Taxpayer Update: Booze, Backflips & Borrowing 💸 | Waikato Betrayal Exposed 🐍 | Debt Crisis Red Alert 🚨
Dear Supporter,
A short work week, but a busy one. Tomorrow morning we launch the much anticipated annual Ratepayers' Report (local government league tables) exposing what town halls across the country don't want you to know. It should hit your inbox first thing.
Then we head straight into spending season with Nicola Willis' election year spend-up budget set to be released in just 26 sleeps.
But first, the elephants in the room: the blinking red lights on our new New Zealand Fiscal Dashboard; plus this week's skullduggery by ratbags elected to local councils (bad news if you live in the Waikato).
For the first time too, the Taxpayers' Union is weighing up a move to expel some Waikato members – who stood for elected office for one thing, but this week proved to do quite another. Details below.
Plus we release our latest briefing paper – this one exposing the Green's Trust Tax policy. It turns out the Greens' claim of it hitting only "the wealthiest 3% of New Zealanders" is, well, more than a little misleading...
Oh, and a good dose of corporate welfare is announced for companies struggling with the cost of... Petrol? No. Diesel? No. Just those doing it tough on jet fuel.
As I said, a busy week. Let's get into it.
Sometimes the truth hurts 😞
At the Taxpayers’ Union, we’re big on transparency. Back in 2020 – when the then Government borrowed for the COVID 'rainy day' – we launched the official New Zealand Government Debt Clock so taxpayers could at least track Government borrowing in real time.
But while the pandemic ended, it's fair to say the borrowing didn't! And now New Zealand is ill prepared for another international or economic crisis.
Back in March, James published an excellent paper Fiscal Reality Check: The Reckoning in Numbers which tracked the trends over time. He exposed that every Kiwi household now carries a staggering $140,000 share of central government debt, up from $29,000 in 2008.
Wellington is forecast to borrow every year in the 2020 decade just to keep the lights on (don't kid yourself that the borrowing is being used for capital or infrastructure spending – surplus is an operational spending measure).
Even worse, there is currently no credible plan to bring the books back into balance.
This is the fiscal 'fudge' we've talked about before. Despite what the politicians say, we are actually further from surplus now (both in terms of estimated time to even and in terms of the size of the structural deficit) than when the current Government entered office.
It's so bad in fact, that Nicola Willis had to invent a whole new measure of 'surplus' – otherwise, it looks even worse.
But as put by Nicola Willis' own Treasury Secretary, Ian Rennie, when he fronted MPs at the Finance and Expenditure Select Committee just before Christmas "there had been no fiscal consolidation under this Government". Ouch.
All this means that by 2030, taxpayers will be paying more on interest than forecast spending on schools, Police, and justice combined.
Welcome to the 'Fiscal Reality' Dashboard 💻
This week, one of our brilliant young interns has turned James' report into an online Fiscal Reality Dashboard to track debt, spending, economic growth, and public service headcount over time.
We're calling it: FiscalReality.nz
The numbers don't lie... 💣🫤
The first step to fixing New Zealand's debt and spending addiction is for the public to understand the extent of the problem.
Bloated spending by successive administrations (and local councils!) is what has driven the cost of living crisis and anaemic economic growth.
FiscalReality.nz invites New Zealanders to take a look and judge for themselves. No spin, just numbers.
For me, the flashing red light is that bond yield. Right now, New Zealand is close to neck and neck with Britain in terms of the price markets are demanding to factor in our Government's risk of default on a ten-year bond.
If seeing the international bond markets determining New Zealand is now as risky as basket-case Britain isn't a wake-up call, I don't know what is!
Tthe more sunlight we shine on this, the harder it becomes for politicians to keep ignoring the fiscal realities and continue to kick the can down the road.
Ignoring the problem won't work. This needs to be tackled before the chickens come home to roost, and New Zealand is back to 1984.
Unless we act now, that "human misery" Nicola Willis likes to talk about becomes inevitable. Hard decisions now are better than more painful ones later.
And as if to sound the same alarm (actually, that's exactly what they were doing!) as we were building the Fiscal Reality Dashboard ratings agency Moody's did this:
Take a look and judge for yourself:
👉 FiscalReality.nz 👈
Palmerston North Mayor blows $1000 a month on booze. Says councillor wrong to make his spending public...
We all know the Beehive likes a boozy night (just ask Maiki Sherman! 🙊) but it turns out the same culture operates in at least one of New Zealand's provincial town halls.
This week we learned that Palmerston North City Mayor, Grant Smith, is racking up at least a grand a month in mayoral booze!
And the Council says it's actually much more but won't give an exact figure because other booze ups sorry, "mayoral events" have been coded as "hospitality" rather than alcohol purchases so are therefore not counted in the figure.
According to our most recent Rates Dashboard, Palmy's residential ratepayers have faced a whopping 25 percent increase in rates under Mayor Smith last term. Enough to drive one to drink perhaps?
Now, we can't take the credit for this exposé. As reported by The Post and its sister paper, The Manawatū Standard:
Palmerston North’s newest city councillor Hayden Fitzgerald has forced the release of details of credit card spending by the city’s mayor Grant Smith over the past three years.
He said there were items on the list he thought would surprise ratepayers, such as visiting Fieldays in Hamilton and attending FIFA Women’s World Cup matches in Auckland, and he wanted the details to be made public regularly in future.
Predictably the Mayor was not too happy with the attention!
He says the spending is necessary to promote Palmerston North's "international relations".
The late Barry Humphries would be proud. We've heard the Mayor's excuse about booze expenses before...
But this is what caught our eye in the media coverage:
[Mayor] Smith hit back, saying it had cost the council $10,000 to fulfil Fitzgerald’s Local Government Official Information and Meetings Act request when his “sensitive expenditure” was already publicly reported every three months.
“I do think there is intent to discredit me,” Smith said.
Let's think that through. First, the councillor who sought the information was forced to use the Local Government Official Information and Meetings Act (the council equivalent to the Official Information Act) just to get a hold of the expense information from his own council!
What well-functioning board would put barriers in place for a director to enquire about the personal expenditure of its own chair (the equivalent relationship between a mayor and councillors)?
But second, how on Earth do you waste 10-grand accessing the information?
Now, we're no fans of the Palmerston North City Council but even we struggle to understand how a financial and record-keeping systems could be so bad as to cost $10,000 to dig out 12 credit card statements and the associated GST receipts.
We smell a rat. Surely the Council is not in breach of its GST/tax record obligations, right? Or is the old "providing transparency is wasteful spending" (along with a grossly inflated figure) being trotted out to try and hide misspending?
We've written the Council asking for a breakdown of the $10,000 and for information about its accounting, record keeping, and expense approval systems.
We'll keep you posted.
In the meantime, let's recognise Cr Hayden Fitzgerald as this week's Ratepayer Hero for his services to transparency. 🏆😘
From “Rates Control” to damage control: LGNZ backflip as political hyenas give middle finger to Waikato ratepayers 🖕😧
Sadly, for every Ratepayer Hero there's a ratepayer scumbag – and this week the Waikato region has gone above and beyond.
Last year, a ticket for the Waikato Regional Council labelling themselves as the "Rates Control Team" ran on a platform explicitly promising (among other things) to withdraw the Regional Council from the Local Government New Zealand (LGNZ) leftwing, anti-ratepayer lobby group.
But just months after taking their oath of office, they've done the dirty - with most of the "team" doing a u-turn and voting to continue to shuffle hundreds of thousands of dollars into the leftwing sock puppet lobby group to fight rates capping and defend anti-democratic 'governance'.
At a vote on Thursday, five councillors reversed their pre-election promises and voted to keep the council as funders of LGNZ. They were:
- The Council Chair, Warren Maher
- Gary McGuire
- Ben Dunbar-Smith
- Robert Cookson
- Mich’eal Downard
With Tory on leave, so not here to temper down my comments, it's fair to say I didn't hold back in my statement to media.
Did I go too far?
“These lying political hyenas are exactly why trust in local politicians is so low. Saying one thing to get elected and doing another once in office is what ratepayers are fed up with.”
“Nothing material has changed at LGNZ. The same organisation and track record remain, yet these pusillanimous u-turning councillors have used flimsy excuses to walk away from their 'pledge' to voters.”
One of our Researchers also noticed – just before the vote – that the explicit promise of the ticket to withdraw from LGNZ (and other numerous policy commitments to save ratepayer money) was removed from the website of the "Rates Control Team".
In fact, now that they are elected, they've had their website changed so that it contains no policy at all!
One might conclude that they knew exactly what they were doing? 🤔
Feedback Sought: Proposed expulsion from the Taxpayers' Union 🥾
I am very disappointed to report that a number of the u-turning Councillors are registered financial members of the Taxpayers' Union.
They sought our help prior to the election, and really pulled the wool over us as friends of the cause.
But (please excuse my language) "pulling the middle finger" to ratepayers just six months after being elected is against everything the Taxpayers' Union stands for.
So, for the first time in our 12 years, I will be recommending to the Taxpayers' Union Board that those councillors be expelled from our Union for both bringing the organisation into disrepute and their clear snubbing of democratic honesty and integrity.
Under the Union's Rules, the power to expel is reserved for the Board. The power has never been exercised.
If you have an opinion either way – send me an email and I will ensure it is put in front of the Board members as part of the discussion.
And, in a dose of irony, the Council's Chair excluded ratepayer groups from presenting to decision makers at Thursday's meeting but welcomed LGNZ with open arms!
But, under our Union Rules we are required to give these turncoats councillors the ability to argue their case before taking the decision. And as people of our word, we will certainly be doing so.
I can make a recommendation to the Board, but I'm not the decision maker. Really keen to have members' views on this one please. 🙏
Will the Greens’ proposed trust tax hit your family? 🏡
While the Government's financials are bad, wait until you see what the Greens want to do with yours!
It’s being sold as a tax on the wealthy. It isn’t.
One in five homes are held in trusts, which means this policy reaches straight into middle New Zealand.
Our boffin reckons homeowners could be looking at annual bills of $8,000 to $18,000, depending on where they live and how much equity they’ve built up.
And it doesn’t stop there.
KiwiSaver and managed funds are often structured as trusts, meaning your retirement savings get caught too. Depending on the fund, the tax could wipe out a significant chunk, or even all, of your annual returns.
So what’s really being taxed? The Greens are going after anyone who put any effort into planning for the future. It’ll grab savings, homeownership, retirement funds - in other words, the Kiwi dream.
If a Labour–Greens Government is in play next election, these kinds of policies aren’t hypothetical. They’re on the table.
➡️ Read the Briefing Paper here ⬅️
Regional airlines get relief at the pump. Bad luck if your trucks don't have wings 🛢️ 💸
We've had a lot of feedback from supporters about the Government's move to further dilute the so-called "Regional Infrastructure Fund".
Put simply, the more time passes, the more Shane Jones' Regional Infrastructure Fund is looking like his Ardern-era "Provincial Growth" (Corporate Welfare) Fund.
Despite this Government's commitments that the RIF would have much more integrity than the PGF, now the fuel crisis is being used to justify the same corporate welfare – but again it's only for the well-connected or 'sexy' photogenic industries politicians are drawn to...
In this case, the Government has announced:
The three airlines receiving funding from $30 million ring-fenced in the Regional infrastructure Fund are:
-
- Air Chathams – $17.2m to refinance debt. The airline connects Auckland, Whakatāne, Whanganui, Kāpiti, Wellington, Christchurch, Chatham Islands and Pitt Island
- Sounds Air – $4.5m to upgrade its fleet and refinance debt. The airline connects Wellington, Picton, Kāpiti, Blenheim and Nelson
- Island Air – $252,000 for fleet maintenance. The airline connects Tauranga and Motiti Island
We saw under the PGF corporate welfare is often publicly framed as 'loans' but are either interest free or simply not chased or repaid so just written off.
We had an email last week from a supporter who owns a mid-sized bus company who asks, "How come I have to just eat the Iran fuel crisis and run at a loss while the air company just hosts a few politicians from Wellington and get given interest free loans to buy new planes and business-as-usual equipment on the taxpayer dime?"
With so many businesses struggling with the cost of fuel, it's hard not to ask the same question.
A new Government, a new 'crisis' but still a case of corporate welfare déjà vu?
Taxpayer Talk: Why is New Zealand’s education system failing our children? 🚸🎙️
Finally, in this week’s Taxpayer Talk, Peter Williams interviews Professor Elizabeth Rata to unpack how we moved from a system focused on knowledge and academic rigour to one that, frankly, isn’t delivering for too many Kiwi kids.
It’s not about one reform or one government; it’s a long, slow shift that’s left standards slipping and outcomes lagging.
Elizabeth argues that there isn't a quick or easy fix. This is a system that’s been heading in the wrong direction for decades.
You can now listen wherever you get your podcasts - or watch the full episode on YouTube. 🎧
Enjoy the rest of your Sunday.
Thank you for standing with us,
 |
|
