14 DECEMBER 2017
FOR IMMEDIATE RELEASE
With the Budget Policy Statement indicating fiscal restraint, and the Government not signalling increases in revenue over and above nominal growth and fiscal drag, the Tax Working Group should be tasked to offer fiscally neutral solutions says the Taxpayers’ Union.
Jordan Williams, the Union’s Executive Director, says:
“We were pleasantly surprised, and welcomed, Grant Robertson’s public comments resulting from our calls prior to the election that any policy changes by the Tax Working Group could be fiscally neutral. Now that he’s in office Mr Robertson should task the Tax Working Group with finding ways to reduce existing taxes to compensate for the costs of any new taxes it suggests.”
“Today’s mini-budget is a signal to Kiwis that the Government does not intend to smack taxpayers with an expensive rejig of the tax system. A credible way to do this, would be to make sure the Tax Working Group understand this.”
14 DECEMBER 2017
Earlier this week, we sent this Offical Infomation Act request (OIA), to the Cabinet Secretary (a senior official in the non-political Department of Prime Minister and Cabinet) asking what information he has, or knows, about the contents of the 36-page secret document.
Even if the DPMC does not actually have the document, any knowledge of its contents is 'official information' for the purposes of the Official Information Act. So, that is precisely what we have asked for.
Back in November the Prime Minister, Jacinda Ardern, said her Government would be "the most open, most transparent Government that New Zealand has ever had". So we started a petition calling on the secret 36-page agreement between Labour and New Zealand First, to be released.
If you want the Government to live up to their campaign promise, click here to sign our petition.
$380 million = $190,000 each
Earlier this week, the Government announced the details of its plan to make the first year of tertiary study free fully taxpayer funded. For the princely sum of $380 million, an extra 2,000 students are expected to pursue tertiary study from next year – that’s $190,000 each.
Giving every student free education in order to encourage a small number to pursue university or a trade offers anything but value for money. If the Government is concerned about some young people not receiving an education, they should target their policies, not give in to universalism.
As covered in our report published prior to the election, 'Robin Hood Reversed', this policy represents a huge wealth transfer from middle-income earners to tomorrow's rich.
The Government's policy gives every future doctor, lawyer and accountant a free ride — at the expense of the average taxpayer. We say it would be much cheaper to give scholarships for those who need them, and spend the money improving the quality of courses (or boosting the funding of schools or education providers).
The officials agree with us
Yesterday, the post-election "Briefings to Incoming Ministers" (BIMs) were released. Our team has been busy working through them and were interested to see the Tertiary Education Commission (TEC) BIM fire darts at Labour's policy.
TEC points to poor decision-making from prospective students as a major problem already. It advises the new Minister that students already change their course, drop out, or act impulsively too much. How much worse will that be once students have no financial stake?
In addition, TEC explain that an increasing focus in recent years has been on 'investing in outcomes' rather than simply measuring success by the number of participants in tertiary education, or the number of degrees awarded. Nevertheless, the Government has ploughed ahead with a "free fees" policy specifically designed to do the opposite: get more bums on seats.
The Value(s) of Auckland DHB
Earlier this week we blew the whistle on the Auckland DHB spending $171,000 updating its ‘values’. That involved holding a ‘values week’ which entailed 17 workshops and 750 hours of staff time. A London business consultant was even flown in – twice – to provide expertise.
The ADHB’s former values of ‘Integrity, Respect, Innovation, Effectiveness’ were replaced with ‘Welcome – haere mai, Respect – manaaki, Together – tūhono and Aim High – angamua.'
Put another way, the DHB spent $170,000 to replace the value of ‘effectiveness’ with merely ‘aiming high’!
The Taxpayers’ Union was happy to offer the ADHB some alternative values, except our suggestions were free of charge. We thought ‘Sticking to our knitting’, or ‘Not flying in a London consultant to legitimise our waffle-fest when sick people are literally relying on DHB resources for survival’, were both good options. You can read our comments to the media here, and coverage on Stuff here.
175,000 more questions for Wintec
The CEO of Wintec, Mark Flowers, appears to be scared of the media. He's reportedly spent an incredible $175,000 of public money hiring lawyers to protect him from the local Waikato Times questioning him about an investigation relating to serious allegations. The allegations are yet to be made public, but if they are as untrue as he claims, why spend $175,000 of our money on lawyers and literally hide in his car in the polytechnic's carpark to prevent having to answer questions?
Our research team are digging deep into this story — as well as similar issues at other polytechnics — so watch this space.
Our 2017 Ratepayers' Report - local government league tables - has identified Otorohanga, and Grey District Councils as the only two local authorities in New Zealand to govern without an Audit and Risk Committee.
Earlier in the year, Ratepayers' Report showed that Otorohanga, Grey and Waitomo District Councils were the only New Zealand councils failing to follow best practice in this area. Now that Waitomo District Council has introduced an Audit and Risk Committee it means Otorohanga and Grey District Councils are the only two not in line with the rest of the country.
Today we launched a campaign on behalf of the Otorohanga, and Grey District ratepayers, calling on their Council to introduce an Audit and Risk Committee.
According to LGNZ, Audit and Risk Committees provide councils with:
- Internal control framework and financial management practices;
- internal and external reporting and accountability arrangements;
- and financial risk management.
The costs associated with having a dedicated Audit and Risk Committee are minimal when weighed against the millions in potential savings of ratepayer money.
How can Otorohanga and Grey District Councils assure they are delivering value for money and managing risk, when they both refuse to implement the most basic oversight that is standard at nearly every other town hall in New Zealand?
If you agree that both Otorohanga and Grey District Councils should have an independent committee to oversee financial risk, click here to sign our petition.
Ratepayers' Report is free to access and online at www.ratepayersreport.nz.
The secret agreement
When the new Government was formed, Deputy Prime Minister, Winston Peters, let slip that a "hidden addendum" to the Labour-NZ First coalition agreement had been agreed to, which clarified how the new Government will operate. Mr Peters promised that the document, apparently 38 pages long, would be released at a later date.
That document is of obvious public importance – it contains Ministerial directives and records the deal between the two parties. Despite that, and Mr Peters' comments, the Prime Minister’s Office has refused to release the document in responses to requests under the Official Information Act. Incredibly, Ms Ardern claims the document doesn’t represent “official information”.
We say that’s absurd. This document allegedly sets down to Ministers the rules and expectations of the coalition. Matters such as whether NZ First has a veto on budget expenditure, or changes in tax settings, are apparently covered. It is at least as constitutionally significant as the Cabinet Manual - the core of Executive Government.
We say that taxpayers, voters, and the public are entitled to know what is in the document and what the Government has agreed to.
Jacinda Ardern made much of transparency and freedom of information while in opposition. We say she should walk the walk and are asking our supporters to join us in signing this petition to tell the Prime Minister to follow the Official Information Act and release the secret agreement.
We can shed more light on the expense scandal at the Waikato DHB, with the release of documents we requested under the Official Information Act arriving on Friday. Documents were released showing a number of important details for taxpayers (see below).
To our surprise, and despite numerous assurances that the money has been (or was about to be) paid back, the documents reveal that the former DHB CEO, Dr Murray, still owes up to $50,000 in unauthorized spending that’s not been paid back. What makes this particularly disappointing is that Dr Murray was earning $560,000 a year.
Waikato DHB ended their investigation partially in exchange for a commitment from Dr Murray to pay back all unauthorized spending. There’s no good reason that debts are still outstanding.
The documents also reveal a timeline of events related to the DHB’s investigation.
It was pleasing to see that Waikato DHB Chair Bob Simcock visited the State Services Commission the day after he was informed of issues related to Dr Murray. That shows prompt action by Mr Simcock who we’ve been calling to front up more information about the investigation into Dr Murray’s actions. Hundreds of people have even signed a petition calling on Bob Simcock to resign for his failure to hold the CEO to account during his tenure at Waikato DHB.
There are still a number of questions that need answers, however, it appears Waikato DHB were under significant pressure to end their investigation. Since the release of the documents, the Minister of Health, David Clark, has announced an enquiry investigation into the events at Waikato DHB and the expense scandal.
We’ll keep you posted.
Our new report, titled Fare Game? Flagging down the cost of public sector taxis, shows that bureaucrats choosing more expensive taxi services over ride-sharing apps like Uber have cost taxpayers at least $9.81 million since Uber’s introduction in mid-2014.
Currently, the 28 tier-one public service departments spend about $9.3 million a year on taxis. That’s compared to just $77k on ride-sharing apps. If all public servants opted for ride-sharing apps over taxis, we calculate the potential savings for taxpayers being around $3.27 million per year.
Despite the recent regulation of the ride-sharing industry, a number of departments still have policies in place banning their staff from using Uber or Zoomy for staff travel. Not only is that not keeping up with the times, it means many more millions are wasted on flash cabs, when a cheaper Uber would do just fine.
The report also assesses the opportunities for increased efficiency in departments who embrace ride-sharing as a means of staff travel. It also shows that internationally, the New Zealand public service is lagging behind.
Gone are the days of paper receipts and employee reimbursement forms. Ride-sharing’s electronic based system facilitates remarkably efficient internal staff travel processes. It’s no wonder federal officials in the United States and Australia have been encouraged to use the new technology.
- Over the 28 public service departments, $9,334,755.87 was spent on taxis over the period of a year, up until 1 June 2017. This is compared to just $77,102 spent on ride-sharing apps.
- By applying fare estimates between Wellington Airport and MBIE offices, the report estimates that using Uber over taxis saves around 35%.
- Applying that figure to government departments, taxpayers could have saved $3.27 million if public servants used ride-sharing over taxis, or $9.8 million since Uber launched in mid-2014.
- Five government departments have travel policies banning their staff from using ride-sharing for staff travel (Department of Conservation, Ministry of Justice, Crown Law, Ministry for Women, and the Department of Internal Affairs).
- Only tier one government departments were included in the survey data. That means that many more millions are likely to have been wasted (and have the potential to be saved) across the wider public sector.
Disclaimer: Neither Uber, or any other ride-sharing interest, have donated, joined, or financially contributed to the Taxpayers’ Union or the publication of this report. To join the tens of thousands of New Zealanders who have, donate now at www.taxpayers.org.nz/join
Labour’s coalition agreements with New Zealand First and the Green Party were released on Tuesday. While they set out the policy priorities of the new government, they do not breakdown the costs. Failing to mention the expenses, both in the agreements and most of the media commentary, should be of real concern to taxpayers.
Headlining the agreements was a new one-billion-dollar “Regional Development (Provincial Growth) Fund”. Despite its infancy, both Labour and NZ First are touting it as a bonanza to their respective supporters. No wonder, ‘Regional development’ is usually code for corporate welfare and pork-barrel politics.
At a cost of $645 per year for the average Kiwi household, more than just political whim will be necessary for any sort of ‘provincial growth’ to result. For every dollar ‘invested’, a dollar is taken from a hard working taxpayer. Disciplined cost-benefit analysis, similar to that done for major roading projects, will need to be legislated to prevent the fund from turning into a slush fund, or make-work scheme.
The risk for taxpayers is the billion being sucked into projects with very low cost-benefit ratios. It could see more government agencies such as Callaghan Innovation, who ‘pick winners’ by giving money to favoured businesses and fashionable industries.
Prime Minister Jacinda Ardern is already indicating the fund will include “a number of regional rail projects” even though KiwiRail is notoriously unprofitable. Treasury have been advising the Government for decades that money spent improving roads offers far more bang for buck than rail. A report released by KiwiRail last year concluded that closing its own freight lines entirely delivered the most long-run value to taxpayers. Ouch. Ms Ardern is picking political popularity of trains, over sound economics.
Some policies don’t even have a budget number attached.
The Green Party has negotiated for "significantly increasing the Department of Conservation’s funding”. The amount? Unknown. It could double the funding of DOC, be a cunning trick on the Greens, or an invitation to the new Green Party Minister of Conservation to raise revenue, such as taxing tourists entering national parks.
To get to power, Ms Ardern has also promised to expand benefits for SuperGold Card holders. The coalition agreement is light on detail, but if NZ First get what they want, expect the annual costs to shoot up by $300 for the average household. That would buy a free annual GP visit and discounted power bills for everyone aged over 65.
Clearly, some would benefit from cheaper power and a free doctors’ visit. But offering universally, instead of targeting the support to those who need it most, suggest this was about satisfying a voter constituency than improving living standards.
There are also the ‘studies’ and ‘reviews’ NZ First has negotiated. A ‘feasibility study’ into moving the Ports of Auckland could see billions spent shifting freight services to Whangarei. Another report, again published by KiwiRail, indicated that just the cost of upgrading the rail freight line from Northland would be up to four billion dollars. The cost to the average household would be $2580.
With Mr Peters’ support so expensive, Finance Minister Grant Robertson’s will need to find a way to pay for it all. Labour’s ‘alternative budget’ made no allowance for coalition negotiations, and very little allowance for new spending.
Jacinda Ardern has indicated that Labour’s tax working group will plough ahead. In any case the new Labour-led government will need to find the money to pay for the coalition ‘compromises’ somehow. Taxpayers, brace yourself to have your pockets opened.
Inland Revenue’s new IT system, implemented in February for their GST services, has been a disappointment. According to official data from IRD, the time spent handling GST related enquiries increased by 50% when the system was first introduced in February earlier this year. As of August, months after implementation, there was still a 20% increase in wait times compared to the previous year.
The point of investing in a new IT system was to make services more efficient at IRD, but this data shows taxpayers are receiving a worse service after the new system was introduced.
Many callers can’t even get to the hold tone. When the system was introduced in February, it faced so much pressure that nearly 2000 callers to the GST line were disconnected without even being put on hold. In the two months prior to implementation, that didn’t happen once.
Over 10,000 calls to the GST line were disconnected in May because IRD systems simply couldn’t cope. Inland Revenue either needs to train existing staff more thoroughly, or bring in additional staff during months they know will be busy. How the IRD is proposing to cut 1,500 jobs in this environment is astounding.
See the IRD's OIA response below:
Auckland Council has been caught out providing false information regarding the average rates paid by Auckland households, with revised figures showing that Aucklanders pay the second highest rates in New Zealand.
Over multiple years, officials have provided incorrect information to the Taxpayers’ Union and Auckland Ratepayers’ Alliance researchers under the Local Government Official Information and Meetings Act 1987, presumably as an attempt to avoid criticism of the Council’s very high costs in comparison to the rest of the country.
As a result of these illegitimate figures, Auckland Council came out much better in our local government league tables than justified. It appears the Council has coordinated responses to deliberately mislead the public on what the average ratepayer pays.
In the initial report, Auckland Council's rates were comparable to New Zealand’s average. Now that the Council has coughed up the true figures, we know Auckland rates are actually the second highest in the country.
Before the Ratepayers’ Report local government league tables were published, we wrote to Auckland Council’s CEO and specifically asked for the rates figure to be checked a third time and were assured it was accurate.
With light finally shed on the truth, we have exposed that Aucklanders pay the second highest residential rates in the country.
This new set of data shows that if Auckland Council were as efficient as others in New Zealand, they would be better fiscally prepared to invest in the infrastructure that our city desperately needs.
Ratepayers’ Report was jointly published by the Taxpayers’ Union and the Auckland Ratepayers’ Alliance.
The ‘please explain’ letter sent to Mayor Phil Goff is here: