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Blue skies and halcyon days - DR R. Worth MP

15 December 2006 - No. 97

Blue skies and halcyon days

This is the last email newsletter of 2006. A year of significant change within the National Party which has brought renewed commitment from the Caucus and unstinting support for the leadership of John Key and Bill English.
Merry Christmas and a Happy New Year to the 19,000 readers of this newsletter.

Curiouser and curiouser
The MP for Mangere Taito Philip Field has been suspended from the Labour Caucus on full pay since 31 August 2006. He has not been in Parliament since.
No record of members’ attendance in the House is now maintained and the Standing Orders no longer require members to attend the House.

Section 20 of the Civil List Act 1979 provides for a deduction of $10 from a member’s salary for each sitting day, exceeding 14 on which a member is absent during a session of Parliament. It does not apply where the absence is as a result of attending conferences, ceremonies or meetings or travelling on any mission or business as a representative of Parliament or with the authority of the House.

So presumably the nominal deductions are being made.
Time To Get Serious About Graffiti - Bring On The Tag-Cams
There should be an urgent Government response to the growing problem of graffiti vandalism following the report of the Local Government and Environment Committee recommending that the Manukau City Council (Control of Graffiti) Bill not proceed.

The bill was developed by the council in response to the growing graffiti problem in Manukau City. While the Committee was sympathetic to the intent of the Bill, it felt that legislating for a local solution to a national problem would create a host of legal and enforcement issues. The local approach would also be unlikely to achieve the objective of curbing graffiti - at best it would simply drive it into other areas.

The committee heard from the Minister of Justice that the Government had a plan to address graffiti issues. However, the plan will not be fully rolled out until 30 June 2010. That is just too long to wait. You only need to look around to see that tagging is a rapidly growing problem.

The response should include:
• Zero tolerance for graffiti vandalism
• Heavier sentences for graffiti crimes to deter and punish vandals
• Part of any punishment should include cleaning up graffiti
• Government funding of neighbourhood kits to help communities clean up their streets
• Trialing of "tag-cams" - mobile surveillance equipment to photograph offenders at graffiti hot-spots.

Visit of President Roh Moo Hyun
I recently had the privilege of hosting President Roh in Wellington at a Business Forum to discuss the Korea New Zealand relationship. The event was held in the Legislative Council Chamber and attended by Korean business leaders from the major Korean chaebols.
It is not widely known that New Zealand had two Chambers in Parliament. The Legislative Chamber was scrapped in 1951 for a range of reasons, not the least of which was that the Select Committee scrutiny of Bills would avoid the need for an Upper House.

The end result of the President’s visit is a 21st Century Partnership between our two countries written in aspirational terms.

National opposed new taxes on investment
National unsuccessfully opposed the passage of the Taxation (Annual Rates, Savings Investment, and Miscellaneous Provisions) Bill which was passed under urgency at the close of the Parliamentary session.

National supports the objective of making New Zealand's tax system both more consistent and simple. Unfortunately, this Act adds more inconsistency and complexity. It introduces a new tax on portfolio investments in offshore companies on the basis of a 5% fair dividend rate, but treats managed funds quite differently from individuals and family trusts.

The new tax was a result of the Government's decision to shrink the former grey list countries - where investments were taxed similarly to investments in New Zealand - to include only Australia. Dr Cullen had claimed the new tax was not intended to tax capital gains, yet it clearly does.

The so-called fair dividend rate is not fair at all. Most submitters to the Finance and Expenditure Select Committee argued that, if the grey list were to be abolished, the new tax should be set to reflect objectively international dividend yields. That would suggest a rate of between 2% and 3.5%. With the yield on international investments currently at 2.2%, the 5% fair dividend rate tax obviously includes a capital gains tax.

The complexity of complying with this legislation, and the fear of IRD-imposed penalties should taxpayers get it wrong, will result in many individuals simply applying the maximum 5% rate to their foreign share investments. Others will simply bring their money home to invest in our already inflated domestic property market.

Because the earnings will be assessed in New Zealand dollars, a currency shift could see taxpayers facing tax bills when their real earnings have been zero. What is more, if their international share portfolio were to decrease in value one year, while they would not face a tax bill that year, they would face a tax bill the next year should the shares return to the commencing value.

Political Quote of the Week
"If one morning I walked on top of the water across the Potomac River, the headline that afternoon would read: PRESIDENT CAN'T SWIM." Lyndon B. Johnson - 37th President


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