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NZCPR 
Commentary

Too Much Secrecy 

On Wednesday, eight central North Island tribes will take control of 170,000 hectares of forests in the Kaingaroa region in the country’s biggest Treaty of Waitangi settlement to date. The total cost of the claim is over $400 million of taxpayers’ money. 

Maori grievances over Treaty settlements date back to 1840. In his iconic booklet The Treaty of Waitangi, written to educate the public about the Treaty, Sir Apirana Ngata explains that under Article One of the Treaty, Maori Chiefs "do absolutely cede to the Queen of England forever the Government of their lands". Under Article Two, “the Queen of England confirms and guarantees to the Chiefs and Tribes and to all the people of New Zealand the full possession of their lands, their homes and all their possessions”. And, under Article Three, “Maori and Pakeha are equal before the Law, that is, they are to share the rights and privileges of British subjects”. In other words, the Treaty gave New Zealand a Sovereign Queen, it created private property rights, and it established equality under the law - no more and no less.[1]

Over the years, many of the Treaty related transactions between Maori and the Crown have been the subject of on-going protest and litigation. The deals were claimed to be unlawful or unfair, and any compensation provided by the government, inadequate. These grievances were often brought by the next generation of claimants, and successive Parliaments have dealt with them.

In 1975, the Kirk Labour Government decided to formalise the process for dealing with Maori grievances through the formation of the Waitangi Tribunal. While originally set up to investigate contemporary claims only, as a result of intense lobbying, the Lange Labour Government in 1985 extended the Tribunal’s jurisdiction back to 1840 in order to deal with historic claims. This paved the way for the rapid development of a professional Maori grievance industry – now estimated to be 1,000 strong.

Since 1975, some 1500 Treaty claims had been registered with the Waitangi Tribunal – that is until the previous Labour Government introduced September 1^st 2008 as the final cut-off date for historic Treaty claims, when a further 1800 claims were lodged.

Since 1990 a total of 26 historic Treaty claims have been settled. That brings the full value of the Treaty claims settled in modern times to $1,049,207 million. According to the Office of Treaty Settlements, negotiations are under way with a further 9 Iwi groups, Heads of Agreements have been reached with 16 groups for settlements worth more than $300 million, and Deeds of Settlement have been established with three groups, which are awaiting final legislation.[2]

It is revealing to look at what taxpayers are offering claimants, by examining the Deed of Settlement of one of the groups waiting for final legislation, Taranaki Whânui ki Te Upoko o Te Ika. Their claim relates back to the sale of Wellington’s Port Nicholson Block in 1839 - before the Treaty of Waitangi was signed![3]

Leading the negotiations for the 17,000 claimants were Professor Ngatata Love and Sir Paul Reeves, and representing taxpayers, was the Minister of Treaty Negotiations, Hon Michael Cullen, and his predecessors Hon Mark Burton and Hon Margaret Wilson.

The settlement agreement has three parts: an agreed historical account and Crown apology, cultural redress, and financial and commercial redress.

The cultural redress recognises “the traditional, historical, cultural and spiritual association” of the claimants within their area of interest in Wellington, enabling them to “protect and enhance the conservation values associated with these sites”. The eighteen sites include islands, lakebeds, scenic and recreation reserves, properties on Thorndon Quay and former college and school sites.

In addition, thirteen sites will be registered with a Statutory Acknowledgement, which means that the claimants to be involved in all resource consent applications. These sites include river and stream beds, coastal marine areas, the bed of the Wellington Harbour, sea and river marginal strips, the Historic Reserves of Government Buildings and Turnbull House, parks, scenic and local purpose reserves, and the Turakirae Head Scientific Reserve.

There are also Deeds of Recognition for reserves and parks, which entitle the claimants to management input, although neither these nor the Statutory Acknowledgements are exclusive – in other words more than one iwi can have similar status and involvement.

Then there are the eight place names that will be altered by the legislation, including changing the name of Mount Misery to Mount Wai-ariki, Baring Head to Orua-pouanui, and Steeple Rock to Te Aroaro-o-Kupe.    

Further, in recognition of the aspirations of the claimants to “provide for the enhanced well being, revitalisation and protection of its members”, the Crown will facilitate “access to government services and work programmes” and they will ensure that an “appropriate” Minister of the Crown will chair an annual hui.

In addition, protocols will be issued by the Ministers of Conservation, Arts, Culture and Heritage, and Fisheries, to encourage good working relationships on “matters of cultural importance”, including the writing of “letters of engagement” to Centre Port and Wellington International Airport inviting them to discuss “issues of common interest”.

The financial redress includes a cash settlement of $25.025 million, along with an additional contribution of $4.859 million to cover the costs associated with the claims process. It also provides an opportunity for the claimants to purchase Crown properties and lease them back to the Government - including the High Court, the National Library, Archives New Zealand, and Wellington Girls’ College. They have also been granted the first right of refusal to purchase all surplus Crown land in the area for the next 100 years.

While this deal is meant to settle Taranaki Whânui ki Te Upoko o Te Ika’s historic grievance, the legislation contains an opt-out clause, so that those who do not agree with this settlement can seek separate redress.[4]

Treaty settlements have been an on-going feature of Parliamentary business over the years, but what is puzzling is the number of repeat “full and final” settlements. A report prepared for the Lange Labour Government by the Justice Department’s Richard Hill in 1989 provides some interesting information.[5] For example, Parliament passed a law in 1906 to provide a “final settlement” for Ngai Tahu relating to a grievance over lands that were sold in 1848. Within a decade the grievance resurfaced and a second “full and final” settlement was eventually made on December 15^th 1944. By the late 1960s, Ngai Tahu were again agitating for a better settlement and in 1973, the Labour Government negotiated a third “full and final” settlement. Ngai Tahu’s fourth “full and final” settlement was granted in 1998 and was worth $170 million of taxpayers’ money.

The Justice Department report also contains information that raises questions about the veracity of the Waitangi Tribunal process. On page 11, the report states “In 1958 the Tuhoe (later Tuhoe-Waikaremoana) Maori Trust Board was established, upon settlement of claims relating to the Urewera for a lump sum payment of £100,000”. Yet on April 6 2009, Judge Patrick Savage, the Presiding Officer of the Waitangi Tribunal, wrote to the Minister of Maori Affairs regarding the Tuhoe’s Te Urewera claim arguing that the Crown has never compensated Tuhoe for the land they say was wrongly confiscated.[6] The figure of £100,000 that the government paid Tuhoe in 1958 in full and final settlement was never mentioned.

David Round, a law lecturer at Canterbury University and author of “Truth or Treaty?”- a book that was seriously contentious when it was released in 1998 - is this week’s NZCPR Guest Commentator. In his article “Reflections on Treaty Issues”, David describes the controversy that has surrounded Treaty issues and introduces his series of weekly columns that will appear on the NZCPR website - along with those of our other columnists - every Wednesday (see here>>>):

“The Treaty has been the instrument of righting some historic wrongs; it has also been for two decades a vehicle for claims of racial privilege and discontent. It has fostered, among some Maori and European sympathisers, a very lucrative little industry of vested interests. At the same time it has irritated many good-hearted New Zealanders. No more historic claims may be lodged; but well-meaning judges have informed us that the Treaty is a ‘living document’ always speaking to us, adaptable to every situation, and one which should be interpreted generously and not in any quibbling legalistic spirit. (It was obviously not their own assets that the judges were so casually and high-mindedly giving away.)”

He then explains what he would like to achieve through his weekly columns: “The Treaty, then, is still around. It is still capable of becoming a focus for future discontents. It would be good if it were to beckon us towards a harmonious united future, but the gloomier option is just as possible. I hope it will be useful, therefore, to provide readers, with some solid information and critical although respectful reflections on Treaty issues. What I offer will not solve the problems we will be facing in the future, but some clearing of the undergrowth may help us to see better and reduce our chances of going astray”. To read David’s article, click here>>>

In 1994, the Bolger National Government introduced a fiscal envelope of $1 billion dollars for the settlement of all historic Treaty of Waitangi claims. Two of the bigger settlements, that of Ngai Tahu and Tainui, have relativity clauses that will automatically trigger an increase in the value of the settlements if the fiscal cap is exceeded. While the present total value of claims now over $1 billion - with many more claims in the pipeline - it is important to understand that relativity mechanisms are based on 1994 values. Taking account of interest and inflation, a settlement of $50 million in 2006/07 is equivalent to a settlement of $26 million in 1994, so there is still some way to go before the  relativity clauses could result in Iwi groups that have grown exceedingly wealthy through the generosity of successive Governments coming back to the negotiating table to ask for more.

Since the Waitangi Tribunal process does not involve advocacy on behalf of the taxpayers who foot the bill for Treaty settlements, that responsibility lies firmly with the Minister of Treaty Negotiations, the Hon Chris Finlayson, who, before entering Parliament, acted as a Treaty claims negotiator for Ngai Tahu.  

While the Treaty settlement process is an open one, in that the information is available to anyone with the time and inclination to find it, it can hardly be described as transparent. There is a huge opportunity for claimants to re-write history and to demand settlements that are excessively generous in the confines of a system which is essentially hidden from public scrutiny. Yet it is taxpayers who not only have to pay the bills, but who need to understand that many important state assets are effectively being gifted and sold off to Maori without so much as a murmur.  

NZCPR POLL
This week’s poll asks:
Do you believe there is a need for more transparency regarding the Treaty settlement process?
To vote click here>>> 
(Readers comments will be posted here>>> daily) 
To view last week's comments click here>>>

FOOTNOTES:
All articles can be found on the NZCPR RESEARCH PAGE - click here>>>
1.Sir Apirana Ngata, The Treaty of Waitangi
Available from the NZCPR - click for details>>>
2.Office of Treaty Settlements, Progress of Claims
3.Deed of Settlement, Taranaki Whânui ki Te Upoko o Te Ika 
4.Select Committee Report, Port Nicholson Block (Taranaki Whānui ki Te Upoko o Te Ika) Claims Settlement Bill 
5.Richard Hill, Settlements of Major Maori Claims in the 1940s
6.P.J. Savage, Letter of Transmittal

NZCPR ADMIN
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NZCPR Weekly is a free weekly periodical from the New Zealand Centre for Political Research, a public policy think tank at www.nzcpr.com, established in 2005 by former MP Dr Muriel Newman.  

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NZCPR is setting up a research panel to conduct nation-wide polls on topical public policy issues - such as whether the public really are confused by the 2009 Referendum question! 
We urgently need more volunteers - if you would like to register please click here>>>

NZCPR 
Commentary

A Smack in the Face of Democracy 

"But this is about democracy, the right of people to be heard and it's the absolute height of arrogance that the prime minister is going to use a technicality within the law to circumvent people's rights to express their views on the issue."       John Key backs election smacking referendum, July 2008[1]

The extraordinary political posturing over the upcoming Citizens Initiated Referendum on the smacking law – which is scheduled to take place by postal voting during the first three weeks of August - is breathtaking in its absurdity. To try to discredit both the question and the referendum process demonstrates how desperate the anti-smacking brigade has become. They not only want to turn people off voting but they want to bring the process and therefore the result into disrepute. Sue Bradford, the Green MP who is the architect of the anti-smacking law, has called the question “confusing”. Phil Goff, Leader of the Labour Party claims that it is “badly worded”. And Prime Minister John Key has said it is “ambiguous”. Both leaders have said they do not intend voting in the referendum.

Citizens Initiated Referenda are an important feature of New Zealand’s democratic process. They are based on the principle that political sovereignty resides in the people, who may, from time to time, be called on to deliberate directly on policy matters, rather than leaving it to their chosen representatives in Parliament. As such, referenda are an important tool of representative government, enabling voters through their political sovereignty to make specific policy recommendations directly to government. While the results of a referendum are not binding, governments that ignore the overwhelming will of voters will be judged accordingly.

Citizens Initiated Referenda are not cheap to run. However, it is important to put that into perspective. Firstly, according to advice given by the Chief Electoral Officer, the difference in cost between a referendum held on its own or during an election is not significant – between $5.9 million and $7.3 million for a referendum held at election time, and between $6.5 million and $8.1 million for a stand-alone referendum.[2] Secondly, such expenditure is exceedingly rare with only three other Citizens Initiated Referenda being held – the 1995 fire-fighters’ referendum, Margaret Robertson’s 1999 referendum to reduce the number of MPs, and the 1999 referendum by Norm Withers to introduce tougher sentences for violent crime. Each gained overwhelming support from voters.

New Zealand’s Citizens Initiated Referenda Act, which was passed unanimously by Parliament in 1993, sets into law a rigorous 6-stage process for the establishment of referenda.[3] It involves the proposed petition question being publicly advertised in all daily newspapers for a month, so that any interested parties can have their say on the wording of the question. The ultimate responsibility for the final wording rests with Parliament’s Chief Clerk, who must be satisfied that it complies with the Act by clearly conveying the “purpose and effect” of the referendum, as well as being a question that can be answered with “only one of two answers”.

In light of the criticisms that are being leveled at the 2009 Referendum question and process, I have invited the organiser of the petition, the former MP Larry Baldock to be this week’s NZCPR Guest Commentator. The referendum, which was launched in February 2007, before the law was changed and asks, “Should a smack as part of good parental correction be a criminal offence in New Zealand?” With regard to the criticisms over the wording of the petition, Larry explains:

“The original question we submitted to the Clerk of the House of Representatives back in early 2007 was “should a smack in the context of positive parental correction be a criminal offence in NZ?” As required by the CIR Act 1993, the Clerk published the question in the Gazette and advertised the question in all major papers with an invitation for anyone to submit their opinion on the wording of the question over a 28 day period. Only two submissions were received. One from a couple who stated their opinion that a smack should never be a criminal offence, and the other from the Ministry of Justice.  The Ministry’s submission raised four concerns that were considered by the Clerk in consultation with myself and anyone else the Clerk wished to take advice from as required by S9 of the Act.

“At the time the Clerk of the House was David McGee QC who was widely acclaimed as the most experienced and qualified Clerk in the Commonwealth. Upon his retirement as Clerk in 2007 to assume the post of Ombudsman he was given many accolades by MPs for the diligent way he performed his duties. Surely it is inappropriate for the Prime Minister, Leader of the opposition and Sue Bradford to now be insinuating he did not do his job properly. Especially given that they did not bother to take the time to participate in the submissions on the question when they had every opportunity to”. To read Larry’s full article click the sidebar link>>>.

Violence against children has always been a criminal offence in New Zealand. The 1961 Crimes Act is very clear on that point. For over 40 years Section 59 of the 1961 Crimes Act provided an exemption for parents who used “reasonable force” for the purpose of correcting their children. This was to protect parents who used light force for disciplinary purposes from charges of assaulting their children.  

The law worked well. A review of case law carried out by the Maxim Institute, found only 6 cases with a successful Section 59 defence out of more than fifty cases examined over the last decade or two.[4]

However, in spite of the law working well, in 2003 Green Party MP Sue Bradford decided to draft an “Anti-smacking” private members bill to repeal Section 59 in order to impose a United Nation’s ban on corporal punishment onto New Zealand.[5] Her bill was drawn in the ballot in 2005 and in a speech to Parliament she explained the underlying agenda driving the law change: “When Pākehā colonists first arrived here, they brought a culture that taught that children, along with women and servants, were the property of their father, husband, or employer, and that they were mere chattels to be brought into line by force. Section 59 is the last legal vestige of that culture”.

The Bill did not have sufficient support to be passed – until the resignation of Labour MP Phillip Field in February 2007 provided an opportunity for a deal: the Greens agreed to support Labour if Labour supported the Bill. However, there was still doubt over the numbers – until aspiring Prime Minister, John Key, saw an opportunity to demonstrate Parliamentary leadership by brokering the deal which finally enabled the Bill to pass. The rest is history.

Smacking a child in New Zealand is now against the law. No matter how light the smack or tap, prod or flick - anyone who uses any sort of physical force on a child for disciplinary purposes risks prosecution. Whenever a complaint is lodged, the Police are required to investigate and to inform the Department of Child, Youth and Family. Whether or not charges are laid depends on the circumstances.

What all of this means is that every day all over the country parents, grandparents, and other caregivers are being criminalised by the new law whenever they use any kind of physical force to correct a child’s behaviour. Many live in fear that someone somewhere will tell the authorities what they have done. As a result some are becoming ‘afraid’ of their children - especially those that are being coached on their ‘rights’ at school. Such children are reveling in the power the anti-smacking law has given them.

Despite the incidence of child killings and violent abuse being virtually unchanged since the smacking bill was introduced, do-gooders have the audacity to claim that the law is working. Their assurances that the repeal of section 59 would stop such abuse are quietly forgotten.

John Key has said that if the new law is not working he will change it. That puts the onus onto the public to let him know if the law is not working. Larry Baldock and the 390,000 New Zealanders who signed the referendum petition believe that voting “NO” in the referendum is a powerful way of sending that message.

Given the controversy surrounding the referendum, I have used this newsletter to outline some of the key issues. I have also provided an opportunity for the organiser of the petition to set the record straight regarding the referendum so that you are in a better position to decide for yourself the facts of the matter. I would therefore appreciate you circulating any relevant information to your friends and contacts so that they too can become better informed.

I also need to say that if you feel that these newsletters play a useful role in helping to keep you informed, then please support us – we can only keep our newsletter and website going if readers like yourself support our efforts. To help, please click here>>>

Finally, while the NZCPR Weekly newsletter is published every weekend, from Wednesday, Mid-Week Politics on the NZCPR homepage will feature regular opinion pieces from our four NZCPR Columnists: David Round (law lecturer and author of “Truth or Treaty”) on the Treaty of Waitangi, Marc Alexander (former MP and author of “Justice With Both Eyes Open”) on law and order, Allan Peachey MP (Chairman of Parliament’s Education Committee and author of “What’s Up With Our Schools”) on education, and Ronald Kitching (Mont Pelerin Society member and author of “Understanding Personal and Economic Liberty”) on economic reform.
 
NZCPR POLL
This week’s poll asks:
Do you think the referendum question “Should a smack as part of good parental correction be a criminal offence in New Zealand?” is ambiguous?
To vote click here>>> 
(Readers comments will be posted here>>> daily) 
To view last week's comments click here>>>

FOOTNOTES:
All articles can be found on the NZCPR RESEARCH PAGE - click here>>>
1.Herald, Key backs election smacking referendum
2.Annette King, Briefing Note:  Conducting Citizens Initiated Referenda
3.CIR Act
4.Maxim, Supplementary Material on Crimes Amendment Bill
5.Sue Bradford, Greens draw up their own Anti-Smacking Bill

NZCPR ADMIN
Please forward this newsletter on to your own networks and encourage other people to subscribe - that's how we grow. 

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To contact Muriel about this week’s column please click here>>>. You can reach Muriel by phone on 09-434-3836, 021-800-111 or post at PO Box 984, Whangarei.

NZCPR Weekly is a free weekly periodical from the New Zealand Centre for Political Research, a public policy think tank at www.nzcpr.com, established in 2005 by former MP Dr Muriel Newman.  

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NZCPR 
Commentary

Is Maori Disparity a Myth? 

“Mäori continue to experience relatively poorer outcomes than other New Zealanders, indicating that Mäori social potential has yet to be fully realised. In maintaining a focus on realising Mäori potential, the basis for the development of Te Puni Kökiri’s social policy advice and intervention is premised on what is important within a Mäori cultural construct… with a particular focus on the benefits that can be achieved through Mäori designed, developed and delivered initiatives”.           Briefing to the Incoming Minister 2008, Te Puni Kokiri.[1] 

Over the years claims of a growing disparity between the socio-economic outcomes of Maori and non-Maori have dominated the rhetoric of Maori ethnic politics.  The existence of this so-called “gap” has been blamed on the failure of government to uphold Treaty of Waitangi rights along with a lack of ‘culturally appropriate’ government services. These arguments have led to an explosion in special taxpayer funded race-based services for Maori with an emphasis on ‘by Maori for Maori’ provision. 

Helen Clark and her newly elected Labour Government escalated race-based spending to new heights in 2000 through a high profile “closing the gaps” campaign that allocated well over $100 million for Maori development. Three years later, a report published by ACT New Zealand demonstrated the extent of state subsidies to Maori, with estimates that total government spending on Maori had reached $7.3 billion a year, while the amount of total tax paid by Maori was $2.3 billion a year.[2]

Maori socio-economic disparity claims are based on data collected by the government. The main source is the five-yearly population Census. Up until the 1976 Census, ethnic data was based on the fraction of racial origin, with Maori being defined as having half or more of Maori blood.[3] In 1974, as a result of growing hostility by Maori rights activists to the question (no doubt driven by the looming inevitability of a diminishing population due to widespread intermarriage) the Kirk Labour Government changed the definition. The Maori Affairs Amendment Act of that year re-defined Maori: “All those with Maori ancestry, no matter how remote, were Maori for the purposes of the Act”.

The next Census in 1976 therefore asked two questions – the usual ‘degree of blood’ Maori descent question along with a new one about Maori ancestry. The respondents, however, found it all rather confusing, and as a result the next Census in 1981 reverted back to the fraction of blood question.

There have been many changes since that time to the way Maori are defined, with ethnicity information on births, deaths and hospitalisation using the fraction of Maori blood question right up until 1995 even though it had been finally dropped on Census forms in 1986. Nowadays, the Census asks: “Are you descended from Maori?” and “Which ethnic group do you belong to?” However, it is clear that comparative data about Maori is no longer as robust as it used to be when the degree of blood question was used.

Simon Chapple, a former senior researcher with the Department of Labour, challenged the concept of Maori disparity in a paper prepared for the Ministry of Social Policy in 2000. He explained that, as a result of widespread intermarriage, Maori are not a clearly defined ethnically homogenous group. He states, “At the margin Maori imperceptibly shade into non-Maori. For some people their Maori identity is likely to be very central to their lives. Other Maori are unlikely to think it greatly important: other aspects of their social and personal identities – class, occupation or profession, job, education, religion, leisure pursuits, sports clubs or other gang connections, regional location, family, gender, political leanings and so on – may take precedence”.[4]

He explained this “fluidity” of Maori by describing that “One in every four officially measured Maori in 1996 was not Maori in 1991. One in every twenty officially measured Maori in 1991 had exited the group in 1996”. He also outlined how, “One in every ten Maori descended person in 1996 had discovered their Maori ancestry over the last five years and one in every twenty had lost it”.

The reality is that as a result of intermarriage over the last 200 years, all Maori will have some non-Maori ancestors. The fluidity of Maori, which nowadays depends to a large degree on the public policy incentives that are on offer to those who identify as Maori, also makes a mockery of the notion of biculturalism which presupposes separate Maori and non-Maori populations that do not mix. In fact, most Maori children growing up in New Zealand today have a non-Maori parent. From a public policy perspective, the fact that all children with a Maori parent are counted as Maori for statistical purposes - no matter how distant the ancestry – creates a significant over-representation of Maori in official data.

For instance in the 2006 Census, while 298,395 people indicated their ethnicity as “Maori only”(sole Maori), a further 266,931 people identified with Maori and other ethnic groups (mixed Maori). This means that while sole Maori made up only 7.4 percent of the population, when mixed Maori are added, the proportion rises to 14 percent. And when the 78,648 people who indicated they had Maori decent but did not identify with Maori ethnicity are also added, the number of Maori rises to 15.9 percent. If Statistics New Zealand’s classification practice categorised "mixed" Maori according to their other ethnicity, instead of their Maori ethnicity, the number of reported “Maori” in New Zealand today would virtually halve.

The categorising of mixed Maori as Maori and combining them with sole Maori for the purposes of claiming socio-economic disparity between Maori and non-Maori creates another problem. The differences between Maori and non-Maori, is effectively dwarfed by the differences between mixed Maori and sole Maori. The reason is that the mixed Maori group is younger, is more likely to be better educated with greater job flexibility, and is more likely to be geographically mobile, prepared to move to areas where jobs are available. In other words, this mixed Maori group shares greater similarities with non-Maori, than sole Maori. This makes their combination for policy and funding purposes illogical.  

In a world where increasing intermarriage is rapidly blurring the homogeneity of racial groups, Statistics New Zealand’s classification protocol has resulted in Maori not only being significantly over-represented in official data, but by embedding such huge disparity between the various groups of Maori into the statistics, policy responses become almost meaningless.  

Over the years, indigenous leaders around the world have made good use of racial disparity displayed in official statistics to argue for special rights and resources based on race. Professor Helen Hughes, a Senior Fellow at the Centre for Independent Studies, along with her husband, Mark Hughes, an independent researcher, are this week’s NZCPR Guest Commentators with a paper which looks at this issue from an Australian perspective.

Helen and Mark explain that in Australia, where the Census asks “Is the person of Aboriginal or Torres Strait Islander origin?” the politics of indigenous rights has resulted in separatist policies that have created atrociously dysfunctional communities: “The impossibility of defining ‘Aboriginality’ emerges in defining entitlements. Self identification breaks down when entitlements are in sight. The right to reside in a community, distribution of royalties and hunting rights lead to frequent court disputes over ‘who is Aboriginal’. As the value of land, royalties, forestry, and farming on the 1.25 million km² Aboriginal and Torres Strait Islander holdings increases, the disputes will become worse.”

They explain that “positive discrimination has led to appalling living standards. Communal, inalienable land title has deprived Aborigines of the private property rights that enabled other Australians to acquire land, houses, business and other assets. Jobs are limited to government services with virtually all taken by non-Aborigines because separate schools with special curriculums result in 100% illiteracy and non-numeracy. Australian apartheid policies have had the same dreadful results as they did in South Africa, but they continue to be supported by the ‘Aboriginal industry’. In South Africa, the left led the fight against apartheid; in Australia it supports it.” To read the article click the sidebar link>>>

There is very real danger in Apartheid policies. The Maori rights movement has been extremely successful in persuading successive New Zealand governments to allocate increasing levels of funding to race-based initiatives. Most have been appropriated in the name of reducing so-called Maori disadvantage, even though being “Maori” does not cause disparity. What causes disparity in New Zealand are factors like age, education, literacy, location, marital status and gender – as well as other dynamics like benefit dependence, sole parenthood, substance abuse, violence and criminality.

Being Maori does not signify socio-economic failure and so allocating resources on the basis of race is a gross waste of taxpayer’s money. The best way to tackle disadvantage is to ensure that all children succeed in school, that basic literacy and numeracy training is available to all, that workers in dying industries can re-train, and that the welfare system does not trap people in dependency - nor allow them to stay on a benefit in the long term in areas where there are no jobs.

NZCPR POLL
This week’s poll asks:
Do you believe race should be a basis for government policy-making?
To vote click here>>> 
(Readers comments will be posted here>>> daily) 
To view last week's comments click here>>>

FOOTNOTES:
All articles can be found on the NZCPR RESEARCH PAGE - click here>>>
1.Te Puni Kokiri, Briefing to the Incoming Minister 
2.ACT New Zealand, The Maori Tax to Benefit Gap 
3.Statistics NZ, Report of the Review of the Measurement of Ethnicity 
4.Simon Chapple, Maori Socio-Economic Disparity

NZCPR ADMIN
Please forward this newsletter on to your own networks and encourage other people to subscribe - that's how we grow. 

To help support the publication of these newsletters and receive your free EBOOK and unlimited access to our website Forum click here>>>

To join the mailing list for this free newsletter please click here>>>

Why not submit your burning issue for publication on our website Soapbox Series?

If you enjoy political debate visit the Debating Chamber forum - many of our forum subscribers post up information for the public to view daily.

To contact Muriel about this week’s column please click here>>>. You can reach Muriel by phone on 09-434-3836, 021-800-111 or post at PO Box 984, Whangarei.

NZCPR Weekly is a free weekly periodical from the New Zealand Centre for Political Research, a public policy think tank at www.nzcpr.com, established in 2005 by former MP Dr Muriel Newman.  

If you have a change of address, please note your old address and your new one and click here>>>. To unsubscribe, please click here>>> and send. 
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NZCPR 
Commentary

Recession Increases Need For Welfare Reform 

While socialists have blamed capitalism and the free market for the global financial crisis, economist Richard M. Salesman holds “altruism” responsible. In his article “Altruism: The Moral Root of the Financial Crisis”, he explains that altruism, which is based on the notion that being moral consists of sacrificing oneself for the needs of others, has long been a driving force of government policy.[1] In the US, not only has this resulted in a burgeoning welfare state, but altruistic home ownership initiatives targeted at minority groups, created a house of cards of catastrophic proportions. 

Salesman describes the welfare state as the political ideal of altruism, since it facilitates “the sacrifice of the successful to the needy”. He reminds us that Karl Marx was the pre-eminent altruist of the 19^th century advocating that in a truly socialist world, wealth would be perpetually transferred “from each according to his ability, to each according to his need”. The popularity of progressive tax systems around the world - long-favoured by socialist politicians - bears testimony to the power of political altruism. 

New Zealand has always had a strong welfare state tradition. In its original form - as introduced by Michael Joseph Savage in 1938 - state welfare was more pragmatic than altruistic. It was designed to be a hand-up to work, supplementing widespread community-based charitable efforts to assist the needy. For thirty years, right up until the late sixties, there were less than 15,000 people receiving state welfare, with fewer than a thousand unemployed.

In the late sixties, however, amid growing concerns that the benefit system was losing relativity with rising living standards, the Holyoake Government established a Royal Commission on social security. Many of the recommendations contained in their 1972 report, were adopted by the 1973 Kirk Labour Government. But it was three of those recommendations in particular that were responsible for the establishment of New Zealand’s permanent dependency culture.

The first of the three recommendations changed benefit eligibility from being needs-based and available only to those ‘of good moral character and sober habits’, into a universal entitlement. That change destroyed a well-established social contract between taxpayers and the government that had ensured that only those who were good citizens and met community standards were eligible for state benefits. For the first time ever, the welfare system thus began to reward indolent and destructive behaviours such as alcoholism, drug addiction, and criminality.

The second of the three misguided recommendations was the raising of benefit levels closer to a working wage. Instead of temporary welfare benefits being sufficient to tide people over while they found a new job, the Commission wanted to ensure someone on a benefit could “enjoy a standard of living close enough to the general community standard for him to feel a sense of participating in the community and belonging to it”. As a result of this change, the urgency for a beneficiary to find a job – to ensure they would be appreciably better off - all but disappeared, setting the scene for the establishment of long-term, intergenerational benefit dependency.

The third recommendation - one that changed the face of welfare and the family in New Zealand forever - was the introduction of the Domestic Purposes Benefit. The DPB, a statutory benefit for sole mothers with dependent children, was established to enable an estimated 20,000 women to escape violent relationships. It was a landmark change to the benefit system, being the first benefit available for reasons of personal choice - such as no longer wanting to remain married - rather than for reasons outside of a person’s control such as the death of a spouse, the loss of a job, injury or accident.

More than thirty years on, the results of those three major changes speak for themselves. One in three of all New Zealand families with children are single parent families. A quarter of all children now live with one parent instead of two.[2] According to the budget estimates, in the next financial year 336,000 working age people will be in receipt of a welfare benefit, 400,000 or so working families will be receiving Working for Families payouts, and some 538,000 retirees will be in receipt of a pension. Altogether the total cost of income support will be $21,509 million or one third of all government spending.[3] In comparison, total income support in 1972 (arguably before altruism took hold!) was around 23 percent of all government spending.

The Ministry of Social Development provides a breakdown of benefit data as at March 2009.[4] Their figures show that the number of sole parents receiving the Domestic Purposes Benefit has risen by over 6,000 from a year ago to 102,003. Of those, 76,000 have been on a benefit for longer than a year, with 15,500 receiving a benefit for more than ten years. Maori are massively over-represented – while they comprise 15 percent of the population, they make up 41.5 percent of all DPB recipients.

The numbers of beneficiaries migrating onto the Sickness and Invalid Benefits continue their relentless rise (largely as a result of the benefits not being work tested and in some cases being more generous) with increases over the last twelve months totalling 5,365 and 2,831 respectively to take the totals to 51,041 and 83,961. 

And while the budget shows unemployment benefit numbers rising to 85,000 in the next financial year, the breakdown of the 37,146 receiving the dole in March shows more than a third are Maori, and 31 percent are young people aged from 18 to 24.

This week’s NZCPR Guest Commentator, Luke Malpass a policy analyst with the Centre for Independent Studies, reminds us that the National Party campaigned on reforming welfare. He explains that with the country now in recession, getting the incentives in the welfare system right is more important than ever:

“Welfare policy is important at all stages of the economic cycle. When the economy is growing steadily the aim of welfare policy should be to get every person who is able into the labour force. And, when the economy is in recession it is even more vital that welfare policy is designed to encourage able people into the workforce. To this end welfare policy is a hugely important area in which to legislate. The rules around conditionality are important and the incentives they create crucial.

Luke explains that, “Internationally, New Zealand is behind best practice. In Scandinavian countries, the United States and Germany, welfare has been reformed with remarkable results. Numbers on welfare rolls have been reduced dramatically with the tightening of conditionality and reciprocal obligations. Workfare schemes, time-limiting of benefits, and compelling single parents back into part time work once their youngest goes to school have all been shown to be effective and have positive benefits for peoples’ job prospects. Yet in New Zealand this is still characterised as cruel and uncaring.

He concludes, “As New Zealand heads deeper into recession it is more important than ever that the government’s welfare policy gets it right. Reform is important, because allowing people to become lost on welfare rolls and out of touch with the world of work is a failure of government, and by extension, a failure of society.” To read the full article “Incentivising Welfare”, click the sidebar link>>>

There is no doubt that as the welfare lines grow longer and the cost of income support soars, a major re-think of welfare policy is urgently needed. For instance, New Zealand is one of only a handful of countries that has a stand-alone benefit for sole parents. Most provide temporary support based on the expectation that the mother will re-enter the workforce after a year or two to properly provide for herself and her child.

Many countries have unemployment insurance schemes, or time-limits for the unemployment benefit, as well as a full-time programmes of work, training or job search designed to prevent job seekers becoming isolated and losing their confidence. And with regard to disability benefits, the most successful way to discourage ‘freeloading’ is through tightening the rules of eligibility and more intensive monitoring.

As well as needing to reform our main benefits, we surely need to rethink the whole Working for Families scheme as well. With a stroke of the pen in 2004, the Labour Government effectively turned hundreds of thousands of independent working families – including some who earn up to $120,500 a year - into state beneficiaries.[5] With fear of losing their benefits affecting their decision-making and their lives - dictating to some extent whether they take the new job or accept the promotion package – it could be argued that the massive $2.7 billion in Working for Families payments would be of greater benefit redirected into tax cuts. Tax cuts, as we all know, are vital to incentivising work and wealth creation, and would certainly help the country move out of recession far more quickly.

These are important issues. At the present time more than a quarter of working-age adults are relying on benefits to some extent, and, with a growing population of retirees, younger workers are being condemned to a future of struggling under an increasing tax burden – as the government soaks up more and more of the nation's wealth to pay for our growing state dependency.

The destructive effects of welfare are much too serious for governments to ignore. Now more than ever the culture of welfarism that has burdened us for more than 30 years needs to be broken. Regrettably it is something our new government has not yet acknowledged, let alone addressed.

NZCPR POLL
This week’s poll asks:
Do you believe that welfare reform should be a high priority, medium priority or low priority for the new government?
To vote click here>>> 
(Readers comments will be posted here>>> daily) 
To view last week's comments click here>>>

FOOTNOTES:
All articles can be found on the NZCPR RESEARCH PAGE - click here>>>
1.Richard M. Salesman, Altruism: The Moral Root of the Financial Crisis 
2.Statistics NZ, Projected Families by Family Type 
3.Treasury, 2009 Budget Economic and Fiscal Update
4.Minstry of Social Development, National Benefit Factsheets 2009
5.IRD, Working for Families Tax Credit Chart

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Commentary

Budget Spend-up Continues

“This is the message to New Zealanders: under National, tax cuts are a priority—under National, personal tax cuts are a priority. Most of all, New Zealanders will be able to believe our tax cuts, they will be able to trust our tax cuts. Most of all, our tax cuts will not just be about putting dollars into the pockets of hard-working New Zealanders. They will actually be about delivering the right incentives in the economy. Tax cuts let New Zealanders get ahead in their lives. They encourage New Zealanders to work hard, to get extra responsibilities, to save, and to get further education. We believe in tax cuts, we believe in the power of tax cuts, and we will deliver them.”[1]  - John Key.

Well, that was last year, when John Key delivered the Leader of the Opposition’s speech about the 2008 Budget. 

The National Party’s promised tax cuts were the central component of their election campaign. After nine years of taunting Labour for not delivering tax cuts, they were very clear that they would be able to deliver on their promise because the cost of the tax cuts would be covered by cutbacks they were proposing to research and development and KiwiSave: “Taken together, the removal of the R&D tax credits and the changes to KiwiSaver mean National will not have to borrow or cut public services to fund our personal tax cuts. This is a prudent and responsible tax package. National will not undertake additional borrowing for tax cuts.”[2] 

So if the cost of tax cuts was already covered by the savings already made, why were they cancelled in Thursday’s budget? The answer is that National cancelled the tax cuts because it was easier than cutting government spending. All those opposition years of explaining that lower flatter taxes are vital to driving economic growth and building prosperity were forgotten when faced with pruning nine years of socialist spending programmes put in place by Labour. 

After all of the brave talk of ‘razor gangs’, line-by-line reviews, and reducing wasteful spending, only $301 million was saved; meanwhile core government spending is set to increase from $57,997 million in this 2008/09 financial year to $62,362 million next year, and $65,282 million the year after![3]  

The promised tax cuts – and remember that they were already pre-funded by the cutbacks to KiwiSaver and the dropping of the R&D tax credits – were not massive. Just $98 million was needed to fund the tax cuts next year, $494 million in 2011, and over $800 million thereafter.[4] If the incentive effects of lower flatter taxes are taken into account, the tax cuts should have quickly paid for themselves through higher growth and increased productivity. 

That was certainly the experience of the 1984 Labour Government, which, facing bleak economic conditions, dramatically cut taxes and government spending to balance out the deficit within three years. As Roger Douglas put it, “The current level of Government deficit is one third what it was in 1984. Back in 1984, we managed to get the books back into the black within 3 years. Today, with a deficit one third of the size it was then, it is going to take 11 years to get back to surplus. Any deficit today has to be repaid with interest by future generations. The deficit is not huge, but its existence shows the unwillingness to make modest cuts to return to surplus quickly”.[5] 

A cursory examination of Thursday’s budget identifies many areas of expenditure which hardly resemble “essential” spending.[6] For instance, does the country really need hundreds of policy analysts costing us close to $600 million a year? Of course government Ministers need policy advice, but does the Minister of Social Development really need $53 million worth of advice, the Minister of Education $32 million worth of advice, or the Minister of Maori Affairs $26 million worth of advice? 

In fact, do we really need more than 200 agencies run by the government? [view>>>] Is the Families Commission, which costs $8 million to run, really necessary when there are already many private sector groups doing research on the family and advocating on their behalf? What about the Charities Commission at $5 million, or the Retirement Commission at $5.6 million. In these days of gender equality do we really need a Ministry of Women’s Affairs costing $4.8 million to run? And given the country’s ethnic diversity can we really justify the Ministry of Pacific Island Affairs costing $7.5 million a year to run or the Ministry of Maori Affairs costing $179 million annually. 

Should taxpayers really be bailing out stadium projects in Dunedin, Nelson,  Christchurch, and Whangarei to the tune of $35 million? And what about the $13 million of taxpayers’ money we will be spending on the Americas Cup in the next twelve months – can that really be justified as essential spending? And why are the producers of big-budget film and television productions getting $35 million? 

What about the $158 million appropriated for public broadcasting services – including Television NZ and Radio NZ – or the additional $67 million spent on Maori radio and television services? Are taxpayers getting good value for money for that $225 million? 

How do we feel about the $132 million that will be used to fund legal aid? Do we agree with $102 million of taxpayers’ money being used to fund environmental research while $71 million is used for health research? 

Keeping in mind that the “unaffordable” tax cuts would have cost $98 million next year, how do we feel about the appropriation of $550 million that has been set aside for climate change? Most of this has been ear-marked for buying carbon credits to give to businesses to get the emissions trading scheme off the ground. Those who believed that the Government was genuinely awaiting the outcome of an “independent” Select Committee review will be disappointed to see that the die is already cast. And consumers worried about the added cost of an emissions trading scheme will be especially concerned to find out that the half a billion dollar cost is only the beginning of what will be an enormously unproductive drain on our already fragile economy. 

This appropriation on its own would have almost paid for the tax cuts for the next two years. Unfortunately it demonstrates that rather than looking ahead with a vision for growing the New Zealand economy and catching up to Australia by 2025 – as promised after the election – National appears to have become somewhat captured by the bureaucracy to the point where they are satisfied with tinkering with their predecessor’s socialist spending promises rather than implementing real, badly needed reform. 

This week’s NZCPR Guest Commentator Roger Kerr, the executive director of the New Zealand Business Roundtable, outlines the “appalling economic legacy” that has led to the dire situation we are in today: 

“Core Crown expenses are set to rise by as much as $3 billion this year and to go up from 32 percent of GDP in 2007/08 to 37 percent in the government’s term of office. Public consumption is forecast to grow every year to 2012 (by around 12 percent in total) while private consumption growth is negative each year (falling by nearly 3.5 percent by 2012).  Citizens are being asked to tighten their belts while the government lets its belt out further”. 

He goes on to state, “As commentators have been noting, the government broke a firm election policy commitment in deferring planned tax cuts.  This looks like a soft option relative to cutting more of the last government’s poor quality spending.  None of the modest ‘line-by-line’ review savings represents hard political choices either. 

“What was perhaps most disappointing about the budget was that it contained few indications of forward thinking to deal with the need for structural adjustment and substantially lift productivity growth.  There should also be more urgent short-term action. The forecast rise in the unemployment rate to 8 or even 10 percent of the labour force, for example, should not be passively accepted.  It is an indicator that nothing significant in this regard came out of the Jobs Summit and that more fundamental changes are needed. 

“Overall, what can be said at this stage is that the budget does not have an economic strategy that is capable of achieving the government’s overriding goal of catching up to Australian income levels by 2025”. To read the article “The 2009 Budget – What’s Next?”, click the sidebar link>>>

So rather than provide a clear vision for how New Zealand is going to become that prosperous country that we all aspire to, with lower taxes, greater personal responsibility and more individual freedom, the budget gave us a stable credit rating, aspirational rhetoric, and no tax cuts.

But all is not lost - we did get a $50 million cycle-way. And we mustn’t forget the sweetener to the Green Party, the $323 million for home insulation refits. The problem with those, however, is that if you read the study on which they are justified you will find that general practitioner and hospital records fail to show any real evidence to support the policy. In other words, while people in insulated homes ‘feel’ healthier there is no empirical evidence to show that they actually are.[7]

I will leave the final word to Milton Friedman: "I am in favour of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible. The reason I am is because I believe the big problem is not taxes, the big problem is spending. The question is, "How do you hold down government spending?" The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes."

NZCPR POLL
This week’s poll asks:
How do you rate the Government’s budget - good, satisfactory or disappointing?
To vote click here>>> 
(Readers comments will be posted here>>> daily) 
To view last week's comments click here>>>

FOOTNOTES:
All articles can be found on the NZCPR RESEARCH PAGE - click here>>>
1.John Key, Budget Debate 2008
2.Treasury, Core Crown Expense Tables
3.National’s 2008 Election Tax Policy
4.Radio NZ, Government defers promised tax cuts in Budget
5.Roger Douglas, Budget Low-Lights
6.Treasury, Estimates of Appropriations
7.British Medical Journal, Effect of insulating existing houses on health inequality

NZCPR ADMIN
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Commentary

Cooler Weather Heats Up Debate 

Earlier this month a briefing paper for US government officials and environmental leaders on ways to “re-frame” the global warming debate in order to build stronger public support for climate change legislation, found its way into the hands of the New York Times.[1] Re-framing is a technique used by politicians to make radical ideas more palatable to the public by replacing controversial expressions with language that evokes empathy, cooperation, and a sense of interconnectedness.[2] The concept is largely based on the work of George Lakoff, Professor of Linguistics at Berkley University and well known adviser to the environmental movement, who believes that if you control the language of a debate then you control the way that people think. 

The report obtained by the New York Times had been prepared by the Washington-based public relations firm EcoAmerica. They explained that terms like “global warming” turned people off because they fostered images of “shaggy-haired liberals, economic sacrifice and complex scientific disputes”. The report suggested that rather than talking about ‘global warming’ they should be discussing “our deteriorating climate”. They went on to recommend that instead of using the term the “environment”, they should use “the air we breathe, the water our children drink”, rather than “energy efficiency” which made people think of “shivering in the dark”, they should be saying “saving money for a more prosperous future”, and instead of confusing people with “cap and trade”, they should be using terms like “cap and cash back” or “pollution reduction refund.”

The report stressed the need for aspirational language and shared ideals like “freedom, prosperity, independence and self-sufficiency while avoiding jargon and details about policy, science, economics or technology”. 

Of course, there has already been a major shift in the language of the global warming debate, whereby the term “global warming” has been replaced to a large extent by “climate change”. This has occurred mainly because the physical evidence on global temperature change does not match the predictions. 

According to the theory of global warming being touted by the United Nations Intergovernmental Panel on Climate Change (IPCC), Al Gore and many others (who have spent an estimated $50 billion trying to show man-made greenhouse gas emissions are causing catastrophic global warming) the earth’s temperatures should be rising in line with a continuing increase in carbon dioxide emissions.[3] The problem is that the planet stopped warming more than a decade ago. In fact, as the graph below shows, global warming has now been replaced by global cooling and while carbon dioxide levels continue to rise, temperatures continue to fall. This graph demonstrates that the global warming theory based on the computer models of the IPCC and others, is wrong.


The graph above shows the temperature changes of the lower troposphere from the surface up to about 8 km as determined from the average of two analyses of satellite data. The best fit line from January 2002 to April 2009 indicates a decline of 0.25 Celsius/decade. The Sun's activity, which was increasing through most of the 20th century, has recently become quiet, causing a change of trend. The green line shows the CO2 concentration in the atmosphere, as measured at Mauna Loa, Hawaii. [4] 

The fact that the earth is now in a cooling phase should come as no surprise to New Zealanders, given the unseasonally cold weather we are presently experiencing. Some weather analysts are even predicting that we may miss out on autumn altogether this year! 

But what is a continuing surprise is how our political leaders could be so unaware of what is going on that they can be contemplating passing laws to combat catastrophic global warming when the climate stopped warming of its own accord more than a decade ago. Could this possibly be a modern day version of the Hans Christian Andersen fairy tale “The Emperor Has No Clothes”, where everyone can see that the planet is cooling but with the country’s rulers claiming they are fighting global warming, loyal subjects are afraid to speak out for fear of ridicule or persecution? 

Yet with global warming well and truly over and global cooling upon us, serious questions need to be asked. How can the government justify appropriating taxpayers’ money for schemes based on global warming when the warming stopped over a decade ago? Where are the government’s science advisers in all of this? Why are they not advising the government that we are now in a global cooling phase - and if they are advising the government of this, but the government is not listening, why not? 

A quick review of the 200 or so organisations that are run by the government (see the list here>>>) shows that at least 20 deal with climate related matters. Surely some of these publicly-funded bodies must have raised concerns that the policy responses (if any at all are needed) for global cooling would be very different from those presently operating on the basis of global warming. In particular, surely the National Institute of Water and Atmospheric Research (NIWA) has a particular responsibility to keep the government well informed about such matters. 

Another question that needs to be answered is why isn’t the press inquiring into the fact that the government is still running global warming policies a decade after global warming stopped? As the fourth estate, the free press has a crucial responsibility in a democracy in scrutinising the actions of government and acting as a watch dog for the public. When they are doing their job well, the media play a vital role in facilitating greater transparency and accountability in government. Not only that, but by highlighting problems in the government’s agenda by providing details of all sides of an argument, they enable the public to become well informed about important public policy issues. 

It is worth noting that last year SKY TV did an outstanding job in this regard by screening both Al Gore’s film “An Inconvenient Truth”, which claims that man-made carbon dioxide is causing catastrophic global warming, and Martin Durkin’s documentary “The Great Global Warming Swindle”, which explains that it is natural forces such as the sun, the deep ocean currents, the clouds, and other climatic factors such as snow and ice cover, that drive the climate. They even followed up with a studio debate between climate realists, broadcaster Leighton Smith and scientific expert Dr Willem de Lange,  and a team of three global warming advocates, Dr David Wratt NIWA’s chief climate scientist, Prof Martin Manning of the NZ Climate Change Research Institute, and Cindy Baxter from Greenpeace.  

I have invited Dr Willem de Lange, Senior Lecturer in the Department of Earth and Ocean Sciences at the University of Waikato, to be this week’s NZCPR Guest Commentator and share with us not only why he is a climate realist, but his experience of working with the IPCC. 

Dr de Lange begins his article by explaining that as an expert on sea level change, he was asked by the IPCC to contribute to a chapter on that matter for their Second Assessment Report: “In keeping with IPCC procedures, the chapter was written and reviewed in isolation from the rest of the report, and I had no input into the process after my review of the chapter draft”. In fact, as he explains, he disagreed with the assumptions of a one metre sea level rise that was being proposed in the report, stating instead that “sea level rise would not necessarily result in flooding of small island nations, because natural processes on coral atolls were likely to raise island levels”. 

Dr de Lange explains that when the report was finally published he found himself to be one of the 3,000 or so ‘scientists’ who were listed by the IPCC as agreeing with their proposition that there was discernable human influence on climate even though “I was not asked if I supported the view expressed in my name.” In fact, he states “my understanding at the time was that no evidence of a discernable human influence on global climate existed”! 

In his article he exposes not only how “extreme scenarios were added at a late stage of the review process” into the IPCC and New Zealand climate impact reports, but that he was asked “to state that sea level rise was accelerating, or at least could be accelerating”, which he refused to do. 

Dr de Lange also explains that while it is well known that satellite data gives an accurate measure of global sea levels, they are grossly inaccurate at measuring tidal changes. There, tide gauge data must be used. In spite of this he recounts a situation where the IPCC in its Fourth Assessment Report “spliced the satellite data onto the tide gauge data to ‘find’ acceleration in sea level rise over the period of satellite measurement. This is being used to imply that global sea level rise is accelerating due to global warming (now renamed Climate Change). The satellite data only covered the period of increasing sea level associated with decadal cycles, and the known discrepancy between satellite trends and tide gauge trends was not corrected for. This is poor science comparable to the splicing of proxy and instrument data in the infamous Hockey Stick graph, and the splicing of ice core and instrumental CO2 measurements to exaggerate the changes”. To read the full article including Dr de Lange’s explanation of what drives climate change, click the sidebar link>>>

In the report on reframing the global warming debate obtained by the New York Times, EcoAmerica suggested that discussions about carbon dioxide should be dropped in favour of expressions like “moving away from the dirty fuels of the past”. This demonising of carbon dioxide by deliberately calling it a dangerous pollutant is one of the dirty tricks being used by global warming advocates. Some readers of this column have accused me of not caring about pollution or the environment because I have raised concerns about the agenda of global warming alarmists. To set the record straight, the reduction of dangerous pollutants is a separate issue and one that is to be encouraged because a clean, green environment is in all of our best interests. And as technology advances, over time the emission of dangerous pollutants will be substantially reduced. 

However, carbon dioxide is not a pollutant. It is one of the raw materials that plants use to make food and is therefore at the heart of the food chain. Without carbon dioxide, there would be no life on earth. Making up a miniscule 0.038 percent of our atmosphere (380 parts per million), carbon dioxide levels are presently amongst the lowest they have ever been in the history of the earth. In the Jurassic Period 200 million years ago, carbon dioxide concentrations were around 5 times higher causing plant growth to flourish to levels that could sustain dinosaurs and other massive herbivores.[5] The highest recorded carbon dioxide concentrations at 7,000 parts per million – 18 times higher than today - were found during the Cambrian Period, over 500 million years ago. Clearly, rises in carbon dioxide do not threaten the planet as the alarmists claim. 

NZCPR POLL
This week’s poll asks:
How do you rank the NZ media in terms of giving a good balance to the debate over global warming?
To vote click here>>> 
(Readers comments will be posted here>>> daily) 
To view last week's comments click here>>>

FOOTNOTES:
All articles can be found on the NZCPR RESEARCH PAGE - click here>>>
1.NY Times, Seeking to Save the Planet With a Thesaurus
2.Katy Butler, Winning Words
3.Jerry Carlson, Will Media Expose Global Warming Con Job?
4.Friends of Science, Global Lower Troposphere Temperatures and CO2
5.Ray Evans, Thank God For Carbon

NZCPR ADMIN
Please forward this newsletter on to your own networks and encourage other people to subscribe - that's how we grow. 

To help support the publication of these newsletters and receive your free EBOOK and unlimited access to our website Forum click here>>>

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To contact Muriel about this week’s column please click here>>>. You can reach Muriel by phone on 09-434-3836, 021-800-111 or post at PO Box 984, Whangarei.

NZCPR Weekly is a free weekly periodical from the New Zealand Centre for Political Research, a public policy think tank at www.nzcpr.com, established in 2005 by former MP Dr Muriel Newman.  

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NZCPR 
Commentary

Creating a Wealth Revolution

In his acceptance speech at the Republican convention in August 1988, President Bush announced: “And the Congress will push me to raise taxes, and I’ll say no, and they’ll push and I’ll say no again, and they’ll push again. And I’ll say to them “Read my lips: No new taxes”.  In June 1990 he found himself agreeing to a rise in taxes after all in order to keep the deficit from getting out of hand. One day reporters pursued the President as he jogged laps in St Petersburg, Florida, pressing him to clarify his stand. “Read my hips!” he smirked, and jogged on. Bush’s acceptance of tax hikes in violation of his pledge hurt him badly when he ran for re-election in 1992. He was defeated at the polls that year.                             P. F Boller, Presidential Anecdotes[1]

John Key and his National-led government would do well to reflect on the fate of President George Bush senior after he broke his election tax pledge. After all, tax was a main election pledge of the National Party at the 2008 election. In their case it was a three-year programme of tax cuts that attracted the support of many New Zealanders who were disgruntled with Labour’s broken tax cut promise in 2005. 

John Key said, “I make no apologies for sending a clear message that National values enterprise, hard work, and people getting ahead under their own steam. We think personal tax reductions are the priority in the current environment. The surest way out of the red ink is for the New Zealand economy to grow faster than is currently projected. One of our first priorities is reductions in personal tax. In the short term, personal tax reductions will provide much-needed flexibility to taxpayers confronted with difficult economic conditions. In the medium term, our tax package will help make New Zealanders' after-tax wages more competitive. It will improve incentives in our economy and it will drive growth.”[2] 

While the 2009 tax cuts have now been delivered, National promised tax cuts in 2010 and 2011, “On 1 April 2010 we will shift the threshold at which the 33 percent rate applies out to $50,000 and lower the top rate to 37 per cent. On 1 April 2011 we will lower the 21 per cent rate to 20 percent. The top tax rate applies to many of the skilled workers our communities rely on - including school principals, GPs, police officers, and many teachers. By reducing the top rate we will show these people that they have a real future in New Zealand where their effort and aspiration will be rewarded.” 

John Key explained, “This programme of tax reduction will provide welcome relief for households who are feeling the pressure of a down-turning economy. That means that under National's tax plans around 80 percent of taxpayers will be paying no more than 20c in tax for every additional dollar that they earn. As a result of our changes to the tax structure, most workers with second jobs will pay a secondary tax rate of no more than 20 percent. Our longer-term plan for the income tax system is a simple three-tier structure with the highest rate at no more than 33 percent for income above $50,000.” 

National was very clear that there would be no borrowing to fund tax cuts: “Taken together, the removal of the R&D tax credits and the changes to KiwiSaver mean National will not have to borrow or cut public services to fund our personal tax cuts. We will, in fact, be booking a small saving from the changes we are proposing - $283 million over three years. So, no matter what smears my opponents may try to spread, you can be confident. This is a prudent and responsible tax package. National will not undertake additional borrowing for tax cuts.”[3] 

With National’s tax cut pledge being fiscally positive, there is no sound reason for them to break their tax cut promise. 

Indeed, with the government’s accounts looking increasingly bleak, the prudent course of action is to do what households have had to do and tighten their belt. After all, the current administration has become bloated by nine years of Labour’s regulations, laws and special interest spending promises. Considering that National opposed much of Labour’s agenda they should have no hesitation in eliminating non-essential expenditure.  

In their briefing to the incoming government, Treasury advised National that the rate of growth of government spending over the last nine years is unsustainable. They recommended bold action to reduce spending to affordable levels.[4] This message has just been reinforced by the Secretary of the Treasury, John Whitehead, who in a speech on Friday, stressed how imperative it is that National gets public sector spending under control. He explained that more needs to be done to eliminate wasteful spending including cutting existing programmes that do not fit the Government’s objectives, and he identified $38.5 billion of public money “that could be better used”.[5] 

The Secretary warned, “The state sector is a very large part of the economy - central and local government combined represent about 40 percent of GDP - so it is hugely important that it works as efficiently as possible to support the private sector. We cannot afford to crowd out private enterprise or impose unnecessary costs on people and businesses.” 

And that’s the point. It is the private sector - the wealth makers - that will lift New Zealand out of the recession not the government, who are wealth consumers. That’s why lower taxes, less regulation, and a smaller government must be the priority. Empirical evidence shows the optimal size of government to be about 25 percent of gross domestic product. Switching the dead-weight loss of wealth being consumed by government to the private sector would provide the jobs the job summit merely talked about, creating a wealth revolution this country has not seen for a very long time.[6] 

Treasury is of the view that National should prioritise tax reductions in order to improve New Zealand’s economic performance. In particular they have recommended that the top personal rates of tax be brought down to 30 percent or lower. They have also noted that company tax is now far too high and should be reduced: “Average corporate tax rates in the OECD continue to trend down, and New Zealand’s 30 percent rate is now relatively high, with small OECD countries having an average company tax rate of 26 percent in 2008”. If National is to succeed in their goal of lifting living standards so that New Zealand can catch up with Australia by 2025, an on-going programme of tax cuts is vital. 

In his article “Judging National’s First Budget“, this week’s NZCPR Guest Commentator Sir Roger Douglas MP explains that there are ten fundamental economic truths that should be kept in mind when assessing a government’s budget - one is tax cuts: 

“Tax cuts incentivise work and saving.  Ensuring all income is treated the same will remove costly distortions in our economy – like those occurring when people set up businesses in different ways to avoid tax.  The only way to reduce tax is to reduce Government spending. If Government spending is controlled, taxes can be low.  Mr English calls tax cuts unaffordable.  He’s wrong.  High levels of Government spending are unaffordable.  If we indulge the whim of every special interest group with tax money, taxes will be high.

“New Zealand’s current account deficit has ballooned.  If Government continues to spend at current levels, the deficit will increase.  This will see our credit rating downgraded, and our currency drop even further. But if the Government reduces spending – freeing up resources for tax cuts – it will help New Zealanders get through the recession and make the adjustment more manageable. In a recession we must tighten our belts and Government must realise this applies to it as much as to us”.  To read the full article click the sidebar link>>>

At a time when wealth creators need greater certainty and less government interference, we are unfortunately being subjected to a number of initiatives that will deliver the exact opposite.

The first is in the vital Auckland region where the plan is to restructure seven cities into one super city. This is bound to create widespread uncertainty for an extended period while new consenting authorities are established and new regional plans put in place. This, of course, comes on top of the major uncertainty associated with the reform of the Resource Management Act itself. It is highly likely that many development projects will be put on hold while investors await the outcomes of these changes – at the very time when the country is in desperate need of the economic activity created by Auckland’s “power house”.[For more on this read Owen McShane’s Mid-Week Politics - see sidebar NOTICEBOARD for the link]

The second is National’s proposed new tax increase – in the form of an emissions trading scheme. It is, of course, the worst possible time to impose a new tax on a country as it will significantly hold back our economic recovery. The proposed Emissions Trading Scheme has already had a devastating effect on investment in New Zealand as the submissions to the ETS Review Select Committee from the country’s major industries reveal. Billions of dollars of future investment has been put on hold, and tens of thousands of jobs are in jeopardy as firms consider downsizing or relocating if the scheme is imposed. The proposed Emissions Trading Scheme presently hangs like a pall over New Zealand’s vital industrial sector.[7]

As National faces its first budget - in the wake of the Australian budget which last week delivered on the government’s tax cut promise – our Prime Minister and Finance Minister must not lose sight of the fact that families and small businesses are hurting badly. Many will have voted for National’s tax relief, since the tax cut promise, to drive economic growth and lift living standards, was central to their election campaign. The last thing National should be contemplating is breaking that promise because “postponing” the tax cuts is an easier option than cutting government spending. Voters have long memories.

Earlier this year an opinion poll on tax cuts was published by a left-wing organization which asked whether tax cuts should go ahead “if the government had to borrow to fund them”. Unsurprisingly, a majority of respondents said no and this was used to suggest that New Zealanders did not want future tax cuts.

This week the NZCPR would like to ask for your help in getting as many people as possible to answer this week’s poll question on tax cuts, which we will send to the Prime Minister and Finance Minister. The question asks whether the tax cuts should go ahead “if the government had to cut wasteful public spending to fund them”.

I have posted a short paragraph explaining the poll question at the end of this column and would ask for your help in copying it into an email and sending it on to those people in your address book who you think would like to have a say.

Further, if you would like to join the NZCPR’s Research Panel so that you can take part in a regular series of on-line surveys on attitudes to tax, climate change and so on, please click here>>>

NZCPR POLL
This week’s poll asks:
Do you think the Government should go ahead and budget for the promised tax cuts for 2010 and 2011 if they need to be funded by cutting wasteful public spending? 
To vote click here>>> 
(Readers comments will be posted here>>> daily) 
To view last week's comments click here>>>

FOOTNOTES:
All articles can be found on the NZCPR RESEARCH PAGE - click here>>>
1.P. F Boller, Presidential Anecdotes 
2.John Key on Tax Cuts: The National leader's speech 
3.National's Election Tax Policy 
4.John Whitehead, Looking to and through budget 2009 
5.Treasury, Briefing to the Incoming Minister 
6.Richard Rahn, The Optimum Government 
7.Parliament, Emissions Trading Scheme Review Submissions
Further reading: Owen McShane, NZCPR Mid-Week Politics - Thoughts on the Auckland Super-City ...see link on the sidebar NOTICEBOARD.

MESSAGE TO COPY AND SEND TO YOUR FRIENDS BY EMAIL:

SUBJECT: Tax Cuts

TAX CUT OPINION POLL

Some recent opinion polls have indicated that many New Zealanders are not in favour of the tax cuts promised in the election if it means that the government will have to borrow to fund them.

The New Zealand Centre for Political Research would like to find out whether the public are in favour of the tax cuts planned for 2010 and 2011 still going ahead if it means that the government will have to cut wasteful public spending to fund them. The results of this poll will be sent to the Prime Minister and the Minister of Finance.

If you would like to take part in this one-question poll, please click here>>>

If you would like to join the NZCPR Research Panel and take part in future surveys, please click here>>>

NZCPR ADMIN
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