Taxpayer Update: KiwiSaver interference | Boozy dinners | Wailing unions

May 20, 2021 Grace Ayling

Government sticks its nose into your KiwiSaver portfolio

Our old friend David Clark is back in the news. Today he rolled up to work 🚴 and announced the Government will force default KiwiSaver providers to boycott fossil fuel investments.

I told the media why this is a terrible idea:

The last thing KiwiSaver members need is for politicians to micromanage our funds. KiwiSaver providers are meant to make independent investment decisions in order to maximise returns. Politicising these decisions will ultimately result in lower rates of return.

Once the Government starts sticking its nose in, where does it stop? Will KiwiSaver providers be barred from investing in, say, meat production? Alcohol? GMOs?

The Government already manages carbon emissions at the macro level – take the Emissions Trading Scheme – which has a flow-on effect on KiwiSaver investment decisions. Diktats on the micro level are unneeded.

This move won’t even affect total carbon emissions. Any move to cut emissions below the cap set by the Emissions Trading Scheme creates a ‘waterbed effect’ which frees up credits to produce emissions elsewhere.

Would you spend $24 on two bottles of water?

We used the Official Information Act to obtain the original receipts from the Film Commission's boozy dinners with Amazon film executives.

We highlight this kind of spending not because it's outrageous, but because public servants are likely to be more sensible with the "company card" if they know there's a chance we'll publish the receipts.

Click here and here to view the receipts in high resolution.

These dinners were of course part of a junket set up to facilitate a deal that saw Amazon handed hundreds of millions in taxpayer subsidies for its new Lord of the Rings TV show.

Back-office bureaucrats are exploiting sympathy for frontline workers

Salaries

The Government's proposal to rein in public sector salaries has had a furious reaction from the public sector unions.

They're loudly condemning the idea of wage austerity for heroic frontline nurses, police, and teachers. But that's not what's on the table.

Nurses, police, and teachers are locked into to a step-based pay system. This means they’ll keep climbing up the salary ladder regardless of any salary restrictions announced by politicians. They’re effectively protected from a freeze unless they’re already on the highest possible rung.

The Public Service Association and the Council of Trade Unions know this perfectly well. But that hasn’t stopped them from exploiting public sympathy for frontline workers to shield the wider public service from salary restraint.

The Public Service Commission’s website holds a wealth of statistics on public sector pay rates, which looks beyond the front line and reveals inflated back-office salaries.

Wage growth

The average salary in the public sector is $84,500, compared to $69,000 in the private sector.
Last year wage growth in the public sector was 3 percent, compared to just 1.7 percent in the private sector.
15,000 public sector workers are paid salaries higher than $100,000. Few of these will be teachers, nurses, or police.
The highest-paying Government department is – wait for it – the Social Wellbeing Agency. That agency’s staff enjoy an average salary of $151,700.
Next highest-paying are the Public Service Commission, the Ministry of Defence (not the frontline Defence Force), and the Pike River Recovery Agency, all paying average salaries above $130,000.

Click here to view the graph in a separate window.

Clearly, there is room for salary restraint here. You might even say these figures are obscene. The Taxpayers’ Union certainly would.

While a total freeze might be a blunt measure, the basic thrust of the move fairly reflects the sacrifices made by taxpaying businesses and employees in the private sector, who enjoyed a far lower level of income security through the fallout of COVID-19.

It’s also a sensible start to reining in the Government’s debt monster. The New Zealand Government Debt Clock is about to tick over $70,000 for every household in New Zealand – a terrifying figure no matter how many times Grant Robertson says “it’s not as bad as we thought it would be”.

Of course, the Government has now walked back its announcement to the point where it can no longer be called a freeze. The suffering souls at the Social Wellbeing Agency may still yet see salary adjustments in line with the cost of living. Lucky them!

But there is still much to be settled as the Government enters into protracted negotiations with the public sector unions.

Taxpayers should urge the Government to hold strong in the face of the wailing administrative elite. Throw a bone to the bona fide frontline workers who tend to our sick, educate our kids, and protect our communities, but don’t allow their virtue to be hijacked by well-paid Wellington back-office bureaucrats.

It’s time for random comprehensive audits of wage subsidy recipients

This week the Auditor General slammed the Government’s weak 'audits' of recipients of the COVID-19 Wage Subsidy. The audits consisted of a few questions over the phone, without requiring documentation to actually prove that recipients were eligible.

We say the time has come for full audits, substantiated with hard evidence.

The Ministry doesn’t need to shake down every wage subsidy recipient – it just needs to start making examples of wrongful recipients by pursuing tip-offs and conducting random audits. In fact, the Minister could stand up tomorrow and announce an amnesty period for wrongful recipients to return the money before penalties kick in.

$703 million has already been voluntarily returned, which suggests that, with a stronger nudge, hundreds of millions more could come surging back to the taxpayer.

We’ve asked unions like E Tū and First Union how they were eligible for the wage subsidy, considering their revenue comes from regular union dues. We hit a brick wall. It’s time for the Ministry to start asking these questions, and to demand proof of the answers.

"It is unbelievable": Heather Du Plessis Allan on the taxpayer-funded turtle funeral

Last week we exposed the incredible tale of how DOC and Te Papa trucked, shipped, and helicoptered a dead turtle up and down the country just to throw it a highly-catered funeral.

On her prime-time Newstalk ZB Drive show, Heather du Plessis Allan talked through the details:

HDPA clip Click here to listen to the clip.

Even the left-wing Daily Blog picked up on the story:

When we can’t feed kids lunch and breakfast at school and can’t lift benefits but can spend $12000 on a turtle funeral, it’s difficult not to feel angry. . . this fiasco is so ridiculous it’s mockable and the power of mockery can destroy any earnest progress in a millisecond.

In case you missed our full investigation, you can read it here.

Simon Bridges joins Taxpayer Talk

You might have heard the news that former National Party leader Simon Bridges is releasing a book.

In a total coincidence, he also joined our Taxpayer Talk podcast to discuss his perspective as a former Party leader, growing intellectual intolerance, and the scourge of tax bracket creep. Click here to listen.

And as part of our 'MPs in Depth' series, I sat down with new Labour MP Tangi Utikere. Tangi was the Deputy Mayor of Palmerston North before jumping ship to Parliament when Iain Lees-Galloway decided not to stand again. Click here to listen.

You can subscribe to Taxpayer Talk via Apple Podcasts, Spotify, Google Podcasts, iHeart Radio and all good podcast apps.