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Jim's E-News Nov '09 - Dental Care And More

November Edition
Dental Care Issues for New Zealanders

I am involving myself in a project to raise the profile of, and extend the services for, dental treatment in New Zealand.

The cost of dental treatment is a significant barrier to lifetime dental care and as a result, neglected teeth and gums are a hidden but critical problem for New Zealand’s healthcare system which needs to be urgently addressed.

It is my strongly held view that a high quality, accessible and affordable dental system should be part of the general medical health system in New Zealand. This would provide a public-private partnership which would enable all of our citizens from their earliest years right through to their last, to have their teeth cared for by qualified dental professionals at an affordable cost.

From one end of New Zealand to the other I have been made aware of the importance of this issue to a large number of our citizens, young and old, and it is well beyond time when action rather than words was seen and heard to be taking place.


Let’s be clear about one thing; New Zealand has the best accident compensation scheme in the world. It’s not broken, so why try and fix it; and no matter what Nick Smith tries to tell you - it’s not broke. It has reserves of money. It has over $11 billion of reserves, and last year it collected $1 billion more in levies, than it spent on claims.

Bikers are being unfairly targeted – Nick Smith wants them to pay three times as much in ACC levies as they are paying today.

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Today motorcyclists are paying about $252. Tomorrow they will be paying $735.

This is outrageous. And it is completely unnecessary - because ACC can pay its bills without making them pay three times as much.

ACC was set up as a no-fault system to be run by a government-owned company so that everyone who has an accident gets looked after, and at a lower cost than overseas.

It was never intended to penalise certain groups that it saw as ‘high risk’ - otherwise where do you stop? If its bikers today, why not old people who are more likely to fall over than anyone else; why not 6 year boys who play rugby and are more likely to get hurt than kids playing chess?

The point of the scheme was to avoid this situation, and draw on the overall resources of the whole community. So we all pay a bit, and no one is disadvantaged. Every one avoids the very large lawyers’ bills and insurance company profits that have to be paid under a private insurance system.

We gave up the right to sue under this system, in return for the fair treatment of injured people.

The National-led government is playing dirty with the figures. It’s insisting that all imagined accidents in the future should be paid right now by people like the bike riders. But this wasn’t what ACC was set up to do. It was always intended to be a ‘pay as you go’ scheme.

That means the levies received in any one year, pay for the accidents in that year. And that system has been working fine - in fact ACC has even managed to put aside significant resources.

The real agenda here, is to set up ACC for a gradual return to a privately run insurance scheme. Scaremongering about costs is just the Trojan horse. And inside the Trojan horse is a bunch of lawyers and foreign insurance companies, licking their lips and looking forward to getting their hands on your levies!

I am entirely opposed to any private scheme. And I totally reject the National government’s attempt to make bikers pay three times as much.


We should put party politics aside and come up with a new approach to monetary policy which supports people in New Zealand who produce tradeable goods, rather than those who speculate on property and take the profits off-shore.

The National-led government and its coalition partners refused to take part in the inquiry, with the PM cynically calling it a ‘stunt’ from the opposition parties.

I don’t believe in the “nothing we can do” stance of this government. We could be looking to remove the incentives for those buying investment properties. Banks need to be encouraged to lend to businesses; and we need to review our tax system which at the moment encourages unproductive property investment and discourages investment in the productive tradeable export goods sector.

We need to look at regulating the banking sector so that ordinary New Zealanders don’t pay (in interest rates or hidden bank fees) while the Australian-owned banks make excessive profits.

With the National-led government complacently sitting on the sidelines, New Zealanders will be the losers for it.

To download the banking inquiry report, go to: http://www.progressive.org.nz/latestnews/files/d94c6538c5e4f91bddaaea8e313fd742-89.html

or be in touch with my office for a hard copy.


The ‘big four’ Australian banks control nearly 90% of banking assets in New Zealand. The three New Zealand owned banks have 4% of banking assets.

Have the Banks made a profit?

The combined profits of the ‘big four’ Australian owned banks now exceed the combined profits of all other companies listed on the stock exchange NZX 50 series.

In 2008 Banks earned $3.26 billion; the earnings of the NZX 50 were $2.89 billion.

Did the Banks pass on the cut to the Official Cash Rate (OCR)?

The Reserve Bank cut the OCR from its high of 8.25 % in mid 2008, to only 2.5% today. But the overseas owned banks reduced interest rates by less than the fall in the OCR.

1% margin in interest rates was not passed on to bank customers.

1% extra interest added $787 million to costs for New Zealand businesses; and 1% higher margin on loans added $460 million to the net interest costs to the farming sector.

The biggest cost was in the housing sector: 1% extra interest cost added over $1.6 billion to mortgage repayments.

New Zealand businesses are suffering

In 2009 bank lending for home loans rose about $3.2 billion (to $164.8 billion). Meanwhile business lending fell by about $3 billion (to $78 billion.)

The effects on the farming sector have been negative

Federated Farmers interest rates survey in June 2009 found that farm business overdraft interest rates had fallen an average of 2.68 % since December 2008. Meanwhile the OCR was cut by 4%.

Ordinary New Zealanders had problems paying their mortgages

In five years, Budgeting and Family Support Services has only seen one family lose their house in a mortgage sale. But in the first three months on 2009, fifteen families had already lost their home.

Have the Banks contributed to overseas debt and a housing bubble?

In the last ten years, personal lending has almost doubled, from $60 billion to $105 billion; most of the lending has been for housing.

Home loans now make up 55% of bank lending, up from 35% ten years ago. The banks borrowed more money to fund property price increases which contributed to a rise in overseas debt.

Between 2003 and 2009 net overseas liabilities rose from $100.6 billion to $176.3 billion; that’s a rise from 76.8% of GDP to 98%.

What have the banks got to do with our volatile exchange rate?

High overseas borrowing has impacted on the exchange rate which is subject to high volatility. The export sector makes up roughly 30% of GDP - about $40 billion per year but suffers the most from currency instability which means uncertain returns.


I am under no illusion about the challenge involved if we are to seriously reduce the harm caused by alcohol. But doing nothing is not an option.

Alcohol is by far the most damaging drug in the country. It causes between $2-$3 billion dollars worth of economic and social harm each year. The personal cost to families and loved ones is incalculable. How can we measure the cost of a family tragedy?

One of the most damaging drugs we face right now is not even illegal; our kids can buy it in the local dairy; they play sports and have it promoted to them all the time; they see it on TV, on billboards and hear about it on the radio.

The abuse of alcohol amongst our young people is on the rise and it’s destroying lives.

I have been working with others like Dr Doug Sellman of the Otago School of Medicine to raise awareness of the damage that alcohol is causing. We have a unique opportunity right now to do something, through the Law Commission’s review of the legislation to do with the drinking age, the availability and the advertising of alcohol.

Did you know that every advertisement seen by a young person increases the number of drinks they consume by 1%. They become customers for life. And people like you end up picking up the pieces.

Currently, $200,000 per day is spent on marketing and advertising alcohol. About half the marketing is spent on sponsorship.

I welcome the Law Commission’s issues paper which gives New Zealanders a unique opportunity to reform the legal framework in which alcohol is sold, advertised and promoted.

It gives us a chance today to do more to protect New Zealanders from the harm caused by the abuse of alcohol.

The Progressive Party submission calls on the Law Commission to do more in its final recommendations to guide law makers on how to further curb alcohol advertising, particularly to the most vulnerable New Zealanders - the young. I would like to see more options put forward by the Law Commission on how we can greatly reduce the availability of alcohol to young people. I have also given my opinions and made comments on every option put forward in the Law Commission’s paper, ‘Alcohol in our Lives’.

For the full submission: go to http://www.progressive.org.nz/page4/page4.html
For the speech to the National CAYAD hui: http://www.progressive.org.nz/latestnews/files/20a6baadf8c27479e26f86da00635270-87.html


"Ten things the alcohol industry won't tell you about alcohol"
Alcohol Action are holding their last two last meetings this week with presenter Dr. Doug Sellman.

The meetings are at:
CHRISTCHURCH: Art Gallery Theatre, Tuesday 17th November, 7.30-9pm
PORIRUA: Helen Smith Community Room, Wednesday 18th November, 7.30-9pm

There is still time to get in late submissions to the Law Commission. To see how go to: www.alcoholaction.co.nz

Use milk payout to farmers to strengthen industry

It's important that the increase in Fonterra's payout to farmers is used to strengthen the industry, and not squandered.

The increased pay out is very timely for a large number of farmers who have been struggling with higher input prices and enormous costs for financing. Interest rates for many farmers have not come down.

But the risk is that the higher payout will lead to higher farm valuations and in turn to yet more farm indebtedness. That's what happened too often when the milk payout reached $7 a kilo. When the price then dropped, it left a lot of farmers under mortgage stress.

Banks should be careful about getting into the same position of lending against valuations based on favourable milk payouts.

The payout shows New Zealand is well positioned as a food producer to continue to earn a living when global conditions are less than favourable.

When payouts increase as much as this one has, the extra earnings need to be used to strengthen the industry, for example by stronger investment in research and development, and strenthening balance sheets to reduce our exposure to rapacious overseas owned banks.

A generation of kids will be lost – New Zealand must do more
Launch of the Mutima Project in Christchurch

16,000 children are dying from hunger every day because food aid is now at its lowest level in twenty years, but the National government remains determined not to use our aid for ‘poverty reduction.

The head of the United Nation’s World Food Programme recently announced that tens of millions of the world’s poor will have their food rations cut or cancelled in the next few weeks because some OECD countries have slashed aid after the financial crisis.

The Mutima project is a volunteer organisation and will send a team of cardiac surgeons to Zambia to perform life-saving heart surgery on young adults.

I commend them for the strength of their personal commitment and their determination to serve. We are a stronger and more caring community because of people like these Christchurch surgeons. Because of them, a hundred young Zambians will have a second chance at life.

About 60% of the Zambian population are living on less than a $1 per day.

But where is the urgency from the National government to save a generation of children who will die from starvation if the world does nothing?

The National government has recently announced that it will abolish the goal of ‘poverty reduction’ for our aid, and replace it with a goal of ‘economic development’.

I am a strong champion of economic development but you can’t do much business development if people don’t have enough to eat or clean water to drink.

I want to see the National government do more about bad governance and corruption in some of the poorest countries and see New Zealand get behind a new international Natural Resource Charter which sets out ‘best practice’ in countries with natural resources like oil (or copper in Zambia), so proceeds of those resources go to the poorest people and don’t end up in the pockets of the corrupt.

For the speech, go to: http://www.progressive.org.nz/latestnews/files/aca27eb0a1b9e1fb43d383c21925c9a1-84.html

Who owns the ASB? Not us.

The ASB has been an Australian owned bank for the last two decades, and it is misleading the public when it pretends to be a ‘Kiwi Bank’.

The ABS is running promotional ads claiming ‘We’ve been a Kiwi Bank since 1847’.

The truth is we don’t really know who owns the ASB. We know it is owned 100% by the Commonwealth Bank of Australia (CBA), but who owns the Commonwealth Bank?

It used to be owned by the Federal Government of Australia but it was privatised in stages beginning in 1991.

Almost half of the current owners of the Commonwealth Bank are ‘nominee’ companies. That means their identities are hidden behind other well-known companies, like the Hong Kong and Shanghai Banking Corporation (HSBC).

We don’t really know who owns ASB. All we know for sure is that New Zealand doesn’t.

For the release, go to: http://www.progressive.org.nz/latestnews/files/2d08018f9ac449a6977f81f8bc1b226a-83.html

An ‘unfortunate arrangement’

The Auditor General’s findings about Bill English’s accommodation arrangements go significantly further than findings that caused Marion Hobbs and Phillida Bunkle to stand down from ministerial office in 2001. This makes Mr English’s position as finance minister very difficult. I have been in the same position as Mr Key, in having to make a decision on the future of the Minister. A precedent for the right thing to do has been set.

I wrote to the Auditor-General saying Mr English’ arrangements needed scrutiny. The report finds Mr English’s arrangements were not within the rules. The Auditor General’s report states:

The result was that the Crown was renting a property for Mr English from a trust in which he had an interest, and the arrangement was explicitly based on a view that he did not have an interest. Clearly, this was unfortunate.

The report discloses Mr English went to some lengths to arrange his affairs around the accommodation allowance entitlement. That is not a good look for a Minister of Finance.

The Auditor-General’s advice does not even mention other issues that the Prime Minister still needs to consider: that Mr English was giving his Wellington address as his home for the purpose of being a director of a company (incidentally, the company that owns his Dipton investment), but claiming to live in Dipton for the purpose of receiving an accommodation allowance.

A prudent minister might have noticed the contradiction between those two claims.

I have always welcomed the idea of Mr English having his family with him in Wellington. That is not the issue. The question is whether he was right to claim entitlements for doing so. It would not have been in any way objectionable if Mr English had lived in Wellington with his family and claimed an out of town allowance for his occasional trips to Dipton.

For the release, go to: http://www.progressive.org.nz/latestnews/files/0d975b504f72daa2ccc10d5b6cdf7a14-82.html


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