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ACT's The Letter 29 August 2005

29 August 2005

ACT's The Letter 29 August 2005

The Haps

We have a real election. National's bigger than expected tax package has put the party back in front. Brash looks more confident and his Saturday interview was his best yet.

While the commentators thought Clark "won" the leaders debate the public did not like Clark's shrill performance. This week the finance spokesmen debate.

Tax policies whose is best?

Labour: Good: It is targeted. Party has moved away from socialist universal benefits. Bad: It is not a tax cut. It is middle class welfare with rebate rates of up to 80%. Wasteful. It will not encourage thrift or personal responsibility.

National: Good: A big tax cut. It is more efficient to let people keep their own money. Encourages hard work and enterprise. Bad: Leaves investment tax rate at 39 cents. Encourages tax planning. Only marginally encourage growth.

ACT: Good: A flat rate of 25% will grow the economy significantly every year. A 15% rebate up to $38,000 is better for low-income families. Bad: 25-cent flat rate is still too high.

Are the forecasts right?

Labour's spending spree is based on the Treasury prediction of increasing tax revenue. What if it is wrong? The Letter has seen a private economic prediction that growth will fall not to 2.2% but to just 1% for the next 18 months before growing again.

They predict falling net migration will result in household formation falling by one third just as 4,000 new apartments are completed in Auckland leading to an oversupply and a drop in house prices. The effect on government revenue at first is just $500 million but 1% growth over four years is a drop in government revenue of $9 billion! Net migration peaked at 42,000 in 2002/03; in the last year it is under 7,000. As more Kiwis leave net migration may go negative.

Interesting races.

Last election because the boundary changes favoured sitting members almost no seats changed parties. Not reported in National news are local polls showing:

Hamilton: National's David Bennett is ahead of incumbent Labour MP Dianne Yates in Hamilton East 40% to 26% and National's Tim MacIndoe is neck and neck with Labour's Martin Gallagher in Hamilton West.

Aoraki: Jim Sutton on 30.9% is trailing National's Jo Goodhew who is at 36.9%. The Timaru Herald poll says just 20% rate the MP's performance as good and Clark's high speed ride through the electorate with Sutton will affect 30% of voter's choice.

On these polls seats like Otago Central will fall to National.

Peters in trouble

A recent Bay of Plenty Times poll (11 August) put Winston on just 10%, National's Bob Clarkson on 26% and the Labour candidate on 18%. A third claim to be undecided. But if you divide the undecided votes amongst the candidates Peters is gone. National's candidate is a very successful self-made millionaire known locally as "Bob the builder".

He is a major benefactor of local projects like the stadium. With NZ1 on just 5% Peters is begging Labour for help. He ended the joint candidates address saying "to stop a National government Labour and Green voters must support me." National is running out of coalition allies.


A month ago Richard Worth was at 53% and Rodney Hide was third on 15%. Eight days ago Worth was 37% and Rodney 25%. On Thursday Worth was on 35% Rodney 27%. On this trend Rodney should win.

Student loans

Mallard keeps claiming that making student loans interest free will not increase the numbers taking loans. If this is true then we are sending very dumb students to University - but it is not true. In1994 just 39.9% of students took out loans. By 2004 that had increased to 60%. Since 1999 under Labour total indebtedness has increased from $2.8 to $5.9billion.

Who did win?

The commentators said Clark by talking over Brash won the debate. But talkback has supported Brash as having been honest. One reader said "I think Don Brash won the debate with Helen. He got the women vote. She was vicious, angry, cold and a real bully, she was like those who surround her whom she looks after, whereas Don is there for everyone."

If you switch off the sound Brash looked relaxed. Labour's own polling shows the National party is winning the campaign. Labour's daily new spending promise is destroying Cullen's reputation for fiscal restraint. Labour looks as if it will do anything to win. Character may become the issue this election, "tricky politician" Clark versus "honest citizen" Brash. Brash is roaring up the leadership polls.

Come out?

The question the public asks off the record this election, "Is Winston gay?" We do not think so nor do we think his extraordinary poster admiring his bum is an attempted to win the gay vote. The picture appeared on the front page of the Dominion when NZ1 MPs saved Labour's Foreshore legislation. As a front page spread it was a great photo. As a hoarding it's a disaster.

Lost the plot

A Marae DigiPoll shows the Maori party is now trailing in Te Tai Tonga, where in April they were at over 50%. In Te Tai Tokerau Dover has drawn equal with Harawira. Pita Sharples defence of Mugabe and now his claim that a jury, which included Maori and granted legal aid to Donna Huata is a racist justice system, is losing the Maori party moderate support. Maori TV has done a better job of covering the election than mainstream TV. The loser has been the Maori party who have not performed well.

Our poll

We asked readers whether you prefer National or Labour's tax package. 98% prefer National's policy, not surprising given our readership. But have you noticed how all your lefty friends know exactly how much better they will be under National's tax policy? This week's question. Wisdom of Crowds, "Will Rodney win Epsom?"Vote at www.act.org.nz/poll.


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