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Wairoa responds to Taxpayers' Union rates claim

Further to our questioning of the use of a rates figure that does not include new targeted rates, the Wairoa District Council has issued a media release:

Wairoa District Council Defends Against Negativity

Wairoa is transforming into a vibrantly energetic part of New Zealand and will no longer accept spin-driven criticism. This is the message from newly-appointed CEO of Wairoa District Council Fergus Power, in response to recent criticism by the New Zealand Taxpayers Union over a proposed budget increase.

Describing it as just another example of ‘Wairoa-bashing’, Mr Power said it was a cheap shot that distracted from the fact that the district is very much open for business.

“I have been appointed to bring about a transformation within Council, and within the district. The first step requires active rebut of the sort of nonsense that has been promulgated for years – that Wairoa is in decay, has inept leadership, and is incapable of a sustainable, prosperous future. In fact, Wairoa district has the youngest and most vibrant population structure of all of the cities and districts in the Hawke’s Bay region – with 25% of the population aged between 0-14,” said Mr Power.

“That is backed up with some of the warmest and most welcoming people, a rich and proud Maori culture, the kindest climate imaginable, and a surfeit of fish, game, and opportunities to recreate in the vast outdoors – which includes the stunning Lake Waikaremoana and Te Urewera National Park, and the world-renowned beaches of the Mahia Peninsula, with sun, sand and surfing”, he said.

Wairoa Mayor Craig Little said Wairoa would no longer accept baseless scaremongering.

“I will defend Wairoa district’s reputation aggressively. We are no longer a punching bag. We are punching above our weight and we have much work to do as a community”.

"When the punching bag looks like blue sea, warm sand, sunshine, and an energised and dedicated community committed to a complete transformation of the district – it becomes a slightly harder target. In fact, why would you even want to diminish it?

NZTU criticism was centred around the Draft Annual Plan 2014-2015, which is currently in the consultation phase.

The plan includes a 5.43 percent increase in the budget, which does not include the funding requirements for the Mahia and Opoutama Wastewater Schemes. Ratepayers not involved in either wastewater scheme are not affected by these funding requirements.

Participants in the wastewater schemes are being consulted with separately, as they have several options for repayment. Figures that relate to these schemes in the Draft Plan reflect the default repayment option, although the choices those participants make will have a significant impact on the projected rates requirement.

All Wairoa ratepayers are sent individual draft rates notices, which record the proposed rates amount for their individual properties under the Draft Annual Plan.

Visit www.wairoadc.govt.nz to view the plan in full and make an online submission. Consultation closes at noon on Thursday, June 12.

Ends

We reject that our comments were 'Wairoa bashing' and would rather stick to the issues. 

We accept that the Wairoa District Mayor and CEO were not intentionally misleading Wairoa ratepayers in relation to rate increases related to the Mahia and Opoutama Wastewater Schemes. We also accept that the Council has consulted widely on those schemes and those ratepayers affected are likely to be aware, or will soon be aware, of the financial implications of the schemes and following further clarification we without reservation apologise for any malignment of the character of the Mayor and CEO of the Wairoa District Council.

We still believe that the Council was wrong to use the 5.43% in material issued publicly, without making it clear that this figure did not include spending and rates related to the wastewater schemes. The draft annual plan shows that total rates income (including the targeted rates) is estimated to increase by 15.9%. We thought that it was proper, and still think it proper, to raise the matter publicly. In part we relied on a statement from a Council officer  that the wording was ‘loose’. After assurances from the Council’s CEO that the Council had not meant to mislead the public, we are happy to let the matter be debated as part of the normal draft annual plan consultation process.

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London return for the money written-off on rail since 2008

We’re currently working though the budget announcements and stack of material released last week.  What’s caught our eye are the unbelievable amounts taxpayers are forking out for KiwiRail.  On Budget day the Government announced a further $198 million of funding for KiwiRail’s Turnaround Plan. That brings the total cost to taxpayers of rail to a whopping $12.2 billion dollars since rail was renationalised in 2008.

Worse, Transport Minister Gerry Brownlee has warned that KiwiRail is likely to need more what the Government is calling a 'turn around plan'.

The $12.2 billion taxpayer money written off on KiwiRail is equivalent to over $2,700 per taxpayer - nearly enough buy every Kiwi a return flight to London.

Per household, the amount is $6,900 - enough to buy a good, reliable second hand car.

The $12.2 billion refers to the total Crown investment of $2.4 billion since 2008 and write downs totalling $9.8 billion. 

We've put out a statement calling on the Government to do a U-turn on KiwiRail. At what point will the Government stop throwing good money after bad? Taxpayers should not be burdened with bringing dead rats to life.

It is incredible that for all this money, we still have locomotives with asbestos and ferries that are lemons. We think taxpayers deserve better.

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Where does 5.43% actually equal 15.9%?

Wairoa ratepayers should be furious with the Wairoa District Council for misleading the public on its forecast rate hikes. Earlier today the Taxpayers’ Union discovered that statements by the District’s Mayor and CEO that rates are forecast to increase by 5.43% are fanciful. The real figure is in fact 15.9%.

Earlier today the Taxpayer's Union were alerted to a slight problem with two statements contained in Wairoa's draft annual plan, currently open to public consultation.

In the introductory statement by the Mayor and Council CEO they claim that on average rates are increasing by 5.43%. But when we do the math, not based on the spin but on the financial numbers in the same paper, we come to a whopping 15.9%

So how do the two amounts reconcile? We wrote to the CEO to ask:

 

Here's the draft annual plan we quote. Note pages 1 and 91: 

Late this afternoon we received a call from a Council official who reports to the CEO and had a frank conversation. Amazingly the official acknowledged what he termed as 'loose' wording by the CEO and Mayor. Apparently when the figure was originally reported to the Council it included a significant proviso that two new rates were not included.

The 5.43% figure does not include two new rates which relate to two waste water schemes. Once you include those the rates increase is nearly three times the percentage the Mayor and CEO were trumpeting.

We're calling on the Wairoa Council CEO, Fergus Power, and Mayor, Craig Little, to apologise to Wairoa ratepayers, and correct their misleading statements in the draft annual plan.

What do you think? Acceptable spin, or misleading the public? Comment on our Facebook page here.

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Dusting off the cheque book to qualify for tax relief

Yesterday we were scathing of Mr English's lack of tax cuts in yesterday's budget.

Nevertheless, we were eager to qualify for the only tax cut that was it - the removal of cheque duty - worth about $1 a year per New Zealander.

Budget lock up

To avoid missing out on the tax cut, earlier today we delivered a cheque to The Treasury to cover the lunch provided at yesterday’s budget lock-up.

Rather than pay for our taxpayer funded lunch with cash, we dusted off our cheque book to make the payment. As only the minority of New Zealanders who still use cheques will qualify for the tax relief, we wanted to make sure we are among them.

Yesterday’s budget forecasts that over the next four years, total surpluses will equal $4,935 per household. Of that, Kiwi taxpayers get back $1 from the only tax cut contained in yesterday's budget. 

We’re calling on the Government to lay out a clear and meaningful program of reducing tax and compliance costs.

Cheque and note to Treasury

The Taxpayers’ Union fights for lower taxes and value for money from every tax dollar. New Zealanders are welcome to donate their tax cut by clicking here (or of course sending a cheque!).

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May 16, 2014

Media ›


NBR: Ratepayers underpin vested interests’ development ambitions

With all the focus on yesterday's budget we nearly missed this piece in yesterday's NZ Property Investor.

Ratepayers underpin vested interests’ development ambitions

The Taxpayers' Union says councils around the country are not telling ratepayers about the cost of capital that ratepayers are underwriting for local authority subsidies.

Jordan Williams brought up the issue in relation to Greater Wellington Regional Council and losses arising from its subsidiary CentrePort as a result of earthquake damage last year.

Click here to continue reading (requires NBR subscription).

Post Budget comments from the Taxpayers' Union

Radio LIVE spoke to Jordan Williams and David Farrar of the Taxpayers' Union for their analysis of Budget 2014.

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John Bishop's analysis on Budget 2014

Budgets are essentially political documents, particularly in election year, and this year even more so because the Minister of Finance thinks the Government can have a bit of a spend up while proclaiming the need for restraint and praising themselves for the restraint they have shown.

The spending that has been sanctioned, particularly the family assistance package worth $500 million, goes to the political heartland of the National Party, the middle of the middle class who think they both need and deserve state assistance. There is also a good dollop of dough for sore spots and pet likes Christchurch and schools in North Canterbury, and for some projects of cultural merit like buying the TVNZ Film Archive.

  • Total new spending is $5.7 billion (including $16 billion of reallocation) which takes total spending to $70.3 billion in the current year which represents 30.3% of GDP, almost the same as previously years, but a drop from 34.44% in 2008/09.
  • There is a $372 million surplus forecast, not very big this year but it is forecast to increase to $3.5 billion in 2017/18.
  • Taxation is unchanged except for cheque duty being abolished which will save users about $4m a year, about a dollar per Kiwi, and that is the sum total of tax reform.
  • Spending on households with families increases, with extra money for paid parental leave, family tax credits, doctors’ visits for under 13 year olds, early childhood education, and for vulnerable children, a family assistance package worth $493 million over four years.
  • The economy grew 3.1% in 2013, the fifth highest in the OECD, and growth is forecast to continue at between 2% and 4% over the next four years.

The Minister of Finance also neatly frames the expected debate over election promises. His budget speech states that Treasury advice is that additional spending over the $1.5 billion the current government has allowed itself will boost interest rates. Our prediction is that National will use this to bash Labour and other parties if those promises (spending and revenue reductions) go over the Treasury determined figure. That is consistent with National’s narrative that the country cannot afford a Labour/Greens government.

Our criticisms and quibbles:

  • The ACC levy cuts dangled as a prospect in 2015 could have come earlier or at least been made more definite.
  • The abolition of cheque duty – while welcome – should only be the start not the end of a programme of cutting compliance costs.
  • There is a suggestion of a commitment to further welfare reform. Mr English says in the budget speech:

    “The future cost to taxpayers of people who received welfare in 2012/13 will be $76 B by the time they exit welfare or retire. About three quarters of that cost is due to people who first received a benefit under the age of 20.” 

    This describes the cost of welfare for those for whom it becomes a way of life. So what is the government doing about it? The budget offers nothing: no commitment to developing a policy framework to address a very complex matter, and no practical steps. There is $100 million to help people transition from welfare to work but that is not a long-term answer to the problem of preventing people from becoming welfare dependant in the first place.

So is this a good budget for the country? It’s certainly a well-calculated action plan to get the National government re-elected, but there’s little prospect of reduced government spending, substantial tax cuts or significant reform of spending.

To convince this Government that government is too big in New Zealand and the tax burden should be reduced, we must continue to pressure our politicians to share the benefits of the improved economy with all taxpayers. 

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