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3 News: $15M genetics funding bad economics – union

A $15 million government investment to improve the genetics of New Zealand lamb and beef is bad economics, the Taxpayers' Union says.
The Government this week announced it the investment, over five years, as part of a new partnership with Beef + Lamb New Zealand Genetics.
The Government's $15M contribution will make up part of the $8.8M spent annually on researching genetic improvement in cattle and sheep.
Science and Innovation Minister Steven Joyce said the Government is committed to investing in research that benefits New Zealand. Click here to read more.

Stick to the cake stalls

This morning the NZ Herald reported that the Green Party want taxpayers to foot even more of the bill for political parties:

“The Green Party believes the rules could be amended further. It wants an inquiry to investigate state funding for election campaigns.
A spokeswoman said: "We see partial public funding of parties as a further step to help level the playing field between parties and to help combat parties being captured by wealthy interests."
The party said it was important that the level of public funding was not set so high that the parties did not need to go to the community for more money.
The Greens were heavily dependent on their 14 MPs, who donated nearly $250,000.”
 
In a democracy it is up to the public to decide which party, policies and personalities they want representing them in the corridors of power. The popular prosper and the shunned struggle.

Despite all the rhetoric that private money is bad for politics, it is better than public money cementing the status quo. "Equalling the playing field" by giving political parties taxpayer subsidies gives political incumbents a huge advantage. It makes it more difficult for new political movements to get off the ground. It means that the media gain even more influence.

As it currently stands, the taxpaying public already hand over generous subsidies to political parties so they can in turn be force-fed political propaganda in the lead-up to every election. In the 2011 election alone, taxpayers paid up $3.2m for the privilege.

So, should it really be the taxpayers’ role to support dead-beat political parties whose activists struggle to solicit donations for unpopular policies? Absolutely not.

$15 Million Gifted to Multi-Billion Dollar Industry

Yesterday Stephen Joyce announced:

$15m investment in sheep and beef genetics

Science and Innovation Minister Steven Joyce today announced a $15 million investment over five years into advances in genetics research that will improve the profitability of New Zealand’s sheep and beef sector.

A new partnership, Beef + Lamb New Zealand Genetics, will also bring together New Zealand’s existing sheep and beef genetics research by consolidating Sheep Improvement Ltd, the Beef + Lamb New Zealand Central Progeny Test, and Ovita. Total funding for the new project from government and industry sources will be up to $8.8 million per year.

“Science and innovation are major drivers of economic growth and international competitiveness. The Government is committed to ensuring we invest in purpose-driven research that benefits New Zealand,” Mr Joyce says.

“Genetic improvement in the sheep industry has contributed greatly to farm profitability, and for every dollar captured on farm, another 50 cents is captured off-farm. In just 10 years Beef + Lamb New Zealand Genetics expect that farmers will receive $5.90 extra profit per lamb sold at that time.”

...

We think this is corporate welfare - the only winners are the sheep and beef farmers who will ultimately profit. Like most corporate welfare, it’s everyday taxpayers who will be left out of pocket.

As Mr Joyce goes on to point out in the release, New Zealand already leads the world in pastoral animal and plant genetics.

“As a nation, we are already leading the world in pastoral animal and plant genetics. This partnership will help us maintain this critical position and to continue to build on it through further research and development in sheep and beef genetics.”

The first part of that paragraph is correct - NZ does lead the word. What is not clear is why taxpayers need to stump up to keep us there. Why does this multi-billion dollar export industry suddenly need the Government pouring millions into it? Expecting increases in farmers' profits is not justification.

This funding is for good headlines, not good economics. What other industries have their normal research and development costs borne by the taxpayer?

Auckland Council charges for pool inspections

A reader has sent this in to me. They note:

Just got a letter today that informs me that the  will now inspect my pool fencing every three years to make sure it is still there and charge me for the privilege. Revenue generating at its best.

Original inspection received sign-off. It cost a fortune to put in a steel fence. Current charge for initial inspection is $75 – I am OK with that and foolishly thought that was the end of it.

Now it will be inspected every three years at a higher cost of $125 per inspection. For now.

My points are:

  • Why follow up inspections? It is a metal fence set in concrete – we are hardly likely to lift it out of the ground
  • Why more expensive since it is just (supposedly) reaffirming it is still there so technically they could look from the top of our drive and view it rather than inspect it
  • Why can’t we just send in a photo showing it is still there – saves them a trip and us a lot of money

This is revenue generating pure and simple. It is a loose interpretation of Fencing of Swimming Pools Act 1987 section 10 (Every territorial authority shall take all reasonable steps to ensure that this Act is complied with within its district.)Exploitation of vague legislation seen as a revenue opportunity.

Since Len(it’s all about me) came in our rates have increased and services decreased as well as additional charges sneaking into the mix. This is snowballing and there seems to be no vehicle to challenge other than talk to a child at the call centre who sounded very sweet but “that picnic may be short of a sandwich” if you know what I mean. She struggled to know what to say and failed to find me anyone to talk to. Any suggestions for recourse?

The $75 initial charge does seem okay, but checking every three years the fence set in concrete is still there seems indeed just revenue generating – especially as they will cost more than the original check.

NB: This post also appears on my personal blog kiwiblog.co.nzPlease feel free to comment on the post there.

Update on the AAE - DoC requests that logo be removed

Further to our questions about whether or not DoC is a supporter of the Australasian Antarctic Expedition (the scientific expedition that got stuck in the ice recently), yesterday we received another letter from DoC confirming that DoC has not supported the AAE. It states that DoC has now asked the AAE for its logo to be removed from the expedition's website.

To recap, after asking how much taxpayer money had been committed to the failed expedition, we discovered that the AEE was falsely claiming DoC as a 'supporter'. See my earlier posts here and here.

We look forward to receiving responses from the other New Zealand 'supporters', Landcare Research and the University of Waikato.

Ltr from DoC 15 Jan 2014

Policy victory

Last week we released material showing that millions of dollars is being wasted in a CTU/Business NZ deal for health and safety training that, according to ACC's experts, for every dollar spent 84 cents is wasted. As you'll recall, the Minister of ACC, Judith Collins, labelled the scheme a 'sham' and a 'rort'. It was clear that millions intended to improve workplace health and safety was being used for programmes that did little, if anything, except 'raise awareness'.

We are pleased to report that, despite the initial doubtthe Taxpayers' Union has now confirmed that ACC is cutting the taxpayer funding of the Council of Trade Unions and Business NZ for this dodgy training program. We understand that the final contracts revealed last week dramatically reduce the funding Business NZ and the CTU receive.

This is a big win for levy payers - who will no longer have the burden of funding a deal that achieves little, if anything. For workers this is a win - the money can now be redirected to measures that actually reduces accidents. It's also a win for Business NZ and CTU members - no longer are the two organisations conflicted in their ACC advocacy for members.

ACC has now publicly stated that the this training programme will end this year. That, combined with the CTU and Business NZ's new contracts is a policy victory.

Pressure builds on Len Brown

Pressure builds on Len Brown Newstalk ZB - 20/1/2014

Len Brown's opponents continue to apply pressure on the Auckland mayor.
Security guards protected Mr Brown from hecklers as he opened a railway station at Panmure on Saturday.
New Zealand Taxpayers' Union executive director Jordan Williams says if the mayor feels he needs extra security, he should foot the bill himself.
"And lets be honest, he only has that security to stop people ridiculing him and mocking him, I question whether it is for his genuine protection."
But a spokesman for the mayor's office says the Panmure transport interchange opening was an Auckland Transport event, and the extra security was ATs decision.
There are also claims that Mr Brown has already breached the censure enforced by his councillors.
All 20 Auckland councillors censured the mayor last month, requiring a stronger working relationship and level of accountability.
But councillor Cameron Brewer says the mayor has effectively thumbed his nose at the censure by informing news media of his six priorities for 2014, before telling councillors.
Mr Brewer says the media rang councillors yesterday for comment, but they didn't even know what Len Brown had said.
Mr Brewer says the mayor's actions are not in the spirit of what was formally agreed, not to mention the many assurances and promises the Mayor has made publicly.

Fiscal rules

Readers will be aware that Australia is facing huge deficits, despite the promise of the previous Government to get into surplus.

As a response to this, the Centre for Independent Studies has proposed some fiscal rules to bind future Governments.

They are:

  1. require the federal fiscal balance to be maintained within a range of +2% to -2% of GDP on both an actual and forecast basis
  2. limit the net debt to GDP ratio to 10%
  3. cap the federal revenue and expenditure shares of GDP to 25%
  4. capping real growth in federal spending at 2% per annum

Fiscal rules are not new for Australia. The Labor Hawke/Keating Government set rules being:

  1. Not to raise tax revenue as a share of GDP
  2. Not to raise government expenditure as a share of GDP
  3. To reduce the budget deficit in absolute terms and relative to GDP

Anyway what I like most of all is their mechanism to encourage Governments to keep to the fiscal limits or rules. They propose:

This would involve cutting federal politicians’ overall remuneration by 1% for every percentage point breach of each fiscal rule for the duration of the breach.

Now that appeals!

NB: This post also appears on my personal blog kiwiblog.co.nzPlease feel free to comment on the post there.

Newstalk ZB on funding for yacht race that never happened

Government won't seek repayment from axed yacht race Newstalk ZB - 16/1/2014

The Government has no intention of making the organisers of an axed yacht race repay $100,000 in taxpayer funding.

The inaugural Auckland to Bluff race - scheduled for next month - was cancelled due to a lack of entrants, but not before receiving a quarter of its $400,000 government grant.

The Taxpayers' Union says organisers should be made to pay it back.

But Economic Development Minister Steven Joyce says organisers have already spent the money and he doesn't expect them to find another $100,000 to pay it back. 


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