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Op-ed: For the centre-right to win elections, they have to turn up

The following op-ed is written by Taxpayers' Union Executive Director Jordan Williams and is also available on the NZ Herald website (Premium) here.

Conventional wisdom says oppositions don't win elections – those in power lose them.

So much for conventional wisdom. If ever someone in power had set themselves up for a voter revolt, it was Phil Goff. After promising to eliminate wasteful spending and keep rates under control, his new local fuel tax, targeted rates, and waste charges worked to extend Len Brown's legacy of costly council bloat.

The undercurrent of ratepayer resentment had become a torrent of vitriol, judging by jeers at town hall debates. Going into the campaign, Phil Goff's net favourable/unfavourable rating according to internal National Party polling was negative 30 per cent – even lower than the hapless (now former) Wellington Mayor Justin Lester.

And yet Phil Goff's victory on Saturday was a trouncing. He brought in more than twice the votes of his closest challenger. Clearly, even with a deeply unpopular status quo, voters expect a palatable alternative to rally behind.

With the benefit of hindsight, we can see John Tamihere failed this basic test. Why would Aucklanders on the centre-right rally around a former Labour Minister, risking betrayal and disappointment? And why would more moderate voters elect a man who casually drops Nazi slogans into election debates?

Voters who this year should have led a ratepayer revolt opted to keep a clear conscience, voting for protest candidates like Craig Lord, or skipping the vote entirely.

Even so-called centre-right ticket "C& R Communities and Residents" could barely get more than a few candidates over the line outside of its Ōrākei stronghold. Its campaign was confused, even going so far as urging candidates not to give any specific commitments on rates and spending, despite this being the key issues it was running on. What should have been its campaign strength, and Goff's weakness, was given away.

Results outside of Auckland for the centre-right weren't much better. Christchurch re-elected the Labour-aligned Mayor Lianne Dalziel, Wellington's National Party-aligned "Wellington Party" failed to fire, and Dunedin elected the Green Party's Aaron Hawkins. In Hamilton a solid centre-right mayoral candidate was sidelined by a contest between two middling ones. The one place a Labour mayor has been booted out, in Wellington, it's in favour of a career councillor who in 2017 stood for New Zealand First.

So where are our palatable centre-right alternatives? Or to make the point more obvious: where the hell is the National Party?

Every central government election since 2002 has proven that the National Party brand is, at the very least, recognisable and palatable for centre-right voters. Faint praise indeed, but this is stellar compared to the performance of hodgepodge local tickets.

The constitutional role of political parties is to identify candidates on behalf of their supporters, to act as a quality control, a signal, and symbol. Without the National Party, every centre-right candidate has to start from nil to build recognition, and a campaign infrastructure.

No wonder the high profile candidates that were urged to stand for the Auckland Mayoralty by senior National Party figures turned it down – the party could not be relied upon to do anything to help them. This is what happened in 2016 to Vic Crone, who was well-meaning but naively talked into standing for Mayor by National Party figures who had no intention of helping her.

Even as someone who has an interest in local government, I struggled to work through the laundry list of candidates to figure out who to vote for. The Taxpayers' Union was bombarded with enquiries from members across the country asking us to issue "voting guides".

Labour and the Greens have long since cottoned on that local government matters, throwing their branding and resources at candidates they deem electable and ideologically sound. It works: On Saturday in Auckland, four Labour-branded councillors were elected, plus 27 local board members.

Those of us on the centre-right might not like the effectiveness of this strategy, but we ought to respect it. If you believe in your cause, why wouldn't you take advantage of the most valuable commodity in marketing – name recognition?

National's refusal to fly its colours in local elections is timidity bordering on negligence. Long suffering ratepayers and businesses in neglected territories from the Far North to Invercargill are more than capable of rallying behind change: they just need to see that choice on the ballot paper.

If National truly believes its principles of limited and accountable government are important, then entering local elections is a moral necessity.

Mike Tana should pay the money back

The New Zealand Taxpayers’ Union is calling on former Porirua Mayor Mike Tana to repay money clocked up on his ratepayer-funded fuel card for personal travel.

The Ernst and Young report released yesterday reveals that, within less than three months, former Porirua Mayor Mike Tana used his ratepayer-funded fuel mileage for 1,820km of personal travel, including five round trips to Palmerston North to transport his son.

Based on the Remuneration Authority’s 73-cent-per-kilometre compensation rate, Mayor Tana would have charged $1,328 in personal mileage to the ratepayer.

This level of private benefit from a ratepayer-funded fuel card is not reasonable. Running small personal errands in the work car is one thing, but if you’re embarking on a three-and-a-half hour drive for family reasons, you’d be pretty bold to charge that to your employer. In this case, the employer is the poor old Porirua ratepayer, and Mayor Tana chose to whack ratepayers not once, but on five separate occasions in just a couple of months.

There’s a simple way for Mayor Tana to clear his reputation: pay the money back. It’s not a huge sum, but it’s the decent thing to do.

Revealed: ‘Indigenous procurement' proposal will punish taxpayers

ScalesThe New Zealand Taxpayers’ Union is calling on Deputy Prime Minister Winston Peters to veto Cabinet’s proposal to give special preference to iwi and ‘indigenous firms’ during procurement processes.

Taxpayers’ Union Executive Director Jordan Williams says, “Buried in MBIE’s briefing to Phil Twyford [para. 27] as incoming Minister for Economic Development is perhaps Cabinet’s maddest idea yet: ‘indigenous procurement’ policies that ‘seek to actively increase government contracting to indigenous firms’.”

“When the Government decides who to hire, its sole consideration should be value for taxpayers. It should not use procurement as a way to do favours for particular groups.”

“Iwi authorities like Ngāi Tahu and Tainui are not little guys in need of a handout. Māori authorities already enjoy a special discounted corporate tax rate. This policy will inflate prices for taxpayers, and punish Kiwi businesses trying to compete fairly for government contracts.”

“Winston Peters always campaigns on ‘one law for all’, but does he mean it? This is a great opportunity for Mr Peters to act as a moderating influence and nip this dodgy idea in the bud.”

Editors' Notes:

The relevant paragraph of the BIM states:

  1. When deciding on procurement, Cabinet agreed that you and the Minister for Māori Development should jointly report back on indigenous procurement policies. Indigenous procurement policies seek to actively increase government contracting to indigenous firms. One option under consideration is to broaden the supplier diversity focus to include other disadvantaged groups (e.g. Pacific firms). We are preparing advice to support you in an initial meeting with the Minister for Māori Development on procurement diversity options.

BREAKING: Government finally pulls pin on controversial Clinton Foundation funding

Clintons

We can reveal that the Government has halted its funding of Clinton Foundation subsidiary the “Clinton Health Access Initiative” following nearly three years of campaigning on the issue by the Taxpayers’ Union.

New Zealand taxpayers, to date, have shovelled more than $10 million to the Clinton Health Access Initiative. Had the Government continued to make payments in accordance with the grant agreement, taxpayers would have been on the hook for millions more.

Soon after Hillary Clinton lost the Presidential election to Donald Trump, many western nations that were funding this diplomatic rort pulled out. Australia stopped its funding in late 2016, but New Zealand was one of the few to continue the claim that the funding was for genuine aid.

Taxpayers will celebrate the decision to finally stop using NZ Aid money to fund this scandal-plagued charity. So too will the nearly 7,000 Kiwis who signed our petition on the issue.

Official Information Act response from the Ministry of Foreign Affairs and Trade below. 

2019 Jonesie Awards celebrate the worst of government waste

Today at Parliament, the New Zealand Taxpayers' Union hosted the 2019 Jonesie Awards, an Oscars-style ceremony celebrating the best of the worst of government waste.

The Jonesie Awards are our annual celebration and lamentation of the weird and wackiest ways taxpayer money has been wasted in the last 12 months.

The Jonesie Awards are presented with a tongue-in-cheek entertainment Hollywood style ceremony complete with black ties, evening gown, and the Union's lovable mascot 'Porky the Waste-hater' appropriately dressed in a tuxedo.

While we have fun at the Jonesies, there is, of course, a serious underlying message: all of the spending is taxpayer money, time, and sweat. This ceremony is a warning to our malevolent money wasters in Parliament and town halls: rein it in, unless you want a golden porker of your own to mark your disturbing disrespect for taxpayers.

Local Government Nominees

  • Orakei Local Board: Creative grants – gardening for mansion owners and Tinder for the elderly. Property owners in New Zealand’s wealthiest suburbs of Remuera, Orakei, and Mission Bay are being given ratepayer-funded grants of up to $2,000 to cover the cost of pruning trees on their property. This Local Board has also funded online dating workshops for the elderly.
     
  • Palmerston North City Council: Corporate welfare for Toyota New Zealand. Ratepayers in Palmerston North forked out $391,000 to appease the world’s largest car manufacturer after it threatened to move its offices to another city. The decision was made in a closed council session and was only publicised after a Taxpayers’ Union information request.
     
  • Wellington City Council: $21,000 for studying bike lights. The lycra lobby is alive and well in Wellington. Wellington City Council spent $21,750 on not one, but two studies into different brands of bicycle lights. Sixty-one types of bike light were reviewed for battery run-time, light output, ease of charging, lighting modes, and water resistance.
     
  • Auckland Transport: $1.3 million for a doomed ride-sharing app. Auckland Transport produced an-Uber style app to taxi the wealthy citizens of Devonport to the ferry terminal. For each trip, the user pays $2.50, while ratepayers pay a $41 subsidy. The app was hoped to reduce congestion, but a survey shows it is mainly used by former cyclists, walkers, and bus users.
     
  • Joint nomination: Local councils fighting climate change with air miles. Local councils across the country collectively spent $2.4 million on international flights in 2017/18. Auckland Transport flew business class to a “low emissions vehicle workshop” in Madrid, and Nelson Mayor Rachel Reese visited a “Climatorium” in Copenhagen. Meanwhile, Whangarei ratepayers paid for 11 art museum staff to look at architecture in Vienna. All three councils have declared climate emergencies.

WINNER: Palmerston North City Council's corporate welfare for Toyota New Zealand.

Central Government Nominees

  • Hon Nanaia Mahuta: Local Government Minister forgets about ratepayers. When we heard that ratepayer groups could not get a response from the Local Government Minister, let alone a meeting, we dug deeper. An information request revealed that, despite a paycheque of $296,000 to look after the nation’s ratepayers, Nanaia Mahuta has not met with a single ratepayer association. Meanwhile, she is happy to meet with the council bureaucrats paid with ratepayer money.
     
  • Energy Efficiency and Conservation Authority: $65,000 for bunker oil energy. A “low emissions vehicle” grant was given to Interislander so it could install electric vehicle chargers on its ferries. The chargers are of course powered the same way as the rest of the boat: with emissions-spewing heavy bunker oil. Other grants totalling $4.5 million were given to companies like The Warehouse, New World, and Vector.
     
  • Prime Minister Jacinda Ardern: Fuel price inquiry hypocrisy. The Prime Minister says that New Zealanders are being “ripped off” at the petrol pump, and we agree. But the Commerce Commission investigation she ordered is not allowed to consider the effect of excise tax. So, while the companies take a sliver in profit, Jacinda Ardern gets to keep the 50 per cent of tax that inflates every petrol bill.
     
  • Hon Tracey Martin: for thinking deaf people can’t read. Our Associate Education Minister decided it would be wise to spend $800 of your money on a video of a sign language interpreter. This would make sense for a speech, but it this case, it was to translate one of her written press statements. $800 is our smallest nominated spend, but Jonesie adjudicators were stunned that a Minister evidently thinks deaf people are illiterate too.
     
  • Finance Minister Grant Robertson: $133,000 Wellbeing Budget document. The Government’s annual Budget should set the fiscal tone for all taxpayer spending. The official printed document is usually sparse, but the Wellbeing Budget incorporated glossy graphic designs and photography, blowing out costs by more than 50 percent compared to 2017. The model posing on the Budget’s front cover now lives in Australia, seeking better economic opportunities.

WINNER: Prime Minister Jacinda Ardern's fuel price inquiry hypocrisy.

Lifetime Achievement Award

Invercargill Mayor Sir Tim Shadbolt took home the most heinous ham: the Lifetime Achievement Award for excellence in government wast

His feats are new and old.
 
Sir Tim was arrested 33 times as a protestor in the 1960s and ‘70s, before running for Mayor of Waitemata City in 1983, where he unexpectedly won. After famously losing his mayoral chains (literally) twice, he was voted out in 1989. He then failed to get elected as MP for West Auckland, as Auckland Mayor (twice), and as MP for Wellington Central, before in 1993 finally finding the one group of voters who would accept him: the forgiving folk of Invercargill.
 
He famously said, “I don’t care where, as long as I’m Mayor”.
 
But Sir Tim wanted more. The very next year he unsuccessfully ran for Parliament again, was voted out as Mayor, ran for Parliament once more for the Legalise Cannabis party, and finally was welcomed back to the Invercargill mayoralty in 1998, where he has remained ever since.
 
Sir Tim is now a household name, and has supplemented his ratepayer-funded mayoral salary with a range of celebrity gigs, and even receives public money through his positions as ambassador for the Southern Institute of Technology and director for Invercargill Airport.
 
Sir Tim’s career has recent highlights: in 2015, his Council flew four staff members to China to buy Christmas lights, only to bring them home and discover the lights failed to meet New Zealand standards and were scrapped. A replacement set of lights cost ratepayers $250,000.
 
Sir Tim also has the honour of owning the country’s most expensive mayoral vehicle, a Chrysler 300C.
 
His Mayoral expenses this term alone include $3,100 maintaining his Chrysler, $19,500 on books (mostly books about himself to give to other people), $2,600 on donations to private charity, $8,000 on conference fees, $1,800 at local liquor stores, and $3,200 on custom made rubber wristbands that say, “I met the Mayor”.
 
This year, Mayor Tim was finally knighted. And adding to his prestige, today he enters the pantheon of government waste, alongside last year’s inaugural lifetime achievement winner, the Honourable Shane Jones.

Revealed: New Zealand's army of ratepayer-funded council staff

Staff graph

Figures obtained as part of the 2019 Ratepayers’ Report league tables reveal that local councils across New Zealand employ 30,497 staff – 5,376 of whom earn salaries north of $100,000.

Taxpayers’ Union spokesman Louis Houlbrooke says: "The sheer scale of council bureaucracy is stunning. Ratepayers are forking out salaries for a population the size of Timaru, or double the size of the New Zealand Defence Force. And one in six of these staff members earns a salary higher than $100,000. In the Auckland Super City it is one in four."

Some councils are less efficient in their staffing than others. Ratepayers' Report looks at staffing costs per household, to compare how bloated each council's bureaucracy is on an apples-to-apples basis. We also present staff-to-household ratios.

“Westland District Council ranks the least efficient in New Zealand in terms of both its staff costs and numbers. Meanwhile Rangitikei and Central Hawke's Bay District Councils appear to be getting the most from their staff.”

“Westland, at least, has the excuse of a large geographic area, and a small population means it lacks economies of scale. Ratepayers in Wairoa, Waitomo, Waitaki, and Christchurch should ask what their councils’ excuses are.”

“Often councils will justify rates increases on the basis of infrastructure spending, when in reality the spending is sucked up by rising payroll costs. Auckland ratepayers in particular have cause for concern, with an incredible 2,473 council employees paid more than $100,000. These costs are an obvious place to cut waste, especially as ratepayers suffer under higher rates and other charges.”

Total personnel costs per household (including CCOs):

Highest personnel cost per household:

  1. Westland District Council: $3,643
  2. Wairoa District Council: $3,319
  3. Waitomo District Council: $3,160
  4. Waitaki District Council: $3,143
  5. Christchurch City Council: $3,134

Lowest personnel cost per household:

  1. Rangitikei District Council: $622
  2. Upper Hutt City Council: $693
  3. Whangarei District Council: $718
  4. Tararua District Council: $723
  5. South Wairarapa District Council: $724

Average personnel cost per household: $1,364

Lowest and highest household-to-staff ratios (including CCOs):

Least efficient (households per staff member):

  1. Westland District Council: 19
  2. Waitomo District Council: 20
  3. Buller District Council: 26
  4. Hurunui District Council: 26
  5. Wairoa District Council: 34

Most efficient (households per staff member):

  1. Central Hawke's Bay District Council: 112
  2. Masterton District Council: 104
  3. Whangarei District Council: 102
  4. Rangitikei District Council: 102
  5. Hutt City Council: 100

Average (households per staff member): 67

Numbers of staff earning over $100,000 (including CCOs):

  1. Auckland Council: 2,473
  2. Christchurch City Council: 534 (excludes CCO staff, council failed to supply)
  3. Wellington City Council: 261
  4. Tauranga City Council: 138
  5. Hamilton City Council: 124
  6. Palmerston North City Council: 83
  7. Hastings District Council: 79
  8. Dunedin City Council: 79
  9. Waikato District Council: 69
  10. Queenstown-Lakes District Council: 62

Nationwide: 5,376
Nationwide (all salary levels): 30,497

Staff poster

2019 Ratepayers’ Report released, methodology explained

Banner

The New Zealand Taxpayers' Union, in partnership with the Auckland Ratepayers’ Alliance, has today published this year's Ratepayers' Report  – online local government league tables – at www.ratepayersreport.nz.

With these league tables, New Zealanders can easily compare their local council performance and financial position for 2017/18 against similar-sized councils and types.

Setting out more than two thousand data points, the Ratepayers' Report provides transparency, and per-household figures ensure fair comparisons between councils. The league tables rank Councils on metrics including average residential rates, staffing costs, and Council liabilities among others.

Taxpayers’ Union Executive Director Jordan Williams says, “Some councils do very well in the league tables, some far less so. All figures were sent to councils twice to double check before release.”

“Rates are still on the rise. On average, councils have increased their rates by $90, with the highest rates increase coming from Manawatu District Council which increased rates by $364, or 14%.”

“The data suggests Auckland ratepayers in particular have cause for concern, with the highest average rates in the country, and council liabilities of $21,941 per household. Auckland Council’s liabilities are second only to earthquake-affected Christchurch, and over three times the national average.”

“Every dollar spent by a Council was earned by a hard-working ratepayer. Ratepayers' Report allows ratepayers to understand if they could be getting a better deal.”

Notable Findings:

  • Christchurch City Council continues to have the highest liabilities per household compared to any other council ($25,402). Auckland Council follows in second place, with liabilities per household of $21,941. "That alone is an incredible figure," says Mr Williams. "Think about every letterbox in Auckland having a $21,941 credit card bill in it thanks to Len Brown and Phil Goff."
  • The average liabilities per household of all councils is $6,197.
  • Auckland Council ranks highest for average residential rates at $3,387. There are 2,473 staff paid salaries greater than $100,000 at Auckland Council and its CCOs.
  • The lowest average residential rates in New Zealand are levied by the Southland District Council ($1,737).
  • The least efficient council in terms of staffing is Westland District Council, with a staff member for every 19 households. The most efficient is Tararua District Council, with a staff member for every 117 households.
  • Only five Councils meet the full criteria for prudent Audit and Risk Committees. Two Councils, Palmerston North City Council and Waimakariri District Council, fail to meet any of the recommended oversight policies. Western Bay of Plenty fails to even have a separate Audit and Risk Committee, which is considered basic financial prudence.

Press releases:

Highest and lowest average rates

Highest and lowest liabilities

Auckland highlights

Wellington highlights

Canterbury highlights

Editors' notes:

Data for the report was compiled by the Taxpayers' Union and was supplied to all councils for review prior to publication.

Ratepayers' Report facilitates straightforward comparison of average residential rates via a formula first used by Napier City Council which allows for an 'apples to apples' comparison of average residential rates and charges, based on each council’s definition of a residential rating unit. Only Westland, Buller, and Waikato district councils were unwilling to provide the Taxpayers' Union with the necessary rates information.

For non-rates figures (i.e. liabilities, personnel costs) we have this year assessed council data using Stats NZ’s 2018 household estimates, with some councils opting to replace this estimate with an exact figure. We have done this because councils have different definitions of what constitutes a residential ratepayer or ‘rating unit’.

Queenstown-Lakes, Taupo, and Thames-Coromandel District Councils objected to the use of Stats NZ’s household figures, as these tend to exclude properties left empty, i.e. baches. As a result, per-household figures for these districts may be somewhat inflated.

Q & A

What is the purpose of Ratepayers’ Report?

Ratepayers' Report provides accountability and transparency to New Zealand ratepayers by allowing them to compare their local territorial authority with others around the country.

Where was the data sourced?

The Taxpayers' Union compiled the data in Ratepayers' Report after reviewing each council's annual report for the year ending June 30, 2018.

Other figures were mostly obtained under the Local Government Official Information and Meetings Act, and cover the 2017/18 financial year.

The data has been sent to each individual authority for their review and error checking prior to public launch.

Population and household data is from Stats NZ.

Where did the group finance figures come from?

They are taken from each Council's annual report. They are council figures, plus all those of subsidiary council-controlled organisations.

Which councils are assessed in Ratepayers' Report?

Of New Zealand's 67 territorial authorities, 66 are examined in Ratepayers' Report. That includes all city, district, and unitary councils, with the exclusion of the Chatham Islands Council (due to concerns surrounding that Council's workload pressure and unique position).

What about regional councils?

While we anticipate including regional councils in future editions of the Report, the data we have on their average residential rates bills is at this stage incomplete. Our research suggests that regional councils charge anywhere from $42 to $553 per residential ratepayer on top of the bill charged by territorial authorities. Gaps in the data and different definitions for residential ratepayers dictate that these figures should be considered as supporting evidence, rather than determinative.

Ratepayers’ Report does, however, include Regional Council information in its analysis of Audit and Risk Committees.

Is this the first Ratepayers' Report?

No. Ratepayers' Report was first published in 2014 jointly by the Taxpayers' Union and Fairfax Media. The Taxpayers’ Union have since published updated versions in both 2017 and 2018. This is the fourth edition.

How are the councils grouped?

Unitary authorities – the 5 territorial authorities which also carry out the functions of a regional authority are grouped.
Metropolitan – the 5 large councils with a population of over 120,000.
City – 6 smaller metropolitan councils with populations between 40,000 and 120,000.
Provincial – the largest group, 27 non-metropolitan councils with population over 20,000.
Rural – the remaining 23 councils.
Regional – the 11 Councils that make up the regions of New Zealand.

How was the average residential rate calculated?

Calculating an 'apples to apples' figure for residential rates is difficult because councils use various mixes of rates, levies, and user charges. Our approach is based on work by Napier City Council to find an average residential rate. The methodology councils were asked to use to calculate the figures disclosed in Ratepayers' Report is available here.

While we think this approach is useful and fair, the average residential rates figure should be a guide only. It does not, for example, factor in councils' reliance on commercial rates.

Unitary authorities (Auckland Council, Nelson City Council, Gisborne, Tasman, and Marlborough District Councils) perform the functions of a regional council and therefore can be expected to have higher rates than other territorial authorities.

Were councils consulted in the process?

Yes. Every council was sent a draft version of their respective page to review.

Can the results of the 2019 report be compared to the 2018 edition?

This year, for non-rates figures (i.e. liabilities, staff) we have assessed council data using Stats NZ’s 2018 household estimates, with some councils opting to replace this estimate with an exact figure. We have done this because councils have different definitions of what constitutes a residential ratepayer or ‘rating unit’.

The updated methodology means that (aside from the average rates metric which remains unchanged) the per-household figures should not be compared to the per-ratepayer figures in last year’s report. Nevertheless, we can provide the comparable time-series data for individual councils on request.

CRUSTACEAN CONTROVERSY: Council spends $6,000 on man in crayfish suit

After putting some feelers out, the New Zealand Taxpayers’ Union can reveal that Wellington regional ratepayers have paid almost $6,000 for “Frank the Crayfish”, a man in an elaborate crayfish suit who scolds ratepayers for their environmental habits.
 
Frank stars in Greater Wellington Regional Council’s ‘quirky’ environmental ads, currently warning against burning treated wood. The crayfish suit itself set ratepayers back $3,465, plus $2,500 for the actor.
 
For comparison, the work attire for Taxpayers’ Union mascot Porky the Waste-hatercost just USD100 on Alibaba.
 
Including video production and advertising, the full campaign has cost ratepayers $26,302 so far. Once another two more ad campaigns are completed, the Union estimates Frank will have set ratepayers back by around $67,000.
 
In its official information response to the Union, the Council says that a grown man in an “elaborate” crayfish costume adds “some humour” to serious environmental issues.
 
A crayfish was chosen as mascotbecause crayfish are “sensitive to water quality changes”. It is unclear how this relates to wood burning. The name Frank was chosen in service of the tagline, “Let’s have a frank conversation.” Campaign ads warn against making Frank “cray cray”.
 
The Council also confirmed that it is not sharing campaign costs with any other regional councils, missing an obvious opportunity to save ratepayer money.

This is yet another example of a council trying to emulate corporate gimmickry. Unlike corporate advertisers who need to stand out from competitors, the Council is a monopoly service provider. It could have settled for a cheap, no-frills and less confusing marketing campaign.

For the ratepayers who worked hard for that money, this spending is rock bottom stuff.

Frank the Creyfish

Frank

The Council's responses to our official information requests are available below.

Response_letter_to_Jordan_Williams_NZ_Taxpayers_Union_OIA_2019-257.pdf

Response_letter_to_Luke_Redwood_(New_Zealand_Taxpayer’s_Union)_OIA_2019-264.pdf

Op-ed: KiwiBuild reset plan ominously similar to 2008 American housing chaos

JoeThe following op-ed is written by Taxpayers' Union Economist Joe Ascroft.

On Wednesday, the Government finally announced its KiwiBuild reset. The target of 100,000 homes over ten years has been scrapped and replaced in part by a $400 million “Progressive Homeownership Scheme”, which would distribute additional deposit subsidies for first-home buyers and – subject to some conditions – allow first-home buyers to access government-backed mortgages with just five percent deposits.

The scheme is essentially an expansion of the National Government’s “Welcome Home Loan” policy, which backed mortgages for low-income households albeit with higher deposits and lower subsidies.

The scheme has good intentions. The Government is rightly concerned that many families are locked out of the housing market. However, the details of the scheme are deeply worrying.

First, the plan does nothing to address housing supply. Unless the Government introduces regulatory reform to make housing construction easier and cheaper, introducing additional subsidies and government-backed credit will simply be capitalised into house prices. Unless the underlying factor driving housing unaffordability is solved (not enough houses) the real winners will be existing home owners who will receive a capital gain.

Secondly, the scheme is hugely risky for taxpayers. The policy is specifically targeted at families who are struggling to save for a deposit due to – in Green Party co-leader Marama Davidson’s words – “high rents and low wages”. In other words, these are financially precarious households, who struggle to save and invest.

Granting those families low-deposit mortgages will not increase their incomes or change their savings behaviour. With very little savings or equity, their ability to meet mortgage repayments in the event of a recession or a substantial increase in interest rates is likely to be very poor – just as we saw in the United States in the mid-to-late 2000s, when NINJA (no income, no job or assets) home-owners defaulted on their mortgages at spectacular rates when interest rates climbed.

Worryingly for taxpayers, the Government has agreed to back these mortgages. In short, in the event of defaults any difference between the outstanding value of the mortgage and any capital recovered from a mortgagee sale would be met by taxpayers. In an environment of steadily climbing house prices, any risk to the Crown balance sheet might seem remote, but that can change quickly.

When mortgage defaults climbed in the United States, house prices began to fall and banks were unable to recover their losses. Government-backed lenders Fannie Mae and Freddie Mac, which targeted low-income borrowers in an eerily similar fashion to plans announced on Wednesday, fell over leaving taxpayers to pick up the pieces. The cost of the Fannie Mae and Freddie Mac bailout was $191 billion USD.

Simply, if the answer is subsidised, low-deposit government-backed mortgages for families with low incomes and very few assets, you have asked the wrong question.

The solution to easing the burden of high rental costs on low-income families is to radically reform building regulations and make densification significantly easier. That will involve making politically difficult decisions about the Resource Management Act and other planning laws. Crucially though, it will work and it won’t impose significant financial risks on taxpayers.

Revealed: Taxpayers shell out $15,000 for left-wing lobby group

ActionStation logo

The Government has used taxpayer money to hire its left-wing mates as the Friendship Police, reveals the New Zealand Taxpayers’ Union. 

In May 2019, Netsafe granted $15,000 in taxpayer funding to left-wing campaign group ActionStation, according to information obtained under the Official Information Act.

The payment breaches Netsafe’s commitment not to fund political organisations with Ministry of Justice money.

This is the same group that helps out Labour and the Greens during election campaigns. The cushy contract makes a lie of ActionStation’s claimed independence from government funding.

Taxpayers are unknowingly supporting ActionStation to tell New Zealanders how to have “better, safer and more productive conversations online around Māori, refugees, NZ history and Tiriti”. But the Government shouldn’t be boosting the bottom line of any political lobby group.

People on the left would rightfully be outraged if a National government contracted the Maxim Institute to teach sex-ed in schools, or the New Zealand Initiative to draft the Budget. In principle, this cosy payment to ActionStation is no different.

The Taxpayers’ Union is calling on ActionStation to refund the payment, and front up about any other taxpayer funding it receives or has applied for.


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