The Letter - 4 August 2014
12.5% company tax rate
Cutting the company tax rate to 12.5% will boast GDP growth by 1%. As New Zealand’s best estimated long term growth rate
is 3% this is a huge increase. It is close to an economic silver bullet. It is the best new idea any party has come up
with for years. Jamie Whyte and ACT’s policy team have reviewed the international research. There is now case after case
showing firstly how damaging high company tax rates are to growth. A high company tax rate discourages investment. Lower
investment results in less employment. New Zealand’s relatively high company tax rate is a large part of the reason New
Zealand’s real wages are low. When the company tax rate is reduced investment increases, (projects that were uneconomic
become viable), increased growth leads to increased employment. The higher real wages come largely because the increased
investment leads to a productivity improvement making higher real wages viable.
It is a global economy
New Zealand is competing for capital against the world. When we have a high tax on investment the capital just goes
elsewhere. It is not just Ireland that has shown the economic benefit of a low company tax rate. Ireland’s present woes
came from an unrestrained banking sector, property bubble and poor public financial management, yet the country’s low
company tax rate is helping its rapid recovery. We can observe how high company tax rates damage growth in federal
systems, such as USA and Canada. Conversely, examples from those countries show how cutting the Company Tax rate
increases growth, jobs and real wages. French economic growth is stunted by a complex, high tax regime.
ACT has published the research
Jamie Whyte has released the international research that supports cutting the Company Tax Rate. It is on ACT’s website
and is worth a read www.act.org.nz . ACT has also put out how to fund it. Company Tax does not raise very much. Eliminate all corporate welfare, which is
just crony capitalism, politicians picking ‘winners’, and get rid of the ETS, which even the Greens admit is having no
effect on global warming – just gesture politics.
TV debate tonight Native Affairs Maori TV 8.30pm
Jamie Whyte has been issuing a series of background papers most of which have been ignored by the media. A proposal that
we should have equality before the law, posted three days after the speech was given to no media coverage, has produced
a media storm. Jamie Whyte has not retreated and has shown he is made of strong stuff. Jamie tells The Letter that many
of the journalists who have rung him clearly have not read the speech. Not having read the speech is the only charitable
explanation for the Race Relations Conciliator’s intemperate personal attack. Nowhere in the legislation Dame Susan
Devoy is paid $220,000 a year to administer does it say it is part of her job to publicly attack a candidate for office
who having said he is against racial discrimination. Dame Susan is debating Jamie Whyte tonight on Native Affairs Maori TV at 8.30pm and we look forward to hear why equality before the law is wrong.
Media bias
We have had a look at what the journalists attacking Jamie are saying. Very few address what he has said. The Australian
Fairfax group has resolved the issue by pretending it has not happened. (Print media blackouts used to be effective, but
now, in the age of Facebook and talkback radio, newspapers are just made to look irrelevant or biased. Not one
commentator has defended the example of discrimination Jamie gave. AT our universities today there are students from
state house backgrounds who have been refused a place on courses in favour of students from privileged private schools
because the state house student’s parents are the wrong race. We are also waiting for a media outlet to publish what
Jamie Whyte actually said. We said to one journalist who was attacking Jamie as a racist “Have you read his speech?” Answer “No. I do not read what racists write”. Have a read yourself and you be the judge www.act.org.nz
Epsom is the key
The reason John Key said last week “I am encouraging Epsom voters to support he ACT candidate” is because in the latest
Roy Morgan poll ACT winning Epsom makes John Key PM. It is the same reason Internet Party leader Laila Harre and John
Minto have urged their supporters to vote National to defeat David Seymour. After wondering why John Key has not done a
deal with the Conservatives, Colin Craig then tries to help Labour in Epsom. John Key did look hard at an accommodation
with the Conservatives but decided the fruit loops are unelectable. If Colin Craig had door knocked on 10,000 doors in
East Coast Bays, like David Seymour has done in Epsom, the answer might have been different. If Colin had not told us
all that it is a “no brainer” Christine Rankin would stand in Upper Harbour against Hon Paula Bennett, then we might not
think it is brainless for her to stand in Epsom. By Writ Day she will be the candidate for Mangere.
A Labour MP in favour of productivity
Last week Parliament heard a record number of valedictories. The best was from someone many MPs had never heard give a
speech, the long serving assistant Speaker Ross Robertson, MP for Manukau East. Being working class and socially
conservative Ross would never be selected by today’s Labour party. It is years since the whips have let him ask an oral
question. While overlooked in this country for promotion MPs around the world elected Ross the chairman of their
international association. Ross’s speech covered issues no Labour MP talks about: the importance of productivity, ethics
and why the Official Information ACT should be extended to Parliament and MPs’ spending. Readers interested in a fine
example of Parliamentary speaking should view the YouTube clip. We will never see a speech like that from a Labour MP
again. Go tohttp://www.parliament.nz/en-nz/pb/debates/debates/drafts/50HansY_20140730/draft-transcript-wednesday-30-july-2014