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ACT's The Letter - Tuesday 26 Oct 2004

The Letter

Tuesday 26 Oct 2004


The Letter wishes to unreservedly apologise to Hon John Tamihere for accusing him of taking a golden handshake. We now realise it is all a cultural misunderstanding and the money was koha. So that’s OK. What a shame it took John two weeks to think of this explanation. What a pity the Trust forgot it was koha and said it was for work as an MP. How unfortunate that Deputy PM Cullen said it was a bonus. Were the cheques for $95,000 to non-existent Maori trusts also koha? Was the $18,000 from the Waipareira Trust to Tamihere’s election campaign that he forgot to include in his return also koha? Just say it was all koha and we’ll apologise again.


The Waipareira Trust is now saying that it accepts tax liability even though its initial letter said it was a gross figure. If so that means the golden handshake, oops we mean koha, was $319,672! This also means, depending on penalties, the tax owing could be nearly $300,000. Parliament is in recess, which gives Helen Clark, who has returned from her annual trip socialising with her fellow socialists in Europe, a week to decide whether she thinks the koha explanation will work. The 9th floor spin doctors have let it be known that Clark does not agree with the way Cullen has attempted to defend the payment and attack Tamihere’s accusers. The PM’s line would have been to acknowledge that the charges are serious and let the inquiry decide Tamihere’s fate.


The problem with the PM’s strategy is that QC White’s enquiry has no legal status. The QC cannot examine witnesses on oath, summon witnesses or require the production of documents. The Letter has been told that key witnesses have been advised by lawyers not to co-operate. Some time this week the PM must decide to make the inquiry a legal commission and to widen its terms of reference.


The NZ Herald poll purports to show Labour would win a by-election in Tamihere’s seat but shows no such thing. Tamihere won 71.6% of the vote last election. The poll shows he is now at 48.2%, only 10% ahead of Pita Sharples. Last election the government lost 10% during the campaign. In by-elections there is always a swing against the government, even greater if the electorate thinks the government is at fault.


It seems certain the Reserve Bank will make the sixth interest rise this week giving NZ the biggest interest rise this year and the highest interest rates in the developed world. The Kiwi continues to rise and now approaches parity with the Aussie whose Reserve Bank has taken a much more cautious approach. The Reserve Bank believes that NZ’s smaller economy requires bigger interest rises to contain inflation. The Letter knows of no economic theory to justify this approach. The threat of an overshoot and a hard landing is now greater than from inflation.


The polls have Kerry and Bush neck and neck but there is another very reliable way of predicting elections – the futures market. The Iowa Electronic Markets (IEM) allow any one to buy future contracts on elections. Participants do not just predict winners they predict what % vote candidates will get. In the last 49 elections the market was off just 1.37%, much less than the polls’ margin of error and much more accurate than any opinion poll. This morning the best “price” was for a Bush win by more than 52% of the votes followed closely by a Bush win by under 52% of the vote. Collectively, the market puts the odds of a Bush win at 60:40. See


If Kerry wins it will be thanks to ACT. Not ACT NZ but America Coming Together, the Washington 527 committee founded by hedge fund billionaire George Soros. (527 refers to its tax-free status). ACT pays 1500 canvassers $8 to $12 an hour to go door-to-door enrolling in the key battleground states. Anecdotal evidence is that enrolments are up. Of course Republicans are also enrolling voters but the $18 million Soros has put up may prove crucial. Half the US electorate did not vote last election; just a few extra votes in key seats would have won it for Gore. Most non-voters are not even on the roll. Get them on the roll, get them to the poll. The Democrats have a built in advantage as most unregistered voters are Democrats. In past elections the Republicans have been able to out spend the Democrats but thanks to 527 committees that have no campaign limitations and donations like Soros’, Democrats are matching Republican spending.

The massive spending on just 11 swing states demonstrates the limitation of first past the post voting. Most Americans might as well stay at home on election days, which quite rationally they do. Computer and telephone canvassing of every household in key marginal neighbourhoods mean that each side has identified a few thousand swing voters who will decide the election. MMP may be getting bad press but at least every NZer’s vote is equal. Most Senate races are a forgone conclusion and thanks to gerrymandering of congressional seats there are less than a dozen real congressional races.


The Logistics and Transport Institute awarded former ACT leader Richard Prebble with their premier prize, the Bob Owens award for outstanding contribution to NZ transport – his role, in port reform, open skies deregulation and rail corporatisation.


Last week we asked, “Should Tamihere be sacked?” and 90% say yes. This week “Should the Reserve Bank lift interest rates this week?” We’ll send your answers to the Bank

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