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Op-ed: An ode to Phil Twyford’s epic record of failure

Twyford

The following is an op-ed from Taxpayers' Union Campaigns Manager Louis Houlbrooke.

Phil Twyford says he will build light rail in Auckland if Labour wins the next election.
 
Of course, he promised exactly the same thing at the last election and, after spending two and a half years in discussions and $5 million of taxpayers’ money commissioning reports, nothing has been decided, far less built.
 
A Minister reaches a low point when he goes for re-election solemnly vowing to implement an old flagship policy ‘for real’ this time around. It was promised previously, it was not delivered. But perhaps it’s for the best: Twyford’s record of expensive policy failures suggests a tram down Dominion Road would terminate in hell.
 
When elected in 2017, Phil Twyford promised to build 100,000 KiwiBuild homes in 10 years, with an initial investment of $2 billion. More than two years into that period, KiwiBuild has delivered just 548 houses. At the current rate, Twyford’s promise will be fulfilled in a mere 436 years. He’s been stripped of his KiwiBuild responsibilities and the new Minister in charge, Megan Woods, avoids even uttering the policy’s name.
 
He also promised to build SkyPath – a cycleway across Auckland’s Harbour Bridge – for $67 million. The budget has already blown out to $360 million, with work not yet begun.
 
Then there was his 2017 promise to make “virtually all” of the Government’s 15,000 vehicles electric by 2025. So far, he’s achieved it for less than one percent.
 
Not content with a track record that makes David Clark look like Mr Fix-it, Phil Twyford appears determined to one-up himself. In the last month, he has unleashed a new tranche of disappointment and waste.
 
Twyford said he was a “huge advocate” for a rapid rail, a 60-minute service between Hamilton and Central Auckland, even though it was not a 2020 election pledge. That last part was surprising, considering he had commissioned a business case for his beloved project.

The business case put the cost of rapid rail “between several billion and more than $10 billion.”
The Taxpayers’ Union economist’s reaction was to start sobbing into his well-loved copy of Adam Smith’s ‘The Wealth of Nations’. “What kind of business case is that?” he lamented. “It’s going to be between two billion and more than ten. How do you even start to do a proper cost-benefit analysis when you have no real idea of the cost?”
 
We told our economist to do his job and find the midpoint of several billion and infinity. His head exploded and the Union is currently looking for a new economist.
 
Then there are the ongoing blowouts and delays in the Transmission Gully highway project. But according to Phil Twyford, Phil Twyford is not to blame. Apparently, 2020’s pandemic caused the problems of 2019 and 2018. Bad news, Dr Bloomfield: the virus is time-travelling.
 
Twyford had nine long years in opposition to develop policy, and now three longer years in government to implement it. He has failed at every major hurdle so far and shows no sign of reforming.
 
So, how has the Prime Minister responded to Twyford’s epic series of failures? She’s promoted him. Now at number four on Labour’s list, Twyford trails behind political powerhouse Kelvin Davis, but is ahead of Chris Hipkins, who runs a third of the Government, and Megan Woods – who seems to run the rest.
 
The Honourable Phil Twyford’s record this year won him the award for lifetime achievement in government waste. The previous year’s recipient, Sir Tim Shadbolt, troughed away for 35 years to receive that honour. Twyford got there in three. He’s that good at being bad.

Growing out of it: Five policies to encourage growth and conquer debt

The New Zealand Taxpayers’ Union has released a new paper outlining a suite of proposals to lift economic growth and therefore reduce debt as a proportion of GDP.

On current forecasts, government debt is set to reach $150,000 per New Zealand household. There are two ways to slay this debt monster: cut spending, or grow the economy. While we need to do both, our latest paper hones in on the second approach.

Growing out of it: Five policies to encourage growth and conquer debt makes five recommendations, all funded from the $14 billion set aside in the Government’s COVID-19 Response and Recovery Fund:

• Cut GST from 15% to 10% for the next 12 months
• Permanently cut the $70,000-threshold rate from 33% to 30%
• Permanently cut the $48,000-threshold from 30% to 27%
• 15-month hiring trial periods from October 2020 to end of 2021
• Increase the $100 million overseas investment threshold to $500 million

Targeted tax relief will spur economic activity when we need it most. We propose a temporary GST cut which will incentivise New Zealanders to bring forward planned spending, and we also suggest cuts to marginal income tax rates that will reward productive work.

Traditional tax relief, however, should only be one part of a growth package. Growth can also be encouraged through relief from regulatory taxes. Specifically, we propose temporary but significant relaxation in rules that make employers less willing to hire staff, and foreign businesses less likely to invest in New Zealand.

Decade of deficits revealed as Treasury opens the books

Dear Supporter,

I’m writing to you from the media and analyst “lock-up” where Treasury just presented its Pre-Election Economic and Fiscal Update.

The Update, which the Public Finance Act requires of Treasury just prior to every election, lays bare the Government’s books and include the latest projections on debt, spending, and the economy. This is the first proper update we’ve had from Treasury since the Budget way back in May.

In short, Treasury is projecting at least 15 years of deficits, unemployment to remain elevated for some time, and our economic recovery to be slower than previously expected.

Mood in the room

Understandably, the room was sombre. Journalists targeted the Minister of Finance Grant Robertson with questions on accelerating house prices and inequality, while analysts in the room noted the substantial increase in projected debt over the next decade.

On debt, the Minister was defensive. He tried to argue that he was unwilling to introduce austerity-style cuts to New Zealand, but didn't present a plan for New Zealand to get out of our looming 15 year debt spiral. More explanation will be needed from Labour if they want to remain credible on the economy.

Deficits 

With economic growth expected to be weaker in the next four years than previously forecast, Treasury is now projecting deficits right out until the end of their projection range in 2033/34. This is a change from its forecasts at the May Budget – when Treasury had expected we would return to surplus by 2027/28.

The result for taxpayers: net crown debt is expected to be $269.3 billion – or $149,600 per household – in 2033/34. That’s up from the $132,700 per household forecast at the Budget in May.

Weaker long-term economic recovery

The latest forecasts indicate unemployment is expected to remain persistently high. While unemployment is not expected to spike as aggressively as Treasury forecast in May, peak unemployment (of 7.8%) is now not expected to arrive until March 2022 – so the economic pain for some households may continue to intensify for the next 18 months. Previously unemployment had been expected to be down at 6% by March 2022.  

But worst fears for 2020 avoided 

At the Budget in May, the economy had been expected to contract by 24% (on an annualised basis) in the second quarter of this year, but Treasury now expects the contraction to be smaller at 16%. We will find whether that’s accurate tomorrow when Stats NZ release the official numbers. Treasury are attributing this smaller contraction to the Government’s wide-spread (and expensive) wage subsidy scheme and a faster than expected bounce-back from national lockdown.  

In the near term that is having an impact on deficits, which are generally not as high as Budget forecasts in May. These better-than-expected near-term forecasts are reflected in the labour market – the fear of unemployment reaching 9.8% in the third quarter of this year hasn’t borne out.

Conclusion

With so much deficit spending, the Taxpayers’ Union's message of fiscal prudence and ensuring quality government spending is more important than ever. Today's numbers provide alarming context to the questionable lolly-scramble announcements being made on the election campaign trail.

You can read Louis’ comments to media here: “Decade of deficits” are a national crisis

Thank you for your support,


Joe Ascroft
Economist
New Zealand Taxpayers' Union

 

Taxpayer Update: Politicians kill jobs | MP's office rort | Goodie bags

New paper reveals how 'job creation' projects destroy jobs

Too often, our politicians fall into the trap of thinking they can create jobs by piling on more and more government taxpayer spending. But if that were true, high-spending countries like Greece and Spain wouldn't be facing a decades-long employment crisis.

The Taxpayers' Union's latest briefing paper reveals how Government spending – including projects intended to create jobs – destroys productivity and employment.

We draw on work from Treasury and New Zealand economists estimating the 'deadweight loss' of our tax system  this is the way taxation motivates people to work less, and spend and invest less, leading to economic distortions. Applying it to some recently announced pet projects is sobering:

Jobs cost image

Because government spending projects are funded via taxation, we can use what economists call the "deadweight loss" to see how many jobs are killed by handouts such as James Shaw's $11.7 million grant to a "Green School".

Click here to read the paper.

While it's true that economic stimulus is needed in the era of COVID-19, this needn't come in the form of giant cheques. Leaving this money in the economy via lower tax rates will allow money to circulate in a way that creates jobs passively, without costly perverse incentives.

Taxpayers rorted by Labour MP's electorate office deal

Ginny  + Monster

The cozy deal between list MP Ginny Anderson (pictured above with the Debt Monster), the Labour Party, and the NZ Professional Firefighters Union is a rort on taxpayers.

As Stuff explains, Labour gets cheap rent on office space off a local union, sublets the rooms to Andersen, and then bills parliament (i.e. taxpayers) at a markup, pocketing the difference.

Taxpayer funding for offices is meant to cover the costs of being an MP and servicing constituents. Here, Ginny Anderson has abused that trust to line the pockets of her political party.

This sort of union backhander is what we’d expect to see in the corrupt unions of Australia. Here in New Zealand, we expect such favours to be disclosed as donations, so why weren't they?

With the discounted rent not being disclosed as a political donation, we've referred the matter to the Electoral Commission. We're also writing to every other MP to ensure they're not funneling their office funding to political mates or their business interests.

"Green School" handout shows dangerous trend of horse-trading over funds

James Shaw

It's been revealed that James Shaw put billions of dollars in infrastructure funding on the line in order to negotiate his $11.7 million handout for a private "Green School".

This is a perfect example of a worrying trend in the way the Government makes funding decisions. Here's what Jordan had to say:

The spectacle of politicians horse-trading individual funding decisions is something we expect to see in smoke-filled rooms of yesteryear, not a modern day New Zealand with a reputation of being corruption-free.

The Provincial Growth Fund, and now the COVID ‘shovel ready’ fund, are normalising a process of decision making that rewards companies which are politically connected. It is a dangerous path.

Steven Joyce reintroduced the sort of corporate welfare largess not seen in New Zealand since the Muldoon Government. But instead of fixing the problem, the current Government has doubled down and we have now returned to politicians making funding decisions for individual projects and pet causes.

Enough is enough. Now we are seeing the warts and all flaws in the process, New Zealand should return to a transparent process of the politician’s job being limited to setting criteria and objectives, and leaving it to officials to make the individual grant decisions.

State Services Commissioner responds to our complaint regarding the Ardern-Bloomfield ad

Bloomfield ad

Remember the Labour Party's ad featuring Dr Ashley Bloomfield and other public servants? We complained to the State Services Commissioner that it was an improper use of taxpayer-funded staff.

Now, the Commissioner has responded:

It would not be appropriate for a public servant to agree to feature in party political electoral material in their official capacity where this implies endorsement by the public servant of the political party. To do so would compromise their political neutrality and by implication that of the Public Service as a whole.
...
Placing footage of Ministers and public servants doing their official work on a political party branded platform could create confusion about the motivations and political neutrality of the public servants concerned. ... In this instance, and having regard to all the circumstances, my judgement is that on balance there is potential for questions to be raised regarding the participation of the public servants in the video

The Commissioner isn't taking further action (the video has already been removed) but at least he's has sent the message to bureaucrats that it is totally inappropriate for public servants to feature in a party political advert. Taxpayers pay public servants to do their jobs, not to aid their political masters in re-election campaigns.

The Commissioner also said, “I understand that none of the public servants involved were aware that the footage would be used in the way that it was.”

Based on this, it appears there has been a clear breach of the Cabinet Manual, which states ‘Ministers must uphold the political neutrality of the public service and not ask officials to act in any way which would conflict with their obligation of neutrality.’ But enforcement of the integrity of the Manual is ultimately up to the Prime Minister. Some would say that’s a case of the fox guarding the henhouse!

Revealed: Taxpayer-funded ‘wellbeing’ goodie bags during lockdown

Goodie bags

Our research team recently revealed that the NZ Super Fund spent over $15,000 on “COVID-19 well-being parcels” from designer supermarket Farro Fresh for its highly-paid staff over lockdown.

According to NZSF, the parcels included ‘sundry goods’ such as coffee and hot cross buns.

Forty-five of the Super Fund's staff are paid more than $300,000. Pretty much everyone else is paid more than $100,000.  As I told the Herald, these people do not need care packages paid for by taxpayers who are going without during COVID-19 lockdown.

The Taxpayers’ Union requested the credit card statements of the NZSF from the 1st of March 2020 – 31 May 2020 under the Official Information Act. In addition to the goodie bags, other interesting payments included:

  • Inspired Accountants team building trip for corporate strategy team for $1359.90 paid for during Level 3 lockdown.

  • A canoe hire for $794.00.

  • Hand sanitiser for $568.80.

  • Renewal of a practicing certificate with the NZ Psychologists Board for $550.85.

  • A 10-year anniversary gift for a staff member for $515.

  • Lunch at White & Wongs for $156 the day it was announced New Zealand would enter Level 4 lockdown.

  • “Motivation morning tea” before working from home for the investments team, for $107.61.

Have a great week,

Louis circle


Louis Houlbrooke
Campaigns Manager
New Zealand Taxpayers' Union

Complaint laid with Broadcasting Standards Authority re Labour Party TV ad

The New Zealand Taxpayers’ Union has laid a complaint with the Broadcasting Standards Authority regarding the Labour Party’s first television advertisement for the 2020 election campaign.

In the advertisement, Jacinda Ardern misleadingly claims that her Party will “make apprenticeships free”. In reality, these apprenticeships are not free – they are paid for by taxpayers.

Spreading the myth that there is such a thing as a free lunch – or a free apprenticeship – is wrong. That’s why we’re holding the politicians to account.

Under Labour everyone who earns up to $300,000 a year will pay more tax in NZ than Australia

Labour have just announced a new tax rate of 39% on incomes over $180,000. This is in contrast to Australia that has legislated to cut taxes.

Of course the 39% new tax rate is just the beginning. If they have a Labour/Green Government then they could strike a deal to implement part of the Greens’ tax agenda also.

But even with just what Labour is promising, this will see every New Zealander who earns up to and including $300,000 a year paying more income tax in New Zealand than they would in Australia.

Income NZ Aust Extra tax NZ
 $    10,000  $      1,050  $             –    $          1,050
 $    20,000  $      2,520  $          342  $          2,178
 $    30,000  $      4,270  $      2,242  $          2,028
 $    40,000  $      6,020  $      4,142  $          1,878
 $    50,000  $      8,020  $      6,592  $          1,428
 $    60,000  $    11,020  $      9,592  $          1,428
 $    70,000  $    14,020  $    12,592  $          1,428
 $    80,000  $    17,320  $    15,592  $          1,728
 $    90,000  $    20,620  $    18,592  $          2,028
 $  100,000  $    23,920  $    21,592  $          2,328
 $  110,000  $    27,220  $    24,592  $          2,628
 $  120,000  $    30,520  $    27,592  $          2,928
 $  130,000  $    33,820  $    30,592  $          3,228
 $  140,000  $    37,120  $    33,592  $          3,528
 $  150,000  $    40,420  $    36,592  $          3,828
 $  160,000  $    43,720  $    39,592  $          4,128
 $  170,000  $    47,020  $    42,592  $          4,428
 $  180,000  $    50,320  $    45,592  $          4,728
 $  190,000  $    54,220  $    48,592  $          5,628
 $  200,000  $    58,120  $    51,592  $          6,528
 $  210,000  $    62,020  $    56,092  $          5,928
 $  220,000  $    65,920  $    60,592  $          5,328
 $  230,000  $    69,820  $    65,092  $          4,728
 $  240,000  $    73,720  $    69,592  $          4,128
 $  250,000  $    77,620  $    74,092  $          3,528
 $  260,000  $    81,520  $    78,592  $          2,928
 $  270,000  $    85,420  $    83,092  $          2,328
 $  280,000  $    89,320  $    87,592  $          1,728
 $  290,000  $    93,220  $    92,092  $          1,128
 $  300,000  $    97,120  $    96,592  $             528
 $  310,000  $  101,020  $  101,092  $             (72)

A person earning $40,000 a year pays 45% more income tax in NZ than Australia. On $70,000 you are paying 11% more here than Australia and on $200,000 you are paying 13% more here than Australia.

The amount of revenue this will bring in is trivial compared to the amount of extra spending and debt Labour is incurring. So beyond doubt, if re-elected, they’ll then say they need to increases tax even more.

National on the other hand says it is unfair that inflation pushes you into a higher tax bracket even when your disposable income remains constant, so National will inflation adjust tax brackets to stop inflation pushing up your tax bill every year.

David Farrar is a Cofounder of the Taxpayers' Uion. This post originally appears on Kiwiblog.co.nz

 

105 police line: callers waiting longer, hanging up during lockdown

Documents released to the New Zealand Taxpayers’ Union under the Official Information Act revealed that during lockdown, almost 40% of callers to the non-emergency 105 police number abandoned calls rather than wait for an answer. Further, the average wait-time appeared to increase significantly during this period.

For the period of 1-17 April:

• 38.28% of callers abandoned calls.
• Average wait time was 6 minutes 11 seconds.*
• Ten callers waited longer than 45 minutes, with the longest wait being 53 minutes.

It is a concern if frustrated callers were opting to not report crime or breaches of the COVID-19 level 4 lockdown rules.

The police spent $1.22 million on an advertising campaign to promote the 105 number. The callers who spend more than 45 minutes waiting for the police to pick up would probably have preferred some of that money was used on the frontline service.  

While the average waiting time, is reported in 2019 was 56-73 seconds, during COVID-19 lockdown that extended to more than six minutes.

Many government departments found themselves with nothing to do during lockdown. Smart all-of-government thinking would have seen under-utilised human resources reallocated away from non-essential departments to frontline services such as police communication. 

*Police were unable to provide us with the average estimated waiting time given to callers at the beginning of calls.

References:

Information Response Document 1
Information Response Document 2

Briefing paper: The jobs cost of taxpayer-funded projects

The New Zealand Taxpayers' Union can reveal that the $11.7 million payment to the Green School will result in 25 fewer jobs in the private sector.

This calculation was made based on a new briefing paper, The jobs cost of taxpayer-funded projects, released by the Union today.

Union spokesman Louis Houlbrooke says, "Our latest research examines work by the Treasury and New Zealand economists estimating the 'deadweight loss' of our tax system this is the measure of the cost of taxation that is not the amount of money taken from the private sector, but the way the taxation motivates people to work less, and spend and invest less, leading to economic distortions."

"Because government spending is funded via taxation, we can examine the deadweight loss of handouts such as that announced by James Shaw last week."

"Research from local economists leads us to a conservative estimate that the deadweight loss of tax (or the spending it funds) is about 15%. That means the Green School handout didn't just take $11.7 million from taxpayers; it cost the economy an additional $1,755,000."

"So how many jobs did this eliminate? Based on the government's own job creation estimates, a job can be created for around $70,000. That means the deadweight loss of the Green School handout cost the economy 25 jobs." 

"Too often, our politicians fall into the trap of thinking they can create employment with increased spending. But if that were true, high-spending countries like Greece and Spain wouldn't be facing employment crises. While it's true that economic stimulus is needed in the era of COVID-19, this needn't come in the form of giant cheques. Leaving this money in the economy via lower tax rates will allow money to circulate in a way that creates jobs passively, without costly perverse incentives."

Spending items singled out as examples in the briefing paper include:

• The $72.5 million support package for the racing industry generated $10.9 million of deadweight loss and cost the economy 155 jobs.
• The $1 billion annual allocation for the Provincial Growth Fund over the last three years has generated $150 million of deadweight loss per year and cost the economy 2140 jobs per year.

Opinion: Ratepayers deserve the right to fire their representatives

This op-ed is written by Taxpayers' Union Co-Founder Jordan Williams and was published in the print edition of The Northland Age on 3 September 2020.

Sir Winston Churchill said that democracy is the worst form of Government except for all those other forms that have been tried from time to time.  He is right, but not for the reason opinion leaders now pontificate.

In modern times democracy is lauded for its ‘representation’. But if that were true, surely we’d want a system better at picking the best and brightest to ‘represent’ us. No, it’s not the representation that makes democracy great, it’s the opposite: the ability to sack our elected leaders – to ‘kick the buggers out’.

But as we’ve seen so often in local government, the chance to kick the underperforming, the dishonest, or the lame ducks out does not come round enough.  Auckland was lumped with Len Brown for three years too long after his antics and abuse of office became public. We’ve now got a Mayor under investigation by the Serious Fraud Office and offering no assurances that he will stand down if charges are laid.

Voter recall options are gaining popularity overseas and it's time New Zealand had the conversation. That’s why the Taxpayers’ Union has launched a proposal with other ratepayer groups advocating for the introduction of recall elections at all levels of local government, including District Health Boards.

A motion to recall an elected official would need the signatures of at least ten percent of voters in that official’s constituency. This is called the trigger threshold. If the threshold is reached, there will be a poll to determine if the representative should be recalled. If recall is supported by a majority, a by election would occur. A recalled official would be eligible to stand in that election (unless they are otherwise prohibited by existing law).

A recall option would improve democratic accountability by holding officials to account directly. When a local politician ignores public sentiment, misbehaves, or breaks an election promise, they would risk having to face the people again, prior to the next scheduled poll. The policy would enable voters to have a say within a term of office, rather than just at election time every three years.

It affirms the basic concept of “sovereignty of the people”. The right to elect should include the right to eject.

We propose some constraints, such as not allowing for a recall to be triggered within six months of a scheduled election and preventing the same official facing a recall election within six-months of winning an earlier poll. We also suggest the term of local government bodies could be extended by one year to four years, once the safety mechanism of recall elections is in place.

A ten percent trigger threshold is the same as applies for citizens-initiated referenda. For the Auckland Mayor, it would mean around 38,000 signatures would be required – not an easy task. A recall poll for an Auckland City Councillor could be triggered by around 11,000 signatures from the applicable ward.

With recall elections, Auckland ratepayers could have ejected Len Brown for his expense shenanigans, histrionics, and tabletop dalliances. Kāpiti Coast ratepayers could have ousted David Scott who refused to resign for more than a year after being convicted of indecently assaulting a female colleague by rubbing his genitals against her during a council morning tea.

It's time to return the power to the people, and ensure that our elected officials have voters firmly in mind as they exercise their civil decision making on behalf of us all.

The joint proposal paper, ‘Recall Elections for Local Government’, is available to read at www.taxpayers.org.nz/recall_paper

Police plan to turn motorists into cash cows

Title image

Did you see the news break yesterday that the Police are abolishing their 10km/h speed tolerance nationwide?

That means that from today Police will be issuing fines for going as little as 101km/h on the open road – even when passing another vehicle!

This Government has put up fuel taxes every year, and introduced the Auckland Regional Fuel Tax.  Now they’re using the Police as tax collectors.

Click here to sign our petition against this nasty revenue grab.

Road safety advocates have labelled the move as “petty, vindictive and ineffective”.  Deliberate speeding is one thing.  But unintentional speeding where it’s a few kms over, such as when a driver is not fixated on the speedo, should not be fined.  Crashes caused by speeding are seldom due to a driver doing one or two kms over the limit.

This new policy that will see thousands of New Zealanders fined for going only one or two kms over the posted limit – even while passing another vehicle.

Police Minister Stuart Nash can overrule this policy

The one person who can overrule this policy is the Police Minister Stuart Nash. 

Jordan knows Stuart pretty well from his electorate in the Hawke’s Bay.  Jordan says that Minister Nash will almost certainly buckle to public pressure if we put enough on him. 

We'll deliver the petition to the Minister when it reaches 5,000 signatures, but in the meantime, let the Minister of Police know you've signed by flicking him a message at s.nash@ministers.govt.nz.

Thank you for your support.

Louis circle


Louis Houlbrooke
Campaigns Manager
New Zealand Taxpayers' Union

PS. You can share our petition to keep the 10km/h tolerance on Facebook by clicking here.

Revealed: Taxpayer-funded ‘wellbeing’ goodie bags during Level 4 lockdown

Farro parcelThe New Zealand Taxpayers’ Union can reveal that the NZ Super Fund spent over $15,000 on “COVID-19 well-being parcels” from designer supermarket Farro Fresh for the Fund’s highly-paid staff over lockdown.

Taxpayers’ Union spokesperson Louis Houlbrooke says: “At a time when global markets were plummeting, and the fund’s investment portfolio was dwindling, the leadership at NZSF were focused on buying goodie bags for their well-remunerated staff.”

According to NZSF, the parcels included ‘sundry goods’ such as coffee and hot cross buns. Assuming every full-time staff member received a goodie bag, the average parcel cost about $106.

“The CEO of NZSF is paid around a million dollars per year.  Forty-five staff are paid more than $300,000. Pretty much everyone else is paid more than $100,000 – 121 out of 135 full-time staff.  These people do not need home-delivered hot-cross buns funded by taxpayers who are going without during COVID-19 lockdown.”

“The pandemic has once again highlighted the mismatch between the public and private sectors during an economic crisis. The unprecedented economic fallout of COVID-19 left many in the private sector reeling. Businesses unable to trade during the Level 4 lockdown were left scrambling to make up the losses on their balance sheets, with closures and lay-offs common.”

“In stark contrast, staff at NZSF enjoyed complete job security and hot cross buns while the taxpayers who fund their salaries were cutting back.” 

The Taxpayers’ Union requested the credit card statements of the NZSF from the 1st of March 2020 – 31 May 2020 under the Official Information Act. We found:

$9,782.00 spent on Farro Covid-19 wellbeing parcels on 2 April

$5,174.00 spent on Farro Covid-19 wellbeing parcels on 4 May

$89.50 spent on an individual Covid-19 wellbeing parcel from Baskits on 4 April

$88.58 spent on an individual Covid-19 wellbeing parcel from Baskits on 3 May

Other statements of interest included:

Inspired Accountants team building trip for corporate strategy team for $1359.90 paid for on 6 May – during Level 3 lockdown.

A canoe hire for $794.00 on 9 March.

Hand sanitiser for $568.80 on 6 March.

Renewal of a practicing certificate with the NZ Psychologists Board for $550.85 on 6 March.

A 10-year anniversary gift for a staff member for $515 on 24 April.

Lunch at White & Wongs for $156 on 23 March – the day it was announced New Zealand would enter Level 4 lockdown.

“Motivation morning tea” before working from home for the investments team, for $107.61 on 23 March.

Meals from Farro for a staff member “having difficult time during lockdown” for $94.97 on 2 April.

Taxpayer Update: Bloomfield ad | Recall elections | Burger subsidies

Labour uses Ashley Bloomfield for the election campaign

Bloomfield ad
On Saturday the Labour Party posted a new ad on its Facebook page. The ad was filmed in the Ministry of Health's contact tracing centre and included a number of public servants, including Dr Ashley Bloomfield (see the still image above).

This is disgraceful. Taxpayer-funded civil servants should not be made complicit in the governing party’s political propaganda.

And during an election campaign, it is especially important that the Prime Minister does not use her special access to public servants in a way that advantages her political party. You can read our full comments here.

Shortly after we (and ACT) drew attention to these problems, Labour took down the video for a re-edit. But it's hard to see how this ad can be salvaged.

We've lodged a complaint with the State Services Commission.

Local leadership woes show need for recall elections

Tenby Powell

Two recent stories are sadly typical examples of failed leadership at the local level.

At Tauranga City Council, elected officials are calling for the resignation of Mayor Tenby Powell, who has apparently created a toxic culture, abusing colleagues in front of staff and causing one councillor to claim he hates working at the Council.

Meanwhile, at Canterbury DHB, seven out of 11 executives have resigned, with the chief medical officer blaming the Board's adversarial culture.

Frustratingly, in both cases local voters have to wait two years for the chance to eject those responsible.

We say that's not good enough. In the latest episode of Policy in 60 Seconds, Islay explains how recall elections could be introduced in New Zealand to boot out failed politicians before their term is up:

Click here to watch on Facebook.

Last week we teamed up with the Ratepayers' Alliance and the Rodney-based Northern Action Group to launch a joint campaign for recall elections.

Here's Jordan discussing the idea with Peter Williams on Magic Talk.

You can read the policy proposal paper here, and add your voice to the campaign here.

Burger subsidies? There's got to be a better way

Burgers

The Restaurant Association is campaigning for a taxpayer-funded subsidy on dining out.

Usually, a business group wouldn’t dare ask for such a blatant special favour. But in the age of COVID-19, the floodgates have opened with the Government agreeing to handouts for favoured sectors such as the racing industry, and to fashionable businesses like AJ Hackett Bungy.

Financial assistance should apply fairly to all. A temporary cut to GST, for example, would benefit all struggling businesses by encouraging consumers to bring forward spending, whether that be on eating out or on a new washing machine.

I made the case for a temporary GST cut in this op-ed on Interest.co.nz.

We'd also suggest that instead of handouts, many businesses could benefit from regulatory relief which doesn’t cost taxpayers a cent. In fact, the Restaurant Association was on to a good thing earlier last week when it suggested restaurants should be able to sell alcohol with their deliveries and takeaways.

$8.8 million beautification of council chamber is obscene

WRC office

Ratepayers in the Waikato are forking out $8.8 million for the Regional Council's fit-out of its new office.

The Chairman, Russ Rimmington, complained that before renovation the chamber looked like a badminton hall and had ‘no style’.

Diddums. Self-important regional councillors might think they’re entitled to more extravagant surroundings, but most ratepayers will never see the inside of this building.

The Council doesn’t even own the building, so the $3.1 million spent on building works won’t be reclaimed at sale down the line. From a ratepayer perspective, this money may as well have been tossed in the river.

More Debt Monster sightings

After a brief disappearance during the new COVID-19 outbreak, the Debt Monster is back with a vengeance.

New Zealand First staff were alarmed to see him approaching their campaign bus outside Parliament, and drove away moments after this photo was taken:

DM with bus

Later, he was seen trying out Trevor Mallard's $572,000 slide:

DM on slide

Witnesses report he's a big fan.

The Debt Monster even tried to give James Shaw a hug at a business breakfast, but the Green Party co-leader wouldn't face him. 😔

DM with Shaw

Taxpayer Talk podcast going strong

Two more episodes of our Taxpayer Talk podcast are available.

In the first, Islay sits down with former Treasury economist Michael Reddell to discuss what the Reserve Bank's money-printing and interest rate-cutting means for the economy. Listen here.

In the second, I challenge the CEO of Tourism NZ to explain why his agency is spending $10 million on an international tourism campaign while the borders are closed. Listen here.

You can find all our Taxpayer Talk episodes on Apple PodcastsSpotifyGoogle Podcasts, and iHeartRadio.

Have a great week,

Louis circle

A picture containing mirror

Description automatically generated
Louis Houlbrooke
Campaigns Manager
New Zealand Taxpayers' Union

 

Media coverage:

Newshub  ACT's David Seymour says Labour acting like a 'one-party state' after releasing video featuring shot of Ashley Bloomfield

Newstalk ZB  Labour campaign ad featuring Ashley Bloomfield has been taken down

Stuff  Mega polytech has 21 staff with chief executive in their title

Stuff  Restaurants want Government to spend $27m subsidising meals

Northland Age  A pattern of sloppiness

KiwiBlog  Taxpayer Talk: Michael Reddell on Unemployment, Negative Interest Rates and a Temporary Cut to GST

Sunday Star-Times  The price of our vain belief in Covid-19 exceptionalism

Interest.co.nz  If we can't cut the OCR, how about GST?

Stuff  'Don't blame us, we don't decide what we're paid' - the catchcry of mayors and councillors everywhere

NZ Herald  Covid 19 coronavirus lockdown: Auckland Mayor Phil Goff on extension - 'Do not panic buy'

Northland Age  A tale of two speeches

Homepaddock  No indexation = tax increase

Sunday Star-Times  What NZ's economy can learn from the myth of Franklin Roosevelt's New Deal success

Otago Daily Times  Councillor's $100k-plus salary for 30hrs a week

Timaru Herald  Another SCDHB surplus 'sets an example' for others

 

Proposal paper: A recall option for local government

The New Zealand Taxpayers’ Union, its sister group, the Auckland Ratepayers’ Alliance, and Rodney-based ratepayer group Northern Action Group, are today launching a joint campaign and proposal paper calling for the introduction of recall elections across local government, including District Health Boards.

To support this campaign, click here to email the Labour and National Parties calling on them to adopt recall elections into the their 2020 election manifestos.

Louis Houlbrooke a Taxpayers’ Union spokesperson says:

“Recall elections affirm the basic concept of ‘sovereignty of the people’. In a democracy, it is a fundamental right to elect representatives and that should also include the right to remove them from office and replace them at any time. It is also suggested in the report that the term of local government bodies be extended by one year to four years, once the safety mechanism of recall elections is in place.”

Jo Holmes a Ratepayers’ Alliance spokesperson says:

“Ratepayers deserve the right to fire their poorly performing representatives. We’ve had Len Brown, and the pain of having to wait three years to get rid of a lame-duck mayor after the expose of his abuse of office. Now we have a Mayor facing an SFO investigation, with no way to get rid of him should charges be laid.”

William Foster a Northern Action Group spokesperson says:

“A right to elect should mean a right to eject.  Ratepayers deserve the right to fire their poorly performing representatives.  We’re backing this proposal to increase the democratic accountability of elected officials.”

Under the system proposed, a motion to recall a named elected official will need to acquire signatures from 10% of the number of voters who last voted in the constituency. This is called the trigger threshold. If the threshold is reached, there will be a recall poll to determine if the representative should be recalled. If recall is supported by a majority, the official is recalled. There would then be a special election to fill the vacant position. A recalled official would be eligible to stand in that election (unless they are otherwise prohibited by existing law).

Mr Houlbrooke says:

“We are encouraging people to express their support for recall elections and put it on the political agenda for the coming election. To aid this, we have built an email tool which will allow people to email Local Government Minister Hon Nanaia Mahuta and the National Party local government spokesman Lawrence Yule directly. The policy could easily be adopted for the October’s election.”

Recall Elections for Local Government, a joint proposal paper, can be read below.

Taxpayer Talk: Tourism NZ and its new $10m international ad campaign

Despite our closed borders, Tourism NZ is spending $10 million on a new campaign meant to bring overseas travellers to New Zealand. The campaign is supposed to bolster New Zealand’s international brand of “kaitiaki, manaakitanga, and integrity”. In the latest episode of Taxpayer Talk, Louis questions Tourism NZ CEO Stephen England-Hall on whether this will deliver value for taxpayers.

You can subscribe to Taxpayer Talk via Apple PodcastsSpotifyGoogle Podcasts, iHeartRadio and all good podcast apps.

Barrie Saunders: COVID revisited – brickbats and suggestions

A few months back I gave the government a seven out of ten for its handling of COVID.  That assessment has plummeted in over the last week, as revelations about its management of at risk border workers has shown astonishing gaps.  There has been a breakdown in the MoH-Ministerial relationship in respect of expectations and communication, and now the panicked dictate to the port sector.

It is clear that a majority of staff working to protect us all from high-risk arrivals to New Zealand have not been given the tests that Minister Hipkins had assured the public were happening.  Rather than being grumpy about this failure of the Ministry/DHBs to perform as expected he, and the public, should be outraged.  We are all entitled to know exactly how the Minister’s expectations were communicated to officials and see their explanation for what actually happened.

It is quite likely this failure to meet Ministerial and public expectations will result in thousands of people losing their jobs and businesses failing, as Auckland endures at least two weeks at level three.  This is not a simple oversight – it's a major public policy failure.  It fits a pattern of sloppiness, which started when then-Police head Mike Bush told Simon Bridges’ Select Committee that the Police were not following up on all people in self-isolation, as had been stated to be Government policy.

It reinforces the importance of a quality, efficient inquiry into how we have handled COVID from the beginning.

Having failed in the last 100 plus days to protect at risk workers, the public and the economy from the arrivals, last Friday the MoH issues an order to seaports:  “We now require everyone who works at the maritime border to get a test for COVID-19 over the next three days.”

This was presumably driven by the remote possibility that the Aucklander, who worked at a cool store, may have picked up COVID-19 from an imported product, that could have come via a seaport.

We have 13 ports that handle international vessels but it is very unlikely that any port, other than POAL or Port of Tauranga (POT), could have sent product to that cool store.  So why did such a blanket order go to all ports and why was the requirement the tests be done within three days when such a sloppy attitude was taken for months to the at risk workers, mostly at the airports and quarantine facilities?

Its understood after some pushback from the port sector the order was limited to the two major import ports.  It covers anyone who visited the port between July 21 and August 17.  Clearly those making the policy don’t understand how ports work.   Many businesses operate at the ports and when you cover everyone who has visited the two ports we could be looking at around 12,000 people altogether, who are widely dispersed in Auckland and Tauranga.

Did MoH check the local DHBs could actually do this testing within the timetable, or did they think this would happen within three days from the Friday decree by simply waving a wand?

In addition to the two above failures, it's apparent MoH has done zip since the first round to refine policy settings.  We still have the absurd nonsense of butchers, greengrocers and bakeries being banned from opening at the higher COVID levels thereby channelling all food business to the supermarket duopoly.  It's about safe practices not the product range.  Surely MBIE, which must have some understanding of business, could educate MoH and Ministers.

I sincerely hope we get on top of this latest outbreak very soon and we don’t end up like the state of Victoria.  However, as a matter of urgency whoever is in Government after the election will need to overhaul both the policies and operation of our pandemic system, because it has been found wanting far too many times.

There are two ways I think the pandemic could be better managed.  First equip pharmacies to do the testing.  Second have a mobile unit in at least Auckland to go to likely sites where people have COVID instead of sending them off to join some long queue.  We will get more outbreaks and pandemics and need an enduring system.

Barrie Saunders is the Chairman of the New Zealand Taxpayers' Union and a former Chair of the NZ Port CEOs Group. This piece was originally published on his personal blog at https://barriesaunders.wordpress.com.

Briefing paper: Cut GST for COVID-19 economic stimulus

GST paperA new briefing paper released by the New Zealand Taxpayers’ Union makes the case for a temporary cut in the rate of the Goods and Services Tax (GST) from 15 percent to 10 percent, mimicking what the United Kingdom Government did with VAT immediately following the Global Financial Crisis.

Policymakers are currently grappling with the question of how to spur spending in the economy as we face a recession. This question will become urgent as the wage subsidy scheme ends in September and we see the real effects of COVID-19 on our economy.

With the official cash rate already close to zero, monetary policy has become increasingly ineffective as a stimulus tool. This has seen politicians propose fiscal interventions, such as the Government’s interest-free business loan scheme, but these interventions are often poorly targeted and create perverse incentives.

Fortunately, our tax system already provides a sound, indiscriminate mechanism to encourage spending. A temporary cut to GST during the height of recession would encourage New Zealanders to bring forward consumption – similar to a cut in the official cash rate.

This spending would breathe life into revenue-starved businesses, ensuring they can continue to employ New Zealanders and keep supply chains unbroken.

We suggest a sunset clause kicking in after a year to avoid long-term deficit effects or politicians replacing the lost revenue with increases to more economically damaging taxes.

On a yearly basis, the fiscal impact of this cut would be a $7.36 billion reduction in reduction in revenue for the Government. However, this impact could be reduced implementing the policy for a shorter period of time.

Taxpayer Update: Damning report | Green manifesto | Debt Monster selfie

Damning report on Provincial Growth Fund confirms pork barrelling, conflicts, and worse

pgf

damning new report from the Auditor-General has confirmed what your humble Taxpayers' Union has been saying about the Provincial Growth Fund all along. He found failing processes with regards to the approval of grants, managing conflicts of interests, and tracking of performance.

The Auditor-General said:

It was not always clear from the documentation why certain projects were considered for funding from this part of the Fund. . . it was difficult to find evidence of how projects had fully met the normal criteria for the Fund.

When the Auditor-General with all his expertise does a deep dive into the application documents and still can’t figure out why recipients were granted funding, we have a serious problem.

The Auditor-General goes on:

In my view, in the interests of the transparency of the overall process, it is important for the public and Parliament to have better visibility of how all the parts of the Fund operate

We couldn’t agree more. Post COVID-19, every dollar handed out from the fund is borrowed from future generations of taxpayers. New Zealanders deserve more information to shed light on whether Shane Jones’s slush fund justifies a mortgage on our future.

The report’s breakdown of spending by region shows the real motivation behind the Provincial Growth Fund. The region to receive the most funding – half a billion dollars and counting – is Northland. That’s a $3,671 election bribe for every man, woman, and child in the region that New Zealand First is targeting for votes. It is banana republic stuff and is a blot on New Zealand’s reputation for having incorruptible institutions.

Labour candidate does the right thing. But what about National in Port Hills?

Candidates

The Labour Party’s new Palmerston North candidate, Tangi Utikere (pictured left), is the City's deputy mayor.

Last week we called on Mr Utikere to give up his ratepayer-funded salary – and now he’s agreed.

Good on him. The amount of money saved might be small in the scheme of things, but it's an important principle: ratepayers should not be forced to pay a councillor to campaign full time for a political party they may not support. It also sends the right message about the attitude Tangi Utikere will bring to Parliament when it comes to the use of public funds.

Meanwhile, National’s candidate in Port Hills – Catherine Chu, a Christchurch City Councillor – continues to take a $114,000 salary from ratepayers while she campaigns, on top of a taxpayer-funded salary as a DHB member! As we told The Pressratepayers deserve more focus from their local representatives.

Taxpayer Briefing: The Green Party Manifesto

Greens graphic

Our Analyst, Neil Miller, was tasked with trawling through the Green Party's 52-page manifesto so you don't have to. Highlights/lowlights include:

  • A "wealth" tax – i.e. a tax on retirement, housing, entrepreneurship, and death for the average Auckland homeowner.

  • Not one, but two more income tax brackets above 33%.

  • "Investigating" a sugar tax.

  • A "water only" policy for sports clubs.

  • Taxpayer-funded snorkeling lessons (yes, seriously).

Clear here to read Neil's full briefing for taxpayers.

AJ Hackett Bungy process could set chilling precedent

AJ Hackett Bungy

Crux reports that MBIE handed over taxpayer money to AJ Hackett Bungy without even confirming that private funding wasn't available.

As one of New Zealand's most successful tourism operators, AJ Hackett Bungy would have survived without corporate welfare. It is completely unacceptable that it received a taxpayer-funded handout of $5,100,000 (and access to a further loan of the same amount) while smaller, less well-known and less politically connected businesses continue to struggle and fail.

The least taxpayers expect is a thorough process to make sure alternatives are unavailable before public funding is provided. In this case, AJ Hackett Bungy simply stated that it had not received a response from its bank – incredibly, that single line was enough to be given a cool $5 million.

We say Tourism Minister Kelvin Davis must signal to the wider corporate community that this is not the standard process. Otherwise, businesses may pursue a strategy of making merely token attempts to secure private funding (or making no such attempts at all) before asking for a handout.

AJ Hackett’s reputation should not be tainted by handout

AJ Hackett ONZM

In our annual Jonesie Waste Awards, we nominated the handout given to AJ Hackett Bungy as an example of unfair corporate welfare, joking that AJ Hackett is the only tourism operator in Queenstown who doesn’t want to throw Tourism Minister Kelvin Davis off a bridge.

An associate of Mr Hackett's family has since contacted us to clarify that AJ Hackett separated from his company’s New Zealand operations several years ago. He had no involvement with the lobbying for taxpayer funding.

It’s a shame that an iconic New Zealand innovator should have his reputation tarnished, through no fault of his own, as a result of a politically-motivated handout. The Taxpayers’ Union apologises to Mr Hackett, having now learned he is not liable for payments given to the company that bears his name.

If only AJ Hackett Bungy the company valued their reputation as much as Mr Hackett's family, they wouldn't have attempted this cosy special deal.

No Marama, tax is not "love"

Q&A clip

We've laughed before about commentators claiming that "tax is love". But now our politicians are saying it too.

Here's our response to Green Party co-Leader Marama Davidson, who made the claim on Q&A:

Marama Davidson is asking New Zealanders struggling to pay higher income taxes, fuel taxes, rubbish taxes, and tobacco taxes, to accept all this with a warm feeling of affection. That’s not just delusional, it’s offensive.

Frankly this is a grotesque, masochistic, Orwellian distortion of language. The Green Party should be ashamed.

Tax punishes productive New Zealanders and takes food off the table. For those who have recently lost their jobs, tax paid is the difference between meeting mortgage payments and losing the house. And then, come election time, politicians fritter away our hard-earned taxes on political bribes to serve their own re-election chances.

Debt Monster gets a selfie with the Prime Minister

It's been a busy couple of weeks for the Debt Monster. Here he is posing with the Prime Minister at a campaign event in Naenae:

DM + PM

The Debt Monster is a big fan of Jacinda. He even woke up early to meet her and Grant Robertson for a breakfast event at Te Papa! Click here to watch the short clip on Facebook.

The Debt Monster is our malevolent symbol of the cost of politicians' borrowing – set to reach $109,000 per Kiwi household in 2024.

He's not party political – he loves to stalk any politician who vies for votes with taxpayer money. Look at this photo from Judith Collins's recent event in Petone:

DM + Judith Collins

Judith seemed to see the funny side. She even posted on Facebook about the encounter.

The Debt monster also visited New Zealand First's campaign launch in Auckland:

DM + Shane Jones

Who's that in the background? Another Debt Monster??

He was hoping to hear Winston Peters' big speech, but New Zealand First staff members wouldn't let him in.

The Debt Monster will be an inescapable presence on the campaign trail. We won't let politicians forget that their promises are paid for by future generations of taxpayers.

Have a great week,

Louis circle


Louis Houlbrooke
Campaigns Manager
New Zealand Taxpayers' Union

 

Media coverage:

Timaru Herald  Another SCDHB surplus 'sets an example' for others

Hawke's Bay Today  Tukituki MP Lawrence Yule told taxpayer-funded signs breached rules

Democracy Action  Infrastructure costs now include an 8 percent Taniwha Tax

The Press  Christchurch City councillors enjoy a bit (of work) on the side

Bay of Plenty Times  Tax write-off: IRD waives hundreds of millions of dollars in debt

Sunday Star-Times  The Government's Covid-19 spending will be an economic albatross for decades

Newsroom  Ardern hypes up housing in the Hutt

The Press  National candidate resists call to forgo ratepayer-funded salary during campaign

Hawke's Bay Today  Resident claims Wairoa rates restructure could 'kill' town

Crux  A J Hackett $10 million - company claims "no support from shareholders or banks"

Taxpayer Briefing: The Green Party Manifesto

Greens graphicIntroduction

The Green Party of Aotearoa (they do not use the term New Zealand) has launched a 52-page manifesto. We at the New Zealand Taxpayers’ Union read the modestly titled “Think Ahead. Act Now. Our Green vision for Aotearoa” so you do not have to.

Crunching the numbers did not take long. There are literally no costings – none. However, reading through page after page after page of expensive policies confirm that any number would be very large indeed.

Here are the key terrifying points for taxpayers in the Green Party Manifesto for the 2020 general election.

[My comments in brackets.]

Healthy nature

• Establish a Minister for Animals and a Parliamentary Commissioner for Animal Welfare.

[More bureaucracy and another Commissioner job for ex-Green MPs. Is this really a priority in a COVID-19 environment with soaring debt? This is literally the third policy listed in their document.]

• Uphold the kaitiaki, proprietary, and customary rights of iwi and hapū over water.

[This would dramatically expand the rights of iwi and hapū over all water.]

• Create a fairer system for water allocation by introducing fees for commercial users like bottling plants. Iwi and hapū would be involved in designing the framework.

[Why would iwi and hapū have input into a commercial framework?]

• Increase funding support for iwi and hapū, landholders, and community organisations to restore the health of forests and waterways.

• $1.3 billion to create thousands of jobs for nature over the next four years, including 6,000 jobs in conservation.

[The NZTU has never seen a robust definition of what a job for nature is. Does it count jobs that would have already been created?]

• The Green Party is not in the pocket of big fishing companies.

[Gee… I wonder who that is a dig at?]

• Phase out low-grade plastic products that can be easily replaced with reusable alternatives, especially plastic water bottles, cotton buds, and fruit stickers.

[While people are losing their jobs, the Greens are focused on banning cotton buds and fruit stickers.]

• Review the New Zealand-Aotearoa Tourism Strategy in light of COVID-19.

[A five-agency review of the Tourism Strategy in light of COVID-19 was already announced last week. Just a shame we will not be getting any tourists any time soon.]

Fairer communities

• Develop a Kids in Nature programme where schools get operational funding to enable students to learn in outdoor classrooms, build their outdoor recreation skills, and go kayaking, bush walking, and snorkelling.

[Taxpayer funded snorkelling for rich city kids.]

• Roll out Te Reo Māori as a core school subject through to Year 10.

[Can students snorkel and learn Te Reo Māori at the same time for double NCEA credits?]

• Embed ecological sustainability and civics education in the curriculum.

• Fund arts, culture, and creativity in schools, including supporting the Creatives in Schools programme.

[Is there going to be any time left in school for maths?]

• Secretive donations and unequal access by lobbyists creates an uneven playing field.

[Probably talking about that miscreant Jordan Williams at that terrible Taxpayers’ Union.]

• Uphold human rights by lowering the voting age to 16 and extending voting rights to all people in prison.

[All people in prison. Clayton Weatherston’s vote will be worth the same as yours!]

• Entrench Māori seats in Parliament.

[This would effectively make it impossible for future Parliaments to remove Māori seats as Labour and the Greens will always support them.]

• Make local elections fairer and more accessible by… removing barriers to the establishment of Māori electoral wards.

[The main barrier is that most people do not want Maori wards.]

• Strengthen accountability by reforming the Official Information Act and providing greater transparency of political lobbying.

[Presumably a reference to Greenpeace or Forest and Bird, noted lobbyists with Parliamentary passes.]

• Significantly reduce alcohol advertising and sponsorship of sporting and cultural events.

[Have they checked whether there are companies or charities ready and willing to step up to fill the massive funding gap this would create?]

• Remove the ability of big alcohol and supermarket corporates to challenge Local Alcohol Policies.

• Require health warning labels on all legal drugs, including alcohol.

• Guarantee equal gender representation in Government appointments, while addressing other gaps including ethnicity and disability.

[Quotas! Where are we going to find all those male nurses?]

• Increase funding to Family Planning clinics to ensure contraception and abortion care is available everywhere.

• Ensure Aotearoa’s defence forces promote peace, justice, and environmental protection (such as fisheries enforcement) throughout the Pacific and the world.

[Groovy man!]

• [Defence Force] Establish a Conflict Prevention Unit.

[Even groovier man!]

• Oppose Aotearoa’s participation in the Five Eyes spy network.

[Some pretty serious geo-political consequences in that short sentence.]

• Work with global partners to support the forgiveness of unjust Global South debt, and fair debt relief measures, especially in the aftermath of the COVID-19 crisis.

[A trillion-dollar sentence right there.]

• Incorporate matauranga Māori into the health system, and fund provision of primary healthcare through Māori organisations, overseen by a new Māori health agency.

• Investigate a levy on sugary drinks to fund affordable dental care.

• Support water-only policies in schools, hospitals, and sports clubs.

[No more beers after the match for you, peasants!]

• Facilitate finance for development of papakāinga [housing] on Māori land.

[We’re halfway through with no reference to tax. The only references to economic growth are negative.]

• Review the use of algorithms and risk profiling in immigration decisions.

[We suspect most people would support risk profiling.]

• Reform sentencing, bail and parole laws to enable the gradual replacement of most prisons with community-based rehabilitation.

[Abolish most prisons!]

• Oppose the use of the Public Works Act to acquire Māori land.

• [Page 31] Introduce a new tax of 1 per cent on an individual’s net wealth above $1 million and 2 per cent on net wealth over $2 million. This tax would only affect the wealthiest 6 per cent of New Zealanders.

• Create two new top income tax brackets for a more progressive tax system that redistributes wealth.

[Oprah voice: You get more taxes! You get more taxes! You get more taxes!]

• Support green roofs and other “soft” infrastructure.

[Whisky Tango Foxtrot is “soft” infrastructure?]

Clean economy

• Phase-out the most environmentally degrading agricultural inputs, such as synthetic fertilisers and harmful pesticides, and ban Palm Kernel Expeller (PKE) imports.

• Support farmers to transition to organic agriculture.

• Make donations to non-profit art and creative organisations tax-deductible, like charities are.

• Ensure funding of arts and culture organisations does not solely rely on gambling revenue, and work with venues to secure revenue that doesn’t rely solely on alcohol consumption.

[Again, who is going to step up to fill up this funding gap? Probably the taxpayer.]

[Arts and culture is listed under economic policy but there is no section on tax…]

• Embed creativity in future Wellbeing Budgets and the Treasury’s Living Standards Framework, so it influences policy-making right across government.

[Hopefully we can pay off our huge national debt with creativity. What’s the exchange rate on that?]

• Establish a Public Interest Journalism Fund, making grants available for projects and journalists, with criteria to ensure diversity of voice in media is considered as part of the grants process.

[Formalise Government funding for selected journalists. Yet somehow the influence of lobbyists is the bigger problem.]

• Implement a ‘digital services tax’ on digital advertising revenue, to disincentive sending revenue offshore and provide a new stream of funding for local media.

[Basically, try to force government agencies and businesses to use New Zealand advertising even though Facebook or Google are more effective and cheaper. This goes even further than the media companies’ desperate pleas to the Epidemic Response Committee.]

• Increase RNZ’s funding, including RNZ Concert, which could then employ journalists losing jobs in the private media sector.

[“Funding” = taxpayer money for what is considered by New Zealanders to be the most left-leaning media outlet.]

• Make electric cars more affordable and invest in better cycle lanes, buses, and trains.

[Taxing tradies to subsidise Teslas.]

• Commit government departments to buying more goods and services from Aotearoa businesses.

[This would breach multiple trade agreements.]

• Use government procurement to support local suppliers and open-source software, including hosting government data onshore, to deliver broader value to Aotearoa.

[NZ Made even if there are cheaper and better alternatives from overseas.]

• Review regulatory frameworks that distinguish between commercial businesses and non-profit organisations, to support social enterprises to thrive.

• Commit to open data so people can innovate, while protecting individual privacy and data sovereignty, including Māori data sovereignty.

[Second reference to Maori data sovereignty in the document.]

• Design people-friendly streets that are safer for walking and cycling, particularly around schools.

• Expand electric vehicle charging stations across Aotearoa.

[Current usage – 1%-3% of the time they are active.]

• Move to default union membership so people automatically join a union when they start a new job, but can opt out.

[Will this include the Taxpayers’ Union?]

• Restore the right to solidarity strikes and political strikes.

[The 70s called – they want their strikes back!]

• Progressively shift to five weeks annual leave.

[Another burden on employers.]

• Improve redundancy processes and provide a minimum of one-month full pay for people made redundant.

• Extend the living wage beyond the core public sector, including to contractors.

[Costly implications for many government agencies and businesses.]

• Develop specific employment and equity standards to be used when selecting contracts for government procurement.

[Again, no focus on value for money, just virtue signalling.]

Sources

Green Party Manifesto

Lawrence Yule billboard found to be an election ad

Taxpayer-funded billboards promoting National MP Lawrence Yule have now been deemed candidate advertisements by the Electoral Commission.

The Commission's decision was made in response to a complaint by the Taxpayers' Union, which understood the large billboards were recently erected and therefore could not be considered part of Mr Yule's standard display of contact details.

As a result of the Commission's decision, the money spent on these billboard will be apportioned into the election period, and will count towards Mr Yule's election spending limit.

Union spokesman Louis Houlbrooke says, "Mr Yule claimed he had written approval to erect these billboards with taxpayer money, but now we see the Electoral Commission find against him. Either the Commission has made a remarkable u-turn, or Lawrence was telling porkies."

"The question now is whether taxpayers will get their money back. That's a matter for Parliamentary Services, who, according to Yule, approved the billboard. However, now that the Electoral Commission has determined these billboards are candidate ads, Parliamentary Services needs to demand Yule repay costs for the portion of time the billboards have stood during the election period."

The Taxpayers' Union has written to the Speaker of the House to ensure this action is taken.

Taniwha taxes adding 8% to cost of infrastructure builds

Taniwha tax graphic

The New Zealand Taxpayers' Union can reveal that councils are allocating up to eight percent of total build costs for iwi engagement for COVID-19 response projects.

Taxpayers' Union Executive Director Jordan Williams says, "While trawling through council applications for 'shovel-ready' funding, we came across a proposal from the Waipa District Council that allocates eight percent of the total build costs for iwi engagement. When compared to project management costs of just six percent of the budget, eight percent — or $2,000,000 — for iwi engagement is outrageous."

"Ratepayers would be disturbed to know that eight cents on the dollar of these projects are going toward iwi engagement. Particularly since they're already on the hook for an expensive Resource Management Act process: $609,000 for the full $25,000,000 proposal."

​"The Council has framed this consultation as 'mana whenua will be invited to be involved through co-design of some aspects in the proposal and the sharing of iwi narratives of the region.' But there's a difference between inviting mana whenua to participate and making ratepayers hand over millions for iwi engagement."

"Greasing up local iwi so they agree to shoo away taniwha really isn't necessary, especially for minor cases like the Council's proposal. The proposal is a package of projects such as toilet facilities and playground upgrades. These projects aren't major builds, they're community facilities. Ratepayers are especially feeling the pinch right now and a taniwha tax cannot be justified." 

The Taxpayers' Union is conducting an audit of council 'shovel-ready' proposals to determine how widespread these practices are.

Attachments:

Taxpayer Talk: Auckland’s water crisis – interview with Water Care CEO Raveen Jaduram

Auckland’s water crisis has been in the media over recent weeks, and the 2020 drought reminds us a lot of the water restrictions in 1994.  Auckland’s population is now 50% larger than 1994, has water infrastructure kept up?  Just how vulnerable are we to dry years?  Is the Waikato river the solution?  Taxpayers’ Union Executive Director, and Auckland Ratepayers’ Alliance Founder Jordan Williams sits down with the CEO of Water Care Raveen Jaduram for a deep dive into Water Care - its business model, how it’s funded, and how it trades the risk of drought with affordability.

To subscribe to the New Zealand Taxpayers’ Union visit www.taxpayers.org.nz/sign_up

To subscribe to the Auckland Ratepayers’ Alliance visit www.ratepayers.nz/join

*** If you are struggling to pay your Water Care bill and need some assistance, including details on the Water Utility Consumer Assistance Trust is available at https://www.watercare.co.nz/Help-and-advice/Help-with-your-account/Need-help-paying-a-bill and http://www.waterassistance.org.nz ***

Support the show (http://www.taxpayers.org.nz/donate)

You can subscribe to Taxpayer Talk via Apple PodcastsSpotifyGoogle Podcasts, iHeartRadio and all good podcast apps.

Government waste celebrated at 2020 Jonesie Awards

Photo from event

The third annual Jonesie Awards were hosted at Parliament today, celebrating the best of the worst of Government waste.

Every year, we host a glamourous Oscars-style award ceremony to highlight and lament the most absurd examples of wasted taxpayer money to emerge in the last 12 months.

Behind the tuxedos and gilded statuettes is a serious message: politicians and bureaucrats in both local and central government happily fritter away your hard-earned money on bizarre pet projects and ill-planned schemes without fear of consequence.

The Jonesies serve as a shot across the bow for anyone in charge of a government chequebook: rein in the waste, or see your name up in lights at the next Jonesie Awards.

Local government nominees

Dunedin City Council: Responding to COVID-19 with dots

Dunedin City Council responded to COVID-19 by spending $40,000 on red and blue dots for its main street. The dots were variously justified as a tool to assist social distancing, a way to attract people to the city, and as a “traffic calming” device. The Council also spent $145,000 on a new tourism slogan: “Dunedin, a pretty good plan D”.

Napier City Council: Golden handshake for a failed CEO

After a series of headline-grabbing failures, Napier City Council gave its CEO Wayne Jack a reported $1 million payout to leave before his contract expired. Mr Jack’s final official act was to throw himself a $4,000 farewell tea party. The Mayor complained that she was not invited.

Wellington Mayor Andy Foster for Extraordinary Leadership

When nine-term councillor Andy Foster was unexpectedly elected Mayor last year, he promptly enrolled himself in a $30,000 leadership course at Arrowtown’s Millbrook estate. However, he has refused to say what, if anything, he learned – and has since spent more money on a team facilitator to smooth over problems on his Council.

Auckland Council: Temporary cycleways for COVID-19

Auckland Council installed 17 kilometres of temporary cycleway in response to COVID-19. Like Dunedin’s dots, the initiative was intended to assist social distancing. All works had to be reversed in a matter of weeks. The total cost is estimated to be more than a million dollars.

Rotorua Lakes District Council: $743,000 for the Hemo Gorge sculpture

Rotorua’s 12-metre, 3D printed Hemo Gorge sculpture was initially planned to open in 2017 at a cost of $500,000. Three years later, it is still under construction, and costs have blown out to at least $743,000.

WINNER: Wellington Mayor Andy Foster for Extraordinary Leadership

Central government nominees

Rt Hon Winston Peters: Responding to COVID-19 with horse tracks

The Deputy Prime Minister and New Zealand First Party Leader led the Government’s COVID-19 response by announcing a $72 million funding package for the racing industry. This package included two synthetic horse tracks. No-one has been able to establish how horse tracks relate to coronavirus.

Rt Hon Trevor Mallard: $572,000 for a Parliamentary slide

As part of his initiative to make Parliament more “family-friendly”, the Speaker of the House commissioned the construction of a playground on Parliament’s lawn. The playground, which essentially consists of a slide and some stepping stones, was budgeted at $400,000, but ultimately cost $572,000.

Hon Chris Hipkins: $87 million for unwanted internet modems

An $87 million package to give students the means to study remotely during COVID-19 lockdown resulted in thousands of unwanted modems being sent to wealthy schools. Epsom’s Auckland Grammar alone received 137 unwanted modems, and even Mike Hosking’s child was a beneficiary of the policy.

Hon Shane Jones: Three train trips for $6.2 million

The Regional Economic Development Minister re-opened the Wairoa-Napier rail line last year, predicting that up to six train services would run per week. As of last month, only three services had run in total: a cost of more than $2 million per train trip.

Hon Kelvin Davis: $10 million for AJ Hackett Bungy

In response to a tourism downturn due to COVID-19, Tourism Minister Kelvin Davis singled out one of Queenstown’s most successful businesses – AJ Hackett Bungy – for a taxpayer handout. AJ Hackett received a $5.1 million grant, plus a potential $5.1 million loan, all on top of its substantial payout received under the COVID-19 wage subsidy scheme.

WINNER: Rt Hon Winston Peters for responding to COVID-19 with horse tracks

Lifetime Achievement Award

Hon Phil Twyford is this year’s Lifetime Achievement Award Winner for excellence in government waste.

First elected as a list MP in 2008, Phillip Stoner Twyford was thrust into power as Minister of Housing, Urban Development, and Transport in 2017.

His most high-profile election promise was to build 100,000 KiwiBuild homes in 10 years, with an initial investment of $2 billion. Two years into that period, KiwiBuild has delivered just 395 houses – fewer than the number of houses blocked by protestors at Ihumātao. At the current rate, Phil Twyford’s promise will be fulfilled in 436 years.

Even with the taxpayer subsidy, these homes are too expensive or located in places people don’t want to buy. As a result, many finished homes have sat on the market for six months or more, and the Government has promised to buy back homes that do not sell.

Last year, the Prime Minister finally removed Phil Twyford from the Housing portfolio.

However, his record of waste now extends far further than KiwiBuild. As Transport Minister, Twyford blew out the cost of SkyPath – a cycleway across Auckland’s Harbour Bridge – from $67 million to $360 million, with more cost increases expected once construction actually begins.

Twyford has also increased fuel taxes by 12 cents per litre – and even more in Auckland – across three years.

This tax hike was justified on the basis of paying for light rail from Auckland Central, down Dominion Road to the airport. Last month, after two and a half years and $5 million was spent investigating the project, the light rail proposal was shelved.

Despite the main justification for fuel tax hikes being void, Twyford has no plans to reverse his increases to the tax on commuters.

In his maiden speech in Parliament, he remarked: “At the end of our times here, some of us will be remembered, but most of us will not.”

He need not worry. We are confident that taxpayers will never forget Phillip Stoner Twyford.

'Aroha' posters deemed to be Labour Party ads

Poster with stamp

The Electoral Commission has confirmed that the 'Aroha' posters of Jacinda Ardern, promoted by artists Weston Frizzell and advertiser Phantom Billstickers, does indeed constitute a party advertisement for the Labour Party.

This judgment comes after the New Zealand Taxpayers' Union laid a complaint regarding the posters. The Commission's response to the Union can be viewed below.

Union spokesman Jordan Williams says: "It's a relief to have clarity on this matter. As a campaign organisation, we're forced to comply with strict rules around political advertising, especially in the lead-up to an election. It's a matter of democratic integrity that these rules are applies equally, regardless of a campaigner's political slant."

"These posters were obviously advertisements, even if the artists didn't think of them as such. You can imagine a scenario where a poster of Jacinda Ardern  or Todd Muller for that matter  was on every street corner, a week out from an election. This could absolutely influence voters, so the posters should have authorisation statements and count toward campaign spending limits."

"In its letter to the artists, the Electoral Commission notes that some posters may still be up, and that the artists will have to take 'corrective action'. If the Commission is not satisfied with this action, it has the power to refer the advertiser to the Police."

"Initial signs suggest the artists are not taking this warning seriously. They continue to actively promote the poster – without an authorisation statement – on their social media. Regardless, the posters have already reached hundreds of thousands of New Zealanders through social media and news coverage. Strong actions will be needed to remedy this influence. Perhaps, for example, the advertiser could fund poster space for campaigners with different political views."

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Blog: Why alternative monetary policy may not lead to investment spending in the economy

This blog post is written by Taxpayers' Union Economist Karan Menon.

Facing the biggest economic shock in our lifetime, Reserve Bank Governor Adrian Orr is signaling his support for the use of “alternative monetary policy” to jog the Kiwi economy.

He is currently holding the Official Cash Rate at 0.25%, the lowest it has been since the OCR was introduced in 1999, till March 2021.

The cash rate is predicted to be cut even further by the end of the year to fall below zero – that means banks will now be charged on their deposits with the Reserve Bank. The intention of this expansionary monetary policy is to curb a deflationary spiral (an overall decrease in price levels) caused by the COVID-19 pandemic and to disincentivise retail bank deposits held in the central bank.

The Reserve Bank of New Zealand (RBNZ) is already implementing another form of ‘alternative’ monetary policy with its LSAP (Large Scale Asset Purchase) programme.

The LSAP programme will reduce market interest rates further and thereby reduce borrowing costs for retail banks as their wholesale borrowing costs have reduced. This is due to interest rates being inversely related to bond prices. As the RBNZ purchases government bonds, the demand for bonds increases, thereby increasing the price of those bonds and decreasing interest rates.

The RBNZ will purchase $60 billion of government bonds over the next 12 months to achieve these reductions in interest rates on mortgages and term deposits. This value roughly amounts to 29% of NZ GDP.  This process is known as an open market operation where money supply is linked to the sale and purchase of government bonds

These tools are used by the RBNZ to control inflation – in this case, to keep it from dropping too low.

The RBNZ is given operational independence to keep inflation between 1 and 3 percent on average over the medium term, but with the recent COVID pandemic, sharp projected contractions in economic activity will likely reduce inflation and employment targets below RBNZ’s objectives.

Therefore, the RBNZ aims to lower the borrowing costs for households and businesses and increase spending across the economy. Retail banks are in the business of lending, and this lending is financed by depositor funds or borrowed funds. The ability to service this lending is based on a bank’s liquidity which is calculated by taking the total lending as a proportion of total deposits.

With expansionary monetary policy decreasing “hoarding behaviour”, we can expect lower retail interest rates on both mortgages and deposits for businesses and households.

The complication with decreased interest rates on deposits is that we could see (and in fact already are seeing) investments diverted away from bank deposits to other financial investments with higher rates of return.

The relationship between expansionary monetary policy and the diversion of investments can be seen internationally. The US currently has its cash rate at 0%, while its stock market has seen steady increases. The NASDAQ closed on a high Tuesday and the S&P 500 index saw a 0.43% gain. The increases in those indices obviously have additional explanations, but deposit interest rates are also decreasing, implying investors are looking to the financial market for higher returns.

Real economic conditions in the US are simply not reflected in the US stock market. A wave of optimism is sweeping through Wall Street, which stands in contrast to the stark economic realities of the US. Unemployment, which hovered around 4% in February shot up to 13% in May.

The real-world macroeconomic implication of expansionary monetary policy, and the subsequent diversion of investments, would be to diminish the capacity of retail banks to lend and further, lending would be on the back of bank borrowings.

Adrian Orr’s intention of increasing investment spending and incentivising businesses to spend more on their operations is in fact reasonable. The risk, however, is that the outcome of his approach will be an over-extension of the banking sector, which could further exacerbate the economic crisis. If in fact the RBNZ achieved its goal to encourage spending for both households and businesses, banks would be unable to increase their cash position in the case of any further shocks to spending.

If banks become unable to lend, any good achieved by Orr’s expansionary monetary policy would be wiped away and the economy would be left in an even worse condition than currently projected.

Taxpayer Talk: Chris Penk - Flattening the Country

In our newest episode of Taxpayer Talk, Jordan sits down (in-person!) with Helensville MP Chris Penk who has written a book investigating the claim that the Government had "gone early and hard" in its fight against
COVID-19. Support the show (http://www.taxpayers.org.nz/donate)

Flattening the Country is available at https://chrispenk.national.org.nz/flattening_the_country.

You can subscribe to Taxpayer Talk via Apple PodcastsSpotifyGoogle Podcasts, iHeartRadio and all good podcast apps.

Tool launched for Christchurch ratepayers to submit against rate hike

Chch rates preview

The New Zealand Taxpayers’ Union has launched a tool for Christchurch ratepayers to submit against Christchurch City Council’s proposed rate hike options.

The official consultation form for the Council’s updated budget is frankly a scam. Ratepayers are asked to choose between three different rate hikes – 3.5 percent, 4.65 percent, and 5.5 percent. This is a false choice, engineered to manipulate submitters into endorsing the 3.5 percent rate hike, when in reality many or most ratepayers would prefer a freeze or even a cut.

With the submission period closing on Monday, we’re encouraging Christchurch ratepayers to submit against the proposed rate options. Our submission form, available at www.ChchRates.nz, provides different rate options, and submissions are sent straight to the Council’s consultation inbox.

Christchurch City Council cannot seriously cry poverty while setting aside $118 million for a sports stadium, and paying 531 of its staff salaries higher than $100,000.

In April, Lianne Dalziel said she was “laser-focused” on delivering a rates freeze to reflect the hardships caused by COVID-19. But she and a majority of her Councillors have been swayed by self-interested Council staff warning of redundancies. That’s disgraceful – the responsibility of a Council is to protect ratepayers, not to provide livelihoods for its own staff.

With unemployment forecast to spike in coming months, the case against increasing council taxes is stronger than ever.

Taxpayer Update: Ihumātao | Sack Dr Clark | Posters investigated

Will Winston put the kibosh on the Ihumātao deal?

Winston/Ihumatao

After months of delays, it's been reported again that the Government is on the verge of purchasing the land at Ihumātao using $30 million of taxpayer money.

This would be a disgraceful capitulation to illegal occupiers. 

However, we understand that New Zealand First Leader Winston Peter is furious about the deal and had a tense exchange with the Prime Minister on Tuesday night. He has the power to block the deal at the 11th hour and gain huge publicity.

Jordan texted Winston yesterday to remind him of our petition against the deal, which has 11,000 signatures. We're watching very closely.

Petition launched for resignation of David Clark

David Clark

Health Minister Dr David Clark was missing in action for virtually all of the COVID-19 pandemic after repeatedly breaching his own guidelines by travelling unnecessarily, mountain biking when that was forbidden, and moving house and his office at the exact time he was requiring people to stay home and work from home.

And now he's overseen a series of quarantine failures: most spectacularly, the two COVID-19 positive women who were allowed to travel the length of the North Island without being tested.

In fact, 51 out of 55 quarantined individuals released under compassionate exemptions were not tested. That is disgraceful and Dr Clark has accepted no responsibility.

He's now been shunted away from the media, with Megan Woods brought in as a "Dr Fix-It". Why keep David Clark on a $300,000 salary?

We've launched a petition calling on the Prime Minister to immediately sack the Minister for his repeated failures in response to the COVID-19 pandemic.

--> Click here to sign the petition <--

Electoral Commission investigating 'Aroha' posters

Aroha poster

We're glad to hear that the posters of Jacinda Ardern plastered across the country have been taken down while the Electoral Commission investigates whether they count as election advertisements.

The posters are clearly advertisements: by the artist's own admission, they are drawn in a "propaganda style" and are inspired by the famous "Hope" posters of Barack Obama.

This means they need a promoter statement and should fall within election spending limits.

If the Commission finds that the posters are legit, we'll be surprised, but it means we can crowdfund our own poster campaign. Our posters could look like this:

Tax is Love poster

Ratepayer heroes! Horowhenua Council CUTS rates in response to COVID-19

Levin clock tower

This is what leadership looks like. Horowhenua District Council hasn't just frozen rates – it's cut them by 1.83% in response to COVID-10 hardships.

The Mayor and his officials wanted higher rates, but six out of eleven Horowhenua Councillors seized their democratic responsibility and put the interests of ratepayers first.

Well done to Councillors Wayne Bishop, Victoria Kaye-Simmons, Todd Isaac, Robert Ketu, Pirihira Tukapua and Sam Jennings.

Yes, the Council will have to cut employee costs and sacrifice spending plans, but it’s a necessary sacrifice that reflects the cut-backs being made in households across the country.

Ultimately, this move will make Levin and surrounding areas better off. More money in ratepayers’ pockets means more demand for local goods and services. And ratepayers from other parts of the country will be looking on in envy – perhaps even considering a move!

Is your local council hiking rates? Contact them NOW and tell them what Horowhenua District Council has done.

Petition launched: Keep it The Tron!

Hamilton sign

As if New Zealand doesn't have bigger issues to debate, Newshub, Stuff, and RNZ are all reporting on calls to change the name of Hamilton to "Kirikiriroa".

If the Council considers a name change, it will mean a divisive consultation process, a potential referendum, ratepayer-funded revamps of branding and signage, and staff and councillors' time wasted.

The change would then be considered by the New Zealand Geographic Board, meaning taxpayers across the country cough up.

--> Click here to sign our petition against the name change <--

We say Hamilton City Council should ignore the vocal minority and stick to their core business of delivering value for ratepayers.

There's also the suggestion the Council could go for a "compromise" option of a dual name. Based on previous government and council rebrands, we can imagine the new council logo looking like this:

Kirikiriroa logo

As if that will make anyone happy!

A surprise from Labour's list ranking...

Twyford promoted

Last week Labour revealed their updated Party list for the 2020 election.

We were astonished to see Phil Twyford moved from #5 up to #4 after his calamitous management of KiwiBuild, and more recently, his total failure to deliver his Auckland tram project.

(In fact, Twyford has now confirmed he's given up on Auckland Light Rail this side of the election. That project was the main reason for increased fuel taxes, so why is he planning to hike fuel tax again on 1 July?!)

For fun, I also researched Labour's lowest-ranked candidates. At the very bottom, #84, is a teacher unionist named Georgie Densey. Her Twitter page has one post, where she shares this praise of Metiria Turei:

Labour tweet

Interesting.

How would this look on a billboard?

National MP Nick Smith has revealed that Parliament's architecturally designed playground – which is basically just a slide and some stepping stones – went $172,000 over budget.

All up, the design, construction, landscaping, and engineering fees totalled $572,000.

Slide poster

We plan to make taxpayers remember this kind of waste when they cast their votes on 19 September.

All the best,

Louis circle


Louis Houlbrooke
Campaigns Manager
New Zealand Taxpayers' Union

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Media coverage:

Horowhenua Mail  Horowhenua District Council labelled 'heroes' for cutting rates

Stuff  Taxpayers' Union urges Human Rights Commission to speak up on Kiwis paying for quarantine

Star News  Ardern posters make cash, draw complaints

Southland Times  Southland District Council approve rate amid deficit budget

Stuff  Shots fired: Hunters hit back at Keep It Real Online ad campaign

Newstalk ZB  Artist behind Jacinda Ardern poster denies it's political advertising

Newshub  Hunters up in arms over Government's new online safety ad campaign

Croaking Cassandra  Little fiscal discipline at the RB

1 News  Art or political propaganda? Electoral Commission investigating artists' Jacinda Ardern appreciation poster

NZ Herald  Shovel-ready projects get the green light to go ahead under new infrastructure law

Newshub  'Forget about tax cuts': Economist warns of hikes ahead no matter who wins election

Newshub  ACT Party demands end to Government's 'Unite for the Recovery' campaign

1 News  John Armstrong: Is Jacinda Ardern utilising taxpayer-generated revenue in order to run a 'propaganda unit'?

The Press  Surprise in the post as Christchurch rates hike is less than thought

Taxpayer Update: Statue madness | Taxpayer-funded propaganda | $4000 for tea

Statue controversy is pathetic

John Hamilton

We are currently facing the economic fallout of a literal pandemic. But our country's media and politicians have decided the biggest issue affecting New Zealanders is whether or not our statues are racist.

On Thursday, Hamilton City Council removed a statue of the city's namesake, John Hamilton, after a local kaumatua threatened to tear it down himself.

What a pathetic capitulation. Why are councillors focused on a statue? Don’t they realise that by so swiftly agreeing to pull it down, they’re inviting wasteful new debates over other statues, and even Hamilton’s name?

Councillors need to refocus their time and attention away from petty controversies and onto issues that matter: namely, their annual budget. Tear down wasteful spending, not statues.

Statues of Edward Gibbon Wakefield, Captain Cook, and Richard Seddon are also under siege, as are street names and museum exhibitions deemed 'colonial'. The Māori Party wants to make it an election issue.

God help us.

Here's a real problem

New data from the OECD confirms hard economic times ahead for New Zealand: we are looking at a forecast decline in productivity of 8.9%, or 10% if there’s a second wave of COVID-19. That’s worse than the average forecast decline for the OECD countries.

Because of New Zealand's lackluster contact tracing capabilities, the Government pursued an extremely strict lockdown in response to COVID-19. This hammered our output.

The lockdown also necessitated massive amounts of spending. Already, Government debt has risen from below 20% of GDP to above 25% – and it’s expected to peak much higher, at $109,000 household. And once the wage subsidy ends in September, we can expect an unemployment spike too.

In short: why are we talking about statues?

COVID-19 ads looking more like propaganda

You might think that the taxpayer-funded ad campaign to 'Unite against COVID-19' is now over. Instead, it's been replaced with a new one: 'Unite for the recovery'.

This double-page ad is being promoted in the Herald and the Dominion Post:

Unite ad
The message is being promoted by the Government in other platforms, along with the 'Be kind' slogan that is closely associated with Jacinda Ardern.

These advertisements are not primarily informative or educational, unlike earlier Government COVID-19 advertisements. We have now moved into the realm of thinly veiled political propaganda at the taxpayers’ expense.

‘Unite for the recovery’ is expected to be the central theme of the Labour Party’s 2020 election campaign. With Government debt going through the roof, we say borrowed funds should be used on vital services, not propaganda. 

Before previous elections, Auditors General have slapped down incumbent Governments for using taxpayer money for political messages. We've laid a formal complaint with the Auditor General – we'll let you know what he comes back with.

Napier City Council's morning tea is only the tip of the iceberg

Wayne Jack

RNZ reports that Napier City Council's CEO has thrown himself a $4,251 farewell morning tea.

Incredibly, the Mayor's only complaint about the spending was that she wasn't invited!

The RNZ report seems to skim the real waste in this story: CEO Wayne Jack has been given a $1 million golden handshake to leave. Ratepayers are forced to reward poor performance.

Mr Jack assumed 660 council staff would want to attend his farewell. On that note: does Napier City Council really need 660 staff on payroll??

Cutting council payrolls is key to rates relief

We've been advising councils to respond to COVID-19 by freezing rates. While some councils have taken our advice, many more are complaining that a rates freeze would involve major cuts to spending.

That's true. Why not review payroll spending?

A new report from local government analyst Larry Mitchell reveals that council employees earn, on average, 37.9% more than those in the private sector.

The average council spends 23.8% of its budget on payroll, but there is significant variation: Kapiti Coast District Council spends 34.7% on payroll, whereas Rangitikei spends just 10.3%. This suggests councils could cut down on staff or salaries if they were serious about relief for ratepayers.

You bought a free internet modem for Mike Hosking

Routers

This might be my favourite waste story of the year. Buried among the Government's countless "COVID-19 response" spending projects was $87 million worth of IT equipment for kids studying from home. The idea was to get the kit to kids in poor households without access to the internet.

The result: hundreds of unwanted internet modems are piling up in school offices, or being sent to families that don't need them. Even Mike Hosking's son got one!

Is the discriminatory elective surgery policy really a response to COVID-19?

The Taxpayers’ Union has filed a complaint with the Race Relations Commissioner over Capital and Coast DHB's policy of prioritising Māori and Pacific patients on elective surgery waiting lists.

Taxpayer-funded health resources should be allocated solely on clinical need in all instances, not racial preference. We hoped this was just a rogue DHB making policy on the hoof. We were wrong.

Eight other DHBs have introduced or are looking to introduce this clearly discriminatory policy. Three more refused to rule it out.

Supposedly, this policy is a response to COVID-19. There was a backlog of surgeries created when hospitals effectively shut down bracing for a tsunami of virus patients that never arrived.

Those days are past. There are no patients still in hospital with COVID-19. When the elective surgery backlog is cleared, and in many instances that has already happened, this policy should be immediately dropped if it really is just related to COVID-19.

The Union doubts that DHBs will do that. There is an agenda here and Official Information Act requests will be lodged to discover the truth.

Taxpayers’ Union lays complaint over ‘Unite for the recovery’ ads

The New Zealand Taxpayers’ Union has laid a formal complaint with the Auditor General regarding today’s full-page advertisements placed in a number of newspapers, including the NZ Herald and the Dominion Post, by the Government (pictured below).

Unite ad

These advertisements are not primarily informative or educational, unlike earlier Government COVID-19 advertisements. Today’s ads have moved into the realm of thinly veiled political propaganda at the taxpayers’ expense.

'Unite for the recovery’ is widely expected to be the central theme of the Labour Party’s 2020 election campaign. Only 102 days from an election, the public service should be vigilant to political masters using taxpayer-funded resources to support political messages.

Full page newspaper adverts of a political nature, even in this depressed media environment, are expensive. With Government debt going through the roof, borrowed funds should be used on vital services, not propaganda.

Formal complaint to the Race Relations Commissioner from Taxpayers’ Union

The New Zealand Taxpayers’ Union has lodged a formal complaint regarding the recent Capital and Coast District Health Board’s decision to move Māori and Pacific patients to the front of their elective surgery queues. We welcome Race Relations Commissioner Dr Meng Foon’s recent comments on radio that on the basis of our complaint he would “look into” the policy. However, he needs to go much further.

Taxpayer-funded health resources should be allocated solely on clinical need in all instances, not racial preference. Even if we are wrong, elective surgery waiting lists are not like primary health care, where race is sometimes used as a cheap proxy for need. For elective surgery, precise clinical data is available to determine the need of each and every individual. That is how the lists are constructed. The arguments that a particular race has higher or lower (on average) need is invalid.

The New Zealand Taxpayers’ Union is disappointed that Dr Foon has chosen to not speak up on this issue. He had time to acknowledge Rotuman Language Week on his Facebook page but apparently not enough time to address this clearly unfair policy which is based on ethnicity. The Capital and Coast District Health Board’s policy is a critical race relations issue and Dr Foon should bring the full force of his office against it immediately.

We are also extremely concerned by comments by Sean Plunket on his radio show that he was aware of ‘anecdotal evidence’ of other District Health Boards considering the same policy. This policy needs to be stopped before it starts.

Taxpayer Talk: Socialism – The Failed Idea that Never Dies

By many measures, socialist ideas are more popular than ever, with academics and increasingly hip activists unashamedly promoting the collective ownership of wealth and centralised government-led decision making. Louis has a discussion with Dr Kristian Niemietz from the Institute of Economic Affairs, who has written a book named 'Socialism: The Failed Idea that Never Dies'.

You can subscribe to Taxpayer Talk via Apple PodcastsSpotifyGoogle Podcasts, iHeartRadio and all good podcast apps.

Taxpayer Update: Race-based hospital waiting lists | Chch rates U-turn | Public health follies

DHB prioritises patients according to race

Wellington hospital

We were amazed to find out this week that Wellington's DHB now has a policy which moves Māori and Pacific patients to the front of their elective surgery queues.

We all pay tax into the health system with the expectation that we will receive help when we need it. This DHB's decision to use skin colour to determine who goes to the front of the queue isn't just racist, it goes against the egalitarian vision of a publicly-funded health system. What would Michael Joseph Savage say?

We say the Health and Disability Commissioner needs to step in to protect the integrity of the health system – taxpayer-funded health resources should be allocated on clinical need, not race politics. We've approached him for comment, and are preparing a complaint to the Race Relations Commissioner. We'll let you know how we get on.

Election Day's convenient timing

This week our analysts have been going back through the enormous volume of Budget announcements. One thing is clear: the Government's electoral strategy is to do all it can to keep the patient alive until after the election – then it'll send you the bill. Grant Robertson is spending like mad to keep New Zealanders happy... until after the election. To illustrate:

We would hope that, when politicians respond to a crisis with a spend-up costing tens of billions, they do it purely with the public interest at heart. But the timeline above does seem awfully convenient.

Auckland Council shamed with CBD billboards

Goff billboard

Our sister group, the Auckland Ratepayers' Alliance, has been doggedly campaigning to expose the "Rich List" of Auckland Council staff paid more than $250,000.

Thanks to a grassroots fundraising push, they are raising billboards across central Auckland. Pictured is an epic example from Eden Terrace.

Click here to browse the full Town Hall Rich List.

If you live in Auckland, make sure you sign up here to get updates on the campaign tackling Phil Goff's attempt to hike Council taxes again this year.

Betrayal in Christchurch? Council looks set to U-turn on rates freeze commitment

Lianne Dalziel

After initially opposing and then supporting a rates freeze, Christchurch City Mayor Leanne Dalziel is once again on track to hike rates.

The three options put in front of councillors this week – rate increases of 3.5%, 4.65%, and 5.5% – are offensive to households who've had their livelihoods damaged by COVID-19.
 
It is especially galling that councillors were swayed by self-interested staff warning of redundancies. Countless ratepayers have lost their livelihoods in the wake of COVID-19. Why should council employees be a protected class?
 
A rates freeze would have required some tough but necessary cuts to salaries and non-essential spending. But Dalziel is now pushing a budget that includes a massive $118 million discretionary spend on a sports centre! It’s like she’s decided the reality of this crisis is too hard to deal with, and has returned to a dreamworld in which COVID-19 never happened.

We'll be ensuring Christchurch ratepayers submit in favour of a zero rate increase during the consultation period, regardless of the "options" presented by the Council.

We continue to track where each local council stands on our Rates Freeze Dashboard.

Most recently, we've had to change the status of Waitomo District Council: the Mayor had been pushing for a rates freeze, but this week all of his councillors voted against the idea. Shame on them. Our statement is here.

Public health units waste our money – now using COVID-19 to claim they're underfunded.

Public health rules

This week public health specialists were touring media studios demanding more taxpayer funding.

This campaign could be taken more seriously if they stopped wasting money on pointless public relations campaigns under the guise of public health.

Here at the Taxpayers' Union we thought we should fact check their claims of poverty.

Public health units get around $440 million annually from the taxpayer. Fair enough. But what are they using it for? In recent years they've used these funds to:

Imagine if all this time and money had been used for pandemic planning! Public health units could have used their resources to set up contact-tracing capabilities, instead of telling New Zealanders how to live Government-approved ultra-PC lifestyles.

Two incredible tales of waste from Dunedin City Council

It's been an odd couple of weeks for Dunedin ratepayers.

Dots

First, the City Council spent $40,000 on a "street makeover" which consisted mainly of colourful dots painted directly onto the road. This was apparently a response to COVID-19. (We can't figure out how, either.)

Now, the Council has revealed its new tourism campaign:

Plan D

The slogan is Dunedin – A Pretty Good Plan D. The price tag for ratepayers is $145,000.

I'll admit, I think it's funny. But Dunedin ratepayers are apparently fuming at how much of their money has been spent on a campaign that insults under-sells their beloved town.

And in all seriousness, central government is already devoting funds to a major domestic tourism promotion campaign. What's the value in having every local council spend money to fight over a limited number of domestic tourists?

Public art, or election advertising?

Here's the sight that greeted Taxpayers' Union staff as we arrived at the office this week:

Poster

First we thought it was Wellington City Council trolling us (the ad is literally just outside thr entrance of our building), but it turns out these posters of Jacinda Ardern are rolling out across the country.

The massive posters are reminiscent of Barack Obama's "HOPE" ads and include the Māori word for "love".

Some research eventually revealed the ads are run by billboard company Phantom Billstickers. The art team is Weston Frizzell, who say:

We think Jacinda has done a brilliant job leading Aotearoa though the Covid19 pandemic. We were proud to show our support with an iconic painted portrait.

We've created this giant street poster. For $190 (+P&P) you can buy one hand signed by both of us, and we will paste up another FOR FREE as part of a nationwide street poster campaign to share this message of AROHA.

For the sake of transparency, election advertisements are legally required to carry a 'promoter statement' stating who is responsible. These posters don't.

We'll see what the Electoral Commission thinks!

Have a great long weekend,

Louis


Louis Houlbrooke
Campaigns Manager
New Zealand Taxpayers' Union

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Three regional councils drag the chain on rates relief

A round-up of the country’s regional and unitary councils reveals that ratepayers in Wellington, Otago, and Southland are being ripped off by authorities who are forging ahead with rate hikes planned prior to COVID-19.

Rates table

New Zealand Taxpayers’ Union spokesman Louis Houlbrooke says, “An economic crisis is the worst time to increase tax – and that includes the taxes set by our regional authorities. Unlike income taxes, the level of rates does not reflect a household’s ability to pay, meaning they’re especially unfair on Kiwis who have lost income and livelihoods.”

“Three regional councils in particular need a kick up the arse – Greater Wellington, Otago, and Southland are on track to hike rates by 5%, 9.1%, and 5.9% respectively – in line with plans set prior to the COVID-19 outbreak. Now is not the time for a business-as-usual approach to rates.”

“Other regional councils have revised rate hikes downward in the face of COVID-19, but the real benchmark has been set by those freezing rates entirely. Congratulations to the regional councils of Waikato, Bay of Plenty, Taranaki, Hawke’s Bay, Tasman, and West Coast, who have committed to a zero rate increase. By finding savings and deferring non-essential spending they have done right by struggling ratepayers.”

The Taxpayers’ Union is tracking the rates status of all local councils at www.taxpayers.org.nz/rates_dashboard, and will be releasing region-by-region roundups of local councils as information comes to hand.

Taxpayer Update: What will PM Muller do | Race-based funding | Pork 🐷

The National Party has a new Leader

Todd Muller image

This afternoon, Bay of Plenty MP Todd Muller successfully challenged Simon Bridges for the National Party Leadership.

While we don't endorse political parties, we watch National very closely as a party of 'limited government'. Even if they fail to take back the Beehive in September, they have the power to force the Government's hand on policies that seriously impact taxpayers.

What would a Prime Minister Muller do?

With the media focused on the politics and personalities of this saga, there has been next to zero coverage given to what matters: the policies Todd Muller would push as Prime Minister.

Any promises made by Simon Bridges are now effectively void, meaning Muller has to answer questions like:

  • Does National still pledge to adjust income tax bracket thresholds in line with the cost of living?

  • Does National still pledge to repeal the Auckland fuel tax, and to not increase fuel taxes if elected?

  • Does National still plan to make NZ Superannuation more affordable by increasing the entitlement age to 67 in 2040?

We're seeking a meeting with Mr Muller next week to get a steer on where he stands on these issues and more.

Coincidentally, we sat down with Todd Muller for a podcast interview just a few days before he announced his leadership bid. He described himself as "broadly socially conservative, and from an economic perspective reasonably liberal".

If you want a measure of the man, I recommend listening to Islay's interview with Muller here.

Podcast image

It is to Todd Muller’s credit that he is one of the few MPs to have taken a pay cut in his case of over $600,000 a year – to enter Parliament, having left a high-powered position at Fonterra. This suggests he is motivated by public service rather than raiding the taxpayer’s wallet.

He is one of the few MPs who has paid more tax in this life than he has taken out of the system, unlike most Labour MPs and sadly many National MPs.

Revealed: COVID-19 GP funding is race-based

This week we revealed that COVID-19 support funding for general practitioners was allocated significantly on the basis of enrolled patients’ ethnicities.

A response we obtained under the Official Information Act showed that GPs received $4.50 in funding per Māori or Pacific patient with any other ethnicities worth only $1.50 only a third of the amount.

Info response

Elderly and individuals from low socio-economic areas were valued at the increased Māori/Pacific amount. 

So much for the Government’s COVID-19 slogan that ‘we’re all in this together’. Skin colour shouldn’t be the proxy for how much money the Government allocates for healthcare.

COVID-19 doesn’t spread to Māori and Pacific patients more than other patients. In fact, only 8% of cases in NZ involve someone of Māori ethnicity and 5% for patients of Pacific ethnicity. This is around half their respective shares of the population so in fact they are less affected than other ethnicities, yet they get 200% more funding. This is putting wokeness ahead of public health.

Sometimes Māori and Pacific health is targeted because those communities are generally in low socioeconomic circumstances. But for GPs the Government has all of that socioeconomic data, and could have targeted the money on that basis.

Had the Taxpayers’ Union not sought out clarification over how funding was distributed, the information would never have been available to the public.

Rates freeze campaign: “Now is not the time to put up Council taxes”

An economic crisis is the worst time to increase taxes – and that includes council taxes.

On Monday night Jordan spoke to Q&A making the case for rates freezes: unlike income taxes, the level of rates don’t reflect the ability to pay. This means struggling businesses and households who have lost their livelihoods are still hammered.

Q&A interview

Has your local council agreed to a rates freeze?

We’re tracking the status of all councils on our rates freeze dashboard, with recent significant victories including Taranaki Regional Council and Nelson City Council.

The message is starting to sink in. So far, 14 councils have agreed to our call for a freeze rates. Another 37 have reduced their planned rate hikes.

A minority of councils are still proceeding with their pre-COVID rate hike plans, but I'm confident we can make them flip.

Here's how the regional and unitary councils are tracking:

Rates table

Find out how where your local council (and its neighbours) stands on our rates freeze dashboard. Please let us know if you have more up-to-date information on your local council.

What about Auckland Council?

Our sister group, the Auckland Ratepayers’ Alliance, will soon be rolling out its own campaign for a zero rates increase in Auckland. This will include leaflet drops, yard signs, and a dedicated website through which ratepayers can make submissions as part of the Council's 'emergency' consultation.

Next week the Alliance is also unveiling billboards promoting the Auckland Town Hall Rich List. If you haven't already, take 30 seconds to look at www.richlisters.nz.

We’ve got Phil Goff from a 3.5% rate hike down to 2.5%, but we think he can do better.

The Council’s “2.5% or 3.5%” consultation options are designed so that the Mayor can claim Aucklanders support a rate hike when submissions inevitably favour the 2.5% option. We want to achieve a majority of submissions favouring a zero rate hike (or temporary reduction), regardless of the options currently being put forward by Auckland Council.

Government ignores advice – taxpayers now buying 285 pigs everyday!

Porky pigs

Seven weeks ago, Ministers learned that, with butchers closed, a surplus of pigs threatened to create animal welfare problems.

Officials suggested allowing retail butchers to open under COVID-19 rules, but the Government dismissed that advice. As a result, taxpayers are now buying 2,000 pigs a week.

The Government’s determination to shut down butchers against official advice hurt those businesses, damaged the pork industry, and made conditions worse for pigs. Even with the taxpayer footing the bill for 2,000 pigs a week, this only covers up to 40% of the weekly surplus. The other 60% will have to be destroyed. What a waste.

Our mascot, Porky the Waste-hater, asked me to include his thoughts in this newsletter:

Everyone knows how the life of a pig on the farm will end. Pigs are smart and sociable creatures and deserve to be treated with respect. When they do make the ultimate sacrifice, it should be for something noble like a bacon sandwich. Instead, 5,000 pigs a week are being killed for nothing. Where's the kindness in that?

Have a great weekend,

Louis


Louis Houlbrooke
Campaigns Manager
New Zealand Taxpayers' Union

 

Revealed: Covid-19 funding for GPs is race based

The New Zealand Taxpayers’ Union can reveal that COVID-19 support funding for general practice clinics was allocated significantly on the basis of enrolled patients’ ethnicities. Information obtained under the Official Information Act 1982 showed that organisations received $4.50 in funding per Māori or Pacific patient with any other ethnicities worth only $1.50 only a third of the amount.

Elderly and individuals from low socio-economic areas were valued at the increased Māori/Pacific amount. 

So much for the Government’s slogan ‘we’re all in this together’.  Skin colour shouldn’t be the proxy for how much money the Government allocates for healthcare.

Covid-19 doesn’t spread to Māori and Pacific patients more than other patients. In fact, only 8% of cases in NZ involve someone of Maori ethnicity and 5% for patients of Pacific ethnicity. This is around half their share of the population so in fact they are less affected than other ethnicities, yet they get 200% more funding. This is putting wokeness ahead of public health.

Sometimes Māori and Pacific health is targeted because those communities are generally in low socioeconomic circumstances. But for GPs the Government has all of that socioeconomic data, and could have targeted the money on that basis.

There was also an alarming lack of transparency around this funding. In fact David Clark wheeled out the ‘we’re all in this together’ line in announcing the GP funding package. Had the Taxpayers’ Union not sought out clarification over how funding was distributed, this information would not have been available to the public. Increased demands on healthcare due to COVID-19 mean it is more important than ever that resource allocations are subject to public scrutiny.

Information response from the Office of the Director-General of Health:

Info response

MPs in Depth: Reform priorities, time in the private sector and long-held political aspirations — Todd Muller MP

This morning it was reported that Todd Muller is making a challenge for the National Party Leadership. Prior to these reports, Islay Aitchison sat down with him to hear more about his political philosophy, his goals and his background.

You can subscribe to Taxpayer Talk via Apple PodcastsSpotifyGoogle Podcasts, iHeartRadio and all good podcast apps.

Taxpayer Update: Debt clock launched | Tram shelved | Rock bottom journalism

Watch Government debt tick up in real time

Debt clock preview

Following the Budget’s eye-wateringly high debt forecast, the team have been thinking about how to best illustrate what it looks like to borrow $200.8 billion by 2024 (or $109,700 added to the mortgage of every New Zealand household).

A couple of the staff put together a website at www.DebtClock.nz which makes it clear just how quickly the Government is racking up debt.

!! Watch it and weep ‼️

As you watch the debt tick up in real time, remember that you and your children will be forced to pay for it plus interest.

After COVID-19, paying down debt will become one of our country’s' most important challenges. Here at the Taxpayers' Union we’ll be challenging the politicians to come up with smarter ways to cut government waste so the debt clock stops ticking without the need for painful new taxes.

Light rail "on hold" – so why hike fuel tax?

Sad Twyford

In a statement quietly released the evening before Budget Day, Transport Minister Phil Twyford confirmed that he's put his troubled Auckland tram proposal "on hold".

Funding this project was a key excuse for annual fuel tax hikes. Now that light rail is on hold, we say July's 4c/L tax hike should be shelved too. This would provide vital economic relief for low-income families and the struggling regional tourism sector.

Since our public advocacy, the National Party has jumped on board with Simon Bridges also pointing to the light rail cancelation as justification for shelving the tax hike.

The question of fuel tax aside, Twyford's decision to defer light rail trams down Dominion Road is the right one. He's walking away from a growing financial headache, and that deserves praise. In fact, he should consider doing the same with the failed KiwiBuild initiative, or perhaps even the City Rail Link. He may find that the COVID-19 crisis gives him cover to make prudent decisions that would otherwise be politically embarrassing.

Tourism talkfests waste time and money

Minister Davis

Among the slew of Budget announcements was the formation of yet another working group: a ‘New Zealand Futures Tourism Taskforce’ that will ‘lead the thinking on the future of tourism’. Working group members will presumably be paid by the taxpayer.

Kelvin Davis should already be taking advice from the tourism sector – it’s one of his key duties. Why does he need to set up a working group to spend months producing and consulting on reports?

There’s a risk that the group will be captured by special interests. The Minister has a responsibility to the general taxpayer, and mustn’t allow a select group of tourism operators and bureaucrats to dominate his thinking, especially when it comes to taxpayer-funded handouts.

Then there’s another new committee: the ‘Tourism Recovery Ministers Group’, featuring Davis, Grant Robertson, Nanaia Mahuta, Eugenie Sage, and Fletcher Tabuteau. This one is just baffling. Why does Kelvin Davis need three other Ministers and an Under-Secretary to help him to his job? Don’t his colleagues have enough on their plates?

KiwiRail handout is about politics, not COVID-19

Budget 2020’s $1.2 billion spend on KiwiRail has nothing to do with COVID-19 relief as advertised.

KiwiRail is a state-owned enterprise, and as such is expected to run a profit. However, it’s never paid out a single cent in dividends to the Government.

KiwiRail already got a billion dollars in Budget 2019. At the time, we said that was the equivalent of setting money on fire – that’s basically what Treasury analysis has said for decades. This latest package will cost another $656 per Kiwi household.

There are countless other potential projects with better cost-benefit ratios – and all the jobs ‘created’ by paying for new InterIslander ships will be in South Korean ship yards. The KiwiRail handout is really about satisfying the Greens’ train fetish and assisting NZ First’s quest to move Auckland’s port to Northland. Why not be transparent about it?

You paid someone to write this article (EXPLICIT) 🔞

Ending HIV

I'm not making this up: someone was paid with taxpayer money to write a diary of their day in the office wearing a...

*clears throat*. Sorry, I can't finish that sentence.

If you dare, you can view the article here. But seriously, you might not want to. It is certainly not safe for work.

The NZ AIDS Foundation and its 'Ending HIV' website is taxpayer-funded, receiving $4.23 million a year from the Ministry of Health.

Last year a Ministry spokesman said: "The Ministry is committed to continuing its support for NZAF and its Ending HIV campaign."

To be fair to the Foundation, they are entrusted with some very important work around HIV testing. But we're not convinced the Foundation's 'journalism' is an essential use of borrowed money. Call us prudes!

Have a great week,

Louis


Louis Houlbrooke
Campaigns Manager
New Zealand Taxpayers' Union

PS. Our Taxpayer Talk podcast is going strong. Listen to our Budget Day analysis here. We also sat down with National MP Simon O'Connor as part of our "MPs in Depth" series.Donate

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Taxpayer Talk: Out of the Budget 2020 lock-up – Joe Ascroft and Neil Miller on the economics and politics of the biggest budget of our lifetime.

The Taxpayers' Union's Consulting Economist Joe Ascroft, and former Treasury (now Taxpayers' Union) Analyst Neil Miller, sits down with Jordan Williams to discuss Budget 2020, the economic and political risks, and what it says about the Government's election strategy.

You can subscribe to Taxpayer Talk via Apple PodcastsSpotifyGoogle Podcasts, iHeartRadio and all good podcast apps.

Budget 2020: The Politics - Neil Miller

Budget Special from the Taxpayers' Union

The Minister of Finance Grant Robertson describes Budget 2020 as a “once in a generation” budget to combat “a 1-in-100-year threat” of the global COVID-19 pandemic. It certainly contains high level of additional spending, headlined by the $50 billion COVID-19 Response and Recovery Fund (of which only about $20 billion is still actually available today).

To put $50 billion in context – the amount of new spending in a normal year’s budget is usually about one to three billion.

This spending will be funded by significant increases in debt as tax revenue will remain steady. There are no new taxes or tax increases announced which will be something of a relief to taxpayers.

However, it is also a “blank cheque” budget. Under the large headline figures, there is often a lack of detail about the spending which makes the quality of many proposals hard to assess. During questions, the Minister indicated that some of the $20 billion will go to Health (including laboratories and contact tracing) but the decisions were yet to be made. We have the bill, but do not know what we are going to be served.

In Defence, over half the new spending – the purchase of Super Hercules planes – is contingent because Cabinet has not considered a business case, far less approved it. That is a $900 million ($491/household) “maybe” even though Defence Minister Ron Mark says it remains his number one priority in Defence. Yes, the Budget was put together quickly under tremendous pressure but COVID-19 can not be blamed for over two years of delays on the planes. Treasury is publishing a summary of initiatives not in the Estimates on the week ending 22 May 2020. Most of this is information that would usually be in the Budget itself.

In any case, how buying more planes resolves a pandemic is unclear.

The Government has locked in high spending, but many of the hard decisions have been deferred until after the election. It is only after the election that New Zealanders will have to face the realities of paying back debt, and new policies from a new Government. Budget 2020 has one eye firmly on the election, hoping the economy can continue a slow recovery, hoping there is no second wave of infections, and hoping the current Government can be returned with a mandate.

If it is, expect a change in policy direction. Questioned about the lack of significant tax reform in the Budget, the Finance Minister confirmed there was none, and none would happen this term. That carefully leaves open the possibility of significant tax reform (including new taxes and tax increases) in the next term if Labour retains the Treasury benches.

In short, buy now, pay later.

There are other worrying trends.

There is evidence of interest group capture resulting in high levels of spending which are hard to justify. This includes funding boosts for certain industries (racing, fishing, arts, sports and more coming soon for media), certain voting blocks (including the $911m Maori COVID-19 package and the Pasifika funding parcel), and certain failing industries (KiwiRail gets a projected boost and NZ Post gets Government support despite being “no longer financially viable”).

The Government is also centralising decision making into new bureaucracies. "Workforce Development Councils" will "strategically plan" for the recovery of industries and jobs, and "Regional Skills Leadership Groups" will "improve information gathering". This is not a small investment – $276 million ($150/household) for a lot of officials, boards, reference groups, and consultation meetings. The Government is also planning to run a bulk food distribution operation called the "New Zealand Food Network" despite a number of companies and organisation already working in this space.

A "Infrastructure Industry Reference Group" is considering 1924 applications for $136 billion of projects. Clearly not all of these will be of high quality or quick to start.  A new road in starting in 2023 is little use to the unemployed in 2020 and 2021.

The increased Government control of the economy mirrors increased Government control of freedoms. Budget 2020 confirms that this is a hands-on Government, even if the details of what it might have its hands on remain sketchy.

The Taxpayers’ Union will continue to provide expert additional analysis as our team has time to consider the details further. One early concern is that the Government’s projections on unemployment remaining under 10% and economic growth returning next year seem very optimistic.

It appropriate to finish by acknowledging the hard work of Treasury officials and Ministerial staff preparing this document. This Budget was not what they planned six months ago or even six weeks ago. The key decisions were signed off on 6 April, very late in the normal Budget cycle. Minister Robertson even mentioned that some of the decisions in today’s papers were made on Monday. However, it is an important Budget and needs to be scrutinised closely to ensure taxpayers are receiving value for their money.

Also: Kiwiblog: Budget Lockup 2020 – A report from the inside

Neil Miller is a former Treasury Analyst, a former Director of Research in Office of the Leader of the Opposition, and is an Analyst at the Taxpayers' Union.

Budget 2020: The Economic View - Joe Ascroft

Budget Special from the Taxpayers' Union

Skyrocketing debt

Unsurprisingly, the Government’s Budget Responsibility Rules (which capped Government spending and debt in coming years) are dead. Net debt is forecast to climb from $57.7 billion ($31,500 per household or 19% of GDP) to $200.8 billion ($109,700 per household or 53.6% of GDP) by 2024. Deficits are expected to average $28 billion ($15,300 per household) per year across 2020 to 2022.

It’s easy to get lost in the numbers – but these are truly eye-watering figures. More than one in every four dollars spent by the taxpayers will be borrowed over the next three years.

Luckily for the Government (and taxpayers) borrowing costs are expected to remain low – in no small part due to the Reserve Bank’s quantitative easing (freshly-printed cash used to purchase Government debt) programme, which yesterday was doubled from $30 billion to $60 billion. If the Reserve Bank hadn’t embarked on this programme, financial markets might have struggled to digest forecast debt in coming years.

To put that in context, $60 billion amounts to more than half what the Government plans to spend in the next year. To say the least, the Reserve Bank is doing a lot of heavy lifting to enable the Government's spending programme.

The big risk? If there is any inflationary pressure in the coming years, the Reserve Bank will have to pull back on printing money and push up interest rates. In that world, Government debt would become a problem very quickly. 

Unemployment climbs

Treasury predicts unemployment to climb to 8.3% in 2020 and – with the aid of the Government’s $50 billion recovery fund – fall to 4.2% by 2022. However, if the fund fails in its goal to stimulate the economy (perhaps because the spending is poorly targeted, politically manipulated, or poorly managed) then unemployment will remain higher for longer. The main forecast (excluding the recovery fund) assumes unemployment will remain at 5.7% in 2022.  

The $50 billion fund

The Budget centre-piece is a $50 billion ($27,332 per household) ‘Covid-19 Recovery Fund’ to be spent over five years.

Today the Government has announced $15.9 billion ($8688 per household) of new initiatives to be packaged under the ‘Recovery Fund’ including:

  • an extension of the wage subsidy scheme for businesses who have suffered at least a 50% fall in revenue ($3.2 billion or $1750 per household); and,

  • a jobs package split across a variety of sectors including $1.6 billion ($874 per household) for trades and apprenticeships and $1 billion ($546 per household) for ‘environmental’ jobs.

$10.7 billion ($5,847 per household) of this fund has already been allocated through to April. 

The Rest?

The sector allocations Budget (at least in fiscal terms) pale in comparison to the sheer size of the recovery fund, but still deserve mentions:

  • $1.2 billion ($655 per household) more has been wasted on KiwiRail – despite a decade of Treasury advice that rail is not worth the cost.

  • $1.77 billion ($967 per household) has been allocated for defence – of which about half is for new aircraft.

  • A $3 billion ($1640 per household) infrastructure investment fund.

  • A $55.6 million increase in foreign aid.

  • $280 million ($153 per household) for NZ Post (old-fashioned snail mail, not couriers).

Joe Ascroft is the Consulting Economist for the Taxpayers' Union

Budget 2020: What Taxpayers Need to Know

Budget Special from the Taxpayers' Union

As I write this, Grant Robertson is unveiling Budget 2020 in Parliament.

Two members of our team have just emerged from the pre-Budget briefing. Below, our Consulting Economist Joe Ascroft summarises the contents of the Budget and what it will mean for you, the taxpayer.

We've also had Neil Miller – a former Treasury Analyst and Director of Research for the Leader of the Opposition – in the room. He's written for David's Kiwiblog and well as a separate piece on the political ramifications of today's announcements (see below).

Overall impression: The Blank Cheque Budget – big set up for election announcements to come

The economic landscape in New Zealand has fundamentally changed in recent months and if anyone had forgotten that fact, Budget 2020 is a wake-up call. Debt is expected to skyrocket, economic growth is projected to collapse, and unemployment is forecast to climb higher than during the GFC.

The total size of the Government’s fiscal response is simply enormous. The Budget centre-piece is a $50 billion ($27,332 per household) ‘Covid-19 Recovery Fund’ to be spent over five years, which includes a (more focused) extension of the wage subsidy schemes among other policies.

The Budget was clearly rushed and it showed. Much of the announcements are simply big numbers with no actual allocation. Think Shane Jones's Provincial Growth Fund on steroids. All of the "Wellbeing" focus from last year has been unceremoniously canned. Unlike in recent years, none of the Associate Finance Ministers were anywhere to be seen and the Secretary of the Treasury did not speak to the room or make herself available to take questions.

About half of the recovery fund has still been left available to be spent across the forecast period as required. More spending announcements should be expected in the coming months to be funded from this allocated balance.

And yet despite the severe recession we now find ourselves in, the Government has still wasted plenty of taxpayers’ money. KiwiRail, our foreign aid budget, and NZ Post all receive big cheques.

This Budget (and the election campaign to come) is going to need a lot of scrutiny if we are to avoid a 1970s-style 'big government' economic paralysis. We'll be burning the midnight oil over the next few days as we wade through the detail and pick out what the politicians don't want you to know...

Read our economic and political analyses of Budget 2020:

Budget 2020: The Economic View - Joe Ascroft

Budget 2020: The Politics - Neil Miller

Taxpayer Talk: Tim Hazeldine and Eric Crampton on Auckland's CBD Rail Loop and post-COVID economic recovery

On this episode of Taxpayer Talk, Jordan Williams interviews Tim Hazeldine and Eric Crampton. They discuss Auckland's CBD Rail Loop, incentives for infrastructure spending and Thursday's Budget.

Prof Hazledine’s opinion pieces referred to are here:
https://www.newsroom.co.nz/ideasroom/2020/05/11/1162413/tank-the-tunnel
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12327344

The NZ Initiative paper referred to is here:
https://www.nzinitiative.org.nz/reports-and-media/media/media-release-new-zealand-cant-afford-any-boondoggles-in-the-post-covid-19-recovery-new-report-says/

You can subscribe to Taxpayer Talk via Apple PodcastsSpotifyGoogle Podcasts, iHeartRadio and all good podcast apps.

Taxpayer Update: What to look for on Thursday | 18 days of reading about rock lobster

This will be a big week for taxpayers.

Thursday is Budget Day, when Grant Robertson will decide how to spend around $100 billion of your money.

As usual, we're sending staff to the Budget Day lock-up briefing. This event gives economists, sector groups, and unions a chance to read through the spending documents before the public release, so they can release independent analysis at 2pm to balance out the Finance Minister's spin.

Porky in front of Beehive

But this year we were almost locked out. Speaker Trevor Mallard tried to use COVID-19 as an excuse to restrict access to the briefing and only invite selected journalists. It was only after we kicked up a fuss that he extended the invitation to 25 independent analysts, including our consulting economist Joe Ascroft.

This means we'll be bringing you (and the media) a taxpayer perspective on Budget 2020 shortly after 2pm on Thursday.

What should taxpayers look for in Budget 2020?

Ideally, the Government would provide economic relief to struggling households with tax cuts.

Slashing fuel taxes, for example, would encourage regional tourism and reduce costs for less well-off households. Another option would be a short term reduction to GST – similar to what Britain did to VAT just after the GFC. Cutting taxes means householders pick the winners (in what they spend the extra money on), not politicians...

However, the Finance Minister hasn't signaled any interest in tax cuts – and it's hard to see him dialling back taxes his Government increased.

So, assuming tax cuts are off the table, here's how we'll be judging the Budget Day announcements:

Principle one: Don’t bed in new spending.

New spending may be justified in the short and medium term but should come with sunset provisions to ensure the liability on taxpayers does not extend past the recovery period, after which we will need to pay down debt. Locking in long-term deficits will mean much more pain later. 

Example: The $25 lift in benefit payments should be reversed once GDP returns to that of Q4 2019.

Principle two: Quality of spending still matters.

Spending should not be justified on the basis of 'stimulus' or 'relief' alone. We must demonstrate that new spending is effective and fair.

Example: Wasting money on make-work infrastructure schemes with negative cost-benefit ratios will make New Zealand poorer. 

Principle three: Help businesses help themselves.

Many businesses will thrive if the Government simply gets out of the way. The Government should examine areas where regulation and spending projects can be rolled back on a trial basis.

Examples: Encourage development by suspending provisions of the Resource Management Act. Encourage foreign investment by reviewing Overseas Investment Office rules. Reduce uncertainty and protect productivity by deferring low-priority legislative programmes, such as 'Fair Pay' agreements and annual minimum wage hikes.

A worrying start: DHBs rewarded for poor performance

David Clark

In the days leading up to the annual Budget, Ministers usually make a few small teaser announcements to warm up the media and plant some feel-good stories.

This morning, Health Minister David Clark emerged from obscurity to announce a $3.9 billion funding injection for District Health Boards. That will cost more than $2000 per New Zealand household, a spending wallop that would have been the centrepiece of a Budget five or ten years ago.

In February, the Health Minister claimed he was putting DHBs 'on notice' for their poor financial performance. But now he's rewarding them.

All but one of our DHBs are racking up significant deficits, necessitating taxpayer-funded bailouts. How can we trust them to manage bigger budgets when they can't manage their current ones?

If this is the teaser, it's safe to say we're nervous about the main show.

18 days of reading dumped on a sunny Friday afternoon

At 3pm on Friday, the Government dumped literally hundreds of official documents relating to the COVID-19 response on its official website.

To be honest, it could have been worse: Governments usually do document dumps at 5pm to limit scrutiny and media coverage. It is a time-honoured political strategy because it works.

The 286 documents reveal advice received by the Government prior to 17 April. Assuming it takes an average of 30 minutes to read each document, it would take one analyst nearly 18 working days to read all the papers, far less analyse them. Even a team of five analysts would have had to start reading on Friday afternoon, then worked full days on Saturday, Sunday, Monday, and part of today just to complete reading the dump.

Who gags the gagging order?

Ministers gagged

Obviously, such a massive dump of information requires a careful communications plan, particularly when you are the most "open and transparent" Government in history. Thankfully, in the interests of openness and transparency, the plan was accidentally sent to lots of people for whom it was not intended.

A leaked memo from the Prime Minister’s Office told Ministers not to discuss the papers except through short written answers vetted by the Prime Minister’s staff. Ministers should not be interviewed, and any questioning of the response should be “dismissed” because public support is with the Government, meaning it does not need to defend its actions.

This bold (some might say arrogant) strategy went about as well as could be expected. The memo went to the public sector, then spread far and wide, including to the inbox of our friendly mascot, Porky the Waste-hater. An aghast Beehive tried to recall or retract the errant email but that never works. Those who ignored the initial email suddenly become very interested in why the Beehive didn't want them to read it.

Only three Ministers “across all the relevant detail”

Heroically defending the leaked email, the Government spokesman called it a "clumsy instruction", and that the point was media should only talk to “the Ministers involved in all aspects of the response – such as Ardern, Deputy Prime Minister Winston Peters and Finance Minister Grant Robertson – as they were across all the relevant detail.”

That is a very short list of Ministers “across all the relevant detail” for the biggest health and economic crisis of modern times. Notable absentees from the approved list include Minister of Health David Clark, Minister of Employment Willie Jackson, Minister of Tourism Kelvin Davis, and Minister of Small Business Stuart Nash.

Someone loves the Rock Lobster

Shane Jones lobster

We're not talking about the B-52s song. Someone in the highest level of Government seriously loves the rock lobster industry. As an advocate for taxpayers, Porky naturally went to the Economic section of the proactively released documents. There were only 50 of them (three working days of reading). If you only read these papers, you would have to believe that the most valuable industry impacted by COVID-19 was rock lobster fisheries. Seriously, there are seven papers out of 50 devoted solely to the rock lobster (crayfish) industry.

The entire rock lobster industry is valued at $300 million. Rock lobsters got seven papers. Tourism, a $17 billion industry that has been devastated, got two papers. Hard-hit hospitality got no papers at all. Where are the Government’s economic priorities, and who in Cabinet really, really likes rock lobsters? [Porky has a theory. See the image above.]

The papers also reveal the Government is providing “mental wellbeing support to fishers primarily through an independent fishing industry health and safety provider.”

The obvious question is where is the mental wellbeing support for tourism, hospitality, and retail? This is the Government of kindness after all.

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Taxpayer Update: More pay cut victories | Business loan bonanza | Where's Heather? | Where's David?

State Services Commissioner throws his weight behind our pay cut campaign! 🎉

Pay cut victory

We've had another major win in our campaign for the public sector to share the financial burden of COVID-19.

Last month, we wrote to the State Services Commissioner and all major state sector agencies (including councils), asking if they would commit to a pay freeze and CEO pay cuts.

Remember, despite the fanfare (including from the Taxpayers' Union!) over the Prime Minister's original pay cut announcement, the small print revealed it only applied to a select group of "core public service" CEOs.

That meant that while Director-General of Health Ashley Bloomfield would be taking a 20% pay cut under the PM's policy, the six DHB CEOs paid more than Dr Bloomfield were protected!

Peter Hughes

On Wednesday night we cracked open the (virtual) bubbly when the State Services Commissioner responded to our letter, saying he's now decided to recommend a pay freeze and CEO pay cuts for the whole state service. That includes DHBs, universities, crown agents (like ACC and Callaghan Innovation), and independent commissioners.

In the Commissioner's words:

I encourage chief executives to consider taking a similar reduction to their colleagues in the Public Service. As you know, the public sector is made up of a wide variety of organisation types. But the public view us all as the government. New Zealanders will be looking to us all to demonstrate leadership at this time.

Crucially, he is also recommending "no pay increases for senior leaders and higher-paid staff and no or minimal increases below that level."

This pay freeze will save far more money than the Prime Minister's original promise. And it couldn't have been done without the support of people like you who signed our petition and donated to the campaign efforts.

Top bureaucrats scrambling to respond 🏃🏽

Now our campaign has reached the "snowball" stage, as different agencies scramble into action.

Public expectations are so strong now that even agencies exempt from the Commissioner's advice are telling us they'll cut pay!

So we are pleased to reveal that includes New Zealand's highest-paid public sector CEO: Matt Whineray from the Guardians of NZ Super.

Whineray
Last year Mr Whineray topped our Public Sector CEO Rich List with a salary of $1,065,000. His office has confirmed to us that he will take a six-month 20 percent pay cut.

Meanwhile, MetService has also informed us its CEO will take a pay cut, with pay hikes cancelled for all other staff. This one is significant because MetService is a state-owned enterprise. Now we can put pressure on other SOEs like New Zealand Post, KiwiRail, and Landcorp to follow suit.

Finally, while the State Services Commissioner does not have authority over local councils, the signal for town clerks could not be clearer. If they fail to cut their cloth, they will mark themselves as the most greedy class of bureaucrats. We're currently sorting through where each of the 78 councils stand: we'll be naming and shaming those who fail to share the economic burden of COVID-19.

Council fat cats set to be exposed 😳

Tomorrow our sister group the Auckland Ratepayers' Alliance is publishing an 'Auckland Town Hall Rich List' that exposes the 86 Auckland Council staff paid salaries above $250,000 (yes you read those numbers correctly).

Here's a sneak peek of the double-page ad they're publishing in Auckland newspapers:

Herald on Sunday ad

If you live in Auckland (or pay rates there) I highly recommend signing up to the updates from Jo Holmes and her Ratepayers' Alliance team. To do that, click here and you'll be sent the full Rich List as soon as it comes out.

Our team in Wellington has already started work on a nationwide Town Hall Rich List for other local councils, so watch this space.

A terrible policy: interest-free business loans 🤯

Business loan scheme

The Government’s newly-announced business loan scheme leaves taxpayers exposed to enormous financial risk. 

With banks carefully looking to manage risk and putting limits on lending, Grant Robertson has spat the dummy and decided to effectively open a bank of his own by offering interest-free business loans out of Inland Revenue. 

The details are unbelievably lenient:

  • Businesses will not have to justify their plans or the health of their balance sheet before they borrow up to $100,000 interest-free from taxpayers.  

  • There is no need to use existing lines of credit – meaning businesses that don't need the help, can still get it. 

  • The loans are interest-free, then revert to just 3% in a year’s time. Borrowers don’t even have to begin repayments for two years.

To qualify, all you need is 50 or fewer employees, have (or expect) a 30% decline in revenue in any month since January (the same as the wage subsidy), and make a declaration that you think the business will be viable after the coronavirus passes (a bonus for optimists!). IRD will simply assess whether your business is viable based on 2019 income.

You would almost have to question the business acumen of any business which did not take full advantage of the scheme regardless of need. The scheme gives two years to turn a profit on free money from the taxpayer.

The unintended consequences and risks for taxpayers are chilling. If you’re a company director with existing debt or finance, say on a company vehicle, you’re probably obliged to now move that debt onto the taxpayer. Why should taxpayers be forced to take on the commercial risks of almost every small business across the country? 

If most eligible businesses take up the loan, our back-of-the-envelope calculation suggests the scheme moves about $6 billion of risk onto the Government's books. $6 billion (or six thousand million) is about $3,200 per Kiwi household.

Labour should have learned their lesson with interest-free student loans. Uptake was far higher than they had anticipated because Labour had only calculated the numbers of students "in need". In real life, most students looked at a deal they would never get from a bank or even their parents and said "I would be an idiot not to take this money even if I just put it in the bank". That is precisely what will happen here.

Because this is a policy targeted at small businesses, we're unlikely to see the National Party heavily criticise it. We exist to speak from a taxpayer perspective when politicians won't.

And it was an accident of Parliament?! 🤦

And from the 'you couldn't make this up' file, we now learn that the enabling legislation (passed under urgency on Thursday night) was mistakenly passed after an error meant that the wrong piece of legislation was introduced to Parliament

Apparently the loan scheme legislation was just a draft. It hadn't been properly analysed by officials, and (so we are told) even been properly approved by Cabinet.

Think about that for a moment. A piece was legislation passed within a few hours, which accidentally brought into law a multi-billion dollar loan scheme equivalent to about one fifth the total annual spend of the Government.

Simon Bridges has been criticised for travelling to Wellington to do his job. We think the more valid criticism would be how on Earth the opposition didn't notice this monumental error!

ACT's David Seymour at least picked up on the mistake in his speech before the final passage of the Bill. But he didn't realise its significance. And even while criticising the Government's competence for tabling the wrong Bill Mr Seymour implicitly supported the measures, calling the loan package "positive".

Is no one in Parliament there for the taxpayer?

Louis's tweet summed it up:

Passionate lawmaking

Where’s the $9.5 million Heather Simpson report? 🤷‍♂️

Heather Simpson

The 2019 Global Health Security Index (GHSI) concluded that New Zealand scored just 54 out of 100 points for pandemic readiness, which ranked us 30th among the 60 high-income countries reviewed. There is another, local report which might also cast doubt on our preparedness, but it is long overdue, and questions are beginning to be asked.

On your behalf, we've had a researcher laboriously watching all of the meetings of Simon Bridge's Epidemic Response Select Committee. On the 22nd of April, expert witness Sir Professor David Skegg raised the issue of what had happened to the broad review of the health sector which was being led by Heather Simpson, formerly Helen Clark’s long-serving Chief of Staff. The review was conducted before the COVID-19 outbreak. Its cost? A cool $9.5 million.

Professor Skegg noted that the final report was due in March, but it is still nowhere to be seen. Diplomatically, Professor Skegg said he was particularly interested in what the report might have said about the state of our pandemic preparedness before the outbreak. Others have not been so charitable with growing concerns that the Simpson report was going to be critical of our readiness at the time, but is now being sanitised to avoid embarrassing the Government.

We sure would like to see the Tracked Changes on that report when it is released… which will probably be at 5pm on a Friday.

Where’s David? - the fun nationwide search for David Clark launched❓❓❓

Finally this week, a lighter note:

Where's David?

Observers of politics were shocked when the Hon Dr David Clark was reportedly spotted in Wellington. Dr Clark, who during the COVID-19 crisis has provided Acting Minister of Health Dr Ashley Bloomfield with long distance intangible moral support from his opulent Dunedin bubble, apparently broke his self-imposed strict self-isolation policy to visit the nation’s capital.

For weeks now, Dr Clark has assiduously isolated himself completely from health policy, media, politics, constituents, the Epidemic Response select committee, mountain biking, being a Minister, daily press briefing sessions, and nighttime spear fishing from a homemade microlight aircraft (although the last one was a work in progress).

Here at the New Zealand Taxpayers’ Union we felt that such a momentous occurrence had to be celebrated. In normal times we would have sent Porky the Waste-hater to publicly accost Dr Clark and deliver a petition that he returns his Ministerial salary for the last month. Alas, Porky, like the rest of us, is in lockdown and does not think he could catch Dr Clark on the bike track in any case.

So, the Taxpayers’ Union most senior analyst spun our patented Decision Wheel. It basically is a cheap cardboard wheel covered in obvious suggestions. Using the Decision Wheel takes 30 seconds, costs nothing, and is still more sensible that many Government spending decisions. The Wheel suggested “run a competition”. Our first thought of asking taxpayers’ “if the Minister of Health can effectively disappear during the biggest health crisis of our lifetime, what are we paying the Minister of Health for?” This was disqualified as a trick question because the answer was far too easy.

We then struck on the idea of “Where’s David?” – a game loosely based on “Where’s Wally”, a game which everyone knows but no one over the age of 8 ever plays unless forced to by someone under the age of 8. It is also discriminatory against colour-blind people, according to our junior colour-blind researcher. The consensus is that he must have lost repeatedly to a six-year-old to be so bitter.

So, the rules are simple. We are asking people all over New Zealand to be on the lookout for Hon Dr David Clark (from the safety of their bubbles of course). Send us a verifiable photo of a sighting and be in to win the Grand Prize of a Mountain Bike… ride after lockdown is lifted. To make things easier for contestants, the organisers have published a list of places that Dr Clark will definitely not be sighted:

  • A COVID-19 press briefing
  • A hospital
  • The café at Police National Headquarters
  • Road trip with Hone
  • His Ministerial office
  • Muddy tracks suitable only for bicycles with off-road capacity
  • In a car adorned with his name, photograph, and cellphone number.

UPDATE: #WheresDavid (house-moving edition)

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“Where’s David?” – the fun nationwide search for David Clark

Where's David image

Observers of politics were shocked this week when the Hon Dr David Clark was reportedly spotted in Wellington. Dr Clark, who during the COVID-19 crisis has provided Acting Minister of Health Dr Ashley Bloomfield with long distance intangible moral support from his opulent Dunedin bubble, apparently broke his self-imposed strict self-isolation policy to visit the nation’s capital.

For weeks now, Dr Clark has assiduously isolated himself completely from health policy, media, politics, constituents, the Epidemic Response select committee, mountain biking, being a Minister, daily press briefing sessions, and nighttime spear fishing from a homemade microlight aircraft (although the last one was a work in progress).

Here at the New Zealand Taxpayers’ Union we felt that such a momentous occurrence had to be celebrated. In normal times we would have sent Porky the Waste Hater to publicly accost Dr Clark and deliver a petition that he returns his Ministerial salary for the last month. Alas, Porky, like the rest of us, is in lockdown and does not think he could catch Dr Clark on the bike track in any case.

So, the Taxpayers’ Union most senior analyst spun our patented Decision Wheel. It basically is a cheap cardboard wheel covered in obvious suggestions. Using the Decision Wheel takes 30 seconds, costs nothing, and is still more sensible that many Government spending decisions. The Wheel suggested “run a competition”. Our first thought of asking taxpayers’ “if the Minister of Health can effectively disappear during the biggest health crisis of our lifetime, what are we paying the Minister of Health for?” This was disqualified as a trick question because the answer was far too easy.

We then struck on the idea of “Where’s David?” – a game loosely based on “Where’s Wally”, a game which everyone knows but no one over the age of 8 ever plays unless forced to by someone under the age of 8. It is also discriminatory against colour-blind people, according to our junior colour-blind researcher. The consensus is that he must have lost repeatedly to a six-year old to be so bitter.

So, the rules are simple. We are asking people all over New Zealand to be on the lookout for Hon Dr David Clark (from the safety of their bubbles of course). Send us a verifiable photo of a sighting and be in to win the Grand Prize of a Mountain Bike… ride after lockdown is lifted. To make things easier for contestants, the organisers have published a list of places that Dr Clark will definitely not be sighted:

- A COVID-19 press briefing

- A hospital

- The café at Police National Headquarters

- Road trip with Hone

- His Ministerial office

- Muddy tracks suitable only for bicycles with off-road capacity

- In a car adorned with his name, photograph, and cellphone number.  

Taxpayers' Union reveals donation fund for COVID-19 relief

After inquiries with Treasury, the Taxpayers' Union has confirmed that New Zealanders can voluntarily donate to a Crown receipts account to assist with COVID-19 relief, reduce the burden of debt for taxpayers, and avoid the need for new taxes.

The bank number is 03-0049-0000327-25, and a copy of the deposit clip can be viewed here. Treasury requests that donors include the name of the payee and purpose of payment e.g. “Covid Donation” in the reference fields. Donations unrelated to COVID-19 or any specific purpose can also be made but “donation” should be included in the reference field.

COVID-19 is set to saddle future taxpayers with a massive bill for the current health response and economic relief programme. We're pleased to learn there is a mechanism for New Zealanders to pitch in extra on behalf of those less able to pay.

Some commentators have used COVID-19 as an excuse to call for punishing new taxes. Those people can now put their money where their mouth is and voluntarily give to the Government.

The Prime Minister should publicise this option at her next press conference. We are confident that a number of patriotic New Zealanders will step up and contribute.

New Zealanders who can't stomach giving any extra money to the Government may alternatively consider a donation to their local Taxpayers' Union.

The full email chain between the Union and Treasury can be viewed here.

Taxpayer Talk: Can you put a value on life?

The conversation around how and when to raise the lockdown has generated some unenviable problems for policy makers, none more so than how to value the lives of those saved by lockdown versus the jobs and businesses it will destroy. Dr Bryce Wilkinson joins the podcast to discuss his latest paper, which helps to shed some light on how these calculations of life and death are made. You can read Dr Wilkinson's paper here.


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

Support the show (http://www.taxpayers.org.nz/donate)

Taxpayer Talk: In the market, with Bevan Wallace

What is quantitative easing, and why are markets in New Zealand and abroad seen a recent bounce after dramatic falls due to COVID-19? For an in depth look at how markets are responding - including their implications on housing and inflation here in New Zealand, Jordan and Joe are joined by Bevan Wallace, Executive Director of Morgan Wallace. Bevan’s recent explainer on QE and inflation is available here.

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

Support the show (http://www.taxpayers.org.nz/donate)

 

Major victory in campaign for public sector pay cuts

The Prime Minister’s announcement of a 20 percent pay cut for MPs and public sector CEOs is a significant victory for taxpayers.

Today’s announcement is a very welcome signal from the Prime Minister. Families across the country have their livelihoods threatened by the economic shutdown, so it’s only fair that politicians and public sector leaders share the financial burden.

The pay cuts need to extend deeper into the public service - many of the individuals reporting to public sector CEOs will be earning more than $250,000 themselves. But the sacrifices announced today are a great start, and the Prime Minister should be congratulated for her leadership.

We’d like to thank everyone who signed our petition for public sector pay cuts, as well as those who have shared our Public Sector CEO Rich List, which highlighted just how inflated the salaries of public sector bosses are.

Of course all eyes are now on local government. We’re calling on Mayors, Councillors, Town Clerks, and all of those on more than $250,000 and working for a council, to stand with our Prime Minister and make the same sacrifice, as we all unite for COVID-19.

Campaign launched: Public sector pay cuts for COVID-19 relief

Today we have launched a new campaign to temporarily reduce the remuneration of politicians, senior bureaucrats, and council bosses to match those voluntary and involuntary efforts in the private sector where pay is being slashed.

We’re asking the public sector to fairly share the burden of the economic crunch by cancelling all pay hikes until the economy has recovered. We’re also asking elected officials, public sector CEOs*, and their leadership teams** to take a 12-month twenty percent pay cut.

A temporary salary reduction for those paid the most in the public sector would be a prudent and compassionate response to the pressures faced by households and businesses across New Zealand. Business leaders predict unemployment to rise to around ten percent in the coming months, and private sector bosses are taking financial haircuts to limit the impact on lower earners.

The average public sector salary is around a third higher than that of the private sector. They also have the luxury of far higher job security. A twenty percent pay cut is a small sacrifice in these extraordinary times when so many New Zealanders are losing their jobs.

A petition for taxpayers to support the campaign can be signed at www.paycut.nz

>> Click here to add your name in support <<

The Taxpayers' Union is also drafting a Parliamentary amendment bill:

  1. instructing the Remuneration Authority not to increase any remuneration until real GDP is at or above the Q4-2019 level; and
  2. confirming in the law that those whose remuneration is determined by the Remuneration Authority can voluntarily forgo all or some of their pay.

* includes CEOs of SOEs and Crown Companies.
** defined as second-level managers who report to CEOs.

Taxpayer Talk: Economic relief spending: is it worth the cost?

Spending of taxpayer money has gone through the roof as the Government helps businesses through the COVID-19 crisis. How concerned should New Zealanders be? And how does our response compare to other countries? Louis interviews local Economist Joe Ascroft and Daniel Bunn of the Tax Foundation (based in Washington DC) – who is leading their project Tracking Economic Relief Plans Around the World during the Coronavirus Outbreak.

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

Statement on COVID-19 Wage Subsidy

As confirmed by the Government today, the New Zealand Taxpayers' Union is one of the many employers that have accepted the COVID-19 Wage Subsidy. This decision was made on the basis of our ethical obligations to staff during the government-mandated economic shutdown.

The decision to accept this subsidy was not as simple for us as for most organisations. Prior to COVID-19, we have stated on the record that we would never accept taxpayer funding. That commitment was, of course, made in a time few New Zealanders could possibly have anticipated COVID-19 and the ensuing economic situation.

After brief deliberation, the Taxpayers' Union board determined the welfare of our employees to be a more pressing immediate concern than ideological purity.

Moreover, we support the Government's strategy helping employers through the current crisis and we have not criticised any employer for taking this subsidy. It is important to distinguish between targeted corporate welfare, which we oppose, and across-the-board compensation for the effects of a government-mandated economic shutdown.

We stand with all employers affected by the lockdown and urge the Government to urgently advance an 'exit plan' that will create the conditions for all businesses to return to self-sufficiency.

UPDATE: With the immediate economic impact over, and donation income recovered back to pre-pandemic levels, in late 2020 the Taxpayers' Union took the decision to pay back the wage subsidy. You can read more about that decision here.

Taxpayer Talk: Should local councils freeze rates?

Despite the national health and financial emergency, most councils are still planning to hike rates - some up to nine or ten percent. Louis interviews Hutt City Councillor Chris Milne & Christchurch City Councillor Sam MacDonald on their response to our campaign calling for a nationwide rates freeze and ways councils can save money.

You can support our campaign calling for a naitonwide rates freeze at www.ratesfreeze.nz. The dashboard referred to in the podcast is available at www.taxpayers.org.nz/rates_dashboard

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

Where does your council stand on a rates freeze?

rateCouncils across the country are scheduled to increase rates by as much as 10% in the coming months, despite the hardships faced by households in the wake of the COVID-19 lockdown.

> Click here to sign the petition calling for a nationwide rates freeze <

Find out where your local (and regional) council stands on rates freezes in the table below.

Green means a council has signaled a rates freeze.
Orange means a council has signaled a reduction in planned rate hikes.
Red means a council has not signaled any reduction in planned rate hikes.

This dashboard is subject to ongoing updates. Please contact [email protected] if you have more up to date information.

Header

Council Notes (click for source)
Ashburton District Council Has replaced a 4.88% rate hike with a 2.5% rate hike
Auckland Council Has raised rates by a 3.5% hike.
Bay of Plenty Regional Council Has decreased rates by 2.8%.
Buller District Council  Council will hike rates by 2-2.5% (higher than the original forecast of 1.1%)
Carterton District Council Council average rates increased by 1.72%. 
Central Hawke's Bay District Council Council signalled a rates increase of 3.68% (1.5% higher than long-term plan).
Central Otago District Council Has replaced a 4.9% rate hike with a 1.1% hike
Chatham Islands Council  
Christchurch City Council Mayor abandons rate freeze promise, with a hike of 3.8%.
Clutha District Council Has reduced a 3.61% rate hike to 1.93%
Dunedin City Council Has reduced rates to 4.1% from the planned 6.5%
Environment Canterbury Will reduce 9.8% rate hike, signalling 4%
Far North District Council  Council reduced rates to 2.23% hike
Gisborne District Council Council increases rates by 3.26.
Gore District Council Council passed its annual plan with increase in rates by 2.84%    
Greater Wellington Regional Council Council agreed on an average 3% rates increase, down from its planned 6.3%.
Grey District Council Has an overall increase of rates to 2.7%
Hamilton City Council Has increased rates to 2.8%, down from the planned 3.8%
Hastings District Council Will replace the 4.4% rate hike with a 1.9% hike
Hauraki District Council Plans to adopt scheduled 5.4% rate hike
Hawke's Bay Regional Council Has increased rates by 1.9%
Horizons Regional Council Has replaced a 5.95% rate hike with a 1% hike
Horowhenua District Council Has decreased rates by 1.83%.
Hurunui District Council Has reduced the 5% rate hike to 3.74
Hutt City Council Has reduced the 7.9% rate hike to 3.8%
Invercargill City Council Has reduced a 3.5% rate hike to 2%
Kaikoura District Council  Has increased rates by 4.6%
Kaipara District Council Has reduced a 5.49% rate hike to 3.97%
Kapiti Coast District Council Has reduced a 5.7% to 2.6%
Kawerau District Council Have kept the rates increase at 3.5%
Mackenzie District Council Have reduced planned rate increase of 8% to 4.8%
Manawatu District Council Has a rates freeze until 2021
Marlborough District Council Has signalled replacing a 4.86% rate hike with a hike less than 2.2%
Masterton District Council Has cut the planned rate from 6% to 2%.
Matamata-Piako District Council Has implemented a rates freeze.
Napier City Council Is reviewing its 4.8% rates hike.
Nelson City Council Has implemented a rates freeze.
New Plymouth District Council Has reduced planned 6.47% rate hike to 3.95%
Northland Regional Council Has replaced an 8.6% rate hike with a 4.5% hike
Opotiki District Council Has replaced a 5.06% rate hike with a 2.92% hike
Otago Regional Council Has implemented a rates freeze.
Otorohanga District Council Mayor says council has not discussed rates relief
Palmerston North City Council Has replaced a 4.4% rate hike with a 1.95% hike
Porirua City Council Council has replaced a 6.75% hike with a 4.98% hike
Queenstown-Lakes District Council Replaced the 6.76% rate hike with a 1.59% rate hike
Rangitikei District Council Has implemented 3.6% rate hike down from 6.27%
Rotorua District Council Has implemented a rates freeze
Ruapehu District Council Has replaced the 4.03% rate hike with a 3.50%
Selwyn District Council Has replaced the 3.5% rate hike with a 1.6%.
South Taranaki District Council Has implemented a rates freeze.
South Waikato District Council Has implemented a rates freeze
South Wairarapa District Council  Plans to reduce a 13.75% rate hike to 2.54%
Southland District Council Replacing a 2.65 % rate hike with a 2.31% hike
Southland Regional Council No reports (on track to proceed with 7.7% rate hike)
Stratford District Council Has reduced a planned 5.72% rate hike to 4.3%
Taranaki Regional Council Has budgeted for a rates freeze
Tararua District Council Has reduced rates hike to 2.5%
Tasman District Council Council has voted to freeze rates
Taupo District Council Has decreased rates by 0.43%
Tauranga City Council Has replaced a 12.6% rate hike with a 7.6% hike
Thames-Coromandel District Council Has lowered rates hike of 9.98% to 4.98%
Timaru District Council Councillors implemented replacing 7% rate hike with a 2% hike
Upper Hutt City Council Has reduced a 4.7% rate hike to 1.5%
Waikato District Council Going ahead with scheduled 3.66% rate hike
Waikato Regional Council Has implemented a rates freeze
Waimakariri District Council Has reduced a 4% rate hike to 1.5%
Waimate District Council Has reduced a 7.7% rate hike to 3.7%
Waipa District Council Has reduced a 2.7% rates hike to 2.4%
Wairoa District Council Has increased rates by 5%
Waitaki District Council Has committed to a rates freeze
Waitomo District Council Has reduced to 1.54% hike
Wellington City Council Planned 9.2% rate hike to be reduced to 5.1%
West Coast Regional Council Has voted to freeze rates
Western Bay of Plenty District Council Has increased rates by 1.98%
Westland District Council Planned 8.5% rate hike will be brought down to 1.67%
Whakatane District Council Has increased rates by 3.5%
Whanganui District Council Has reduced a 3.9% rate hike to 2.3%
Whangarei District Council Has voted to replace a 5.2% rates hike with a 2.2% hike

> Click here to sign the petition calling for a nationwide rates freeze <

Taxpayer Talk: NZ Initiative on COVID-19 - Dr David Law and Dr Eric Crampton

In this episode, Jordan talks to Dr David Law (Research Fellow) and Dr Eric Crampton (Chief Economist) at the New Zealand Initiative thinktank. Dr Law has just published a paper, Policy Point: Short-time work to maintain employment and Dr Crampton a Research Note: Effective Treatment: Public policy prescription for a pandemicBoth join us to discuss their papers, as well as why current calls from leftwing groups for a UBI are misguided.

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

Taxpayers' Union launch podcast: Taxpayer Talk

In response to the speed in which the economic and political environment is changing due to COVID-19, we have brought forward the launch of our podcast.  The first interview was last Thursday and Friday with Damian Grant and Michael Ridell who take opposing views on the extent to which the Government should intervene to keep people in their jobs during the crisis.

You can subscribe to Taxpayer Talk via Spotify here (press "follow" after clicking the link). Apple Podcast approval is still in process.

We welcome your feedback / constructive criticism as we master the art of casting the pod from self-isolation!

 

Pandemic response: Campaign for nationwide rates freeze launched

The Taxpayers’ Union has launched a campaign aiming to force New Zealand’s mayors and regional council chairs to commit to a 12-month rates freeze in light of current economic challenges.

While the Government prioritises economic relief for struggling families and employers, most local councils are still planning significant rate hikes in the coming months. Some have plans to hike rates up to nine or ten percent from 1 July.

In the letter to mayors and chairsTaxpayers’ Union Executive Director Jordan Williams says, “The Government is currently prioritising economic relief for businesses and households facing economic calamity. But rate hikes at this time of economic turmoil will serve to exacerbate immediate financial stresses and undermine the Government’s relief strategy. Any economist will tell you that a recession is the most damaging time to hike taxes.”

The letter advises councils to cater for the reduction in expected revenue with cuts to lowest-value spending, rather than borrowing. “Households and businesses are cutting costs and it is only fair that your council does the same — we must all cut our cloth to fit the new economic reality.”

A public petition has also been launched at www.RatesFreeze.nz.

Exclusive: Ministry of Health hasn't asked where staff have traveled

The Ministry of Health has not been asking staff returning from overseas where they traveled, the New Zealand Taxpayers' Union has learned.

An information response from the Director-General's office confirms that "The Ministry has not actively recorded or captured personal travel of staff and Ministry staff have not been required to inform the Ministry of their plans when they take annual leave."

As a result, the Ministry was unable to inform the Taxpayers' Union whether any of its staff had traveled to or via China in the period leading up to 4 March.

We requested this information after receiving a tip-off that a staff member at the Ministry had recently returned from China and attended a social event with colleagues.

Requiring staff to report on their international movements costs nothing. It's a basic precaution that countless businesses up and down New Zealand are taking.

We fund the Ministry of Health to provide leadership for the entire health system. If this is the example being set by our top health bureaucrats, how do they expect other employers to be prudent?

COVID-19 - Government's package a mixed bag

The team have spent yesterday afternoon working through the Government’s COVID-19 response package. A couple of the staff are in self-isolation, so we’ve well and truly rehearsed using the virtual technology in preparing this note and our media commentary.

In summary, the package is not as comprehensive as many economists were expecting. On the eight measures we have been lobbying for, the Government has picked up some of the ideas but left many out. Grant Robertson has signalled more is to come on Budget Day (14 May) or even before then.

Overall, yesterday's package is not as focused on protecting jobs as we were expecting. For example, the wage subsidies to employers are effectively limited to organisations with 20 or fewer staff.

The Government also appears to have used COVID-19 to make some permanent policy changes. For example, while temporary boosts to income for beneficiaries and those most vulnerable are justified, the Government has increased benefits by $25 per week on a permanent basis (that is in addition to the normal annual adjustment for wage inflation). 

The Winter Energy Payment (paid to all on any non-student benefit or NZ Super) is also being doubled to $40.91/week for singles and $63.64/week for couples. But in this case, just for this year.

Summary of Government's response package:

  • $500 million boost for health (the cost is equal to $278/household)

  • $5.1 billion in wage subsidies for affected businesses in all sectors and regions, available from today ($2,833/household)

  • $126 million in COVID-19 leave and self-isolation support ($70/household)

  • $2.8 billion income support package for our most vulnerable, including a permanent $25 per week benefit increase and a doubling of the Winter Energy Payment for 2020 ($1,556/household in the first year)

  • $100 million redeployment package ($56/household)

  • $2.8 billion in business tax changes to free up cashflow including a provisional tax threshold lift, the reinstatement of building depreciation, and writing off interest on the late payment of tax ($1,556/household)

  • $600 million initial aviation support package ($333/household).

Our take:

The New Zealand Taxpayers' Union is welcoming the temporary measures to ease pressure on employers contained in yesterday's economic relief package.

Yesterday's relief package is a vindication of the long-term fiscal prudence by a generation of finance ministers. Measures like temporary wage subsidies are extremely costly, but can be afforded thanks to successive governments' commitment to low public debt.

We're pleased to see the waiving of interest for late tax payments, and the increase to Winter Energy Payments which will help keep vulnerable older New Zealanders at home. We recommended these changes in our briefing paper released Monday. The lift in the threshold for provisional tax will also be a welcome relief to small businesses.

We’re open to increasing benefits for the duration of the pandemic, but COVID-19 is not an excuse for locking it in. For context, the cost of the benefit hike is around $2.3 billion — almost five times as much as the boost to the health system. Every extra dollar spent here means one fewer for the productive sector and frontline health services.

There are also policy measures such as the changes to depreciation treatments which, although we support them, seem totally unrelated to the immediate threats to business cashflow and New Zealand jobs. It suggests this was very much policy designed to be seen to be doing something, rather than policy targeted at the specific challenges we face now.

Elephant in the room: 1 April minimum wage hike

The big hole in this package is supporting businesses faced with higher costs due to the minimum wage going up on 1 April. The people who get slammed most will be the working poor, earning the minimum wage or close to it, who work for a large employer that doesn't qualify for the wage subsidy package or will only receive limited assistance. 

The obvious measure is to pause the minimum wage hike until economic conditions allow.

More information:

For convenience, we have copied links to the Government’s announcements and factsheets below.

Government's media releases:

Minister's speech to Parliament

Policy factsheets:

COVID-19: Taxpayers’ Union release recommendations for New Zealand’s immediate economic response

Responding to the developing threat of COVID-19 to the New Zealand economy, the New Zealand Taxpayers’ Union has released a paper outlining its recommendations in advance of the Government’s package being announced tomorrow.
 

As fiscal conservatives, it does not come naturally to call for a dramatic expansion of the size of state spending. However, a core role of government, and why we pay taxes, is to protect the citizenry at times of national systematic shock such as war and pandemic.

COVID-19 is the biggest economic event of my lifetime. It is essential that the Government takes all steps to protect lives and livelihoods now, but also our ability to recover quickly once the health crisis is over. It is with that in mind that our economic team has drafted these recommendations for emergency measures.
 
We accordingly urge the Government to adopt the measures outlined below, which are explained in our paper:

  • Provide all New Zealand employees with one month of sick leave in addition to existing rights for the rest of 2020, paid for by the taxpayer;
  • Use buyouts rather than bailouts. Taxpayer funds paid must be in return for the Crown taking a significant/majority or total shareholding;
  • Scrap the 2020 increase to the minimum wage — but if the Government insists on going ahead, have it meet the costs to employers for the next 18 months;
  • Fund unlimited childcare for health workers, aged care workers, and Police staff for the next 18 months;
  • Partner with Progressives, Foodstuffs and Uber to make grocery delivery free;
  • Give lump-sum payments to taxpayers by retrospectively cutting the bottom tax rate from 10.5% to 5% for the 2019/2020 tax year;
  • Expand 'Winter Energy Payments' to begin immediately and continue through winter 2020; and
  • Suspend interest and penalties for late tax payments from employers.

 

Picture of wasteful spending: taxpayers coughing up for arty Italian holiday

The New Zealand Taxpayers' Union can reveal that Creative New Zealand and Museum of New Zealand Te Papa Tongarewa are providing nearly $900,000 in taxpayer money for artists and curators to attend the Venice Art Biennale in 2021.

Showing off to Italian art collectors might be glamorous and good fun, but taxpayers shouldn't be forced to cover the cost of the lucky few who get to do it.

Opening night alone comes with a $100,000 fee. Outrageously, that’s the least of taxpayers’ worries, because another $770,000 is set to be frittered away on flights, freight and hotel rooms.

Not a single expense was spared for the truly needy in our society: artists and gallery curators.
 
With tough economic times coming, this ‘nice to have’ spending needs to be stopped.

Revealed: Former Quitline operators hoard millions in taxpayer funds

Paul Callaghan swandiving

The Taxpayers' Union can reveal that The Quit Group the charity originally commissioned to run Quitline continue to hold $2.8 million in taxpayer funds, despite having lost their government contract in 2015.

The Quit Group promised to hand the funds over to anti-smoking initiatives. They have failed to keep their promise, and the Ministry of Health has failed to hold them to account.

In fact, since 2015 the Quit Group have been using the funds to collect investment income and pay board membership fees to themselves – $72,000 per year, or $18,000 per board member.

To make things worse, the Chair of the Quit Group is Chris Cunningham, who has recently been investigated by Charities Services for running up $128,000 in travel expenses as Chair of the Hepatitis Foundation.

The detail:

In 2016 RNZ reportedThe Ministry of Health called in lawyers for advice and has since reached an agreement with the Trust on using the money to support the government's goal to make New Zealand smoke-free by 2025. Ministry spokesperson Grant Pollard said that any Ministry funding remaining with the Quit Group Trust must be used for the purpose of supporting the 2025 Smokefree goal. He said the specifics of how the funds would be used have yet to be decided and is still being worked through. "The Ministry still has the option of auditing the Trust if an agreement can't be reached on how the funds will be utilised."

In 2017, the Ministry conducted this audit, but was hampered as the group claimed to have archived its records with no IT platform for retrieval. However, based on 'assumptions and estimates', the Ministry concluded that The Quit Group had received a funding surplus of $435,700 between 2007 to 2016.

Moreover, according to The Quit Group’s latest financial statements, it still has assets totalling $2,726,737, down from $3,164,394 in 2016. The Group has no staff, but continues to gain investment income from these assets and has paid out $702,296 in expenses since 2016. These expenses include $72,000 per year in fees for the four board members. The Group's four board members are Chris Cunningham, Janet Pearson, Mary McCulloch, and Annette Milligan.

An information response released to the Taxpayers' Union makes for disturbing reading. The Ministry concedes that it failed to stipulate any timeframe in which the group would have to use its funds. The Ministry does not plan to refer the group to the Charities Commission, and will instead "encourage the Trust to commit to spending the reserves. . .in a timely and appropriate matter."

This beggars belief. The Ministry has already let this group off the hook for four years. All this time, The Quit Group's board members have hoarded three million dollars, eating away at it by paying themselves board fees for doing stuff all. It's an insult to the ailing New Zealanders who desperately need anti-smoking support and other core health services.

The Minister of Health needs to step in to refer The Quit Group to Charities Services, so that the Government can repossess the funds on behalf of taxpayers.

Finally, the gravy train has to end for Chris Cunningham. He should by now be discredited from holding any of his taxpayer-funded positions. These include:

  1. Hepatitis Foundation (board member)
  2. The Quit Group (Chair)
  3. Maori Knowledge and Development Panel (Chair)
  4. Massey University’s Research Centre for Maori Health and Development (Chair)

Just how badly can one man rip off taxpayers?

Exposed: The shocking $6.2m bill to rebrand fire services

Graphic

The $6,254,064 cost of rebranding New Zealand’s fire services is a shocking indictment on the merger of rural and urban services, which was meant to save taxpayer money.

Rebrand breakdown

The spending figures were tabled to select committee this month and can be found on page seven of this document. The expense covers signage and uniforms – not the restructure process itself. The rebrand is ongoing, so figures will increase.

“We have consistently opposed government rebrands, which always suck resources away from core services. But the price of this rebrand has left us stunned – we’ve never seen anything like it. This money could have paid a year’s salary for 145 trainee firefighters.

And the culture of waste within FENZ isn’t limited to rebranding. Delving deeper into the Select Committee report reveals further incredible expenses.

  1. In the previous two years, FENZ spent $31 million and $32 million on external contractors. (p45)
  2. In the previous two years, FENZ spent $1.7 million and $2.1 million on public relations/communications personnel. (p36)
  3. FENZ has spent $122,731 sponsoring TV Three’s “The Block”. (p35)

This absurd level of spending reinforces the findings of our latest research report Cash to Ashes, which found that FENZ expenditure is skyrocketing, as it can spend its insurance levies without Budgetary scrutiny. The funding model for FENZ is simply not fit for purpose. We’re calling on Minister Tracey Martin to scrap the fire levy entirely, and set a reined-in budget for FENZ through the standard Budget process.

Revealed: Chris Hipkins forces school to open with a roll of zero

The New Zealand Taxpayers’ Union can reveal that Tuturumuri School in the Wairarapa is currently open and employing four staff – despite having zero students. The Union tells this story in video form below.

This revelation is the result of a tip-off from a concerned taxpayer. The school is costing taxpayers $1,300 a day, and the school confirms two full time staff (a teacher and an aide) are required to be on site each day. Two part-timers (a caretaker and cleaner) are also still on the payroll.

After the school’s roll dwindled from seven at the beginning of last year down to two, the board voted to close the school. However, the Minister of Education has stepped in at the last minute to insist on yet another round of consultation (despite the school having gone through a similar process in 2018).

Taxpayers’ Union spokesman Louis Houlbrooke, who visited the school last week, says: “The situation at Tuturumuri is bizarre. Two staff members are forced to show up each day at a ghost school, twiddling their thumbs while they wait for the Minister to make a decision. This is a case of provincial politics overriding common-sense. Clearly, the school has an important place in the region’s history, but now it’s time to turn off the taxpayer-funded life support.”

After contacting the Minister’s office, the Union received the following response:

“After consideration, I agreed to close it two years ago but was lobbied heavily to reconsider, including by National Party MPs, and I am doing that. There is a statutory process that must be followed when consideration is being given to closing a school. While this process is underway, the school remains legally open and the staff remain employed. I received a report on a potential closure from the Ministry of Education at the end of last week. It does not need to go to Cabinet.

The Union has requested further information about costs and the Ministry’s consultation process. We await a response.

Report: Reformed fire service fails to deliver promised savings

The 2017 amalgamation of urban and rural fire services has delivered huge cost increases for taxpayers, finds a new report from the New Zealand Taxpayers’ Union.

Cash to Ashes: The inefficiency of fire service reforms can be read here.

Graph

Key findings:

  1. The merger and centralisation of urban and rural fire services was meant to produce $47.7 million in efficiency savings by 2021/22. In practice, there have been no efficiency savings, and Fire and Emergency NZ (FENZ) has cost taxpayers $338 million more in its first three years than was forecast to Cabinet in 2016.
  2. $163 million of the $205 million increase in forecast expenditure between 2017/18 and 2018/19 was dedicated to ‘Support Services’ – i.e. back office bureaucracy.
  3. FENZ has increased spending by $43 million on ‘communications and computers’ over three years.
  4. FENZ is spending $27.4 million on external consultants over three years.
  5. FENZ is ‘gold plating’ its infrastructure. New stations in Lake Okareka and Wanaka cost $1.9 million and $4 million respectively, far more than comparable volunteer stations in Australia. FENZ has even opened a double-bay station, complete with training space, laundry, and kitchenette, in Tinui, a town of 20 people.
  6. FENZ spent $17 million responding to the Pigeon Valley Forest fire – more than 17 times more than the response to the remarkably similar Hira Forest fire in 1981.
  7. FENZ does not have to justify wasteful spending to Cabinet, as it collects revenue through the fire insurance levy, bypassing the Budget bid process.

Cash to Ashes recommends that FENZ be required to go through the scrutiny of the Budget bid process to secure its funding. The report also proposes abolishing the fire insurance levy entirely, and collecting revenue for FENZ from general taxation.

Former National Rural Fire Officer Murray Dudfield, ONZM, consulted on the report. Reflecting on its findings, he says:

“The annual rural fire costs in 2015/16, to local government rate payers, was $29 million. In addition the 2017 PWC report concluded that the 2015/16 expenditure of $389 million was appropriate for the NZ Fire Service functions and output responsibilities. Following the merger of urban and rural fire services on 1st July 2017, the latest FENZ forecast of expenditure is showing a hefty spend of $617 million in 2020/21. The FENZ Board, in just year four of this merger, are planning an additional $228 million more than the 2015/16 budget. The merger was intended to produce savings and deliver cost effective benefits to all New Zealanders. However these savings and benefits are now disappearing in a puff of smoke unless the Minister gets involved. On behalf of all New Zealanders the Minister of Internal Affairs, Tracey Martin, must take urgent steps to ensure FENZ delivers the savings identified by Government in 2016.”

Mr Dudfield also joined Duncan Garner on The AM Show to discuss the report.

In a foreword to the report, Insurance Council Chief Executive Tim Grafton asks, “Why should those who insure be the ones that fund FENZ? Everyone benefits from FENZ services, not just those who take responsibility to insure themselves.”

Wuhan Virus: New Zealanders left high and dry as Embassy staff holiday – Kiwis told to call WHO

Kiwi taxpayers in China have no one to turn to with New Zealand Embassy Officials having remained on holiday despite the Wuhan Virus turning New Zealanders’ lives in the province upside down.  The Embassy in Beijing remains closed for Chinese New Year.

This afternoon the Taxpayers’ Union received a tip-off that Kiwis in China cannot get a hold of any of the hundreds of New Zealand officials who work in the country.  “We called the Embassy and couldn’t believe that at 1pm Beijing time, despite the developing situation, the Embassy is closed,” says Jordan Williams, a spokesman for the Taxpayers’ Union.

“While Australia’s Minister of Foreign Affairs works with the Chinese Government to evacuate Australian citizens from Wuhan, New Zealand’s Foreign Affairs officials are quite literally still on holiday. It’s an incredible situation given events over recent days.”

“What is the point of a diplomatic post, if it’s not open when New Zealanders actually need it?”

“In Australia the Foreign Affairs Minister is front and centre in efforts to extricate Australians.  Here, not a word from MFAT or our Minister.”

“If you call our Embassy in Beijing, you are told it is closed for Chinese New Year, and to contact the MFAT’s emergency line based in Wellington.  We called the line asking who on the ground Kiwis stuck in Wuhan could contact.  MFAT advised us that New Zealanders should contact the World Health Organisation, or the New Zealand Ministry of Health.”

“According to MFAT, $50 million of taxpayers’ money was used for ‘elegant and sustainable new building to be the heart of its official presence in China’ on ‘a quiet leafy street in Beijing’. But at the very time New Zealanders most need help, the doors are locked.”

“And it’s not just people stuck in Chinese provinces.  We are hearing of widescale cancellations of orders from China for New Zealand goods and last minute cancelations of tour group bookings following the Chinese Government’s travel restrictions. These are the very officials Kiwi businesses rely on for advice.”

“If the sample of businesses we have spoken to is reflective of the potential economic impact, MBIE and MFAT should be hands on deck, not on holiday.”

“Minister Winston Peters, and the Ambassador Clare Fearnley, need to end their holiday and get back to work.  Chinese New Year or not.”

Sources:

Australian response: https://www.9news.com.au/national/coronavirus-australian-government-extricate-nationals-trapped-in-wuhan-health-news/b236a1dc-e019-46a0-a063-348bf236cb25

Cost of Embassy $50 million source https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12179737

Quote from MFAT website: “Our place in Beijing” https://www.mfat.govt.nz/en/countries-and-regions/north-asia/china/new-zealand-embassy/our-place-in-beijing

Embassy contact details: https://www.mfat.govt.nz/en/countries-and-regions/north-asia/china/new-zealand-embassy/contactfull

ENDS

Taxpayers’ Union submits design proposal for Beehive artwork

The New Zealand Taxpayers’ Union has formally submitted its design proposal for a 3.5-metre artwork in the Beehive entrance, pictured below.

Artwork
The Union will refuse the $15,000 commission fee should its submission be chosen.

Perfectly placed to greet MPs and Ministers arriving for work, Don’t Waste It serves as a warning to would-be money-wasters in the heart of government.
 
For those New Zealanders not lucky enough to earn a politician’s salary, a five dollar note represents a meal, or the bus fare for a job interview. That small sheet of polypropylene can be the difference between hunger and happiness, poverty and opportunity.
 
Taxpayers understand the value of money, because they work for it. But too often, politicians take money from us only to fritter it away on pet projects, political fads, and minor extravagances. The taxpaying public can never be too firm in its opposition to government waste. It is in this spirit that we submit our proposal.

Artwork 2

Christchurch City Council Hands Out $96,000 in Goody Bag Perks

The New Zealand Taxpayers' Union can reveal that the Christchurch City Council spent $96,459 on induction perks for new and returning councillors and community board members following the 2019 local election.

One of the items included in the goody bags was a brand-new $2,407 Dell tablet. Councillors could choose to swap their ratepayer-funded iPad Pro for the more expensive device — the thing is, these iPads were actually purchased as late as 2017. The Council is indulging in flashy new devices every electoral cycle.

Other technology perks included $257 keyboard cases and extra power adaptors. This is in addition to a hefty $990 annual 'allowance', most of which is intended to be spent on wifi and phone calls. It's not clear whether the Council actually checks in on how this money is used.

While residents languish under soaring rates, elected officials are enjoying unnecessary lavish perks that most ratepayers couldn't afford to purchase for themselves.

This information was obtained under the Local Government Official Information and Meetings Act. While the Taxpayers' Union also collected induction perk data from Wellington City and Auckland Council, it's difficult to accurately compare the figures, as other councils may not have included technology provided in their responses. 

Revealed: Civil Aviation Authority's Sky-High Catering Costs


The New Zealand Taxpayers' Union can reveal that the Civil Aviation Authority spent over $232,000 on catering between July 2018 and June 2019.

An annual catering expense of $232,000 is around $1000 every single working day of that year.

Living costs in New Zealand are spiralling out of control and Kiwis are desperate for tax relief. Rather than making Government departments more efficient, we're seeing free lunches rolled out in public entities.

Hard-working taxpayers don't get free lunches. Are these bureaucrats really more deserving?

The Taxpayers' Union contacted a CAA employee to further enquire about the catering expenses. Regrettably, she was away from her desk for a — presumably catered — CAA function.

The Taxpayers' Union is waiting on further details.

Revealed: The Public Sector CEO Rich List

Taxpayers can now browse the specific pay rates, ranked, for public sector chief executives.

This year taxpayers will pay $62 million in salaries for the 140 public sector CEOs. The average is paid $443,000, and 53 earn more than the Prime Minister.

Many of these individuals make major decisions about services that impact millions of taxpayers' lives. Publicising their salaries serves to promote accountability and transparency at the highest level.

Other Rich-Listers lead obscure QUANGOs (quasi-autonomous non-governmental organisations) that generate little value for taxpayers. We hope the Public Sector CEO Rich List provokes debate over the necessity of these positions.

Rich list header

Rank Organisation Name (2019) Salary (2019) Notes  Name (2018) Salary (2018) Notes
1 Guardians of New Zealand Superannuation Mr Matt Whineray $1,065,000.00 Estimate provided by board  Mr Matt Whineray $960,000.00 Not available in SSC report. Source
2 Accident Compensation Corporation Mr Scott Pickering $841,000.00   Mr Scott Pickering $833,000.00  
3 Housing New Zealand Corporation  Mr Andrew McKenzie  $791,000.00   Mr Andrew McKenzie  $703,000.00  
4 University of Auckland Prof. Stuart McCutcheon $760,000.00   Prof. Stuart McCutcheon $760,000.00  
5 Commissioner of Police Mr Mike Bush $709,000.00   Mr Mike Bush $708,000.00  
6 The Treasury Mr Gabriel Makhlouf $687,000.00 Annualised based on 362 days  Mr Gabriel Makhlouf $645,000.00  
7 New Zealand Transport Agency ACTING (Mr Mark Ratcliffe)  $682,000.00 Annualised based on 168 days  Mr Fergus Gammie $619,000.00  
8 Chief of the New Zealand Defence Force Air Marshal Kevin Short $670,000.00   Lt Gen. Tim Keating $675,000.00  
9 Controller and Auditor-General Mr John Ryan  $670,000.00 Annualised based on 364 days  ACTING (Mr Gregory Schollum) $657,000.00  
10 Auckland DHB Ms Ailsa Claire $667,000.00   Ms Ailsa Claire $635,000.00  
11 Waitemata DHB Dr Dale Bramley $666,000.00   Dr Dale Bramley $653,000.00  
12 Solicitor-General Ms Una Jagose $666,000.00   Ms Una Jagose $665,000.00  
13 Inland Revenue Department Ms Naomi Ferguson $657,000.00   Ms Naomi Ferguson $674,000.00  
14 New Zealand Trade and Enterprise Mr Peter Chrisp  $651,000.00   Mr Peter Chrisp  $638,000.00  
15 University of Otago Prof. Harlene Hayne $644,000.00   Prof. Harlene Hayne $644,000.00  
16 State Services Commissioner and Head of State Services Mr Peter Hughes $630,000.00   Mr Peter Hughes $630,000.00  
17 Oranga Tamariki—Ministry for Children Mrs Gráinne Moss $628,000.00   Mrs Gráinne Moss $647,000.00  
18 Financial Markets Authority Mr Rob Everett $628,000.00   Mr Rob Everett $615,000.00  
19 Canterbury DHB Mr David Meates $613,000.00 Also responsible for West Coast DHB  Mr David Meates $607,000.00 Also responsible for West Coast DHB 
20 HLC Ltd (previously named Hobsonville Land Company)  Mr Chris Aiken  $612,000.00   Mr Chris Aiken  $471,000.00  
21 Ministry of Justice Mr Andrew Kibblewhite  $603,000.00 Annualised based on 150 days  Mr Andrew Bridgman $606,000.00  
22 Department of the Prime Minister and Cabinet Mr Brook Barrington  $603,000.00 Annualised based on 215 days  Mr Andrew Kibblewhite $611,000.00  
23 University of Canterbury Prof. Cheryl de la Rey  $594,000.00 Annualised based on 150 days (Estimate) Dr Rod Carr $662,000.00  
24 Victoria University of Wellington Prof. Grant Guilford $587,000.00   Prof. Grant Guilford $587,000.00  
25 Ministry for Primary Industries Mr Ray Smith  $572,000.00 Annualised based on 242 days Mr Martyn Dunne $592,000.00  
26 Ministry of Education Ms Iona Holsted $568,000.00   Ms Iona Holsted $597,000.00  
27 Ministry of Social Development Ms Debbie Power $566,000.00 Annualised based on 147 days  Mr Brendan Boyle $677,000.00  
28 Counties-Manukau DHB Fepuleai Margie Apa  $565,000.00 Annualised based on 301 days  ACTING (Dr Gloria Johnson) $499,000.00  
29 Tertiary Education Commission  Mr Tim Fowler  $561,000.00   Mr Tim Fowler  $557,000.00  
30 Ministry of Business, Innovation and Employment Ms Carolyn Tremain  $555,000.00   ACTING (Ms Carolyn Tremain) $560,000.00  
31 New Zealand Tourism Board (Tourism New Zealand)  Mr Stephen England-Hall  $550,000.00   Mr Stephen England-Hall  $536,000.00  
32 Public Trust  Ms Glenys Talivai  $549,000.00 Annualised based on 105 days Mr Robert Smith  $537,000.00  
33 Deputy State Services Commissioner (and Ms Power was also Chief Executive) ACTING (Mr John Ombler)  $546,000.00 Annualised based on 147 days  Ms Debbie Power $533,000.00  
34 Auckland University of Technology  Mr Derek McCormack  $545,000.00   Mr Derek McCormack  $545,000.00  
35 Ministry of Foreign Affairs and Trade Mr Chris Seed  $545,000.00 Annualised based on 150 days (Estimate) Mr Brook Barrington $630,000.00  
36 Capital and Coast DHB ACTING (Ms Julie Patterson)  $535,000.00   ACTING (Ms Julie Patterson) $365,000.00 Annualised based on 20 days
37 Callaghan Innovation Ms Victoria Crone $533,000.00 Estimate Ms Victoria Crone $529,000.00  
38 Southern DHB Mr Chris Fleming $531,000.00 Estimate Mr Chris Fleming $520,000.00  
39 Department of Internal Affairs Mr Paul James  $528,000.00 Annualised based on 273 days  Mr Colin MacDonald $666,000.00  
40 Ministry of Health Dr Ashley Bloomfield  $528,000.00   Dr Ashley Bloomfield $256,000.00 Annualised based on 20 days
41 Department of Corrections ACTING (Ms Christine Stevenson)  $524,000.00 Annualised based on 147 days  Mr Ray Smith $563,000.00  
42 MidCentral DHB Mrs Kathryn Cook $523,000.00   Mrs Kathryn Cook $516,000.00  
43 Northland DHB Dr Nick Chamberlain $523,000.00   Dr Nick Chamberlain $523,000.00  
44 Ministry of Housing and Urban Development Mr Andrew Crisp  $523,000.00 Annualised based on 196 days      Established 1st August 2018
45 Fire and Emergency New Zealand Mr Rhys Jones $519,000.00   Mr Rhys Jones $503,000.00  
46 University of Waikato Prof. Neil Quigley $517,000.00   Prof. Neil Quigley $515,000.00  
47 Ministry for the Environment Ms Vicky Robertson $513,000.00   Ms Vicky Robertson $496,000.00  
48 Massey University  Prof. Jan Thomas  $506,000.00   Prof. Jan Thomas  $506,000.00  
49 Hawke’s Bay DHB Dr Kevin Snee $504,000.00   Dr Kevin Snee $504,000.00  
50 Museum of New Zealand Te Papa Tongarewa Board  Mr Geraint Martin  $500,000.00   Mr Geraint Martin  $500,000.00  
51 Bay of Plenty DHB Ms Helen Mason $486,000.00   Ms Helen Mason $477,000.00  
52 Ministry of Defence Ms Helene Quilter $484,000.00   Ms Helene Quilter $483,000.00  
53 Waikato DHB ACTING (Mr Neville Hablous)  $477,000.00 Annualised based on 65 days  INTERIM (Mr Derek Wright) $473,000.00 Annualised based on 258 days
54 New Zealand Qualifications Authority  Dr Karen Poutasi $466,000.00 Estimate Dr Karen Poutasi $461,000.00  
55 Department of Conservation Mr Lou Sanson $464,000.00   Mr Lou Sanson $461,000.00  
56 New Zealand Lotteries Commission  Mr Chris Lyman  $459,000.00   Mr Chris Lyman  $450,000.00 Annualised based on 181 days
57 New Zealand Security Intelligence Service Ms Rebecca Kitteridge $452,000.00   Ms Rebecca Kitteridge $463,000.00 Annualised based on 276 days
58 Earthquake Commission Mr Sid Miller $452,000.00   Mr Sid Miller $443,000.00  
59 Government Communications Security Bureau Mr Andrew Hampton $443,000.00   Mr Andrew Hampton $444,000.00 Annualised based on 276 days
60 Te Puni Kōkiri - Ministry of Māori Development Ms Michelle Hippolite $442,000.00   Ms Michelle Hippolite $444,000.00  
61 Ministry of Transport Mr Peter Mersi $434,000.00   Mr Peter Mersi $437,000.00  
62 Nelson Marlborough DHB Dr Peter Bramley $433,000.00   Dr Peter Bramley $433,000.00  
63 Statistics New Zealand Ms Liz MacPherson $428,000.00   Ms Liz MacPherson $404,000.00  
64 Pharmaceutical Management Agency Ms Sarah Fitt $427,000.00   Ms Sarah Fitt $427,000.00 Annualised based on 176 days
65 Health Quality and Safety Commission  Dr Janice Wilson  $423,000.00   Dr Janice Wilson  $415,000.00  
66 Clerk of the House of Representatives Mr David Wilson $423,000.00   Mr David Wilson $410,000.00  
67 Te Kāhui Whakamana Rua Tekau mā Iwa—Pike River Recovery Agency Mr David Gawn $418,000.00   Mr David Gawn $418,000.00 Annualised based on 151 days
68 Te Wānanga o Aotearoa Hon Te Ururoa Flavell  $416,000.00 Annualised based on 307 days (Estimate) Dr Jim Mather $412,000.00  
69 Civil Aviation Authority of New Zealand Mr Graeme Harris $416,000.00   Mr Graeme Harris $414,000.00  
70 Worksafe New Zealand  Ms Nicole Rosie  $416,000.00   Ms Nicole Rosie  $407,000.00  
71 Education New Zealand Mr Grant McPherson $415,000.00   Mr Grant McPherson $403,000.00  
72 Environmental Protection Authority Dr Allan Freeth $413,000.00   Dr Allan Freeth $409,000.00  
73 Manukau Institute of Technology  Mr Gerald Gilmore  $406,000.00   Mr Gerald Gilmore  $406,000.00  
74 Commerce Commission Ms Adrienne Meikle  $404,000.00   Ms Adrienne Meikle  $405,000.00 Annualised based on 55 days (E)
75 Education Review Office Mr Nicholas Pole $402,000.00   Mr Nicholas Pole $405,000.00  
76 Lincoln University  ACTING (Prof. Bruce McKenzie)  $401,000.00 Annualised based on 181 days  ACTING (Prof. James McWha)  $433,000.00 Annualised based on 96 days
77 Ara Institute of Canterbury  Mr Tony Gray  $400,000.00   Mr Tony Gray  $400,000.00 Annualised based on 300 days
78 Sport New Zealand  Mr Peter Miskimmin  $400,000.00 Estimate Mr Peter Miskimmin  $396,000.00  
79 Chief Ombudsman Mr Peter Boshier $400,000.00   Mr Peter Boshier $400,000.00  
80 Eastern Institute of Technology  Mr Christopher Collins  $399,000.00 Estimate Mr Christopher Collins  $399,000.00  
81 Taranaki DHB Ms Rosemary Clements $399,000.00   Ms Rosemary Clements $399,000.00  
82 Chief Parliamentary Counsel Ms Fiona Leonard $397,000.00   Ms Fiona Leonard $393,000.00  
83 High Performance Sport New Zealand Ltd Mr Michael Scott $391,000.00   Mr Michael Scott $392,000.00 Annualised based on 160 days
84 Whanganui DHB Mr Russell Simpson $389,000.00   Mr Russell Simpson $388,000.00 Annualised based on 156 days
85 Wellington Institute of Technology / Whitireia Community Polytechnic Mr Chris Gosling $388,000.00   Mr Chris Gosling $388,000.00  
86 Lakes DHB Dr Nick Saville-Wood  $385,000.00 Annualised based on 56 days  Mr Ron Dunham $416,000.00  
87 New Zealand Blood Service  Ms Samantha Cliffe  $378,000.00 Estimate Ms Samantha Cliffe  $360,000.00  
88 Otago Polytechnic  Mr Phil Ker $371,000.00   Mr Phil Ker $369,000.00  
89 Unitec Institute of Technology ACTING (Ms Merran Davis)  $371,000.00   ACTING (Ms Merran Davis) $365,000.00 Annualised based on 17 days
90 Serious Fraud Office Ms Julie Read $371,000.00   Ms Julie Read $356,000.00  
91 Ministry for Culture and Heritage Ms Bernadette Cavanagh  $367,000.00 Annualised based on 150 days  Mr Paul James $391,000.00  
92 Electricity Authority Mr James Stevenson-Wallace  $366,000.00 Annualised based on 287 days Mr Carl Hansen $390,000.00  
93 Land Information New Zealand ACTING (Ms Lisa Barrett)  $365,000.00 Annualised based on 308 days  Mr Andrew Crisp $491,000.00  
94 Toi Ohomai Institute of Technology Dr Leon de Wet Fourie $362,000.00   Dr Leon de Wet Fourie $362,000.00  
95 Wairarapa DHB ACTING (Mr Craig Climo)  $358,000.00 Annualised based on 104 days Ms Adri Isbister $331,000.00  
96 Broadcasting Commission (New Zealand On Air) Ms Jane Wrightson $358,000.00   Ms Jane Wrightson $358,000.00  
97 General Manager of the Parliamentary Service Mr Rafael Gonzalez-Montero  $358,000.00 Annualised based on 154 days  Mr David Stevenson $371,000.00  
98 New Zealand Customs Service ACTING (Mr Bill Perry)  $355,000.00 Annualised based on 147 days  ACTING (Ms Christine Stevenson) $411,000.00  
99 Te Arawhiti — Office for Māori Crown Relations  ACTING (Ms Lil Anderson)  $355,000.00 Annualised based on 181 days      Established 1st January 2019
100 Te Whare Wānanga o Awanuiārang Prof. Wiremu Doherty $350,000.00   Prof. Wiremu Doherty $350,000.00  
101 Health Research Council of New Zealand  Prof. Kathryn McPherson  $350,000.00   Prof. Kathryn McPherson  $350,000.00  
102 Southern Institute of Technology  Ms Penelope Simmonds  $348,000.00   Ms Penelope Simmonds  $344,000.00  
103 Social Investment Agency ACTING (Ms Dorothy Adams) $347,000.00   ACTING (Ms Dorothy Adams) $338,000.00  
104 Universal College of Learning Dr Amanda Lynn  $345,000.00 Annualised based on 287 days Ms Leeza Boyce $373,000.00  
105 Maritime New Zealand  Mr Keith Manch  $340,000.00 Estimate Mr Keith Manch  $334,000.00  
106 Nelson-Marlborough Institute of Technology  Mr Liam Sloan  $339,000.00   Mr Liam Sloan  $265,000.00 Annualised based on 266 days 
107 Open Polytechnic of New Zealand  ACTING (Dr Caroline Seelig)  $339,000.00 Estimate Dr Caroline Seelig  $339,000.00  
108 New Zealand Antarctic Institute (Antarctica New Zealand)  Ms Sarah Williamson  $339,000.00 Annualised based on 14 days Mr Peter Beggs  $335,000.00  
109 South Canterbury DHB Mr Nigel Trainor $338,000.00 Estimate Mr Nigel Trainor $330,000.00  
110 Tairawhiti DHB Mr Jim Green $338,000.00   Mr Jim Green $338,000.00  
111 Parliamentary Commissioner for the Environment Rt Hon Simon Upton $337,000.00   Rt Hon Simon Upton $335,000.00 Annualised based on 258 days
112 Waikato Institute of Technology ACTING (Mr David Christiansen)  $336,000.00 Annualised based on 322 days Mr Mark Flowers $429,000.00  
113 Energy Efficiency and Conservation Authority Mr Andrew Casely $336,000.00   Mr Andrew Casely $328,000.00  
114 New Zealand Film Commission Ms Annabelle Sheehan  $327,000.00   Ms Annabelle Sheehan $327,000.00 Annualised based on 174 days
115 Arts Council of New Zealand Toi Aotearoa Mr Stephen Wainright  $323,000.00   Mr Stephen Wainright $323,000.00  
116 Te Wānanga o Raukawa Ms Mereana Selby $312,000.00   Ms Mereana Selby $299,000.00  
117 Ministry for Pacific Peoples Laulu Mac Leauanae $302,000.00   Laulu Mac Leauanae $301,000.00 Annualised based on 363 days
118 Heritage New Zealand Pouhere Taonga Board  Mr Andrew Coleman  $300,000.00   Mr Andrew Coleman  $300,000.00  
119 Health Promotions Agency Mr Clive Nelson $299,000.00   Mr Clive Nelson $293,000.00  
120 Hutt Valley DHB ACTING (Ms Dale Oliff) $297,000.00   ACTING (Ms Dale Oliff) $296,000.00 Annualised based on 181 days
121 Accreditation Council (International Accreditation New Zealand) Dr Llewellyn Richards  $296,000.00   Dr Llewellyn Richards  $289,000.00  
122 Ministry for Women Ms Renee Graham $284,000.00 Annualised based on 242 days  Ms Renee Graham $285,000.00  
123 New Zealand Symphony Orchestra  Mr Christopher Blake  $277,000.00   Mr Christopher Blake  $277,000.00  
124 Northland Polytechnic  ACTING (Mr Wayne Jackson)  $276,000.00 Annualised based on 181 days  Dr Mark Ewen  $245,000.00  
125 Tai Poutini Polytechnic Mr Alex Cabrera $270,000.00 Estimate Mr Alex Cabrera $257,000.00  
126 Telarc Ltd  Mr Philip Cryer  $264,000.00   Mr Philip Cryer  $264,000.00  
127 Takeovers Panel Mr Andrew Hudson $263,000.00   Mr Andrew Hudson $263,000.00 Annualised based on 247 days
128 Western Institute of Technology Mr John Snook  $258,000.00 Annualised based on 181 days  Ms Barbara George $254,000.00  
129 External Reporting Board Mr Warren Allen $256,000.00   Mr Warren Allen $251,000.00  
130 Transport Accident Investigation Commission  Ms Lois Hutchinson  $255,000.00   Ms Lois Hutchinson  $255,000.00  
131 Real Estate Agents Authority  Mr Kevin Lampen-Smith  $248,000.00   Mr Kevin Lampen-Smith  $246,000.00  
132 New Zealand Artificial Limb Service  Mr Sean Gray  $245,000.00   Mr Sean Gray  $245,000.00  
133 Te Reo Whakapuaki Irirangi (Māori Broadcasting Funding Agency) Mr Larry Parr $230,000.00 Estimate Mr Larry Parr $221,000.00  
134 Human Rights Commission  ACTING (Muaausa Pele Walker)  $226,000.00 Annualised based on 181 days  Ms Cynthia Brophy  $257,000.00  
135 Drug Free Sport New Zealand Mr Nick Paterson $209,000.00   Mr Nick Paterson $209,000.00 Annualised based on 335 days
136 Social Workers Registration Board Ms Sarah Clark $209,000.00   Ms Sarah Clark $207,000.00  
137 Te Taura Whiri I Te Reo Māori (Māori Language Commission) Mr Ngāhiwi Apanui $203,000.00   Mr Ngāhiwi Apanui $203,000.00  
138 Broadcasting Standards Authority Ms Belinda Moffat $198,000.00   Ms Belinda Moffat $190,000.00  
139 New Zealand Food Innovation Auckland Ltd Ms Alexandra Allan $183,000.00   Ms Alexandra Allan $175,000.00  
140 New Zealand Walking Access Commission Mr Ric Cullinane  $181,000.00 Annualised based on 300 days Mr Eric Pyle $157,000.00  
    Total $62,009,000.00   Total $60,570,000.00  
    Average $442,921.43   Average $438,913.04  

Taxpayers can also download the table as a spreadsheet to sort by type – such as Tertiary Education, DHBs, and so on.

The publication of this Rich List comes after the State Services Commission agreed to release this year's Senior Pay Report using specific pay rates rather than salary 'bands', in light of correspondence from the Taxpayers' Union and the Ombudsman.

Figures relate to the 2018/19 and 2017/18 financial years and were provided by the State Services Commission's Senior Pay Report. The Report uses estimates in cases where the final remuneration level is not yet determined.

CEOs that did not hold their position for the full year have had their salary figures annualised by the Union.

The list excludes local government (ratepayer-funded) chief executives.

Rubbish tax is set to cost families – and the environment

Louis HoulbrookeThis op-ed is written by Louis Houlbrooke, Communications Officer at the New Zealand Taxpayers’ Union.

The wistful days of Jacinda Ardern’s “no new taxes” pledge are long gone.

Last week, Associate Environment Minister Eugenie Sage proposed lifting landfill levies from the current $10 per tonne to $60 per tonne by 2023.

Like higher fuel taxes and road user charges, Sage’s proposed rubbish tax will eat directly into family budgets, through more expensive rubbish bags, higher rates, fees at the landfill, and costs passed on by businesses.

Her tax is expected to swell government and council revenues by $220 million a year, or more than $120 per household. And that’s on average – the tax will hit harder for larger families who produce more waste and tend to be poorer. By itself, the cost could be tolerable, but it comes on top of other new taxes, higher rates, and generally increasing living costs.

Intensifying poverty is the obvious downside to any tax, but a rubbish tax has further consequences – results that fly right in the face of Sage’s environmental focus.

Despite the bad rap landfills get, their use is often a best-case scenario. Take the five million-plus mattresses on which Kiwis currently sleep: these will not last forever, and they cannot be recycled. It is simply irresponsible to punish New Zealanders for sending these mattress to a landfill when the next-most-likely alternative is dumping it at your local park, river, or roadside.

Even in the case of rubbish that can be recycled, we cannot rely on wishful thinking about flawed, real-world human behaviour. The bane of illegal dumping faced by councils up and down the country suggests that even now, the ‘tidy Kiwi’ stereotype doesn’t hold up the way we like to imagine.

Have you ever called your council to get rubbish on your street cleared? Good luck with that. It’s not hard to guess what will happen when littering is made even more attractive.

Finally, there’s the question of what happens to the revenue that is collected. While half will be sucked directly into the budgets of local councils, the remaining funds go to the Government’s ‘Waste Minimisation Fund’.

This slush fund pays out large quantities of our money to companies embarking on eco-friendly projects. Recipients include large businesses like The Warehouse, Z Energy, and Fletcher, sometimes taking millions at a time for projects like tyre recovery and recycling old TVs.

There is no clear-cut way to judge which of these projects are mere PR stunts, and if they actually need funding or could have simply proceeded without taxpayer help.

So far, the fund is limited to $10 or $12 million a year, and has escaped serious political scrutiny. If Sage gets her way and the size of the fund balloons, it will need close monitoring as businesses up and down the country judge how to get their hands on this dosh.

In other words, we can expect the Government to have powerful allies as it pushes its tax through Parliament. Those families bearing the cost will need to push back hard – and the Taxpayers’ Union will be joining them. Submissions on the proposal are now open to the public.

Wellington City Council’s “living wage” badge is a waste of money

Town Hall

The Taxpayers’ Union is questioning why the Wellington City Council pays $4,000 a year to the left wing “Living Wage” campaign.

According to an official information response, the price includes $2,500 in annual accreditation fees, plus $1,500 in administration fees.

The only thing the City Council gets for this spending is a pat on the back from unions on the Left. It’s ratepayer money down the drain and back-door funding of a political group.

Wellington City Council isn’t like a private businesses that needs PR stunts to compete for attention – it already has a captive customer base of ratepayers. If the Council wants to inflate its employees’ wages, it can simply do it. There’s no need to pay for a gold sticker.

The overall plan to implement the Living Wage is expected to cost ratepayers $3.4 million over 10 years.

Paying a group of activists to lobby other councils is wrong. New Mayor Andy Foster should cut this spend.

Here is the full official information response from Wellington City Council:

Dear Mr Houlbrooke,

Thank you for your email dated 27 August 2019 in which you requested information relating to the Accreditations held by the Council and the annual costs associated with those Accreditations.

Further to my decision email dated 24 September 2019, I can now provide you with the information we have collated. Please note: only two of the Council Controlled Organisations hold accreditations. These are provided below.

The Council holds the following Accreditations:

New Zealand Immigration (Accredited Employer).

The accreditation is valid for 2 years and each renewal costs $600 + GST

Living Wage (Living Wage Employer Annual Accreditation).

Annual accreditation fees are $2,173.91 + GST, and Administration fees of $1,500 (no GST payable)

Building Consent Authority Accreditation.

(Please Note: Accreditation is a mandatory requirement for the Council in order to receive and process building consents. Accreditation fees are paid every two years)

The fees for the period May 2019 to May 2021 are $30,647 + GST

Pool Safe

Annual fees are $750.00 including GST for each of the Council’s 7 pools.

Food Act Accreditation

8 Public Health Officers are accredited and renewal is required every three years at a cost of $621.04 + GST ($77.63 per officer)

Wellington Zoo holds the following Accreditations:

Be Accessible

No annual fees

Qualmark

Annual fees are $2,248.25 + GST

CarboNZero Certification

Annual fees are $6,200 +GST

Fair Trade Workplace

No annual fees

Zoo and Aquarium Association of Australasia Animal Welfare Accreditation

Annual fees are $1,363 + GST

Zealandia holds the following Accreditations:

CarboNZero Certification

Annual renewal fees are $5,582 + GST

Qualmark Gold Award

Annual fee is $1,181 + GST

Be Accessible

No annual fees

 

Op-ed: Why is Labour struggling to deliver?

The two year media reviews of the Labour led coalition agree it is struggling to get enough runs on the board.   Why is this so?

After nine years of opposition it can be expected there would be a running in period.   However that doesn’t adequately explain why they are delivering less than they had hoped.

While it is natural to expect Labour would have a modest understanding of how business works, it was a surprise to me also, that far too few Ministers actually understand how Government works.  So many don’t understand the mechanisms of government which means they failed to make best use of their time in opposition.   Not only that, its apparent they don’t understand the most important law of all – the law of unintended consequences.

In opposition I had several meetings with Phil Twyford and found him to be personable and passionate about his policy areas of transport and housing.   As a Minister however he has come across as arrogant, dismissing Treasury officials early on for their questioning of his Kiwibuild targets.   “Wet behind the ears” he said.   That may or may not have been true, but it is now apparent Treasury wasn’t pessimistic enough.

The Auckland tram (or light rail) project is a true “train wreck” in public policy making.   Good journalism from Stuff and others including the Herald’s Matthew Hooton, reveal a picture of chaotic decision making.   Early on Transport Minister Twyford transferred responsibility for the City-airport link from Auckland Transport to NZTA.   Then an “unsolicited bid” for a quite different proposition emerged from the NZ Super Fund together with a Canadian infrastructure fund (CDPQ Infra), jointly known as NZ Infra, which NZTA was asked to evaluate.

Apparently NZTA decided this proposal lacked merit and continued with its tram project along Dominion Road.  Various business entities invested in the NZTA concept in anticipation of bidding for work.

The situation now is the Ministry of Transport and The Treasury are going to evaluate both concepts and Cabinet will decide their preference early next year.  They will need to also get NZ First on board, because the project is not part of the coalition agreement.

To further complicate matters Hooten claims that the recently appointed NZTA chair Sir Brian Roche, was informally involved with the NZ Infra proposal along with Sir Michael Cullen at its beginning.   He is said to be very enthusiastic about it.

While Brian Roche (a personal friend) is well qualified to navigate his way through this quagmire, the integrity of government procurement processes have taken a serious reputational hit.

Minister Twyford has criticised previous NZTA actions regarding NZ Infra.   However it appears NZTA officials repeatedly asked the Minister to clarify the project’s objectives as to whether the focus was in getting to and from the airport in the fastest possible manner or having a tram/train to the airport, which would allow for housing densification.

Twyford thinks we can have both and has referenced London’s tube service from Heathrow to London.  I have used the regular tube from Heathrow to the city, which was a nightmare after a long flight and takes about 50 minutes.  There is a fast 15 minutes service from Heathrow to Paddington which leaves every 15 minutes from Heathrow and has no stops until it reaches Paddington.

I doubt a service every 15 minutes from Auckland going non stop to say Britomart, would be justified by the numbers of customers, so he really need to make up his mind about what’s required.  And while its very easy to publicly slag off officials who cannot publicly answer back, I think it is an unwise practice.  Officials can find ways of biting Ministerial critics.

The billion extra trees, which may or may not be additional to what the private sector would have planted, has also created picture of confused policy making.   The main justification appears to be to create carbon soaks to help NZ achieve the net carbon emission goal by 2050.

As I understand it pine forests will only buy us time over the first 30 years because once harvested they will have to be replanted.   Many in the rural sector don’t like the idea of the landscape being dominated by pine trees and say it will destroy local communities.

Both NZ First and Labour don’t like land being sold to foreigners, but we now have this strange situation where the Green Minister Land Information has allowed Japanese company Pan Pac Forest Products to buy around 20,000 hectares of land for forestry blocks.  This decision followed from a 2018 law change which allowed the Minister to by-pass the Overseas Investment Office, the agency responsible for regulating foreign direct investment into New Zealand.  Other land has being sold to foreigners who want to take advantage of this Government’s policies in respect of climate change and forestry.

As National’s Paul Goldsmith said: Foreign investors can’t buy farm land to farm, or to convert to horticulture or vineyards, but they can buy productive farm land on a massive scale to put into forestry blocks”.  He said “this is creating massive distortions in land use decisions in rural New Zealand”.

In defence Winston Peters said forestry is good for marginal land.   But it’s is not clear all the sales to foreigners are for land that is marginal for pastoral farming or horticulture.   Meantime Shane Jones has indicated he is sensitive to rural concerns about the impact of forestry on their communities.

This saga indicates a Government that is not thinking through conflicting goals in a rigorous manner.   If a National Government had made these forestry decisions there would have been a ballistic response from the parties now in the coalition.

Barrie Saunders is the Chairman of the New Zealand Taxpayers’ Union.  This opinion piece original appeared at https://barriesaunders.wordpress.com/

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.

Zero Carbon Bill Submission

Joe at committee

Earlier today our economist Joe Ascroft submitted in person to the Environment Select Committee on the Zero Carbon Bill. 

The Bill sets out expectations for reducing New Zealand's emissions profile as part of a global effort to limit climate change. 

Joe spoke to our written submission, which is available here

Our key contentions to the Committee were that:

1. The economic effects of taxing and limiting emissions are often underplayed by climate activists. NZIER forecasts that real GDP could be between $10.2 and $49 billion smaller by 2050 if we adopt a split-gas approach compared to current emissions targets. Compared to taking no action at all, GDP could be up to 22 percent smaller by 2050.

2. The Ministry for the Environment argues that the economic modelling fails to take into account the impact of climate change on the New Zealand economy, but that critique misses that New Zealand's impact on climate change is likely to be very small. 

3. The poorest households are likely to be disproportionately hurt by any intervention. NZIER modelling indicates the poorest 40 percent are likely to experience six times the harm of the richest 20 percent. 

4. Aggressively targeting our agricultural sector could simply cause production to shift overseas - with no subsequent net impact on global emissions.

Revealed: Adverse drug reactions cost taxpayers quarter of a billion

Pill graphicBetween 2015/16 and 2017/18, DHBs spent $280 million treating patients due to adverse drug reactions, reveals the New Zealand Taxpayers’ Union in its final health productivity briefing paper.

It’s seriously concerning that taxpayers spent $280 million in three years dealing with botched prescriptions and incorrect use of medication. That’s the equivalent of 10 flag referendums, or $150 per household. DHBs need more discipline in setting and meeting targets to ensure drugs are correctly prescribed and patients understand how and when their prescriptions.

This problem needs to be addressed not just for the sake of patients, but for taxpayers who are forecast to be absolutely hammered by rising demands on healthcare services.

Some DHBs are much worse than others. Canterbury DHB alone spent $60 million treating those with adverse drug reactions across the three year period. Waikato DHB spent nearly $40 million.

There needs to be further investigation at Counties-Manakau DHB over treatment related to adverse drug reactions. Their reported rate of treatment and total spend related to adverse drug reactions is much lower than you would expect for a DHB treating such a large population. If their reported data is correct, they are performing extremely well, but they may also not be correctly recording treatment data.

The information was obtained under the Official Information Act and has been released as part of a serious of briefing papers, linked here.

Advice on clean car scheme is seriously flawed – policy must be put on hold

In a submission to the Ministry of Transport, the Taxpayers’ Union reveals that the cost-benefit analysis prepared by Ministry of Transport and used to advise Ministers on the Government’s Clean Car Standard and ‘Feebate’ policies has serious flaws which undermine justifications for the policies.

More than 90 percent of the Ministry’s estimated benefit is attributable to consumer fuel savings, but even in their most conservative assumptions they incorrectly pegged before-tax fuel prices at 40 to 50 cents per litre more expensive than in reality. This was due to their reliance on 2011/2012 price projections from MBIE which have failed to bear out. In short, they got the price of fuel totally wrong – using previous forecasts, instead of current reality. As a result, the proposed savings calculations do not reflect reality.

But that’s not the only mistake.  Even if you ignore the fuel price assumption errors, the Ministry simply assumes consumers are irrational and that the Government needs to intervene to rectify this issue – with no evidence or literature cited to reflect this position.

When preparing the Union’s submission on the clean car policies, we readily found plenty of evidence that consumers do in fact understand the benefits of fuel efficient cars – but none of this evidence is addressed by Ministry officials in their analysis. That’s potentially fatal for the Ministry’s analysis – if almost all the benefits from buying EVs flow through to consumers from fuel savings and consumers understand the value of these savings, there’s no good reason for the Government to intervene.

Finally, officials need to reconsider how they perform cost-benefit analysis. The infamous BERL alcohol paper has become a joke within economic circles in part because they counted all of the costs from alcohol, without taking into account benefits to consumers, like enjoyment. The analysis from Transport similarly counts all of the costs from driving a car which is less efficient than an EV or a Prius, but ignores the benefits to consumers which lead them to make that choice. Consider, for example, a ban on ice cream sales. It would be bizarre to count reduced consumer spending on ice cream as a ‘benefit’ without acknowledging the lost benefits to consumers from ice cream consumption.

The Government’s Clean Car Discount and Standard policies should not proceed until Ministry of Transport officials fix the analysis Ministers relied upon to set the policies.

Full submission:

Email correspondence with the Ministry of Transport: 


Revealed: $20 million of redundancy payments dragging down health sector

GraphicIn a new briefing paper, the New Zealand Taxpayers’ Union can reveal that in the period 2013/14 through 2017/18, DHBs spent $20.37 million on redundancy payments.

Some redundancy payments are inevitable, but spending an average of $26,800 on 758 payments is a poor use of money. DHBs should be prioritising patient care and services, not golden handshakes to staff who are being let go.

Huge variance in the size of payments between DHBs should ring alarm bells. Waikato DHB, which has since had its board sacked, had the highest average redundancy payment of $47,800. In contrast, while South Canterbury DHB made more than 100 payments in five years, the average payment was only just over $10,000.

There’s no right way to manage redundancy payments – sometimes letting staff go is the efficient option – but DHBs should be careful to keep their average payments low so funding is going to patient care.

This information, obtained under the Official Information Act, has been released as the second of three briefing papers on healthcare productivity. The first briefing paper can be viewed here, along with the introductory report, Productivity in the Health Sector: Issues and Pressures.

The face that haunts Porirua ratepayers

FaceThe New Zealand Taxpayers’ Union is questioning the value of a $98,876 brand makeover at Porirua City Council. 

The official new avatar for the Council, which you would expect to be emblematic of the rebrand’s quality, is a limp and childlike smiley face. The design was apparently chosen because it ‘connects with the city’s youthful population’. When Porirua ratepayers gaze long enough into the face, the Council’s five percent annual rate hikes gaze back.

Councils do not need to engage in corporate branding exercises. Unlike businesses, councils are monopoly service providers and do not need to market themselves to their ratepayers, who are already a captive audience.

Porirua isn’t the only council to have indulged in an expensive rebrand, but this is no excuse. In our experience, branding exercises are driven by political egos and only serve to distract from inadequate services or rising pressure on ratepayers.

$25,000 was spent on photography alone for this rebrand, according to a response obtained under the Local Government Official Information and Meetings Act.

Revealed: Missed specialist appointments cost taxpayers $29 million

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The New Zealand Taxpayers’ Union is asking DHBs to charge patients who miss specialist appointments, in light of new figures that show missed specialist appointments cost taxpayers $29 million in FY 2016/17.

District Health Boards need to become more efficient if we expect to keep healthcare costs manageable in response to an aging population. Tackling the $29 million annual spend on missed specialist appointments would be one way to meet that goal.

Some DHBs are worse than others: Counties Manakau, Waikato, Lakes District and Auckland each have missed specialist appointment rates above 10 percent. In contrast, South Canterbury DHB has an admirable 2.5 percent missed appointment rate.

DHBs need to work harder to reduce rates of missed specialist appointments. When patients miss an appointment, they contribute to a clogged health system and impose higher costs on taxpayers – in part contributing to the accelerating health costs demonstrated in our recent report Productivity In The Health Sector: Issues And Pressures.

Figures for DHBs across the country were obtained under the Official Information Act and have been released by the Union in a new briefing paper, the first in a series of three papers on healthcare productivity. The Union can provide raw figures for interested media.

The briefing paper makes three suggestions for DHBs:

  1. DHBs should charge patients who miss their specialist appointments.
  2. Those DHBs that do not measure (or report on the cost of) missed specialist appointments should do so.
  3. DHBs should be more active in reminding people of appointments to reduce the number that are missed.


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