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Dr Muriel Newman

Stealing an Election

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Election 2014Elections should be a contest of ideas. Once every three years political parties are given an opportunity to pitch their ideas to voters on how they would run the country. The campaign period gives voters a chance to carefully examine the policies of the parties, and to decide on the sort of government they would like to see in charge of the Treasury benches.

This election campaign has, however, been effectively stolen from voters. Left wing activist Nicky Hager clearly planned to dominate the campaign period with the publication of his book of hacked emails. He has done this before. He knows how the media works and how they feed on a diet of scandal and sensation. He knew releasing private emails would overshadow the campaign and give him unprecedented publicity.

Opposition politicians love government scandals too.  Scandals not only enable them to score multiple points against the incumbents, but they provide them with an opportunity to claim their own image is whiter than fresh snow. Their innocence and purity is of course fake. Politics is not called the “dark art” for nothing.

Politics is and always has been a very tough business – tougher than anything else. To survive and thrive politicians have to learn to play hardball. Those who can’t or don’t want to play, generally do not last in politics.

It has never been any different. In fact, those politicians who have been bleating the most loudly about how dreadful it all is and calling for inquiries – pretending they would never conspire with others to try to discredit their opposition – are simply playing the game. They are gaining easy publicity from a scandal obsessed media that wants to keep the story running for as long as they possibly can.

But while this whole affair has been played ad nauseam, the elephant in the room is the question about how it can be that Nicky Hager can receive stolen goods and knowingly profit from them by selling the hacked emails in his book, without being charged by the Police for the crime of receiving. Under Section 246 of the Crimes Act 1961, “Every one is guilty of receiving who receives any property stolen or obtained by any other imprisonable offence, knowing that property to have been stolen or so obtained, or being reckless as to whether or not the property had been stolen or so obtained.”

According to Section 247, the penalties for the crime of receiving, depends on the dollar value of the goods received. If the goods do not exceed $500, then the maximum penalty is three months imprisonment. If they are valued between $500 and $1000 then the maximum penalty is 12 months imprisonment. And if they are valued at over $1000 then the maximum penalty is seven years imprisonment.

Hager clearly sits in the latter category.

But it isn’t just the owners of the confidential emails who are the victims of Mr Hager and his partners in crime – it is also New Zealand voters. The media’s fixation on the scandal has meant that they have largely ignored their crucial Fourth Estate role of reporting party policies and asking tough questions. This means that the full implications of key policy agendas have not been revealed.

This is a potentially dangerous situation.

In case anyone needs reminding, it was the former Labour government’s policy agenda of tax and spend that pushed the country into a recession in early 2008, months ahead of the onset of the global financial crisis. The government had become bloated and profligate. Excessive government spending had forced up interest rates to amongst the highest in the OECD. Even though there was a serious shortage of unskilled workers, the welfare system was failing to move beneficiaries into jobs. The economy was out of balance, the labour market was inflexible, the bureaucracy was stultifying, and small businesses were going to the wall.

While the National Government’s focus on lowering the tax burden, reducing government spending, and removing the roadblocks to growth, has certainly turned the situation around, this is no time for complacency. The global economy is far from stable. Our own exporters have been knocked back over recent weeks with commodity prices tumbling in many markets. Brazil has just slid into a recession, as has Italy – for the third time. The Greek economy is continuing to contract, France’s economy is flat-lining, even the German economy is shrinking. In fact the eurozone as a whole has had zero growth and the Eropean Union grew at just 0.2 percent.

Add to this the major geo-political unrest, and the economic outlook is extremely uncertainly.

That means these are times for caution – for prudent economic management. Extravagant election promises need to be brushed aside and the hard questions asked about who is capable of running the country in troubled times. This should be the primary issue of the campaign.

So what should we be looking for?

In 2007, policy analyst Phil Rennie published a report into the Labour Government’s spending binge.[1] He examined social statistics to see whether New Zealanders were better off as a result of the massive government spend-up. What he found paralleled many other studies from around the world, which showed that government spending has little impact on social improvement once it exceeds a critical level of around 30 to 35 percent of GDP. At that stage, instead of providing essential public good services which otherwise wouldn’t exist, the government starts taking over programmes that were previously the responsibility of individuals.

Another important research paper published in 2011 by the Institute for Economic Affairs, looked into the drivers of economic success. It analysed the results of dozens of studies involving countries from all around the world, to find that increasing taxes and government spending do not improve overall wellbeing. They concluded, “the surest way to increase economic growth is to reduce government spending and taxation.”[2]

What this and other research shows is that all the political-speak about boosting growth through higher taxes and increased public spending are simply weasel words.

History shows the only sustainable way to improve national prosperity and living standards is by reigning in government spending and lowering the tax burden on the nation. When taxes are low and a government is living within its means, the energy and drive of individuals who want to get ahead is released. It is their collective effort that brings jobs and growth and prosperity to a nation.

On the left of the political field are Labour and the Greens. If Labour falls in the polls, the Greens usually rise, giving their policies more weight. Both parties want to penalise wealth creators with an increase in the top rate of income tax to either 36 cents in the dollar or 40 cents. Both parties want to raise the tax on trusts, to either 36 cents in the dollar or 40 cents. Both parties want a new capital gains tax of 15 percent on all businesses, investments and farms. The main exemptions identified are for the family home and personal assets. For a comprehensive analysis of Labour’s capital gains tax proposal, see Frank Newman’s excellent analyses HERE and HERE.

Labour and the Greens have signalled higher ACC levies, a new carbon tax, and a variety of eco taxes and levies. They want to raise the minimum wage towards their goal of the $18.80 living wage. They plan to build thousands of houses, pay baby bonuses, extend paid parental leave, buy back state assets, establish a new Green bank, nationalise the electricity industry, and remove the 90 day trial period for new workers.

Dominating the right of the political field is the National Party. They have navigated the country through the financial crisis and disastrous earthquakes to a surplus, while continuing income subsidies to protect the most vulnerable in society. Their focus continues to be on wealth creation – increasing economic growth through reduced government spending and lower taxes, improving infrastructure to ensure that provincial and rural areas can participate in New Zealand’s economic development, and opening up new trade markets. They plan to lower taxes further when the economy allows them to do so and they are committed to further reducing the bureaucracy as the best way to create jobs, growth and rising living standards.

Examining political party manifestos is a sobering business. Because there is no requirement for party promises to be costed or even realistic, many are over-blown. One party that believes it is a serious player has provided no details at all to back up its policy slogans – a situation that must surely be eroding the confidence of potential voters.

This week’s NZCPR Research Associate Mike Butler has looked carefully at the various party manifestos, and has provided a comprehensive analysis of their spending promises – here is a rundown from the smaller parties:

“New Zealand First wants comprehensive compulsory savings, he wants the New Zealand Superannuation Fund to buy shares in New Zealand infrastructure companies, and he wants to buy back SOE shares at purchase price.

“Colin Craig’s Conservative Party has nothing to say on the economy other than no tax on the first $20,000 of earnings.

“The Act Party wants to build wealth by focusing on economic growth, encouraging individual responsibility, raising standards of achievement in education, maintaining sound economic management, including a balanced government budget, price stability and a free and open market economy.

“United Future embraces free trade agreements, would review legislation that burdens farmers, and the tourism sector, and require that all foreign charter vessels are to remain outside a 25-mile limit.

“The Maori Party appears to have run out of ideas. The Party achieved its reason for being, namely the repeal of the Foreshore and Seabed Act 2004, nudged the constitution towards including the Treaty of Waitangi, got the government to sign up to the United Nations Declaration of the Rights of Indigenous People, and, shovelled a lot more welfare towards Maori through the so-called one-stop Whanau Ora programme.

“Hone Harawira’s Mana Party has no clues on the economy and is big on taxing the rich to fund the idle. Mana would replace GST with a ‘Hone Heke tax’ on financial speculation, would exempt the first $27,000 earned, and reintroduce a more sharply progressive yet undefined tax scale, introduce a significant capital gains tax on all but the family home and Maori land, and reintroduce inheritance tax but exclude land held communally on behalf of iwi.

“For an extremely wealthy guy, Kim Dotcom appears to have few ideas about building the economy… Suggested amendments to the Copyright Act are not surprising for a foreign national trying to avoid extradition to the United States on copyright infringement charges”. For more details see Mike’s full article HERE.

With only two and a half weeks to the election one hopes the focus will move from stolen emails to substance. Whether the media will give policy some breathing space remains to be seen. Should they continue to entertain themselves with sensation and sleaze instead of policy and informed debate at this critical time then the country will be worse for it and the media as a profession will have some explaining to do.


Would you like to see Nicky Hager held to account for the part he has played in the criminal activity surrounding the stolen emails?  

Click HERE to see all NZCPR poll results



1. Phil Rennie, New Zealand’s Spending Binge
2. Patrick Minford and Jiang Wang, Public Spending, taxation and economic growth – the evidence