ACT's great chance

- Low flat tax;
- Choose private, integrated or state schools and funding follows every child;
- Have a health insurance account you choose to get the care you need;
- Choose the accident and sickness cover you want based on your risk;
- Pay for your own retirement nest egg that can be inherited without the state.

No it's not a libertarian agenda, but it should be ACT's. An agenda to reflect its name, the Association of Consumers and Taxpayers. An agenda that means school funding follows parents' decisions, that means what you pay for healthcare reflects your risk and waiting lists are traded for hospitals dealing with customers who expect service. Moving the no fault flat rate ACC model to one where people with low risk pay less premiums than those that are high risk, and finally making retirement a personal responsibility. Big tax cuts so people can pay for health and sickness insurance that reflects their risk, responsibility and what they want.

It would be a point of difference from National, but will it happen?

Following on from the Libertarianz annual conference in the weekend, some of the usual inter-necine mumblings between ACT and Libertarianz have reminded me of what we should all be arguing about - quite simply this election is the best opportunity in recent history to present freedom at the ballot box since the 1980s.

Why?

The 1990s National government once had a strong appetite for economic freedom, and was still privatising and deregulating even up to 1999 (ACC and Postal services being the last example), although it had virtually no appetite for personal freedom. ACT and Libertarianz both grew in 1996 and 1999 because of increased frustration at the limp wristed attitude to freedom of National After National lost in 1999, it struggled to regain power against Labour (which of course has no interest in shrinking the state). In 2002 National offered next to nothing and ACT had its best ever result.

However, the last election was difficult for both ACT and the Libertarianz. National in 2005 offered a semi-libertarian leader and a platform to cut taxes, privatise and abolish race based privilege by the state. Supporters of ACT and the Libertarianz voted National as they saw the chance, which appeared distant only a year before, that Labour could be defeated. Funnily enough having nearly won an election on principle, National has run a mile from it.

Labour is finished. National can almost sleepwalk to victory, and as it does so it has moved to the centre. National is Labour lite, and no one who wants a smaller state and more freedom can see a vote for National being good for anything other than replacing Helen Clark with John Key (maybe worthy but not much more than that).

So this is where ACT can come in.

Sir Roger Douglas in his widely reported ACT conference address advocated a positive agenda that is NOT all ACT Policy, including shifting healthcare to an insurance based model, education vouchers, make the first $20,000 tax free, drop the 39% tax rate, implicitly opening ACC fully up to private competition including personal accident and sickness insurance (replacing sickness benefit perhaps). Positive stuff. Frankly, with Sir Roger Douglas ACT has a chance to have a presence and to debate head on, ON PRINCIPLE, with Key and Clark. After all, Clark was in Cabinet with him.

ACT could advocate zero income tax like Sir Roger did in his book Unfinished Business, or flat tax like it did in the late 1990s. However, regardless of detail it can outline a vision of less government and substantial more choice for education, health (and ACC and sickness insurance which are ignored but directly related) and retirement. Kiwisaver for example could be shifted into private accounts that could replace National Superannuation in due course.

This agenda could inspire people to think "wow I could send my kids to private school without paying twice" or "i can live a healthy lifestyle and pay less for healthcare AND have my own insurance account to ensure I get cover when I need it". At one time Sir Roger Douglas believed 50% of voters would go for this, then he reduced his ambition to 30%. Surely 10% would be attracted by this prospect of serious reform of education, healthcare, ACC, the welfare state and cutting taxes. Especially with the credibility of Sir Roger Douglas on the ballot.

Whilst National limps to power, ACT could inspire those who want serious change to vote for it as a viable coalition partner, instead of the morally bankrupt Maori and NZ First Parties.

If not now, then when?

Oh and Libertarianz? Don't worry, there is still room there. I don't expect ACT to advocate privatising schools and hospitals, ending the welfare state, abolishing the RMA, reforming drug laws, abolishing laws on blasphemy and the rest. No. ACT is not the libertarian party. Libertarianz is a bigger package, a complete one to shrink the state on principle to its core functions. Personal liberty has never been much on the ACT agenda, although to be fair in the last three years ACT has been far better on this front than it ever was before.

ACT DOES have Sir Roger Douglas who has more political courage than virtually anyone in National, and it has Rodney Hide who, on a good day, can be quite inspiring. If you can't ride a wave of anti-Labour sentiment to grow, become a critical fixture for National and pull National towards some serious reform then you should give up. Don't be limp wristed, be bold, be like the Greens, be advocates for consumer choice, taxpayer rights and private enterprise. Attack the inability of state health and education monopolies to deal with people's needs, demand that government shrink and taxes shrink with it.

It is, after all, what you exist to advocate. After all, do you think a National Party Cabinet would be better or worse off with Sir Roger Douglas and Rodney Hide on it? How likely is it if nobody really knows what ACT is offering?

A lousy tax cut idea

Idiot Savant at No Right Turn talks of speculation in the Sunday Star Times that Cullen's tax cut might be a "social dividend" flat payout of $1000 per "low income earner" (otherwise known as the Labour core).

He describes this as "a good idea, and certainly far better than anything offered by the "tax cuts for the rich" brigade. It targets support at the needy rather than the greedy,"

Now I'm not one to look a tax cut in the mouth, but he's seriously wrong. He isn't advocating a tax cut after all. A tax cut, you see, means your net income increases as the government takes less of what you earn. You get a steady amount each fortnight or month, can afford to save it, spend it, or do as you wish. It is permanent, sustainable and reduces the size of the state (which I acknowledge isn't important to him, as he sees it as the best way to deliver health, education and social insurance monopolies).

What will happen if people on low incomes get $1000 one off? Well, there will be a lot more big TVs being sold, some fashion trips, a few more new car stereos, some trips to Australia and the rest. In other words, it will be used to buy consumer goods. Now that, in itself, isn't a bad thing, except that this dividend wouldn't be paid to everyone, especially the majority who pay 90% of income tax. Don't forget those on the top tax rates pay the vast majority of income tax, but to argue they don't deserve a dividend is grossly unfair.
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No, Idiot Savant wants you to keep working 2 days a week for the beloved Nanny State and be grateful that with every extra dollar you earn, you only get to keep 61c of it, even before you give up a 12.5% surcharge of what you buy to the state, be damned grateful we let you keep that you rich thieving bastard (the undertone being "you don't fucking deserve what you earn, just wish the revolution would come one day and you'll get yours you bourgeoisie scum").
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Far more generous is the Libertarianz policy announced in the weekend of immediately creating a tax free threshold of $10,000 for everyone, which would mean those lowest earners (and students, children and others earning a bit here and there) would be free of income tax, but would also be a boost to all other income earners.

You see cutting taxes does not "disproportionately" benefit the rich, given it was their money in the first place. That is the fundamental difference between statists and libertarians. Statists think taxes are "society's money" or "government money" and getting a tax cut is "taking it from society". Libertarians believe it is your money that the government has taken, and a tax cut is giving you back your own money. No pure tax cut can be disproportionate by definition.

Of course he goes on to advocate a universal basic income, a concept some libertarians advocate as a transitional step to replacing the welfare state, using Milton Friedman's negative income tax concept with a flat tax. That idea, as a transitional measure, has some merit for debate. However he sees it as basically freeing people from work "It would substantially improve the actual, substantive freedom of people to lead their lives how they wish". Well for people who want to not work. You know those useful productive dynamic people who want to live off of the back of everyone else until they decide not to, while we all pay for them. Of course it would reduce the freedom of people for the rest of us having to pay for everyone else.

So there you have it - the left want people to get an income for doing absolutely nothing - their birthright to have everyone else pay for them to live, and not just survive but to be not uncomfortable. They want everyone else to pay for it, because - well they believe once you get above average you owe it to pay for those below - and not only that, if you ask for a tax cut when you are "rich" (above average income) you're selfish and evil.

It's quite despicable.

Cruel and deliberate?

Sue Bradford, champion of those who live off of the money of others taken by force. She thinks welfare benefits should be enough to have a satisfactory lifestyle, not a last choice to cover bare necessities whilst people seeks to become independent. According to the NZ Herald she claims beneficiaries face "deepening poverty" when in fact they just don't keep up with the incomes of those who work - funny that - shouldn't welfare be enough for subsistence?

No, Bradford and the Greens think if the economy grows then so should welfare. It shouldn't just be about keeping someone fed, clothed, housed and heated, but maintaining a certain RELATIVE standard of living compared to everyone else, even though it hasn't been earned. That's the difference. The Greens are Marxists who see the welfare state as a means of taking from the rich and middle class and giving to the poor, and so they would cheer on a doubling of benefits.

However they fail to even acknowledge the absolute destitution of ambition, effort or motivation of many on welfare. Take some examples listed by bloggers:

No Minister's tale from Murupara;
No Minister's tale from Mangere Bridge;
Oswald Bastable's example of Brits on welfare.

Sue, people who work hard and save are sick of paying for those who treat welfare as a choice, who proudly do nothing. Welfarism has failed, miserably. A radical change is needed, for starters it needs to be time limited and those on welfare should receive no more for having more children.

Ultimately the whole damned thing needs to be abolished, and by the way Sue, then you and all those who care so much can do more by yourself, put your own money where your mouth is. You could do far worse than to listen to Lindsay Mitchell who knows this area only too well.

Some more questions for Dr Cullen on rail

And by the way, John Key and Maurice Williamson will need to answer them too, after all if you're not going to sell it....


Who will be responsible for allocating subsidies to the "new" NZR, will it be the soon to be created New Zealand Transport Agency which will also be responsible for the state highway network (so has a conflict of interest), or the Ministry of Transport, which doesn't have a significant capability in making funding decisions?

Will the 60 year + old rolling stock for the TranzCoastal, Overlander and TranzAlpine be replaced? When? For how much and will it be subsidised?

What is the strategy for the following lines that are not used? (Taneatua, Whakatane, Rotorua, Rapahoe, Castlecliff)

What is the strategy for replacing the vast majority of the diesel locomotive fleet which has engines built in the 1970s?

Will you be owning the new trains being bought for Wellington that are partly local authority funded, or will GWRC still own them?

Will you operate a transparent accounting structure that separates overheads, fixed and variable costs for each line, so that it becomes clear what routes you subsidise and by how much?

Will you subsidise trains by paying for services to be operated or just for rolling stock and locomotive, regardless of how well used they are?

How will you ensure neutral treatment of the coastal shipping industry now you will be a major player (and competitor) with the ferries?

Will you let the "new" NZR get into road freight or not?

Will you let other companies buy their own locomotives and rolling stock to operate trains or have any restrictions other than safety, or any capacity limits? In other words, will you operate an open access railway?

Will you be building any new lines and if so, why, what are the net benefits?

What policy will you have about closing lines and stations, or are they all to remain perpetually open?

How much taxpayers' money are you budgeting for rail infrastructure, rail services and rail rolling stock, beyond what is funded from the National Land Transport Fund through Land Transport NZ?

Will the railways be transferred to NZRC and will it still be expected to make a profit (as it did when it originally ran the lot from 1982 to 1990)?

How will you ensure the subsidised railway system wont cross subsidise the rail ferries?

Will you subsidise any passenger services besides commuter services in Auckland and Wellington?

Aussies about to fritter away their surplus

It is Australia's Budget Day. The booming Australian mining sector has seen a massive tax windfall for the Australian Federal Government, with one economist suggesting A$20 billion should be put away and invested, much like Norway and other governments do, to fund future liabilities and to cover federal spending for a "rainy day". However no, the Rudd government (and it's not much worse than Howard) will spend it like the proverbial drunken sailor, although it will also give tax cuts. The result is further bloating of the Australian Federal Government, further dependency on middle class and corporate welfare, and simply sheer waste, when Australians could be enjoying low flat federal taxes and a diversifying economy, rather than one that milks commodities and keeps the rest of the economy propped up on transfers.

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However, whilst the best time to squeeze efficiency out of the public sector would be now, the incentives to do so are the poorest. Why do politicians love spending other people's money so much, and why do people let them do it?