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Richard Prebble's Letter From Wellington

Richard Prebble's
Letter from Wellington
Monday, 21 January 2002

Happy New Year The new year has started well, the rain is producing grass hydroponically and driving people into shopping malls. The two old parties seem to have gone on holiday. While Helen Clark was away in North America, no one in government did anything.

No one knows what happened to National. For two weeks over Christmas, National didn't even have a press secretary on call, so the ACT Party - like rust that never sleeps - was the only party answering the phone.

Opening Election Year ACT is opening election year with Richard Prebble's State of the Nation address at the Crowne Plaza Hotel in Auckland on Wednesday. It has proved so popular that all the original tickets sold out and the venue has had to be expanded. Some tickets are still available from the ACT head office, phone 09 523 0470 or email

Wasting the Fund Dr Cullen's super fund will be a major election issue. The fund, that was to be financed by government surpluses, is now all borrowed. The money will be invested in overseas equities. ACT says this is as sensible as borrowing on your credit card to finance your retirement fund.

The fund is projected to eventually reach $45 billion - nearly 50 percent of New Zealand's GDP. ACT believes politicians can't be trusted with such massive temptation. Some politician will dip into the fund for their favourite scheme.

The Letter can reveal that Dr Cullen has already started to waste the fund. The latest government accounts show the Finance Minister has taken the $256m set aside for the fund in the five months to November 30, and invested it temporarily with the Treasury at the official cash rate of 4.75 percent. During the same five months, the government borrowed $549m at 6.44 percent. The difference of 1.69 percent is what Dr Cullen is losing taxpayers on the fund. ACT's Finance spokesman Rodney Hide has calculated the taxpayer is losing $83,200 a week on the deal.

No private investor would stay in a fund that borrows at 6.44 percent and invests the money at 4.75 percent. But Cullen has locked us all in.(See for Rodney Hide's media statement.)

SAS Cover Blown The Defence Minister won't confirm what New Zealand's SAS troops are doing in Afghanistan. The Prime Minister, at a press conference, refused even to acknowledge that the SAS are in Afghanistan - for security reasons. The Australians have happily stated the number of SAS soldiers they have in Afghanistan. Does Helen Clark think that Osama bin Laden, from his cave, is reading The New Zealand Herald?

No one has told the German Secretary of Defence that the presence of New Zealand SAS is supposed to be a secret. In a press release, he revealed that the New Zealand SAS soldiers are in Kabul, building accommodation for German troops. (For details see

No Seats on the Plane Helen Clark's sudden, late announcement that she is going to Waitangi has caused panic among Labour's back bench. Every Labour MP who was boycotting Waitangi in solidarity, now wants to go there. They've discovered the flights are full and there's no accommodation.

The ACT Party booked more than four months ago. ACT has three women MPs, so the honour of becoming the first woman to speak on the national marae might go to ACT, if Helen Clark chickens out. The Letter can't imagine Ms Clark letting ACT lead the fight for gender equality.

Health - the Issue Health will dominate the election. As ACT predicted, the health unions are exploiting the Employment Relations Act. The Canterbury strike is not just over pay but is also a power play to create one union representing all health workers.

A monopoly health provider will lead to a monopoly union. The government has no answers. It was the Mayor of Christchurch who brought the parties together in Canterbury. A measure of the government's frustration can be gauged from Jim Anderton's threat at the Christchurch meeting that if the strike proceeds, the government may re-write the employment relations laws.

Post Office Blues The Kiwi Bank is in trouble. More than 300 Post Shops are privately-owned franchises and not one franchisee has signed an agreement to open a Kiwi Bank outlet. The franchisees' analysis shows the bank will cost them money.

The shop owners' biggest concern is security. Post Shops were not built with banking security in mind. They fear armed hold-ups.

Money for Roads Auckland Mayor John Banks was amazed to get a call recently from Helen Clark asking "how can the government help?" John replied: "Auckland has three needs - roads, roads and roads". He was even more amazed when Helen said she agreed.

Price Fixing Medicine A communication from the Pharmacy Guild to chemists has been leaked to the Letter. It explains that the Commerce Commission advises that the government's insistence on a national patient benefit, is price-fixing. On legal advice, the guild is applying for a waiver. Otherwise, pharmacists are at risk of action under the Commerce Act. The legal process to get the waiver is costing chemists $50-100,000 and up to 60 working days.

The guild's letter says: "The thing we object to is that we are having to go to these lengths to implement a set of policies agreed and desired by the government. In the sights of the Commerce Commission ... will be all other health providers who operate to standard subsidy arrangements and patient benefits. This will include GPs, resthomes, private hospitals, midwives and so on". (See htt p:// for a copy of the letter.)

Weakening Economy? Treasury's latest financial statement for the five months to November 30, shows total tax revenue was up by $138m, due to larger than forecast provisional tax. But GST revenue was down $68m, well below forecast. This indicates businesses are being hit by a double whammy - they're paying more tax but earning less.

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The latest version of the Letter will always be available at All previous Letters from Wellington will be found at

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