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ACT's The Letter - Monday, 27 June 2005

ACT's The Letter
Monday, 27 June 2005

The Gamble

The outcome of the election has come down to how the public reacts to National's tax package. It's high stakes politics. If tax cuts are regarded as too big the party loses credibility. If too little they will be dismissed as swapping chewing gum for a bar of chocolate. While there are examples of an opposition promise being an election winner, such as Rob Muldoon's National Super at $60, it's governments that lose elections rather than oppositions winning.

Boxed in

National's decision to sign up to the Cullen fund has removed a billion dollars a year in tax cuts. National is reduced to running the hoary old political chestnut that cuts can be financed from growth. John Key thinks the Cullen fund is nuts. He is proposing a merchant banker's solution, keep the fund to keep the pensioners happy and simply borrow an equivalent amount to fund tax cuts.


Helen Clark is running a totally dishonest campaign saying tax cuts mean cuts in core services. She even claims expenditure was cut by the last National government. Oh that it was. The National/NZ First government went on a $600 million spending spree and just like Labour's there was nothing to show for it. Treasury has reported spending in health has been rising unsustainably for over a decade.

Real Waste

National is also running the line that significant tax cuts can be financed by cutting waste. The 38,000 extra civil servants since Labour came to power is evidence of wasteful spending and Labour cannot justify the extra staff by pointing to any reductions in waiting lists, improvements in education or 111 response times. The real waste is in welfare.

Welfare Abuse

Despite virtual full employment, welfare rolls have not made a corresponding drop. In his Orewa II speech Brash pointed out NZ's population has increased 6% but invalid and sickness benefits have increased by 40% since Labour was elected. 79,000 people are still claiming to be unemployed. Of over 300,000 adults on welfare, approximately 200,000 are able bodied. The relative rise in welfare has occurred under both old parties. Since 1975 the population has increased 32%, sickness beneficiaries by 500% and invalid beneficiaries by 700%. It has to be fraud. The DPB increased from 12,600 in 1974 to 109,000 today. If Labour is re-elected Treasury projects a further 18,000 increase in the 3 main benefits. National's solution, yet more training schemes, is too weak.

Two Billion for tax cuts

Currently taxpayers are paying approximately $5b for welfare - this excludes super. Government could slash the unemployment benefit simply by enforcing present rules such as requiring the unemployed to accept work or go off the benefit. If all beneficiaries were required to re- apply and those able to do so were required to work a 40-hour week it would dramatically reduce abuse and slash welfare by at least $2b in just 18 months. In Wisconsin unemployment dropped 50% on day one of requiring beneficiaries to work. Welfare fraud turned out to be far higher than officials had suspected. Many of those involved in $12 billion black economy here are falsely claiming benefits.

Apple turnover

The apple growers turned up at parliament to demand Labour take action to open up the Australian market. MPs queued up to speak to the growers. Overheard. Organiser "Who are you?" Reply "Gordon Copeland, United Future MP." "OK, I guess you can speak." Copeland then tells the surprised growers he has been leading the campaign to get apples into Australia. Pity no one noticed!

Mark's movie

Tomorrow night Mark Prebble's film "Futile Attraction" has its premiere at the Paramount theatre in Wellington. It has attracted international attention because Mark (Richard's nephew) has made the film without any tax payer money. Instead actors and crew donated their time and he raised the money from the Internet. has a cult following. Making a movie without the Film Commission's support has not made the project popular with an arts establishment addicted to government patronage. The NZ Film Festival has refused to show it. Helen Clark is not attending but if you want to go to a world premiere and perhaps the only NZ showing of a genuine kiwi film there are still tickets available. $13.00 phone 04 384 4080.

Clark's $90,000 plus bill

Clark's attack on the Speaker was not because Wilson threw her out of parliament but because Helen is in serious trouble over Ken Shirley's complaint about Labour's bus stop advertisement, "You are better off with Labour". The Letter has been told the Parliamentary Commission has ruled the ads are party political and cannot be funded by parliament. Labour has taken the ads down, 133 of them at a cost of $90,000 (plus art work). Wilson has had a letter drafted by the Commission on her desk for signature for over a week advising Clark that she must repay the $90,000. Clark is pressuring Wilson to bend the rules, override the Commission and let her off repaying the money.


We have received over a thousand suggestions for our billboard competition. See sample at Some are unrepeatable in a family publication like this, such as tennis balls/ no balls/ big balls. We liked excuses/ exams/ education. National have over 80 of their billboards up nationwide, that's over $250,000, which would confirm rumours the party's coffers are overflowing.


This week The Letterasks,"Should the Labour government ban the Zimbabwe cricketers from touring?" We will send the results to Phil Goff. Go to


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