Jul 31, 2008

Why We Keep Warning The Government About Risk

We are indebted to No Minister for this quote from Michael Bassett

Winston Peters made a name for himself in the 1990s with his crusade against some businessmen who used tax avoidance schemes to benefit themselves. He tried to paint himself as the “Mr Clean” of New Zealand politics. Many believed him. At the 1996 election he won 17 seats for New Zealand First, and became Deputy Prime Minister and Treasurer in a coalition government with National.
However, New Zealand First was never more than a front for a lazy, self-obsessed showman. It had no substantial core of supporters except for a disparate collection of the discombobulated and the edentulous. Winston has twisted and turned, always looking for some kind of financial saviour and new political supporters. In 1999 his party almost disappeared, surviving the election with only 5 seats because he hung on to Tauranga by the slender margin of 63 votes. New Zealand First appeared to be in its death throes.
This was the point where the racing industry came galloping over the hill. Thanks to generous financial support from several major industry players, New Zealand First clawed its way back to more than 10% of the party vote and 13 parliamentary seats in 2002. According to Tony Wall, the popular Sir Patrick Hogan, unbeknown to most New Zealanders, paid for a lot of Winston’s election advertising and rounded up votes for New Zealand First. They formed a mutual admiration society that survived through the 2005 election by which time Winston’s party was suffering another attack of electoral anorexia. Indeed, it almost died. Winston finally lost the Tauranga seat that he’d held since 1984, and his party only just got above the 5% MMP threshold. It’s not too much to say that the money paid for New Zealand First’s campaign by the racing industry got the party back into Parliament. Then the racing industry’s investment paid a dividend in the form of a gusher from the government, a bigger return it seems, than any punter will ever receive either on course or through the TAB. Tens of millions of dollars, by the look of it, much of it taxpayers’ money has flowed into the racing industry over the last three years.
How much of all this has been known to Helen Clark and her government, and for how long? When she gave the ministry of racing to Winston Peters did she know the extent to which New Zealand First had become beholden to the racing industry? Did she realize when her ministry agreed to the reduced totalisator duty from 20% to 4%, said to be worth $32 million per annum to the racing industry, that it could be seen as payback to her racing minister’s big backers? The same with the new tax write-down periods for race horses, and this year’s budgetary $9 million for co-sponsorship schemes? Has Helen Clark kept an eye on Peters’ appointments to the New Zealand Racing Board to which, according to Wall, he’s appointed people with the backing of the big racing industry players?
No wonder top racing figures in the country regard Winston Peters as the best racing minister they’ve had. I was once Minister of Racing myself. I was subjected to arguments for tax changes, just as other ministers have been over the years. But like them, I couldn’t see any fairness in screwing the taxation scrum in a manner that specifically favoured one group within the community.
And under First Past the Post, the government I served in was never likely to be subjected to the sorts of pressures that can develop when election outcomes are usually cliff-hangers.
The industry’s moment came under MMP, especially when in 2005 the election outcome was unclear. The industry got their man into a position of influence. So eager was Labour to retain office that ministers appear to have looked at the wall ever since they took office for a third time while payouts have been made to Winston’s backers. On the face of it, this looks like a scandal that dwarfs the Winebox. It’s time Tony Wall received a bit more encouragement from the mainstream media. He must surely be the best investigative journalist in the country. What he has told us appears to amount to corruption on a grand scale.