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ACT's The Letter - 14 March 2005

ACT's The Letter - 14 March 2005


The ACT conference saw a change of direction. ACT welcomed the election of Don Brash as Leader of the National Party due to many of his views being similar to those of ACT's. ACT's President Catherine Judd had even called Brash the 10th ACT MP. His 2004 Orewa speech with its strong call for one law for all was pure ACT policy. But that's all changed. Rodney Hide said in his speech "dropping Helen Clark's 39 cent tax rate is no longer a National Party priority." It is to ACT. "National now accepts the 'smoke and mirrors' Cullen fund." The Cullen fund commits National to big government and makes real tax cuts impossible.

"Businesses are going to have to pay for another weeks holiday." Four weeks annual leave is a crippling burden on small business. "Unbelievably National now agrees with Jim Anderton that government should own and run a bank." As former governor of the Reserve Bank, Brash had made it clear NZ did not need any more state banks. Rodney observed National is now more left wing than it was under Bill English. "National's strategy is this; vote for us and nothing will change."


National is a conservative party promising to manage Labour's policies better. ACT is a liberal party. ACT is for freedom, free enterprise, personal responsibility, against big government, high taxes and political correctness whether it is implemented by Labour or National. ACT's strategists realise ACT is alone in advocating these policies and ACT is now campaigning against both the two old parties. There will be no accommodations this election, which is why Rodney is contesting the seat of Epsom.


The party strongly endorsed this change in strategy. Judd in a fine speech said "it's what a classical liberal party needs to do – to make our case in its own right. We are a free market party and we are prepared to take our chances in the market." See http://www.act.org.nz/confspeeches for conference speeches.


Rodney announced ACT's thinking on tax "drop the company rate and top rate of personal tax to 25 cents in the dollar. And we should extend the bottom rate of 15 cents all the way up to $38,000. We should do that immediately." The advantage of this policy is it flattens the tax rate, gives a lower company rate than Australia and really helps hard working Kiwis. The cost is still less than the surplus and would deliver far more than the trade unions' 5% wage rise. Only ACT who recognises that tax cuts must be matched by spending cuts can credibly campaign on tax.


There's an interesting issue unfolding in parliament's Finance and Expenditure Select Committee. Ministers of Finance used to regularly ask Treasury to cost Opposition's tax policies and then use the data in their election campaign. Michael Cullen argued Treasury had used wrong assumptions to cost his 1996 policies and laid a complaint with the State Services Commission that a non-political civil service should not cost parties campaign policies. It was upheld. Last year Cullen told the committee he would like to ask Treasury to cost ACT's policy but the rule prevented him. If asked by the Select Committee, Treasury would do the costing. While Rodney was away on ACT's leadership primary, the committee unanimously voted to ask Treasury to cost all parties' policies. Richard Prebble who replaced Rodney on the committee has welcomed the prospect. Suddenly National, who know their policies don't add up and Winston who is sure his policy would not stand analysis have changed their minds. The resolution stands. Treasury, who are horrified at having to cost all party promises, must respond to what is now a request from parliament. They are proposing to contract a reputable firm of economists and give them access to the Treasury computer model of the economy. ACT has already benefited from this resolution. Treasury has conceded a flat tax is progressive and would add up to 1% growth each year.


The United party using taxpayer funds put advertisements in newspapers opposing the Civil Union Bill and supporting marriage. Yet the Relationships (Statutory References) Bill 2004 that gives legal recognition to Civil Unions and extended legal recognition to de facto relationships was passed with the help of United. All their MPs voted for a government motion to advance the bill and Peter Dunne voted for the bill at every stage. Go figure. See http://www.act.org.nz/u-turn. Last week we commented on Anthony Walton's sudden resignation as Deputy Leader of United and some naughty readers might think we were making a personal reflection. Not so. Mr Walton is a man of the highest personal integrity. We cannot imagine him ever voting to assist a Labour government encouraging de facto relationships. The Letter apologises to Mr Walton and his family for any distress our statement may have caused.


Clark's refusal to use her position to speak against the trade union campaign for an inflationary wage round and the endorsement of the campaign by Labour's President Mike Williams has, as we predicted, got the Reserve Bank worried. As Clark comments on everything, including the performance of the US President, her "no comment" is taken by union members as a licence to strike. The increase in interest rates has already wiped millions of dollars off the share market. It is a failure of leadership by Labour.


54% of readers think National will have no policy. Are you serious? Even we think they will have something. This week "Do you support dropping the company and top rate of tax to 25 cents while lifting the 15 cent rate up to $38,000? Vote at http://www.act.org.nz/poll. Your vote will assist ACT's policy committee.


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