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

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

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

So, who should win?

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

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

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

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

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

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

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

But isn’t this a caucus matter?

Yes, and no.

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

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

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

Contact details for all National MPs are available here.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Examples (GST excluded) include:

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

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

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

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

Callaghan's travel costs also ballooning

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

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

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

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

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

The New Zealand Taxpayers’ Union can reveal that only 60% of seats were filled on the ratepayer subsidised Wellington-Canberra flight route, compared to an average of nearly 80% for all flights in and out of Australia.

Figures published by the Australian Government in their international airline review for 2016/17 make for sober reading. No one at the office is surprised that Singapore had to move their flight route to Melbourne after examining the flight utilisation figures from 2016/17. Making profit, even after ratepayer subsidies, on a route where 40% of seats are empty on an average flight would be very difficult. Unfortunately it's difficult to ascertain whether Wellington Regional Economic Development Agency expected this kind of result, because the documentation surrounding the subsidies (which according to some reporting, amount to $8 million over ten years) is extremely limited.

Changing the route to Melbourne is unlikely to be successful either. Jetstar had to discontinue their Wellington-Melbourne route in 2016 because it was unprofitable to compete with Air New Zealand and Qantas. Are ratepayers really getting a good deal by subsidising flights on a route which is already serviced by two airlines?

The failure of Singapore Airlines' Wellington-Canberra route shows what an utter waste the route’s multi-million dollar subsidy has been.
 
The Wellington-Canberra route should never have been subsidised in the first place. Now that the spending has proven to be a complete waste, you would expect WREDA (Wellington Regional Economic Development Agency) to scrap it. Instead, the agency says they’ll subsidise the new route – despite there already being regular flights between Wellington and Melbourne.
 
At this point unelected bureaucrats are just giving free ratepayer money to Singapore Airlines for no benefit. It’s corporate welfare at its worst.
 
Remember, the Wellington-Canberra route was celebrated with a $50,000 ratepayer-funded party. Can Wellington ratepayers get a refund now? They certainly deserve one.

The Taxpayers' Union has launched a petition to end ratepayer subsidies to Singapore Airlines. You can sign it here: http://www.taxpayers.org.nz/wreda_petition

The Taxpayers’ Union can reveal that a small government agency spent over $300,000 on ‘entertainment’ in 2015/16 – including a drag queen dinner and show for staff.

The Union gained receipts for Callaghan Innovation’s entertainment purchases via the Official Information Act.

From a laundry list of receipts from bars, cafes, and restaurants, we're still working through abuses of taxpayer money. Already we've discovered a blatant example: $2,063 ($2,372 including GST) spent on a team dinner at a drag queen cabaret bar, K Road’s Caluzzi.

Dinner at Caluzzi includes a show, and a promise that ‘you will be entertained and served by our fabulous drag queen hostesses throughout the night.’ The bill included eleven bottles of wine, and one non-alcoholic drink.

We’ve got nothing against drag queens, but this was an event for staff, funded by taxpayers. It’s an appalling display of largesse from an agency the average taxpayer hasn’t even heard of.

All up, $304,675.22 was spent on entertainment in the 2015/2016 year. That’s enough money to host a Sunday barbeque for the entire city of Invercargill*.

Our researchers have also requested and are awaiting the entertainment expenses for 2016/17 with anxiety.

*Based on a barbeque for four, including 1kg of sausages ($6), a box of Lion Red ($15.99), a can of tomato sauce ($1.60), and a loaf of bread ($1).

To coincide with the implementation of the latest tobacco excise hike of 10%, plus inflation, we've released a new report that shows the ineffectiveness of tobacco tax hikes as a tool to reduce smoking rates, and reveals the unintended consequences of the policy: direct financial harm to smokers and their families, and crime towards retailers.

The goal of excise tax – to reduce smoking rates and prevent smoking-related illness – is a noble one. But it’s not enough to judge a policy by its intentions. Our new report evaluates tobacco excise tax based on its actual results, both intended and unintended.

Impact on smoking rates

Despite tobacco prices increasing by over 60% since 2012, only one in ten adult smokers quit. Amongst Maori and Pasifika, there has been no statistically significant reduction in smoking rates over the last decade. In other words, it’s completely failed to achieve the goal of reducing smoking rates in those communities where they are the highest.

Cost to households

We could tolerate an ineffective policy if it caused no harm. But tobacco tax hikes cause enormous harm, devastating the incomes of the vast majority of smokers who haven’t quit.

A pack-a-day smoker is nearly $3,000 per year worse off in real terms than they were in 2010. This direct financial harm will only worsen as the tax is hiked year after year – salt in the wound for New Zealanders already addicted to a harmful substance.

Crime

Higher tobacco prices have made smokers more willing to purchase black market tobacco, and there is an increased incentive for illegal supply, sourced through burglaries and robberies.

Robberies, many of which are violent, have increased by 26.6% since 2014. Frustratingly, we don’t know the exact extent to which this is caused by tobacco tax hikes, because Police haven’t been asked to record the data.

It’s a huge concern then that, without relevant data, we have a four-year plan to hike the tax. To proceed blindly with this policy is to disregard the physical safety of law-abiding retailers and their staff.

Alternatives

The best the Government could do would be to hurry and legalise the sale of nicotine e-cigarettes, which are still technically illegal to sell, but are a much safer alternative to smoking, and a proven pathway to quit.

Dragging the chain on nicotine e-cigarettes suggests the Government is more interested in the money tobacco taxes bring in, than reducing the harms of the addiction.

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.”

ENDS

14 DECEMBER 2017
FOR IMMEDIATE RELEASE

“Grant Robertson’s pre-Christmas spend-up appears to tie his hand in years to come, and offers a welcome dose of fiscal restraint,” says the Taxpayers’ UnionExecutive Director, Jordan Williams, reacting to today’s Half Year Economic and Fiscal Update.
 
“Today’s HYEFU was a mini-budget – it changes the direction of the Government’s spending priorities in the short term, and returns the tax system to a more complex tax and credit churn system.”
 
“But on the other side of the coin, Labour deserve real credit. There is no enormous tax grab forecast and Mr Robertson is signalling that he will run a very tight ship. Uncommitted operational spending is only $6.6 billion, or $660 million per year, out to 2022. That is only about half what National budgeted over recent years, and will need to also cover those coalition agreement policies not already costed and factored into the books.”

ENDS