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.