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Taxpayer Update: Socialist MPs | Notes to Nanaia | Debt clock ticking

Why didn't these MPs boast they were socialists before the election?

McAnulty quote

Thursday night's Budget Debate took a weird turn. Multiple Labour MPs (and one Green MP) took off their centre-left masks and professed allegiance to socialism.

The following quotes are taken direct from Parliament’s “Hansard” transcript:

Kieran McAnulty: “Yes, I am a socialist and I'm proud of it. Yeah—there you go. [Applause] Thank you very much. Bring it on, and I'm very proud to say to the good people of the Wairarapa that they elected a proud socialist as their MP.”

Angie Warren-Clark: “Oh, what a pleasure it is to speak after my colleague, my comrade, Kieran McAnulty.”

Duncan Webb: “Well, there's so many of us great socialists on this side of the House.”

Deborah Russell: “I stand here as a very proud member of the great socialist democratic Labour Party.”

Anna Lorck: “I'm a socialist!”

Ricardo Menendez-March: “The Green Party will continue working hard to offer our support to Labour to enact genuine bold socialist policy.”

If these MPs are such proud socialists, why didn't they tell New Zealanders during the election campaign?

Could it be that they knew taxpayers would object to a political system that holds contempt for individual rights of property and liberty?

It’s easy to write these things off as a joke, but socialism is the leading man-made cause of death and misery across the world. The Prime Minister should ask these MPs to publicly retract their outbursts. At the very least, they should meet with New Zealanders who escaped socialist regimes in China, Venezuela, Cambodia, and the Soviet Union.

Until then, they deserve our mirth. We've pulled together clips from Parliament TV that capture the ideological fever surrounding Red Robbo’s benefit-boosting budget:

Propaganda videoClick here to watch the video.
Click here to share it on Facebook.

How Grant Robertson's Budget pulls New Zealand to the Left

Budget image

A Government Budget can either grow the economic pie, or divide it.

Grant Robertson's Budget unveiled last week was very much a dividing-the-pie budget. Instead of improving incentives for New Zealanders to be productive, he did the opposite, announcing bigger rewards for anyone who goes on the benefit.

Our Executive Director Jordan Williams and consulting economist Joe Ascroft both attended the Budget lock up. I sat down with them immediately afterwards for an in-depth discussion of the economics and politics of Budget 2021. Click here to listen.

I also joined The Panel on Radio New Zealand to explain why the Taxpayers' Union calls Budget 2021 a "major shift in the economic dial to the Left'. Click here to listen.

Some Budget spending that escaped media attention

Budget 2021 divvies out $5 million for public servants and iwi to explain to New Zealanders what Matariki is:

Matariki

Next up, the Budget spends $44 million on getting bureaucrats to teach businesses how to use computers:

Digital skills

Finally, $5.5 million is being given to Beehive offices to help them deal with the findings of a review of "harmful behaviour" in the workplace.

Francis review

(Translation: $5.5 million more for extra political advisors spin doctors, using the Francis Review as cover.)

Grant Robertson says his new levy isn't a tax

The headline says it all.

The Government's proposed unemployment insurance scheme (which will pay people who lose their jobs 80 percent of their salaries) will be funded by all workers via a levy – similar to ACC.

We say that if it looks like a tax and quacks like a tax, it's a tax.

Levy meme

Grant Robertson is claiming it isn't a tax because he doesn't want to look like he's breaking his pre-election "no new taxes" promise. But we all know he's already broken this promise with his new taxes on landlords. He can stop playing games now.

An inside view of Nanaia Mahuta's office

Nanaia Mahuta

We received a fascinating tip-off earlier this year from a very reliable source that Foreign Affairs Minister Nanaia Mahuta had requested officials change the way they format their briefing papers. Specifically, she asked officials to use fewer words and more pictures in her Ministerial briefings!

As is our practice, we used an Official Information Act request to confirm it was really true.

First, they extended the four week deadline to six "due to the necessity for consultation". Then, they provided only a partial response: one of the three relevant pieces of correspondence was withheld on the basis of "confidentiality of advice" and "to protect the free and frank expression of opinions by departments".

So we weren't able to verify the tip-off – but the fact they won’t answer the question says it all.

The Ministry did inform us of this change the Minister requested to the way her letters are written:

MFA style guideClick here to view a larger image.

Focusing on the things that matter!

Maybe we should do a fundraiser for a picture book atlas to present to the Minister.

MSD isn't enforcing parental responsibility rules for beneficiaries

Parents who are on the benefit are required to meet certain obligations to keep getting their payments, including having their children in school or early education, and enrolled with a doctor.

The obligations were put in place in 2013, but it turns out the Ministry of Social Development can’t be bothered enforcing them. In fact, they never have! To date, no parents have had benefits docked for failing to meet these basic obligations.

The Ministry's excuse: enforcing the rules would involve "a burdensome administrative process".

We say that's not good enough. Sure, there should be some room for flexibility, but to ignore legal obligations carte blanche makes them meaningless. The rules were put in place by an elected Government. It's the job of the Ministry to put in place systems that allow those rules to be enforced efficiently.

We'll be watching to see whether the Minister (Carmel Sepuloni) gets her officials to crack down, or scraps these sensible rules.

Secrecy continues at Christchurch City Council as crucial report withheld from ratepayers

Christchurch City Council last year spent $95,000 on a review of Council spending. It turns out the review found millions in Council waste – but the Council refuses to release the report publicly!

This is yet another appalling display of secrecy from Christchurch City Council. Our fight back in 2018 to get the Council to release the cost of a $1.3 million touch screen led us all the way to the steps of the High Court before the information was grudgingly released. The saga led to a damning judgment from the Ombudsman. Now, it appears the Council’s new Chief Executive is continuing the City Council’s culture of secrecy.

The Council argues that releasing the report would raise privacy concerns. Fine then: release it in redacted form, with identifying details of individuals blanked out. The Council might fear the political consequences of releasing a critical report, but that’s not a legitimate reason to withhold public information.

The Debt Clock still running hot ⏰

We've updated the Official New Zealand Debt Clock at www.DebtClock.nz with the latest figures from Budget 2021. Turn on the news and you’d think everything is fine, but the numbers don’t lie.

Debt Clock

Grant Robertson's borrowing now totals almost $64,000 for every Kiwi household. All of this will have to be paid off, with interest, by taxpayers in the decades to come. And if interest rates return to the long run average, God help us.

Enjoy the rest of your week,

Louis circle


Louis Houlbrooke
Campaigns Manager
New Zealand Taxpayers' Union

ps. Unlike most pressure groups in Wellington, we are 100% funded by our members and supporters. But we can’t save the world if we can’t keep the lights on. Click here so we can continue to hold the politicians' feet to the fire and fight for taxpayers.Donate

Media coverage:

RNZ  Budget 2021: Hillside railway workshops coming back to life

RNZ  
$85m Hillside workshop Budget boost: Seymour's comments 'ludicrous'

RNZ  
We don’t need to be nervous about double digit inflation

RNZ  
The Panel with Duane Major and Amy Adams

NZ Herald  
Look to the future, don’t dwell on rewriting the past

NZ Herald  
KiwiRail the big transport winner with money for new locomotives and locally built wagons

RNZ  
Masterton councillors to vote on Maori wards for 2022

Sunday Star-Times  The Fair Pay Working Group will undo Jim Bolger's enduring legacy

Revealed: EECA spent $500,000 staging a fake climate march

The Energy Efficiency and Conservation Authority (EECA) spent $500,000 staging a fake climate march, complete with major streets closed in Wellington. This was part of EECA's $3 million "Gen Less" ad campaign – "a call to people and businesses to commit to living a 'less is more' lifestyle in their energy use."

The spending information, released to the New Zealand Taxpayers' Union under the Official Information Act, can be viewed here.

The $3 million cost was made of two sub-campaigns, each centred around different versions of two ads.

•  The first ad, produced in 2019, presents quotes from historical figures including Winston Churchill, Princess Diana, Martin Luther King Jr, and Anne Frank, edited to sound like calls for climate action.

• The second ad, produced in 2020, features a bearded, pierced narrator walking through a crowd of chanting protestors. Smoke bombs are set off in the background. The narrator urges viewers to buy less, fly less, and drive less. Important Wellington streets were closed for the fake protest, including Featherston St and Hunter St.

Each ad cost around $500,000 to produce, with the remainder of the $3 million spent to buy air time, radio time, digital advertising, and a series of congratulatory Stuff articles.

The sheer cost is incredible. EECA's old ads may have been annoying, but at least they looked cheap. For perspective, EECA could have simply used the $3 million to supply energy-efficient lightbulbs for hundreds of thousands homes.

The absurdity of shutting down streets and hiring fake climate protestors is amplified by the fact the ad was produced shortly after a series of School Strike 4 Climate marches, from which plenty of footage was already available. Instead, EECA disrupted traffic and blew out its own emissions by transporting dozens of actors to a fake protest.

The message behind the Gen Less campaign is so broad and obvious that it's redundant. People know how to save energy in fact, they've already got an incentive to do so in order to cut their power bill and avoid the cost of carbon credits.

Taxpayers will judge for themselves the ethics of exploiting the legacy of Anne Frank and purchasing positive news coverage for this campaign.

The total reported spending on the Gen Less advertising campaign, as of February, was $2,979,423.42.

Op-ed: Enforce electoral laws – Let’s do this!

Newshub headline

Faced with a steadily growing number of electoral finance investigations by the Serious Fraud Office, Prime Minister Jacinda Ardern stared kindly into the camera and intoned, “we should be looking at the way our regime works. Clearly, it's not currently, so let's do something about that."

The Taxpayers’ Union could not agree more that we should “do something about that.” However, the “something” is not to change the rules again or argue they are unclear (which they are not). The real “something” is to actually enforce the law. These prosecutions are proof that the regime is finally starting to work.

It is a terrible look for the Prime Minister to suggest that the electoral finance law needs to be changed so soon after her party has been charged. National was charged – the law was fine. New Zealand First was charged – the law was fine. Labour is charged and their ally the Māori Party is under investigation – the law is not working and needs to be changed. That is Banana Republic behaviour.

Of course, all parties are presumed innocent until found guilty of course, and all have pleaded innocence in relation to the charges.

Prime Minister, the problem is not the regime or the system – it is how politicians try to constantly push the boundaries of the system. They do it because it often works, there are rarely any consequences of note, and, if there are, they come long after the election affected by the activity in question. By the time any judgment is made most voters, if they were even aware of it, will have forgotten about the issue.

National and Labour are well established parties with teams constantly working on the minutiae of election finances. There are no excuses. The Māori Party is alleged to have missed deadlines for declarations which seems to be a cut and dried issue. Either they did, or they did not. There is no room for interpretation.

There is no hope of taxpayers ever seeing a cent paid back from New Zealand First – sorry, the completely separate New Zealand First Foundation – now that the organisation is essentially moribund. If Winston Peters wants to come back, he will likely disband New Zealand First (and its debts), then create the First New Zealand Party with Rt Hon Winston Peters as the leader.

Advance New Zealand’s Billy TK can plausibly plead ignorance – there is plenty of evidence of that in his public comments. His co-leader, Jami-Lee Ross, much less so. In fact, what Labour is being charged with (hiding the identity of donors and the size of the donations) is – allegedly – known in Wellington as “the JLR shuffle”.

We do need to do something and that is to support the Serious Fraud Office finally enforcing the existing laws. Parliament has not done it, the Police have shown no interest in doing it, and the Electoral Commission cannot enforce them.

All power to the Serious Fraud Office.

Op-ed: We should be thanking smokers. Instead, we’re making them miserable

Next time you splutter your way through a cloud of second-hand smoke, consider the plight of the poor sod who exhaled it.

The average smoker earns less, has poorer mental health, and will live a shorter life than the rest of us. They face social stigma, restricted employment opportunities, and all the inconveniences and anxieties that come with servicing an addiction.

And holy smokes do they pay for it. Annual tax hikes have driven even the cheapest cigarettes to $30 a pack, 80 percent of which goes straight to the taxman.

All up, smokers pitch in around $2 billion a year in excise and GST to fund schools, roads, puppy dogs for the blind, Parliamentary playgrounds, and so on – far more than what they cost the health system. Instead of giving them dirty looks, we ought to give them medals for services to the taxpayer.

The darker side of the tax is that it makes already-poor families even poorer. When taxes are taken out of a low-earning household’s budget, that means less for the kids’ school lunches, shoes, and extra-curriculars. It’s enough to make a kid want a smoke.

Fortunately, the Government now appears to recognise tobacco taxes have gone far enough. This year was the first in a decade that didn’t see tobacco tax hiked beyond the rate of inflation.

What changed? Maybe it was the Tax Working Group’s warning against higher taxes on the poor. Or the spate of often-violent dairy robberies, driven by the sky-high street value of stolen durries. Perhaps most significant is the growing consensus within public health circles that, having whittled down the smoking rate to 13 percent, we’re now dealing with the most serious addicts for whom price is no object.

However, the Government is stuck with the optimistic goal of Smokefree 2025, set a decade ago by politicians who probably knew they wouldn’t still be in office come crunch time. Officially, achieving Smokefree 2025 means getting the smoking rate below five percent.

It’s with that goal in mind that the Government has unveiled new proposals to replace excise tax hikes. It turns out a rigid adherence to a blunt 10-year-old goal is not a formula for sensible policy.

The most striking suggestion – it would be a world-first – is to force tobacco companies to reduce the nicotine content of cigarettes.

The Government ought to ask why other countries haven’t attempted this. First thing first: nicotine may be addictive, but it’s not what kills people. That would be the tar and other by-products of combustion. Reduced-nicotine cigarettes would be just as harmful as the full-strength stuff, but a smoker would have to huff down more sticks to achieve the same buzz.

That means more tar and more tax. Even if that spurs a few smokers at the margin to quit, is it really a victory for public health if the remaining smokers intensify their smoking habit and its associated health risks?

Then there’s the proposal to restrict where cigarettes are sold. It’s hard to see how this would deter a smoker from buying darts if they’ve already tolerated a decade of tax hikes. It would, of course, be a boon for the supermarkets or pharmacies that secure local monopolies on tobacco sales, while small dairies on the edge of profitability go out of business without visits from smokers who make additional purchases.

Next is a proposal to ban anyone born after a certain date from ever buying smokes, meaning eventually even 40 or 50 year-old smokers will be ID’d each time they buy a pack. The idea is to create a ‘smokefree generation’, but we already have one – 15–17-year-olds have a smoking rate of just three percent and sinking, well below the Smokefree 2025 threshold. For perspective, Māori women have a smoking rate of 32 percent.

Perhaps the downright meanest proposal is to ban filters on cigarettes. While filtered certainly aren’t safe, they’re better than the alternative. At best, banning filters will just make smokers miserable; at worst, it’ll kill them. Welcome to Smokefree Aotearoa!

There’s an overarching failing that applies to all of these proposals: they’ll only affect legal cigarettes.

Already, thanks to sky-high taxes on legal tobacco, one in ten cigarettes smoked in New Zealand are illicit – either home grown, or illegally smuggled from Asia in suitcases and shipping containers. Imagine how this black market will thrive once it’s the only source of filtered, full-strength tobacco.

In fact, the Ministry of Health has even advised that the proposals will increase illicit trade, necessitating (presumably costly) strengthened measures to crack down on the black market.

So should we just give up on the smokefree dream? Not at all, even if the 2025 deadline is unrealistic. Smokers are increasingly working out for themselves that they can transition off the death sticks and on to vaping, which is estimated to be 95 percent safer.

We should celebrate that. All the Government needs to do is ease off its plans to regulate the bajesus out of vaping products. Meanwhile, the rest of us can do our part by casting a little less judgment at the guy blowing blueberry clouds on smoko.

Louis Houlbrooke is the Campaigns Manager of the Taxpayers’ Union and is a vaper

For disclosure, around 10 percent of the Taxpayers’ Union’s total income comes from industry membership, a subset of which is tobacco.

Submissions on the Government’s proposals for Smokefree 2025 can be made here.

Budget 2021 is a major shift of the economic dial to the left

Banner

We’re just out of the Budget 2021 lock up, where your humble taxpayer advocates and analysts have spent the morning working through the Budget papers.

I’m afraid to tell you that from a taxpayer perspective there are no redeeming features of this Budget. It represents a major shift of the economic dial to the left by rejigging the tax and transfer system strongly towards those not in employment.

And there’s yet another broken promise. As predicted by the Taxpayers’ Union, Grant Robertson’s ‘no new taxes’ promise is out the window. He’s foreshadowed a new Unemployment Insurance Tax – to operate like ACC, where unemployed will get 80% (that’s not a typo) of their income if they lose their job.

The Government’s spin is that this is the ‘Recovery Budget’ but the sole economic plan is to hike benefits. There is no reference to productivity in the material we’ve seen, and the only help for business is an expansion of an initiative for MBIE bureaucrats to teach businesspeople how to sell things on the internet.

Labour is out of control

Despite significant improvement in the economic and fiscal outlook, Grant Robertson has decided we are now in a permanent emergency.

  • Benefit increases pushed through last year as part of our “Covid Response” have been entrenched and expanded – even while unemployment is forecast to fall. The cost of this amounts to $3.3 billion or $1822.22 per household.

  • The “Covid Recovery Fund” has been raided for all and sundry poor-quality spending. Here’s a small(ish) example: $527 million is being used to expand the rollout of so-called “free school lunches”. Strangely, this measure is not only linked to COVID, it is also justified in the Budget documents as a “job creation” measure for 2000 roles. For those following along, that’s a cost of $263,500 per job (far more than the jobs lost due to the tax taken in the first place!).

  • With the economy running stronger than expected, taxpayers should be picking up less of the tab – but government spending is forecast to run nearly $14 billion ($7,722.22 per household) higher between 2022 and 2025 than forecast in December.

It’s one thing to prop up the economy when we’re all locked inside, but now we’re (mostly) back to normal, isn’t it time to turn off the tap?

Return to 1980s-style social welfare will reduce long term living standards

The benefit hikes announced today will reduce the incentive for Kiwis to work, and result in more intergenerational unemployment poverty.

Economic analysis in the United States over recent weeks suggests that if you increase unemployment benefits too high (as Biden has done) people simply won’t show up to work – one reason why experts have said employment growth there has been so disappointing. With large benefit increases on the way, we risk making the same mistake: why turn up to work, when staying home pays so well?

Unlike President Biden’s relief, our Government is locking in these measures permanently and with their new policy to link benefits to wage growth, the problem doesn’t go away even in a hot economy.

Labour rightly applauded Bill English’s targeted social investment approach – to get people off welfare and into work. Labour’s abandonment of that approach will see higher intergenerational welfare dependency.

Making trains at home

In the 1980s we learned the hard way that making everything at home is an expensive way to live. Forty years later, the Government has decided to rekindle the spirit of Muldoon and begin making KiwiRail’s equipment in Dunedin rather than buying it in from overseas. The total increase in funding for KiwiRail will cost taxpayers $722.22 per household.

Grant Robertson's new unemployment tax

And if that wasn’t enough, we can reveal the Government is doing a deal with the unions to introduce an expensive new unemployment insurance programme. The scheme will cover 80 percent of incomes for those who become unemployed. That sounds generous – and it is – if the scheme follows similar European models, it will mean a new tax.

Health sector sucks up billions more

Health takes the lion’s share of new spending – with more than $4.6 billion allocated to the sector alone through 2025. More than two-thirds of that amount is just allocated to support budget-busting DHBs. But the Government should read our reports on health productivity – unless the sector focuses on becoming more efficient and catching up with other OECD counterparts, our health system will continue to be an unpredictable liability.

Joe Ascroft, our consulting economist who joined us in the lock up, is equally unimpressed:

The Economist’s View

This time last year, the country was staring down economic armageddon. Coronavirus had all-but closed the economy and near-term forecasts for unemployment, debt, and economic growth were extremely dire.

A year on and the economic environment is better than all but the most optimistic of forecasts. Yet, even as unemployment sits at 4.7% (forecast to fall further) and economic growth is again firmly positive (expected to peak at 4.4% in 2023) debt is still expected to climb considerably reaching a peak of $184.2 billion in 2024 (46.9% of GDP or $102,333.33 per household).

While that is considerably better than even Treasury’s forecasts in December (debt was then expected to peak at $194.2 billion – or $5,555 more per household than today), the Government has taken advantage of the rosier economic forecasts to spend even more over the forecast period than had been forecast just six months ago. Between 2022 and 2025, government spending is now expected to cumulatively come in $13.9 billion ($7,722.22 per household) higher than in December.

Normally you might expect forecast government spending to come in lower with the economy tracking better (lower unemployment should mean less social spending), but clearly the Government has chosen to take advantage of the moment and press on with some of the more expensive items on their policy wish list.

The Big Picture

It’s now been a decade since New Zealanders last received a tax cut (legislated in Budget 2010, taking effect in 2011) – but main benefits have been increased four times (three times under Labour and once under National). Instead, a new tax is in the pipeline to fund the Government’s planned unemployment insurance scheme.

At some point, something has to give. With the global economy opening up and opportunities to work overseas expanding, many taxpayers will be thinking seriously about moving overseas to earn more and pay less tax. That could be the start of a nasty downward spiral - as high-earning taxpayers move overseas, the burden of Government spending grows with higher taxes or debt required to fund the gap.

Obviously the circuit breaker is stronger growth and higher incomes – but there was no sign of any focus on that problem in today’s budget.

More to come

We’ve spent the last hour talking to journalists who have also just got a hold of the documents. I’m joining Magic Talk at 6:30 tonight, and we’ll keep you in the loop as we continue to work through the detail.

With the new economic figures, our official Government debt clock will also be updated in the next few hours. Keep an eye on www.debtclock.nz – it’s slowed, but only a little…

Thank you for your support.

Our comments to media

Jordan

Jordan_signature.jpg
Jordan Williams
Executive Director
New Zealand Taxpayers’ Union

 

Taxpayer Update: KiwiSaver interference | Boozy dinners | Wailing unions

Government sticks its nose into your KiwiSaver portfolioDavid Clark

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

I told the media why this is a terrible idea:

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

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

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

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

Would you spend $24 on two bottles of water?

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

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

Receipt 1 Receipt 2

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

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

Back-office bureaucrats are exploiting sympathy for frontline workers

Salaries

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

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

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

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

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

Wage growth

  • The average salary in the public sector is $84,500, compared to $69,000 in the private sector.

  • Last year wage growth in the public sector was 3 percent, compared to just 1.7 percent in the private sector.

  • 15,000 public sector workers are paid salaries higher than $100,000. Few of these will be teachers, nurses, or police.

  • The highest-paying Government department is – wait for it – the Social Wellbeing Agency. That agency’s staff enjoy an average salary of $151,700.

  • Next highest-paying are the Public Service Commission, the Ministry of Defence (not the frontline Defence Force), and the Pike River Recovery Agency, all paying average salaries above $130,000.

Department salariesClick here to view the graph in a separate window.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

HDPA clipClick here to listen to the clip.

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

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

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

Simon Bridges joins Taxpayer Talk

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

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

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

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

Donate

Have a great weekend,

Louis circle


Louis Houlbrooke
Campaigns Manager
New Zealand Taxpayers' Union

Media coverage:

The Weekend Sun  
Deep freeze for turtles and servants

Star News  Cost of Crusaders partnership with ChristchurchNZ still unknown

Newstalk ZB  Heather du Plessis Allan on the flying turtle

The Daily Blog  The danger of the $12000 flying turtle funeral

RNZ  Bryce Edwards: The public sector worker backlash against Labour

Auckland’s light rail issues can be easily, quickly, and cheaply solved

The New Zealand Herald has rightly argued that the Labour Government's Auckland light rail plan is facing huge hurdles to get back on track. It notes that the cost of light rail has soared from $2.3b to up to $15b.

 

Since being elected on a promise of light rail, Labour has already spent $35m of taxpayer money producing absolutely no results. In response, the Government changed the Minister in charge, and has gone back to the drawing board. It has set up an establishment unit to decide the mode, route, and cost estimates for an indicative business case for Cabinet within six months. In other words, everything. They are literally starting again from scratch. That is $35m that taxpayers will never get back.

 

There is little faith outside of Cabinet that the Light Rail v2.0 will go any better. Priding itself on being a caring organisation, the New Zealand Taxpayers’ Union has stepped in with a bold plan.

 

We commit to delivering exactly the same outcomes on Auckland Light Rail for the price of a sausage roll.

 

Here are the key points of the plan developed by our sausage roll loving analyst Neil Miller:

  • We will deliver 0.00mm of light rail track, easily matching the last three years record.
  • Construction costs will be eliminated because there will be no construction.
  • Valuable resources will be freed up to actually fix Queen Street.
    Consultation, which produced more problems than it solved last time, will not be necessary.
  • Equally, consultants will not be required. PWC partners may have to downgrade their new yachts.
  • There will be no legal expenses because: No Taxpayer Money = No Lawyers.
    Vast numbers of New Zealand Transport Agency staff will be freed up to work on projects which build transport things.

 

Our economist has costed this plan at between $1.70 (Big Ben Sausage Roll) and $6.60 (I Love Pies Sausage Roll).Transport Minister Michael Wood, you are most welcome.

Op-ed: Back-office bureaucrats are exploiting sympathy for frontline workers

Louis HoulbrookeThe Government’s bombshell announcement that it will rein in public sector salaries has been applauded by unionists – specifically, the Taxpayers’ Union.
 
Union co-founder, blogger, and cheeky fellow David Farrar proclaimed Grant Robertson and Chris Hipkins honorary members of the Taxpayers’ Union for their fiscal restraint during a pandemic. It is hard to think of any accolade that would annoy those Ministers more.
 
Meanwhile, public sector unions reacted with fury, loudly condemning the idea of wage austerity for heroic frontline nurses, police, and teachers.
 
But this nasty prospect is a false one. Nurses, police, and teachers are locked into to a step-based pay system. This means they’ll keep climbing up the salary ladder regardless of any salary restrictions announced by politicians. They’re effectively protected from a freeze unless they’re already on the highest possible rung.
 
The Public Service Association and the Council of Trade Unions know this perfectly well. But that hasn’t stopped them from exploiting public sympathy for frontline workers to shield the wider public service from a pay freeze.
 
The Public Service Commission’s website holds a wealth of statistics on public sector pay rates, which looks beyond the front line and reveals inflated back-office salaries.

•  The average salary in the public sector is $84,500, compared to $69,000 in the private sector.

•  Last year wage growth in the public sector was 3 percent, compared to just 1.7 percent in the private sector.

•  15,000 public sector workers are paid salaries higher than $100,000. Few of these will be teachers, nurses, or police.

•  The highest-paying Government department is – wait for it – the Social Wellbeing Agency. That agency’s staff enjoy an average salary of $151,700.

•  Next highest-paying are the Public Service Commission, the Ministry of Defence (not the frontline Defence Force), and the Pike River Recovery agency, all paying average salaries above $130,000.

Department salaries

Click here to view the graph in high resolution.

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

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

It’s also a sensible start to reining in the Government’s debt monster, soon set to reach $100,000 for every household in New Zealand – a terrifying figure no matter how many times Grant Robertson says “it’s not as bad as we thought it would be”.

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

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

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

Louis Houlbrooke is the Campaigns Manager of the New Zealand Taxpayers' Union.


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