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ACT's The Letter - Monday 1 March 2004

The Letter
Monday 1 March 2004


Labour is stunned by its poll reverse and struggling to discover how they got it so wrong. Labour’s own polling had told the party the public was relaxed about race relations, not overly concerned about treaty settlements and, provided there was public access, the foreshore was not going to be an issue. Now the polls say the electorate regards race relations as the issue, treaty settlements are out of control and the foreshore is a beach too far. More worrying for the government is the majority of the electorate thinks Labour cannot solve the race issues and thinks Don Brash has the solution. A large number of voters say they have a strong view on the issue and it will decide their vote. It is very hard for a government to recover from such a view shift.


Like an Italian tank (one forward gear and four reverse), Labour is now keen to abandon policies that Helen Clark asked her government to be judged on. Retreat is the most difficult manoeuvre; it can easily turn into a stampede.


Commentators have correctly identified that Labour’s Maori caucus may revolt against an abandonment of Maori policies. The Maori MPs are aware Clark is the only Labour leader to have lost all the Maori seats. NZ First thinks it could win the Maori seats again. At 4%, Peters’ support is now mostly Maori. In parliament Peters is Brash’s strongest critic, claiming that National would ban Maori All Black teams.


Clark is attempting a political circus trick. On the one hand to persuade the electorate the government is listening, that Labour is willing to change race-based policies, and on the other, that there are no race-based policies, so there is no need to change anything. Clark’s problem is illustrated by the government’s use of the words public domain in the foreshore issue. If public domain and crown ownership are the same Labour can simply change back to crown ownership. Labour’s problem is the words do not have the same meaning, Labour’s policies are race-based and PR won’t do it.


If Labour does abandon race policies it risks losing another constituency, the committed left. The Australian Labor Party, when it decided it was electoral suicide to oppose Howard over the Tampa refugees, lost votes not just to the Liberals but also to the Greens. Jeannette Fitzsimons is arguing for race-based law and that Maori own the foreshore. In MMP voters have a choice and the Greens’ strong polling indicates Labour is losing to both the left and the right.


MPs are very uneasy about the prosecution of Nick Smith for speaking out on behalf of constituents who believe they were badly treated by the Family Court. Electors are fronting up to MPs’ constituency clinics telling extraordinary stories about their treatment by the Family Court; claims of false accusations to gain access given with impunity because it’s secret evidence. The chief Family Court judge is willing to selectively release evidence to make what MPs think is a political point, and then insist that Nick Smith be prosecuted for representing his constituents. If convicted, Nick could lose his seat. The Court is on a collision course with parliament. With superb timing, ACT’s Muriel Newman’s private members bill to open the Family Court, has been drawn from the ballot. In West Australia similar claims of excess by the Family Court led it to be opened. Muriel’s bill will produce a real debate and following Nick Smith’s prosecution, a real prospect of success. The bill is on


ACT leader Richard Prebble last weekend gave a paper to Alamos Alliance, the prestigious annual think tank in Mexico. Vittorio Corlo, the president of the Central bank of Chile, also gave a paper. 30 years ago the Chilean economy was closed to international trade, the fiscal deficit was 30% of GDP, inflation 500%, and the average tariff 105% and there were Muldoon like price and interest controls. Chile’s annual economic growth ‘86 – ‘97 averaged 7.3% (more than twice NZ’s), forecast growth is 4.5% to 5.5%, inflation is nil, and there is a fiscal and current account surplus. Chile has solved the pension problem with a savings based scheme that has assets equal to 60% of GDP and last year Chile was a net exporter of capital. Under a socialist government, privatisation has continued and all municipal water supplies are privatised. As Labour terminates NZ’s only private prison, Chile’s socialist government last year privatised all prison services. Vittorio Corlo says the real reason for Chile being able to become South America’s only first world nation is that both the left and the right believe in sound economics. There is even an ACT-like party called the Sound Economic party. While Labour has failed to achieve any progress in trade, Chile has free trade agreements with both the US and the EC.


Alan Gibbs, the New Zealand businessman who has developed and is now manufacturing the world’s first real amphibious car, has agreed to lead a workshop at ACT’s conference this weekend. The real challenge of the Aquada is not just the revolutionary engineering but overcoming the red tape. There has been no new car company in America for 60 years. The Swiss asked, “Is it a car?” - “Yes,” “Then it may not sail on Lake Geneva.” “But it is a boat.” “Then it may not go on the road.” You can register for the conference on


Should Maori MPs split to form their own party? To vote go to We’ll send results to the Maori Affairs Ministers. This message has been brought to you from the ACT New Zealand Parliamentary Office


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