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Living Wage policies: The best of intentions but the worst of results

Seventeen parking wardens contracted by Wellington City Council were not rehired in-house, with further job losses inevitable under the Council’s living wage policy, according to a new report we've released today authored by our Research Fellow Jim Rose.

The report's key findings are:

  • Seventeen Wellington City Council employees lost their jobs after being under the skill level required for the living wage.
  • Councils hire on merit, so candidates under the skill level commensurate with the living wage will be crowded out by higher-skilled candidates.
  • There is no consensus or scientific basis for the calculation of a living wage. Any calculations arepolitically subjective.
  • Any living wage in New Zealand will be abated by up to 40% by decreases in government transfers and increased income tax obligations.
  • Living wages shift the burden from means-tested taxpayers to ratepayers and business owners.
  • Below-living-wage employment allows for in-work training, where employees tradeoff lower wages for the opportunity to learn skills that increase their future earning potential.

Unknown-1.pngLiving Wage Aotearoa New Zealand nobly want to alleviate poverty and reduce unemployment with their activism for a living wage, but the evidence to date shows they are achieving the exact opposite. This report shows that a living wage will only make it harder for low wage earners to find work.

Contrary to intentions, living wage policies actually hurt the very people they seek to help. For the first time, we reveal that seventeen parking wardens lost their jobs at the Wellington City Council as a result of its living wage policy.

Living wage policies mean higher-skilled candidates apply for jobs previously occupied by lower-skilled candidates. Of course councils will hire on merit and shortlist the candidates who previously would never have applied for the lower, pre-living wage role. That's exactly what happened when Wellington City Council brought its parking services in-house.

Minimum wage applicants do not get a shot against better-qualified candidates attracted by the higher wages. So much for the poverty alleviation and reduced unemployment.

The economic theory is clear that living wages do more harm than good, but the job losses in Wellington is the proof in the pudding. Councils should stop implementing these living wage policies which achieve so little but cost ratepayers who can ill afford it.

Living wage policies mean ratepayers pay more for less and achieve none of the intended poverty relief.

Jim's full paper (which the above summary is based on) can be viewed here.

Yule set to cost ratepayers $100k if elected to Parliament

Taxpayers are on the hook for between $90,000 and $100,000 in by-election costs in the case of Lawrence Yule being selected as the National Party's Tuki Tuki candidate and subsequently elected in this year's general election. This figure was revealed after we asked the council for its calculation of the anticipated costs of such an election.

While no price can be put on democracy, the figure puts into perspective the promises to not make a tilt at Parliament that Mr Yule made when seeking to be re-elected last year as mayor of Hastings.  It's obvious that Mr Yule should have been upfront at the time, given the huge costs that are now likely to fall on ratepayers.

With sitting councillors likely to contest the Mayoralty, ratepayers could be hit a second time round too, in the event a second by-election is required to fill a Council seat.  It could be a double whammy.

The correspondence can be viewed here.

 

 

Lack of oversight by Greater Wellington Regional Council 'scary'

A Greater Wellington Regional Council guarantee to cover $150 million of debt in the event of default by CentrePort has raised serious concerns as the New Zealand Taxpayers’ Union reveals correspondence that shows the Council has received no documentation whatsoever about CentrePort's insurance cover, or any information about the impairment of the Port's assets.

This is a terrifying show of failure of the most basic risk management and governance. The Council has only verbal assurances from the Port about its insurance arrangements, and despite owning 76% of the Port and being the guarantor of its debt, has required no reports whatsoever about the impairment of assets due to damage resulting from the November earthquakes.

No private company director in the country would be so casual about risk. It is worse than incompetence by those who sit on the Council.
 

While everyone assumed, as stewards of our money and managers of our community owned assets, Regional Councillors would have more information than the public about just how badly the Port is damaged, they simply don’t.
 
What audit committee would allow a $150 million debt guarantee related to property developments without having in place precise disclosure and agreements about insurance?  This is a potential liability that could cripple the Regional Council, while they keep their heads in the sand.

Would you give your own money to the Clinton Foundation?

Following on from our blowing the whistle on the Government earmarking another $5.5 million of NZ Aid money to be given to the Clinton Foundation over the next few years, we’re sorry to report that the Government is refusing to veto the extra spend.

Last week it was reported that the Clinton Global Initiative would be shutting its doors. Nevertheless, Kiwi taxpayers are still on the hook to fund the separate (albeit affiliated) Clinton Health Access Initiative.  The $5.5 million is in addition to the $7.7 million already spent.

So here at the Taxpayers’ Union, we thought we’d gauge public opinion on what people in the street think about millions of their taxpayer money being used to fund the Clinton Foundation’s charities.

We asked Wellingtonians whether they’d be willing to park with their own money and donate to the Clinton Foundation.

We spent a day asking people for their views and to donate.  We couldn’t find a single person was willing to give their own money to the Clinton Foundation, or its charities.  Only about one in twenty thought it was a suitable use of taxpayer money.

It’s time to send a message to politicians like Minister McCully that our money isn’t a political play thing.

Sign the petition calling on Murray McCully to veto the extra funding for the Clinton Foundation affiliate.

Council-owned art: half a billion collecting dust

The Taxpayers’ Union can reveal that local councils across New Zealand have accrued more than half a billion dollars of artwork – at least $560 million – with 93% of the collections collecting dust or otherwise not on public display.

nobody_here_but_us_small.jpgA Taxpayers’ Union briefing paper on research looking at the public accessibility of municipal artworks is available below.
 
While we expected local authorities to own significant portfolios of art, such as where councils run galleries or museums, we were amazed to find that the vast majority of works publicly owned are in fact hidden from the public.

We found that many of the most expensive items are in mayoral offices or collecting dust in storage.

Much of the artwork has been donated or bequeathed to the local authorities so that the public can enjoy it.  But that's not happening.  In addition, many larger councils designate an amount to be spent each year on new artwork despite only a tiny fraction of their collections being accessible to the public.

At a time where most councils are imposing average rates increases multiple times the rate of inflation, this research suggests local officials should reconsider where their priorities lie. Is it really worth holding onto such large portfolios when most are in storage gathering dust?

Among the key findings of the research are:

  • Territorial authority councils (district, city, and unitary) own at least $568,393,020 of artwork, made up from at least 173,269 pieces;
  • The amount of artwork on public display is only 7%;
  • Auckland Council has the most valuable collection of artwork, making up almost half of the country’s collection at $276,981,903; and
  • Whakatane District Council has the least amount of works on public display, with only 0.2% of their $8.75 million collection on display for the public to enjoy

The most perplexing leaving gift ever?

As regular readers will know, the Taxpayers' Union operate a tip-line for insiders and members of the public to report government waste.  In December we received a tip off that former Wellington Mayor Celia Wade-Brown asked officials for a ratepayer-funded tattoo as her departure gift as Mayor of the City.

We found it difficult to believe that an elected official would ask for a tattoo, which we were told was to be on the former Mayor’s ankle, so (as is our practise to verify tip-offs) we made a request under freedom of information laws to the Wellington City Council.

To our astonishment last week we received confirmation from Wellington City Council that the tip was correct!  Fortunately, the Council refused to grant an unusual request by former Wellington. 

Ratepayer-funded body-art is perhaps the most unusual spending request we have ever come across.  Well done to the person in the Council who had the nous to say no!

Below is a copy of the Council’s response to the Taxpayers’ Union request for information.

 

*** Update ***

15370110_10154102077479562_6118097164540683699_o.jpgStuff.co.nz; the NZ Herald; and even international media have now picked up the story:

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11783492 

http://www.stuff.co.nz/dominion-post/news/88495740/staff-stump-up-for-mayors-tattoo

https://www.theguardian.com/world/2017/jan/17/new-zealand-mayor-taxpayers-fund-gecko-tattoo-parting-gift 

They've also found pictures of the tattoo: a Gecko.

Australian Government pulls plug on Clinton Foundation funding

lthm.gifWith news that the Clinton Foundation is laying off 22 staffers due to the discontinuation of the Clinton Global Initiative, we have revealed that the Australian Government is cutting all financial ties with the Clinton Global Health Initiative.

In 2014 Australian Foreign Minister Julie Bishop announced that the Australian Government had committed to five years of financial support for the Clinton Health Access Initiative, the sister organisation of the Clinton Foundation.  By last year however, that funding had stopped, with the Australian Government jumping ship very soon after Donald Trump’s victory in the US election. 

News.com.au reported late last year that:

AUSTRALIA has finally ceased pouring millions of dollars into accounts linked to Hillary Clinton’s charities.

Which might make you wonder: Why were we donating to them in the first place?

The federal government confirmed to news.com.au it has not renewed any of its partnerships with the scandal-plagued Clinton Foundation, effectively ending 10 years of taxpayer-funded contributions worth more than $88 million.

The Clinton Foundation has a rocky past. It was described as “a slush fund”, is still at the centre of an FBI investigation and was revealed to have spent more than $50 million on travel.

Despite that, the official website for the charity shows contributions from both AUSAID and the Commonwealth of Australia, each worth between $10 million and $25 million.

News.com.au approached the Department of Foreign Affairs and Trade for comment about how much was donated and why the Clinton Foundation was chosen as a recipient.

A DFAT spokeswoman said all funding is used “solely for agreed development projects” and Clinton charities have “a proven track record” in helping developing countries.

Australia jumping ship is part of a post-US election trend away from the former Secretary of State and presidential candidate’s fundraising ventures.

The news follows our petition launched last week calling on Foreign Affairs Minister Murray McCully to veto MFAT’s plans to give another $5.5 million of NZ Aid Money to the Clinton Health Access Initiative, an affiliate of the Clinton Foundation. The petition has attracted nearly two and half thousand signatures and can be signed at: http://www.taxpayers.org.nz/clinton_petition

NZ Aid should be going to programmes that are the most effective and efficient in achieving our aid objectives. Channelling money through entities established by international politicians is not a proven effective and efficient method of giving aid to those who most need it.

It is simply bad practice for MFAT to give Aid money to an entity so closely associated with politics and politicians. The money would be much better going straight to an organisation like the Red Cross.
 
The Australians have stopped - so why haven't we?

Government set to give Clinton Foundation another $5.5 million

clinton.jpg

The Taxpayers’ Union can reveal that the Government has budgeted to give another $5.5 million dollars of taxpayers’ money to the controversial Clinton Foundation, despite Mrs Clinton’s failed US Presidential bid and controversy over improper ties between the Clinton Foundation, the State Department and donations from foreign governments to the foundation while Ms Clinton was US Secretary of State.

Figures obtained by the Taxpayers’ Union under the Official Information Act show that to date Kiwi taxpayers have forked out $7.7 million to the Clinton Foundation’s “Health Access Initiative” with $2.5 million and $3 million earmarked for 2017 and 2018 respectively.

Given the lessons of the Saudi Sheep saga, we are staggered that MFAT appear to still think handing out money for diplomatic purposes is sensible.  Even worse, this money comes from the NZ Aid budget which should be going to programes which are the most effective at helping the world’s poor - not sidetracked into political objectives.

cheque.jpg

It is possible that officials have reason to believe that the Clinton Foundation’s work does provide good value for money, although given the controversy in the US that seems unlikely. The refusal to front up and explain leaves a stench of buying political access.

Given New Zealand’s faux pas in co-sponsoring the UN Security Council resolution condemning Israel on Christmas Eve, and the heavy criticism of New Zealand which has resulted, the continued support of the Clinton Foundation risks even more damage to New Zealand’s ability to wield any influence in the US.

The MFAT response to the Taxpayers’ Union information referred to above is available here.

* Update - claims of 'separate legal entity' *

After a brouhaha on twitter and blogs running MFAT's spin about the  “Health Access Initiative” being a "separate legal entity" from the Clinton Foundation, we've issued a press release clarifying the situtaiton:

 

MEDIA RELEASE

MFAT EXCUSES RE CLINTON FOUNDATION 'NONSENSE ON STILTS'

The excuse justifying the millions of taxpayer dollars the Ministry of Foreign Affairs and Trade (MFAT) will pay the Clinton Health Access Initiative that it is a “separate legal entity” to the Clinton Foundation is pathetic says the Taxpayers’ Union.

Earlier today the Taxpayers’ Union released a response to an Official Information Act request to MFAT which showed that in addition to the $7.7 million already paid, the Government has budgeted another $5.5 million of NZ Aid money for the Clinton Health Access Initiative.

Executive Director of the Taxpayers’ Union, Jordan Williams, says, “This excuse from MFAT is nonsense on stilts and they know it.  The Clinton Health Access Initiative is a subsidiary of the Clinton Foundation and is responsible for appointing the board members."

“Government spin doctors can try to dance on the head of a pin to justify MFAT's actions, but the fact is the two entities are even described on their own websites as 'affiliated entities'. The Clinton Foundation controls the organisation Kiwi taxpayers are funding."

In September, the New York Times reported that the Initiative would be separated if Clinton won the US Presidential election. The relevant article is available at: https://www.nytimes.com/2016/09/15/us/politics/clinton-foundation-staff.html.

Also available is the most recent publicly available income tax return for the Clinton Health Access Initiative which discloses that the Clinton Foundation is a “Related tax-exempt organization” and appoints members of the board of the Clinton Health Access Initiative (refer to pages 73 to 75 of the document available at http://bit.ly/2jgeLOc).

* Update 2 - petition calling for McCully to veto funding *

Following feedback from a number of members and supporters who emailed or phoned our office, we have launched a petition calling on the Minister of Foreign Affairs, Murray McCully to veto MFAT giving anymore NZ Aid money to the Clinton Initiative.

You can sign the petition here.

How we are fighting the war on government waste and making the case for tax cuts in 2017

Three years fighting for taxpayers

The Taxpayers’ Union has today released its annual review, covering the last 12 months of operations.

Click here to view in full-screen mode (opens a new window)

The document concludes what has been a busy, and effective, year for the Union.  Our combined effort exposed, fought, and defeated the awful 'Taniwha Tax’ in Auckland; blew the whistle on the government’s programmes of corporate welfare; and, most importantly, held the politicians and bureaucrats who waste taxpayers money to account.

Our plan ahead 

But there is much more to do.  The Kaikoura Earthquake make our arguments for ensuring taxpayers get value for money in all areas of government spending even more important.  For example, infrastructure spending should be put to the best use possible. We cannot afford to continue to plough money into rail if the economics doesn’t make sense, and that money would be better spent on a more secure national highway network or more coastal shipping. 

It’s the role of taxpayer groups like ours to ask some of those difficult questions and, if necessary, challenge the sacred cows of New Zealand politics.

Tax cuts

Assuming the quakes cost around $3 billion, there is still plenty of room for tax cuts in next year's budget.  At minimum New Zealanders should be compensated for the hidden tax hikes that have occurred under the current Government because of fiscal drag – where inflation pushes income earners into high tax brackets (resulting in the average tax rate increases over time).  We’ll be fighting for you to make sure these measures are legislated next year - rather than just election promises liable to be traded away as part of costly post-election coalition negotiations.

We hope you are as proud of our achievements as we are, because they could not have happened without your support.

Thanks to all our members, donors and supporters who make our work possible.

If you're not already a member click here to click here to join the Taxpayers' Union, or click here to make a donation.

Trans-Tasman report calls for life-saving reforms to help smokers quit

The New Zealand Taxpayers' Union,  Australian Taxpayers’ Alliance and MyChoice Australia have jointly launched a  report calling for the governments on both sides of the Tasman to legalise, and lightly regulate new technologies to help smokers quit. 

The report, E-cigarettes: Reducing the Harm of Smoking, builds on the report we released in January examining the extent to which New Zealand politicians are using smokers as cash cows.  At the time we questioned why politicians claim higher tobacco taxes are necessary to promote better health, but to date have prevented the sale of new generation smoking alternatives such as e-cigarettes which are far less harmful and the most popular smoking cessation tool used in England.

While politicians cry crocodile tears about the harms of smoking, their refusal to allow the sale of healthier alternatives appears to be motivated by the revenue stream from the taxes on traditional cigarettes.

E-cigarettes provide a healthier alternative to traditional cigarettes and mean smokers are not forced to be the Government’s cash cows. While the New Zealand Government is well ahead of Australia in terms of moves to legalise the technology, suggestions that it should be taxed like traditional cigarettes would undermine the very benefits the new technologies offer.
 
E-cigarettes offer the only real pathway to the Government’s aspiration of a Smokefree New Zealand by 2025. If governments tax next-generation smoking technologies like they do traditional cigarettes, they will be effectively choosing the tax revenue over saving lives.
 
Millions of smokers worldwide have quit smoking because of this technology, and it is now the most popular way for smokers to quit in countries such as the United Kingdom. Public health experts worldwide have praised it as being 'at least 95 percent' safer than smoking. It is time for our regulations to catch up to the times and encourage this life-saving technology.

The report is also available to download as PDF here.


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