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Championing Value For Money From Every Tax Dollar

Government acknowledges merits of full capital expensing – but why just bloodstock?

The Taxpayers’ Union is welcoming the underlying principle in the only tax change announced as part of today’s Budget 2018 to promote economic growth: full capital expensing of bloodstock.
 
“Allowing full expensing of capital investments is the best tax reform no one has heard of,” says the Union’s Economist Joe Ascroft.
 
“This is the rocket Donald Trump has put under the American economy in its recent tax reform.  The economic advice is that it would massively increase business investment in capital and accelerate productivity growth.  Productivity growth is the most relevant factor in determining income growth – the measure will lead to increased wages.”
 
“The obvious question is why the Government would choose to favour just a single industry or special interest?  That’s an outrageous way to run a tax system, and isn’t fair to the hard working employees and employers in other sectors.”
 
Editor’s note: The fiscal impact of full capital expensing is largely temporal. Full expensing pulls forward any existing tax benefits into a single year, rather than increasing the total value of any tax benefits. More information can be found at paragraphs 71 to 77 in the Taxpayers’ Union submission to the Government’s Tax Working Group, available at http://taxpayers.org.nz/twg_submission.

Labour delivers predictable budget in sweet economic times

From the Budget 2018 lock-up, the New Zealand Taxpayers’ Union is welcoming Labour’s adherence to its pre-election ‘fiscal rules’ despite delivering significant Labour-Party style sweeteners in the Budget delivered today.
 
Taxpayers’ Union Chairman, Barrie Saunders, says:
 
“This is a classic Labour Party Budget, in probably the best economic times inherited by a new Government since Norman Kirk’s election in 1972. As a result Labour have been able to deliver significant spending initiatives, and keep to the prudent fiscal targets.”
 
“Nevertheless, much of the Government’s claims about boosting funding to health and education do not match the numbers, with the growth of overall funding actually growing at a slower rate than the final budget delivered by the last National Government. The big growth is actually in Social Security and Welfare, with spending increasing by 10.9%, compared to 3.2% in the last budget.
 
“Of real disappointment is the focus in this budget of dividing the pie, rather than growing it. The only economic initiative is the R&D tax credit change announced earlier in the year.”
 
“In terms of tax relief to grow business, the only initiative comes in the form of allowing tax deductions for racing studs – full deductibility for capital stock. The Taxpayers’ Union has been arguing that this measure would be the most effective way of boosting industry and wages across the whole economy. Winston Peters has traditionally had a close relationship with the racing industry, however we do not support favourable treatment for business types in the tax system."

Confirmed: $5.5m for the Clinton Foundation in 2018/19

Hillary Clinton

UPDATE: You can email the Minister of Foreign Affairs about this issue by clicking here.

A subsidiary of the controversial Clinton Foundation is set to receive US$3.9m (NZ$5.5m) in taxpayer money in 2018/19, the New Zealand Taxpayers’ Union can confirm. This is in addition to NZ$8m given to the organisation since 2014.

MFAT claims that the organisation in question, the Clinton Health Access Initiative, is a separate entity. This is absurd – the Clinton Foundation appoints the organisation’s directors, making it a subsidiary in legal terms.

The Foundation is currently under investigation by the FBI over the way it obtained donations while Hillary Clinton was US Secretary of State – the same period in which the New Zealand Government began giving the initiative money.

Taxpayers deserve confidence that aid commitments are made to help the world’s poor, not to win favours with foreign politicians.

Even if aid money was meant to be used for diplomatic purposes, the funding’s justification for no longer holds with Secretary Clinton out of public office. It seems that all taxpayers have to show for our generosity is a stop on her book tour!

The new Government should follow Australia’s lead and cut ties with Hillary Clinton’s potentially corrupt organisations. She is perfectly capable of raising money without handouts from the little New Zealand taxpayer.

--> Click here to sign our petition to end taxpayer funding for the Clinton Foundation. <--

This is the kind of nonsense that our Minister of Foreign Affairs Winston Peters prides himself on exposing and cutting out. He should politely wait until Secretary Clinton leaves the country, then announce an end to the funding.

The documents confirming the funding, released to the Taxpayers’ Union under the Official Information Act, are available below.

Taxpayers' Union presents submission to Tax Working Group

The New Zealand Taxpayers’ Union has finalised and presented its submission to the Tax Working Group, along with submissions from more than 800 Taxpayers’ Union members and supporters.
 
31668502_1452936374810378_4153403108682434674_n.jpgWe look forward to hearing the Working Group acknowledge not just our own submission, but those of the 800 or so taxpayers who have submitted via our website.
 
The basic message from our supporters is clear: the Tax Working Group should not be used as an opportunity to dig even deeper into taxpayers’ pockets. This theme is reflected in our own submission, which says that any proposals to hike or introduce new taxes should be offset with tax cuts in other areas.
 
A big thank you to all of our supporters who gave us helpful feedback on our Exposure Draft, ensuring our constructive suggestions for the Working Group are comprehensive and of a high standard.
 
Our full submission can be read here, or at the bottom of this page. Key points include:

1. Where new taxes are recommended, we say the Tax Working Group should make them revenue neutral – i.e. balanced with tax cuts in other areas.
 
2. No taxation without indexation: we call for income tax thresholds to be indexed to changes in average earnings or, at minimum inflation (as happens in Canada). This would end fiscal drag (also called 'bracket creep').
 
3. We call for the company tax rate to be cut for all businesses rather than cutting tax rates for smaller businesses (as the Working Group’s Background Paper proposed). Having multiple levels of company tax would create perverse incentives.
 
4. We call for full tax deductibility for businesses’ capital spending within the first year of purchase to increase incentives to invest in capital and productivity, and increase wages.
 
5. The loophole allowing charity-owned businesses (such as those owned by churches and iwi even when none of the profits are used for the 'charitable' purpose) to operate tax-free should be closed.
 
6. Similarly, Māori Authority-owned businesses should operate under the same tax rate as their competitors paying 28% income tax - and not be allowed pay the special 17.5% rate.
 
7. We explain why introducing a complex Australian-style capital gains tax would be a step backwards and bad for investment, growth and employment.
 
8. On retirement investment, we say taxpayers should be allowed to deduct inflation from taxable interest income.

We've made it easy to submit to the Tax Working Group

We've made it easy for you to make a submission to the Government's Tax Working Group, chaired by Sir Michael Cullen. Our online tool will make sure your voice is heard.

Will you take a moment to send the Working Group a clear message? The Tax Working Group should not be used as an opportunity to dig deeper into our pockets.

--> Use our customisable template to make a submission to the Working Group <--

As if fuel taxes weren’t enough, the Group's chair, Sir Michael, has been talking about wealth taxes, asset taxes, environment and water taxes, and capital gains taxes. He's even been talking about taxes for 'bad behaviour', covering sugar, salt, fat, plastics, and more.

Our full submission is currently out for consultation with our members. You can view the Exposure Draft here (feel free to give feedback using this form).

Our key submissions are:

1. Where new taxes are recommended, we say the Tax Working Group should make them revenue neutral – i.e. balanced with tax cuts in other areas.

2. No taxation without indexation: we call for income tax thresholds to be indexed to changes in average earnings or, at minimum inflation (as happens in Canada). This would end fiscal drag (also called 'bracket creep').

3. We call for the company tax rate to be cut for all businesses rather than cutting tax rates for smaller businesses (as the Working Group’s Background Paper proposed). Having multiple levels of company tax would create perverse incentives.

4. We call for full tax deductibility for businesses’ capital spending within the first year of purchase to increase incentives to invest in capital and productivity, and increase wages.

5. The loophole allowing charity-owned businesses (such as those owned by churches and iwi even when none of the profits are used for the 'charitable' purpose) to operate tax-free should be closed.

6. Similarly, Māori Authority-owned businesses should operate under the same tax rate as their competitors paying 28% income tax - and not be allowed pay the special 17.5% rate.

7. We explain why introducing a complex Australian-style capital gains tax would be a step backwards and bad for investment, growth and employment.

8. On retirement investment, we say taxpayers should be allowed to deduct inflation from taxable interest income.

9. Any environmental tax proposals should (in addition to being revenue neutral) be sector neutral – i.e. politicians should refrain from targeting specific industries.

Our suggested submission can be altered as you wish.

--> Click here to make your submission to the Tax Working Group <--

Submissions to the Working Group close on Monday at midnight.

Thank you for ensuring there is a strong voice for taxpayers.

Taxpayer-funded health activists bully Youthline against advice

Taxpayer-funded health activists ignored advice from the Ministry of Health, Auckland Council, and Auckland Transport, to bully a company into dropping a promotion to raise money for Youthline, reveals the New Zealand Taxpayers’ Union.
 
Healthy Auckland Together (HAT), a coalition of public agencies and taxpayer-funded health groups, used taxpayer money to try and shut down a Youthline fundraiser because they objected to a Coca-cola billboard.
 
HAT complained to the Advertising Standards Authority about a Coca-cola bus stop billboard because it was 550m away from a school. This particular billboard encouraged people to text a number to donate to Youthline.
 
You would think that a public health group would be concerned about youth mental health, but in this case, HAT is blocking vital Youthline revenue for the sake of nannyism and anti-capitalism.
 
This organisation is turning into a group of zealots. They ignored advice from their own partner organisations Auckland Council, the Ministry of Health, and Auckland Transport.

Correspondence obtained under the OIA reveals all three had explicitly asked to be left off the ASA complaint, with the latter two citing a lack of evidence for making a complaint. The correspondence can be below.


 
At worst, we are looking at out-and-out dishonesty; at best, it is unprofessionalism of the worst kind.
 
The question remains as to why other taxpayer-funded groups are backing this political campaign. The New Zealand Transport Agency, for example, should have no role in this sort of thing.

 

Petition shames Hamilton Mayor into U-turn

You did it!

Earlier today our mascot “Porky the Waste Hater” presented our petition calling on the Hamilton City Council to ditch the proposal to change its name, to the Mayor and Councillors.

It is fair to say that the Mayor was NOT happy with the attention and our presence.  He wouldn’t even talk to us, or address our submission on his personal proposal to spend tens (or hundreds) of thousands of dollars to change the name of Hamilton City Council to Kirikiriroa City Council.

Your efforts – more than 1,500 signatures in only 36 hours – meant the Mayor didn’t even have a Councillor to second his motion.  Not even one. He withdrew the proposal soon after we presented the petition.

In the context of the Council wanting to hike rates by 20% in only two years, our spokesperson Louis Houlbrooke  – who presented to the Councillors – summed it up like this:

"Cases like this pose the question, if this is what you do with ratepayers' money in the light of day, then what are you doing when we're not looking?"

You can read more about what happened at the meeting on the New Zealand Herald.

Delivering-petition-outside-the-Council.png

Thank you to the fifteen hundred people who stood with with us on this issue to hold local to account on wasteful spending.

Petition launched on Hamilton City Council name change

It is astounding that Hamilton City Council’s mayor is pushing a name change while Hamilton ratepayers face rate hikes of 9.5% a year, says the New Zealand Taxpayers’ Union, launching a petition on the issue.
 
Taxpayers' Union spokesperson Louis Houlbrooke says, “The Mayor should be dealing with a rates crisis, not spending even more ratepayer money on something completely non-essential.”
 
“When the smaller Stratford District Council changed its logo, it was estimated to cost at least $65,000. The cost to ratepayers will be far higher in Hamilton. Perhaps a better comparison is when Auckland’s tourism agency updated its slogan, costing ratepayers $500,000.”
 
“Even setting the cost aside, the Mayor insults ratepayers by prioritising window-dressing rather than improving the city’s finances or basic services. It looks like a classic political distraction – dead-cat-on-the-table style – so people don’t see the Mayor’s hands reaching deeper into ratepayer pockets.”
 
“These types of vanity projects are costing ratepayers across the country. We must send a message to mayors across the country that they are paid to serve ratepayers, not to craft legacies for themselves.”
 
The Taxpayers’ Union has launched a petition to encourage Hamilton City Councillors to vote down the name-change project at Thursday’s meeting. Sign the petition here:  https://www.taxpayers.org.nz/name_change_petition

Police spend $2.5m on clothing allowances for non-uniformed staff

Police clothingNew Zealand Police handed out $2,505,317 in clothing allowances to non-uniformed staff in 2017, according to figures obtained by the New Zealand Taxpayers’ Union.

Most of this spending was on 1,412 staff in the Criminal Investigator Branch staff who receive allowances of $1,413.72 a year.

$1,400 a year would give you a pretty nice-looking wardrobe, but it’s not clear who the police need to impress.

Outside of the media, most people in the private and public sectors pay for their clothes personally. Why do the police have a different standard?

There is no way of tracking whether this allowance is actually spent on clothes, so it is really just a salary top-up.

High salaries for investigators might be justified – but it would be more transparent to just increase the main remuneration figure, instead of hiding wages in secret benefits.

The full set of figures, obtained via the Official Information Act, can be viewed below.

National Party leadership

Wellington has seen a flurry of activity this week as Bill English declared that he would be stepping down as National Party Leader and resigning from Parliament. We thanked Mr English for his service on behalf of taxpayers, noting his success in cutting taxes in 2010 and making state owned enterprises more efficient in the previous Government’s second term. You can read our media statement here.

However, minds must now turn to the race for the leadership. So far Amy Adams, Simon Bridges, and Judith Collins have declared, although there is speculation that Mark Mitchell and Steven Joyce are also considering entering the contest.

The National Party leadership will be determined by a run-off vote among the Parliamentary caucus, with the vote scheduled to take place on the 27th of February.

Leadership

So, who should win?

Members and the media have contacted us asking who the Taxpayers’ Union will be endorsing.

The Taxpayers’ Union won’t be endorsing any of the candidates for the National Party leadership. However, it is important to acknowledge that the leadership race will shape the largest centre right party, and its policy platform, for years to come.

That’s true of any political party – you only need to look at the Liberal Party in Australia to see the difference between the leadership of Tony Abbot and Malcolm Turnbull. Closer to home, we saw very different visions of the Labour Party during their widely publicised leadership races in 2013 and 2014.

Whoever wins this race will have a significant impact on the political landscape, including issues facing taxpayers. We all have a stake in this race.

This contest is not proceeding behind closed doors. Candidates appear eager to prove their chops in the media. This is an opportunity for the public, because, while we may not have a vote on the leadership, we can secure some basic commitments from the candidates.

Here’s are the questions journalists should be asking the contenders:

- Will you retain National’s commitment to cutting personal taxes?
- Will you, in addition to cutting tax, index tax brackets to inflation?
- Will you cut the company tax rate to make New Zealand businesses more competitive on the global stage?
- Will you reverse Labour’s policy of free tertiary education?
- Will you rule out a sugar tax?
- Will you rule out an Auckland fuel tax?

But isn’t this a caucus matter?

Yes, and no.

While it’s true that only caucus members get a vote, Members of Parliament are ultimately accountable to the electorate.

Every National Member of Parliament will have a say in the leadership, and when the next National Party leader only needs 29 people to support their bid, your local National MP could be determinative.

Letting your local National MP know that taxpayers deserve a voice in the leadership could be crucial in shifting votes.

Contact details for all National MPs are available here.


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