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Richard Prebble: The Letter

We Are back

Nine years ago The Letter retired to Lake Rotoma. A general election has been called for 20 September so it is time to return from the pleasures of the Lake and ask “where is the money coming from for all these election promises?

Election is a tossup

The first TV poll of election year showed National at 51%, Labour at 33% and the Greens at 8%. National can govern alone say the commentators. That was election 2011. The first TVNZ the poll for this election year National is again on 51% and the Greens 8% but Labour is up 1%. More ominous for National their coalition ally ACT was on zero. In the 2011 election National received 47%. This time National strategists think the party might get 45%. Without a revival of ACT National will struggle to form a stable coalition.

What now for ACT?

The Letter’s advice was blunt. “You have a good product and a blown brand. The party needs new leadership”. With the election of a new leader and a new candidate for Epsom, ACT’s membership and fundraising have surged. ACT is the “new” party for the 2014 election.

Cometh the hour

Dr. Jamie Whyte is a dream candidate for ACT, lecturer at Cambridge University and international expert advisor on “risk” to global banks. The Global Financial Crisis showed the cost of getting risk wrong. The left say the GFC proves that unbridled capitalism does not work. Jamie Whyte points out every one of the banks that failed were regulated. The GFC was a failure of regulation. Dr. Whyte warns the new regulations will not prevent a future crisis. New Zealand must prepare for new global shocks.

Unhappy campers

Only Labour insiders knew David Cunliffe had two secret trusts. The leak came from within Labour. Who are the secret donors? Mr. Dotcom and Owen Glenn would have outed themselves. It has to be donors whose names would shock. Was David Cunliffe’s primary funded by American businessmen he met when he was a “capitalist” at Boston Consulting? It is illegal for a foreigner to give over $1,500 to a political party though not to an MP. The speculation will not stop until Mr. Cunliffe fesses up. Offering to pay it back is as useless as a bank robber saying he is giving the money back.

There is more to come

The Letter has learnt that another candidate for the Labour leadership also received a significant donation from a businessman. We do hope the MP remembers to declare it or would he like us to do it for him?

He is a wrecker

Matt McCarten’s appointment as Labour’s chief of staff is very significant. He is a hater. Matt has fallen out with everyone he has ever worked for. If McCartten decides David Cunliffe is the stooge of the nameless businessmen who funded his primary campaign Matt will lead the coup. On second thoughts, Matt does not need a reason to plot a coup. It is what he does

Parliamentary Services Concerned

Parliamentary Services has issued strict instructions that parliamentary staff are employed by the taxpayer to assist MPs and must not engage in party political campaigning. All commentators agree McCarten has been hired for his campaigning skills. No doubt the Commission will be sending a please explain letter.

Why appoint McCarten?

Labour believes that if only the “missing one million” who did not vote last election had gone to the ballot box they would have won. McCarten has been employed to get out the non-vote in South Auckland.

Will it work?

Maybe voters stayed at home because they like John Key. McCarten ran the Mana Party campaign last election and they failed spectacularly. Matt thinks everyone in South Auckland is a homeless out of work Maori or Pacifica. Actually South Auckland is diverse; most people have jobs and their own home. Most Labour voters think McCarten is an extremist. For every vote McCarten gets Labour will lose two voters.

Lonely Hone

Under McCarten’s campaign direction Hone Harawera has found he is leading a “class war” party. Hone is so irrelevant in parliament he rarely bothers to attend. Now Matt is directing the campaign to defeat the Mana Party. Hone must wonder why he left the Maori Party.


The fastest growing group is people who call themselves independents. When ACT stayed on the cross benches the party’s vote went up in every election. When ACT appears to be just an adjunct of National the party’s vote has fallen. ACT is not having any cups of tea this election. ACT is campaigning for David Seymour to win on his own merit as a good “independent” MP for Epsom.

Women friendly

ACT has a new generation of women candidates. The party is wooing Dr. Kim Douglas. She is Roger Douglas’ niece. If elected she will create history. Her great grandfather, grandfather, father and uncle have been MPs. She has a doctorate and a degree from Oxford, has worked in the Treasury and internationally as an engineer. If she agrees to stand it will be a real coup.

Can New Zealand pay more tax?

The Left say their promises can be funded by more taxation. The rate of tax can be increased but will it result in more revenue? In the nineties the treasury commission Dr. Patrick Caragata to do modeling on the growth maximizing tax rate. The model showed that investment growth and jobs were highest when tax was between 16 and 25 percent of GDP. Dr. Sully, one of the international academics on the project, said his model showed that the Government is taking such a large proportion of GDP that the New Zealand economy cannot generate more tax revenue. Any increase in the rate of tax will damage the productive economy so that total tax review will fall.

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