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The Letter – Monday, 20 February 2006

The Letter – Monday, 20 February 2006

The Letter – Monday, 20 February 2006

The Letter Limited -

The Haps

The electoral spending gets more serious. Labour announces more re-regulation of utilities. Parliament resumes and Don Brash surprises.

Auditor-General to Report

Labour's electoral over spending is now being investigated by the Police. The penalty is just a fine. Last week the issue got much more serious. The Speaker advised the Parliamentary Commission that she had referred complaints made during the election by ACT's Stephen Franks and National's Simon Power to the Auditor-General. The Auditor-General has agreed not just to investigate but to make another report on the use of taxpayer funded publicity.

Clark Worried

Party President Mike Williams' admission that Helen Clark had used her Leader's fund money in the last three elections to fund Labour's election pledge cards has made the position much worse. The Member's Handbook not only bans using taxpayer's Leader's funds from financing "electioneering material", the Handbook says that all publicity must carry the Parliamentary Crest to show it is taxpayer funded. None of the pledge cards have the Parliamentary Crest on them. Leaving off the Parliamentary Crest is prima facie evidence that Clark knew this was not legitimate spending and she was attempting to hide the misappropriation.

Clark is very worried

Clark escaped having to repay the $90,000 for the bus stop billboards because the Speaker upheld the spending. This time Speaker Wilson has not upheld the spending. It would be extra ordinary if the Auditor-General disagreed with the Electoral Commission that the pledge cards are "electioneering material".

The Donna precedents

When the Auditor-General said he believed that Donna Awatere-Huata had misused her taxpayer accommodation expenses, he recommended the matter be referred to the Serious Fraud Office. The Serious Fraud Office did not charge her because she was entitled to claim the expenses and she herself had not benefited. The Pipi fund fraud was another matter, Donna benefited and the Serious Fraud Office prosecuted. The precedent is set. Clark has benefited from her illegal spending. The Auditor-General must recommend that Clark's spending be referred to the Serious Fraud Office for prosecution

No Defence

In parliament Labour has not tried to defend its actions but to claim that others are also guilty. There is a problem. The Electoral Commission has already dismissed Labour's claim that Don Brash authorised the Brethren spending.

What about Peters and Dunne

Winston Peters said after the Tauranga Electoral petition he had no regrets bringing the case and "that the intent of our electoral law was that there were stipulated spending limits." While he attacked National last week, Peters has made no comment on Clark's use of the Leaders fund. Both he and Peter Dunne are shocked at the revelations. They are waiting to see if the Police prosecute and what the Auditor-General says. This scandal has the potential to dissolve the coalition, bring down the government, end Clark's hopes of a UN job and even see Clark in the cell next to Donna's.

Revitalised Opposition

Even the anti National media agree that Don Brash gave his best speech ever in the opening debate, which we did not predict, and Clark's speech was flat and tired, which we did predict. The best speech in the debate was given by Hone Harawira where he shredded Labour's Maori MPs. Have a read

Re-regulating Utilities

Labour in a confused way is moving to regulate utilities. Electricity is now a total mess. The new Electricity Commission is second-guessing Transpower and is going to decide whether a new high voltage line is needed to Auckland. The situation is urgent. The grid is 40 years old and the Cook Straight cable is in need of replacement. Labour is demanding high dividends from all SOE's. Transpower's response is to, in effect, say it has been under investing and under charging for years and has increased its charges 19% this year. In response another government agency, the Commerce Commission, has threatened to put Transpower under price control and is conducting an urgent hearing in an attempt to roll back the price increase before 1 April. The methodology used by the Commission is a formula, CPI minus, (i.e. price increases less than inflation), which does not allow for the possibility that there has been massive under investment and prices have been set too low. Confused? It gets worse. The local line companies who are subject to price control will pass on the 1 April increase. If the Commerce Commission does succeed in rolling back Transpower's increase, most of the line companies whose prices will by then have been set will be in breach of their price controls. Once you start regulating…


The real problem in telecommunication is the regulations that are already in place. The Kiwi share far from protecting consumers by making local calls "free", (of course they are not free), gives Telecom a local loop monopoly. Labour is too scared to abolish the Kiwi share, so it is trying to find a regulatory way to encourage competition for the supply of a "free" good. Not easy. Telecom is such a large part of the share market that last week, when the rest of the share market went up, the index went down solely because of the fall in Telecoms shares. Labour knows that if it gets any regulation wrong, and it will, the results will have significant economic ramifications.

Our Poll

We had a huge reaction to last week's poll. 99% of readers want Helen Clark to repay the money she took to pay for Labour's election campaigning. Many readers emailed that they want to see Clark prosecuted for theft. This week's poll. Rodney Hide has been asked to be a contestant in "Dancing with the Stars". Is dancing a good way to get fit? Is Rodney the next "Norm Hewitt? Or is it too awful to contemplate? Give Rodney your view. Vote at


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