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Time for recall elections for local government?

On Sunday we suggested that New Zealanders should be given the ability to recall their representatives after the latest of a series of scandals involving Auckland Mayor Len Brown was revealed. The NZ Herald picked up our suggestion:

'Secret room' spending shows need for recall elections

A lobby group says revelations Auckland Council spent $30,000 on "secret rooms" for Len Brown show New Zealand needs recall elections to dismiss politicians before their terms expire.

The Council spent the money building a private bathroom and dressing room hidden behind a bookcase in the Auckland mayor's new office, the Herald on Sunday reported.

The Taxpayers' Union today said the Government should give local communities the ability to petition for recall elections.

"Councillors have already censured Len Brown for misusing funds but clearly the line in the sand is being ignored," said Jordan Williams, Taxpayers' Union executive director.

"A recall option would enable ratepayers to petition for a vote to fire a shameless [politician] who lacks any respect for those who pay the bills." Read more.

Voter recall options are gaining popularity overseas and it's time New Zealand had the conversation. Though often associated with the United States, where they have a long history and are used at both the state and local leve, recall mechanisms also exist in British Columbia, several Swiss cantons, the Philippines and Venezuela.

Recently the UK Government introduced the Recall of MPs Bill to the House of Commons on 11 September 2014, after pledging to the public to go so upon election in 2010. Many UK MPs, led by backbencher Zac Goldsmith, think the Government’s proposed threshold of recall only after a committee of MPs has found the representative to have been engaged in “serious wrongdoing” is too high.

Based on the swamp of emails we've been getting, many Auckland's think the threshold to censure a Mayor seems to be pretty high too!

We think that it's time the Government gave ratepayers a voice between elections. A recall option would enable ratepayers to petition for a vote to fire a shameless politicians who lacks any respect for those who pay the bills. New Zealanders need a mechanism to replace elected representatives if they fail to perform or bring their office into serious disrepute.

As Zac Goldsmith recently said:

“What is at stake is a matter of principle – do we trust out voters to hold us to account or not?”

It’s time to have the recall conversation.

Is bigger better for local councils?

That's the question facing the Wellington region with the Local Government Commission releasing it's proposal for a "Super City" stretching from the Wairarapa to the Cook Strait.

TDB Advisory report, commissioned last year by the Hutt City Council, reviewed the international literature on the relationship between size and cost-effectiveness of local government. It examined the expenditure data from New Zealand territorial authorities to assess the relationship between size and cost-effectiveness. The report found that efficiencies are generally gained up until a local council area covers 50,000 inhabitants. Once councils reach around 200,000 in population it appears that diseconomies of scale kick-in and that larger councils tend to cost more on a per ratepayer basis.*

There are other problems with the model chosen by the Commission:

  • It doesn't offer value for ratepayers - that's not just our view, the Commission's own analysis ranks the chosen model fifth in terms of net benefits of the eight options presented. Projected efficiency gains of $30 million per year at 3% of operating expenditure are derisory given the risks of adverse efficiency changes described from other local government agglomerations.
  • A move to capital valuations for rates will hurt the CBD the most - as Aucklanders well know, capital valuations shift the rates burden onto inner suburbs. The Commission does not hide its intention to cross-subsidise. Wairarapa, for example is warned that it will lose $11m of subsidy if it goes it alone. We see Wairarapa’s determination to be self-reliant as creditworthy. Judging from the relative performance of Christchurch and its neighbouring small councils, Wairarapa will have every prospect of showing the Commission to be dead wrong.
  • The goal of 'regional coordination' is fudged - the proposal is obscure about the relationship between local boards and regional coordination matters such as economic development and transport.
  • It won't make the boat go faster or promote 'a single voice' - despite the recent efforts to address economic development at a regional level, the proposal gives economic development to local boards. Even if the scheme resulted in a 'single-voice' democracy we've not been able to track down evidence of advantages stemming from such a system. If anything, ‘single voice’ democracies in seem better positioned to squeeze central government for pork barrel politics courtesy of the taxpayer.

The Commission's draft proposal is available on this page. Submissions close on 2 March 2015.

First birthday

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A year ago today the Taxpayers’ Union launched with the aim to become a loud voice fighting for lower taxes, less government waste, and to put pressure on politicians to cut corporate and union welfare. Today's anniversary is a good chance to look back on some of the campaign highlights in our first 12 months.

Waste watch campaign highlights

Our first major exposé was Transpower's $1.2 million café on The Terrace in Wellington. The exclusive café meant staff could avoid walking to one of the dozen coffee shops within a few hundred metres of Transpower's office building. Even worse, the money was spent despite Transpower having only 18 months left on its lease!

The Seven Sharp item was the first of what has become regular television coverage of our campaigns.

Seven Sharp on Transpower cafe

We exposed DOC’s IT screw-ups and staff junkets to Australia (to learn skills not applicable in New Zealand). Our work saw media attention given to the taxpayer funded brochure to explain to elderly how to take a bus and the 1,000 taxi trips taken by health officials to avoid the 500 metre walk between offices.

We’ve held politicians to account, exposing how much hush money taxpayers are forking out when MPs have fallings out with staff, and questioning MPs for charging holidays to the taxpayer.

We stopped the CTU/Business New Zealand 'rort' that had seen $20 million spent on health and safety training that, according to ACC’s own analysis (which we uncovered), wasted 84 cents per dollar spent.

We’ve kept the pressure on local government too – exposing the handshake deals in Dunedin,  Len Brown’s debt problem, Auckland Council’s secretaries with secretaries, the ratepayer funded conference on the practise of multiple sexual relationships, the 100k curtain and Napier’s 'museum of omnishambles'.

Reports

Sky High briefing paper on passportsJordan McCluskey's report calling on 10-year passports saw the tough questions put to the Prime Minister John Key and Internal Affairs Minister Peter Dunne. It lead to considerable media attention and helped force the Government to review our passport regime with, according to Peter Dunne, a view of returning to a 10-year passport regime.
 

Jono Brown's Rate Saver Report outlined 101 ways councils can save money and received the support of Invercargill Mayor Tim Shadbolt, and Hutt City Mayor Ray Wallace. 


 

Ratepayers ReportWe worked with Fairfax media to publish New Zealand's first comprehensive online local government league tables - Ratepayers' Report. It highlighted how our largest city's finances are in poor shape, with Auckland Council carrying more than $15,800 in liabilities per ratepayer.

Bribe-O-Meter logoOur election 'Bribe-O-Meter' armed voters with the facts on how much the party promises would cost taxpayers. Thanks to donations from members and supports just like you, our targeted online advertising meant the figures reached more than 215,000 voters.

 

Jim Rose's report examining the cost of corporate welfare since 2008 was released earlier this month. Already it's seen Economic Development Minister Steven Joyce on the defensive about the $600-$800 average household annual cost of the government's programmes of corporate welfare. The report includes forewords by Labour MP Stuart Nash, and Auckland Chamber of Commerce CEO Michael Barnett.

But our continued work relies on you...

Only your donations and membership keep us afloat. If you agree our work is valuable please click here to donate now or if you're not already a member click here to join.

Here's to you, for our first year in our campaign for a lower tax burden.

Clarification of council debt in Hawke's Bay

The Hawke's Bay today is referencing our Ratepayers' Report - local government league tables, in correcting what appear to be mistaken information about the indebtedness of Hastings District and Napier City councils. Local debate is raging in Hawke's Bay as the twin cities prepare for the release of the latest amalgamation proposal from the Local Government Commission expected before the end of the year.

Taxpayers' Union joins debt debate

The Taxpayers' Union says its own figures show Napier Mayor Bill Dalton "is comparing apples with oranges" in numbers he released this week. Photo / Duncan Brown

A lobby group set up to keep a check on government spending has waded into the debate about Napier and Hastings' respective council debt.

The Taxpayers' Union says its own figures show Napier Mayor Bill Dalton "is comparing apples with oranges" in numbers he released this week, which were also criticised as "miles off" by Hastings Mayor Lawrence Yule.

Taxpayers' Union executive director Jordan Williams said the organisation went through a rigorous process earlier this year to collect debt figures for all New Zealand councils.

It published the figures in online "league tables" which included other measures of local body performance.

The league tables are online at RatepayersReport.co.nz

"Mr Dalton's figures appear to be very different from the ones we ran past the council's finance team earlier in the year," Mr Williams said yesterday.

"Mr Dalton is right that Hastings has higher debt per ratepayer, but his figures are arguably misleading by failing to take into account differing accounting policies used by each council."

"On a total liabilities measure, the latest figures available show that Napier Council owes external parties $714 per ratepayer. Although Hastings District is higher, $2501, that is still less than the New Zealand average, $4386."

Read more.

 

Joyce responds to corporate welfare analysis

Steven Joyce has provided a response to Jim Rose's Monopoly Money report - but appears to focus just on R&D tax credits, rather than address the bulk of corporate welfare identified in the report.

Joyce disputes corporate welfare analysis

Steven_Joyce_copy_21.jpgEconomic Development Minister Steven Joyce is disputing the Taxpayers’ Union analysis of corporate welfare under National, saying he disagrees with its characterisation of a subsidy and its estimate of would-be corporate tax rate reductions.

As revealed in National Business Review last Friday, a Taxpayers’ Union report claims that National has handed out an average of $1.18 billion a year in corporate welfare since it came to power in 2008. (See report attached)

In the Monopoly Money report, Jim Rose – a former principal adviser at the Treasury and former senior analyst at the Ministry of Business, Innovation and Employment – concludes that such business subsidies are costing New Zealand households an average of $600-800 a year.

Continue reading on the NBR site ($)

NBR on 'Monopoly Money'

Crony capitalism undermines sustainable growth National Business Review - 14/10/2014

 

On Friday we launched our hardest hitting report to date,Monopoly Money. The report includes forewords by Labour's Napier MP, Stuart Nash, and the Chief Executive of the Auckland Regional Chamber of Commerce & Industry, Michael Barnett, ONZM.

This morning the NBR published Mr Nash's foreword as an opinion piece on its website (click link to view). 

Our Monopoly Money report can be viewed online here

Taxpayers' Union lends voice to international coalition

Today the Taxpayers’ Union has joined a large international coalition of taxpayer groups with the intention of opposing supranational taxation schemes, including ‘harmonising’ tax rates across borders and levying taxes on behalf of international bodies. The 22 signatories represent groups from 15 different counties.

International efforts to subject New Zealanders to a taxes on sugar, consumer products and even financial transactions, are deeply concerning. We’ve joined forces with our overseas equivalents to highlight these developments.

International taxes are potentially very problematic – they will tend to come on top of national taxes, the control will be small, opening the schemes up for potential corruption. Without voters to hold these policymakers accountable, the taxes will be easy to increase once they are in place.

The situation has become urgent in connection with the World Health Organization (WHO) meeting in Moscow starting today. The scope of the WHO meeting is to discuss raising excise taxes and to recommended uniform excise tax rates.

One of the points made in the letter is the value of competition by countries:

Tax Competition, by contrast, is a natural dynamic that allows people to move economic resources from high tax areas to low tax areas. Other regions must adjust, or risk depriving their own peoples of opportunities to prosper. This maximizes economic efficiency and allows consumers to pay the best price for the highest quality.

A copy of the letter and list of signatories can be viewed here.

New report on corporate welfare

The Taxpayers’ Union has today launched new a report, Monopoly Money, which examines the cost and case for New Zealand’s extensive corporate welfare programmes. 

The report, which examines the cost of corporate welfare since the 2007/2008 budget, shows:

  • Since National took office, corporate welfare has cost taxpayers $1-1.4 billion ($600 - $800 per household) per year

  • If corporate welfare was abolished, enough money would be saved to reduce the corporate tax rate from 28% to 22.5%

  • If applied to personal income tax rates, the saving would allow the 30% and 33% income tax rates to be lowered to 29%

  • Alternatively, the 10.5% rate (applicable to the first $14,000 of income) could be reduced to 7%.

Labour MP, Stuart Nash, and Chief Executive of the Auckland Regional Chamber of Commerce & Industry, Michael Barnett, ONZM, have provided forewords to the report.

Mr Nash says:

"Given that politics is a contest of ideas and vision, any government spending on the scale identified in this report should be transparent and open to public scrutiny. I therefore welcome the Taxpayers’ Union efforts in this area."

Mr Barnett, says:

“Corporate welfare seldom represents a good or fair use of tax and ratepayers' money. The report shows that evidence of substantial benefits is scant and limited.”

The report’s author, Jim Rose says:

"Taxpayers and politicians from all sides of the political spectrum should ask whether the public gets value for money from these business handouts."

Bill English was right when he said last month that welfare is like crack cocaine. There needs to be a real effort to beat the vested interests and put an end to these corporate welfare programmes.

This report will serve as a wake up call for taxpayers - the per household cost of the corporate welfare detailed in the report equals between $600 and $800 every year. The amounts may be justified - if the Government is a better investor than private citizens. The economic evidence, however, suggests that governments, politicians and bureaucrats do not have the market disciplines to be better investors on a consistent basis. 

To read our report full screen click on the image below. Alternatively, you can download the report as a PDF by clicking here.

Serious questions for Wananga

This morning's lead story in the NZ Herald will no doubt leave a bad taste in taxpayers' mouths, with reports that the Whakatane-based Te Whare Wananga o Awanuiarangi has received $6 million in payments it wasn't entitled to.

The Warriors are caught up in an investigation into a Maori tourism qualification involving alleged overpayments of $6 million of taxpayers' money.

Nearly 100 players and staff "completed" an 18-week course in just one day and a member of the club board - who also worked for the wananga that ran the tertiary course - has been referred to the Serious Fraud Office.

So 100 staff and players left left to do an 18 week course, came back with a certificate and no one asked questions?

Donna Grant has resigned from the Whakatane-based Te Whare Wananga o Awanuiarangi and offered to assist with any potential SFO inquiry, according to her lawyer.

"She is absolutely confident she has done nothing wrong and is happy to co-operate," said Richard McIlraith of law firm Russell McVeagh.

A prominent figure in kapa haka and Maori performing arts, Mrs Grant is the daughter of Sir Howard Morrison and Sir Owen Glenn's sole representative on the five-person Warriors board. She was also the driving force behind the Warriors Foundation, the club's now defunct charity arm, which delivered the Hei Manaaki course to 94 players and staff from the league team.

Her husband, Anaru Grant, is the chairman of Te Arawa Kapa Charitable Trust which also delivered the course twice in Rotorua.

Forensic accounting firm Deloitte referred those three courses to the SFO, while the wananga cancelled the certificates of 217 students and refunded an additional $1.3 million in taxpayers' money. The Herald revealed last month that players and staff from the Warriors received certificates last year, which are among those now recalled.

Chief executive Wayne Scurrah said it was "disappointing to be caught up in all of this" but the club did not know the course was supposed to be 18 weeks long, not one day.

He declined to comment further because a board member was involved and referred questions to chairman Bill Wavish, who did not return messages.

This seems very strange. When you're looking to book a cause, the length is usually the key piece of information. Was it the Warrior's board member who arranged the training?

Mrs Grant's resignation and the referral to the SFO come in the wake of a review released yesterday that found the Hei Manaaki programme was "overfunded", according to the Tertiary Education Commission and the NZ Qualifications Authority.

An independent report by Deloitte, which formed part of the inquiry, found the monitoring of Hei Manaaki - levels 3 and 4 of the National Certificate in Maori Tourism - was poor and highlighted some "internal inadequacies in the academic oversight processes".

Students spent an average of 183 hours with tutors but the wananga was given taxpayer funding for 388 hours. Poor monitoring of attendance "may have resulted in the award of these national qualifications to students who have engaged in only a small proportion of the course", said the report.

This has the potential to seriously undermine the viability of the Wananga. It shows a severe failing of governance.

The "substantially compressed delivery" led to students participating in a programme that fell "well short" of its approved credit value.

Graham Smith, chief executive of Te Whare Wananga o Awanuiarangi, said 217 certificates were cancelled.

One employee was dismissed for misconduct and disciplinary action for other staff has not been ruled out.

 


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