New report - Welfare Bums
Welfare Bums: Adding up the cost of corporate welfare in the 2016 budget
Corporate welfare amounts to more than $800 per New Zealand household, according to a calculation by the Taxpayers’ Union contained in a report released today. The report, entitled Welfare Bums, is authored by economist Jim Rose.
The report updates the previous Taxpayers’ Union reports, Any new kids at the trough?, which scrutinised Budget 2015, and Monopoly Money, published soon after the 2014 Budget.
The key findings in the report are:
- Corporate welfare will cost taxpayers $1.36 billion this year, up from $1.2 billion in the 2015/16 financial year
- The Government will spend the equivalent of $803 per household on corporate welfare, compared to $723 per household spent in 2014/15
- Handouts to the private sector in Science and Innovation have grown to $250 million, co-funding “commercialisations” and start-ups.
- The primary sector and communications are the other main corporate welfare growth areas, with over $375 million being handed out to private providers installing ultra-fast broadband and irrigation.
- Taxpayers continue to throw money at KiwiRail, which since 2008, has been given $3.5 billion worth of subsidies, and has cost the taxpayer a staggering $14.4 billion in asset write-downs.
- Solid Energy makes matters worse, being handed an investment write-off of $60 million.
Taxpayers and politicians from all sides of the political spectrum should ask whether the public gets value for money from these business handouts.
For every dollar spent on corporate welfare, there is one less dollar for education, health, or investment by the taxpayer who earned it.
Corporate welfare is defined as government expenditure used to subsidise businesses or specific industries. Hard copies of the report are available on request.