The Taxpayers’ Union can reveal that Invercargill Mayor Tim Shadbolt has racked up $147,243 in mayoral expenses since late 2016 (the beginning of this term in local office).

Tim Shadbolt has shown considerable fiscal irresponsibility in his latest term of office, spending inordinate amounts of money on frivolous or personal things.

Seven different times, his card was used for ‘accommodation for Mayor Shadbolt and Family’. Ratepayers might be surprised to learn that the Mayor is using their money to take his family on junkets.

Other expenses included spending $19,534 on books and magazines, $8,051 on conference fees, $3,256 on wristbands, $2,662 in donations to private charity, and $1,854 at liquor stores.

Mayor Shadbolt also spent nearly $3,113 on maintenance for his famous ratepayer-bought Chrysler 300C, revealed earlier in the year to be the most expensive mayoral vehicle in the country. It’s no wonder that the Council is reviewing the cost of its fleet if existing vehicles are kicking up so much in maintenance costs.

We sent the same request to other councils Mayor Shadbolt’s indulgence dwarfs that of others.

Ratepayers might be concerned that the Mayor uses so much public money on gifts and personal adventures. Perhaps in the future he could personally pay for his family getaways and bottle shop runs?

The full spreadsheet of expenses, obtained under the Local Government Official Information and Meetings Act, is available here.

The New Zealand Taxpayers’ Union has started a petition calling on councils across the country to reject the Childcare Allowance just introduced by the Remuneration Authority, which allows councillors and local board members to claim up to $6,000 per year from ratepayers for childcare.

“Ratepayers should not be forced to pay for local politicians’ nannies and housekeepers,” says Jordan Williams of the Taxpayers' Union.

"In very few jobs does the employer stump up for childcare. Why should politicians receive ratepayer funded benefits very few ratepayers are afforded?"

"Where does it stop? What about councillors with elderly dependents, or councillors without a partner to split household bills? Many politicians have costly personal circumstances, but we expect them to manage these costs privately.”

"I was brought by a single Mum on the District Council before I was even school aged.  The idea that ratepayers would be responsible for hiring a nanny is entitled nonsense."

The New Zealand Taxpayers’ Union is questioning Porirua City Council’s decision to spend $9,218 on flights to Canada for an ‘indigenous art exchange’.

The spending details have been released as part of a Taxpayers’ Union investigation into 2017/18 travel expenses at councils across the country.

It’s ridiculous for Porirua City Council to spend money this way when its average residential rates are 28% above the national average. Many ratepayers will be appalled that their money isn’t being used to improve the council’s financial position or maintain basic services.

Instead, ratepayers forked out for artists and Council staff to enjoy a junket to Winnipeg, for an ‘indigenous art exchange’ involving ‘demonstrations of how digital media can be used to empower indigenous communities’. This all sounds fascinating, but it is entirely unclear how it delivered value for Porirua ratepayers. In fact, the only clear beneficiaries of the spending were the two artists who got a profile boost, and the two Pātaka museum staff who even received $70 per-day spending allowances for the 14 day trip.

We understand that the Council is currently being lobbied to declare a ‘climate emergency’. If it does this, it should show it’s serious by swearing off unnecessary, feel-good junkets and air travel.

The Canada flights were purchased on top of a significant $38,950 spend on domestic flights, meaning the Council spent a total of $48,168 on air travel in 2017/18.

Using figures obtained under the Local Government Information Act, the New Zealand Taxpayers’ Union can reveal that Dunedin City Council was the country’s third-highest spending council in terms of air travel in the last financial year.

The Council spent $347,885 on air travel in 2017/18 – $214,067 of which was domestic, $133,818 of which was international.

“This is incredible hypocrisy,” says Taxpayers’ Union spokesman Louis Houlbrooke. “You have to wonder how Councillors who voted for the ‘climate emergency’ did so with a straight face. On one hand they’re telling ratepayers to expect major lifestyle changes and sacrifices, on the other hand they and their staff are burning jet fuel at a rate that would make NASA proud.”

“We would love to know how or why the Council racked up this eye-watering expenditure, but the Council has refused to release the destinations of its flights, despite multiple requests. Almost every other council in the country has been able to provide this information, so why is Dunedin City Council refusing to be transparent? Is it ashamed of the extravagance of its ratepayer-funded, emissions-spewing junkets?”

“What we can say is that we see Dave Cull in the fashionable cafés of Wellington every other week. Perhaps Mayor Cull has passed on the jet-setting culture of Local Government New Zealand to his local Council, at the expense of Dunedin ratepayers.”

The first and second-highest spending Councils were Auckland and Wellington, which spent $1,221,571 and $591,310 respectively.

The Taxpayers' Union will be contacting the Ombudsman regarding Dunedin City Council's failure to release information on flight destinations.

The New Zealand Taxpayers’ Union can reveal that, despite plans to declare a ‘climate emergency’, Wellington City Council spent a massive $623,296 on air travel in the previous financial year.

This makes Wellington City the country’s second highest-spending council behind Auckland City ($1,221,571). Notably, Wellington City’s air travel spending is more than double that of Christchurch City ($278,316), despite Wellington City’s considerably smaller population base.

A major contributor to the air travel blowout was economic development agency WREDA, which spent $201,464 – $168,672 of which was international.

For Justin Lester to declare a ‘climate emergency’ is incredible hypocrisy. He needs to look in the mirror: his Council and CCOs have been spewing emissions at a massive rate while enjoying ratepayer-funded junkets to the likes of Switzerland and Shanghai.

Ratepayers will be looking on with envy at the lucky bureaucrats who flew premium economy to Texas for the South by Southwest Festival, or London for a live music conference. It’s completely unclear how this relates to delivering value for ratepayers, or how it aligns with the Council’s virtue-signalling on climate. In fact, it’s out of touch on every level.

What’s so special about Wellington that its Council needs to spend almost twice as much as Christchurch on air travel? Councillors ought to be embarrassed and must demand changes in policy and culture inside the Council and its CCOs.

Wellington City Council Group air travel, 2017/18

• Domestic: $275,269 (1,438 flights)
• International: $348,027
• Total: $623,296

 

Sub-groups (click titles for raw documents):

Wellington City Council (Destinations)

• Domestic: $145,736 (973 flights)
• International: $99,488
• Total: $252,224

WREDA

• Domestic: $32,792 (136 flights)
• International: $168,672 (107 flights)
• Total: $201,464

Wellington Water

• Domestic: $50,979 (136 flights)
• International: $7,977
• Total: $58,956

Wellington Zoo

• Domestic: $10,511 (36 flights)
• International: $41,677 (23 flights)
• Total: $52,189

Experience Wellington

• Domestic: $16,963 (47 flights)
• International: $19,843
• Total: $36,806

Wellington Venues

• Domestic: $13,225 (87 flights)
• International: $9,901
• Total: $23,126

Wellington Cable Car

• Domestic: $3,782.14 (11 flights)
• International: Nil
• Total: $3,782.14

Zealandia

• Domestic: $1,281 (12 flights)
• International: $469
• Total: $1,750

Basin Reserve Trust

• Total: Nil

 

The number of international flights is not available for every agency.

Within the first weeks of becoming leader of the Labour Party, Jacinda Ardern made the call not to defend Metiria Turei’s self-confessed cheating of the welfare system. It was the right move. Workers rightly resent the idea that beneficiaries game the system while others work long shifts, pay secondary tax, and contribute to society with the aim of getting ahead or giving their children a better life.

So it was shameful when in Budget 2019 the Government announced a linking of benefits to average wages. Now, beneficiaries will get payment increases in line with the wage rises that others earned and sacrificed for.

Benefits have already been annually adjusted for inflation: that’s enough to keep up with increases in the cost of living. But last week’s change means beneficiaries will now share the cream of economic growth, automatically, every year – without having to get off the couch.

Treasury estimates the change will cost working taxpayers $320 million in the first four years (that’s $143 per worker), with costs climbing every year after that.

The Government could justify the cost to taxpayers by comparing benefits to superannuation, which has been indexed to wages since 1977, but experts acknowledge that’s increasingly unaffordable and will eventually need reform.

If the Government was consistent with indexation, it would turn its attention to tax brackets. If the top tax bracket was indexed for wages since it was set at $70,000 in 2011, it would now be set at $87,755. Likewise, instead of paying 30 cents on the dollar in tax from $48,000 a year, the second-highest rate would not kick in until $60,000.

In other words, average income earners would be in for significant tax relief.

If that seems too generous, bear in mind that it’s the same principle that now applies to both superannuation and the benefits system. Unfortunately for the taxpayers who fund these programmes, the Government cries poverty when it comes to taxes, refusing to even go so far as to adjust brackets for inflation.

This means that every year, a portion of our income is pushed by inflation into higher tax brackets, meaning we’re taxed harder even though we’re no richer. As a result, in just two or three years the average wage earner will be paying tax in the top 33 percent tax rate – meaning the Government snatches a third of any pay rise or overtime.

Grant Robertson could have used the room in his Wellbeing Budget to treat taxpayers fairly, like superannuants and beneficiaries. Instead, by ignoring the pain of inflation on taxpayers, and boosting benefits, he’s doubling-down on the unfairness of the wealth transfer system.

Labour is now giving its working base a clear message: we’ll keep increasing the penalty for your hard work, and endlessly boost the reward for unemployment. This does not bode well for wellbeing.

Dear Supporter,

Our team has just returned from the Beehive, where we attended the media and analysts' lock-up event for the Government’s new “Wellbeing Budget”. This year’s Budget was accompanied by some level of turmoil, with leaks, alleged hacks, and a (very brief) police investigation all entering the headlines throughout the week.

We’ve had two and a half hours to file through the fiscal documents and spending announcements. We now want to give you an insider’s look, before the spin on the 6pm news.

Our overall impression of this Budget is, glossy marketing aside, it is a classic welfare-spending, rail-worshipping, Michael Cullen-style Budget.

You can read Jordan's headline media statement here.

The Government is holding up its big spend on mental health services as evidence of a fresh new “wellbeing” approach, but the figures tell a different story. The Government is spending almost three times as much on rail ($2.14 billion / $1,175 per household) – including KiwiRail, regional rail and the Auckland City Rail Link – than on direct mental health spending ($823 million / $452 per household).

The “wellbeing” focus appears to be nothing more than a communications strategy from the Government. Budget 2019 is indistinguishable from any other normal Labour Budget, with more money for welfare recipients and no room for tax relief.

The big-ticket items

KiwiRail: An additional $1 billion ($549 per household) is being allocated for KiwiRail including $375 million for new wagons and locomotives and $331 million for new track and infrastructure. As a State-Owned Enterprise, KiwiRail is expected to be profitable – but it has never paid a cent in dividends to the Government. An additional billion dollars will not change reality – KiwiRail is a fundamentally unprofitable enterprise. Click here for my comments to the media.

Mental health: An extra $823 million ($452 per household) is being spent on mental health and addiction services. It has high aspirations, but few plans for judging value for money. As Scotland learned in the 1990s, a lot of extra money can go into mental health with little or no effect on measured outcomes. Click here for Louis' comments to the media.

Venture Capital Fund: Wealthy tech entrepreneurs rejoice! The Government is allocating $300 million ($164 per household) for a venture capital fund to help tech entrepreneurs who can’t convince investors or the bank to fund their projects. Worst of all, the project is being routed through the New Zealand Super Fund, which should be focused on delivering returns for future retirees. We say socialism for tech nerds is still socialism. Click here for my comments to the media.

Maori, Pasifika initiatives: Much of the spending on education, health, and even business is targeted on the basis of race, including an $80 million ($44 per household) injection for the Whanau Ora programme. We say targeting spending on race will lead to unfair and inefficient outcomes. Click here for Louis' comments to the media.

Welfare changes: Following the release of the Welfare Expert Advisory Group’s report, the Government has chosen to spend $535 million ($293 per household) to boost up the welfare system. Benefit sanctions for breaking the rules are being withdrawn and beneficiary payments will be adjusted upwards annually in line with wages, rather than inflation. Click here for my comments to the media.

As for the economy…

The economy itself is expected to track slightly weaker in coming years (forecast GDP growth is set to average 2.6 percent in the next five years) but is not projected to enter recession or enter serious headwinds. Business investment growth, however, is expected to fall off a cliff in 2019 (0.7 percent growth) compared to 2018 (6.8 percent growth), which could be a reflection of weak business confidence in response to plans for a capital gains tax and international trade sentiment. The Government also still expects to meet its self-imposed Budget Responsibility Rules, including reducing net debt to below 20 percent of GDP by 2022.

Click here to read my media statement on the economic/fiscal update.

There’s a lot of information we’re still absorbing, so watch out for our next newsletter which will pick up some of the smaller-ticket items.

Until then,

Joe Ascroft Economist New Zealand Taxpayers' Union

 

The Taxpayers’ Union can reveal that, despite declaring a ‘climate emergency’ on Thursday, Environment Canterbury is the largest spender on combined international and domestic flights of all regional councils, bar Auckland.
 
On one hand, Ecan is making grand gestures indicating ratepayers will have to fork out more for climate change action. But it turns out ratepayers are already paying council staff to create emissions on their way to France, San Francisco, and Germany. One junket in Canada was, ironically, meant to address climate change. Ratepayers will be wishing council staff had just stayed at home.
 
The $21,000 international spend was in addition to a further $241,000 spent on domestic flights. The total $262,000 spent on flights in 2017/18 means Ecan is the seventh-largest spender on flights out of 77 councils across New Zealand, and is (Auckland aside) the highest-spending regional council.*
 
Out of all 77 councils Ecan was also the fourth most frequent flyer with 1,360 domestic flights flown in the 2017/18 financial year.
 
Ecan’s primary functions are local ones, so it’s unclear why any international travel is necessary. Even domestic flights should be limited – in the time of Skype, the cost of constant trips to Wellington is eye-watering and unjustified.
 
The Ministry for the Environment’s advice to those concerned about climate change is very clear: fly less. Ecan should either take this advice, or announce a ‘hypocrisy emergency’ to match its climate one.
 
Background documents:
LGOIMA response
International travel breakdown
 
*Travel expenditure figures for all councils have been obtained by the Union and are set to be released shortly, pending the release of final figures from Auckland Council.

The Mayor of Nelson’s genuine concern for climate change is being questioned, with the Taxpayers’ Union revealing the Mayor flew to Copenhagen for a luxury trip primarily to view a yet-to-be-open climate change museum.

An official information response shows that Mayor Rachel Reese spent four nights at a luxury hotel in Copenhagen costing the ratepayer nearly $2,000, and all ratepayers were left with is the bill and emissions.

Incredibly, there wasn’t even a climate conference, or even a climate conference centre. The Mayor flew to the Norway to look at a 'Climatorium', which is still being built, and a road which absorbs water to heat a kindergarten.

The Climatorium building is not set to be opened until 2020. According to reports, the Mayor hoped to pitch the idea to the European Union of Nelson having their own southern hemisphere Climatorium. In previous public comments, the Mayor has suggest that Shane Jones’ Provincial Growth Fund could foot the bill.

This has all the hallmarks of a classic ‘climate junket’. The Mayor should be sticking to her knitting – Nelson’s roads and rubbish – not swanning off to fight climate change with air-miles.

The New Zealand Taxpayers’ Union can reveal that Waikato Regional Council last year sent out 177 electronic Christmas cards to political insiders – at cost of $9,341*, or $53 per card.
 
The Union was tipped off about the cards by one of the recipients, who was concerned about the extravagance of the ridiculous ‘gesture’. According to the Council, the cards were sent to 177 “leaders of central and local government organisations, Waikato’s ministers [sic] of parliament, and non-government organisations with which Waikato Regional Council works closely.”
 
Investing this much time and money into a feel-good Christmas message for political insiders suggests the Regional Council is either overfunded, or has its priorities completely out of whack.
 
Fellow bureaucrats might have been impressed by the bells and whistles, but ratepayers will be wondering why the money wasn’t instead used for core services like roads and rubbish.
 
This was an unjustifiable indulgence, and the Regional Council needs to confirm it was a one-off. A more ratepayer-friendly option would have been to visit The Warehouse, which is selling 10-packs of Christmas cards for 47 cents.
 
*Including GST and postage.