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The Letter – Monday, 11 December 2006

The Letter – Monday, 11 December 2006

The Letter Limited -

The Haps

Politics winding down. Just six days of parliament left. National morphs further into Labour. The census raises questions about growth. “Read this book” says reviewer.

Pre Christmas

Politics tends to wind down prior to Christmas. Governments like to put the accelerator down and push though legislation but there are few bills this year. In Christmas week Ministers have a tendency to release controversial reports knowing that they will not get proper scrutiny. The first of these the governments long over due climate policy document covering electricity generation due today.

All wind

Without subsidy wind is not competitive with coal and even with a subsidy wind is not the answer. Owen McShane in his weekly digest comments on a new report by J.A Halkema “Wind Energy: Facts and Fiction: A half truth is a whole lie” and says the promises of wind is not being delivered. (No one has figured out how to get the wind to blow everyday.) See While Labour is setting totally unrealistic “aspirational” goals, New Zealand, per head of population is further from achieving its Kyoto targets than any other Western nation. This is partly because of good growth but mainly because methane, not carbon dioxide is the biggest producer of green house gasses and we are cutting down our forests to create methane producing dairy farms. The report to handle this will be much more controversial topic is being held back for Christmas week.

Bull Sh*t

Today the Herald reports UN saying “Cows, not cars, top threat to the environment”. Owen McShane’s Digest also says that the academic magazine American Scientist says the concentrations of methane in the atmosphere, unlike carbon dioxide, are falling! See It would be so like Labour to launch a program to control something that is not a problem.

The Nat-Labs

It has been observed that the final result of war is to become your enemy. We observe that the war on terror to preserve democracy daily results in less freedom. In politics one observes the same thing happening to parties. Helen Clark rails against the “failed policies of the past” while quietly adopting an independent Reserve Bank, the Fiscal Responsibility Act, SOEs, etc. John Key and Bill English in their head long rejection of Don Brash appear to be morphing National into Labour. Those on the hospital waiting list who had their operations delayed yet again by a strike will be amazed to learn that John Key thinks the labour laws are working well.

What is left?

John Key has publicly rejected dropping race based policies, rejoining ANZUS, has embraced Kyoto, talked of increasing social spending and has re instated PC by appointing a woman’s affairs spokesman. National has given up the high ground on election funding. While John Key says he favours tax cuts he has made Bill English his finance spokesman who has publicly questioned the connection between tax cuts and growth and as finance minister did not promote free enterprise solutions.

History lesson

It is worth remembering that National has tried the me-too policy before, in the 2002 election, and the result? The worst defeat in the parties history. National tried a clear policy choice last election. The result? The best result for National for 15 years.

Winning strategy

Don’s Orewa speech galvanized National’s base and attracted new members and support. Muldoon showed that the one thing worse than a Labour government is a National-Labour government. National’s leadership seems to be saying that it is willing to enter into a coalition with the Maori party who split with Labour because there were some race based policies even Labour would not adopt. Turia called in a recent speech for other races to have separate representation in parliament!

Growth without wealth

Two documents this week raise questions about living standards. The first is a paper by Helen Clark’s husband that suggests we are working longer with both parents working but our real standard of living has not increased. The declining affordability of housing seems to reinforce this. The second document is the census and the news that the population has had its biggest percentage increase for over 100 years. It is an obvious point but often missed, if the economy is growing but so is the population, then the individual standard of living may not be growing as there are more of us to share.

Book Review

“Read this book – I have just read – at one sitting – Richard Prebble’s latest book, Out of the Red. If you read no other book this year (or next year) read this one…”Out of the Red” would make a great Christmas present for those friends and relatives who still believe that the Lange/Douglas government sold off our national “assets”. As always with Prebble, there are fascinating insights into the politics of the process, but the book is actually about business, governance and management. We do not expect retired politicians to write great textbooks on management but that is what Richard Prebble has done. Given that most management texts are written by overseas experts we are doubly fortunate that this one is grounded in New Zealand enterprises and experience.

Once again we should apply the media attention “inverse square rule”- which says that the attention paid by the media to a book bears an inverse squared relationship to its importance. Think Hagar and think Prebble and you will get the point – especially when you have read “Out of the Red”
Owen McShane Digest.

How to buy

Just $29-95, free post go to or buy the old fashion way and send a cheque for $29-95 to The Letter, 45 State highway 30, Lake Rotoma, RD 4, Rotorua, 3074, today, to get delivery for Christmas.


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