The Letter
Monday, 24 November 2003
Last week ACT Leader Richard Prebble gave three lectures in Canada.
THE CENTRE HAS MOVED
Fifteen years ago, Canada was running huge deficits and debt had reached 100 percent of GDP. Canada signed a trade
agreement with the US (their CER), deregulated state trading institutions, introduced GST and cut tax - a mild
Rogernomics. The result: deficits have become surpluses; Canada is one of the OECD’s star performers.
MORE PARALLELS
A Liberal government that campaigned to roll back these reforms defeated Brian Mulroney’s Conservative government, then
kept them. The Conservatives have not known how to respond, and then split. French-speaking Quebec complicates Canadian
politics – as Maori seats, to an extent, complicate ours. Former Finance Minister Paul Martin, who insisted the Liberals
continue with fiscal prudence, will succeed PM Jean Chrétien in December (the two don’t like each other).
CANADA’S CHALLENGE
Parallels with New Zealand continue. Chrétien made anti-Bush statements and refused to support the Iraq war. Canada is
now without influence with its most important trading partner. Like New Zealand, Canada is contributing to Afghanistan
and Iraq, but without the reward of having been there early. Failure of the World Trade and NAFTA talks means Canada has
little influence in the world.
FREEDOM INDEX
The Economic Freedom of the World 2003 report (measuring 2001) puts Canada at number 6, New Zealand at 4, but the US is
at no 3. The Fraser Institute surveys every US state and Canadian province economic freedoms and shows a remarkable
relationship between freedom and business growth. Every US state is economically freer than every Canadian province and
is growing faster; the exception is Alberta, which is the freest Canadian province and fastest growing.
MONOPOLY SERVICE
Canadian healthcare is a huge issue. There are no private hospitals or health insurance. Waiting lists, like in New
Zealand, are growing. Like New Zealand, the Government response was to lie, publishing waiting lists understating the
real delays. For 13 years, the Fraser Institute has surveyed doctors and published the real waiting lists, making health
the top issue. This years survey concludes: “that waiting times for treatment in Canada continues to grow... Even more
discouraging is evidence that provinces that spend more on healthcare are not rewarded with shorter waiting lists. Only
substantial reform of the regime will alleviate the medical system’s most curable disease – longer and longer waiting
lists”.
THE RIGHT’S CHALLENGE
Faced with a Liberal Party that has moved to the Centre (as the Clark Government has done in New Zealand), how does the
Centre-Right respond? The Progressive Conservatives tried Bill English’s approach, with even less success. A new
pro-free enterprise party, called the ‘Alliance’ (ironic) advocates more freedom, and has been more successful, but
under a two-party system, the Centre-Right split has been disastrous. The Conservative and Alliance Parties have just
agreed to merge.
OPTIMISTIC CONCLUSION
The belief in the individual, in private property rights, free enterprise, the rule of law and democracy – is winning.
The Left can only win by adopting liberal policies.
The US economy’s success is such that the US share of the world’s GDP has increased to 30%. The 7% increase in the US
economy in the last quarter is going to have a positive effect on the world economy and New Zealand, as a trading
nation, will also benefit.
ACT AND BUSINESS
The Letter was not surprised by a Herald/Auckland Chamber of Commerce survey of 500 businesses that showed ACT had the
best understanding of business needs. ACT and National were the only parties to receive a positive rating.
DOG CONTROL
Following a spate of dog attacks, Labour tripped over itself to bring in more dog control regulations. It proposed
access fencing from the street to everyone’s door so the family pet could not savage burglars. They proposed
micro-chipping all dogs, starting in 2006, and it seems they even wanted leashes on sheep dogs working a mob of sheep
along a country road. These more ridiculous provisions were dropped by Select Committee. In passing legislation,
however, Labour over-ruled the Committee’s recommendations. It is insisting on universal micro-chipping and the
breed-specific bans, against all expert advice. New Zealand has 500,000 dogs – at $25 for chip and insertion, we have
some $13.5 million of unproductive cost, excluding the considerable ongoing administration costs that will be involved.
Labour over-reacted, and we all face extra costs and more regulation.
UF-OUTDOOR RECREATION MERGER
United Future can now add another to its list of 'coalition' partners. There's been the Ethnic Minority party, Future
New Zealand, Advance New Zealand, the Conservatives and now he's jumped in with the Outdoor Recreation Party. Rumours
abound that United Future is struggling to attract the 500 members it needs to remain a registered political party.
THIS WEEK'S POLL
The Letter is fixated by the All Blacks like the rest of the country. Should John Mitchell go? To vote, go to
http://www.act.org.nz/vote. We will send the results to the New Zealand Rugby Union.
ENDS