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The Letter Monday 14 June 2004

The Letter Monday 14 June 2004


The board of ACT, on the caucus' recommendation has appointed Rodney Hide, having won NZ's first primary, party leader. Rodney ran an innovative campaign. His Blog is very good, see The ACT caucus put all the candidates through a thorough "job interview" before looking at the primary result.

The appointment of Muriel Newman as deputy reflects ACT's desire to increase its support with women, the elections of Ken Shirley as whip – to use his experience, and Stephen Franks to the Board – to demonstrate the party's unity. The party is planning to relaunch over the next few weeks to display its new leadership. There is no doubt Rodney is a formidable debater; last year he demolished Brian Edwards who has been one of NZ's toughest interviewers. Rodney has acknowledged that leadership requires a different style but The Letter hopes he will remain the scourge of those who help themselves to taxpayers' money.

Rodney has a mandate to lead his party. He brings intelligence, energy and a new style to ACT. All the candidates agree the he is an outstanding communicator. ACT has clearly entered a new era.


Last week National issued press statements saying the effect of the budget is that a family with two children who double their gross pay receive almost identical after tax/benefit income. Hello? Readers of The Letter have been aware of this; we used the example of a family that doubles its gross pay from $25,000 to $50,000 and their after tax income is only $79 a week greater. We note that John Key MP, who claimed to have just discovered this, has not found out that the family can get more than this ($3,000) by having another child instead of doubling their income. Is National too PC to point out the only way for low-income families to increase their income is to have more children?


Minister Maharey's response to National was "So what? It's a non-argument. Effective marginal tax rates are part and parcel of any targeted system anywhere in the world." He said National agreed with targeted systems after having "discovered" that tax cuts could not deliver the same gains. When asked by the media what National would do differently John Key responded: "Well we certainly would be looking to engage some relief for more people than this budget is doing." Yeah right.

Labour's abatement is 88c in the dollar. Under Bill Birch abatement faced by solo mothers returning to the work force was 90c. The advantage of a low flat tax rate is everyone keeps 80c of every extra dollar they earn. This is the choice. Hand out welfare and the incentive is not to work, or set one low flat rate and the incentive is to work hard and improve one's income. All parties in parliament are in favour of handouts with negative incentives except ACT who favour tax cuts and positive incentives.


At the select committee hearing into the Industrial Relations Bill, employers have complained about lawyers who advertise they will take cases on a contingency basis. Richard Prebble asked the Law Society how many lawyers are now earning their living from employment law cases. He has received the following reply "A total of 2400 solicitors have stated they undertake employment law". 12 years ago the number would have been less than ten. To see the full reply see


ACT has elected a new leader for the first time in eight years. Nine ACT MPs were elected last election but because now independent MP Donna Awatere Huata's injunction to prevent the ACT caucus from using the Electoral Integrity Act has still not been decided by the Court of Appeal, next on the list, Kenneth Wang, was not able to vote. The Court of Appeal agreed at the outset the issue was urgent but since hearing the case on 1 April there has been no decision. Kenneth Wang has now missed over 30% of his time as an MP. Who knows? Some of the votes might have been different. A vote on the leadership is one of the most important in an MP's career and Kenneth may have to wait eight years for the next vote!


The four new judges of the Supreme Court have been appointed, salary $313,900 plus an annual expense allowance of $6,500 each. New offices in the law school have been fitted out and a temporary court set up. But where are the cases? In six months only one legal aid case has been decided and the appeal refused. There are four criminal cases and one civil case still waiting for their leave applications to be heard. So there is nothing for any of the judges to do come 1 July. Parliament's experienced lawyers told Margaret Wilson there were just not enough appeals to justify a NZ Supreme Court. How are the judges going to fill their days?


The Letter notes that NZ media, who throughout President Reagan's time in office portrayed him as a B-grade actor reading a script, are now acknowledging he was a significant statesman. Thought: Is the portrait of President Bush similarly inaccurate. Second thought: Reagan won the cold war but another legacy was his implementation of tax cuts and the longest period of prosperity in US history. After the tax cuts the rich paid more tax than before. Yet the two old parties still won't cut the top tax rate.


Readers think Helen Clark does not need to visit Europe every year – or if she does she should stay there for good. But The Letter received this interesting comment. "Helen should be encouraged to visit Europe as often and for as long as she likes. It makes her happy. She does not do anything and Michael Cullen runs things better when she is away." This week's question - "Should the government spend $21 million advertising the budget?" Vote at - we'll send your views to the Auditor-General who is investigating.


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