Lower Taxes, Less Waste,
More Accountability

Championing Value For Money From Every Tax Dollar

One tax law for all? Apparently not

Go Bus

The other week it was announced that Tainui and Ngai Tahu-owned Go Bus had picked up four South Auckland public transport contracts. Initial media reports suggested that this was not a sign of the best man (or company) winning, but rather the result of a quirk in New Zealand tax law that sees Maori Authorities pay only 17.5% company tax rather than the usual 28%.

In fact, it was worse than that. An article today by the National Business Review reveals that the two owners of Go Bus, Ngai Tahu Go Bus and TGH Direct Investments (owned in turn by Ngai Tahu Charitable Group and Waikato Raupatu Lands Trust) are charitable trusts, therefore paying no company tax at all.

It was later revealed that Go Bus Chief Executive, Calum Haslop, sought to downplay the significance of his business not being subject to company tax:

“It’s really only the last two years or 18 months really that we’ve been an iwi subsidiary. Nothing has changed in terms of our competitiveness. The tax or otherwise question is not something we turn our minds to, and it is not an element in terms of our competitiveness or any reason we’ve been able to win these Auckland contracts.”

The CEO can do all he can to downplay the fact that Go Bus has a significant tax advantage, but for its competitors, paying the usual 28% corporate tax rate, the remarks are fanciful.

Many New Zealanders will be shocked to learn that New Zealand is unique in the Commonwealth in allowing organisations whose membership is defined by blood to qualify as "charitable". We believe that companies should be required to pay taxes, no matter what the racial or ethnic background of their ultimate shareholders.

The only silver lining out of this is that it has once again ignited the debate about tax advantages and ways we can lower the tax burden for businesses. Our research shows that abolishing corporate welfare alone would allow the corporate tax rate to be reduced from 28% to 22.5%. Such a move would significantly improve New Zealand's competitiveness, encourage investment and create more jobs for Kiwis.

When politics is life and death

On Monday I teamed up on Newstalk ZB with left wing commentator Josie Pagani to talk about the 11,000-strong petition calling on the Government to fund the new melanoma drug, Keytruda, and the support the campaign has received from opposition politicians, particularly Labour Party leader Andrew Little.

Codi MorganThe personal stories of people desperate for the treatment are heartbreaking. The latest is Codi Morgan (pictured) who at only 21 is dying from melanoma. He is just the latest to turn to a crowd-funding website to find the $11,000 per month he needs for the treatment which his doctors tell him is keeping him alive.

Of course even if the budget for medicines was doubled overnight, decisions would still be required by Pharmac in order to allocate the resources — inherently difficult when you are trying to maximise the lives saved with what will always be limited resources. The question is therefore who should make these decisions?

Politicians or doctors?

KeytrudaThe costs and benefits of these medicines need to be weighed up in a rigorous, scientific and evidence-based process. Until recently the Pharmac model, where officials independently analysed and worked to get the best health outcomes from taxpayer money spent on medicines, worked well.

Unfortunately the independence of the model is being broken down and it's not the fault of Labour alone. The precedent was set in 2008 when the National Party (then in opposition) campaigned on directing Pharmac to fund the breast cancer medication, Herceptin.

At the time, Pharmac was funding the drug for nine weeks, while National sought to have it funded for twelve months. Pharmac's advice was that there would be no added benefits from further funding the drug, and that the $19 million cost of doing so could be better spent on other medicines.

By campaigning, and then deciding to fund the medication once elected, the National Party allowed the genie out of the bottle. Politics now trumps science.

More drug funding campaigns inevitable

Andrew LittleCoincidently, just before we went on air, Stuff.co.nz broke the story that Mr Little hosted drug company executives at a special dinner in the lead up to Labour backing the Keytruda campaign. This of course is the same Labour Party which criticised Ministers for meeting alcohol industry representatives while the Government was reviewing how it regulates their industry — meetings which, on the face of it, were completely justified.

From the perspective of drug companies, lobbying politicians now makes perfect sense. Indeed, they will no doubt hope that other campaigns are launched for opposition politicians go into bat for them. Worse, by the Prime Minister discreetly putting pressure on Pharmac through the media, the Crown's' bargaining position to get the best possible price from the drug companies is undermined.

This is why we do what we do at the Taxpayers' Union 

One of the strongest arguments for Keytruda and taxpayer funding of other lifesaving melanoma drugs is that Australia and Britain publicly fund the same. It is these sorts of haves and have-nots which result in living in a country which is poorer than the countries we like to compare ourselves to. It is the human face of running public policy settings which have resulted in lower economic growth and a poorer New Zealand.

The Taxpayers' Union uncovers examples of government waste nearly everyday. The $11,000 per month Codi needs to survive is put in perspective by the huge amounts of money we see wasted. Take for example the $140,000 television screen MBIE purchased for their office. Or perhaps the $1.3 billion of corporate welfare we uncovered in the last budget — a sum much larger than Pharmac's $800 million annual budget.

Should Keytruda be funded before other drugs? I couldn’t possibly say. But what is clear is that when the Government wastes our money, they’re wasting money that could save lives.

You can donate to Codi's "Givealittle" campaign here.

MBIE's bad numbers lead to bad policy

MBIE.jpgWe're calling for an apology from the Ministry of Business, Innovation and Employment after bad numbers provided to the Government caused them to approve mandatory insulation requirements for rental properties thinking that the requirements would result in $640 million of economic gains, when in reality they will result in $430 million of net losses for New Zealand households.

A report by Ian Harrison of TailRisk Economics uncovered that a basic error in calculations by MBIE means that the cost-benefit return on the Government's new insulation requirements for rental housing was just 28 cents, not the $2.80 reported by MBIE.

Mr Harrison's calculations are not based on different interpretations or assumptions. Rather they have identified a basic mix-up in the figures that MBIE plugged into its cost-benefit modelling. This mistake lead to a completely fictitious result.

TailRisk Economics is the same consultancy that first blew the whistle on the Department of Building and Housing's analysis of earthquake prone building risk. Since then the Government has completely changed course, thanks largely to Mr Harrison's advice being accepted as correct. It looks like the Government has been caught short again on basic economic calculations.

It seems highly likely that the Government would not have plowed ahead with the new insulation requirements had Minister been in receipt of the correct figures. Their decision last year imposes costs of $430 million even after the benefits of the scheme are factored in. MBIE's bad numbers have in effect imposed an enormous regulatory tax on New Zealand landlords and renters at a time when housing is becoming increasingly expensive.

We have called on MBIE to explain how it is that this sort of blunder could have happened, and whether they are looking to hold officials accountable over this expensive error.

Our question for Minister Joyce is this: why aren't systems in place to prevent these sorts of expensive errors?

You can download the MBIE advice here, and the TailRisk report here.

UPDATE: Government stands by numbers, but our advice is that TailRisk is right

Fairfax is reporting that the Government is standing by its numbers, so we had our Research Fellow, Jim Rose, take a look.

According to Mr Rose, in a nutshell, the wrong number was put into table 22 (page 48) of the MBIE report, which gives the annual benefits per household. $439.95, the net present value of lives saved, was transferred from page 39 rather than $127.92 from page 38, which was the annual benefit of lives saved. 

So MBIE used five years of $127.92 benefits to calculate a net present value ($439.95) but then used the latter figure to calculate a new net present value based on $439.95 of benefits every year for 30 years.

 

Revealed: Speaker's warning to Labour over Parliamentary funds

We are blowing the whistle on the apparent misuse of taxpayer-funded Parliamentary resources by the Labour Party.

Andrew LittleSome weeks ago Labour sent an email in the name of Paul Chalmers, the Project Manager at Labour House, to Labour's Auckland supporters detailing how Andrew Little had opened a Auckland office that will be "the centre of the Labour and progressive movement in Auckland and the place to co-ordinate the local government and General Election campaigns."

The email also called on "like-minded partners" to share office space and other facility resources.

It appears that Andrew Little and his MPs are pooling together taxpayer resources to open a campaign office in central Auckland for the Party and Phil Goff’s campaign for the Auckland mayoralty. Use of taxpayer resources in this way is clearly against the rules.

The Speaker has confirmed that the Parliamentary Service will be monitoring Mr Little's spending and has written to him setting out the rules for taxpayer funded out-of-Parliament offices.

Speaker David CarterWe’ve expressed concern before that Mr Goff intends to be paid as an MP in Wellington, while he is campaigning for a new job in Auckland. This letter from the Speaker suggests that he too is concerned with MP’s taxpayer funded resources being misused for political purposed in Auckland.

While it is good news that the Speaker has written to Mr Little as a result of us bringing this to the Speaker's attention, we think this sort of behaviour is precisely why Parliament should be subject to the Official Information Act, like almost every other public body which spends our money.

Politicians have a bad habit of using taxpayers' money for political campaigns to protect their own jobs. In 2005 the Electoral Commission referred Labour to the Police after finding that the Party had spent $446,000 of taxpayer money on pledge cards, as part of their election campaign in the lead up to the general election that year.

The original email, and the correspondence between us and the Speaker, is below.

Auckland motorists already paying plenty

We are hitting out at renewed calls to introduce a new motorway or congestion tax for Auckland and calling on the National Party to stand by its election promise and rule out new taxes.

The proposal would require the National-led Government passing legislation to allow Auckland Council to tax motorists.

With Aucklanders paying less than $1.85 per litre for petrol, more than half of what we are paying at the pump is tax. Add a potential motorway toll to that and there is little doubt that motorists are being treated as cash cows.

Auckland Council piled on to rates a last minute transport levy last year and now politicians want motorists to stump up even more. The National Party would be breaking a promise if they let them do it.

Along with our sister organisation Auckland Ratepayers’ Alliance, we have called on Auckland local body candidates to find efficiencies and cut wasteful Council spending before proposing any increased charges. 

Fuel tax

LINZ charging excessive fees

Today we revealed that Land Information New Zealand has overcharged New Zealanders by $40 million for its "Landonline" service, despite the requirement that it is to function on a cost-recovery basis.

Data from LINZ shows the account as having a forecast surplus of $40.284 million at 1 July 2016.

Landonline is the LINZ service used to change and order copies of land records. When Kiwis buy or sell a home, they are being forced to pay well in excess of the costs need to run the service. Housing already costs enough in New Zealand without the Government clipping the ticket on the way through. It's not right.

Government agencies are required to operate these monopoly services on a cost-recovery basis. LINZ appears to be ignoring that.

We are calling on the Minister for Land Information to ensure her officials cut the costs of Landonline and stop price gouging for access to this core government service. 

Q&A

What is Landonline?

Landline is the transaction centre for carry out land dealings online. Every time a real property is sold in New Zealand, the record is entered into Landonline. More information can be found here.

What are the current charges?

Licence fees vary between $511 and $1022, a breakdown for fees can be found here. These fees are passed onto sellers and vendors of real estate.

Why is there a surplus?

The surplus is due to Land Information New Zealand charging more for the service than it costs.

Why is making a profit on Landonline inappropriate?

Landonline provides a service, which costs money to run, but over which the government holds a monopoly. When fees are set higher than what is required for the service, the government is making money from a monopoly service.

How did the Taxpayers' Union find out about the Landonline surplus?

The Taxpayers' Union runs a confidential tipline for New Zealanders to dob in government waste and rorts. Late last year a concerned member of the public approached us about LINZ's excessive fee charging. 

What is a memorandum account?

Memorandum accounts record the accumulated balance of surpluses and deficits incurred in the provision of certain outputs on a full cost-recovery basis. These accounts are used to separately disclose the cost of such outputs over the years, given that such information would otherwise just be aggregated as part of an entity's financial position. 

In general, full cost-recovery (including the capital charge) applies where departments supply services to third parties in the absence of competition or under a statutory monopoly. 

Except where prior approval for alternative arrangements has been obtained from Treasury, departments must use memorandum accounts to record the accumulated balance of surpluses and deficits incurred in the provision of third-party fully cost-recovered outputs.

What should happen now?

The fees charged for users of this service should be reduced to a point where the surplus is distributed and it is operating on a cost-recovery basis, in accordance with Treasury’s advice.

 

Upper Hutt Mayor responds to criticism

hairdresser_1_.jpgOver the weekend we revealed more Upper City Council corporate welfare 'economic development' grants amounting to $375,000 of ratepayers’ money. Joining Burger Fuel, grant recipients include Subway, Vogue (a clothing store), Bed Bath and Beyond, and even a hairdresser!

Stuff.co.nz covered our comments here:

"It is economic trickery benefiting only the favoured businesses.

"Take the example of Prodigy Hair. There are at least 29 hairdressing firms in Upper Hutt, but the council picks this one out for a handout."

Previously, the council defended its corporate welfare scheme on the basis that it was creating jobs, Williams said.

"Of course the politicians and officials ignore that every cent is drained from the very community they are claiming to help. It is intellectually dishonest. 

"Upper Hutt ratepayers are smart enough to see that this isn't economic development, it's robbing the poor to pay the rich."

To respond, Mayor Wayne Guppy spoke to Newstalk ZB's Larry Williams tonight just prior to the political Huddle with our Executive Director Jordan Williams and Vernon Tava.

 

Corporate welfare for hairdressers?

Back in June we slammed Upper Hutt City Council for giving a $32,000 Business Development Support grant to listed fast-food retailer BurgerFuel to set up a shop in the City. Now we can reveal that Subway, a hairdresser, a cinema and even a Bed Bath and Beyond also received ratepayer-funded grants.

So far in the 2015/16 financial year, Upper Hutt City Council has spent more than $160,000 of ratepayers’ money on subsidies to eleven businesses.

Taxing people more through rates for corporate welfare isn’t economic development, it is economic trickery benefiting only the favoured businesses. Take the example of Prodigy Hair. There are at least 29 hairdressing firms in Upper Hutt and surrounding area, but the Council picks this one out for a handout.

Previously the Council has defended this corporate welfare scheme on the basis that the Council is creating jobs. Of course the politicians and officials ignore that every cent spent on these initiatives is another cent taken out of the community they are supposedly helping. It is intellectually dishonest.

Upper Hutt ratepayers are smart enough to see that this isn’t economic development, it’s robbing the poor to pay the rich. The Mayor, Wayne Guppy, needs to explain how sucking money out of a community to spend it on a favoured business is justified. 

List of recipients of Council grants:

  • Subway Main Street
  • Maidstone Sports (The Mall HCSC Ltd)
  • Vogue on Geange
  • Vogue (The Mall HCSC Ltd)
  • Bed Bath Beyond (The Mall HCSC Ltd)
  • Udy Contracting
  • Blue Pencil
  • Prodigy Hair
  • BurgerFuel
  • Miro Cinema
  • Fets (Fire and Emergency Training Solutions)

Upper Hutt City Council refused to divulge how much funding each firm received.

Mayor Wayne Guppy was interviewed on Newstalk ZB, who then asked our Executive Director, Jordan Williams, for his thoughts on the programme. You can listen to the interviews below.

 

Government Ministers too posh to fly Jetstar?

The Taxpayers’ Union can reveal that Ministers are not practicing what they preach in their apparent support for more competition in New Zealand’s skies. 

In August, Economic Development Minister Steven Joyce and Transport Minister Simon Bridges welcomed Jetstar’s expansion into the regions. But despite the apparent support, it appears than not a single minister took a Jetstar flight that month. Not even one.

While the Government crows about how Jetstar means better value for consumers, we asked for a breakdown of all taxpayer funded flights taken by Ministers that month. The data reveals that of the $74,503 spend on domestic flights in August alone, not one dollar was spent on the cheaper flights. 

Some would say that politicians prefer Koru lounges and canapés than roughing it for a short flight with the rest of us. Others might just prefer Ministers practiced what they preached. 

Flights charged in August for Ministerial domestic flights. Costs are GST exclusive.

Minister

Cost of Domestic flights
August 2015 ($)

Rt Hon John Key

2,207

Hon Bill English

3,302

Hon Gerry Brownlee

1,751

Hon Steven Joyce

3,705

Hon Paula Bennett

3,029

Hon Dr Jonathan Coleman

3,264

Hon Amy Adams

2,426

Hon Chris Finlayson

2,416

Hon Simon Bridges

3,595

Hon Hekia Parata

3,261

Hon Anne Tolley

3,316

Hon Dr Nick Smith

6,297

Hon Murray Mccully

731

Hon Nathan Guy

2,433

Hon Nikki Kaye

2,305

Hon Tim Groser

1,415

Hon Michael Woodhouse

3,172

Hon Todd Mcclay

2,776

Hon Peseta Sam Lotu-liga

2,601

Hon Maggie Barry

2,220

Hon Craig Foss

2,750

Hon Jo Goodhew

2,741

Hon Nicky Wagner

3,646

Hon Louise Upston

2,621

Hon Paul Goldsmith

1,955

Hon Te Ururoa Flavell

3,562

Hon Peter  Dunne

1,006

Tobacco tax hike: It’s all about the money

Cover page

Over the last 12 months we’ve had a number of members who smoke ask us to examine the issue of tobacco taxes.  So to coincide with today’s 10% hike in tobacco excise we’ve released a report examining the issue.

Smokers have become the political punching bag over the decade with the current Government hiking excise taxes nearly every year under the guise of health concerns and to pressure low income New Zealanders to give up the habit.

Our members who smoke often feel as though they are treated as cash cows. Our research shows that their concerns are justified, with government tobacco excise income around three times the estimated cost of smoking to our health system.

The report details the effect of tobacco excise increases, the failure of the Government to legalise the sale of healthier alternatives which would minimise harm, and the misuse of taxpayers' money given to not-for-profits which lobby the government.

Politicians claim higher tobacco taxes are necessary to promote better health, but the Government has prevented the sale of new generation smoking alternatives such as e-cigarettes which are 95% less harmful and are the most popular smoking cessation tool used in England.

While politicians cry crocodile tears about the harms of smoking, they are refusing to allow the sale of healthier alternatives. It appears the only reason is to protect the revenue stream from the taxes on traditional cigarettes.

From today, a $20 20-pack of cigarettes includes nearly $16 dollars of tax

cigarette-tax.jpg

It makes a complete mockery of the National Party’s election promise not to increase taxes.

Increases in tobacco excise tax are often held up as interventions that are effective at reducing consumption amongst low socio-economic groups. However, significant tax increases have coincided with an increase in the socio-economic smoking gradient. Counterintuitively, the poor are the least likely to respond to tax hikes. That means they, and their families, go without.

Just because a consumer base is poor, it does not mean that the Government is any more justified in making consumer health choices for them. Worse, increasing taxes well in excess of the health costs of tobacco, knowing that they are being paid by those least able to afford it, is morally questionable.

Excise_tax_revenue.jpg

Even anti-smoking group ASH’s own expert estimates that tobacco excise tax is around three times the actual costs to the public health system caused by smoking (and that was before today's tax hike).

The report also examines the work of ’sock puppet’ lobby groups – those which are funded by the government to lobby the Government.

Every year the Ministry of Health waste tens of millions of dollars on tobacco groups that aren’t actually helping smokers quit. Instead they’re running political campaigns to lobby the government for higher taxes and more controls.

Take ASH for example. Here is a group which is 95% taxpayer funded which openly works with the Maori Party to lobby the Government for higher taxes and more tobacco controls. If the shoe was on the other foot and the Government was funding property groups to campaign for RMA reform, the Maori Party would be justifiably outraged. This is no different.

Every dollar wasted on taxpayer funded political campaigns is one less for frontline health services.

Q&A

Why a report on tobacco tax?

Tobacco excise taxes increase by 10% on 1 January 2016. Tobacco duties and excise tax revenue, which has increased by almost $450 million since 2009, now accounts for about 1.4% of total government revenue.

How much of the retail price of tobacco is tax?

As of 1 January 2016, excise tax accounts for around 66 cents per cigarette. For a 20-pack of cigarettes which may retail for $20, excise tax accounts for $13.33. After adding the 15% GST to the total, it means for every $20 20-pack of cigarettes, the government takes $15.94.

What are the report’s key findings?

The report details tobacco control measures since the 1980s and shows:

  • Smokers are paying more in tax than ever before, with almost $16 of combined excise tax and GST per $20 20-packet of cigarettes
  • Tobacco excise and duties now account for 1.4% of government revenue 
  • E-cigarettes have been found to be 95% healthier than traditional smoking and are the most popular smoking cessation tool in England but remain illegal to sell in New Zealand
  • The Ministry of Health is funding 'sock puppet' political campaign groups that use taxpayer money to lobby the Government

What are the report’s recommendations?

  1. A moratorium on tobacco tax increases until reviews can be undertaken on:
    1. the risks of an Australian style illicit tobacco problem developing in New Zealand; and
    2. the potential harm reduction in lifting New Zealand’s blanket ban on the sale of e-cigarettes and other new generation tobacco products.
  2. An independent review of Ministry of Health funding of tobacco lobby groups to ensure that taxpayers are receiving value for money.
  3. Extending the Official Information Act to cover those not for profit organisations which are majority taxpayer funded.

Mexican sales falsehood continues to be repeated by anti-sugar lobby

This weekend TV3’s The Nation looked at excise taxes and specifically whether the sorts of taxes we impose on alcohol and tobacco should be extended to sugar, fats, or junk food.

Professor Nick Wilson from Otago University is quoted in support of imposing a sugar tax (among others) and tells Torben Akel that:

“A ten percent price increase, as in Mexico has produced, roughly, a ten percent reduction in sales.”

Fizzed-out.jpg

This isn’t the first time this claim has been made by New Zealand academics campaigning for a sugar tax. Back in July we published a report by Joshua Riddiford which not only looked into the merits of a sugar tax, but showed up the falsity of the ‘it’s working in Mexico’ claims.

Our report published Nielsen sales data (showing actual volume sales) for the first time publicly. It showed actual industry sales before and after the implementation of the Mexican tax. The Nielsen data shows that Mexican sales of sugar sweetened beverages have barely moved after the sugar tax.

Sales are sales – surely the numbers don’t lie

Repetition of the same sound bite doesn’t make it true. The favoured study used by public health academics (and other campaigners) was funded by a pro-sugar tax campaign group and is based on surveying Mexican consumers on their expressed preferences. The real sales data shows that despite what people tell researchers, the Mexican sugar tax caused a drop of consumption of only 0.2% which as since bounced back.

wilson.jpgAcademics are supposed to promote informed public debate. Instead, there appears to be continuation of an activist political campaign based on misinformation and bias. Choosing to ignore the sales data which is clear suggests either failure to stay up to date with evidence, or deliberate misrepresentation. 

Expressed preferences are often skewed. For example, when you ask people how often they use local libraries, they inflate reality. Here, people have told researchers they are reducing their consumption of sugary drinks when the sales data shows that not to be the case. Sales figures don’t lie, but people do, and it’s misleading to rely on a survey study when gold standard Nielson sales data is available.

We all agree that obesity is a problem, but the evidence is that sugar taxes raise a heck of a lot for politicians while hurting the poor, but do very little to help those over-consuming. As a precaution, and to give Professor Wilson the benefit of the doubt, we'll be sending him a copy of our report on Monday.

Click here to access or read a summary of Fizzed out: Why a sugar tax won’t curb obesity.

Jim Rose: The low skilled won't be hired for living wage jobs

The Taxpayers' Union and the Wellington Chamber of Commerce are mulling legal action against the Wellington City Council's decision to restrict it choice of security contractors to those paying a 'living wage'. We've told the the National Business Review that if the Chamber don't, we will almost certainly hold the Council (and Councillors) to account for deliberately ignoring its own legal advice and plowing forward with a measure that imposes more costs on ratepayers, including those earning minimum wage, for absolutely no gain. Click here to read the media coverage.

Our Research Fellow, Jim Rose, has written the following analysis of the decision from an economic perspective. 

Chairman's Address and Report to the 2015 AGM

When we launched the NZTU back in November 2013, I remarked, echoing Churchill, that this was not the beginning of the end, or even the end of the beginning.

It was in fact the beginning of the beginning. Now two years ago, we can see how far we have come, but we can also see how much further we have to go.

The distance we have travelled is to turn an idea, more correctly an ambition that burned hot and hard in the minds of Jordan Williams and David Farrar, into something real and tangible. The organisation exists and is active and achieving. It has full time and part time staff, volunteers and interns, members and supporters.

David and Jordan wanted an organisation that would advocate for taxpayers, the ultimate and really the only source of government revenue.

They wanted an organisation that would cry, hoi …that’s not right or not fair on those who were wasting money on their own vanity and comfort, on projects that didn’t achieve what they set out to achieve, and on the never ending claims made on the taxpayers’ wallet for ever more spending. And for taxpayers include ratepayers and others who have to pay because they have no choice.

I think we have delivered that. We have exposed stuff, drawn attention to rorts and snouts in the trough, to excessive spending, and to extravagance wherever we have found it. The $6 million plus house for our consul general in Hawaii is only the latest example. Grooming lessons for Auckland Council staff, and a hair straightener for MBIE staff ($409.25) all cost money and reflect a culture that says it’s already to be profligate with someone else’s money. That someone else in this case is the long suffering taxpayer or ratepayer, and we have had enough.

It’s not all point and shout. We have tried to develop a reasoned critique around spending. We have argued from a principled and a factual basis that the billion dollars worth of corporate welfare this government dishes out each year doesn’t produce good results, is unnecessary, plays favourites and most seriously of all, the very practice of grants and subsidies to so called emerging businesses says that bureaucrats and ministers are better at picking winners than investors and entrepreneurs in the marketplace are. That’s just nonsense.

And there is more to come. One publication now in its development stages is an alternative economic strategy. We’ve called it Plan B. It sets out what we and a bunch of very reputable economists and business leaders think the government should now do to improve our economy. It’s a ready-made agenda for reform, which we intend to use to argue for positive changes to improve growth and prosperity.

We will also be making specific points about the sale of some government assets, actually they are government liabilities for which there is no business case for the taxpayer to own, and to continue dumping money into. And we will also be giving the government some advice about how to spend the budget surplus, now that it has turned up.  

Our view – unsurprisingly – is that hardworking New Zealanders ought to get most of the surplus given back to them in tax cuts. It can hardly be the case that governments know how to spend money better than ordinary people.

If there is a surplus it is because the government has taken too much from us. The answer is simple. Give it back. We will be saying why, and putting forward some ideas about how.

2016 looks bright for the Taxpayers Union. We have created Auckland’s largest political movement. The Auckland Ratepayers Alliance has over 14 thousand members, more than the Green Party and very close to the reported  membership of the Labour Party across the whole country.

And those people are going to be active in trying to unseat the gang of nine, those councillors who voted for a nine percent plus increase in rates for the average Auckland household.

They are going to feel the heat, and we will be backing the ARA to defeat as many of them as possible. Auckland needs sensible government that lives within its means, not continuing extravagance that raids the ratepayers’ pocket whenever the council’s coffers run low.

Always, but always, we know that we depend on the support and generosity of our supporters and members. We are always grateful, but we are also almost always desperate as well. Donating to causes and charities is the ultimate act of discretionary spending, but without continuous support we will simply not survive and be able to do the work that so much needs to be done.

I urge you all not just to dip into your pockets once, but to sign up for an ongoing commitment, monthly, quarterly or whatever suits you best. We can then see a positive cash flow into the future, which not only gives us comfort to proceed with projects, it also tells us that we are doing the right things, the things our members want us to do. Of course if you can manage a more substantial donation once or twice year, that is even more welcome.

Many of the groups that we battle against can go to government agencies and get taxpayer funding to lobby the government for their causes. That path is closed to us, which means we rely on people like you. You have not let us down, and we want to continue to make you happy in what we do and in what we achieve.

Finally may I thank very much my fellow board members, David Farrar, and Gabrielle O’Brien and our executive director Jordan Williams and various other staff members, volunteers, contributors, all of whom have given freely of their time and talent. I applaud you along with our members and supporters for keeping the NZTU alive and well through another eventful year.

 

John Bishop
Chairman
New Zealand Taxpayers’ Union

20 October 2015

WCC legal challenge

The Taxpayers’ Union is currently considering legal action against Wellington City Council following the council voting to extend the so-called living wage to private contractors.

Like others, our initial legal advice is that the Council is highly likely in breach of the Local Government Act which requires Council to provide services in the most efficient manner. If the property and business groups decide against seeking judicial review of the Council we are almost certain to do so.

Our main hesitation is that the Council may throw good money after bad to defend the decision. But that might be a necessary evil to act as a reminder to councils throughout the country that they are required to be prudent stewards of ratepayers’ money.

Choosing to pay someone more than is necessary for him or her to do the job does not alleviate poverty. Charging people on the minimum wage more money in rates so the Council can pay higher wages is expensive virtue signally with ratepayers picking up the bill. Why should those working for the minimum wage pay more in rates for councillors to feel good about themselves?

Our Chairman, John Bishop, was recently interviewed by Mark Sainsbury on RadioLive about our likely legal challenge. John explains our opposition to the move and why the Council should stay out of the affairs of a private company. Audio available here.

David Farrar has obtained a transcript of the Wellington City Council’s CEO advising Councillors against the move, which is available on Kiwiblog. 

$80,000 taxpayers dollars for meaningless waffle

images-2.jpegThe Government is giving $80,000 (labeled a "Community Development Scheme" grant) to the Methodist Mission for the following:

The key outcome for the project is the development of a greater sense of community within the inner city. The project’s goal is to harness this energy to empower residents and the broader community to self-identify and achieve their aspirations. 

Talk about an easy gig. For $80,0000 who wouldn't harness energy and be empowered to self-identify and achieve aspirations – whatever that means? It’s the sort of Government spending waffle that usually goes unnoticed, but adds up and needs to tackled.

Many of the grants under the Community Development Scheme are services the Ministry of Education or Health should be providing anyway. Instead of funding good quality core government services, these grants blur the line between community efforts and government funded services. It may even come at a cost to community involvement, fundraising and philanthropy.

One of the reasons New Zealand’s communities are poor is because they are over taxed. Only politicians could think that that ‘development’ means taxing more more so that they can play Santa Claus and give dollops of cash to groups offering these sorts of platitudes. If a community groups wants to tender for something a community needs good on them, but the Government should be funding specifics, not aspirations.

Below is a list of this year's grants (each for $80,000).

Taxing the ill

DHBs charging millions for patients to park

web_image.jpgOur new briefing paper on public hospital parking charges reveals that District Health Boards are raking in nearly $15 million per year in parking charges at New Zealand’s public hospitals.

The information has been compiled from Official Information Act requests shows that more than $44 million has been levied since the 2012/13 financial year. The Paper shows that of the twenty DHBs, seven (Northland, Hutt Valley, Mid-Central, Capital & Coast, Auckland, Waitemata and Waikato) charge patients for parking at one or more of their hospitals.

Taxpayers have already paid for the construction of the hospital and the car park. Why must they pay twice when they are unfortunate enough to have to make use of the facilities? Talk about kicking someone when they are down.

Parking taxes at hospitals punish those who are ill and may well be on benefits. The last thing that a patient should have to worry about if they are attending for treatment is whether there is going to be a penalty notice waiting for them when they return to their vehicle. Often patients won’t know how long their treatment will last and therefore how much to put in the meter.

While modest charges may make sense in large city hospitals where good public transport is available, we think for places like Northland, where patients often travel considerable distances, hospital parking fees are are a nasty revenue gathering tool which should be abolished.

When New Zealanders are ill or suffering from a family emergency, the last thing they should have to worry about is whether or not they have enough spare change for the DHB's car park.

View the paper below, or download here.

Guest post: GST on online purchases

Greg Harford, the General Manager of Public Affairs at Retail New Zealand has drafted the following on proposals to reduce the threshold for GST for imported goods purchased online.

Many people agree that tax is a necessary evil that we need to provide core Government services. Many people also think that, if we have taxes, they should be as low as possible, and enforced both fairly and consistently.

Retail NZ was interested to see that the Taxpayers’ Union is running a poll on whether the Government should reduce the threshold at which GST is collected on imported goods. At the moment, a loophole in the law means that if you buy $399 worth of books from your local bookshop, you pay GST, but if you buy them from a foreign website, GST is not paid. This means that those shopping in local stores pay more than their fair share of GST, while those shopping online from offshore don’t pay their share. It also means that the New Zealand Government is effectively applying a reverse tariff against New Zealand businesses, and that it’s harder for Kiwi firms to compete for Kiwi business.

Retailers have long argued that the Government should close this loophole. New Zealand (and Australia) are well out of line with international best practice on this, and it is time for change.

It has been suggested that the arguments against this are that collecting GST would be administratively burdensome, that the tax collected may be less than the cost of collection, and that consumers will be forced to wait longer for the delivery of products.

The administrative question is a bit of a red-herring. Retail NZ and Booksellers NZ have been lobbying for the GST registration of foreign companies selling to New Zealand – so GST would be collected by foreign websites in exactly the same way that it is collected by New Zealand-domiciled retailers. This would largely remove administrative cost (the cost would be no different to the costs imposed on domestic businesses), ensure that the tax collected is greater than the cost of collection, and ensure that most goods would flow freely across the border, without delay or inconvenience to consumers.

The big foreign etailers are all in a position to “switch on” sales tax collection for New Zealand (they do it for some other jurisdictions). If the major etailers registered for GST, this would mean that GST would be collected on the vast majority of items imported into New Zealand.

The current process may, however, be required for goods purchased from boutique companies that do not register for GST. However the volume of items processed in this way is expected to be very small. This would, we expect, lead to a substantial reduction in costs to Government overall, which would be good news for taxpayers.

No tax system is perfect. GST is not a new tax. It has long been a tax on the consumption of goods and services in New Zealand. Some people may wish to have an argument about whether GST is a fair or appropriate tax system for our country. But if we have such a tax, it should be levied universally, irrespective of where the transaction takes place.

I was slightly concerned to read in a Taxpayers’ Union email that foreign websites could be banned from trading in New Zealand. To my knowledge, this has never been mentioned in the debate either here or in Australia, and we would certainly not support such an approach. We are not against online shopping, but we are concerned about a tax that is unfairly applied and seriously disadvantages New Zealand businesses.

Our point in relation to the 'banning' of foreign websites is that it is the inevitable conclusion if a foreign domicile website (say one offering music downloads) simply refuses to apply NZ's tax law. We of course hope that it never happens!

First sugar taxes, now meat, dairy, and even bread

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Within hours of our release of our latest report paper examining why sugar and other food taxes don't work, Auckland University has published a report calling for new food taxes which looks to be the most ridiculous yet.

Auckland University academics are calling for a 20% flat rate tax on bread; breakfast cereals; processed meat; fresh beef, lamb, hogget, and poultry; all take-away foods; butter; cakes; biscuits; cheese; cream; pies; pizza; sauces and condiments; milk; ice cream; yoghurt; and eggs.

The University’s press statement says that "Maori and low-income New Zealanders are most likely to benefit from these policies”. 

We are dumfounded that ivory tower academics could think that taxing staple foods will help the poor. We had to call Auckland University to check that this wasn’t a hoax. They even want to tax fresh milk, eggs, and meat.

Ramping up taxes on basic staples under an arrogant guise of helping the poor is surely a cruel joke. Pulling numbers from secret computer model and boldly claiming that it will be the amount of ‘lives saved’ is political advocacy, not academic research.

Given the mistruths and fundamental flaws the Taxpayers’ Union is beginning to uncover, Auckland University should be reining in its public health unit before this whole issue becomes an embarrassment for the University. For example, our paper shows that the claims being made by Auckland University's activist academics of a 12 per cent drop in Mexican soda sales since that country implemented a soda tax are false. Actual sales figures, collated by Neilsen and published in our report show that Mexico’s tax has had virtually no impact on the volume of sales. 

The Taxpayers’ Union report, Fizzed Out: Why a sugar tax won’t curb obesity, is available here.

Links:

Update: Food and Grocery Council have just issued this media release largely agreeing with us

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Press Release: 9 July 2015 

Auckland University wants to tax bread, cereal, meat, eggs and milk 

A call by Auckland University academics to tax New Zealand families’ staple foods such as bread, milk, eggs and meat is lunacy, says NZ Food and Grocery Council Chief Executive Katherine Rich.

“Over the past two years, the Universities of Otago and Auckland have called for new food taxes on salt, fizzy, sugar generally, fat and saturated fat.

“But what’s new in today’s announcement, and buried in the small print, is a 20% extra tax on the staple foods that New Zealand families rely on – bread, breakfast cereals, eggs, cheese, milk, beef and lamb.  These foods are an important part of a healthy and balanced diet for most New Zealanders.  

“The academics’ computer modelling might look sophisticated and compelling in theory, but it’s a computer model. The number of lives they claim will be saved by introducing such a tax is just a prediction.

“What is not a prediction is that slapping taxes on will not change people’s eating or drinking habits unless those taxes are very high.  This has been proven around the world.

“What would be very real would be higher food costs for all New Zealand families due to the relatively inelastic demand for important staple foods. 

“Based on sales of these foods over the past 12 months, at the very minimum these taxes would add $1 billion a year to families’ grocery bills. To give some specific examples, these taxes would generate $40 million from taxing eggs, $92 million from milk, $56 million from breakfast cereals, $90 million from bread, $74 million from cheese, $40 million from butter and margarine, and $70 million from sausages and other packed meats.   And that’s just supermarket sales. Kiwis buy their groceries in lots of other places, too.” 

Mrs Rich said suggesting a tax on milk, cheese, butter and yogurt was ironic given that for the past few weeks New Zealanders have been discussing the price of dairy foods.  

“There is also a stark truth behind these tax ideas. If these taxes were levied at a high enough rate and they did actually change behaviour, they would do so only by making a huge part of the weekly grocery shop unaffordable for many New Zealand families, particularly our poorest.

“The researchers, surprisingly, said in the media today that these taxes would help people on low incomes. I would like to see them try to explain to some of New Zealand’s poorest families why they should pay more for their bread, eggs, cheese, mince and milk. I suspect some of their academic theories promoting hiked grocery prices for everyday food necessities will not be well received by the public.”      

New report on why a sugar tax won't curb obesity

The Taxpayers’ Union is today launching a report which corrects the recent claims of New Zealand campaigners about the effectiveness of sugar taxes in curbing obesity.

The report contains Nielsen sales data, which is being publicly released for the first time in New Zealand. The data shows that Mexican sales of sugar sweetened beverages have not moved, despite the introduction of a sugar tax. While Auckland University’s public health activists are choosing to use interview data which supports their campaign, the real sales data does not lie.

Fizzed out: Why a sugar tax won’t curb obesity, sets the record straight, and examines honestly whether taxes on food and drink, such as that introduced in Mexico, are likely to reduce consumption and affect obesity rates. 

Key findings:

  • Fizzed-out.jpgOnly 1.6 per cent of New Zealanders' total energy intake comes from the added sugar content of sugar sweetened non-alcoholic beverages
  • New Zealanders' consumption of sugar and sugar sweetened beverages is trending downward
  • New Zealanders are still getting fatter despite consuming less calories, suggesting that we’re not burning as many calories
  • Sugar taxes hurt the poor and do not result in the decreased consumption tax-supporters claim
  • Similar taxes overseas have not worked - Mexico’s tax on soda resulted in no decrease in consumption, despite recent claims to the contrary by New Zealand campaigners
The report's author, Joshua Riddiford, sums up the politics of food and drink taxes in his executive summary:

Proposing a 20 per cent tax on sugar, as some groups have suggested, appears to be more about value judgements on sugar than actually helping New Zealanders towards better health outcomes.

Christopher Snowdon of Britain’s Institute of Economic Affairs, has written a foreword to the report which concludes:

A sugar tax is attractive to politicians because it allows them to engage in mass pick-pocketing with a sense of moral superiority.

It is not good enough to say that anything is worth a try in the campaign against obesity. A policy that is known to incur significant costs without reaping any measurable rewards is a policy that should be rejected.

The report which can be viewed below or downloaded as a pdf. Hard copies are also available on request.

MBIE revoke offer to meet

The head of the government department that spent $140,474 on a TV screen, $67,339 on a sign and $5,480 on an arts consultant for its new Wellington offices, has retracted an offer made to the Taxpayers’ Union to meet about the Ministry’s spending.

After we expressed public concerns last week about the Ministry's spending, MBIE officials told us that the CEO, David Smol, would be willing to meet and discuss the wasteful spending within the Ministry. Now the media heat has died down, they refuse to talk.

We wanted to have a serious meeting away from the media to constructively engage on how the Ministry is spending taxpayers’ money. Instead of keeping their word, the Ministry is once again running from accountability.

Below is the video of Porky presenting a Taxpayers' Union Certificate of Achievement in Government Waste to the Ministry's Head of Communications. On the video he can clearly be heard saying that the CEO would meet with the Taxpayers' Union to discuss wasteful use of taxpayers’ money...

Porky presents waste award to MBIE officials

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Porky, the Taxpayers’ Union government waste mascot, this morning visited the Ministry of Business, Innovation and Employment to award a Government Waste Certificate of Achievement to David Smol, the Ministry's Chief Executive, for the Ministry’s extraordinary lavish office fit out.

After some waiting, Mr Smol failed to front, but an MBIE official accepted the award on his behalf (high quality versions of the images below video of the award ceremony are available on request).

This spending is an absolute disgrace and not the first time MBIE has given the middle finger to taxpayers. First there was the $67,339 sign, now the $140,474 television, but they also spent $5,480 on a consultant just to advise what art was best for the office.

This is a Government department behaving like a Madison Avenue advertising agency. The award is to recognise the achievement of wasting so much of other people's money.

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Why is there no accountability for these repeated mistakes? Who below the Chief Executive could possibly have authority to sign off on a $140,000 TV screen?

The decision maker should be sacked, or Mr Smol should do the honourable thing and fall on his own sword.

 

 

New report: Corporate welfare in the 2015 budget

Any new kids in the trough?

Corporate welfare in Budget 2015 will cost the average New Zealand household more than $750.

Any new kids at the trough? a report by Jim Rose launched today, collates all of the corporate welfare in Budget 2015. The report updates our previous report, Monopoly Money: the cost of corporate welfare since 2008.

The new report shows:

  • Corporate welfare will cost taxpayers $1.344 billion this year, up from $1.178 billion in Budget 2014

  • The amounts are the equivalent to $752 (Budget 2015) and $663 (Budget 2014) per household

  • The largest item of corporate welfare is still KiwiRail which has cost taxpayers $13.2 billion (including write downs) since 2008 with still no sign of the ‘turn around’ National promised soon after it was elected to office.

  • ‘Economic development’ is the second largest category of corporate welfare, including a $115 million appropriation for NZTE 'international business growth services’ which saw the controversial ‘Agri-hub’ given to a Saudi farmer.

  • The fastest growing area of corporate welfare is the ramping up of taxpayer funded grants to agriculture businesses wanting to install irrigation.

Corporate welfare is where politicians try to pick winners and the taxpayers lose. It robs middle class taxpayers to reward the well off and politically connected. For every dollar spent on corporate welfare, there is one less dollar for education, health, or investment by the taxpayer who earned it.

The report includes a forward by Matthew Elliott, Chief Executive of the London-based business group, Business for Britain. Mr Elliott has been in New Zealand as a guest of the Taxpayers’ Union and told media:

Many of the business subsidies and corporate handouts this report exposes are more suited to an EU-style picking business winners regime than a modern open economy. What these reports demonstrate is that lower taxes – not additional government spending – are the best driver of economic growth and prosperity.

The report embedded below (and also available for download). The earlier report, Monopoly Money: the cost of corporate welfare since 2008, is available here. Hard copies are available on request.

Saudi Sheep deal: Complaint to Auditor General

Last week the Taxpayers’ Union called on Foreign Affairs Minister, Murray McCully, to publicly release the legal advice relating to the Saudi sheep deal. Our own legal advice is that a genuine claim is highly unlikely. Now that the dispute has been settled, there can be no prejudice to the Crown.

Taxpayers have a right to know whether Government decisions on complicated trade disputes involving their money are based on sound legal advice.

On Friday we also wrote to the Auditor General asking for her to investigate the allegations of "cheque book diplomacy" and the circumstances around the Cabinet Paper. The letter is below.

Tax Freedom Day 2015

Today marks the first working day New Zealanders stop working for the Government and take home what they earn.  According to figures from the OECD, New Zealand’s total government outlays as a percentage of GDP is 41.4% this year, with Kiwis marking ‘Tax Freedom Day’ on Queens Birthday Monday.

Tax Freedom Day has arrived four days earlier this year than in 2014, meaning the burden of Government has reduced.

Despite this earlier arrival, total Government outlays as a percentage of GDP remain higher than the OECD average, and higher still than what they were under the last Labour Government.

Since peaking in 2010 at 48.5% in the aftermath of the Global Financial Crisis, Tax Freedom Day has arrived earlier every year since. This is a positive trend, which ensures that taxpayers are increasingly supporting themselves rather than supporting central and local government.

How does New Zealand compare to the rest of the OECD? Have a look at the table below.

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Why abolishing the KiwiSaver $1,000 kick starter makes sense

On One News, they found someone to complain that they won’t be getting a free $1,000  contribution from the taxpayer. She claimed that the contribution “kind of feels stolen” from her.

Her name is Alexa Rae Johnson. The same one who only moved to NZ this month to start a job here. Has been here working just one month, and already complaining that we’re not giving her a free $1,000.

Consider that the contribution was scrapped to fund the child poverty package. Now is Miss Johnson in poverty? Well, on her travel blog, she boasts of having traveled to 39 countries in the last couple of years.

Now this post is not a criticism of Alexa Rae. If a Government is silly enough to offer free $1,000 handouts to people who have just moved here, who wouldn’t want one. I’ve taken one. You’re a bit of an idiot if you don’t take one.

But the issue is whether the $1,000 hand out was a good use of taxpayer money. I’m not sure we need to help someone who has travelled to 39 countries save money.

Stuff reports some interesting data:

While 2.5 million people have signed up to KiwiSaver 38 per cent are making no contributions to it.

Many of those members are likely to be children whose parents signed them up to take advantage of the now-removed $1000 kick-start.

So middle class families with smart accountants have all rushed in to get the $1,000 handout for their kids, but it doesn’t actually lead to them saving money. They just take the $1,000 and leave it there.

In fact the overall change in savings behaviour has been very limited:

KiwiSaver has cost the taxpayer more than $6 billion and its success in helping people who really need a boost in their retirement savings has been described as “marginal, at best” in a report released by the Inland Revenue Department.

Think what else we could have done with that $6 billion?

Of those who are saving 56 per cent have money taken from their salary and wages and of those 58 per cent contribute at the minimum 3 per cent rate.
But just one third of the income saved was estimated to be additional savings.

So of the 2.5 million in KiwiSaver just 62% are making contributions. That’s 1,550,000 people. And of those 1.55 million just 56% are contributing from their wages. That’s 868,000.

And of that 868,000 only a third are doing additional savings, which is 290,000.

So we’ve spent $6 billion and it has led to just 290,000 people actually saving more money. That’s a cost of almost $21,000 per net saver. Now these are ballpark numbers and not entirely accurate, but the overall picture is clear that it is a hugely expensive scheme that has had a modest impact at best on savings.

IRD concluded:

A costs and benefit analysis shows that for the period 2007/08 to 2013/13, the additional savings amongst the estimated target group for each $ of government spending ranged from $0.20 to $0.38 as the level of government contributions dropped with fewer new enrolments and policy changes. 

So 20c saved for every $1 spent.

25% of the Crown subsidies were paid to the highest income quartile.

Middle class welfare.

David Farrar is a cofounder of the Taxpayers' Union and blogs at Kiwiblog.

How to avoid ACC over-payment

ACC fees are being cut - so why is the NZTA trying to charge motorists more?

Earlier this month ACC Minister, Nikki Kaye, announced cuts to the levies that motorists have to pay. The new fee regime will come into force from 1 July 2015. Unfortunately for taxpayers, it looks as though NZTA didn't get the memo.

If your motor vehicle registration is due to expire NZTA will write to you inviting you to renew your vehicle registration. Incredibly the notices invite recipients to renew at the current rates for up to 12 months, despite ACC levies dropping by 41%, on average, from 1 July.

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We think the NZTA are being discourteous by not mentioning the reduced rate on the letter asking motorists to renew their registrations.

Instead of the ACC levy cuts being pro-rated, people will need to renew their licence twice to ensure that they get the advantage of the lower rate. Instead of pro-rating the ACC component of the registration fees, NZTA require motorists to to renew their licence twice to ensure that they get the advantage of the lower rate.

Only a bureaucrat could support NZTA's policy not to pro-rate the amounts. It means more administration and hassle for motorists and more work for the NZTA. Despite that, it is the only way to ensure that vehicle owners get the full benefit of the ACC levy cut.

UPDATE: The NZTA has contacted us to clarify that with the letters, an insert is included explaining the changes. We welcome that, however wonder why the 12month fee doesn’t simply reflect the change, rather than force people to renew twice in order to take advantage of the lower fee.

 

Stop the Travel Tax

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In Budget 2015, Bill English has delivered a new tax on hard working New Zealanders - a tax on travel.

Bill English's Travel Tax will clip the wings of Kiwi families - making it about $80 more expensive for a family of four to get the the Gold Coast.

With the economy recovering and the surplus just out of reach, why are the Government taxing the aspirations of working New Zealanders rather than cutting government waste?

CLICK HERE TO SIGN THE PETITION

National deliver high tax, high spend Budget

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Your humble taxpayer advocates have just been released from today’s Budget 2015 lock-up. 

We wish we had better news

From a taxpayer perspective, Budget 2015 is Bill English’s worst. We have awarded it a two out of ten, and “National’s Labour-Green high tax, high spend Budget”.

Instead of controlling spending, cutting government waste and reprioritising spending into areas most in need, Budget 2015 introduces new taxes and reduces the incentive to work.

The good:

  • more money to health (an additional $1.7 billion over the next four years), education ($686.9 million increase for 2015/16), tertiary education ($113 million for 2015/16) and law and order ($218.5 million between Police, the SFO and Justice/Courts for 2015/16).
  • A ‘child hardship package’ targeting those most vulnerable and increased requirements on those receiving benefits to be available for work.
  • Modest changes to Working for Families to reduce welfare for those earning more than $88,000 (the average reduction being around $3 a week).
  • Provision for annual ACC levy cuts of $375 million in 2016 and a further $120 million in 2017.
  • Removal of the $1,000 KiwiSaver ‘kick-starter’ which gave a bonus even to babies of millionaires to join KiwiSaver. We’ve expressed our concern in the past with the economic analysis showing that despite it’s cost, the KiwiSaver subsidies do little to increase the overall amount of private savings.
  • Making more Crown land available for housing.

The bad:

  • The 2014/15 financial year is forecast to be a deficit of $684 million.
  • Budget 2015 estimates a tiny surplus of $176 million for 2015/16. The consensus from our economic advisers is that this surplus is optimistic at best. Any further declines in dairy prices, for example, would obliterate this amount.
  • Very little reprioritisation of existing spending to areas more in need. The taxpayer funded lobbying, advertising campaigns, and pointless government programmes will continue.
  • No commitment to cut the Wellington bureaucracy - the number of back office pen pushers will remain as high as at anytime under the Helen Clark Government.

The ugly:

  • A new Travel Tax! The Government is introducing a new tax on international travel that will add around $22 per return ticket for every traveller.
  • Reducing the incentive for beneficiaries to get into work - Budget 2015 increases the benefit rates for families with children by $25 per week – the first core benefit rate increase above inflation since 1972!
  • An extra $80 million for the corporate welfare scheme that saw Larry Ellison’s Oracle Racing awarded millions.
  • Despite the recent report by the Auditor-General damning the lack of oversight and high administration costs, Budget 2015 allocates $49.8 million more to Whānau Ora.
  • Yet another $429 million for KiwiRail. In answering questions in the lock-up, Mr English was quite candid that despite the KiwiRail ‘Turnaround Plan’ (and the billions of taxpayer money piled in) – it still hasn’t turned round!

Our initial comments to media on the Budget 2015 are available here. We have also issued press releases specifically on the new 'Travel Tax' and the changes to KiwiSaver.

Taxpayers’ Union co-founder, David Farrar, has blogged his thoughts on the Budget at KiwiBlog.

We will be spending the next week or so going through the fineprint and working hard to uncover what the politicians don’t want you to know. In the meantime, it looks like National has well and truly turned into a Labour/Green-like Government that looks likely to cost taxpayers a fortune.

The $26m flag referendum

During the 2014 election, part of National's campaign platform was to hold a referendum on the New Zealand flag.

With the design process now underway, public opinion is divided over whether the $26m cost of the referendum is value for money.

While some of the proposed designs have been taken seriously, with thought and consideration, others are a bit more... "abstract". 

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We have launched a poll to see what you think of the referendum process: is the $26m price-tag a waste of money, or the fair price of democracy?

 

CLICK HERE FOR OUR POLL

IRD exercise video

The IRD has spent more than $418,000 of taxpayer money on a campaign featuring a YouTube video of 80’s style aerobic exercises to promote filing of tax returns. 

You paid for it, so you might as well enjoy it:

It is essential that the public are well informed on how to comply with their tax obligations. We say that spending nearly half a million on a video of people dancing round in leotards is a strange way to achieve it.

While the videos cost $41,000 the IRD won’t tell us what the remaining amount was spend spent on. We presume it is online advertising, which has only resulted in 20,000 views, less than the audience of daytime television.

Interestingly the IRD released the information publicly and issued a press release at the same time as the information was sent to the Taxpayers’ Union. That is highly unusual and indicates that officials are trying to put their spin on a bad-looking story. For example, they credit the videos for 36,000 more online registrations, but acknowledge that the YouTube video has only about half that number of viewers.

The IRD's response to the Taxpayers' Union request for informant under the Official Information Act 1982 is below.

Tell Steven Joyce to pay it back

steven_joyce.jpgYesterday saw the disclosure of MPs' and Ministers' expenses - the perks they get courtesy of taxpayers to fulfil their duties.

Like most taxpayers, we were aghast to learn that Steven Joyce had racked up a mind-boggling taxi bill while on a day-trip to Sydney. The driver was instructed to keep the meter going... and going... and going.

That meter kept clicking over for a whole 9 hours and cost taxpayers an eye-watering $1,248.

We say that $1,248 taxi bill is unfair to the hard working taxpayers who earned it. Politicians should be as frugal with taxpayers' money as if they were spending their own - and we cannot think of anyone who would keep a taxi meter clicking over for nine hours.

Click here to sign our petition demanding Mr Joyce to pay back his $1,248 taxi fare.

Taniwha Tax petition launched

 New Mana Whenua rules

After the launch of The Taniwha Tax: Briefing paper on Auckland Council's new Mana Whenua rules, we were inundated with emails from our members and supporters, aghast at the silent imposition of this regulatory tax upon Auckland property owners.

Many expressed concern that Central Government appeared to be sitting on its hands regarding this issue and wanted to have their opposition to this new tax noted.

We've launched an online petition for member and the concerned public to send a message to the Government.

Click here to sign the petition to repeal the Taniwha Tax.

Check whether your property is one of the 18,000 affected by the Taniwha Tax

Although some types of resource consent activities (such as discharging into water or air) may trigger 'cultural impact assessments' regardless of where they are in Auckland, the main impact is likely to be initially felt by property owners within 200m of more than 3,600 sites of value to Mana Whenua.

Auckland Council has a mapping program that allows you to search for your property.

Here's our guide to use it:

1. Go to http://acmaps.aucklandcouncil.govt.nz (if a pop-up box appears - 'click to continue')

2. Search for your address in the search bar.

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3. On the left hand side (in the 'layers' tab)

3.1 Untick "Zones"
3.2 Untick "NonStatutoryInformaiton"
3.3 Next to the tick for "Overlays" press the "+" button (a sub menu should appear)
3.4 Ensure that only "Sites and Places of Significance to Mana Whenua" and "Sites and Places of Value to Mana Whenua" are ticked.

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The purple triangles are sites of significance to Mana Whenua while the purple shaded areas are sites of value.Note that even if your property does not have a purple triangle, if it is within 250m it is affected. 
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Taxpayers' Union launch 'Taniwha Tax' briefing paper

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The Taxpayers’ Union, with support from the Auckland Property Investors’ AssociationAuckland Ratepayers’ Alliance and Democracy Action today launched a briefing paper on Auckland Council’s new Mana Whenua Cultural Impact Assessment provisions. The paper, entitled The Taniwha Tax: Briefing paper on Auckland Council’s new Mana Whenua rules.

We believe that every Auckland homeowner or potential homeowner needs to know how the new provisions affect them.

Most affected property owners will not become aware of the provisions until they suddenly find there is a site on or near their land, or they are told they may need to get a Cultural Impact Assessment (CIA) when applying for resource consent. Worse, the Council isn’t even sure that some of the 3,600 sites deemed ‘of value’ even exist. It didn’t bother to check.

The Briefing Paper quotes extensive criticisms of the provisions made on behalf of some of New Zealand’s largest corporates, including Vodafone, Spark, Chorus, Transpower, Vector, Watercare.

If you thought that navigating RMA red tape was hard, these provisions could require you to negotiate with up to nineteen Mana Whenua groups in order to gain development consent, the rules mean that resource consents may be subject to expensive modifications, even if the reasons are entirely spiritual in nature.

The Council has previously tried to dampen public concerns, claiming that not many Cultural Impact Assessments have been required so far. They ignore the cost and delay of applicants having to go to iwi groups to ask whether a CIA is required.

Most of the messages contained in the Paper are not those of the Taxpayers’ Union. We have deliberately repeated what would otherwise go undiscovered in the files of lawyers, planners and Council insiders. Our work is to shine some democratic light onto what has happened."

The report is available to download here. 

 

UPDATE: To check if your property is one of the estimated 18,000 affected by these provisions, please click here for our guide.

Launch of Auckland Ratepayers' Alliance

You asked and we delivered

Over the last 18 months, we have received a lot of feedback from members and supporters that something needs to be done to hold the flame to Len Brown and Auckland Council’s culture of waste. We've been doing our best from here in Wellington, but the time has come for an Auckland-based group dedicated to holding the Super City to account.

This morning the Taxpayers’ Union’s newest initiative - the Auckland Ratepayers’ Alliance publicly launched. The Ratepayers' Alliance will stand up against Auckland Council’s wasteful spending, poor financial mismanagement, the proposed rates increases and the new taxes the Council wants to introduce. The group has very similar objectives to the Taxpayers' Union, albeit focused just at the Super City. You can read more about the group's plans at www.ratepayers.nz.

Best of all it's free to join the Auckland Ratepayers' Alliance by clicking here.

The media spokesperson for the Ratepayers' Alliance is Jo Holmes. Jo is a natural, and I just know she will do a great job sticking up for ratepayers and cutting through the Council's spin.

I am sure you will join me in wishing our new sister organisation every success.

10-year passports shouldn't come at a price

We are repeating our calls on the Government to increase the term and lower the price of New Zealand passports. Documents obtained under the Official Information Act show that despite the review having been scheduled for completion by the Department of Internal Affairs in December 2014, it only now before Cabinet which is expected to come to a decision next week on whether to return to 10-year passports.

In August last year Internal Affairs Minister Peter Dunne made it clear that the review of our current passport regime would be complete by December 2014 and presented to Cabinet for approval. We were worried that he had been sitting on his hands for four months or perhaps hoping that the issue would go away. Instead we understand that officials are advising that technical barriers exist which make ten-year passports difficult (presumably those difficulties do not apply to Australia, the UK, the USA, and those european countries listed in our report on 10-year passports).

Nevertheless, there is positive news in this morning's NZ Herald:

New Zealanders are set to enjoy 10-year passports once again - but at a price.

It is understood the Cabinet will decide in the next few weeks to extend the passport validity period, which was reduced to five years in 2005.

This will require an amendment to the Passports Act, and is likely to lead to higher fees for renewing a passport.

Prime Minister John Key said officials wanted the validity period to remain at five years. But he hinted that the Government would go against their advice and revert to 10-year passports.

"Good news is coming," he told NewstalkZB.

The change followed an independent review of passport security measures by former diplomat and Foreign Affairs chief Simon Murdoch, and a separate review of the costs related to processing passports.

The two reports were finished in December and sent to Internal Affairs Minister Peter Dunne to make a recommendation to the Cabinet.

The Government is unlikely to use urgency in Parliament to change the legislation. But it may seek a shortened public consultation process, which would require agreement from other political parties.

Mr Key has previously warned that a return to 10- year passports is likely to lead to higher fees because revenue from processing the documents will fall. At present, it costs $135 to renew a passport. Analysis by the Taxpayers' Union showed that fee was more expensive than nearly every other comparable country.

Increasing the cost of passports is unjustified. When we released the report on 10-year passports the Department of Internal Affairs was claiming on their website that the New Zealand passport fees compared ‘favourably’ with other countries. We proved them wrong.

Even if a 10-year passport cost the same as the existing 5-year one, New Zealanders would still be paying more than our trading partners for the ability to travel.

The price for a passport should reflect the cost. The Government has previously ran the passport regime at a profit and while returning to 10-year passports will help, the price should be benchmarked against our trading partners to ensure Kiwis are getting a fair deal.

We will be keeping a close eye on this issue.

 

Len Brown gagging ethnic advisory panel members

The message Auckland Council is effectively giving members of its Ethnic Advisory Panel is "Shut up until you're told to speak."

The Council appears to be in damage control after a member of the panel joined the Chairman and resigned labeling the Panel 'tokenism' and a 'waste of money'.

These advisory panels are supposed to be about communities having their say, but now the Council is trying to gag them from speaking to the media. It seems as though Len Brown and Auckland Council want the pretense of inclusiveness, but officials are telling panel members to zip-it when they don’t sing to the right tune.

It is becoming clear to us that the only person wanting this expensive tokenism is Len Brown.

Currently the Council has advisory panels for Youth, Ethnic Affairs, Pacific, Senior, Disability and Rural interests.

We have called on the Council to abolish the expensive advisory panels, with the exception of the disability panel, which provides important advice on the plight of assess-impaired members of Auckland’s community.

There are currently plans to introduce a ‘Rainbow Panel’ of GLBTI representatives.

Rather than ramming identity politics down ratepayers’ throats, Auckland Council should focus on keeping costs down. This expensive faux-democracy via expensive token ‘representatives’ delivers next to no value for money to ratepayers.

It’s time for these panels to go.

Bribe-O-Meter - cost of NZ First Northland bribes now more than $200 per NZ household

Following another week of policy announcements on the Northland by-election campaign trail, NZ First is now clocking up promises that, if implemented, would cost more than $200 per New Zealand household.

As of today, National has promised $63.5 million for Northland, while NZ First's promises total $378.9 million. The amounts are equivalent to a cost per New Zealand household of $35.67 for National’s promises and $212.87 for NZ First.

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The largest new bribe since last week's update was Mr Peters’ pledge to use taxpayer money to bailout the Kaipara District Council’s debt arising from the Mangawhai Heads wastewater project. This alone increased Mr Peters’ Bribe-O-Meter total by $80 million.

On yesterday’s TVNZ Q&A debate, Mr Peters made reference to a policy to build a ‘fast’ train service to the North. An independent economic expert commissioned by the Taxpayers’ Union for the Bribe-O-Meter, estimates that a high-speed rail link to Northland would cost at least $6.5 billion, more than Northland’s total annual GDP.

But you can breathe a sigh of relief. Winston Peters’ Chief of Staff confirmed to us this morning that the NZ First leader was not meaning high-speed rail. Apparently Mr Peters’ comments relating to ‘fast’ rail to Northland was a reference to line upgrades, already factored into the Bribe-O-Meter, and an express passenger service.

We are proud that the Bribe-O-Meter is forcing politicians to be transparent about the cost of their promises, but with one week to go there is still a risk that politicians turn the by-election into a lolly scramble at taxpayers’ expense.

Over the flip is a breakdown of the promises and our methodology.

Winston Peters' flagship policy an unwanted handout

It appears that Mr Peters wants to spend hundreds of millions of dollars on a NorthPort rail link, but hasn't even spoken to the Port's management.

The Taxpayers' Union can reveal that Winston Peters has never visited, nor spoken to the management of the port company his key Northland by-election promise is framed around. Mr Peters announced soon after his Northland campaign launch that his party would champion an extension of the Northland railway line to the Port Whangarei and channel growth there, rather than allow expansion at the Port of Auckland.

Below is a letter we sent to Mr Peters last week seeking clarification of the cost to taxpayers of the policy and confirmation that he has never visited the port. The letter also outlines Mr Peters' apparent confusion between Northport (operating near Marsden Point) and the now defunct Port Whangarei (which for legal and technical reasons is unable to be reopened). 

Last week, Northport's CEO  told us that the Port does not want the rail link and that Mr Peters had never spoken to them about any rail proposal.

This is just the sort of expensive political promise our Northland Bribe-O-Meter is designed to expose. Mr Peters appears to consider New Zealand's hard earned tax dollar so expendable that to win a by-election he's willing to throw nearly $200 million at a Port, despite having never visited or spoken to those in charge.

Our letter is here: 

No response has been received from Mr Peters or his staff.

Northland Bribe-O-Meter update

Today we have released updated figures for our Northland by-election edition of the election costing Bribe-O-Meter. The figures show that National is catching up with NZ First in the amount of taxpayer funding pledged to the electorate.

We have updated our figures to take account of Simon Bridges' Akerama Curves Realignment Project announcement this afternoon. We have also revised the cost estimate of Mr Peters' rail policy pledge downward from $198 million to $172 million, reflecting advice received from KiwiRail.

As of today the National Party's election promises total $35.67 per New Zealand household. That compares to NZ First having pledged policy we estimate would cost $165.96 per New Zealand household if implemented.

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The National Party may argue that the new bridges and motorways come from existing roading budgets and therefore are not 'new spending'. Nevertheless, where it appears projects have jumped the queue ahead of other projects, we have included them in the Bribe-O-Meter figures.

This by-election is quickly turning into a buy-election paid for by all New Zealand taxpayers. The Bribe-O-Meter's purpose is to provide transparency on pork barrelling taxpayers are being forced to pay for.

Over the flip is a breakdown of the promises and our methodology.

GST and online sales

The Government has announced that it is currently investigating ways to ensure New Zealanders are charged GST on purchases they make online from foreign vendors. Netflix was one of the first companies to state that they do not intend on charging New Zealanders GST to use their service.

Just how the Government intends to levy GST on all online purchases is anyone’s guess. The devil will be in the detail.

The key question for taxpayers is whether this ‘itunes tax’ is about fairness, or revenue gathering. If the politicians are to be believed that this is purely about creating an equal play field, then there is no reason why the extra tax collected shouldn’t be used to lower New Zealanders’ tax burden in other areas.

It should come as little surprise that retailers in New Zealand are welcoming the announcement. Online purchases, especially of physical goods, have the ability to erode their market share, and with it taxes that the Government would otherwise receive. Any regime would also have to carefully look at the impact of compliance costs.

Yet on the other hand, the Government’s proposal seems fraught with difficulty, especially in relation to digital content. New Zealanders live in an increasingly globalised world. The internet allows the free flow of information, communication and access to content. And let's face it, IRD can't possibly reach every online retailer.

Two ISPs, Orcon and Slingshot, have lead the charge to open-up access by providing their customers with a way to access otherwise geo-blocked content. Certainly there are other ways for users to access international content, whether that be anonymity software such as Tor, or by using a VPN. When these workarounds are combined with virtual credit cards, like Entropay, users are free to consume content from wherever, whenever, in whatever jurisdiction has the best price.

The potential for a 15% increase in in the price of digital content may easily lead to an increase of people finding workarounds or increase the number of people engage in illegal file-sharing.

We look forward to scrutinising the proposal that the Government eventually releases, with a view to ensure that the Government offsets any increase in the tax take by reducing the tax burden elsewhere. 

Ratepayer-funded fashion advice at Auckland Council

Back-office Council staff have been receiving chic stylist advice courtesy of Auckland ratepayersweb-image.png

Despite the Council cutting services and library hours, the council seemingly has money for make-up and fashion advice for back-office accounting staff.

Material we’ve just released us show that the Council accountancy team hired image consultants Fox & Mae to run “Brand Me” sessions for the back office team to learn about grooming at work, what to wear and smart-casual Fridays.

Most employers expect their employees to be tidy and well presented, even if they are a back-office worker. Image consultants are normally employed by celebrities, the very wealthy, and front-facing staff who are acting in a front-facing role.

It is sadly ironic that the accountancy team, the very people whose job it is to keep Council spending under control, have been wasting money on what looks to be ratepayer-funded fashion and make-up advice.

Northland Bribe-O-Meter

While the by-election is a show-down in Northland, the cost of politicians’ pork-barrel politics will impact upon the pockets of all New Zealand taxpayers

Northland Bribe-O-Meter banner

Today we are proud to relaunch our election Bribe-O-Meter to keep track of the pork-barrel promises being announced on the Northland campaign trail. The Bribe-O-Meter was introduced in the 2014 General Election as a way for taxpayers to gauge what parties were promising, and how much those promises were going to cost taxpayers.

It hotly contested elections, politicians will be quick to pull out the taxpayer-chequebook. This projects endeavours to ensure that taxpayers know what their candidates want to spend, and how it’s going to affect taxpayers throughout the country. Upon the launch of the Bribe-O-Meter – Northland Edition, the leading candidates have already made some big ticket announcements.

The National Party’s promises currently total $28.37 per New Zealand household, while our estimates of announced New Zealand First policies comes to over $180 per household.

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 Over the flip is a breakdown of the promises and our methodology.

Public sector pay rises a tax on private earners

When the Prime Minister announced an overhaul of the way that MPs’ pay would be calculated, after an embarrassing 5.4% pay rise form the Remuneration Authority, we at the Taxpayers’ Union were cautiously optimistic.

While it was reassuring to see politicians from across the political spectrum admit that the proposed pay rise was hard to swallow, the solution proposed by the Prime Minister creates some potentially perverse incentives.

The Council of Trade Unions, along with the Labour Party, more or less welcomed the changes proposed by the Prime Minister. The CTU’s chief economist, Bill Rosenberg, said that MPs’ salaries should not be indexed to the private sector.

That’s a sentiment we agree with. Too many of our aspiring politicians take a significant pay increase upon becoming an MP – a pay rise that is completely out of step with their earning potential in the private sector.

The Prime Ministers’ proposal for MPs’ pay would see increases indexed against the public sector. Every time our policy-makers increase the pay of taxpayer-funded public servants, they will in turn increase their own pay packets.

The real losers in this arrangement? Taxpayers.

On yesterday’s Firstline Labour leader, Andrew Little, answered a few questions about MPs’ pay and what approach his party would be taking.

We were staggered with the former trade-union man’s free and frank admission that public sector workers had been receiving more generous pay rises than those workers in the private sector.

Paying public sector workers more than those in the private sector does not get New Zealand ahead. It means those in the private sector pay more taxes and take home less. Does Mr Little not realise that or is he pandering to public sector unions?

Unless the Prime Minister ensures that public servant pay rises are reined in, he may find next year’s Remuneration Authority poses an even greater embarrassment.

Massive cost blowout at IRD

In what is the largest example of government waste the Taxpayers' Union has exposed so far, we can this morning reveal that the Government is about to blow $163 million on back peddling 2013 changes to the IRD's child support system.

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In 2013 the Government passed significant reform of the Child support system that, among other things, changed the formula for the calculation of child support, and how it is collected.

Last week the Government introduced a Bill to Parliament that includes a number of changes to the tax system. The Bill didn't go unnoticed, but the Government's PR machine focused on the changes to the GST system which we welcomed.

But amoung the 211 pages, the Bill proposes to roll back a number of the child support measures passed in 2013. These significant changes to child support, as far as well know, haven't received any public attention nor were flagged by the Government. This is presumably why no one has yet exposed the significance of the turn around, the reasons and the eye-watering amount it's going to cost.

In the IRD's Regulatory Impact Statement (a report which officials must prepare explaining the policy reasons behind a proposed law) is the following:

The original 2011 cost estimate for the programme to implement the [2013 child support] reforms was $30 million. As the legislation was developed and greater details on the specific changes were determined and finalised, a business case was prepared in 2012. The business case revised the estimated cost up to $120 million over the ten year period from 2011-12 to 2021-22 (costs in the latter half of the period cover ongoing depreciation, capital charges and ongoing additional staff costs to administer the modernised scheme). The increase reflected a greater appreciation of the complexity of the changes proposed by the new formula. One of the main assumptions in the business case was that the vast majority ofthe expenditure would be operating cost. 

During 2013 Inland Revenue re-assessed the time and costs associated with the programme and the assumptions underlying the business case. It became clear that the work could not be implemented, to the level of quality and certainty required, by the original legislative deadline. More time was required. Also, the assumption that the majority of development costs would be operating and not capital expenditure was proving to be incorrect as the reform was implemented. Capital expenditure comes with associated depreciation costs and capital charges leading to a higher overall cost for the reforms. If the correct assumption had been made in the business case, the cost of the reforms would have been much higher than $120 million. In early 2014, the legislative deadlines were delayed a year to allow time to complete the first phase to the standards required. The revised estimate of the project, including costs from the delay and the higher ratio of capital expenditure, is now $210 million for the ten year period from 2011112 to 2020/21. The majority ofthe higher cost is the depreciation and capital charge associated with the capital expenditure.

That's right the $30 million cost for implementing the child support reforms has ballooned to $210 million!

'Depreciation and capital charge associated with the capital expenditure' is bureaucratic code for an IT cost blow out

So what is the Government doing?

Clearly a $180 million (or 700%) cost blowout is an unacceptable course of action. That's what the U-turn in the Bill introduced last week will remedy right?  If only it was that simple.

Elsewhere in the same document, officials say:

The cost ofimplementing phase 1 and part of phase 2 of the reforms [contained in the new Bill] is estimated at $163 million. 

There will be an additional cost ofmigrating the reforms to the new "transformed" environment. 

What a complete shambles. $163 million is what it will take to implement the revised policy! An extraordinary cost - more than $100 for every New Zealand household with not a single dollar of it going to vulnerable kids or struggling families.

The Revenue Minster has some explaining to do. We hope that opposition parties will be ensuring this happens when Parliament return on the 10th.

Click here to read the Regulatory Impact Statement on the IRD's website.

Politicians pontificating on pay-rise policy

Crocodile tears

This morning we called the bluff of MPs, some of who are crying crocodile tears in the media about their pay hike. We wrote to each asking whether they will be accepting the backdated pay increase.

We asked each MP the following: 

Dear Member,

Given various public comments that yesterday’s determination by the Remuneration Authority is unnecessary or unjustified, we seek your clarification by 5pm tonight whether you will be: 

a)    accepting the increase in pay and back-pay;

b)   refusing the amount (or refunding it to The Treasury); or

c)    giving the amount to a charity.

If you intend on giving the money to charity, please specify which charity.

The responses we received have been quite disappointing. One National MP was quick to respond with a one-letter message, “A”. We also received an odd response on behalf of all Green MPs.

Rather than answer our questions, the Greens provided a few points as to what their policy would be for the Remuneration Authority and future payments to MPs.

That’s all good and well. While their proposed solutions differ to ours, it would undoubtedly see a reduction in the rate at which pay rises occur. But what good is proposing a solution unless you practice what you preach?

When we pressed them further, the Greens refused to say what their MPs would be doing with their pay increases. We can only assume that despite their policies, they will be pocketing it.

No one fighting for taxpayers

dollar-money-cash-1200.JPGThe Remuneration Authority has approved another five and a half percent pay rise for backbench MPs, backdated to July last year.

With inflation close to zero this 5.4 percent boost is a slap in the face to taxpayers. In what other profession do you get paid an allowance for your family’s travel expenses?

For too many backbench MPs, $156,000 is the most money they will earn in their lifetime. How does that reflect the community service element of being an MP?

The current model has screwed the scrum against taxpayers. Not only should the remuneration be set once every 3-year Parliamentary term, but taxpayers need a voice in this decision. The Authority has a union representative for public sector workers, but no one representing taxpayers.

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We've launched a petition calling on the Government to appoint a taxpayers'  representative (ideally an economist). We need someone in the room to push back against the continued creep of higher and higher salaries for MPs.

Click here to sign the petition

Auckland Council's ten very expensive tickets

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This morning we have released documents we've obtained from the Auckland Council revealing that ATEED, Auckland Council's economic development agency, has gifted $50,000 of ratepayers' money to the prestigious Remuera Golf Club for the Holden PGANZ Championship.

Auckland Council claims to have no money, but finds $50,000 of 'spare' ratepayers' money to give a hand-out to Auckland's richest golf club. While the spin doctors might label it 'economic development' - how can this hand-out possibly be given priority over roads, rail and housing?

Ten tickets - that'll be 50k

We found out about this $50,000 gift after a Council run social media account advertised a competition, offering ratepayers ten tickets to the event. We suspect the ten tickets are all ratepayers are ever going to see of the $50,000! 

Officials have told us that there is a project sharing agreement in place where the Council receives 50% of any profits from the event over and above $150,000. We think that the answer shows that officials are trying to have it both ways by claiming that the grant is an 'investment' rather than a ratepayer-funded handout to sport. When it proves to be a flop, we suspect they will probably call it a tourism expense...

If anyone really thinks that this amounts to a genuine investment that will provide a decent return to ratepayers, well, we've got a bridge to sell ya... 

Click here to view the Council's response to our information requests.

We did it!

New Zealand Taxpayers' Union Inc.

You spoke and they listened!

Steven Joyce has announced that no taxpayer money is going to be used to support SkyCity’s convention centre. Instead, SkyCity are going back to the drawing board to come up with a cheaper design. Fantastic.

In just a few days more than fifteen hundred people signed our petition and the message got through to Mr Joyce and SkyCity. This is a win for the little guy.

While there could be devil in the detail - and don't worry we'll be making sure that SkyCity don’t now try to build something a fraction of the size that was promised - today at least taxpayers can breathe a sigh of relief.

SkyCity look set to hit the jackpot

The NZ Herald is reporting that Prime Minister John Key is not ruling out taxpayer money being used to subsidise the controversial SkyCity convention centre. Despite the deal being finalised in May 2013, it is reported that negotiations between the Crown and SkyCity are ongoing and nothing has been taken off the table.

The whole idea of the SkyCity deal was that Auckland would get an international class convention centre, paid for by SkyCity, in return for various concessions to the casino. That’s bad enough, but with Mr Key’s refusal to rule out taxpayer cash, it appears that SkyCity is about to hit the jackpot.

It was never suggested or intended that the taxpayer or ratepayer would have to shoulder any of the burden. If SkyCity underestimated the cost of the centre when they signed the deal, that's their problem. 

Any taxpayer support is nothing less than corporate welfare, no matter how the Government spins it. Our report on corporate welfare is available for download here - unfortunately it appears that we might need to bump the numbers up soon...

Poll: Should SkyCity be bailed out with taxpayer money?

Ratepayer Funded Art (with poll)

In light of Auckland Council’s decision to spend $200,000 on a sculpture many are saying in symbolic of the treatment of its ratepayers, I wanted to highlight how lucky we are in Wellington to have the Wellington Sculpture Trust. Why is it that Auckland Council seems to keep having problems with expensive art projects (as well as the new 'penis' art, the $1 million sculpture of state house is a good example) but in Wellington I can't think of a single controversy?
 
The Trust was formed in 1982 and is responsible for most, if not all of Wellington’s iconic art landmarks (below is a selection). I joined in early 2013 soon after the wonderful Nga Kina was revealed.

According to the Trust's website:

The Arts Advisory Panel is made up of arts professionals who assist in the selection processes. The panel currently comprises arts practitioners, the director of the City Gallery, Wellington, curators and an architect. Urban design and public safety advice is provided by the Wellington City Council’s liaison officer.

Wellington City Council plays a significant role. It provides most of our sites, helps supervise the installation of sculptures, and becomes the owner and caretaker of the sculptures on behalf of the city and the Trust after an appropriate defect liability period.

The Trust also has honorary advisers separate from its arts advisers to broaden its resources. These people have expertise in fields such as engineering, financial management and law. 

Is the Trust's model better than the a council commissioning art? From what I understand the Wellington Sculpture Trust pitches art projects in a way that matches public money with amounts contributed by private donors.

We're running a poll on whether ratepayer money should be used for art. I'm certainly interested to see whether people prefer no ratepayer funding of art, or a Wellington/trust model. Clearly Auckland's decision-making process needs improvement.

Poll: Should ratepayer money be used for art?

Coverage of LGNZ's efforts to impose new taxes

Coverage of the Taxpayers' Union response to LGNZ's efforts to impose new council taxes such as local fuel, sales and even income taxes.

Taxpayers' Union fuming over council plan (3 News, 2 February 2015)

A ratepayer-funded plan which suggests imposing more taxes to raise cash for councils has the Taxpayers' Union fuming.

Rates are the primary source of income for local authorities, but in a discussion paper released today, Local Government New Zealand suggests other funding sources.

The report lists imposing road tolls or bringing in taxes on income, certain types of expenditure, fuel, or certain transactions as options.

But Taxpayers' Union executive director Jordan Williams says the average rates bill has doubled over the last two decades, and the paper is only about how to tax more.

"Instead of focusing on the quality of councils' spending decisions, this campaign is using ratepayer money on propaganda promoting new taxes," he said.

"Nowhere in the discussion paper do we see a disciplined analysis of why local government spending is out of control." [...]

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Council Digesting Report (Rotorua Review, 4 February 2015)

ROTORUA Lakes Council (RLC) won’t rule out a raft of possible new taxes that have been outlined as options in Local Government New Zealand’s (LGNZ) funding review discussion document.

LGNZ, a lobby group made up of 78 councils, including RLC, has issued the document which outlines options for addressing shortfalls in local government funding.

The options, which it says would sit alongside rates, include a local income tax, local expenditure tax, regional fuel taxes, transaction taxes and what it calls ‘‘selective taxes’’. RLC chief executive Geoff Williams said the document was intended to stimulate a discussion about possible funding opportunities and constraints in New Zealand, and declined to rule anything out.

[...]

Unsurprisingly, Yule’s claim that the discussion paper was not meant to pre- empt an overall increase in taxes was met with some scepticism by lobby group The Taxpayers’ Union.

‘‘Mr Yule is telling the public that the goal isn’t to increase the overall tax burden, but he released a report, not on ways to save money, but on ways to tax more,’’ said Taxpayers’ Union executive director Jordan Williams.

‘‘New Zealand’s average rates bill has doubled in the last 20 years, tracking at twice the rate of inflation. Instead of focusing on the quality of councils’ spending decisions, this campaign is using ratepayer money on propaganda promoting new taxes. Nowhere in the discussion paper do we see a disciplined analysis of why local government spending is out of control.’’ The LGNZ funding review document is available at lgnz.co.nz and submissions are open until March 27.

Read more.

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Also: Council funding reform plea shot down (NZ Herald, 3 February 2015)

 

Local councils want ability to impose regional income, fuel and sales taxes

Local Government New Zealand, is spending considerable ratepayer money on a campaign promoting local income taxes, regional fuel taxes and regional GST-style regimes to increase the tax burden of local councils. LGNZ today launched a review document on various options for new taxes. You can download the paper here.

This diagram illiterates well the growth of local government (source):

New Zealand’s average rates bill has doubled in the last 20 years, tracking at twice the rate of inflation.

Instead of focusing on the quality of councils' spending decisions, LGNZ appear to be using ratepayer money on studies and propaganda promoting new taxes. We have long been concerned that LGNZ too often represents the interests of councils, rather than those paying the councils' bills! Nowhere in the discussion paper for example, do we see a disciplined analysis of why local government spending is out of control.

We've also been alerted to emails where LGNZ spin doctors are sending  draft opinion pieces to local mayors so that they can 'leverage local media' and promote these new taxes. 

"Trust us we're politicians"

In the LGNZ press release, the lobby group's President, Laurence Yule, says that:

The goal is not to increase the overall tax burden for New Zealand, but rather to determine whether a different mix of funding options for local government might deliver better outcomes for the country.

Mr Yule is telling the public that the goal isn’t to increase the overall tax burden while at the same time releasing a report that isn't on ways to save money, but on ways to tax more.

Former North Shore City Councillor, North Shore City Council David Thornton writes:

LGNZ Review is about more money for more spending

Few ratepayers object to the principal that all citizens should contribute to the cost of running their communities, and that those contributions should be within the ratepayers’ ability to pay.

The Local Government New Zealand funding review revisits many of the issues raised in the Independent Rates Review of 2007 and repeats some of the same conclusions reached then.

The difference between the two reports is that the 2007 review was looking for alternatives to rates, while this new report is aimed at raising new funds in addition to rates.

In other words LGNZ, on behalf of all councils, wants to spend more, and needs more money to feed those expansive ambitions.

We agree. The Taxpayers' Union isn't against new taxes per say. Our view is that new taxes should replace old ones (i.e. an equal decrease to compensate). In the case of local government though, LGNZ's efforts are so the local government spending binge can continue...

Poll: Should councils be given new powers to impose local GST, fuel and income taxes?

Vote by clicking here. 

HPA now giving away taxpayer funded surfboards and fishing rods

A few weeks ago we went public with our concerns about the ’No Beersie' campaign by the Health Promotion Agency. To recap:

  • * the campaign cost taxpayers $1.2 million;
  • * it doesn’t target those most likely to be affected by alcohol related harm; and
  • * even the HPA’s own focus groups found the campaign confusing (some even thought it was advertising beer!).

Despite the bad press (including this scathing Waikato Times editorial) the HPA is feeling very jolly indeed with your money.  It’s either that or the HPA so desperate to be liked they’re giving away fishing rods, surf boards and even $100 petrol vouchers! 

All this with money that should be helping those who have a problem with alcohol.

We’ve launched a petition to tell the Government to end to these sorts of silly taxpayer funded advertising campaigns promoting common sense and feel-good nonsense.

 

Do you agree that this is a waste of money? Will you support us? Sign the petition by clicking here.

Taxpayer support of Eleanor Catton

The Taxpayers’ Union is releasing figures obtained from Creative NZ showing that author-turned-policy-critic, Eleanor Catton, has received tens of thousands of dollars worth of grants courtesy of New Zealand taxpayers.

Some might question why Ms Catton would have a go at New Zealand when it's Kiwi taxpayers who have largely funded her education and career.

In addition to the usual government support of students, Ms Catton has received special Creative NZ funding amounting to tens of thousands for her artistic endeavours. Ms Catton's most notable work, The Luminarieswas completed while being on a six-month residency funded by Creative New Zealand. Far from not supporting the arts, it appears that taxpayers have been rather generous.

Despite The Luminaries being a commercial success, taxpayers still paid for the book to be translated into three languages. If that's not generous support, what is?

We said in our media release on Wednesday that if Ms Catton isn’t thankful for the support by the New Zealand Government while she wrote The Luminaries, maybe she should use some of the substantial royalties to pay the money back.

Click 'read more' for the raw data.

HPA spends $1.2 million on "Not Beersies" campaign

Today we released documents which detail the cost and focus group feedback on the ridiculous “Not Beersies” campaign by the Health Promotion Agency.

The documents show that:

  1. the campaign had the least positive impact on entrenched, high-risk drinkers;
  2. it instead targets those least likely to face harm from alcohol consumption;
  3. the HPA spent at least $1.2 million on the campaign (we say at least because officials refused to tell us how much advertising agency fees taxpayers covered; and
  4. the HPA conducts no cost benefit analysis on its campaigns. 

The Taxpayers’ Union had feedback that the ‘Not Beersies' ads were making people thirsty for beer. Some participants in the Agency’s own focus groups said the same - that the ads encouraged drinking or were confusing.

Is promoting a cultural change now synonymous with health promotion?

The Health Promotion Agency acknowledge that the campaign probably won’t reduce alcohol consumption and won't affect the most at-risk of alcohol harm - but they spent the money anyway.

The HPA spent over $1.2 million of taxpayers’ money in order to promote a ‘culture change’. No wonder no one bothered to do a cost benefit analysis.

It’s a creative campaign, but it’s using taxpayers’ money for social engineering rather than for the purpose of reducing harm or promoting health. The documents show that the HPA knew that they were woefully off the mark. They pushed ahead and spent the money anyway.

In December the Advertising Standards Authority received a complaint from an individual who incorrectly thought the ads were promoting beer. The campaign has also been publicly labelled "sexist and offensive" and with claims they miss the point as beer consumption continues to fall. Cleary the campaign message has become confused and contorted.

We think the campaign is an own goal. What do you think? Does the HPA and its ad agency have more money than they know what to do with? Should the Government be requiring the HPA to justifiy its budget and force it to invest in measures that actually reduce harm? Let us know on our Facebook page.

SkyCity handout: Letter to the editor nails it

A letter to editor published in today's NZ Herald nails the problem with SkyCity trying to strong-arm the Government for a handout for the National Convention Centre.

Corporate parasites cashing in

Commenting on its convention centre proposal, SkyCity says it is “working on a solution with the Government to bridge the funding gap. In resolving this issue, we will ensure that the value of this significant and complex project is not diminished for our shareholders’’.

Is it for real? Does it really believe taxpayers and ratepayers should subsidise its shareholders? We really do live in a country drowning in corporate welfare when people can make statements like this without being castigated by the Government or the Auckland Council.

The only utterances we have heard from them is that a bail-out with public money would be the last resort and not desirable. No flat-out refusal, as there should have been.

Once again, private enterprise is targeting the public trough. New Zealand is a country where profits are always privatised and losses always socialised.

I am sick of overpaid corporate parasites feeding off my endeavours. Chorus is another example. The Commerce Commission has allowed it to once again overcharge for its services, causing internet providers to raise their prices.

Chorus — not the taxpayer or consumer — stuffed up its quotation. So once again, shareholders should not be inconvenienced or short-changed.

Graham Hansen, Howick.

We don't know Graham, but he might be interested to read our report Monopoly Money which tracks the cost of taxpayer funded corporate welfare since 2008. The report is available to view and download here.

Len Brown's rates

Today we released information showing that while Aucklanders have been facing hefty rates increases, rates for Len Brown’s seven bedroom mansion have been falling.

Information obtained by the Taxpayers’ Union show that Mr Brown’s annual rates bill has fallen by several hundred dollars since becoming Mayor – from $3,994.05 in 2011/2012 to $3,693.76 in 2014/2015.

Since becoming Mayor of Auckland, Len Brown’s rates have fallen by several hundred dollars.

When Aucklanders are feeling the pinch of soaring rates Len Brown must have the best deal in Auckland with a decrease of almost ten per cent in three years.

While everyone’s rates are going up, Len Brown’s are going down. It’s salt in the wounds of those whose rates have increase ten, twenty or thirty percent.

Since our launch in 2013 we have been keeping an eye on huge rates increases within Auckland. Our competition to find the largest rates increases revealed one ratepayer, Mrs Glenys Smith, faced an increase of 34.2 per cent from the 2011/2012 year.

No wonder Len Brown broke his promise to hold rates at 2.5 per cent, it appears that Auckland Council’s inefficiency affects everyone but him.

It’s easy to break your promise when it’s everyone else picking up the tab.

Guest Post: Larry Mitchell on Auckland Council’s “Elephant in the Room”Guest Post: Larry Mitchell on Auckland Council’s “Elephant in the Room”

In the last year there has been a lot of discussion regarding efforts by Auckland Council to fund its yawning funding gap, a gap that mostly relates to its transportation (roading) budgets. New tolls for existing motorways are a possibility, as well as distorying the Auckland Energy Consumer Trust so that Auckland Council (instead of the intendand benificiares) get the annual payout.

Feedback included one commentator who “shouted” (in bold caps) … “Hang On! lets not try to fill any funding gap before we first address Auckland Council’s wasteful and unaffordable expenditures which are so clearly out of control!” … the Elephant!

Fair point … so here, to start this particular ball rolling, are some simple financial facts concerned with Auckland’s expenditures.

The 2012- 2022 long term plan forecast Council group expenditures to increase by 24% over the next five years, although this year’s 2014 actual result is slightly less (by 3%) than that forecast.

Recent publicity surrounds the funding deficit issues referred to already, that is, the search for increased income and other sources to meet budgeted funding totals. But there is something important missing from this picture. Nowhere in the debate surrounding the financial management of Auckland Council is there to be found any call for or actions to address the funding shortfall by making budget savings derived from expenditure reductions.

How different this is from individual budget holders of our family’s expenditures or of firms in the private sector. Any private sector firm faced with a similar funding dilemma to that of the Council would not hesitate in wielding the axe to its expenditures. They would act promptly to lower their overheads, then most likely to reduce payroll, while all the while seeking more efficient and economical ways to produce their goods and services. So why is our Council somehow exempt from employing these sensible strategies?

It appears that the Council’s coercive powers give them an assured (taxation) basis for their revenues and that effectively removes any incentive or compulsion for their making cost savings.   

This is the reason Councils usually just run “cost plus” budgets year after year. A small number, usually those reacting to pressures of their ratepayers, from time to time trim their costs. Currently though New Zealand Councils by and large show little interest in making cost savings as tables of recent year’s inexorable rates increases attest.

An analysis of alternative solutions, designed to modify Auckland Council budget strategies fall into two broad areas.

The first is to look at the Auckland Council culture and practices that have allowed this situation to develop.

The second addresses a range of specific tactics that can make inroads (savings) to meet balanced budget objectives..

So how did this expensive, unaffordable approach to Auckland Council financial management arise? There is no need to itemise these reasons as recent publicity has already done so. One glaring example of a lack of cost control however is the Council payroll. With over 1,100 (roughly 15% by number) of all Council employees drawing over $100,000 salary per annum this of itself is sufficient evidence of poor cost management for most ratepayers when their average incomes are in the mid-sixties.

In the interests of brevity we now merely list some of the missteps that have lead to the creation of our under-performing, expensive monster of a Super Council: 

  • The election of a Mayor and Council (majority) who have shown little interest in the creation of a high performing cost-effective unit of local government. Recent events may have forced them to address some funding alternatives but any cost savings ideas remain missing in action
  • Failure to do (as the Royal Commission recommended) and put in place a governance and management structure where performance and cost control would have the highest priority. The appointment of the suggested performance audit function was quietly shelved – some might say to be replaced it seems by an army of Mayoral feel good PR spin merchants?
  • Appointments in key financial positions of persons with no interest or track records in seeking to achieve affordable, high performance service delivery
  • Layered staffing structures with high payroll and head counts consequently building up large departmental overhead structures.
  • The absence of useful benchmarked expenditure-setting controls or performance improvement processes.
  • A failure to determine (including the use of independent public opinion surveys) the level of service ratepayers are prepared to trade off against cost savings.
  • A disinterested hands off external audit role. This is obvious from recent annual audit management clearance letters to the Council. These reflect an ineffectual extremal audit presence out of its depth, often beholden to Council management and totally disinterested in improved Council performance.

The result of these circumstances are well understood by Auckland ratepayers - just look at their rates bills and see the nearly daily headlines of the latest examples of Council waste and extravagance. Lack of control of Council expenditures has lead to unaffordable rates and their projected high percentage annual increases.

Only a total turnaround of leadership and of Council culture plus effective cost savings tactics can address these issues. Electors, as ratepayers seeking better value for their money have their opportunity next year to (albeit somewhat indirectly) set affordable cost-effective budgets by electing a Council with these as their principal agenda.   

Larry Mitchell is a local government financial analysist.  The views are his own and do not necessary reflect those of the Taxpayers’ Union. Larry can be contacted vai [email protected].  

Daniel Hannan MEP on David Cunliffe & Trickle Down Myth

Daniel Hannan, a Conservative Member of the European Parliament, has written an article for CapX on the myth of “trickle down economics”. He quotes former Labour Party leader David Cunliffe and seeks to dispel the myth surrounding free market economics.

In the run-up to the recent New Zealand election, for example, the Labour leader, David Cunliffe, asserted: “The rich are getting much richer, the middle is struggling and the poor are going backwards. It’s the human face of ‘trickle-down economics’, the idea that if we give more to those at the top, eventually things will get better for the rest of us.”

Cunliffe (who went on to lose badly, Kiwi voters evidently not sharing his analysis) was in distinguished company. When he was standing for the presidency in 2008, Barack Obama had similarly excoriated “the economic philosophy [which] says we should give more and more to those with the most and hope that prosperity trickles down to everyone else.”

It’s a wide-spread meme.

The case against trickle-down, then, is pretty clear. But who exactly is making the casefor it? Where are the economists, the politicians, the commentators, arguing that we should give more to the rich? Who avers that the best way to stimulate the economy is for plutocrats to have more to spend on their Lamborghinis and swimming pools?

Well, here’s an odd thing: I can’t find anyone. Which is, when you think about it, pretty astonishing. One of the consequences of the Internet has been to ensure that even the most eccentric points of view generally turn out to have some advocates. But my online searches, while turning up hundreds of people debunking trickle-down, have not discovered a single person defending it. Could it be that the whole thing is a socialist fantasy, a false creation proceeding from the heat-oppressed brain of Left-wing polemicists? 

If nobody can be found to promote this theory, why is it that there are so many politicians who are quick to rally against it? And what does it actually mean?

Hannan explains:

Coolidge, surely the most underrated of all American presidents, had applied the logic of the Laffer Curve avant la lettre. He could see that the punitive tax-rates levied under the Wilson administration were pushing wealthy people into removing their assets from the productive economy, and believed that, by cutting tax rates, he would boost tax revenues – as well as stimulating the economy in general. 

He was absolutely right. In 1921, when Americans earning over $100,000 were expected to pay an eye-watering 73 per cent in federal income tax, they accounted for 30 per cent of a total tax yield of $700 million. By 1929, when the top rate had been cut to 24 percent, the federal government collected more than a billion dollars in income taxes, of which 65 percent came from those earning over $100,000.

So “trickle-down economics” as characterised by Mr Cunliffe and others appears to be the rallying cry of certain politicians that want to tax people higher amounts and in doing so reduce the amount of tax raised by the government.

Mr Hannan’s full article is well worth a read. It can be found here.

SkyCity convention centre bailout? NBR readers say no

Just before the Christmas break we were aghast to learn that SkyCity was looking to a government bailout after cost overruns with the National Convention Centre project.

It looks as though NBR readers agree with us.

An overwhelming number of NBR poll participants say the government should not pitch in $130 million for Sky City’s new convention centre.

The Auckland-based company increased building estimates for the centre, putting the cost between $470 million and $530 million.

The casino operator had previously estimated the centre would cost $402 million, which it had agreed to cover in return for extensions to its Auckland gaming licence.

The entire purpose of the SkyCity deal was that Auckland and New Zealand would gain a world class convention centre, paid for by SkyCity, in return for various regulatory concessions for the casino.

It was never suggested at the time that taxpayers or ratepayers would have to shoulder any of the burden. If SkyCity underestimated the cost of the centre when they signed the deal, that’s their financial problem and should not be borne by taxpayers.

Economic Development Minister Steven Joyce says he expects the cost difference to be bridged through cost-cutting and in the procurement process, though would consider other funding options if needed.

"Any such options would not involve granting SkyCity more or different gambling concessions, or making further changes to any legislation that affects casinos or gambling," Joyce said.

It looks to us as though Minister Joyce is trying to warm up the public to the idea of gambling taxpayers’ money on the venture.

If that’s the case, we think he will be facing an up-hill battle!

NBR poll participants are strongly against the government forking out money to help SkyCity, with 86% of participants voicing their opposition to the idea. 

Sky City corporate welfare

Fairfax has picked up our comments on SkyCity's recent comments to prompt taxpayer funding of the controversial convention centre.

Auckland Councillors blast Sky City 'corporate welfare' Stuff 22/12/2014

Auckland ratepayers should not have to pay for a blow-out in the cost of the Sky City National Convention Centre, councillors say.

Economic Development Minister Steven Joyce raised the prospect of the Auckland Council chipping in to help fund the project, after new estimates revealed the cost could blow out by as much as $128 million.

The increase in cost could leave taxpayers on the hook for any shortfall, but Joyce said the council could provide some assistance.

[...]

The Taxpayers' Union has derided the deal as "corporate welfare" and called on the Government not to bail Sky City out.

"The whole idea of the SkyCity deal was that Auckland and New Zealand would get an international class convention centre, paid for by SkyCity, in return for various concessions to the casino," Taxpayers' Union executive director Jordan Williams said.

"It was never suggested or intended that the taxpayer or ratepayer would have to shoulder any of the burden. If SkyCity underestimated the cost of the centre when they signed the deal, that's their problem."

Read more.

Cruisin' on the taxpayer

New Zealand taxpayers have forked out $9 million to pay for a  four-day UN conference in Samoa that included hiring the luxury P&O Pacific Jewel cruise liner. New Zealand covered the accommodation and operating costs, of September’s Small Island Developing States.

We not aware of New Zealand taxpayers having ever chartered such a luxury cruise-liner. The ship is marketed as 'the world's largestPacific-Jewel.jpg adventure park at sea’ and includes a zip-line across the top deck, an outdoor circus performance arena and numerous movie theatres. Conference attendees had nine bars, pubs and nightclubs to choose from and seven restaurants and cafes to dine in.

It seems inconceivable that the Ministry of Foreign Affairs and Trade would think it a good use of taxpayers’ money to fund the chartering of a luxury cruise-liner for a conference in another country.  It appears that MFAT brought in the liner so conference attendees could avoid the mainland.

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$9 million is nearly half New Zealand’s annual aid budget to Samoa and amounts to $4,500 per attendee. The amount does not include the cost of attendees’ flights or travel (and presumably cocktails) which makes the $9 million amount all the more remarkable.

If the $9 million had been used for genuine economic development or investment, no one would complain. Instead taxpayers forked out for a conference which ‘achieved’ a document that ‘reaffirmed’, ‘acknowledged’, ‘recognised' and ‘recommitted’ to various bureaucratic platitudes.

Little of the money is likely to have gone into the local Samoan economy. The British-American owned company, P&O Cruises, appears to have been the main beneficiary.

We should be funding measures that actually develop economies, not chartering liners to talk about it

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Earlier in the year press releases were issued by Foreign Affairs Minister, Murray McCully and the Ministry which pumped the value of the talk-fest. They failed to mention the fact that taxpayers were footing the bill at a cost of more than $2 million per day. It it a shameful misuse of public money and officials are no doubt praying that the Christmas rush allows them to avoid public vilification.

 

State Services Commission staff the highest paid

The average salary for staff at the State Services Commission is higher than at any other government department, according to figures released by the Taxpayers’ Union. This morning’s Dominion Post reported the Commission staff earn an average of more than $113,000 a year - $45,000 more than the public sector average.

Frontline orientated groups such as the NZ Customs Service ($60,209) and the Department of Corrections ($60,630) have significantly lower salaries when compared to the management-heavy Ministry of Women’s Affairs ($104,586) and Ministry of Pacific Island Affairs ($90, 887).

Instead of rewarding those on the front line, the Government appears to be making those in Wellington most comfortable. How can, for example, the Ministry of Women's Affairs and the SSC justify higher average salaries than both Foreign Affairs and the Serious Fraud Office?

In light of the recent blunders by the State Services Commission, Paula Bennett should be asking some serious questions as to whether taxpayers are receiving value for money from those who are supposed to be promoting an efficient public service.

Over the flip is the list of government departments and average salaries (access by clicking 'read more').

Annual Review

The Taxpayers’ Union has today released its annual review, covering the first 12 months of operations.

We’re proud of the document, and what we’ve achieved to date, but there is still plenty to be done.

There are hundreds of organisations that campaign for more government spending and a higher tax burden. The Taxpayers’ Union helps balance that debate by exposing government waste, arguing for more efficient government spending, and promoting the benefits of lower taxes.

Thanks to all our members, donors and supporters who make our work possible.

If you're not already a member click here to click here to join the Taxpayers' Union, or click here to make a confidential donation.

'Trickle down economics' doesn't exist

This morning's Radio NZ's Morning Report interviewed Labour's Finance Spokesperson Grant Robertson on the OECD report on inequality released today. In the interview, Mr Roberson referred a number of times to 'trickle-down economics' and reiterated the point Green Party co-leader Russel Norman made in an earlier interview that the theory is invalid. But what does the term mean and have fiscally conservative groups (such as the Taxpayers' Union) or centre-right politicians ever argued for lower taxes on the basis a 'trickle-down' theory?

Audio on demand: Labour's take on inequality's effects

What is 'trickle-down economic' theory? Does it exist?

Back in February, Jenesa Jeram at the New Zealand Initiative, a Wellington based think-tank, considered the same question.

Defeating the trickle-down straw man

Jenesa Jeram | Research Assistant | New Zealand Initiative

In debating, speakers are not rewarded for having a superior argument per se. They are rewarded for convincing the audience that they do. The easiest – but ultimately dishonest – way to do this is to caricature the opponent, portraying their argument as ridiculous beyond belief.

Trickle-down economics is an example of a “ridiculous beyond belief” idea; that giving money to the rich will eventually trickle down to the rest of the economy to benefit all. Indeed, the refutation of this theory of trickle-down economics dominates the discourse.

Recently, opposition leader David Cunliffe cited the theory’s failure in his State of the Nation speech, arguing that “The rich are getting much richer, the middle is struggling and the poor are going backwards. It’s the human face of “trickle-down economics”, the idea that if we give more to those at the top, eventually things will get better for the rest of us.”

The problem is, there is no such thing as trickle-down economics. In fact, it is an oxymoron: it has no “economics” in it whatsoever. Thomas Sowell, senior fellow at the Hoover Institution argues convincingly that the theory is a straw man argument – a flimsy invention of those arguing against it so they can easily knock it down. Sowell writes that the idea cannot be found in “even the most voluminous scholarly studies of economic theories”.

Trickle-down economics is a complete caricature of the original arguments supporting economic growth. No economist has ever argued that in order to make a poor person richer you should make a rich person richer first. Economists have, however, argued that economic growth can make us all better off, whether we are rich or poor.

So why has this trickle-down nonsense persisted for so long? Perhaps because it sets the parameters of debate around redistribution, focussing solely on inequalities in wealth, rather than inequalities in capabilities. If wealth is not trickling down naturally through voluntary processes, then it is up to the government to intervene to ensure it does.

However, there is a much better way to deal with inequalities. Instead of trying to correct inequalities through redistribution, we should ensure that everybody has a chance to participate in our growing economy. First and foremost, this means making sure people acquire the right capabilities and education.

Rather than waiting for wealth to trickle-down from the top, the focus should be on ensuring everyone has the ability to swim with the economic tide.

Ms Jeram's final two paragraphs hit the nail on the head. In fact they are a better summary of the main message of the OECD report: the importance of investing in education and ensuing equality of opportunity.

Unfortunately Messrs Robertson and Norman couldn't help but take the opportunity to use the report to mischaracterise the economic arguments for a low tax economy. Our press release responding to the comments is over the flip.

 

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.

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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.

 

Time for Fed Farmers to be weaned

Image from Stuff.co.nzIn yesterday’s NBR it was revealed that the Federated Farmers lobby group had received $228,000 of taxpayers’ money in the past five years.

“It shows Federated Farmers received many payments via three Sustainable Farming Fund projects – a contestable fund investing up to $8 million a year in applied research and projects led by farmers, growers and foresters.

The $228,658 in payments include three separate Federated Farmers farm days from 2010-2012 that the ministry contributed almost $150,000 toward. Other payments were made for leadership programmes, training seminars for farm managers, two Federated Farmers’ AGMs, as well as attendance at an international sheep meat forum in Brussels.”

More via NBR (paywalled)

We have called for Fed Farmers to be weaned off taxpayer funding.

Government agencies should not be handing over taxpayers’ money to lobby groups and pet causes. Here a group that speaks for one of our largest industries is on the take form the Government’s ‘Sustainable Farming Fund’.

How can a lobby group such as Fed Farmers remain credible and independent, when it’s receiving taxpayer funded top ups?

Pie in the sky

This morning we released advice on the cost to taxpayers of three of Internet-Mana’s education policies. At a total cost of $17.6 billion they are higher than the entire policy package of the three main political parties combined.

Labour leader David Cunliffe is right when he reportedly said that Internet-Mana are ‘numerically challenged'.

With just three policies Internet-Mana have managed to pledge more spending than National, Labour and the Greens combined.

Even the $11 billion in spending cuts proposed by the ACT Party wouldn’t pay the tab for Internet-Mana.

According to Dr Michael Dunn of Economic and Fiscal Consulting Ltd, forgiving student loan debt would cost $14.2 billion, while ‘free’ tertiary education and full student allowances would cost $568 million and $570 million per annum respectively.

Altogether these three policies would cost a staggering $10,386.84 per household.

As most of Internet Mana's policies lack sufficient detail to enable them to be costed, the Party has not been included in the Bribe-O-Meter graphic at bribe-o-meter.co.nz.

Click here to visit the Bribe-O-Meter.

Final results of Bribe-O-Meter published

Yesterday we published the final update of our election costing 'Bribe-O-Meter' in the lead-up to Saturday’s election.

The Bribe-O-Meter now reflects the costs of all policies announced. It shows that of the main parties:

  • the Greens have promised to spend the most, $6.54 billion, or $3,857.77 per household during the next Parliamentary term;
  • the Labour Party have committed to a policy programme worth $5.81 billion, or $3,423.16 per household; while
  • National have committed to $1.4 billion, or $823.62 per household of new spending.

Throughout the election campaign our independent expert has made adjustments to the Bribe-O-Meter's numbers as parties have announced, refined and clarified their policies. Nevertheless, throughout the Greens have consistently proposed the highest amount of new spending, while ACT have been the only to propose an overall reduction.

While Labour and the Greens have outlined their plans for the next three years, National have remained more reserved, perhaps signalling debt repayment or future tax relief.

Click here to visit the Bribe-O-Meter.

Free Tertiary Education on the Taxpayer

Internet-Mana promises free tertiary study Stuff.co.nz - 12/09/2014

Free tertiary education and a universal student allowance could be delivered immediately if they were prioritised over tax cuts, the Internet-Mana Party says.

Taxpayers' Union spokesman Ben Craven said writing off student debt would benefit professionals such as lawyers and doctors who had large student loans, but were also likely to be on good incomes.

Forgiving the entire amount of student loan debt currently owed would cost an average of $8374 per household, and was likely to be more expensive than the election policies of all the mainstream political parties combined, Craven said.

"Most voters will see this promise by Internet-Mana as both fanciful and misleading."

Click here for the full story on Stuff.co.nz.

Cost of forgiving student debt

Yesterday the Internet-Mana Party announced that it wants to forgive existing student loan debt.

NBR: Internet Mana says it will forgive student debt, currently totaling $14.2b

Internet Mana has today today confirmed it would make tertiary education free — but added a new wrinkle: a pledge to "Develop a comprehensive loan forgiveness programme for those with existing debt."

The party says it will also introduce a universal student allowance.

It says total student is currently $14.2 billion.

...

The debt write-off scheme would be phased in from 2016 and be "funded from a variety of sources."

We believe the policy would result in a dramatic wealth transfer from middle class taxpayers to the lawyers, accountants, doctors and professionals who have large student loans, but are also likely to be on good incomes.

With student loan debt is currently $14.2 billion, forgiving it would cost, on average, $8,374 per household - that cost alone is more expensive that all the election policies of the mainstream political parties combined

Following our spokesman's public comments NZUSA President Daniel Haines' took exception claiming that the cost to taxpayers of forgiving student debt is only $8 billion.

“The student loan scheme is currently in the government’s books at $8 billion, not the $14.2 billion the Taxpayers’ Union cites, and reversing the tax cuts that benefited those high-earners – as Internet MANA proposes – would provide $1 billion per year, some of which could be used for debt relief for those struggling with their student debt burden on low incomes.”

Screen_Shot_2014-09-13_at_11.37.18_am.png

Mr Haines' claim might hold more credibility if he wasn't contradicted by this illustration on his organisation's own homepage

Treasury's PREFU document* shows that student debt has risen from the $13.5 billion to $14.2 billion. The $13.5 billion figure is quoted on the NZUSA's homepage.

$14.2 billion is the estimated nominal value (including accrued interest) of all student loan borrowings. It is the figure that the NZUSA usually use in publicly and advocacy for 'the burden of debt'. The amount represents $8,374 per household.

It’s a nice try by the NZUSA to use a discounted value, but the fact remains that forgiving student debt would cost $8,374 per household.

Mr Haines also claimed in his media release that repaying a debt is a tax. In fact, the tax is on the middle income earners who pay the interest on his degree, while he reaps the rewards of a subsidised tertiary education.

A student loan represents a choice made by an individual to accrue debt in the short term in order to better their employment prospects in the long term and, in turn, their earning potential. As ridiculous as the suggestion that all student debt would be wiped, is NZUSA's inference that Kiwis' mortgages, hire purchase payments and monthly credit card bills are taxes too.

* Refer to note 13 on page 101 of the Pre-election Economic and Fiscal Update. More comprehensive information on Student Loans, including nominal debt and carrying value are available on the Ministry of Education's student loan annual report.

NZ First still won't front up

With just over a week to go until the general election, and with much chatter of Winston Peters riding high in the polls. New Zealand First still won't front up with details of the cost of its election policies for inclusion in the 'Bribe-O-Meter'. This morning we issued a media release giving NZ First a final chance to provide our expert the material to cost NZ First’s policy.

"The Taxpayers’ Union has made numerous formal and informal approaches to Mr Peters and his party. Despite our best efforts Mr Peters continues to fob off providing transparency to the voting public."

Our independent expert, who used to lead the team at IRD that costed social policy for numerous governments (ironically including when Mr Peters was Treasurer!) has spoken to Party officials in Winston Peters’ office but still does not have enough information to give any insight as to what NZ First’s policies will cost.

Perhaps the reason NZ First has shied away from releasing their policy costings is because Mr Peters is worried it would deter voters? In 1996, the last time National was forced to go into government with Mr Peters, it cost taxpayers $5 billion, or $2,950 per household.

Right now we’re working hard behind the scenes to complete the final update of the Bribe-O-Meter. With the exception of NZ First, we want to thank the general helpfulness and enthusiasm other parties have displayed towards the project.

The voting public and taxpayers deserve better – but it looks like Mr Peters doesn’t want you to know how much his support will cost…

Dr Michael Dunn on relationship between unemployment and minimum wage

Minimum wage policy was quite a feature on last night's TV3 leaders' debate between John Key and David Cunliffe.  Stuff reports:

The first half of the televised TV3 debate was dominated by the economy, with Key on the attack over Labour’s plan to raise the minimum wage by $2.

Key argued that small business can’t afford the hike and it will cost jobs.

Cunliffe cited US research that shows there is no relationship between a minimum wage rise and unemployment, saying this was backed by Treasury. ‘‘You can have cheap government or you can have good government,’’ he said.

Earlier in the week, we released an independent report by Dr Michael Dunn (who ran the team at IRD costing social policy for various ministers of revenue) which critiques the numbers in the Green Party's wage policy. The report is relevant to the debate:

Context

There is now a lot of debate about the minimum wage and the expected impact of an escalation of the minimum wage on employment as well as on net Government revenues (the fiscal impact). 

Our previous analysis focussed on the fiscal impact, and showed that even without limiting employment growth, the extra revenue from income tax (and for that matter, on GST on the additional wages) would be insufficient to offset the additional cost to the Crown to fund its payroll and primary service contractors.

Impact of increasing minimum wage on employment

We are now hearing claims that “numerous studies have shown that increasing minimum wages has no adverse impact on employment levels, and may in fact lead to increased employment”.

We agree that there are numerous studies from well-respected researchers that demonstrate this to be the case, particularly in the US. However, the US is a poor choice for estimating the likely impact of increasing the minimum wage in New Zealand. The minimum wage in the US is less than 40% of the median wage, whereas in New Zealand the minimum wage is above 60% of the median wage. This means that further increases here are much more likely to affect wage relativities and the employment market in general.

There are studies that demonstrate an impact of increasing minimum wages on employment in countries where the minimum wage is above 50% of the median wage. We referred to some of these in our previous paper. We repeat that section of our paper below.

 

Untitled.png 

Source: US Department of Labour, September 2014

Studies that compare the employment effects of minimum wage changes in different countries

Research into the impact of increasing minimum wages on employment has identified that the effects are negligible when the minimum wage is below 35% of the average wage (as in the US), but are more significant and negative (i.e. raising the relative minimum wage reduces future employment) when the minimum wage is above 45% of the average wage (as in France and several other European countries).

So in short, Mr Cunliffe is right to say that in countries such as the United States, Japan and Korea, where the minimum wage is a small fraction of the median lifting the wage has little impact. The key question though is whether that holds true in New Zealand, France and Turkey - where minimum wages are already a much higher percentage of the median.

Dr Dunn's full paper can be downloaded here. His abridged version (just covering above) is available here.

 

 

 

Are the Greens still an environmental party?

Analysis of the spending promises by the Green Party shows that only 9% of the Party’s committed spending so far this election relates to environmental priorities. According to the ‘Bribe-O-Meter' of the $4.9 billion in new spending the party is promising, only $443 million relates to the environment.

Unlike the Green Party I joined in 2004, the existing policy platform appears to be more about transferring wealth than protecting the environment. In comparison to the $443 million pledged for environmental causes, the Green’s welfare policies have been assessed by our independent expert to cost $1.82 billion. $1.82 billion is equivalent to $1,073.24 per New Zealand household.

Based on these numbers, the current Green Party is arguably only 9% ‘green’.

How green are the Greens?

Expert costing of Green Party wage policy

The Taxpayers’ Union is today releasing independent research from former NZIER Principal Economist, Dr Michael Dunn, which raises significant questions about the Green Party’s election costings.

Dr Dunn’s analysis of the Green Party’s “Fairer Reward for Fair Effort” policy document shows that the Party’s taxation forecasts are incorrect and instead of generating tax revenue, will actually result in a net loss in revenue.

The Greens say that their policy will mean increased revenue to the Government of $800 million per year, our independent expert says the actual cost to the Government is at least $110 million. That is a massive difference of more than $900 million in the one policy and suggests the Greens' costings are fundamentally flawed.

On top of the drop in tax revenue, Dr Dunn estimates that the policy would increase government expenditure on employee wages and contracts for services by around $1.1 billion over 3 years.

The Taxpayers’ Union repeats our offer to allow our independent expert to confidentially cost any political parties' policy before they are released so that the public can have confidence in how much a policy will cost or benefit taxpayers.

The report's author, Dr Michael Dunn, has told media:

The Greens' costing completely ignores the reduced taxes from companies due to the higher wages. They appear to assume that businesses can magically generate more money to fund higher wage bills. It doesn’t happen like this in the real world.

Expected slower employment growth will also adversely affect tax revenue.

Under this policy the Governments' primary fiscal balance would be reduced, by at least the direct costs already acknowledged by the Green Party, as the incremental tax revenue yield would be minimal, if any. In addition social transfer payments linked to wage rates would be increased.

This isn’t some Taxpayers’ Union hack calling into question the Greens' costings. Dr Dunn led the team at IRD that costed revenue policy and produced budget revenue forecasts for 12 years. He has advised both National and Labour led administrations. We've engaged him to review numerous party costings and provide the information for our Bribe-O-Meter.

UPDATE: Our expert, Dr.Dunn, wishes to thank a reader who pointed out that the proposed October 2014 increase in the minimum wage would be only 75 cents per hour, and that would have a reduced cost and impact. He has recalculated his figures accordingly, but the conclusions are unchanged. The updated report is available for download here.

Dr Michael Gousmett on shifting the burden

According to an article in The Press, the Christchurch City Council is to approach the government regarding the ownership costs of the city’s proposed major facilities. That then shifts the burden from the city’s ratepayers to the country’s taxpayers.

Council trying to lighten load for city ratepayers

“The city council does not want ratepayers bearing the ownership costs of all the central city’s major new facilities and is talking to the Government about alternative options.

Mayor Lianne Dalziel told The Press the council was talking to the Government about ownership arrangements and the timing of some of the projects.”

Dr Michael Gousmett has written to us suggesting a different solution:

Shifting the burden from ratepayers to the country’s taxpayers might be fair and reasonable given the underlying reason for having to do so, that is, a natural disaster. 

Has the council considered approaching the ratepayers instead, not to ask for increased revenue from rates which according to the council’s 2013 financial report generated $277 million, or 30 percent of the council’s income of $938 million, in revenue?

The mayor said the council was “agnostic” over whether the Crown or a private sector partner ended up owning and operating the new facilities, but it did not want to carry all the costs.

I am suggesting something else – asking the ratepayers if they would invest in these assets through a share or bond issue by the council to contribute towards the cost of their construction. 

As well as having a sense of ownership, ratepayers could be given preferential treatment by way of a dividend paid at a higher rate, with the council also offering shares to non-ratepayers as well. 

The dividend could then be applied against the rates by way of a non-taxable rebate, or alternatively treated as income in the hands of the ratepayer, whichever they choose to suit their personal tax position. 

We think it's an idea worthy of discussion. What do you think? Drop us a line, or pop a message on our Facebook page.

Taxpayers’ Union has attacked National more often than any other party

Since the Taxpayers’ Union launched a number of left wing critics have claimed that we are just a front for the National Party, and are biased in its favour. The critics are wrong and their politically motivated criticisms are just nonsense.

We have always maintained that our stand is against waste and inefficiency and against bad policy wherever we find it, and that has always included the current government.

As Chairman I ensure that our Board and staff know that we are our own vehicle, with our own purposes, and don’t do other people’s bidding. Of course, we work with other groups (for example we partnered with Age Concern, Consumer NZ and the Financial Services Council for the Fair Tax for Savers campaign) where our objectives align.

An analysis of our media releases shows that we have criticised the National led government more often than any other party or entity.

Of the 192 media releases made by the Taxpayers’ Union since we started operations in October 2013, 121 media statements have been about central government of which 67 have criticised some aspect of the National Government’s policy and just 12 statements have supported a policy stance.    

The figures for Labour are 9 statements against and one in favour; for the Greens it is four against and two in favour.

We backed Winston Peters on the Interislander issue, and criticised a NZF candidate for double dipping and commended another NZF candidate, Ron Mark, for promising not to do so. We have issued only three statements about the Mana Party all critical of some aspect of their policy.

63 statements have been about local government. Most of these, 60 out of the 63 were about specific councils; 31 were about the Auckland Council alone.

Three were to do with our local government report which detailed the financial position of all councils, and a second report setting out 101 ways councils could save money.

We have criticised the current government on nine separate occasions for its continued use of taxpayers’ money in grants and handouts to so called growth companies. We called these ‘corporate welfare’ and in turn we have been attacked by Minister Stephen Joyce for doing so.

And we went after government Minister Todd McLay for getting a government grant to back a tourism project in his own electorate. The “stench of pork barrel politics in Rotorua” was our headline.

We have upset Business New Zealand as well as the Council of Trade Unions for revealing government funding to a joint venture those two bodies had for health and safety training. The ACC’s audit of the training labelled it a waste of time, and the government withdrew the funding.

We have also campaigned against the government’s decision to make passports valid for only five years, and we claim some credit in forcing a rethink which has put ten year passports back on the agenda.

These figures speak louder than the cries of our critics. Their claims of our being a National Party front organisation is empty rhetoric without any factual substance.

We have been genuine in our efforts to hold the government to account and to promote better policy and more effective spending.  We will continue to do that regardless of the outcome of the election.

After the flip is our raw data.

Minor parties added to Bribe-O-Meter

We've added the Green, ACT, United Future and Conservative Parties to the ‘Bribe-O-Meter’ election costing page launched last month.  Excluding ACT and New Zealand First, the total election ‘bribes’ - that is new spending not already in the budget covering the next parliamentary term, equals $12.7 billion, or $7,486 per household.

We're delighted that the Bribe-O-Meter is enabling Kiwis to judge for themselves the various bribes this election. With the addition of the minor parties voters can assess which political parties are offering taxpayers value for money.

Currently National's election promises add up to $329 per household. The equivalent figure for Labour is $2,776, the Greens $2,893, United Future $1,253, and the Conservatives $236. ACT is in the negative, committing to cut spending by $6,876 per household.

A lack of detail in New Zealand First’s policy documents has made it impossible for the Union's independent expert, Dr Michael Dunn, to calculate credible figures for the Party’s inclusion in the Bribe-O-Meter.  Public and private requests to New Zealand First have, to date, not resulted in amelioration. New Zealand First apparently just doesn’t have the information. It appears that Mr Peters makes promises to all and sundry, but no one at his office is adding up the cost.

Click here to view the Bribe-O-Meter.

Bribe_o_meter

Inciting violence, but @peace with taxpayers’ money

Music has always been a tool of free expression. Particularly from the 1960s onwards, artists began politicising their messages through music, voicing their opinions about war, famine and other hardships. The Beatles, Bob Geldof, The Exploited and Pussy Riot music has not just been a tool of expression, but a call to action.

Yesterday saw the release of a track by New Zealand hip-hop act @peace, grimly titled “Kill the PM”.

Fairfax reports:

An Auckland hip-hop crew slammed for releasing a song with lyrics that apparently include a threat to kill Prime Minister John Key are urging young people to enrol to vote.

Kill The PM, by @peace, depicts a golfing, luxury car-driving Key, and says he should die - "ain't doin' nothin' so I'm gonna kill the prime minister".

It continues: "I been tryin' to get a job but they got none/so I instead I got a sawnoff shotgun/and 'pop'."”

It soon came to our attention that @peace had been in receipt of taxpayer-funded grants from NZ On Air for previous tracks.

According to the NZ On Air website, the group has received $32,000 since late 2011. $6,000 of which was received to make a music video for one of their songs last month.

So far NZ On Air has refused to denounce @peace for their hateful track, nor have they pledged to refuse the group taxpayer-funded grants in the future.

We have written to NZ On Air to outline our concerns and request assurance from the Chief Executive that no further taxpayer-funded grants will be made to any group espousing hate-speech.

Letter is uploaded here:



Dunedin City Council Loses 152 Cars!

The Taxpayers' Union is calling for Dunedin City Council to disclose more details after it was revealed 152 Council vehicles have been sold without the Council recouping a cent. It is estimated that the Council is out of pocket to the tune of $1.5 million.

Dunedin City Council criticised over missing 150 fleet cars Newstalk ZB - 23/08/2014

Dunedin City Council is being criticised for failing ratepayers, by refusing to explain how it managed to lose more than 150 fleet cars.

The Council has confirmed it has complained to police over the alleged fraud which has cost the city more than 1.5 million dollars.

The information was released by way of a video comment from the Mayor and the Council's CEO no one's been available to answer questions.

Taxpayers Union spokesman Jordan Williams says people are right to feel aggrieved at the lack of information.

He says the Council should be explaining more about the complaint it's made to police.

Click here for the full news report.

Taxpayers' Union launch 2014 Bribe-o-meter

This morning we launched our 2014 election costing project to calculate the total cost of promises politicians make in the lead up to the 2014 General Election. The “Bribe-o-meter” allows Kiwis to judge for themselves the political bribes as parties vie for votes.

The Bribe-o-meter will hold the politicians and political parties to account for how much their pork barrel bribes will cost New Zealand households. For too long politicians have got away with plucking numbers out of thin air when announcing policy.

The Bribe-o-meter is about transparency. We will be updating the figures weekly, allowing potential voters to assess which political parties are offering taxpayers value for money.

As of Monday, National's promises add up to $2,770 per household. For Labour it's $4,082.

We've engaged Dr Michael Dunn to undertake the economic research for the project. Dr Dunn will provide the Taxpayers' Union independent figures and analysis. Dr Dunn is a former Principal Economist at the New Zealand Institute of Economic Research and led the team of financial analysts at the Inland Revenue Department that forecast government tax revenues, and costed social policy through thirty Budget, Half Year and pre-Election Economic and Fiscal Updates. While at IRD, Mr Dunn served under numerous ministers and treasurers under National and Labour lead governments.

In the coming weeks we will be updating the Bribe-o-meter tables, asking Dr Dunn to provide an expert review of parties' cost estimates and adding the costs of further announced policies. We'll also be adding the estimated costs of policies proposed by the minor parties.”

Click here to view the Bribe-o-meter.

Porky presents troughing award to CEO of Ministry of Pacific Island Affairs

Introducing Porky, our new mascot and aspiring list MP!

Porky loves identifying troughing MPs and bureaucrats. The crème de la crème, he surprises with an awards ceremony. After all, when you’ve turned troughing on the taxpayer into an art, it would be rude to get no recognition!

This morning Porky issues his first award having read the Dominion Post's coverage of Pauline Winter, the Chief Executive of the Ministry of Pacific Island Affairs and her $30,000 expense bill , including weekend trips for her and an assistant to fly to Auckland most weekends.

Taxpayers are stumping up for Pacific Island Affairs boss Pauline Winter to travel between Wellington and Auckland most weekends.

Winter has a home in Westmere, but her $240,000-a-year job is based in the capital.

Her expense records show that over the last year she flew between the two cities almost every weekend. Between July 2013 and 2014, her expenditure totalled more than $30,000, most of which went on airfares, taxis and rental car hire in Wellington and Auckland.

Taxpayers fork out $270,000 per year for this Chief Executive and she is refusing to take calls from the media. The Taxpayers' Union called on Ms Winter to front up, or resign.

This afternoon Porky visited the Ministry of Pacific Island Affairs, hoping to present Ms Winter with a “Troughing Award” to acknowledge her endeavours with taxpayers’ money.

 Unfortunately Ms Winter's didn’t front. Porky was devastated. Executive Director Jordan Williams recounts:

"For Ms Winter's gallant efforts to rip off New Zealand taxpayers with publicly funded weekend trips to the exotic capital of the South Pacific known as Auckland, Porky and I visited the Ministry’s offices to present her with the first of our 'Troughing Awards’."

“Ms Winters was in the office but refused to front-up or speak to media."

"Despite Ms Winter's expenses being more than $30,000 she chose to hide in her office and send a spin doctor to accept the award on her behalf."

“Ms Winter's refusal to justify her expense bill is the epitome of arrogance. She should front up, justify her extravagance on the taxpayer purse, or resign.”

Porky’s quest will continue - in fact you can expect to see him out and about where ever wasteful bureaucrats, politicians and taxpayer funded groups are wasting hard earned tax dollars.

Fair Tax for Savers

This afternoon in partnership with Age Concern, Consumer NZ and the Financial Services Council, we launched the 'Fair Tax for Savers' campaign in Wellington.

 

Campaign supporters

What is the Fair Tax for Savers Campaign asking for?

We're calling on politicians to remove the over-taxation of long term savings, specifically:

  • the effective tax rate paid on KiwiSaver funds to be the same as the marginal income tax rates KiwiSavers would pay on their other income; and 

  • term deposits to be taxed only on the real interest rate (actual interest rate less the rate of inflation) rather than the nominal interest rate (the actual interest you receive) as the compensation for inflation is not really economic income. 

The campaign involves inserting more than 120,000 post cards in print media for readers to complete and send to MPs. The first insertions were made this morning.

Support the campaign

Please take a few moments to visit www.fairtaxforsavers.org.nz and email a postcard to your local MP asking for fairer taxes on savings.

NZ Herald on patronizing brochures

Backlash over costly brochure Herald on Sunday - 27/07/2014

The Herald on Sunday included comments from Taxpayers' Union Executive Director Jordan Williams in coverage of the recent "No car? No problem!" brochure from the Office for Senior Citizens which cost approximately $37,000 excluding staff time. 

"A brochure telling senior citizens they can walk or catch the bus when they're no longer able to drive has been slammed as patronising and a waste of public money."

The brochure, which was first printed in 2005 with an updated version this year, has cost about $37,000, excluding staff time.

Taxpayers Union executive director Jordan Williams said the money could have been better used.

"Our seniors weren't born yesterday - spending taxpayers' money to produce patronising brochures explaining to them the existence of taxis and public transport is insulting.

"The Government is throwing money away at brochures that parrot what is surely common sense."

Read the full article here

Ministry of Health's Taxi Spending Raises Eyebrows

Ministry says walk's silly, we'd rather take a cab Stuff.co.nz - 27/07/2014

When it comes to walking the talk, it seems Ministry of Health staff would rather just take a cab.

Last year ministry staff took more than 1000 taxi rides for less than $10 - at the same time as officially advocating walking as a way to increase New Zealand's low levels of physical activity.

The ministry has internal advice for staff on nutrition and physical activity that includes walking short trips, and using stairs rather than lifts.

The taxis were an unacceptable use of taxpayer money by a ministry responsible for promoting physical activity, according to the Taxpayers' Union. "It is sadly ironic that while the Ministry of Health spends taxpayer money to promote active living, officials are getting taxis a few hundred metres down the road," said Jordan Williams, executive director of the Taxpayers' Union.

Click here for the full story.

Getting around without a car

The Taxpayers’ Union is questioning the merits and costs of the “No car? No problem! Getting around your community without a car” brochure, released by the Office for Senior Citizens. The brochure’s purpose is to explain to senior citizens transport options when they can no longer drive.

The primary purpose of the taxpayer funded brochure is to make suggestions such as:

  • “walking more often”
  • “getting lifts from family and friends”
  • “using taxies”
  • “using public transport"
  • “letting others use your car to drive you places”
  • "public transport and getting family to drive you"

It has cost taxpayers over $37,000 to produce the brochures since 2005 (excluding the cost of staff time).

Instead of addressing pressing issues such as fraudsters preying on our seniors and elder-abuse, the Government is throwing money away at brochures that parrot what is surely common sense. When the brochure launched, the Minister for Senior Citizens even put out a press release to welcome it!

We think that publishing a brochure explaining that people can walk places is a waste of taxpayers’ money and public servants’ time. Take a read and tell us what you think via our Facebook page.

We know that politicians like to be seen to be doing something, but surely New Zealanders don’t need to be told by the Government that taking a bus is an option, when you can no longer drive.

No Car No Problem

 

To view the responses to our information requests lodged with the Minister and Office for Senior citizens, click the links below. 

OIA response 19 June 2014

OIA response 3 July 2014

 

 

When someone else is paying, why walk?

A few months ago a Ministry of Health official contacted us regarding the use of taxi charge cards within the Ministry, and suggested we look at the number of 'micro-trips' taken by managers, often between the Ministry's Wellington offices and Parliament.

Details of the Ministry's taxi charges show its Wellington staff are making more than 1,000 taxi trips a year costing less than $10.

In the 2012/2013 financial year, Ministry staff based in Wellington charged taxpayers for 8,645 taxi trips with 1,076 of those for journeys costing less than $10.

It is sadly ironic that while the Ministry of Health spends taxpayer money to promote active living, officials are getting taxis a few hundred metres down the road. 

A taxi trip for the sake of a five minute walk is simply not justifiable when it’s someone else's money. The documents show that these short trips make up more than ten percent of all taxi charges by Wellington based staff.

Taxpayers will not be impressed that Wellington health bureaucrats are the in habit of getting them to pay for micro-trips when it is probably faster to walk.

Ministry of Health response 05/06/2014


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