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The Letter

The Letter


It’s the last week of recess. There is no sign of a recovery in Labour’s polling. The economy is slowing. Current polls put ACT at 2% and Rodney Hide trailing in Epsom. Speaker Wilson has bent the rules to let Labour use parliamentary funds to campaign.


As previously reported Clark used her parliamentary leaders fund to put up 133 bus stop ads telling voters “You are better off with Labour”. Such party political ads cannot be paid for from taxpayer money and must be repaid. Ken Shirley lodged a complaint. The Parliamentary Services Commission ruled the expenditure was illegal and Clark must repay the money. On Thursday Speaker Wilson, Clark’s close friend, said in this case because it promoted the budget, she was making an exception, and Clark need not repay the money! Thought - if ACT had put up bus stop ads saying “You get real tax cuts with ACT” would they be OK, or is there now a different rule for govt parties? Ken Shirley has referred the matter to the Auditor General. Read the documents and you be the judge. Go to corruption.


Despite denials, Beehive sources are adamant there has been a major rift between Clark and Cullen. Clark is blaming Cullen’s budget for Labour’s unpopularity. Cullen says that Clark signed off on the entire budget. It is the demand by ministers to a future 28% spending increase that gave no room for tax cuts. Using Maharey to sell Labour’s economic message is a sign that Clark is trying him out for the finance role but there is the little matter of getting re- elected.


ACT has struggled in the polls just as the party has never been more successful in promoting its ideas. All parties voted against Derek Quigley’s bill for a timetable for treaty claims, every party voted against Richard Prebble’s bill to make criminals serve their full sentences. ACT is the only party to have a 100% record of opposing tax increases and now every party, except Labour, including the Greens and the Maori Party are all saying they want to repeal at least some of the taxes they voted for. ACT’s polling reveals that voters are aware ACT has led on these issues and voters feel positive towards ACT, however, past deeds are not enough.


ACT voters want the party to continue to lead where other parties are afraid to go. There is no shortage of such issues, like nuclear free NZ, reducing the size of government and welfare fraud.


The two old parties debate the affordability of tax cuts when there is over $2 billion of welfare abuse a year. It is easily demonstrated. Anyone who is able bodied who wants to work today can get a job yet there are 75,000 receiving an unemployment benefit, at a cost of $800 million a year. In 1970 there were 7,000 adults on a sickness benefit. Adjusted for the increase in population of 44% there should be around 10,000 on that benefit today. There are 40,000. 10,000 people received an Invalids benefit in 1970; again adjusted in proportion to the population rise there should only be 14,500 today. There are 135,000. That is not a misprint. There is no change in criteria that explains these massive increases. The stories of young men going on the unemployment benefit so they can surf full time, and people who can go fishing but their back is too painful to work, are all true. Every day offenders who were fit enough to rob a dairy give their occupation as sickness beneficiary. It is welfare abuse on a massive scale. No other party will address this issue. See Richard Prebble’s speech


Cutting welfare abuse would fund significant tax cuts. Reducing the 39% tax rate to 33% costs $690m.


Why would any centre right voter in Epsom vote for Richard Worth? Under MMP if National win the electorate, they get no more seats. That is right! Electoral seats are deducted from a party’s list vote. (ACT got no extra MP when Prebble won Wellington Central, which is why last election he did not waste party resources winning the seat back). Worth is high on National’s list so he does not need to win Epsom to be back. The only time it makes a difference who you vote for in the constituency is when a party is under the threshold. In 1999 although NZ First missed the threshold Winston won Tauranga giving them 4 MPs. By voting for Rodney in Epsom the centre right receives extra MPs.


Labour is running the line that tax cuts are inflationary and will result in increased interest rates. Roger Kerr in a recent article absolutely refutes that claim. Inflation is a monetary phenomenon and not affected by tax rates. Countries with low tax rates like Hong Kong do not have high inflation. NZ has an open economy, the cost of international goods are not affected by changes in NZ’s tax rates! Kerr is kind enough to think that Cullen believes his claims and suggests that Cullen is spouting the Keynesian cost-push theory of inflation that has been discredited for years. Go to Roger Kerr’s article


The Outdoor Recreation Party, which polled 1.28% last election merged with the United Party on the promise of MPs. On United’s list no member of the Outdoor Recreation Party will be elected. Dunne is a one man black hole, absorbing and destroying political parties.


97% of readers think Clark would be willing to enter into a coalition with Peters. The Letter notes the majority of NZ First supporters want Winston to go with Labour.


“Was the Speaker right to allow Helen Clark to spend $90,000 of taxpayers money claiming you are better off with Labour? poll we will send the result to the Auditor General.


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