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ACT's The Letter - 10 November 2003

The Letter
10 November 2003


Richard Prebble is visiting America.


No chance in this term. Despite Bush’s call for an FTA with Australia, officials doubt it. While agriculture is a big hurdle, pharmaceuticals have emerged as the problem. US drugs are selling in Australia below US prices and the price of drugs is an election issue in the US. There is no possibility of New Zealand getting an FTA at the same time as Australia (the Clark strategy) but there is a chance that, if Australia gets an FTA, New Zealand may be offered the same agreement.


Labour hoped that the new security situation would mean a change in the US position. No. The US view is that part access for US carrier groups to New Zealand is now even more important. The US believes it cannot make an exception and US officials believe the opposition to nuclear propulsion is not rational. Even though on a per capita basis only Norway is contributing more troops than NZ, the nuclear issue means NZ is not gaining the benefits. Few American officials and probably fewer Kiwis know that New Zealands SAS is now administering a whole province in Afghanistan (the one where the Taliban blew up the statues of Buddha).


The US economy is rebounding - 7% growth for the quarter.


New York is now one of the safest cities in America. The broken windows/zero tolerance policy certainly works. The District Attorney for Manhattan says in the 1970s he could be called to up to five homicides in 24 hours. Since September 2000, on similar duty, he has been in all that time called to just three murder enquiries! The District Attorney, who at first opposed the zero tolerance policy as unworkable, puts the success down to five factors:

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1. The targeting of “quality of life” crimes that create the feeling of disorder – vandalism, graffiti, minor street offences.

2. Targeting the gangs and getting them off the streets with longer prison sentences.

3. The use of computer technology to identify crime hot spots, and then implement blanket policing.

4. Speedy trials. Minor offenders can be booked for disorderly behaviour in the morning, convicted, and be serving a community service that day.

5. Minimum sentences. The Legislature has insisted that violent offending results in long prison sentences – even for first time offenders. Crime has fallen because the criminals are in jail.

There is no doubt effective policing lowers crime and the quality of life of New Yorkers has improved.


The benefits of school choice are still being debated – but no researcher has found evidence to show it does harm. Parents are convinced that it works. The school choice movement continues to grow, as 30% of all US fourth graders cannot read at the required fourth grade level!


At the local State level the Republicans continue to win – two more Southern States. A sign of President Bush’s popularity is that local Republicans used messages from the President as a campaign aid. Bush has two issues – the economy and Iraq. The tax cuts are working. Congress has just supported an $84 billion Iraq/Afghanistan package. The Letter predicts in July/August America will declare the job done and withdraw most troops. Bush will be hard to beat.


ACT MPs are shocked at the scale of the Huatas’ feeding at the taxpayers’ trough – nearly $2 million. Mrs Huata did not renew her ACT Party membership, which means she has left the ACT caucus. This may prove significant. An MP who goes independent alters the proportionality of parliament and therefore triggers the Electoral Integrity Act. Richard Prebble has said that even though ACT did not support the Electoral Integrity Act – it is the law and ACT will not hesitate to use it to get Mrs Huata out of parliament.


Last year ACT revealed how working New Zealanders were worse off after extra tax and inflation, and called for a tax cut for every worker. Earlier this year Michael Cullen promised relief for low-income working New Zealanders in next year’s budget, and some structural reform to increase the gap between welfare and work. This would have gone down like a lead balloon with the benefit unions who Labour count on for about 300,000 votes.

Obviously they have forced a re-think, with Labour now telling low-income workers not to expect much from next year’s budget. Cullen indicated to parliament's Finance and Expenditure Select Committee last week that help might be confined to boosting payments within the present family support system. Because family support is mostly paid to beneficiaries (about 80%) this will be good news for beneficiaries, but do nothing to widen the gap between welfare and work, and will still leave working New Zealanders worse off under Labour.


Labour didn't even mention Donna Huata in the House this week. Is the government afraid similar Closing the Gaps spending may be investigated? $2m is just a drop in the Closing the Gaps ocean. The name has been dropped but the money is still flooding out the door. Pipi may not be any worse than dozens of similar trusts and agencies. But who's looking?

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