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Christchurch City Council buckles: releases $1.2m “touch wall” spending

After being faced with legal action from the Taxpayers’ Union (and potentially the Attorney General), Christchurch City Council has buckled and confirmed the amount spent on its seven-metre ‘touch wall’ – $1.245 million.

This was an eleventh-hour backdown from the Council. We literally had the affidavit signed, papers prepared, and were ten minutes away from filing in the High Court.

The fact this spending, originally requested back in January, is now exposed is a major win for transparency. It send a message to councils across the country that ratepayers expect and will demand transparency. Councils that ignore freedom of information laws will face very real legal consequences. This was to be in court in a matter of days.

The cost of this touch wall is, as we suspected all along, enormous. It says everything about the Council’s priorities that they would spend over a million dollars on a touch screen while basic infrastructure is in poor shape and rates are skyrocketing.

Like media organisations and other watchdog groups, we are heavy users of freedom of information requests, but we have never seen such stubborn secrecy over what you would expect to be a relatively minor spending item. This secrecy has now backfired – in a kind of ‘Streisand effect’, the touch wall’s cost has turned into a much bigger story. Let this be a lesson to politicians try to hide where our money is being spent.

Taxpayers' Union welcomes Ombudsman judgment against Christchurch City Council

The Ombudsman has invited the New Zealand Taxpayers’ Union to bring enforcement proceedings to the High Court over Christchurch City Council’s failure to release the spending figure for the seven metre ‘touch wall’ in its new library. He has also asked the Attorney General to consider doing the same.

Taxpayers’ Union Executive Director Jordan Williams says, “Over a month after the Ombudsman recommended releasing the spending figure, we’ve seen nothing from the Council. This is brazen, especially under a mayor who has been promising more transparency over the use of ratepayer money.”

“The Ombudsman has made an excellent and correct decision, first in recommending the release of the information, and now in approaching the Attorney General. We’ve never seen such a damning judgement against a public body.”

“We are currently seeking legal advice – bringing action against the Council ourselves is something we are considering, regardless of whether the Attorney General does the same.”

“Christchurch ratepayers have a significant interest in this kind of spending, especially as both the library and town hall projects face budget blowouts, and rates are being hiked by an average of six percent annually.”

“But this issue is bigger than Christchurch. For too long public agencies have flouted freedom of information law. If we need to take Christchurch City Council and Lianne Dalziel to Court to set a precedent that this sort of disregard for transparency has consequences, then it’s worth the effort.”

Taxpayers’ Union welcomes Rex Nicholls to Board of Directors

Rex NichollsThe New Zealand Taxpayers’ Union is pleased to announce that former Wellington City Councillor Rex Nicholls has joined the organisation's board of directors.
 
Rex’s background is in engineering, project management, and property investment. His mix of civic and private achievements place him perfectly as an ambassador for taxpayers.

Rex says:

“I’ve always operated on the basis that money in my pocket will be much more efficiently spent than if I run it past a Government Department first. Spending other people’s money should carry a huge duty of care – but it seldom does.”

More information about the Taxpayers’ Union team is available here: www.taxpayers.org.nz/our_team

'Hot horse' subsidy costs to sky-rocket: Winston's Dowry grows

Winston's-Dowry-banner-v1.1.png

It was revealed last week, that the tax break for racing industry bloodstock is expected to cost significantly more than previously anticipated. The tax breaks for the racing industry have faced ridicule as the only tax cut in Budget 2018.

That's not surprising: the racing industry has historically been a strong supporter of New Zealand First. The Electoral Commission recently found that Sir Patrick Hogan was in breach of the Electoral Act when he funded a full page ad in support of the party prior to the General Election last year. 

At Budget 2018, the cost of the tax break was expected to equal $4.8 million over the next four years, however IRD officials expect the tax break will cost up to $40 million - a 733% increase in the cost of the policy. That means taxpayers will be on the line for an additional $35.2 million over the next four years, which is all added onto Winston's Dowry!

Winston's Dowry as at 2 July: $5.168 billion ($2989 per household)

The total cost so far is $5.168 billion - or $2989 for the average New Zealand household, although if officials continue to increase the expected cost of policies, this figure will grow. 

"The Dowry" to date:

  • Provincial Growth Fund: $3 billion or $1735 per household
  • Additional funding for the Ministry of Foreign Affairs and Trade: $1.144 billion or $661 per household
  • Additional funding for the Ministry of Defence: $426 million or $246 per household
  • Additional funding for learning support: $272.8 million or $157 per household
  • Additional funding for Oranga Tamariki: $269.9 million or $156 per household 
  • Adjusted 'Hot horses' tax break, the new Forestry Hub, and a rename for the Ministry of Children: $55.4 million or $32.05 per household

Letter to Hon Kris Faafoi on alternative nicotine products

As part of our campaign to Clear the Air, we have written to Minister of Commerce and Consumer Affairs Kris Faafoi to highlight the government-led misinformation that prevents smokers from switching to less harmful alternatives, and saving up to $2 billion a year in excise tax.

Winston is in!

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With Jacinda Ardern now on maternity leave, Winston Peters has finally grasped the wheel of power.

However, Mr Peters has had significant control over spending since the Government was formed late last year. Since then, Winston has negotiated for an array of projects, policies, and prizes for him and his NZ First Ministers.

This includes the Provincial Growth Fund, significant increases in spending for the Ministry of Foreign Affairs and Trade, and the Ministry of Defence, a vanity project (re)re-branding of the Ministry for Children, and a tax credit for hot horses, among other initiatives. 

Winston's Dowry as at 21 June: $5.132 billion ($2960 per household)

The total cost so far is $5.132 billion - or $2960 for the average New Zealand household, although depending on how Winston behaves from the 9th floor, that figure could grow in coming weeks. We'll be watching closely for announcements from NZ First Ministers and the acting Prime Minister so we can update Winston's Dowry

"The Dowry" to date:

  • Provincial Growth Fund: $3 billion or $1735 per household
  • Additional funding for the Ministry of Foreign Affairs and Trade: $1.144 billion or $661 per household
  • Additional funding for the Ministry of Defence: $426 million or $246 per household
  • Additional funding for learning support: $272.8 million or $157 per household
  • Additional funding for Oranga Tamariki: $269.9 million or $156 per household 
  • 'Hot horses' tax break, the new Forestry Hub, and a rename for the Ministry of Children: $20.2 million or $11.70 per household

 

New report: Public sector wage data undermines public sector union claims

Wage Gap report cover

Over the last 25 years, public sector incomes have grown much faster than the private sector, while public sector employees also enjoy a higher rate of sick leave costing taxpayers $173 million, according to Public Sector Wage Gap: The taxpayer-funded premium for working for the government, a new report we've released today.

If you work for the Government, you earn a third more on average, with taxpayers footing the bill.

This report seriously undermines the public sector unions’ claim for 9-15 percent pay hikes for their members. It blows to bits claims the last Government did not pay bureaucrats enough.

The public sector pay gap nearly doubled since the 1990s. If anything, a wage freeze, not hikes, would be fairer.

Left wing activists and unions would have the public believe that the public sector has undergone nine years of neoliberal hell. But this shows that to be a lie.

Key findings of the report:

  • The gap in weekly earnings between the public and private sectors has grown since 1990, from 18.9% of private sector earnings to 34.6% in 2017. The gap peaked in 2010 at 38.4%. The premium is even higher for hourly earnings (as public sector employees, on average, work fewer hours).
  • If the Government had retained a public sector earnings premium of 20%, taxpayers would save $2.5 billion per year, or $1,445 per household in lower taxes or reduced Government debt.
  • The public sector took an average of 8.6 and 8.4 days of sick leave in 2016 and 2017, compared to the private sector average of 4.7 days per year.
  • If the public sector reduced its rates of sick leave to private sector levels, the taxpayers would save $173 million per year, or approximately $100 per household per year in lower taxes, or reduced Government debt.

Key recommendations:

  • The Government should set a goal of returning to a 20% public sector earnings premium by placing constraints on public sector wage growth and focusing on growing productivity.
  • If private sectors stagnate or decline (such as in a recession) the Government should be willing to cut public sector wages to match.

You can also download the report here.

Peters prodded into transparency over racing industry review

Rt Hon Winston Peters has now released the terms of reference for his review of the racing industry, due to intervention of the New Zealand Taxpayers’ Union and the Ombudsman.

New Zealand First has a long history of promoting handouts for the racing industry, with an all-weather track and new tax breaks just the latest examples. So naturally, we were very interested when Winston Peters announced a review of the sector.

Whether this type of review leads to impartial policy advice or just proposals to prop up an industry with taxpayer money depends on the questions raised in the review’s terms of reference.

We were stunned when the Minister refused to release the terms, saying there was no document literally titled ‘terms of reference’. After we involved the Ombudsman, the Minister has now released to us the letter to the review head that outlined the scope of the review.

There seems to be nothing remarkable about the released terms of reference, which begs the question of why Mr Peters’ office was so secretive in the first place.

Mr Peters could avoid the perception of cronyism if he were more transparent about his tinkering with the racing industry.

Tax Villains: The Spinoff breach $40,000 agreement with IRD

The New Zealand Taxpayers’ Union can reveal that The Spinoff have broken the terms of their agreement with IRD to publish content in their Tax Heroes project.

The Tax Heroes project, which featured a number of articles from writers associated with The Spinoff, intended to highlight the public good of paying taxes, and in doing so promote compliance with tax obligations among the public.

Due to an official information request, the Taxpayers’ Union can reveal that The Spinoff was paid $40,000 ($46,000 including GST) by the IRD to publish the series.

The IRD is required to be politically neutral – especially so for matters currently under consideration by Sir Michael Cullen’s Tax Working Group.

The Spinoff’s contract with the IRD specifically states: The Spinoff agrees not to refer to any political party or their policies in the content.

However, an IRD-branded article by Maria Slade, published on 31 March, ignores the contractual obligation.

Screenshot 1See also the disclosure statement at the end of the article:

Screenshot 2

The article “Why the lack of a capital gains tax is letting property companies off lightly” advocates for a Green Party policy, a capital gains tax, violating the agreement.

Further, the article’s very first sentence references Labour, which again violates the agreement.

Other overtly political articles bear the ‘Tax Heroes’ tag, but without IRD branding. IRD and The Spinoff must explain whether any of these articles were paid for with taxpayer funds.

If not, and IRD funding was only used for the articles labeled ‘partner content’, then the cost per article was approximately $6,600 – which seems extraordinary.

Taxpayer’s Union Executive Director Jordan Williams says, “The Spinoff appears to have misused $40,000 of taxpayers’ money to push a political message. It is disgraceful, and they should pay the money back."

“The IRD needs to be extremely careful about its place in our constitutional environment. Taxpayers expect our revenue collection service to be strictly apolitical. Any movement away from that norm is unacceptable.”

“Putting aside the breach of agreement, the Tax Heroes series was a terrible use of $40,000 in taxpayer money. The articles were effectively taxpayer-funded pro-tax propaganda, with the first article pushing the Orwellian message that ‘Tax is love’.”

“This kind of taxpayer-funded media rort may keep quasi-news platforms like The Spinoff afloat, but do it does no good for ordinary taxpayers. The IRD should not have been funding pay-for-play websites in the first place.”

Amazon’s exit from Australia a warning for NZ – Australian taxpayer advocate

Amazon’s decision to pull out of Australia in response to a new online shopping tax shows the peril of the New Zealand Government’s plan to introduce its own ‘Amazon tax’, says the New Zealand Taxpayers’ Union, in conjunction with its sister organisation the Australian Taxpayers’ Alliance.
 
Australian Taxpayers’ Alliance Director of Policy Satya Marar (who is currently on secondment in New Zealand) says, “The Australian Government’s online shopping tax denies shoppers and families the same consumer choice available to billions of shoppers worldwide.”
 
“If this happens in New Zealand, Kiwis will be denied access to about 500 million products, most of which are unavailable locally. So instead of creating a level playing field, it only harms consumers.”
 
“Last year, an Australian senate inquiry was told that the online shopping tax would not make Australian retailers competitive, would not raise a significant amount of revenue and that the cost of implementing the tax would force major online platforms to exit the market or cease serving Australians entirely. Now we see these consequences in action.”
 
“New Zealand faces the same risk as it introduces its own Amazon tax. The Government wouldn’t need to assist domestic retailers with taxes on overseas competitors if it addressed local pressures such as zoning laws, strict labour regulations and red tape.”


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