The Letter – Monday, 30 October 2006
Labour talks to itself. Don is going. The economy is slowing. "Out of the Red" is hot.
A party of professional politicians
The problem with staged managed TV conferences is that without any debate the party loses grip with reality, like those
absurd claims that were greeted with applause in news reels of Soviet conferences. Television coverage of Labour's
conference showed delegates accepting without question leadership claims there was nothing wrong in stealing the
taxpayers' money for party campaigning and that the Exclusive Brethren have captured the National Party.
The corruption of the list
The real business of the conference was the election of the executive which is dominated by the voting power of two
large unions - the Service Workers and Engineers unions. These unions have traded their power for places on Labour's
list. Should Andrew Little, the Engineers Union secretary wish to go to parliament via Labour's list, he will be
Don has gone
National MPs have decided that they can't fight another election with Don Brash. Don is in trouble not because of the
recent publicity about his private life but rather his judgment or his lack of it. Putting out a press statement saying
he was returning to Auckland because his wife was sick and then withdrawing it and admitting he was going to save his
marriage, showed a leader panicking under pressure. (McCully's many enemies say he drafted the statement.)
How would we have handled it?
The professional way to handle the Independent front page story would have been to ignore it. To have stayed in
parliament and fronted up instead of legitimising the story by issuing a press statement and then bringing all the media
to your home by going there.
Don wanted to resign
Don's problems are even greater than we have been told. Before the Independant story appeared Don had told senior MPs
that he wished to resign for personal reasons. He had told his family of his decision, hence the need to return home to
explain he had been pursuaded to stay on.
Back bench MPs are asking if this is how he handles his own crisis, how will he handle a crisis that affects them? Even
if they win with Don, how would they survive as a government? The new MPs, who the media say are all grateful to Don,
are the most shocked with his performance. Jonathan Coleman, MP for Birkenhead, is said to be gathering the votes for
It is Key
11% in the preferred leader's poll is huge. National voters have decided. The only question is whether to do the coup
before or after Christmas.
That Auditor General's ruling
Even the National MPs are beginning to realise that there are real problems with the Auditor-General's report. Kevin
Brady has ruled the expenditure on the Pledge Card unlawful not because it was electioneering but because it was not for
a parliamentary purpose. This has significant ramifications. MPs have free parliamentary travel for any purpose. They
can and do fly to attend weddings, funerals, to go on holiday and to politic. MPs have free, unlimited telephone, fax
and email. They have research units that can research any topic. The Auditor-General has ruled that any expenditure by
an MP that does not have a "parliamentary" purpose is illegal and has recommended all expenditure be pre-approved.
No-one in parliamentary service wants to pre-approve every MPs expenditure. It would take an army of civil servants.
What is a parliamentary purpose? Dr Mark Prebble the State Service Commissioner has been called in to find a solution.
Rodney Hide has the answer. Bulk fund MPs and then make them publish their expenditure. Why shouldn't the taxpayer know
how MPs spend their money? There are persistent parliamentary rumours of MPs who have used their free flights to visit
mistresses. If all expenditure was forced to be published it might cause divorces but we would have known that Labour
was using the taxpayer to fund the pledge card.
The current wisdom that the economy will slow to a soft landing is wishful thinking. The trading deficit is a record. It
is unsustainable. Wage inflation remains stubbornly high. When was inflation ever removed without pain and unemployment?
At some point Japanese housewives are going to decide the risk of financing our spending is too great.
Wisdom of Crowds
Chicago has established the first futures market in US housing. The market is predicting not just lower house prices but
in some parts of the US the biggest drop since the depression. US consumption has been based on the wealth effect of
higher house prices. What effect will lower house prices have on Wall Street. the US economy and world trade?
Even though the US Congressional electorates are gerrymandered, (Congress by Republican State Legislatures and the
Senate by the founding fathers), so there is a huge built-in Republican majority, voters can beat a gerrymander if they
are determined enough to achieve change. Our media say voter anger is being driven by scandals and Iraq but there is a
third factor. A recent study shows that libertarians voters; (ACT voters who believe in less government and more
individual responsibility), are the biggest swing vote. It is the Republicans' reckless spending, not Iraq or sexual
sandals that will cause these libertarian voters to stay at home.
"Out of the Red"
"Richard Prebble has been one of New Zealand's remarkable leaders and this book shows how he did it." Sir Roger Douglas.
The book is in Whitcoulls and in good bookshops, but it is easier to buy from our website www.richardprebble.com for
just $29.95, free post and packaging anywhere in NZ.
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