Rates are soaring, transparency is declining, and too many councils are distracted from their core tasks. Whether it’s funding vanity projects, hiring communications staff instead of fixing potholes, or embarking on ideological crusades, councils are too often putting their own agendas ahead of the ratepayers they are supposed to serve.

The numbers speak for themselves. Council debt has ballooned in the last decade, and last year alone, average residential rates increased by almost 15 percent across the country. And despite all their spending, public satisfaction with council performance is falling. Infrastructure is failing, planning processes are sluggish. As a result, voter turnout in local elections continues to decline.

New Zealanders deserve better.

The proposed solutions in this paper are not radical, but are intended to reduce waste and improve performance across the sector. Local government should be lean, transparent, and focused. It should deliver high-quality services at a reasonable cost and be held accountable when it doesn’t.

These reforms are a roadmap to achieving that. This is how we build better councils.

The Taxpayers’ Union is today releasing its latest briefing paper, entitled “$49 Dollars a Week – What Treasury Owes the Average Kiwi.”

This paper explains how much extra income tax a New Zealander on the median salary of $66,196 is paying thanks to bracket creep, compared to when their tax brackets were last adjusted in 2010.

Commenting on the release of this briefing, Taxpayers’ Union Policy and Public Affairs Manager, James Ross, said:

“The inflation tax is robbing Kiwis of $49 a week, every single week. No one voted for this, and it’s long past time for the Government put a stop to this backhanded practice.

“Government spending is out of control, and it’s everyday families who get smacked with the bill. People have been paying more and getting less for far too long.

“Nicola Willis promised tax relief in Thursday’s Budget. Anything less than $49 a week is just shortchanging New Zealanders on what they’re owed.”

The New Zealand Taxpayers' Union can reveal that the $11.7 million payment to the Green School will result in 25 fewer jobs in the private sector.

This calculation was made based on a new briefing paper, The jobs cost of taxpayer-funded projects, released by the Union today.

Union spokesman Louis Houlbrooke says, "Our latest research examines work by the Treasury and New Zealand economists estimating the 'deadweight loss' of our tax system – this is the measure of the cost of taxation that is not the amount of money taken from the private sector, but the way the taxation motivates people to work less, and spend and invest less, leading to economic distortions."

"Because government spending is funded via taxation, we can examine the deadweight loss of handouts such as that announced by James Shaw last week."

"Research from local economists leads us to a conservative estimate that the deadweight loss of tax (or the spending it funds) is about 15%. That means the Green School handout didn't just take $11.7 million from taxpayers; it cost the economy an additional $1,755,000."

"So how many jobs did this eliminate? Based on the government's own job creation estimates, a job can be created for around $70,000. That means the deadweight loss of the Green School handout cost the economy 25 jobs." 

"Too often, our politicians fall into the trap of thinking they can create employment with increased spending. But if that were true, high-spending countries like Greece and Spain wouldn't be facing employment crises. While it's true that economic stimulus is needed in the era of COVID-19, this needn't come in the form of giant cheques. Leaving this money in the economy via lower tax rates will allow money to circulate in a way that creates jobs passively, without costly perverse incentives."

Spending items singled out as examples in the briefing paper include:

• The $72.5 million support package for the racing industry generated $10.9 million of deadweight loss and cost the economy 155 jobs.
• The $1 billion annual allocation for the Provincial Growth Fund over the last three years has generated $150 million of deadweight loss per year and cost the economy 2140 jobs per year.

A new briefing paper released by the New Zealand Taxpayers’ Union makes the case for a temporary cut in the rate of the Goods and Services Tax (GST) from 15 percent to 10 percent, mimicking what the United Kingdom Government did with VAT immediately following the Global Financial Crisis.

Policymakers are currently grappling with the question of how to spur spending in the economy as we face a recession. This question will become urgent as the wage subsidy scheme ends in September and we see the real effects of COVID-19 on our economy.

With the official cash rate already close to zero, monetary policy has become increasingly ineffective as a stimulus tool. This has seen politicians propose fiscal interventions, such as the Government’s interest-free business loan scheme, but these interventions are often poorly targeted and create perverse incentives.

Fortunately, our tax system already provides a sound, indiscriminate mechanism to encourage spending. A temporary cut to GST during the height of recession would encourage New Zealanders to bring forward consumption – similar to a cut in the official cash rate.

This spending would breathe life into revenue-starved businesses, ensuring they can continue to employ New Zealanders and keep supply chains unbroken.

We suggest a sunset clause kicking in after a year to avoid long-term deficit effects or politicians replacing the lost revenue with increases to more economically damaging taxes.

On a yearly basis, the fiscal impact of this cut would be a $7.36 billion reduction in reduction in revenue for the Government. However, this impact could be reduced implementing the policy for a shorter period of time.

The Taxpayers’ Union, with support from the Auckland Property Investors’ Association, Auckland 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.

This morning the Taxpayers' Union is appearing before the Government Administration Select Committee, in support of a petition to reintroduce ten year passports for New Zealanders.

We will also be presenting a briefing paper by Jordan McCluskey, 'Sky High: Briefing paper on passport affordability'.

Our research shows that New Zealand is out of line with the rest of the world

Contrary to statements made by the Government, most of our trading partners issue ten, not five year passports.

The per year cost of a New Zealand passport is more than any other country we examined.

In addition, the Government is sitting on a whopping surplus of $20.8 million because of excessive passports charges.

Click here to read the full briefing paper on passport affordability.

In 2005 the Government introduced biometric technology to passports, made them more expensive and reduced their validity from ten to five years.

Our research shows that the New Zealand passport is now the most expensive in the world on a per year basis. Even if the New Zealand government issued ten year passports, at current prices, New Zealanders would still be paying more than citizens in most countries with whom we traditionally compare ourselves.

Contrary to the Government’s claims that five year passports are necessary for security, New Zealand is swimming against the tide, with Canada, China and the Netherlands all recently increasing their passport validities to ten years.

Kiwi travellers are paying more and getting less. We’re calling on the new Minister of Internal Affairs, Peter Dunne to do the sensible thing and reintroduce ten-year passports. 

The research suggests that current regime isn’t about security, it’s about raising money for the Government.

Click here to download the report.