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Richard Prebble's Letter from Wellington #1 (2001)

RICHARD PREBBLE'S Letter from Wellington Monday, 15 January 2001

A rising dollar and falling petrol prices have given New Zealand a New Year confidence lift. With retailers predicting Christmas sales up five per cent, and the coalition's popularity rising every time it promises to do nothing, 2001 will be a very interesting year.

Politics: A Rorting Start To 2001

With the Prime Minister away climbing mountains in South America no serious decisions have been made. But as Government MPs learn more about the Phillida Bunkle and Marian Hobbs scandal, the more shocked they have become. The inner Cabinet believes both must go. Before the last election both Ministers registered as their primary residence, addresses in the Wellington Central electorate, basing their campaigns on being 'local' candidates. However, they had also registered with Parliamentary Services out-of-Wellington addresses as their primary residences to claim $15,000 tax-free expenses. Both Helen Clark and Michael Cullen applauded a 'new' standard of ministerial accountability following Ruth Dyson's prompt resignation. All eyes are now focussed on Helen.

Trade Unions: A Bygone Era?

The Union movement is worried. Union officials believed the Employment Relations Act would triple union membership from the less than 20 per cent of the work force it currently represented. And in the first six months of last year numbers were up, but now that growth has stalled. Those under 35 have no memory of compulsory unionism, so they do not see the point of paying a week's wages to join a union. A large number of unions have no more members than they did a year ago. Unions cannot be militant if they don't have the strength. The position is different for traditionally strong unions. Their leadership continues to advocate moderation. The latest PSA Journal main article demonstrates this strategy with Radio New Zealand political editor Al Morrison advocating "discipline" and "not creating conditions under which industrial legislation becomes a decisive election issue". Chris Trotter's weekly article points out that "the relatively thin picket lines" at the Waterside Union dispute with the Mainland Stevedores Union is showing that "the watersiders - in New Zealand industrial mythology the toughest unionists around - can be beaten." This is causing great internal anguish to the left. The CTU leadership is enjoying its influence with Government but how long the rank and file will remain subdued is the question of 2001.

The Fire Service

The cost and funding of the Fire Service is a long running and unresolved issue. The Fire Service remains inefficient and expensive. With Alliance MP and former fireman Grant Gillon vetoing any improvements, the Government has signalled an increase in the fire service levy paid for by fire insurance policy holders from 1 April. The Letter has learnt that Michael Cullen has written to the Insurance Council proposing to shift the levy cost to ratepayers. Local body politicians will never accept this proposal in a local body election year. There are going to be fire works.

Members: Quality or Quantity?

A usually reliable source informs the Letter that despite being in power, both Labour and the Alliance, have seen party memberships fall. Labour's membership is only 3,000! To be fair, party membership is falling across the board. The National Party, which once numbered over 200,000 and was, on a per capita basis, the largest conservative party in the world, is believed to now have just 10,000 members. And ACT? We believe we are the second largest party. Over 1,800 members replied to a recent Super survey, easily the largest active membership of any political party.


The Christmas break provided a perfect opportunity to study the Cullen Superannuation bill. The more one examines the Bill the worse it looks. Many issues have not been addressed. The scheme is not sustainable and locks New Zealand into a high tax future. The scheme creates a huge politician-controlled fund, equal to the total investment in every public company. The scheme is designed to smooth out super, but in reality young taxpayers will contribute to the fund all their lives and find that when they retire, the fund is exhausted. These taxpayers will revolt. ACT has posted the Bill, a commentary and a way to make a submission by e-mail on our website: http://www.act.org.nz/action/super Public submissions on ACC and the Employment Relations Bill resulted in major amendments, and with Dr Cullen promising to consider amendments, it is definitely worth making one. Submissions close 9 Feb. ACT's own survey shows our members overwhelmingly favour compulsory savings-based superannuation, with savings to be held in a private savings account of the individuals own choice - very much like the MPs' own existing superannuation scheme.

Airport Landing Costs

Airports around the country consider the election of a Labour/Alliance government a licence to increase landing charges. Rotorua Airport has given notice of a 50 per cent - yes that's right - a 50 per cent increase in landing charges. Christchurch Airport currently wants a grandiose extension to its domestic terminal. Watch this space.

State of the Nation

Every political year starts with Richard Prebble's State of the Nation address. Richard has developed an enviable reputation for the accuracy of his forecasts and the sharpness of his new ideas. Among this year's forecasts is that the election of a Republican President will make taxes a world-wide political issue. (Labour is the only government in the world to increase income tax this millennium). Another issue is the increasing volatility of the Kiwi dollar. Richard will present his ideas of how New Zealand can gain some stability. State of the Nation speech Centra Hotel, Tuesday 16 January @ 12 noon (tomorrow). Enquiries ACT ph 09 523 0480. The speech will be on the ACT website from 12.30pm http://www.act.org.nz/action/son.html

Letter from Wellington is faxed and emailed weekly. To subscribe, or contribute, call 04 470 6624, Fax 04 473 3532, e-mail act@parliament.govt.nz Post to: ACT Parliamentary Office, Parliament Buildings, Wellington.

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