Fran O'Sullivan: Conspiracy theories driving agenda

The Beehive has lost all sense of humour as far as the VBC - otherwise known as the "vast business conspiracy" - is concerned.

That was made plain to the principals of two top professional firms who received phone calls from the Prime Minister last week expressing her displeasure at the latest National Party mock billboard email to do the rounds.

The billboard was - as these things often are - humorous. On one side it featured a grimacing Helen Clark with the slogan "my husband thinks I'm sexy" superimposed on a red background. The other side had Don Brash on a blue background with the slogan "Her husband thinks ..." (well you fill in the gap).

It wasn't even new. It was just one of many "attack" billboards manufactured using the National billboard-maker website during last year's election campaign.

But after a week of mutual mud-slinging by Clark and Brash it probably provided a moment's light relief for all the lawyers, accountants, investment bankers and directors who were in on Friday's "mail drop".

Many would have felt they had rather unfairly been pinged by the Prime Minister as belonging to a business social strata that had, with the National Party and Exclusive Brethren, combined to try to deal her down.

But the mere fact that the billboard was distributed from a professional firm's email servers at a time when the PM was trenchantly squashing the rumour has simply reinforced Clark's determination to crack down on anonymous campaign funding and what she alleges are "cash for policy" deals between business and her political opponents.

Clark's stance puts the business sector in a difficult position.

Parliament's justice and electoral select committee has backed the Government's intended review of the Electoral Act 1993 in specific areas that affect the ability of third parties, including businesses, to fund the political parties. The areas for review include state funding of political parties, election advertising, party donation disclosure regimes and the taxation status of political parties.

The committee's report was not unanimous. The Labour/Green one-person majority argued that "most of us" were of the view that extended state funding of political parties' election campaigns might help to redress the balance "where some parties have apparently unlimited campaign funds because of the interests they represent" and because they can use third parties to campaign against their opponents without being subject to electoral spending restrictions.

National contended state funding rewarded incumbency and increased the possibility of corruption.

Clark - whose Labour Party was the beneficiary of some $800,000 of anonymous business donations at the 1999 election - also wants to remove the ability of business to make anonymous donations because they involve "cash for policies".

As evidence, Clark has cited a charge that insurance companies wanted specific changes to ACC in return for donations. It's the usual "no names no pack drill" scenario.

The thin innuendo appears to be based on conversations Labour's bagmen had with the industry last year. The counterfactual - that some businesses like to make their donations in an anonymous fashion to avoid any such slurs in the first place - has not been examined.

Then there is Clark's outright suspicion of Act's "right-wing" backers, who swapped their financial allegiance to National when Brash ousted Bill English as leader.

Not to mention the Exclusive Brethren's third-party advertising campaign, which has since transmogrified into pernicious investigators into Clark and her husband and at least three other Cabinet ministers.

What's driving Clark's ire is that she suspects the VBC was privy to the rumours about her husband well ahead of the general public and played a role in spreading it "into the golf clubs, business circles, law circles, accountancy circles" where she said she had "heard countless reports from friends of mine who have had this rubbish and slander repeated to them".

What's got lost during the claims and counterclaims is that Clark and her Government will use the advent of the campaign to ensure a major rewrite of the electoral law to constrain the business sector's ability to play any role in changing a Government that has run out of steam.

The real point is not whether Labour "stole the last election" as Brash rather hyperbolically charges over the campaign funding scandal, but whether Labour has lost the ability to present a coherent Government.

Departing Fletcher Building CEO Ralph Waters rammed this home in a rather unconstrained (for him) retirement speech, which took issue with the failure of the Government to tackle some major issues of critical importance - energy planning, infrastructure and so forth.

Lawyer Stephen Franks suggests Finance Minister Michael Cullen's failure to gain sufficient backing for his crackdown on the tax status of international share portfolios is a case in point.

"The Government has admitted it can't pass its tax bill for international investments. Instead we are now being offered the 'Shewan proposal' but at 5 per cent instead of 3 per cent. Dr Cullen claims it is much the same. The claim will not be just to save face. He may be doing it to save the Government.

"Under our constitution when a governing party can't pass a money bill the Governor-General is supposed to get a new government which can. That could be by a coalition reshuffle or a fresh election."

The debate over whether the Government has lost the ability to lead doesn't end with tax (although the failed carbon tax could also be added). Independent regulators are being shuffled out of town by a Government prepared to put its interests ahead of market neutrality.

Other issues of governmental neutrality need to be explored.

How can the Government justify knifing the Exclusive Brethren's special dispensation from labour laws? This is surely simply a spiteful retaliation for the church's decision to hire PIs to follow Cabinet ministers.

How can crack down on the Exclusive Brethren's special privileges when it was prepared to grant a "five-year tax holiday" to GPG's many investors in the original international tax scheme?

If GPG's CEO criticises the Government might he find his company's shareholders on the same footing as other investors when the legislation is reported back?

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