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Real Issues: EFB, Worker's Rights, Flat Tax

Real Issues No. 294 – Electoral Finance, Worker's Rights, Flat Tax
Maxim Institute - real issues - No. 294
27 March 2008

Let the amendments begin
A fitting commemoration?
Flat tax's growing popularity

Heated journey for the Olympic torch
Inaugural elections held in Bhutan


The flawed Electoral Finance Act is back for discussion in Parliament, following the tabling of an amendment Bill by Hon Bill English at the end of last week. The Electoral Finance Amendment Bill would make a small change to the Act, so that a financial agent is no longer required to display their home address on a political advertisement. Although such a change is needed, Parliament is ignoring the many and varied problems in the legislation which are damaging free speech.

Under the current law, section 63 provides that any election advertisement published must include the name and address of the 'promoter' -- who in most cases is the financial agent of a political party, candidate or third party. The practical implications of this are undesired and would result in every billboard, poster or pamphlet advertising a political party displaying the home address of their financial agent. Several breaches of this law have already allegedly been seen by both Labour and the National Party and so it comes as no surprise that this is the first change they see fit to make.

The Bill would amend the definition of 'address' in the interpretation section of the Act, so that an address for a financial agent will be extended to include 'his or her place of residence or business, or the head office of the party' or, for the financial agent of a third party, the 'principal place of business or head office.'

This is a logical change to the Act; one that is not unexpected given the haste with which the law was passed, and the potential risk this creates to the privacy and safety of a financial agent. There is a sad convenience, however, in politicians seeing the need for this change that affects their employees, but failing to see the headaches that are being caused to the general public by this legislation -- by vague definitions of what counts as election advertising, uncertainty over what can be publicly said about parties and their policies, and debates over who can and who can not be registered as a third party. The Bill is expected to have its first reading on 2 May, the next Member's day in Parliament.

Read the Electoral Finance Amendment Bill http://www.legislation.govt.nz/bill/member/2008/0204-1/latest/DLM1219302.html


In 1908, the community of Blackball on the South Island's West Coast, made history. A group of miners went on strike for eleven weeks after having their petition for a lengthened lunch-break rejected. The workers wanted their break lengthened from 15 to 30 minutes. The Court of Arbitration, which was the authority that dealt with industrial disputes at the time, rejected the workers' request after famously holding its own two hour lunch break during proceedings. Seven of the coal miners subsequently went on strike and when they refused to return to work, were fired. The rest of the workers then joined their colleagues in striking until, after eleven weeks, the management of the mines agreed to the longer break. This moment that took place 100 years ago was the first of its kind in New Zealand and was one of the catalysts for the labour movement. It is an event that has shaped New Zealand politics in subtle but meaningful ways. The labour movement sparked at Blackball has given an essential voice to workers throughout New Zealand's history. Yet, as the Government uses the centenary of the Blackball miners' strike to propose minor changes to the Employment Relations and Holidays Acts, we must ask whether the changes being made will actually enhance workers' conditions.

As city-folk rusticated to Blackball to parade and party, the Government outlined the changes that it plans to make this year. The changes will provide minimum meal and rest breaks, a breastfeeding code of practice, and an amendment to the Holidays Act allowing for the transfer of public holidays for shift workers. Cabinet Minister, Maryan Street, announced the planned changes saying, 'It is fitting that we announce these legislative changes today as we commemorate and pay tribute to the 166 miners ....' Indeed, the miners of Blackball should be remembered. Yet, these changes are not truly commemorative of the Blackball strike. In essence, Blackball was about making a work environment better. It was also about a group of people, bound by shared work, taking responsibility for one another. The changes proposed by the Government are worthwhile in principle, but legislating them will not make work environments better or work communities more responsible. As we create an environment in which small issues are legislated, we sacrifice goodwill between employers and employees, ultimately hindering shared responsibility and damaging work environments. We bend relationships between people into officious arrangements printed onto paper. What is good for employees is belonging to a workplace in which responsibility is taken by employers and employees for making the environment the best that it can be.

Commemoration is not simply about repeating watered-down versions of past events. Truly celebrating our history lies in choosing to understand the spirit of what was accomplished and working towards the things that matter now in our time and place. A breastfeeding code of practice, meal breaks and holidays for workers may be valuable, but what is truly needed for workplaces is responsible bosses and employees all working towards an environment of respectful relationships. Rather than introducing more red-tape, each of us needs to use our energy to build more accommodating and respectful workplaces.

Read more about the proposed workplace changes http://www.beehive.govt.nz/release/workers+get+more+protections+workplace


Benjamin Franklin once famously observed that, 'In this world nothing is certain but death and taxes,' but how certain can we about our tax system? A study recently published by the Center for Freedom and Prosperity Foundation looks at some surprising global trends in tax reform. This study shows that a 'flat tax' is growing in popularity as a possible alternative to progressive taxes. In fact, 'flat tax' policy has been adopted by 24 separate nations around the world -- from Iraq to Iceland. With the threat of recession hanging over our heads and tax developing as an election year issue, it is timely to look beyond our borders at what other nations have done.

So what is a flat tax policy? According to the study, a flat tax is a single rate of taxation across the board -- with no exceptions or loopholes. An ideal flat tax regime would only have one low rate (usually less than 20 percent), no death, wealth or capital gains taxes and no taxation on money earned outside of the country. None of the 24 countries now using a flat tax policy meet all of these requirements. Iceland, for example, has a very high 35.7 percent flat tax on personal income. However, even with this imperfect application, the study suggests that the economic effect on these nations has been positive -- stimulating economic growth and increasing tax revenues (despite decreasing rates). These nations also appear to have become more attractive to investment and immigration. The Center for Freedom and Prosperity Foundation is confident that 'the flat tax revolution' will continue to grow around the world.

As we move further into an election year we can expect the issue of tax to take centre stage -- with John Key suggesting a National Government could cut taxes before Christmas, Michael Cullen promising personal tax cuts in the upcoming Budget, and a re-emergent Roger Douglas advocating zero income tax on the first $20,000 earned. Whether detailed consideration would show that a flat tax is a good or desirable thing for New Zealand is not the issue at this point -- what is important is a healthy discussion of the system we do have and whether we can improve it. It is clear that we are continuing to lose our best and brightest overseas, and we remain economically outweighed and outclassed by our green and gold neighbours. Against this background we must be willing to have open and robust debate, and to consider whether the experience of others can provide any wisdom for us.

Read The Global Flat Tax Revolution: Lessons for Policy Makers http://www.freedomandprosperity.org/Papers/flattax/flattax.shtml



The Olympic torch relay from Olympia to Beijing commenced this week. The torch is expected to be at the centre of many demonstrations against the Chinese government, especially as it will enter riot-ridden Tibet. Disagreement has been associated with the relay in the past; in fact, the first Olympic relay was an attempt to glorify the Third Reich -- Adolf Hitler ordered the introduction of it in 1936 at the Berlin Olympics. The lighting of the flame at the opening ceremony is, however, a less controversial element of the Olympics, heralding back to ancient Greece, it was first used in the modern games in 1928.


It was an historic day for the small country of Bhutan this week, as they held their inaugural election for the lower House of their 'constitutional monarchy.' The Economist estimated 'nearly 80% of some 320,000 registered voters [in a population of approximately 600,000] had cast a ballot.' The BBC reported that, according to the Election Commissioner Kunzang Wangdi, the Harmony party (Druk Phuensum Tshogpa) 'had won 44 of the 47 seats' in this former 'absolute monarchy.'


'We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.'

Winston Churchill

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