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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.

Four months late: Callaghan releases latest spending figures

Callaghan signFive months after it was requested under the Official Information Act, Callaghan Innovation has now released its 2016/17 entertainment expenses.

The bill increased from the previous year, going from $304,675 to $308,969.

It’s another long laundry list of taxpayer-funded purchases, largely of booze, fine dining, and flat whites for Callaghan staff and the bigwigs they entertain.

Earlier in the year, when we expressed concern about the last set of excesses, the public were assured that Callaghan had tightened up its spending policies. In fact, that looks to be a lie.

The Taxpayers’ Union requested an explanation of this policy change, and the date of implementation, but Callaghan has refused to meet with us or provide any information.

Callaghan refused to release the latest round of expenses to the Taxpayers’ Union last year, suggesting it would instead be included in their annual report. As this never came to pass, the Taxpayers’ Union filed a complaint with the Ombudsman. Callaghan Innovation is currently under investigation.

On Wednesday, Callaghan finally released their 2016/17 expenses by dumping them on its website.

Callaghan’s initial failure to release the 2016/17 spending figures allowed some journalists to dismiss earlier examples of spending largess as ‘historic’. We now see that Callaghan’s waste is anything but. This taxpayer-funded agency has a culture of gluttony. Sadly, it’s no surprise that an agency tasked with doling out grants to businesses would have little regard for taxpayer money.

One more note: certain pages of the latest expense figures are presented as images, not text, making it impossible for us to collate or search spending data. So, we asked Callaghan to provide us the information in a text-based format – and they have decided to process this request as another 20-day official information request. This is the same week they complained how many information requests we send them!

Callaghan Innovation claims to be focused on transparency, while using every possible tool at their disposal to withhold information from the public.

The key figures released to the Taxpayers’ Union this week are in the right-hand column:

Actual expenditure

2013/14

2014/15

2015/16

2016/17

Entertainment

205,416

322,172

304,675

$308,969

Domestic Airfares

667,500

875,954

1,014,171

$966,964

Domestic Accommodation/Travel Expenses

556,006

723,973

855,309

$783,621

Overseas Airfares

490,364

478,885

414,305

$402,459

Overseas Accommodation/Travel Expenses

359,314

483,925

308,341

$285,801

The full breakdown of entertainment purchases can be viewed below. We’re encouraging our 32,000 members and supporters to scan these records and see what stands out.

Bill English thanked for service to taxpayers

The New Zealand Taxpayers’ Union expresses gratitude on behalf of its 32,000 members and supporters to Rt Hon Bill English for his service to taxpayers.
 
Under his tenure as Finance Minister and Prime Minister in 2008-2017, the burden on taxpayers reduced, with core Crown revenue as proportion of GDP cut from 32.6% to 30.5%. That is despite having to respond to the Global Financial Crisis and rebuild our second largest city.
 
The tax cuts implemented by Bill English in 2010 were significant and working New Zealanders continue to reap the benefits today.

Partial privatisation, while controversial at the time, has been a resounding success, working to both reduce debt and improve dividend flows by applying market discipline to what were lazy state owned assets.

And with social investment, Bill English has championed value for money in spending on social services.

We wish Mr English all the best for his career after politics.

Bureaucrats schmooze fat cats with your money

CallaghanThe New Zealand Taxpayers’ Union has today released the full breakdown (attached) of Callaghan Innovation’s entertainment expenses for 2015/16.

Earlier this month, we revealed Callaghan spent $304,000 on ‘entertainment’ in 2015/16. We can now confirm this was mostly purchases at cafes, bars and restaurants, and we have obtained receipts and explanations for the biggest purchases, showing booze forms up to 40% of a typical Callaghan dinner bill.

Examples (GST excluded) include:

  • $5,212 on 188 visits to the Beer & Burger Joint, downstairs from Callaghan’s Auckland office
  • $4,298 on lunches and dinners at Marvel Bar and Grill
  • $3,290 at Mojo coffeehouses
  • $2,063 on a team dinner at a drag queen cabaret bar (K Road’s Caluzzi)
  • $1,719 on lunches and dinners at The George Hotel
  • $1,225 on dinners for staff and clients at Da Vinci’s Italian restaurant
  • $1,134 on one dinner with clients at Dunedin’s No. 7 Balmac
  • $869 at a dinner the Kiwifruit Innovation Symposium & Hayward Medal Dinner hosted by Zespri
  • $861 at Empire Tavern on a staff induction dinner
  • $817 on dinner for ‘customers’ at Grand Century Chinese
  • $769 on a lunch and team building function at The Conservatory
  • $508 (GST included) on a dinner for seven at Dockside, including $201 of wine (40% of the bill), plus a $50 tip.
     

Much of this spending is justified as entertaining 'clients' – but that’s absurd considering this agency’s ‘clients’ are actually businesses receiving Callaghan’s taxpayer-funded handouts. These ‘clients’ are already getting taxpayer pork; boozy dinners and latte lunches are just the gravy on top.

One dinner at Wellington’s Dockside came with a $50 tip. Tipping is rare in New Zealand, it’s something you do to flaunt your wealth. So why are bureaucrats tipping with public money?

Callaghan staff are trying to ingratiate themselves with the corporate culture of the businesses they give money to. That would be fine if they were using their own wages, but instead they’re using taxpayer-funded credit cards.

Callaghan's travel costs also ballooning

The Taxpayers' Union has also learned that over $1 million was spent on domestic airfares, and over $400,000 on international airfares in 2015/16.

Divided by 384 staff (as per their 2016 Annual Report), that’s $2,641 in domestic airfares and $1,079 international per staffer – $3,720 per staffer all up. This figure seems extraordinarily high. It's enough money to fly every staffer to London and back, twice, in one year.

Where on earth is Callaghan flying? They already have teams based in Auckland, Wellington, and Christchurch.

The international travel spend is just as bad. Callaghan only operates in New Zealand, but still spent $414,000 on overseas airfares in just a year.

We suspect part of this travel expenditure is for ‘customers’, i.e. businesses applying for grants. This is absurd – these businesses are receiving taxpayer money, now we discover we also pay for their flights, accommodation, wining and dining.


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