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The Letter, Monday 24 May

The Letter Monday 24 May 2004


The ACT caucus has decided to re-elect all positions in a special Caucus on the weekend 12/13 June. The primary vote closes at 5pm, Friday 11 June. Hon Ken Shirley, Muriel Newman and Deborah Coddington are all eligible to stand again as Deputy, Whip, and Caucus Board representative (provided they have not been elected to some other position). The new leader makes all portfolio responsibilities, select committee appointments, and seniority in the House.


Under parliament rules the ACT parliamentary unit staff contracts (but not MPs’ secretaries) terminate with the leader’s resignation. National had not appreciated this when its leadership changed and that Caucus is still sorting out the effects of the mass termination. ACT is regarded as having the best staff in parliament so the Caucus wants to give the new leader an opportunity to set up a new team as smoothly as possible.


No third party has ever changed leader and survived. Social Credit never endured Bruce Beetham's departure. Alliance never recovered from Jim Anderton's on/off retirement. As ACT has never been built around the leader, but instead, around classic liberal policy, its prospects are better. The primary will give the new leader legitimacy and the Caucus' unanimous decision to spill all positions gives the new leader an opportunity to reshape the team.


The meetings are getting better; 70 attendees in Cambridge on Saturday afternoon! Tonight it is the North Shore. Lindsay Perigo agreed to MC a TV style leadership debate but has now pulled out. Chris Trotter has agreed to take his place. Mr Trotter regards ACT as the "class enemy" so there is no danger of him being compromised or not asking the toughest imaginable questions.


North Shore, 7:30pm tonight, Mary Thomas Centre, 3 Gibbons Rd, Takapuna. Hastings, Tuesday 6:30pm, Angus Inn, Railway Rd. Whangarei, Wednesday 6.30pm, YMCA, Rust Ave. Palmerston North, Friday 6.30pm, Rydges Coachman Hotel, Fitzherbert Ave. All the candidates now have websites: and You can still register to vote in the primary at


Richard Prebble and Rodney Hide will give their post-Budget analysis at the Crown Plaza Hotel, Albert St, Sunday, 30 May at 9.30am. It is $26 per person. Register by faxing 09 523 0472 or online at The brunch will be followed by a primary leadership debate.


Questions from ACT MPs forced Michael Cullen to own up to no reduction in company or the top personal tax rates in this Budget. When Labour was doing its "love-in with business", Dr Cullen promised repeatedly to review company tax rates when “fiscal conditions permit”. In August 2001 he said, “Last month I paid a visit to Ireland to see what sort of lessons their now booming economy might have for New Zealand. Many commentators outside of Ireland claim it is the low 10 percent corporate tax rate that lies at the heart of its economic transformation. This has certainly played a part..." Dr Cullen has also ignored advice from the OECD. The OECD economic survey in June 2002 said “Many of the proposals contained in the [McLeod Tax Review] are commendable, and should be taken up quickly by the government. Aligning the top personal rate with the company rate and moving toward a more even tax treatment of different business entities would help reduce distortions and incentives for tax avoidance." Cullen is also ignoring his own department’s advice. The Treasury report, New Zealand economic growth: an analysis of performance and policy April 2004 found, “A foundational principle for a taxation system that seeks to support economic growth is that it should be ‘broad based-low rate’”.


In 1997, NZ's company tax rates were 4% below the OECD average and now we're 3% above. The rest of the world is cutting tax rates.


Labour promised the income tax surcharge would fall on just 5% of taxpayers and now it is paid by 20% of all full-time workers. The income tax burden falls disproportionately on those earning more than $60,000 a year (an income that both old parties believe makes one rich).


The Court of Appeal has still not made a decision. Meanwhile Donna continues to sit in parliament. She nearly missed the vote of no confidence that was won by the government by just two votes. Last week she missed over a dozen votes on the Corrections Bill. So far this year she has failed to vote on the third reading of four bills. The Electoral Integrity Act was designed to enable parliament to rapidly restore the proportionality of Parliament as decided in the election. If the new Supreme Court takes as long as the Court of Appeal, Donna may make it through to the next election and a lifetime travel entitlement.


Rodney Hide won last week's private members’ bill ballot. His Treaty of Waitangi (final settlement of claims) Bill is Derek Quigley's original Bill setting a final cut-off date for all Treaty claims. Every time the bill is debated, more MPs vote for it. Now all parties, except the Greens, claim to be in favour of a cut-off date for Treaty claims so is it third time lucky?


Who do you think should be ACT’s Deputy Leader? Record your preference at We will give the results to the ACT Caucus.


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