Tim Hazledine, Professor of Economics at the University of Auckland, sits down with Islay to discuss his ideas for a viable path to economic recovery – including a temporary reduction in GST.

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

The New Zealand Taxpayers’ Union is reacting with surprise and horror after being accidentally sent the results of tomorrow’s election.

Acting Labour Party General Secretary Rob Salmond inadvertently included your humble Taxpayers’ Union on their union mailing list this year. Traditionally, unions receive advance notice of the election results they have spent so much time and money on.

Election analyst and failed pundit Neil Miller said: “Obviously we were, to use a technical term, completely and utterly gobsmacked by the new Labour and Advance NZ government.”

He is currently reviewing the 2-page coalition agreement – which appears to be mainly 90s clip art – and the 471-page secret annex which has all the good stuff in it.

Campaigns Manager and Frankie Boyle lookalike Louis Houlbrooke added: “Obviously Jacinda Ardern will remain Prime Minister until her job at the United Nations opens up. Kelvin Davis becomes Deputy Prime Minister and Deputy Prime Minister only. His sole official role is limited to ‘looking good in the background during media standups.’”

Ms Ardern revealed Advance NZ was not seriously considered for the deputy role saying: ‘Billy is too crazy even for me, and Jami-Lee is just too… eww.” She then frantically washed her hands for ten minutes after just saying his name.

There are other changes to the Ministerial lineup.

Megan Woods picks up Davis’ Tourism portfolio. It is in mint condition because it has hardly been used. She also gains another minor portfolio in Social Development. She is demoted to number 8 in the Cabinet to, in Ardern’s words, “enable her to focus on her portfolios”. Such kindness.

Chris Hipkins gains Youth Affairs, Foreign Affairs, Veterans Affairs and Ethnic Affairs. He has been shifted to number 16 because, in Ardern’s words, “Christopher John is just a little ambitious for my liking."

Phil Twyford sheds the few remaining portfolios he had in order to become new Minister of Administrative State Services (ASS). Union analysis indicates this is basically Minister of Internal Affairs with particular responsibility for cleaning the Prime Minister’s pictures of (Saint) Michael Joseph Savage on a daily basis.

Twyford has also been promoted to number 3 in Cabinet. Ms Ardern said: “Phil would have been higher but he cannot beat Kelvin’s legendary work ethic, and he’s not bloody having my job."

The unexpectedly large Advance NZ caucus is still in the ‘getting to know you’ stage. Union spies (ok, it was Porky the Waste-hater in sunglasses and a trenchcoat, and worryingly nothing else) report the most common question in caucus is “who the heck are you?” There was also a moment of embarrassment when an errant Parliamentary Security guard was briefly appointed Under-Secretary for Revenue.

Jami-Lee Ross’s bid to become the first Minister for Sundry Affairs was met with universal hilarity.

Billy te Kahika declined all Ministerial posts, not that he was actually offered any. He justified his position saying: “Being a Minister of the Crown would mean ‘they’ would know where I was at all times.”

Sean Plunket astutely asked: “Who exactly are ‘they’? And why would they be interested in a second-rate Antipodean fruit loop?” Billy shot back: “Oh you know who ‘they’ are Sean - if that is your real name. You are one of ‘them’. You all are!” He then put on his favourite tin foil hat, pulled out his 5G cellphone, and made a collect call to the World Zionist Banking Conspiracy.

Asked how the Taxpayers’ Union would deal with such an unusual Government, Executive Director and serial litigant Jordan Williams in his usual chair at Rosie's Cafe in Parnell sobbed into his Double Ristretto Venti Half-Soy Nonfat Decaf Organic Chocolate Brownie Iced Vanilla Double-Shot Gingerbread Frappuccino Extra Hot With Foam Whipped Cream Upside Down Double Blended coffee.

“How the hell did this happen?” he lamented.

The following is an op-ed by Taxpayers' Union Analyst Neil Miller.

During modern election campaigns there is an increasing emphasis on “fact checking” political statements across the spectrum. Companies have sprung up all over the world to judge the accuracy (or otherwise) of what politicians say on the campaign trail. AAP Fact Checker is the most prominent and prolific organisation of this nature in New Zealand.

The New Zealand Taxpayers’ Union is aware of growing international concern that fact checkers are moving well beyond data into politics, even to the point of partisanship in some cases. We decided to analyse the last ten fact checks by AAP Fact Check to find the answers to three questions:

1. Who did they choose to fact check?
2. Were the criteria for judgement applied consistently and fairly?
3. Was there any instances of partisanship or spin?

If you only looked at the numbers, you could be forgiven for thinking that Judith Collins was Prime Minister and National was the largest party in Parliament. Judith Collins was fact checked five times compared to Jacinda Ardern’s two. The other three articles all focused on National MPs (Paul Goldsmith, Jonathan Young, and Simeon Brown). No other Government MPs were fact checked.

That means that 80% of fact checks were on National MPs, and Collins received more than twice as many checks as Ardern. To an independent organisation such as the Taxpayers’ Union, that does not seem balanced.

We move now to the case that really caught our eye. Simeon Brown’s statement on renewable electricity being judged “misleading”, even though all the figures the quoted were correct to the decimal point. We may be naïve idealists, but figures which are true are facts in our book.
Not so, it seems, at AAP Fact Check. They found an academic who opined that the good results under National and poor results under Labour had “largely been independent of government policy.” That is not a fact – that is a matter for political debate around causality and the influence of Government.

However, having introduced this new causality test, we expected it to be applied rigorously. The fact check of Jacinda Ardern’s comment regarding child poverty made no reference to the Government’s power to influence the figures. The test was not applied.

Next, the Prime Minister got credit for getting the numbers “roughly right”, while Brown was called misleading for getting them exactly right, and Collins was criticised for getting state house waiting list numbers “close to the mark with both figures she quoted, but not 100 per cent accurate.” She rounded the figures up. Politicians do that. A lot. There seems to be very different standards applied here as well.

At times, the Fact Check reads more like a political press release. For example, Ardern’s office was allowed to explain what the Prime Minister actually “meant” in her child poverty comments. A luxury that was not extended to others on the list.

The Prime Minister was also fact checked on her claim that Police numbers went down when Judith Collins was Minister of Police. Despite reporting that “NZ Police data shows actual police numbers rose between 2008 and 2016, during which time Ms Collins served two distinct periods as police minister,” the AAP went out of their way to find a wrinkle.

Triumphantly they wrote “when police numbers are described as an officer to resident ratio, they show an improvement during Ms Collins’ first period as police minister (from 1/519 in 2008 to 1/507 in 2011). However, during Ms Collins’ second run as police minister, population growth in NZ largely outstripped the growth in police numbers (1/514 in 2015 to 1/526 in 2016). This is also true when you compare police to resident ratios for 2008 to the same data for 2016.”

As a result, they concluded the Prime Minister’s statement “does contain a significant element or elements of truth.” This is despite the inconvenient fact that Jacinda Ardern‘s statement which was being checked made absolutely no reference to officer to resident ratios. It talked about Police numbers which, again perhaps naively, we assumed to mean the actual number of Police which, factually speaking, went up under The Crusher.

This example is closer to political spin than fact checking. It adds in a new element never mentioned in the original quote and certainly not what the average person would think of when they heard Police numbers.

When they stick to their core job of checking facts (the company name should be a giveaway), they can do a very valuable job. AAP Fact Check looked into David Seymour’s claim that Labour took “$6 billion surplus to a billion-dollar deficit in only two years before Covid happened." They found it was “mostly true”.

Working from Treasury papers, the surplus was $5.5b (not $6b) and the deficit was $0.9b (not $1b). AAP Fact Check concluded: “While there are minor inaccuracies in the numbers he quoted, Seymour's comments were broadly in line with budget figures reported by New Zealand Treasury.”

Now that is how you fact check properly. Just the facts. Shame it was only one out of ten checks.

The AAP Fact Checker should no longer be taken as fact in this campaign.

The following is an op-ed by Islay Aitchison, Research Officer at the Taxpayers' Union and spokesperson for the Campaign for Affordable Home Ownership.

While Labour has tried to rule out the Green Party's “wealth tax” policy, James Shaw has described those efforts as “not credible” — so at least according to the Green Party, an asset tax is on the table this election. The Greens have claimed that only the wealthiest six percent of New Zealanders would be hit by the tax, but is that accurate?
 
Any individual with net assets exceeding $1 million would be hit by the tax. While that sounds like a lot of money, many New Zealanders will exceed that in their lifetimes. According to REINZ, the median house price in Auckland was $950,000 in August — in other words, an individual with even modest retirement savings and a mortgage-free home in Auckland should expect to be paying the wealth tax by the time they retire.
 
At minimum, census data suggests approximately 45 percent of Aucklanders — that's 15 percent of the country's population — own their own home. Once mortgage-free, most of those households would find themselves liable for the tax. Many homeowners and entrepreneurs outside of Auckland would be affected by the tax as well.
 
Official statistics indicate far more than six percent of New Zealanders would be affected. Analysis of Stats NZ net wealth data by Eric Crampton of the New Zealand Initiative suggests 20 percent of 66–69 year-olds have net wealth exceeding $1 million. Our own analysis of Household Economic Survey data indicates 21.6% of households had net wealth exceeding $1 million as of 2018.
 
While the Green Party's threshold is higher for couples, it would fall again for a retiree once his or her partner passes away. Many would find themselves burdened by the tax even if they had previously fallen below the threshold while their partners were alive.
 
Even the $1 million threshold is something of a false promise. Due the effect of inflation, the thresholds would effectively become lower over time, pulling New Zealanders who are less wealthy into the scope of the tax.
 
Most importantly, a wealth tax wouldn't just tax our homes and retirement savings — it would punish the economy just as we are recovering from COVID-19. We all rely on strong levels of investment and economic growth to provide good jobs and wages. A tax on assets would punish productive investment and keep Kiwi workers in low-wage jobs, with very little hope of a better standard of living.
 
The Green Party's claim that only a small number of New Zealanders would be affected by their plan to tax wealth is unfair and inaccurate. Many households would be affected by the tax once they pay off their mortgage and retire or after their partner passes away. Many more households would be affected by the lower rates of investment and comparatively lower incomes it would cause.

Polling released today by the New Zealand Taxpayers’ Union reveals that 72 percent of New Zealanders oppose an asset tax or “wealth tax”.

Exclusive polling by Curia Market Research commissioned by the Taxpayers’ Union asked respondents, “Do you think there should be a tax that people pay on assets such as houses, cars and KiwiSaver accounts, additional to the existing income tax?”

Seventy-two percent said no, 13 percent were unsure, and just 16 percent supported the tax.

Enthusiasm for the tax was particularly low in rural areas, with just 10 percent in support. And even in the most deprived areas a clear majority of respondents opposed the tax.

Islay Aitchison, spokesperson for the Campaign for Affordable Home Ownership, says, “A tax on assets, as advocated by the Green Party, appears to be even less popular than the failed capital gains tax.”

“New Zealanders’ wariness of a wealth tax is well-placed. Such a tax will discourage local investment, sending wealth offshore and making future generations poorer.”

“The polling was on the principle of a tax on assets, not the specific proposed tax by the Green Party. We think opposition would be even higher if voters were aware of the fishhooks in the Green Party’s specific policy. For example, some New Zealanders would find themselves whacked by the tax following the death of their partner, when the tax-free threshold is lowered from $2 million in assets to $1 million. The tax will even apply to a bach or nest egg held by a family trust.”

“Disturbingly, under MMP we could still see this unpopular and unfair tax forced into legislation by the Green Party. They’ve called the tax a ‘top priority’, and current polling suggests they’ll hold the balance of power, meaning they’re in a position to make demands from the Prime Minister.”

The polling covered a sample of 1080 respondents, with a 3.0% margin of error and was conducted between 22 September and 24 September.

The New Zealand Taxpayers' Union is welcoming intervention from the Public Services Commissioner over a video produced by Oranga Tamariki which appeared to endorse Hon Tracey Martin.

In a response to a complaint from the Union, Commissioner Peter Hughes explained, "In this situation, in my view the content of the video could be interpreted as political endorsement of the Minister and government policies and that is not appropriate."

"I have discussed this matter with the Chief Executive of Oranga Tamariki, Mrs Gráinne Moss. She is clear about the need to uphold neutrality in her agency and regrets that the video created the potential for that to be called into question on this occasion. The video has also been taken down."

Union spokesman Jordan Williams says, "We fund Oranga Tamariki to deliver important services for children, not to produce propaganda for its current political master. Public Sector neutrality is especially important this close to an election, so we welcome the Commissioner's intervention and suggest that other agencies take it as a warning."

Today the New Zealand Taxpayers’ Union launches its nationwide election campaign for Tax Relief Now.

Between now and Election Day we will be making the case for tax relief as the main plank of the economic recovery. We see a basic choice this election: Government-led stimulus spending or a recovery that’s led by consumers and businesses.

Government spending is often wasteful, unfair, and puts politicians and bureaucrats in charge of the recovery. Just look at Creative New Zealand responding to COVID-19 with grants for indigenised hypno-soundscapes, or how tourism grants have propped up a handful of lucky businesses while others languish without support.

In contrast, tax relief will reward productive work, it will help all businesses, it will grow the economy and put taxpayers in the box-seat of the recovery.

Crucially, tax relief now will put a rocket under economic growth – making the huge debts we have accumulated far more manageable.

Yesterday a full-page advertisement appeared in the Herald on Sunday highlighting recent examples of wasteful government spending. Further advertisements will appear in print and online.

The campaign website at www.taxrelief.nz includes a Taxpayer Scorecard, which evaluates political parties based on their commitments to deliver tax relief. This will feature in future advertisements.

In this episode, Islay Aitchison talks to ACT leader David Seymour about his party's proposed tax cuts, public debt and cutting red tape.

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

The following is an op-ed by Taxpayers' Union Analyst Neil Miller.

James Shaw did not just defy a core Green Party policy since 1997 to personally advocate for special funding to a tiny private school… he did it twice.

To their credit, the Government resisted the Green Minister’s persistent and determined attempts to get $13 million for the Green School in Taranaki.

He did, reluctantly, apologise for trying to extort $11.7 million for the provisionally registered school by threatening to block every other shovel ready project until his demand was met.

He did not reveal that the Green School had already been turned down by the Provincial Growth Fund for $1 million a year earlier.

It must be embarrassing to have Shane Jones say that the school’s business case did not add up given the dubious value of projects his slush fund has poured money into. Jones said “James got his nose out of joint and fought for it to be restored through the shovel-ready money.”

When you cannot meet the high moral and fiscal standards of Shane Jones, then you are in serious trouble.

The Taxpayers’ Union suspects that what did not add up was that the Green School is in Taranaki, not Northland. If it were in Shane Jones’ electorate, Jones’ famous nephews would probably be off the couch and already be building the principal a gold-plated office up a mighty Kauri tree.

The Greens consider themselves a principled political party – just ask them. Actually, you do not have to ask. Like a vegan at a barbeque, they will tell you whether you want to hear it or not.

When a political party holds itself to be so much more moral than everyone else, they need to be held to account for the co-Leader’s active defiance of cornerstone Green Party principles and repeated attempts at disinformation when that defiance was revealed.

We still do not even know why he did it. Why was this 50-student school in the regions so important to James Shaw that he would put his political career and possibly his party’s future in Parliament in jeopardy?

We contacted James Shaw’s ministerial office for an explanation. They referred us to Shaw’s initial press release as Associate Minister of Finance, and stressed that this was a shovel-ready job creation project, not an education project.

Still, of all the shovel-ready projects, why did he select a private school and then go so hard in personally lobbying for it given the Greens’ long-established policy? The question remains and it appears unlikely he will answer it clearly.

James Shaw’s colleagues who still believe in Green Party policy should sack him as co-leader before the election.

Dear Supporter,

Creative NZ goes into damage control

We've spent the last week on social media releasing examples of bizarre art projects given taxpayer money by Creative NZ as part of a $16 million COVID-19 response (I've linked to my favourites at the bottom this email).

Talkback hosts Mike Hosking (clip here) and Sean Plunket (clip here) seized on the issue, and their callers are spitting tacks.

Last night, the agency finally cracked under pressure. But instead of defending the bizarre grants, it attacked us for what it called a "low blow"!

Here's their full public statement:

Creative New Zealand is proud to tautoko dedicated, hard-working artists, bolstering a sector knocked to its knees by the impact of COVID-19.

We work to encourage, promote, support and advocate for the arts for the benefit of all New Zealanders — from Bluff to Cape Reinga and beyond, through projects of all shapes and sizes, communities and cultures, glitter and all.

We’re really shocked and disappointed at recent low blow targeting of artists we’ve funded – we stand by them and our decisions. We don’t condone attacks on the arts whānau, or anyone for that matter. To the arts community and supporters: We’re with you, and we value your mahi.

They just don't get it. We're not targeting artists – we're targeting the out-of-touch bureaucrats who waste taxpayer money on weird pet projects.

Creative NZ's attempt to defend themselves is going badly. Take a look at the comments slamming the agency on their own Facebook post.

I joined Magic Talk again today to discuss the drama – and this time, the CEO of Creative NZ fronted up to make his case.

In the interview, the CEO admits that artists don't even need to live in New Zealand in order to be eligible for taxpayer funds. Indeed, a number of the grants we looked into were for artists based overseas.

The CEO also admits he doesn't know what an 'indigenised hypno-soundscape' is – despite spending $50,000 on one.

Listen to the second half of this clip to hear the trainwreck interview.

We're proud of our efforts to shed light on how taxpayer-funded agencies spend our hard-earned money. With the Debt Monster forecast to grow to $150,000 per Kiwi household in 2034, our job is more important than ever.

Thank you for your support.

Louis Houlbrooke Campaigns Manager New Zealand Taxpayers' Union

Facebook links to share Creative NZ grants:

To research and write the first draft of a novel about male affection in hypermasculine spaces.
AWARDED: $13,000

Towards the composition, recording and production of music inspired by the psychogeography of the West Coast.
AWARDED: $34,900

To support the personnel costs and post-production editing for an art documentary based on Papua New Guinea tattoo practice and revival.
AWARDED: $27,500

Towards one phase of illustrating a biography of Leonardo da Vinci.
AWARDED: $21,080

Towards writing a children's picture book (text only) about sustainable community activist Helen Dew.
AWARDED: $3,200

To create and develop an online publication, arts learning resources and musical content based on children's drag theatre show, The Glitter Garden.
AWARDED: $18,000

To create a new series of collaborative quilts with my mother, textile artist Cynthia Johnson.
AWARDED: $17,850

Towards the composition and instrumental arrangement of 10 songs for children, from ideas given by children.
AWARDED: $24,600

Towards a live event watch party and livechat with fans online.
AWARDED: $24,153

Towards writing poetry that explores indigeneity and love in the time of climate change.
AWARDED: $17,798

Towards writing a novel about the collapse of democracy in an association of alpaca breeders.
AWARDED: $26,000

Towards a dance concept video showcasing the impact Coronavirus has had on the New Zealand Chinese community.
AWARDED: $24,500

Towards the development of a first draft of a play that explores the menstrual cycle.
AWARDED: $16,766

To record and livestream a performance from Fat Freddy's Drop.
AWARDED: $44,007

Towards an Indigenised Hypno-soundscape to take you to the imagined worlds of our Kōrero Pūrākau.
AWARDED: $49,999

Towards development of a movement technique that guides and empowers the participants in becoming specialists in their own body.
AWARDED: $4,530

Towards 3 x hour-long live-streamed electronic music performances with live visual animations, from a kitchen in Paekakariki.
AWARDED: $47,703

Towards composing and recording ten original compositions inspired by emotions felt during the Covid-19 lockdown.
AWARDED: $8,885

The New Zealand Taxpayers’ Union is questioning the value of the Arts Continuity Grant, a COVID-19 response fund which has so far paid out $16 million in grants to a variety of questionable short-term arts projects.

Since March, Creative NZ has offered grants of up to $50,000 for ‘a short-term arts project, or the stage of a project, that can be delivered within a changed and evolving environment as a result of COVID-19.’

Many of the descriptions of these projects are, frankly, incomprehensible. It’s hard to see how bureaucrats in Creative NZ can make an objective judgment on which projects are worthy of funding, and which aren’t.

The resulting handouts speak for themselves. Creative NZ is fighting COVID-19 by spending taxpayer money on plays about menstrual cycles, Māori ‘healing theatre’, and ‘Indigenised Hypno-soundscapes’. That’s madness and it reflects terribly on the Minister of Arts Culture and Heritage – who happens to be Jacinda Ardern.

These grants are massively unfair to taxpayers, with the benefits skewed toward politically-connected Wellington weirdos. Handouts for fringe interest groups mean less money is available for tax relief that would reward productive work.

637 projects have received taxpayer funding under the Arts Continuity Grant, including the following:

Eamonn Marra
To research and write the first draft of a novel about male affection in hypermasculine spaces.
AWARDED: $13,000

Fireplace Arts & Media
Towards the composition, recording and production of music inspired by the psychogeography of the West Coast.
AWARDED: $34,900

Julia Gray
To support the personnel costs and post-production editing for an art documentary based on Papua New Guinea tattoo practice and revival.
AWARDED: $27,500

Donovan Bixley
Towards one phase of illustrating a biography of Leonardo da Vinci.
AWARDED: $21,080

Alison Foster, Catherine Cooper
Towards writing a children's picture book (text only) about sustainable community activist Helen Dew.
AWARDED: $3,200

Glitter Garden
To create and develop an online publication, arts learning resources and musical content based on children's drag theatre show, The Glitter Garden.
AWARDED: $18,000

Jess Johnson
To create a new series of collaborative quilts with my mother, textile artist Cynthia Johnson.
AWARDED: $17,850

Kate Newby
Towards intensive artistic research and development.
AWARDED: $49,368

Kath Bee
Towards the composition and instrumental arrangement of 10 songs for children, from ideas given by children.
AWARDED: $24,600

Tamara Neilson-Tetzlaf
Towards a live event watch party and livechat with fans online.
AWARDED: $24,153

Tayi Tibble
Towards writing poetry that explores indigeneity and love in the time of climate change.
AWARDED: $17,798

Duncan Sarkies
Towards writing a novel about the collapse of democracy in an association of alpaca breeders.
AWARDED: $26,000

Kimberley Young
Towards a dance concept video showcasing the impact Coronavirus has had on the New Zealand Chinese community.
AWARDED: $24,500

Rosemarie Kirkup
Towards the development of a first draft of a play that explores the menstrual cycle.
AWARDED: $16,766

Nicole Duckworth
To record and livestream a performance from Fat Freddy's Drop.
AWARDED: $44,007

Khali Philip-Barbara, Te Kahureremoa Taumata
Towards an Indigenised Hypno-soundscape to take you to the imagined worlds of our Kōrero Pūrākau.
AWARDED: $49,999

Connor Masseurs
Towards development of a movement technique that guides and empowers the participants in becoming specialists in their own body.
AWARDED: $4,530

Iain Gordon
Towards 3 x hour-long live-streamed electronic music performances with live visual animations, from a kitchen in Paekakariki.
AWARDED: $47,703

Mad Ave
Towards a wananga for Maori healing theatre practitioners.
AWARDED: $50,000

New Zealand Comedy Trust
To examine what changes need to be made to better support a more diverse and sustainable comedy industry in Aotearoa.
AWARDED: $49,780

Benedict Fernandez
Towards composing and recording ten original compositions inspired by emotions felt during the Covid-19 lockdown.
AWARDED: $8,885

Imogen Taylor
Towards development of a new body of work exploring modernism, feminism & queerness, with specific reference to the Otago region.
AWARDED: $30,089

Claire O'Loughlin
Towards revision and editing of a sailing memoir.
AWARDED: $7,200

Jared Kane
Towards a Māori, queer, young adult novel adaptation of Hamlet based on my innovative unproduced screenplay ‘Hamarete’.
AWARDED: $21,000

Indigenous Design and Innovation Aotearoa
Towards designing new Māori typefaces for print and digital.
AWARDED: $22,110

Peter Daubé
Towards the writing, arranging and preproduction of music that forms a song-cycle from the suburban labyrinth.
AWARDED: $21,800

Update: Taxpayers' Union Campaigns Manager Louis Houlbrooke joined Sean Plunket on Magic Talk to discuss these grants. You can listen to the clip here.

In this episode of Taxpayer Talk, Taxpayers' Union Research Officer Islay Aitchison interviews Tauranga City Councillor Kelvin Clout on dysfunctional Council culture and recall elections. They discuss the COVID-19 Government assistance Tauranga Council is hoping to receive for future infrastructure projects.

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

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.

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.

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

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:

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

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

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

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:

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

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 Houlbrooke Campaigns Manager New Zealand Taxpayers' Union

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.

Immediately after Labour announced its policy for a new higher tax rate on income over $180,000, Louis sat down with Islay and Joe to record a podcast examining the politics and economics of the tax in more detail.

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

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.

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

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

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.

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

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 Houlbrooke Campaigns Manager New Zealand Taxpayers' Union

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

Labour uses Ashley Bloomfield for the election campaign

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

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

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

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:

Later, he was seen trying out Trevor Mallard's $572,000 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. 😔

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 Podcasts, Spotify, Google Podcasts, and iHeartRadio.

Have a great week,

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

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.

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 Podcasts, Spotify, Google Podcasts, iHeartRadio and all good podcast apps.

In this episode of Taxpayer Talk, Taxpayers' Union Research Officer Islay Aitchison interviews economist Michael Reddell on monetary and fiscal policy. Michael Reddell's blog, Croaking Cassandra, can be found here.

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

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.

A 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.

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

A 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?

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 Press, ratepayers deserve more focus from their local representatives.

Taxpayer Briefing: The Green Party Manifesto

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

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

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"

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:

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:

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:

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 Houlbrooke Campaigns Manager New Zealand Taxpayers' Union

Introduction

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

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.

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:

• ‘Shovel ready’ Infrastructure Projects: Project Information Form (see page 5)
• OIA: QUERY IN RELATION TO COMMUNITY SERVICES DEVELOPMENT AND RESTORATION 

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 Podcasts, Spotify, Google Podcasts, iHeartRadio and all good podcast apps.

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.

The Taxpayers’ Union’s Jordan Williams and Neil Miller, sit down with political commentator and Stuff columnist Damian Grant discuss the runners and riders of the sudden National Party leadership race.

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

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."

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.

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 Podcasts, Spotify, Google Podcasts, iHeartRadio and all good podcast apps.

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.

Will Winston put the kibosh on the Ihumātao deal?

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

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

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:

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

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!

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:

As if that will make anyone happy!

A surprise from Labour's list ranking...

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:

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.

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

All the best,

Louis Houlbrooke Campaigns Manager New Zealand Taxpayers' Union

Statue controversy is pathetic

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:

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

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

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.

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).

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.

We're giving taxpayers the opportunity to get to know their MPs beyond photo-ops and party-line speeches. In this episode, Islay Aitchison interviews Melissa Lee MP. Support the show (http://www.taxpayers.org.nz/donate)

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

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.

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 Podcasts, Spotify, Google Podcasts, iHeartRadio and all good podcast apps.

DHB prioritises patients according to race

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

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

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.

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:

• Regulate “healthy options” in vending machines

• Promote tai chi and “Nordic walking”

• Promote astrology charts

• Improve workplace wellbeing with “biophilic office design” (i.e. pot plants)

• Tell us to move to a cool room when the weather is hot

• Pay Olympic athletes to tell us to drink water

• Tell us to “only use your bed for sleep and sex”

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.

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:

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:

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 Houlbrooke Campaigns Manager New Zealand Taxpayers' Union

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.

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.

The National Party has a new Leader

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.

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.

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.

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:

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!

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 Houlbrooke Campaigns Manager New Zealand Taxpayers' Union

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:

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 Podcasts, Spotify, Google Podcasts, iHeartRadio and all good podcast apps.

Watch Government debt tick up in real time

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?

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

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) 🔞

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 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.

To receive our Taxpayer Updates delivered to your inbox, add your details here.

We're giving taxpayers the opportunity to get to know their MPs beyond photo-ops and party-line speeches. In this episode, Islay Aitchison interviews Simon O'Connor MP.

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)

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 Podcasts, Spotify, Google Podcasts, iHeartRadio and all good podcast apps.

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.

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

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

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 Podcasts, Spotify, Google Podcasts, iHeartRadio and all good podcast apps.

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.

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.

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Should Parliament step in to enforce a nationwide rates freeze, what's happening in Botany and should our relationship with China change? Islay Aitchison interviews Jami-Lee Ross.

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)

We're giving taxpayers the opportunity to get to know their MPs beyond photo-ops and party-line speeches. In this episode, Islay Aitchison interviews Paul Goldsmith MP.

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)

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

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!

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.

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:

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 🤯

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:

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

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:

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)

Have a great weekend,

To receive our Taxpayer Updates delivered to your inbox, add your details here.

Taxpayer Talk is back. This week Jordan and Joe interview Act MP David Seymour on the worrying signs of the politicisation of the Reserve Bank, and Grant Robertson's suggestion of monetising the Government's debt. 

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)

We're giving taxpayers the opportunity to get to know their MPs beyond photo-ops and party-line speeches. In this episode, Islay Aitchison interviews Ginny Andersen MP.

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)

We're giving taxpayers the opportunity to get to know their MPs beyond photo-ops and party-line speeches. In this episode, Islay Aitchison interviews Chris Bishop MP.

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)

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.  

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.

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)

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.

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.

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 Podcasts, Spotify, Google Podcasts, iHeart Radio and all good podcast apps.

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.

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 Podcasts, Spotify, Google Podcasts and all good podcast apps.

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.

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

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 pandemic. Both 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 Podcasts, Spotify, Google Podcasts and all good podcast apps.

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!

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 chairs, Taxpayers’ 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.

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?

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:

• • Economic package to fight COVID-19

  • Hon Dr David Clark: Backing our Health systems to battle COVID-19

  • Hon Grant Robertson: $12.1 billion support for New Zealanders and business

Minister's speech to Parliament

• Hon Grant Robertson: Statement to Parliament on the Economic Response to COVID-19

Policy factsheets:

• • Health Package Factsheet

  • Business Cash Flow and Tax Measures Factsheet

  • COVID Leave Support Factsheet

  • Income Support Factsheet

  • Wage Subsidy Scheme Factsheet

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.

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.

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 reported: The 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?

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.

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.

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.

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.

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 1^st 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.”

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

The New Zealand Taxpayers’ Union has formally submitted its design proposal for a 3.5-metre artwork in the Beehive entrance, pictured below.


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.

For most of us, Christmas is about giving. For the Tax Man, it’s all about taking.

Islay wraps up the year with a special episode of Taxpayer TV, revealing the incredible reach of the “Tax on Christmas”.

You can view the video on Facebook here.

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.

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.

This 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.

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:

Wellington Zoo holds the following Accreditations:

Zealandia holds the following Accreditations:

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/

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.

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.

The 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.

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.