Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Richard Prebble's Letter from Wellington 20 May

RICHARD PREBBLE'S Letter from Wellington

Monday, 20 May 2002

Kiwi Apartheid

First, the good news. Dr Cullen has adopted ACT's policy of a 19.5% tax rate for business. The new rate is in the Taxation (Annual Rates, Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Bill introduced to Parliament last week and referred to the Finance and Expenditure Select Committe for public comment. Dr Cullen hopes to pass the law before the election. Imagine the boost to business of tax being cut from 33 to 19.5 percent.

Now the bad news. It only applies to Maori authorities and trusts - such as the Crown Forestry Rental Trust (worth over $200M) and the Waitangi Fisheries Commission and its subsidiary companies that control half the fish quota. Hundreds of Maori businesses will qualify to pay only 19.5 percent tax.

It gets worse. The government is removing the restriction on setting up a charity for your own family, to avoid paying tax. The proposed change is intended to make iwi and hapu tax-free. The IRD says it's still grappling with the implications of this change. The Letter's advice is to enrol on the Maori electoral roll (one drop of Maori blood qualifies). Register your business as a Maori authority, set up a charity for your family hapu, declare your home your marae, and be tax-free for life. ACT's policy is one law for all. (You can read the bill at www.act.org.nz/taxapartheid.)

Father of all Give-Away Budgets

The Letter believes commentators will be stunned by the size of the spending announcements in Thursday's budget. The government started announcing budget spending in December, when the Health Minister said there would be $400 million extra for health each year for the next three years. That was based on the Treasury forecast that economic growth would be 1.9%. But the latest Reserve Bank estimate is for growth of 2.75%. This will result in extra tax revenue of about $2 billion. So Dr Cullen will be able to announce addi-tional health spending of not $400 million but $800 million - and still be within the fiscal cap he set.

The budget will spray money on every interest group.

We Are Still Getting Poorer

Missing from the budget will be a strategy to get to 4 percent per capita sustainable economic growth - the target Dr Cullen agrees is necessary to return New Zealand to the First World. No country has grown sustainably at 4 percent where the government takes 40 percent of the nation's earnings.

ACT's Positive, Practical Alternatives

Rodney Hide has drawn up an alternative budget setting out how New Zealand could attract investment and grow at 4%. ACT's plan is to cut tax rates by adopting a suggestion in the McLeod tax report. It would see a company tax rate of 28 cents, and two tiers of personal tax - 28 and 18 cents - while keeping the low-income rebate of 15 cents. This would give every working person a pay rise. ACT would introduce real welfare reform. The number of able-bodied adults on welfare today is 60,000 more than a decade ago when unemployment was over 10 percent.

ACT favours a bonfire of red tape - including expensive compliance costs from the Employment Relations Act and the Resource Management Act.

ACT would lift standards in education by letting schools pay good teachers more.

(ACT's Budget for Growth is at www.act.org.nz/budget.)

Brash's Role

Last week, Don Brash gave his first public speech since announcing he will stand for Parliament. He said he favoured time limits for welfare. Bill English promptly distanced himself from Brash's statement, which the media accurately reported as being ACT policy. Dr Brash's only chance of being Finance Minister is if ACT does well.

Security is the Issue

This year the Australian and New Zealand governments are issuing their budgets only a week apart - but at opposite ends of the electoral cycle. It's interesting to note the different priorities. Australia has put the emphasis on security. The Australians believe the events of September 11, and the Tampa, show Australia needs more security. Australia also believes it needs to reform its health system, or future health costs will blow the Federal budget.

Security (national and personal) will not figure in the NZ government's priorities, nor will there be any solutions to the exploding health costs.

Personal Security - the Election Issue

In ACT's alternative budget, the only increased spending is on police and defence. New Zealand has a lower ratio of police to population than any state in Australia, and one of the highest violent crime rates in the English-speaking world. Truth-in-Sentencing and Zero Tolerance for Crime do require extra resources. But the annual cost of crime is over $6 billion (more than $4000 per household), and early-release prisoners do $1 billion worth of crime a year! In comparison, the annual cost of prisons is just $355 million. (See www.act.org.nz/crimecosts .)

Governor Rod (Le Pen) Carr?

Labour Party president Mike Williams at the weekend attacked Richard Prebble's comments on government immigration policies, suggesting that Prebble is New Zealand's Le Pen. Is Mike Williams suggesting Reserve Bank Acting Governor Rod Carr is also a follower of Le Pen? The Acting Governor gave as his reason for increasing interest rates, the rising house prices and retail sales in Auck-land, caused by increased immigration. ACT is not anti-immigration, but believes in quality, not quantity.

Government Advertising

The Letter has reported that Brian Edwards' sycophantic biography of Helen Clark is being remaindered in some bookshops at $19.95. A reader of the Letter has now told us that on the PM's website the biography is being sold for $39.95 - a discount on the full price of $44.99. How can the PM's website get away with engaging in retail marketing? When you get to the order page, you find it has turned into a Labour Party site. (Go to www.primeminister.govt.nz , click on speeches and releases, then scroll down and click on '5'.)

Send the Letter to a Friend If you have a friend who you think would enjoy the Letter, why not forward it to them. You can also sign them up for the Letter at: http://www.act.org.nz/subscribe.jsp

The latest version of the Letter will always be available at http://www.act.org.nz/latest.jsp?type=1183 All previous Letters from Wellington will be found at http://www.act.org.nz/search.jsp?type=y1183

© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines


Also, Loan Interest: Productivity Commission On Tertiary Education

Key recommendations include better quality control; making it easier for students to transfer between courses; abolishing University Entrance; enabling tertiary institutions to own and control their assets; making it easier for new providers to enter the system; and facilitating more and faster innovation by tertiary education providers... More>>


Higher Payments: Wellington Regional Council Becomes A Living Wage Employer

Councillor Sue Kedgley said she was delighted that the Wellington Regional Council unanimously adopted her motion to become a Living Wage employer, making it the first regional council in New Zealand to do so. More>>


Scoop Images:
Dame Patsy Reddy Sworn In As Governor-General

This morning Dame Patsy Reddy was sworn in as the New Zealand Realm’s 21st Governor-General. The ceremony began with a pōwhiri to welcome Dame Patsy and her husband Sir David Gascoigne to Parliament. More>>


Ruataniwha: DOC, Hawke's Bay Council Developer Take Supreme Court Appeal

The Department of Conservation and Hawke's Bay Regional Investment Company (HBRIC) are appealing to the Supreme Court over a conservation land swap which the Court of Appeal halted. More>>


With NZ's Marama Davidson: Women’s Flotilla Leaves Sicily – Heading For Gaza

Women representing 13 countries spanning five continents began their journey yesterday on Zaytouna-Oliva to the shores of Gaza, which has been under blockade since 2007. On board are a Nobel Peace Laureate, three parliamentarians, a decorated US diplomat, journalists, an Olympic athlete, and a physician. A list of the women with their background can be found here. More>>

Gordon Campbell: On The Key Style Of Crisis Management

At Monday’s post Cabinet press conference Key was in his finest wide- eyed “Problem? What problem?” mode. No, there wasn’t really a problem that top MPI officials had been at odds with each other over the meaning of the fisheries policy and how that policy should be pursued... More>>


Mt Roskill: Greens Will Not Stand In Likely Post-Goff By-Election

“The Green Party’s priority is changing the Government in 2017, and as part of that we’ve decided that we won’t stand a candidate in the probable Mt Roskill by-election... This decision shows the Memorandum of Understanding between Labour and the Green Party is working." More>>


Get More From Scoop



Search Scoop  
Powered by Vodafone
NZ independent news