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ACT"s The Letter - 7th February 2005

The Letter Monday 7th February 2005

Election Parliament

In the first debate of the year the parties have begun their election campaigns and set out their pitches.

Labour: Helen Clark is pitching for the soccer mums. Her statement was a shopping list of their concerns - quality childcare, education standards, and access to health. Clark's government is the first Labour government since the war to have more support from women than men.

National: Don Brash is attempting to make welfare an election issue. The facts are stark. The numbers on welfare at a time of prosperity are equal to the cities of Christchurch and Dunedin combined. Welfare numbers just keep growing.

NZ First: Immigration again appears to be their only election issue, but then, why change a winning horse?

United Future: Peter Dunne refuses to recognise that his party is really the old Christian Democrat party. His pitch is to drop the Christian label and be a centre party.

Greens: Are trying to make oil - or its lack - an election issue, and are playing down their GE reversal.

Maori Party: Maori First.

ACT: Is campaigning on one law for all, tougher sentencing, tax cuts for every worker, school choice, welfare reform, cutting red tape and protection of property rights.

IT'S THE ECONOMY Last year's 4.5% growth was the second highest in the OECD, the last five years have been amongst the best economically in most voters lifetimes. While economists point out that the foundations were laid in the Douglas/Richardson reforms, it's the government of the day that claims the credit. The Labour government is not doing everything wrong economically. It is passing free trade agreements and has left much of the reforms in place. Governments are hard to beat when the economy is growing.

WELFARE REFORM ACT's polling on welfare reform put it 10th on the voters' issues of concern only because the voters did not have an 11th option. Welfarism is ingrained. Most cannot imagine a state that does not provide cradle to grave welfare.

You'd have to be 80 to remember the introduction of social welfare. Women are particularly concerned about what would happen to them and their children if their husband abandoned them. Unspoken is a concern of what would happen to race relations if 40% of the Maori population were cold turkeyed off welfare.

The news media, the bureaucracy, social scientists, and the Labour party have ignored the incredible success of the Clinton Democratic Government in reforming welfare. In some states welfare rolls are a fifth of what they were and all social statistics, crime, drugs, alcoholism, teenage pregnancy, and even marriage have improved.

Welfare reform is one of the drivers of the remarkable recent growth of the US economy. The NZ welfare system is in need of reform and Labour's refusal to introduce real reform is its biggest failure. It's an issue left wing governments have a natural advantage in. Perhaps Brash, with the power of the pulpit as Leader of the Opposition, can take ACT's welfare reform ideas just as he did ACT's one law for all and make it an election issue.

LABOUR'S INITIATIVES National used to campaign on the need for a stakeholder society and National governments were very successful in increasing home ownership. If Labour can produce a practical solution to make first home owning affordable, it could be an election winner. The majority of households have no savings and the pledge to introduce policies to allow working families to save could also be a winner. Part of the reason ACT has always favoured individualised superannuation is to give more NZ'ers a stake in their own country.

IMMIGRATION: Some commentators are predicting immigration may fall to just 8000 this year. While facts have never stopped Winston, that's about the level he says is OK. This level of immigration and the impact of higher interest rates must affect the house market. A fall of any significance in interest rates would have a real wealth effect. Many homeowners are heavily mortgaged. The Letter believes that while the Reserve Bank is concerned about inflation, the bank is nervous about the impact further interest rate rises would have on indebted households. Higher interest rates could change all the political calculations. A cooling in the house market will have little effect on construction. The government spend up on infrastructure is so great it will absorb any slack.

THE ECONOMY The lift in US interest rates is good news. It's a sign the American economy is growing. The interest rise will halt the fall of the US dollar, forestalling the rise in the Kiwi. All good. Commentators are predicting growth to slow to 2%, at least that's what they said last year. While growth at some stage will slow, The Letter doesn't think the slow down is coming yet. The multiplier effect of the infrastructure spend will keep the economy growing.

MOTHERS ON THE ROAD ACT MPs Dr Muriel Newman, Deborah Coddington and Heather Roy will be on the road in February promoting welfare, education and health reform. The tour gives ACT an opportunity to show off that it has the quality women MPs. What was Katherine Rich thinking, or did she think at all? If National does not want the intelligent women's vote, ACT is happy to provide it a home. For information, go to

POLL Do you believe the government should actively promote, using tax-payer incentives, first home owner-ship? Cast your vote at - Your answers will assist ACT in responding to Labour's proposals. This message has been brought to you from the ACT New Zealand Parliamentary Office


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