Newsletter 31

14 September 2014

6 days out

It’s going to be close.

Three years ago we analysed the accuracy of the poling companies. We found the most reliable to be TVOne Colmar Brunton and Ipredict, and by a long shot.

So we decided to see what they were predicting now, and averaged their polling to see what the result would be. Here it is.

table

The critical issues are:

  • The number of seats the Maori Party wins, or loses. Ipredict has the probability of the Maori Party winning two seats at 18%, one seat at 57% and no seats at 29%.
  • Whether the Conservative Party can reach the 5% threshold. Should they do so the “right” block would have 64 seats, against 48 on the left and 9 NZ First.
  • Act winning Epsom.  Should Act not win Epsom, but the Conservatives reach the threshold, National could govern with the support of the Conservatives.
  • Should Act not win Epsom and the Conservative not reach the threshold, then NZ First would hold the balance of power.
  • The number of votes National and Labour shed over the next six days. Based on recent poll changes the Conservatives are gaining about a third of the votes lost by the two major parties, while NZ First is gaining about a quarter.

 

The big reveal

The biggest loser out of tomorrows “big reveal” could be Mr Dotcom and the Internet-Mana Party.

Dotcom says he will produce emails to show New Zealand is engaged in the mass surveillance of New Zealanders and collecting their electronic metadata. The Prime Minister says they only have some of the emails and he will produce evidence to show that a mass surveillance plan (in response to cyber attacks targeting New Zealand businesses in 2011) was considered but rejected. If the Prime Minister’s evidence comes up trumps Internet-Mana will have even less credibility than it does already.

To date, Internet-Mana has thrown a lot of money at the campaign and a lot of expletives at John Key, but with little to show for it. The irony is that even if National is damaged by the big reveal, it’s likely to be the Conservative and NZ First parties, rather than the Internet-Mana Party, that benefit.

Dotcom has set himself a high bar of expectation given the staged timing and orchestrated nature of the event. If he does not deliver tomorrow the big bang will be a big fizzer. Hone Harawira and Laila Harre will be worried.

 

Maori party on justice

In a press release dated 11 September 2014, the Maori Party says, “it will initiate a review into the entire justice system including the police and courts ensuring the system is aligned with tikanga Maori and will address institutional racism… “We know there is institutionalised racism in the system that is resulting in more Maori and Pasifika peoples being apprehended, arrested, charged, convicted and imprisoned and trialled than Pakeha. All the research and statistics indicate this to be so,” says Te Ururoa Flavell.

We don’t believe this is a case of institutional racism – more a case of the Police apprehending criminals.

 

CGT questions unanswered

The NZ Shareholders Association has written to David Parker to ask a question about Labour’s proposed Capital Gains Tax: “Investors in foreign listed trusts or companies are taxed at present, if bought with the intention of selling for capital gain, and if over NZ$50,000 on the basis of an assumed rate of return of 5%. The Fair Dividend Rate (FDR) tax has been a failure as a revenue generator, and the use of the Australian listed indices has made the preparation of tax returns complex, costly and uncertain. No figures exist to test the success of this tax. Even accounting practices often avoid giving advice on returns involving FDR… It is important that shareholders know before the election whether Labour intends to retain the existing capital gains tax, and to add 15% to it, and whether it intends to retain the FDR Tax, which involves the opening value plus costs, and closing value of the portfolio plus dividends and sales.”

We understand David Parker has not replied. We guess that detail has not quite been sorted out as yet!

 

Peters supports Labour’s CGT

Winston Peters has clarified his party’s position on tax cuts – sort of. He says he is against National’s proposed signalled tax cuts for low and middle income earners. He also stated he would not support Labour’s CGT unless they changed the rules about offsetting capital losses. From this one could logically conclude he would support the CGT if that aspect was changed, although to be fair attempting to divine logic from mouths of politicians is not particularly easy during election campaigns!

Labour’s policy is that capital losses could be offset but only against capital gains and not other forms of taxable income, which we would agree with Mr Peters, is “demonstrably” unfair. Exactly what Mr Peters is proposing instead was not stated but it is curious that this appears to be the only issue he is concerned about regarding the CGT – given the policy has so many flaws.

 

Quotable quotes

“What scares me are the policies that we see in the…fringe parties…because a few of them, quite frankly, are quite mad… Most of the small parties are not pursuing policies that are good for New Zealand – they are pursuing policies that are good for a small constituency.” – Shamubeel Eaqub, NZIER principal economist

 

True lies

Unfortunately there are a number of lies being told in the election that have been repeated so often that they have become embedded as truth. Here are some of the ones that come to mind:

  1. That speculators don’t pay tax on capital gains. They do as we, and many others, have detailed in recent weeks.
  1. That 250,000 kids live below the poverty line. The exaggeration comes from the way “poverty” has been redefined by politicians and child poverty advocates. In New Zealand, families are considered to live in relative poverty if they receive less than 60 percent of median disposable household income after adjusting for housing costs. That is a measure of income distribution, not poverty. It’s shameful that the media has not challenged the alarmist politicians and activist groups over this misleading measure.
  1. The wage gap is widening. It’s not.
  2. There is no relationship between unemployment and a rise in the minium wage. There is. One of the most amusing media segments we have seen recently was a piece done by TV3 about the minimum wage. They interviewed some good business folk from Foxton, which the day before had been mentioned in the Leaders’ Debate. Most were sensible, and said that an increase in the minimum wage would damage their business and would result in people losing their jobs. However, a local cafe owner said the increase was affordable and that it was the right thing to do. We wonder how she responded to her employees, who would no doubt have approached her to ask for a $2 increase in their hourly rate, after seeing her on TV!
  3. “There is a right there that dates back to something called the Treaty of Waitangi that allows us to have these seats under kawanatanga.” – Maori Party leader Te Ururoa Flavell talking about the Maori seats.


Leader debates 

We disagree with commentators who say David Cunliffe has done well in the leaders’ debates. In every debate David Cunliffe has parroted scripted sound bites and repeated them whenever he has struggled with specifics – like the detail of his capital gains tax; and his displays of being earnest appear so staged and scripted that it just does not work. John Key on the other hand has come across as having a grasp of reality and an appearance of genuineness. On that score there has been no contest.


Maori seats on local council spreads

We have recently learnt that yet another district council is looking at race based privilege around the council table, but they are doing so in secret.

Last week the Whangarei District Council had a behind-closed-doors workshop to discuss appointing iwi representatives onto their standing committees. We can’t see any reason why that discussion and the reports tabled should be confidential, other than councillors not wanting to make the public aware that it is a matter being considered. See “RMA racketeers” HERE.


5PM polls

Last week we asked: Do you expect National’s proposed tax cuts for low and middle income earners will be good for New Zealand?

84% said yes, 14% no.

Comments include:

No country has successfully taxed itself into prosperity and New Zealand has no chance of being the first. However, National if is elected, it needs to be less timid and reduce tax across the board – a flat rate of tax paid by all with no initial tax free threshold.  Peter

Tax cuts will give those in the middle and low income brackets the reasons and incentives to be more productive, earn more and thus pay more tax so the net result will be a similar tax intake to that which it now is. Derek

Pay off debt. No political stunts. Just common sense. Mike

Tax cuts are certainly required but they should be aimed at company tax. Company tax needs to be substantially lower, say 15%. This would attract large international companies to set up in NZ. We already have all the other ingredients…..an educated population etc. Ronmac

But must be accompanied by alternative revenue sources rather than spending cuts. Graeme

Any help for tax payers is a good thing after all it’s their money! David


This week’s poll

Our last poll before the election asks: Have you changed your mind during the election campaign about who you will vote for?

To vote, please visit www.5pm.org.nz and look on the RH sidebar.

The 5PM Facebook Page

All of the poll comments from last week have been posted on the 5PM Facebook page HERE.

And finally, please feel free to pass this newsletter on and help us spread the message about 5PM!

Regards
Frank and Muriel Newman