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Richard Prebble's Letter from Wellington

Richard Prebble's Letter from Wellington
Monday, 28 January 2002

Industrial Action

Threats by Labour Minister Margaret Wilson that the government may ban strikes in the public sector, show how panicked Ministers are by the nurses' strike. The government realises how much power the Employment Relations Act has put into the hands of union officials and how powerless Ministers are.

Unions can basically claim whatever they like. The government can see all its extra health spending being taken by wage claims. The quid pro quo for a no-strike clause would be compulsory arbitration. The ERA rejects compulsory arbitration so the government is really suggesting it might abandon a cornerstone policy.


The teachers' pay dispute is not yet settled. Teachers must ratify the union's recommendation to accept a 3 percent pay rise. While they are expected to vote for the deal, it's not popular.

A prominent PPTA leader in Auckland has publicly attacked the agreement and announced he's going to work overseas. The 3 percent increase is less than half what MPs received and less than a quarter of what nurses are striking for.

Last election, teachers provided the core of Labour's party activists. It will be difficult to persuade teachers to go door-knocking for Labour this time.

ACT believes that if parents had more say in running schools, good teachers would get more pay - which they should if the Knowledge Wave means anything.

Ideology over Reality

The government's endorsement of pay parity for teachers means primary teachers are paid the same as their secondary counterparts. That's where the money is going. Even top secondary schools say they can't recruit qualified science teachers because the pay is too low. Primary teachers don't have to deal with the discipline problems that their secondary colleagues do. The average secondary school has suspension hearings every week - now a long legal process taking hours of after-school staff time. Many secondary teachers take Saturday sport.

Pay parity is only possible in a Soviet education model. It means poor-performing teachers with few responsibilities are paid the same as good teachers with heavy workloads.

Law and Order

Are you more likely to be the victim of crime in New York, London or Auckland? Law and order issues are going to dominate the first session of Parliament because the government has a massive 170-page Sentencing and Parole Reform Bill. The government claims the Bill addresses Norm Withers' referendum calling for tougher sentences for violent offenders. The rhetoric is "we've toughened up on really violent, unsafe offenders". The reality is that the Bill is softening sentences and actually reduces the prison time for most violent crime.

The Bill does increase sentences for a few headline crimes. For example, judges will be able to impose a 17-year non-parole sentence for murder, but it's not mandatory.

National and Labour are in a contest to increase the sentence for murder. The Letter notes that National has picked up Stephen Franks' "life means life" proposal.

The US Experience

The United States in the past 15 years has taken a completely different course to NZ with regard to offenders. US courts have less discretion - similar crimes by law have similar penalties, the only criteria for different sentences is the past criminal record of the offender.

Results in the US have been spectacular. New York once had far more burglaries and muggings than London but now the statistics have reversed. And crime victim surveys show NZ now has the highest level of crime per capita of any English-speaking country.

Clark Furious

The ninth floor sent calls to Defence to ask why the Prime Minister wasn't briefed that our SAS have been building accommodation for German soldiers in Kabul. Helen Clark was angry to learn this information via the Letter and even angrier that when questioned at her press conference, she didn't know what the SAS were doing in Afghanistan. Just keep reading the Letter, Helen, and we'll keep you informed.

An Indebted People

Reserve Bank Governor Don Brash gave a thoughtful speech last week to the Canterbury Employers Federation. He made some sobering statements: * NZ's accumulated current account deficits since 1975 amount to $80b; * Household debt in NZ, as a percentage of GDP, is much higher than in any other developed country; * Household savings in NZ are among the lowest in the OECD; * During the 1990s, NZ households went on a borrowing spree - borrowing an extra $45b. Dr Brash points out that households are vulnerable to overseas shocks - not directly but through the banks. Our desire for capital and our poor savings mean "NZ banks now rely more heavily on overseas borrowing than banks in any other developed country", Dr Brash said.

NZ is vulnerable to a change in international finance markets and, because we have most of our money invested in our homes, to a drop in house values. The speech is at .

Alliance Troubles

Media attention has been focused on Matt McCarten and New Labour seizing control of the Alliance from Jim Anderton. The Letter has been receiving leaks from the Democrats suggesting that party is serious about "doing a Green" and breaking away.

The Democrats are the old Social Credit. They claim that, outside Sydenham and Auckland Central, they are the Alliance. Democrat members contribute most funds to the Alliance. Party activists who remember when Social Credit got 20 percent of the vote, claim there are many old Social Creditors who would rally to the Democrats if they broke away.

John Wright and Grant Gillon appear to have little chance of a high list place if they stay with the Alliance so the Democrat MPs might have more chance of getting re-elected by going it alone.


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