www.mccully.co.nz 2 June 2006

A Weekly Report from the Keyboard of Murray McCully MP for East Coast Bays

Skyhawks Coming Home to Roost

Planning to sell your house? Well here’s a tip: Don’t get Helen Clark or any of her Ministers to manage the sale process on your behalf. That’s the compelling message from this week’s revelations in relation to the sale of the nation’s Skyhawks and Aermacchi’s. By all accounts this is the transaction from Hell. If it is any transaction at all. It went like this:

A week out from the 2005 general election, the Labour Government was staring down the barrel of electoral defeat. The polls were even, at best. The agreed strategy was to tell the public just how great things were becoming, and urge them not to take a risk on Election Day. So they needed all the good news stories they could find.

One such story, just a week before the poll, was the announcement by Defence Minister Mark Burton that the Air Force’s 17 Skyhawks and 17 Aermacchi trainers, pronounced by the Government to be redundant four years previously, had been sold for a handsome sum. The purchase price was around $155 million. After all costs, a net return of $120 million was projected. Just the sort of good news story with which to fill a campaign day, and even better, to reinforce the image of competent managers.

Best of all, the deal was to occur imminently. Both fleets would be “progressively shipped to the US over the next few months,” said Minister Burton. Even more reassuringly, all of the required consents had been “extensively discussed with the respective foreign government departments and no problems were anticipated in finalising the arrangements.”

Now, a full eight months later, it transpires that none of the planes have been “progressively shipped” to the US purchaser, Tactical Air Services. And the consents which were so “extensively discussed with respective foreign government departments” seem, miraculously not to have materialised. This week, acting Defence Minister Jim Sutton confessed that no deposit had been paid. (That’s right. No deposit. Just what sort of sale is that?) And nobody seems prepared to bet the bank on the transaction ever being completed.

So, next time you want to sell your house, we have just the people to do the job for you. Helen Clark and her Ministers are the living experts. Provided you are not too fussy about whether you gain all the necessary consents. And don’t mind how much is spent on the sales agents, regardless of whether they actually sell anything. Or whether you actually receive your deposit, let alone your purchase price.

It may have seemed like a great idea in the heat of an election campaign. But now the Skyhawks really are coming home to roost for Helen Clark and her Ministers. And, of course, for those Defence personnel who were silly enough to help the Labour Party out in their hour of need.

Questions Being Asked

In light of the above, questions, as you would expect are now being asked. Like, how much have ErnstYoung, the sales agents, been paid for the non sale of the aircraft. The Government has so far confessed to paying them $1.1 million, but a little update would be appreciated. And how much has now been spent on mothballing the planes in the past five years. The last monthly estimated cost was $300,000, so that could well be a cool $18 million wasted to date.

The original purchase price was stated to be $155 million. And after a projected $35 million of fees and associated costs, the Government expected a net $120 million from the transaction. Well, to date they have received precisely nothing. So won’t it be interesting to get an update on the current costs associated with the outstandingly successful election eve transaction.

Tax Freedom Day 1 June

New Zealanders have spent almost the first half of 2006 working for the government, according to tax specialists Staples Rodway. The firm yesterday released its calculation of Tax Freedom Day - assessed to be 1 June for this year. That’s the date on which, according to Staples Rodway’s calculation, New Zealanders, on average, finish working for the government (having paid their income tax, rates, and indirect taxes on alcohol, petrol etc) and start working for themselves.

Last year it took the average New Zealander 145 days to feed the government’s coffers. This year it has increased to 151 days. Biggest contributors to the growth are higher direct taxes. Company tax increased by 15% and personal tax by 9% (caused by employment growth, wage increases and bracket creep). Indirect taxes grew by 3%. The firm notes that the increase in taxes is substantially higher than the increase in New Zealand’s GDP.

The Staples Rodway calculation for Australia identifies Tax Freedom Day across the Tasman on 10 May - three weeks earlier than here, which, they note “compounds the argument persuading Kiwi’s across the ditch.”

“Given tax cuts announced in the recent Australian Budget it is likely the gap between New Zealand’s Tax Freedom day and Australia’s will continue to widen,” the firm says. And that, ladies and gentlemen, is why Don Brash and others keep identifying the threat of Kiwi talent and capital being lured across the Tasman as New Zealand’s great challenge.

Timor Deployment

Our troops are now in Timor. By all accounts they will be there for a while. And it would be fair to say that the office of the National Party spokesman on Foreign Affairs and Defence has received a fair number of communications of a querulous character. Why was the deployment taking so long? And why were we dependent upon the Australians for transport etc etc. And, why didn’t the National Party spokesman get off his lazy backside and say something querulous himself?

The answer is simple: this is not the time or place. The National Party spokesman strongly holds the old-fashioned view that you don’t engage in political skirmishes over the deployment of troops into a danger zone. Our servicemen and servicewomen, entering a theatre of danger, are entitled to the full and unambiguous support of the parties represented in the Parliament.

In a few weeks time, the Defence Chiefs will front up to the Foreign Affairs and Defence Select Committee to be examined on their Estimate. That will be the time and place for the questions to be asked. And they will be.

Cullen Goes Troppo

Further evidence that Deputy Prime Minister Michael Cullen has past his “use by” date came in the form of his choleric outburst on TV One this Thursday night. Negative polls and the negative public sentiment that drove them were all the fault of a few, named greedy journalists who were blinded by the prospect of tax cuts.

This was a carbon copy of the Michael Cullen who, in 2005, personally authored a Budget that almost lost the unloseable election. The same Michael Cullen who is now being identified by his colleagues, including very very senior colleagues, as a serious electoral liability. And judging by Thursday night’s TV One performance the pressure is starting to tell.

RNZ Job Up for Grabs

The move by former Radio NZ political editor Katherine Ryan to the morning slot has left the pinko hacks at the state broadcaster jockeying for position. But the worldwide headquarters of mccully.co reckons they are wasting their time.

During the election campaign Radio NZ set up a special Election Unit. So who would you put in charge of such a unit? Why so-called economics editor Brent Edwards, noted lefty and the most active trade unionist in the precincts, of course. What better way for RNZ management to signal their total hostility to the National Party. And to suck up to a government riddled with fellow trade unionists.

Now the political editor’s job is vacant, guess who is filling in as acting political editor? Yes, the very same egregious Mr Edwards. So you can work out for yourselves who might be the hot pick for the position. A hot pick that would make our government of trade unionists very very happy indeed.

ENDS

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