped this would become a major debate, as it is in the
United States. Unfortunately, government members on the
committee now just rubber stamp the government line and the
debate is used to discuss anything except fiscal
policy. Last week, Winston Peters used the debate to
defame a Christchurch businessman, falsely claiming that
he'd organised the seminar in Fiji and was running a Ponzi
investment scheme. ACT and National MPs filed a minority
report which Richard Prebble has described as the most
economically literate report from a Parliamentary committee
he's ever seen. The report is a devastating critique of how
the government's balance sheet is deteriorating. The media
ran Mr Peters' false claims and gave not a word to the
in-depth economic analysis. To redress the balance, ACT has
posted the minority report at
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