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ACT's The Letter - Monday 1 November 2004

The Letter

Monday 1 November 2004


Support for Tamihere in cabinet is rapidly disappearing. The first rule for handling a scandal is find out all details, get them out, then deal with it. The PM does not know the extent of Tamihere's troubles. Despite his frequent claims to "fess up" he is unable to explain to his colleagues what else is coming. Once again Rodney Hide knows more about that than the PM and that is making Helen very angry.

Clark should have known because her department "enquired" and cleared Tamihere when ACT questioned the Waipareira Trust's use of taxpayers' money under Tamihere's management. Her department did not even ask ACT for its information, some of which is very relevant to whether any golden handshake should have been paid. ACT has still got the evidence.

Rodney Hide has monitored the Trust since then – some thing Clark omitted to do.

I THINK WE CAN HELP In the spirit of being helpful the PM should re examine the advice that no-one can be prosecuted for a false electoral return more than six months after an election. There is always the Crimes Act 1961 Section 256 Forgery (1) – "Every one is liable to imprisonment for a term not exceeding 10 years who makes a false document with the intention of using it to obtain any property, privilege, service, pecuniary advantage, benefit or valuable consideration." But then Helen has a soft spot for forgery.

HIGHWAY ROBBERY >From Heather Roy's Diary – "Tucked away in the public notices section of the major daily newspapers last week was an ACC advertisement advising the public of the ACC board recommendation for levy increases for the 2005/06 financial year. In short the ACC board is recommending to ACC Minister Ruth Dyson that she:

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* Increase the cost of the annual vehicle licensing fee by $10; Increase the petrol levy from 5.08 to 5.77 cents per litre; * Increase the self-employed levy by 3.9%

This would add around $36 million to ACC's motor vehicle account, one of seven ACC accounts that gather funds. Last year, the motor vehicle account reported a $211 million cash surplus – well ahead of the previous year's surplus of $80 million. Motorists might well ask why they are being asked to contribute even more to an already burgeoning account. Last year's surplus equates to taking $150 more than was needed from every average household." See

DPB BASHING "For sole parents on the domestic purposes benefit, financial incentives to get a job remain weak and should be strengthened," said the OECD report last week. The report went further and said the DPB was too high and discouraged beneficiaries from working. The report pointed out that half of all sole parents in NZ are jobless, high by international comparison, and that this country spends more than most OECD countries on income support for sole parent families. The report recommends more day care facilities that operate when parents are working. The report calls for enforcing a requirement for sole parents to seek work. It also points out that the last budget's family package "reform does little to lower the tax rates facing the second earner in a couple family, giving them limited incentive to work or search for a job." For more see Muriel Newman's weekly news column

HAVE YOUR VOTE There is a fun website – where you can vote in the presidential election. The poll shows that the rest of the world overwhelmingly favours Senator Kerry, except in Niger and Pitcairn Island, who prefer Bush. Kiwis are voting 79% in favour of Kerry. As Letter readers prefer Bush perhaps you can change that.

PM DOES NOT RECOGNISE JUDICIAL INDEPENDENCE Apparently the Chief Justice Sian Elias thought she was speaking off the record when she told us what she actually thinks of our PM. It is no secret the two strong women do not get along and do not talk to each other. Neither is now saying anything, which is a pity. The Chief Justice made a good point when she said that in Britain the judges are always criticising governments vigorously. NZ is so small that it stifles debate. How we pay judges and preserve judicial independence deserves public debate. We think the best contribution was Richard Prebble's speech to the Canterbury Law Society dinner, but we would. Judge for yourself at

The so called convention that the Minister of Finance does not comment on Reserve Bank interest rate policy, may save the Minister from adverse comments from the Bank on government fiscal policy, but it reduces the level of public debate. In Britain, the USA and Australia there is no such convention and interest rates are much lower.

A RISE TOO FAR Last week we asked if you thought the Reserve Bank should raise interest rates and 87% said no. Well governor Bollard went ahead any way but we think he is having second thoughts because he indicated that this 6th increase was the last for the year. The Bank has finally acknowledged that due to fixed interest rates the effect of its increases will go on being felt well into next year as mortgages come up for review. Interest rises can go on affecting the economy for up to 18 months. The evidence points to a slow down next year and that inflationary pressures are easing.

More worrying is the reluctance of NZ businesses to invest. Firms are running at capacity and are short of workers but are not investing in more capacity or better productivity. Economists profess to be mystified by business caution. The Reserve Bank's record in over correcting is the answer. NZ now has the highest interest rates in the OECD. See

THIS WEEK'S POLL Do you have confidence in QC White's Inquiry, without any legal power to call for documents or to compel John Tamihere to give evidence? We will send the result to the QC. Vote at


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