Taxpayer Update: Book your Airbnb before Monday 🗓️ | Robertson's Regrets 🤦♂️ | Handout #5 for ski field ⛷️💸
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Reminder to book your 2025 holiday before Monday! App Tax delivered in 36 hours 📲🏠
This April Fool's Day, don't let the joke be on you! The App Tax (Labour's idea that National promised to scrap) will see the cost of Ubers and Airbnbs, Bookabach, and other online platforms increase their prices by as much as 15%. So if you're planning a family getaway for later in the year, book now to avoid Grant Robertson's Nicola Willis' App Tax.
Come Monday, GST will be slapped on the micro-business mom-and-pop bach or spare bedroom rental providers and part-time Uber drivers who currently fall below the $60,000 GST registration threshold.
This App Tax-grab was never about the multinational providers like Airbnb (they already pay GST). But that's who Wellington want you to think this tax is all about, despite IRD being clear: the tax is on the little guy trying to make ends meet.
It's time for tax relief 💸⏰
This week the Nicola Willis released the 2024 Budget Policy Statement. BPSs essentially set out the framework the Government will take to tax and spending decisions as it prepares its May budget.
The fiscal challenges facing the coalition Government are well known: delivering promised tax relief; curbing Grant Robertson's unsustainable legacy of deficits (the Government Debt Clock is close to being blown to bits); reducing public sector wasteful spending; and ramping up infrastructure delivery.
And this impossible matrix of priorities has to be achieved in a period of stagflation (an economy in recession but with high inflation/interest rates). Ouch.
Perhaps as a result of the conflicting priorities, this year's document is lighter on on detail than usual. But two points jump out:
1.The scale of the Government's spending problem is even worse than previously known:
Between 2016/17 and 2023/24 (forecast), core Crown expenses have grown 84 per cent, compared to a 52 per cent increase in nominal GDP and a 66 per cent increase in core Crown revenue.
While tax revenue has been growing well ahead of New Zealand's economy, Wellington's spending has totally blown out. The result: unbelievable rates of borrowing plug the difference.
2. Even Wellington's boffins are recognising the harm of inflation dragging Kiwis into higher tax brackets and forcing workers to pay more tax each year on the same 'real' income:
Delivering meaningful tax reductions to provide cost of living relief to New Zealanders, who have seen no change in personal income tax rates and thresholds since 2010.
The inflation tax costs the average Kiwi $2,500 a year 🔺💰
The failure to adjust tax brackets since 2010 means that someone on the median salary of $65,749 is now paying $2,496 more in tax each year than they would have done had tax bracket thresholds kept pace with inflation in the same way that we do for payments to beneficiaries or superannuitants. The average worker's pay buys less, but is taxed more!
>> Calculate how it affects you <<
And don't expect National's promised tax relief to ride to the rescue. National's so-called promised 'tax cuts' only compensate for two of the 13 years of stealth tax increases! A step in the right direction, but hardly the 'right wing' slash and burn the media would have you believe!
Speaking of the media bemoaning "cuts" 👀
Isn't it weird the way media don't provide context to scary stories about the nasty Government reducing jobs? Here's Newshub's angle about the very important front line back office agency you'd probably never have heard of had it not been for their $40k farewell parties: the Ministry of Pacific Peoples.
As a well known Taxpayers' Union supporter put it: Oh man how will the Ministry for Pacific People cope with a 50% reduction in staff?
Here's some context not included in the Newshub reporting:
And media wonder why the public's trust is falling?
Ruapehu: Throwing good money after bad, after bad, after bad, after bad ⛷️🔥
From the déjà vu file, the Taxpayers' Union has again been the ski lift party pooper in calling out the Government's yet-again 'last bailout' announcement to gift $7 million to Ruapehu Alpine Lifts' Whakapapa ski field. This is the fifth multi-million-dollar taxpayer bailout in the last 18 months alone.
Even with the $27 million bung in the last two years to try to make the field commercially viable and able to pay its debts, it still isn't.
Despite claims that these handouts are necessary to save jobs in the region, corporate welfare shifts money from productive sectors of the economy into unproductive ones. Rather than save jobs, here it's more likely saving the bankers who lent to the ski field operator and risk the company going bust. But other ski fields around New Zealand successfully run on a commercial basis without taxpayer bailouts. Maybe it's time to let the company fold and get a new team in to have a go?
Some good news for Easter! Landlord interest deductibility restored from Monday with bright line test reduced 🎉✅
It's not all bad news. The Government did deliver two taxpayer wins this week:
Interest deductibility for landlords reintroduced. The current distortion in interest deductibility rules unfairly targets landlords and reduces long-run incentives for landlords to provide housing. The changes passed yesterday will finally put an end to this imbalance.
Bright-line test reduced to two years. The bright-line test is a capital gains tax by stealth. It completely misses the problem when it comes to housing prices which is not enough supply – the only way to do this is with proper RMA reform, which the Government has committed to deliver. We would like to see the bright-line test scrapped entirely but this is a welcome first step.
Labour now know how they'll win the next election! With more taxes... 🤦♂️🥀
After a bruising election, Chris Hipkins has been thinking about how to rebrand Labour. So, like many, we were looking forward to how Mr Hipkins would use his first big speech as Leader of the Opposition last weekend to set out a bold new vision for his Party that recognised their mistakes of the last six years.
Don't hold your breath.
It appears David Parker and the we-didn't-win-the-election-because-we-didn't-propose-enough-new-taxes wing of the Labour Party have captured the leadership. Hipkins wants Labour to double down on wealth taxes and capital gains taxes to "win" back voters.
Robbo's Hot Take: I didn't borrow enough ❓🤷♂️
Last weekend also saw Grant Robertson's exit interview on Q+A with Jack Tame.
Robertson's legacy of 67% higher public spending, higher inflation, higher interest rates, and a 161% increase in government debt was a disappointment even for Grant Robertson, but not in the way you might think.
The interview was a chance for Mr Robertson to have a moment of personal reflection. He sure did too: telling Jack Tame that he wished he'd spent more and borrowed more.
Yes, you read that right.
The CCP now know more about what MP's spend your money on that you do! ☭🕵️
Wellington was rocked this week by news that the an organisation with alleged links to the Chinese Government has hacked into the Parliamentary Service.
15 years ago, our UK sister organisation the TaxPayers' Alliance helped blow the lid on MPs abusing and misusing their spending entitlements on things such as moat cleaning and duck houses. The information came to light thanks to whistleblowers within the system providing data to the media and the Taxpayers' Alliance.
Like our sister groups around the world, we say it is unacceptable for politicians to vote themselves special protections from public transparency of how they spend our money on themselves.
The Parliamentary Service is one of the very few public organisations in New Zealand that is exempt from our Official Information transparency laws. We have no idea what information was obtained from the alleged hack, but it would be a very weird situation where the Chinese Communist Party has more access to information on our MPs' expenses than we do.
Taxpayer Talk – MPs in Depth Series: Cameron Luxton 🎙🎧
This week on Taxpayer Talk is another episode in our MPs in Depth podcast series where we get to know Parliament's new MPs. In this episode, Jordan sat down with newly elected ACT Party MP, Cameron Luxton.
Cameron Luxton is New Zealand's only Licensed Building Practitioner that has ever been elected to Parliament. Prior to entering politics, Cameron worked as a builder and dairy farmer. Cameron tells Jordan about his childhood, struggling at school before eventually engaging thanks to a teacher and classroom that didn't operate in the same 'one-size-fits-all' model as most schools.
Not discussed in this podcast, but worth noting, is Cameron's Member's Bill that would put an end to the archaic Easter trading rules that see the Government dictating what businesses can and can't open and whether you are allowed to have a beer while watching Friday night rugby at the pub.
Listen to the episode on our website | Apple | Spotify | Google Podcasts | iHeart Radio
That's it for this week,
Happy Easter,
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Media Mentions:
Newshub Christopher Luxon rules out new taxes, says 'relief is happening'
Newstalk ZB The Huddle: Peters v Chumbawamba – who's in the right?
NZ Herald Christopher Luxon’s inner circle – the Prime Minister’s most important advisers
1News Govt plan to extinguish youth vaping: What you need to know
RNZ The Panel with Sue Bradford and Sue Thomas (4:05)
Northland Age From the other side – explosion of agendas a baffling phenomenon
Stuff Richlister behind Les Mills gym empire reveals why he donates to political parties
SunLive Economy slips into recession as GDP falls 0.1%
Taupo Times Ruapehu bailout 'corporate welfare'
The Post Call to end restraint of trade clauses that appear in job contracts everywhere
Press Releases:
Grant Robertson interview demonstrates why he should never have been finance minister
Luxon must rule out new taxes, not adopt Labour’s approach
Taxpayers' Union stands down from high alert after sleepless night
Capital city deep in crisis needs more housing
Disposable vape ban will drive people back to smoking
New Zealand in recession as Kiwis' quality of life tanks
IMF right to call for slashing government waste
Government needs to stop tinkering and pop the ballooning bureaucracy
Taxpayers’ Union welcomes the wheels turning on RMA reform
Chris Hipkins out of touch with New Zealand’s tax system
Pseudo-savings must be called out and halted
Small Wellington businesses punished by swipe at drivers for no gain
If the CCP can see politicians' expenses, so should taxpayers
Government must cut spending and provide permanent tax relief
Two steps forward, one step back for taxpayers
Government must not continue Labour legacy of special treatment for DJs
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