The Letter
10 November 2003
FROM AMERICA
Richard Prebble is visiting America.
FREE TRADE AGREEMENT
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.
THE NUCLEAR ISSUE
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).
TAX CUTS WORK
The US economy is rebounding - 7% growth for the quarter.
ZERO TOLERANCE WORKS TOO
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:
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.
VOUCHERS
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!
REPUBLICANS STILL WINNING
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.
HUATA
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.
HAS CULLEN BEEN ROLLED BY BENEFICIARY UNIONS?
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.
PIPI
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?
This message has been brought to you from the ACT New Zealand Parliamentary Office