The Letter

Monday 22 March 2004

INTERESTING WEEK

The next election campaign has already begun. Despite MMP, the electorate realises there’s still a fundamental choice between voting Left or Right. Winston Peters’ decision to support Helen Clark's Treaty Royal Commission has aligned New Zealand First with the Left. Peters has moved Left because he hated Ruth-Richardson’s policies and sees Don Brash as being similar. He is convinced the country will never vote for Brash. Peters, like Clark and the commentators, has fundamentally misread the electorate. The latest TV One poll put NZ First 4%. Brash has ripped away his blue rinse vote, so NZ First is now just a Maori party. Brash’s challenge that National will win Tauranga must be a possibility. On the Left are Labour, the Greens, NZ First and (but we aren’t sure if anyone cares) United. On the Right are the parties standing for equality before the law: National and ACT.

THE LINES IN THE SAND

The devil on the foreshore issue is in the detail, with the political parties confusing the issue by using the same words and giving them different meanings. The term “crown ownership” is an example. Labour's “public domain” has the same meaning – so Winston Peters’ support for a Royal Commission, provided Labour uses the term crown ownership, is not a significant change. “Customary title” is another term being used for different concepts. In common law, a customary title is a very poor form of property and must be continuously exercised in order to retain ownership. As the Court of Appeal pointed out, it will be difficult for Maori to establish any customary title to the foreshore.

Margaret Wilson is proposing to create a new type of customary title, based on ‘ancestral connection’ and ‘mana’. Wilson herself expects the new title to cover most of the foreshore. The Maori Land Court has rejected the concept of a customary title based on ancestral connection saying, such a title was based on greed.

Labour must now be regretting not taking ACT’s advice and just allowing the law to take its course.

THE BUDGET

The 2004 Budget looks to be an election year budget. With a $6.911 billion surplus, and a falling poll rating, Labour is looking to giveaways to win back support. $2 billion of the surplus is already pledged to the Super Fund. This leaves $3 billion to play with. Cullen will project new expenditure out over 4 years, giving him billions to give away. We already know what he won't do: he won’t cut the top tax rate, even though 20% of all full-time workers are now paying it. (Labour's promise was that only 5% of taxpayers would pay the 39-cent income tax). We also know the company rate won’t be cut. Cullen says company tax is just a withholding tax. Labour will redistribute income using family support, with some families getting increases of $50 a week.

Labour thinks voters aren’t grateful for tax cuts – which they see as just keeping their own money – but are grateful for family support, childcare and the accommodation supplement, which are seen as coming from Government.

TAX

National believes it can win an election on the race relations issue, and doesn't want to give Labour any other issue to fight the election on. Electorally this is clever, but a National government elected not to lower the marginal rate of tax would be unable to introduce the policies needed for growth.

MARGINAL TAX

The marginal tax rate is important. Tax is the penalty we pay for working, investing and increasing productivity. We can only encourage the good things like productivity, investment and jobs by cutting the marginal tax rate. Because of our imputation system it’s true that, for many, the company tax rate is a withholding rate. It follows that the 39% tax rate is the investment rate. National now needs ACT to get a good vote so that the next government is able to introduce sound economic policies necessary for investment, growth and jobs.

GOSS

The Beehive is looking for more press secretaries. The fall in the polls, plus the new Ministers, has led for a demand for new PR personnel. The press gallery reports that almost every journalist has been approached. Journalists can read polls too, and joining an outgoing government doesn’t appeal. New Fisheries Minister David Benson-Pope is desperate. His problem is twofold: he’s incompetent and nasty – some say he's nuts. People don't mind working for incompetent Ministers (most of them are). They don't mind working for competent Ministers (a few are). They’ll even work for competent, nasty Ministers (a number spring to mind). But no one wants to work for an incompetent, nasty Minister.

BENIGN ENVIRONMENT

Despite having troops in Afghanistan and Iraq, our PM assures us that we are not at risk of terrorism. But Government is now preparing to spend millions on new security measures – not for you, but for MPs. It is proposed to close all entrances to Parliament for the public. The front steps will only be used on ceremonial occasions.

A new secure entrance way will be built between the Beehive and Parliament building. All visitors will be required to go through airport-type X-ray screening.

Similar screening will be introduced for Bowen House.

Just thought you’d like to know your MPs are safe.

POLL
In last weeks poll only 5% of Letter readers favoured a treaty royal commission. This week’s question: should government repeal the 39-cent tax rate? We'll send the result to both Dr Cullen and Don Brash. Vote on www.act.org.nz/poll.

ENDS

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