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The Letter – Monday, 3 April 2006

The Letter – Monday, 3 April 2006

The Letter – Monday, 3 April 2006

The Letter Limited -

The Haps

350,000 families became beneficiaries on 1 April. Parliament has become very disorderly.

Government got bigger

Labour is boasting that as the extension of 'working for families' kicks in and student loans become interest free, the drop in government polling will turn around. They have just added 350,000 families, around 600,000 voters (20%) to state dependency. It is the Swedish model. Increase taxes on the private sector, employ as many citizens as possible and extend welfare to the middle classes.

Middle class welfare

Labour tacticians have always supported universal benefits so the middle class feels it is getting something for its taxes. Providing universal health, welfare and education has caused the rise of big government. Centre right governments have felt electorally unable to dismantle universality, even though the waste is known to be enormous. Surcharges on the pension and now interest on student loans have not lasted through the electoral cycles.

Most voters state dependant

Labour's strategists are amazed that their audacious move has met with almost no opposition. The majority of the electorate is now dependant on the state. We have a core state sector that has grown to 8%, if we included university lecturers, teachers, GPs, welfare providers, local bodies and SOEs it is another 9% dependant on the state. Then there are the pensioners - 16%, who thanks to Winston Peters, are to receive an entirely unjustified increase. Add the beneficiaries, another 10%. While unemployment is down, there are a staggering number on the invalid and sickness benefit and, usually not mentioned, the large numbers on long term ACC. With student loans becoming interest free, we should include the huge numbers in post school institutions as state dependants - 8%. Some percentages are counted twice but there is now a permanent majority in favour of extending government spending.

Permanent left wing majority?

There are just too few voters who are paying their own way, independent of state spending - less than 25%. Fraser Nelson in a recent article in the Spectator points out that centre right parties get tired of losing elections and start to pledge to out spend the government. Then, as he says, the left's victory is complete.

Where is the protest?

While National has complained about Labour's pledge card, very little is being made of Labour spending $15 million promoting middle class welfare. The TV advertisement for 'Working for Families' was shot in a $700,000 Epsom home. The most effective opposition came from ACT's Heather Roy who pointed out that with 5 children and if her husband was not working, she would be entitled to $22 under the 'working for families' package, despite receiving over $100,000 a year as an MP.

Alternative Strategy

One possible strategy for halting the growth of government is Rodney Hide's Taxpayer's Bill of Rights, whereby the growth of government spending is limited to CPI plus no more than 2%. Rodney's private members bill entitled Local Government (Rating Cap) Amendment Bill, which was drawn from the ballot this week will hold rate increases to CPI plus no more than 2%. With an agreement by third parties to support private members bills Rodney has an excellent chance of getting his bill to the select committee and a real chance of success.

Disorder in the House

Behaviour in parliament has noticeably worsened this year. Question time has turned into a point of order disorder. There are a number of reasons. Labour has lost its ascendancy, it has the feeling of being a minority government, there is real outrage by MPs over the way Labour used taxpayer funds to win the election, a strong resentment over NZ First and United's trading principles for office and the Maori Party's willingness to vote to embarrass Labour creates an increased uncertainty, as every vote is a drama.

Lost Control

Margaret Wilson's ruling that Benson-Pope not be referred to the Privileges Committee for lying to the House when he claimed he knew of no complaint against him as a teacher has not just undermined her as Speaker but also the rules of parliament. If such a blatant case of misleading parliament is unpunished how can any MP be reprimanded? Her authority is further undermined by her protection of the Prime Minister's use of the Leader's fund to finance Labour's election campaign. Wilson's rulings are bizarre. Associate Minister Dover Samuel's last week publicly criticized Conservation Minister Chris Carter over ruling of an Environment Court's decision. MP's would normally question Dover Samuel at length to expose this split in the government. Dover said he could not be questioned because he was not speaking as a minister but as a former local body councilor. Wilson upheld this nonsense and ruled out the questions. As MPs said, "Can Michael Cullen now say 'I was not speaking as finance minister but as a former history lecturer"? The response to such outrageous rulings is disorder.


Clark signalled last week that if David Parker were not prosecuted she would reinstate him as a Minister. Not to do so she said would be a denial of natural justice. Oh? Will Clint Rickards now be restored as Assistant Police Commissioner and promoted to Deputy Police Commissioner, a job refused him by Clark because of the allegations that a court has now cleared him of? Non prosecution by the executive branch is not being cleared. Richard Worth points to the recent High Court decision (Hale v Registrar of Companies) where the High Court upheld a $7000 fine on two shareholders who failed to file financial statements on time. They had left New Zealand and where unaware of the obligation. Parker in contrast admits he knew his declaration was false. An offence that carries a possible $200,000 fine and imprisonment.

Our Poll

93% of letter readers say Helen Clark should not have left an injury accident without checking. 7% think that as she was a passenger it is OK to drive off. This week "Should David Parker be restored as a Minister if the Registrar of Companies decides not to prosecute?" We will send your answer to the PM. Vote at


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