Treasury still has some thinkers

Flat tax was put forward to Bill English as an option according to the NBR.

Pearls before swine some may think, as Bill English could never have the gumption to argue for a flat tax. He has none of the backbone needed to argue that just because people earn more, does not mean they should pay an ever higher proportion of their income to the state. You do not consume more of what the state spends its money on just because you earn more. Too many of the envy brigade on the left would say it is "giving money to the rich" when in fact it is letting people keep more of THEIR money.

Flat taxes are common in former communist countries like Albania, Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Romania, Russia and Slovakia. Indeed even former Yugoslav republics of Macedonia, Montenegro, Serbia and Bosnia Hercegovina have adopted it. Hong Kong has close to a flat tax system.

So moving towards a flat tax IS good policy, it isn't extreme, it isn't uncommon, it is a sensible way to show New Zealand as a low tax small government economy, and it would help attract people. It does mean getting rid of the two top income tax rates, and that means some proper culling of the state. Not the limp wristed "efficiency gains" that haven't delivered.

It means abolishing agencies and functions.

It means saying the government needs to do less.

You'd think a government with ACT in it, might start to do something about it. Wouldn't you?

Kim Jong Il to Barack Obama

Dear Great Leader President Barack Obama of the United States of America (hope I have all your titles right).

Well done on winning the Nobel Peace Prize.

I wanted it, but the Nobel Committee keeps ignoring the nomination every year. I mean I've never attacked any countries, not since my dad died, and besides he IS still the President, so any rescuing I undertake of civilians oppressed in other countries is not entirely up to me.

You'll find the international peace movement recognises that your country not mine has been a grave threat to international peace and security for years. I come from a land of peace, nobody fears crime or war walking our streets, except for the nuclear threat from your country.

Still, I am grateful you haven't threatened the Democratic People's Republic of Korea, haven't interfered with our peaceful possession of nuclear weapons and desire to reunify the country by expelling the South Korean puppet clique, destroying the abomination of Seoul and peacefully negotiating a surrender peace treaty with the United States. All of the people in Korea excluding the traitors and their children and grandchildren in the gulags and the expendable south Korean lackeys of imperialism seek swift reunification and friendship with peace loving peoples of the world.

So in that spirit of peace, I hope you will immediately withdraw US troops from South Korea, just as previous President Jimmy Carter once indicated, but then abdicated on.

To show our glee at your win, my country has celebrated in the traditional way.

In solidarity, Kim Jong Il, Chairman of the National Defense Commission, Supreme Commander of the Korean People's Army, and General Secretary of the Workers' Party of Korea.

Gordon can do it, but John?

Pause for a moment, I am going to praise Gordon Brown.

You see he's about to announce a privatisation programme. Yes you read right. Privatisation, eight months out from an election. It is worth around £3 billion of assets in the first phase, but up to £16 billion overall.

What sort of assets? Well it isn't just surplus pockets of land. It include the sort of assets juveniles would call "strategic":
- Channel Tunnel Rail Link (Folkestone to St Pancras);
- Dartford Crossing (the eight lanes of highway crossing the Thames that completes the M25 ring);
- its stake in Urenco (nuclear fuel enrichment company);
- a third of the debt in student loans;
- The Tote (government owned bookmaker).

So yes, you can privatise a road, a major one at that, which has no serious alternative routes for many miles.

The reaction of the other parties? Would that play this against Brown? Well no:
- The Guardian reported a Conservative Party spokesman saying "Given the state the country is in is probably necessary but it is no substitute for a long-term plan to get the country to live within its means";
- Liberal Democrat Treasury Spokesman Vince Cable said "Given the state of the public finances, asset sales, at least in principle, make sense" but he expressed concern about selling land in a depressed market and how badly the government was in getting value from its privatisations.

So in other words all three main political parties support privatisation.

However in New Zealand it can't be so. National ruled it out to get elected, Labour was the nationaliser extraordinaire, and only ACT of the parties in Parliament warms to privatisation (and even then not too loudly).

Now the UK government could sell much more than that list, but the nature of what is on the list is what is positive. Particularly, given my interests, the Dartford Crossing. It's a tolled crossing comprising two 2-lane tunnels for northbound traffic, and a 4-lane bridge southbound, and it is heavily congested (with plans proposed for an additional crossing). Selling it and letting the private sector choose the best way to expand it will demonstrate to the naysayers who think roads can't be privatised.

Imagine, for example, Auckland's Harbour Bridge and approaches privatised (and tolled) so that another crossing could be financed and built.

However we know it wont happen, for now, but it would be nice if the debate could be had without ghosts of Winston Peters and Jim Anderton taking things to the level of the banal ("but it's strategic, what happens if they want to sell it for scrap").

The New Zealand Government has a whole portfolio of SOEs that could and should be sold, easily, without even going near roads, schools, hospitals or dare I say Kiwirail. There is no good reason why Genesis, Meridian and Mighty River Power are in state hands, when Contact and Trustpower are private sector competitors, and most people don't know whether their power company is private or state owned.

It's time to talk about privatisation - if it isn't controversial in the UK, with its plethora of nanny state quangoes and laws, why so in New Zealand?

ACC deficit shows monopoly failings

ACC has a statutory monopoly. Labour claimed this is the most "efficient" way of insuring personal injury by accident, yet it has proven incapable of managing its own finances in a way that doesn't mean taxpayers and levy payers have to bail it out.

No other country has the socialist style no-fault statutory monopoly state insurance scheme New Zealand has. The claims by its advocates that it is "lauded" the world over seem very empty when no others follow, and this sort of news comes to light.

I've written before on how to change this, individualise the whole system so everyone buys ACC cover for non-work accidents, open it up to competition, so the risk is spread among multiple insurers (coverage for past accidents would either remain with a legacy ACC or tendered among competitors), and then return the right to sue between insurers and let people choose not to be insured. Care would need to be taken to ensure tort law was based on objectively reasonable criteria, but if it came about after a culture of personal insurance, the risks of aggressive tort claims could be minimised. Besides, if you insure yourself against what others do to you, then you have little to complain about.

Of course at the same time, road owners could demand drivers be insured before using their roads, as could others when you use their property, but overall the risk would be spread and shared. Those who undertake risky behaviour would pay, those who don't, wouldn't.

The monopoly has failed, miserably, once again. The measures National are announcing are trying to patch up a system that is breaking. It's time to move fast to open the employment and motor vehicle accounts to competition as a first stage, then individualise the whole system. Then those paying to cover the liabilities of past poor decisions end up being those the system carries the most risk for.

Obama gets unwelcome supporter

Fidel Castro said of Obama winning the Nobel Peace Prize "I must admit that in this case, in my opinion, it was a positive step" according to the Daily Telegraph.

The best sentiments I've noticed on this, is that Morgan Tsvangirai, who had been mooted for the prize, has been imprisoned, tortured, beaten up repeatedly, lost his wife in an accident, and STILL decided for peace in Zimbabwe, to form a joint government with the murdering gangsters of Zanu-PF.

Apparently that wasn't good enough. Not good enough for an African man in Africa at the front line of essentially civil war and insurrection, in a truly bankrupt economy, to risk himself so much to bring peace and justice to Zimbabwe. He may have been able to do much for Zimbabwe with the US$1 million prize.

Instead, a group of Norwegians worshipped words not deeds. Obama did not need encouragement to pursue he soft approach to international relations, and did not need the money to give to charity.

It is enough now that the Nobel Peace Prize has been discredited umpteen times in the past, next year I can't wait for the latest joke to come from the Nobel committee. Maybe Oscar Wrigley can win the prize for science, because no doubt he has great potential.