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Richard Prebble's Letter from Wellington 10/6/2002

Monday 10 June 2002

Early Election Announced Tomorrow?

The buzz in Wellington is that the government will tomorrow announce a snap election. Labour has all year been planning to go early. Mike Williams, who spent a decade with the Australian Labor Party, has been pressing hardest for an early election. Calling snap elections is the Aussie way. The ALP's advice to the NZ Labour Party is that there is little adverse voter reaction to the opportunism of going early "provided the government has a legitimate reason".

This is Labour's dilemma. Even pro-Labour media commentators admit there is no reason. Last week Jim Anderton's Progressive Reactionary Party came out against a winter election. Labour MPs say the decision is now Helen Clark's and she has confided in no one.

Rural Confidence in Free Fall

The latest ACNielsen Rabobank survey shows a sharp drop in rural confidence. Fifty two percent of farmers now expect the economy to worsen over the next 12 months, and 51% expect their incomes to fall.

Respected commentators are now predicting the Kiwi dollar will hit 58c US, which translates into a 25%-plus fall in rural incomes. No wonder Labour wants to go early.

Teachers' Settlement

We have learned officially today that the teachers' pay settlement has failed. Labour has got itself into a mess. Pay rates for university-educated secondary teachers are too low. The public knows that for quality education we must pay good teachers more.

Labour's election promise of pay parity for primary and kindergarten teachers means an across-the-board pay rise has a crippling cost. But Labour lacks the courage to pay good teachers more.


Adding to the teachers' dispute is mounting evidence that the new NCEA system that has replaced School Certificate is a bureaucratic nightmare. Labour's ideological opposition to marks means good pupils are failing. There are no marks given under NCEA, just four grades - 'not achieved', 'achieved', 'merit' and 'excellent'. A minor mistake in map drawing means the pupil must be given 'not achieved'.

This is turning education into something like the Chinese system where pupils were measured purely for their skill at calligraphy in copying Chinese letters. Pupils are just giving up. We have a major crisis in boys' education.

Without a mark, pupils have no idea of how they are really doing. Teachers are overwhelmed with the bureaucracy. It's an education disaster.

Sovereign Yachts Debacle

Everything Rodney Hide has exposed about the government's handling of Sovereign Yachts has turned out to be true. Rodney Hide's exposure of the deal has made it impossible for any government to sell the rest of the Hobsonville land at a fire-sale price. We now know the promoters intended to use most of the land for a housing development.

No Auckland jury is ever going to agree that it was right for the government to sell 4ha of prime harbourside land for just $465,000.

What's State Radio Up To?

State radio last Friday led with a UMR poll that four out of 10 National voters would consider switching to Labour to keep out the Greens. The National Business Review, which commissioned the poll, didn't run this story.

The Letter understands the NBR didn't even know this question was to be included in the poll. State radio had asked UMR (who just happen to be Labour's polling company) to include it and then ran this pro-Labour story as their lead item on the 7am news.

Why didn't state radio ask how many voters would switch to National and ACT to stop a Labour/Green government? In any case, such polls are notoriously inaccurate. The ACT Party has a private poll from Market Pulse that says 39% of National voters would support ACT if they thought ACT might not reach the 5% threshold. Put that poll together with the UMR poll and it leaves National with only 20% of its supporters - hardly credible.

Lower Taxes for Every Worker

Here is some of the reaction to ACT's plan to cut company tax to 28 cents and give every worker a tax cut.

"Crazy," responded Dr Cullen.

"It will cost too much," said National's David Carter.

"These are commonsense policies that are fully in line with good economic practice in successful countries." - the Business Roundtable.

"ACT's attitude to business and the spirit of enterprise is extremely appealing. In particular, we strongly endorse the emphasis on cutting the company tax rate immediately below the Australian rate ..." Employer and Manufacturers' Association.

"If Dr Cullen thinks tax cuts won't stimulate the economy then he's out to lunch." - the Canterbury Chamber of Commerce.

Do Taxes Affect Growth?

The level of tax has become an election issue. Dr Cullen maintains that tax rates have no effect on growth. If he believes this, as a correspondent to The Dominion observed, why didn't he increase taxes, fix health and education, and give us all a free lunch?

Low Income Earners Taxed Heavily

Not only are Australian companies taxed 10 percent less than NZ, but low income earners also pay less tax across the Tasman. An Australian worker on $20,000 a year pays just 11% in income tax. In NZ the same worker pays 18% in tax.

Printing Presses Humming

Taxpayer-funded publicity is pouring out of Parliament. Two Labour MPs, Ann Hartley and Helen Duncan, have been caught putting out glossy pamphlets illegally paid for from their electorate allowances. The Speaker has forced the two MPs to repay the money.

Also reprimanded was Helen Clark's Minister for Carrying her Handbag in Auckland, Judith Tizard. Judith asked her taxpayer-funded electorate office to organise a Labour Party fundraising wine auction - hardly working class, and against the rules.


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