Commenting on the updates to ACT’s alternative budget, Taxpayers’ Union Policy Adviser, James Ross, said:
 
“The only true tax cut is a spending cut, and we welcome ACT’s commitment to tackling the damage caused by 6 years of Labour’s dangerous overspending. Public Spending has increased by nearly 70% in just 6 short years, leaving New Zealand with one of the worst budget deficits in the developed world. That damage won’t be fixed overnight.
 
“Whilst no-one wants to see tax cuts more than the Taxpayers’ Union, it is important to recognise that spending needs to come down dramatically first. It was Labour’s economic mismanagement that got us into this mess, and we commend anyone that puts responsible management of our nation’s finances ahead of poorly costed headline-grabbing policies.
 
“ACT’s switch to a three-tier income tax system is still a step in the right direction. However, cash-strapped Kiwis need to see a commitment that ACT will flatten the tax system when public finances allow. And if nothing else, the inflation-driven tax hikes by the back door faced by working people up and down the country must be brought to an end by indexing tax brackets to inflation.
 
“The move towards incentivising housing development through GST-sharing with councils is a much-needed step to drive growth, and ACT should be commended for taking real action to tackle the housing crisis. Kiwis will also be at minimum a few hundred bucks a year better off under this alternative plan. That is nothing to be sniffed at, but cash-strapped Kiwis need to see more.”

Responding to National’s four step plan to boost international enrolments across Tertiary Education Institutions, Taxpayers' Union Deputy Campaigns Manager, Connor Molloy said:

“At a time when universities all over the country are reporting crushing deficits and announcing hundreds of redundancies, it is paramount that New Zealand remains an attractive prospect for foreign pupils to boost revenue and stimulate our education sector.

“Despite the pandemic period strongly contributing to a sharp drop in international enrolments, the pick-up since then hasn’t nearly been strong enough. National’s plan will at least make it easier and more affordable for oversees students to study in New Zealand.

“While fast-tracking visas and extending working time allowances is a good start, more needs to to be done across the rest of the economy to strip back regulation, entice investment, and optimise productivity.”

Responding to the latest update to New Zealand’s GDP figures, Taxpayers’ Union Policy Adviser, James Ross, said:
 
“As New Zealand struggles under the cost-of-living crisis, the Government must focus on increasing productivity in order to grow the economy. The markets are still gloomy about our prospects over the next 18 months, and so cutting red-tape, reining in government spending and responsibly pruning the tax burden back are needed to attract investment and kick our country into gear.”
 
"Unsurprisingly, between the fall in prices at the farm gate and crippling red tape, primary industries have taken a big hit. High interest rates fuelled by this Government’s addiction to spending are putting even more pressure on farmers who have to worry about servicing debt rather than improving productivity.
 
“Warning after warning from the likes of the IMF keep falling on deaf ears in the Beehive as this Government chokes the country with its reckless overspending. With people getting poorer by the day, is it really any wonder that the hundreds of thousands of the skilled Kiwis we need to grow the economy have been forced to move overseas?”

The Taxpayers’ Union can reveal that as part of the Tax Working Group appointed by Grant Robertson, and chaired by the late Michael Cullen, Treasury and IRD conducted analysis on what percentage of exempting GST from certain goods would actually be passed on to consumers.

The expert advice paper, concluded that while cuts to GST/VAT rates are passed on, exemption or multi-rate policies see just 30% of the tax relief passed on to shoppers.

The paper looked at the best available evidence and concluded: 

This research estimated that changes in the general VAT rate were on average fully passed through to consumers. However, changes in rates for specific goods and services were on average not fully passed through and had an estimated average pass through rate of approximately 30 percent.

Taxpayers’ Union Executive Director Jordan Williams said:

“A pass through rate of 30% to consumers means that 70% of Labour’s GST carve-out would be captured by the supermarkets. Labour costed the policy at $2.2 billion over the four-year forecast period, so supermarkets in effect get a tax cut of $1.54 billion while consumers enjoy just a fraction.

“This isn’t just a hole, it’s a weevil in Labour’s fruit and vege policy. Supermarkets already enjoy super profits thanks to regulatory taxes like the RMA that prop up their duopoly and put off newcomer competition. They are the last group that Labour should be supporting.

“Here at the Taxpayers’ Union we want tax cuts more than any other group. But we shouldn’t sacrifice what is the best GST or VAT system world over in terms of compliance costs and complexity. We favour income tax relief and other measures that cut out the middle man, and let kiwi workers keep more money in their pockets.

“This will be one of the many reasons Grant Robertson does not like this policy. Deep down Chris Hipkins will also know the policy is shoddy. He should put good policy over good focus group feedback and abandon the folly in favour of policies that will really help those struggling to afford the groceries.”

Responding to National’s Primary Sector Growth Plan, Taxpayers’ Union Campaigns Manager, Callum Purves, said:

“National’s plan to get the Beehive out of farming should be welcomed. The agricultural sector is the backbone of New Zealand’s export economy, and any way that the ease of doing business can be increased will only make us more competitive on the world stage.

“Removing the consenting process from low-risk activities such as orcharding and water storage is a common-sense way of immediately reducing the bureaucracy faced by hardworking farmers. However, the fact that National recognize how burdensome this red tape is highlights that the RMA is clearly no longer fit for purpose.

“Removing consenting requirements from these sectors is a great start, but it is just a sticking plaster solution and doesn’t go nearly far enough. The RMA must be significantly reformed to unleash New Zealand’s growth potential.”

The Taxpayers’ Union is in disbelief over National’s announcement that they will continue with Labour’s failed and expensive fees-free tertiary education policy if elected in October.

Taxpayers’ Union Campaigns Manager Callum Purves, said:

“We are starting to wonder if Christopher Luxon has been reading Labour’s policies instead of his own. First it was the winter energy payment, now it’s fees free. National took the principled and morally and fiscally responsible stance by opposing fees free when it was introduced, now they have done a u-turn that is beyond belief.

“Our 2017 report ‘Robin Hood Reversed: How Free Tertiary Education Robs Today’s Poor for Tomorrow’s Rich’ outlined the moral arguments around the inherent unfairness of forcing those on lower incomes to pay for the higher-education of people who will eventually earn more then them, explained why this would create free riders and would lead to lower quality education.

“Unfortunately we have been vindicated and, on top of that, the policy hasn’t even been successful in attracting more students to university. The policy is a moral and fiscal failure. Affordability of university fees is already addressed by the generous student loan scheme, if National want more people attending universities they need to focus their efforts on repealing and replacing the new RMA with a law that makes it cheaper for affordable housing to be built in our largest centres.”

Responding to today’s tax policy announcement from Te Pāti Māori, Taxpayers’ Union Campaigns Manager, Callum Purves, said:

“The proposals laid out by Te Pāti Māori come from a place of fundamental misunderstanding of economics and incentives.

“Removing GST off food will make our world-leading consumption tax system more complex, open to abuse and is poorly targeted. Instead of making it cheaper for just those who struggle to put on the table, this tax reduction applies to all individuals whether they are buying caviar and eye fillet steak or fruit and bread. The wealthy spend a higher dollar amount on food and would therefore be the greatest beneficiaries of the policy.

“Shifting the tax brackets to have even higher marginal tax rates for those earning above $60,000 will ruin incentives for people to earn more money as the payoff for doing so is diminished. Anyone looking at taking on extra hours, up-skilling, gunning for a promotion or creating a side-hustle will have to consider the fact they will lose a significant amount of that money in tax. Many people will decide this isn’t worth it and either not try to increase their incomes or will simply go overseas where they can keep more of their own money.

“The tax free threshold, when paid for by higher tax rates elsewhere will also have significant impacts on incentives to work and encourage people to manipulate their income to get in under the threshold. Secondary earners in a household will likely cut back their hours to below the tax free mark, family owned businesses will pay non-working family members up to $30,000 to ensure that as much money as possible is not taxed.

“Our recent report on the Green’s wealth tax by Taxpayers’ Union research fellow, Jim Rose, highlighted how a wealth tax would be unlikely to generate much revenue, would discourage innovation, saving and investment and would see more highly-skilled New Zealanders heading offshore. The report also highlighted how the impact wealth taxes have on successful Māori who decide to go out on their own rather than operating within treaty governance entities.

“Taxes on foreign companies will raise costs for many everyday goods and services that are not produced in New Zealand. These costs will make products more expensive for New Zealanders while also discouraging overseas companies from investing in New Zealand, creating jobs and paying tax.

“The land-banking tax and vacant-house tax are solutions for the wrong problem. The policy proposal correctly identifies regulatory issues preventing the development of Māori land but similar issues apply to all land. Cutting red tape that prevents building, developing and renting properties would be a more effective and enduring solution for the housing crisis. By making it easier to build, the increased supply in the market will flatten the growth in property prices and will make it no longer worthwhile to speculate. Instead, these proposals will make it even risker to invest in creating more housing with the threat of a 33% tax on the market-value of a property for anyone unable to fill a property within 6 months.

“If money-hungry politicians were able to end tax evasion and get more money by simply spending more they would have done it already. These proposals in their totality will simply flood New Zealand with a tsunami of tax loopholes. If reducing tax avoidance is the goal, our tax system needs to be made simpler and flatter so that it becomes impossible to avoid."

The Taxpayers’ Union is calling on the Minister for the Environment, David Parker, to pause the proposed Resource Management Act replacement bills until after the election to ensure that MPs have sufficient time to properly consider the changes they are voting on.

Taxpayers’ Union Campaigns Manager, Callum Purves, said:

“Rushed lawmaking more often than not leads to bad lawmaking, especially with bills as large and complex as those presented by Minister Parker. The 931 pages of legislation, the 1377 pages of select committee reports and the 977 page Supplementary Order Paper mean it is near impossible for any MP to truthfully say they have fully read and considered all aspects of the proposals. It is a chaotic mess.

“Those people who will actually have to deal with this legislation such as councils, developers, farmers and renewable energy companies have had to participate in a rushed process of submissions and consultations so have been unable to provide comprehensive feedback and recommendations.

“Pausing these reforms until after the election will allow for more time to ensure the reforms are done well and are an improvement on the status quo. Otherwise New Zealanders will be stuck with less certainty and more complexity leading to higher development costs and worse outcomes for the environment."

Commenting on the tax announcements in New Zealand First’s campaign launch, Taxpayers’ Union Campaigns Manager, Callum Purves, said:
 
“Record levels of inflation have not only eroded Kiwis’ incomes, but have forced many to hand over a higher share of their wages to the Government each year. We already adjust superannuation and welfare payments for inflation so it is about time that we did the same for working families through income tax bracket indexation.

“New Zealand First’s proposals for tax incentives are, however, concerning. When Government’s pick winners, they invariably get it wrong, costing the taxpayer for poor returns. Yes, we need to reduce our corporate tax levels to make New Zealand a more attractive place to do business and bring in more foreign direct investment, but it is not the Government’s place to play favourites.

“Removing GST on certain food products is a populist policy that does not stand up to scrutiny. It would almost certainly not be fully passed onto consumers, create more complexity for businesses when pricing, likely lead to expensive court battles over what is and is not exempt, and fail to target support to those who need it most. New Zealand’s clean and efficient GST system is something worth retaining.” 

More bad news on the cost of living front

This week's slight dip in the inflation figures will not come as much consolation for families across New Zealand who are struggling with the cost of living. While the overall rate may have dropped, food price increases and domestic inflation both continue to remain stubbornly high despite the aggressive interest rate hikes by the Reserve Bank.

Stop with the excuses Grant... IMF puts blame on Government's wasteful spending 

The Government likes to talk tough on the cost of living, but fails to acknowledge that its own spending is one of the biggest drivers of the problem.

Even the International Monetary Fund said last month that Grant Robertson needs to rein in his excessive spending. If the Finance Minister really wants to bring down inflation, he needs to cut the waste.

Here are some places he could start...

Taxpayers still footing bill for Pamū/Landcorp animal welfare violations 🐮😔

This week, we revealed that taxpayer money is being used to reimburse animal welfare fines for farmers at our taxpayer-owned farming company, Pamū (formerly known as Landcorp). 

Pamū states that they are ‘proud guardians of our land and animals' but the string of offences that taxpayers have been made to stump up for paint a very different picture. 

You wouldn't expect your employer to pay a speeding ticket you received while working, would you? Well that's what is happening here. Taxpayers are being forced to subsidize the small minority of farmers who mistreat their stock. This isn't even the first time this has happened, the Taxpayers' Union called out exactly the same practice by what was then called Landcorp three years ago. 

Allowing Pamū farmers to get off lightly is unfair on private sector farmers who work hard to maintain world-leading standards of care. It's certainly unfair on the animals who suffer. Having taxpayers cover the fines removes individual responsibility and weakens the deterrent effect that ensures Pamū farmers treat their animals with the care they deserve. If you would like to contact Pamū urging them to stop paying these fines, you can do so here.

Pūhoi to Warkworth opening ceremony blowout 🚗🥳

What roundup of Government waste would be complete without a party for politicians and public servants?

Your humble Taxpayers' Union this week revealed that despite Labour opposing the Pūhoi to Warkworth highway (remember Chris Hipkins and Grant Robertson labelling it the 'holiday highway'?), they couldn't give up an opportunity for a knees-up!

Having learnt nothing from the lavish Transmission Gully opening ceremony last year, Waka Kotahi – along with Auckland Transport this time – spent at least $44,380.74 on the opening ceremony for the Pūhoi to Warkworth highway.

And one has to question whether there was that much to celebrate. This vastly over budget $880 million road is already falling apart at the seams. Multiple internal reports made it clear that landslides were leading to cracked barriers and warped surfaces, and this has been happening regularly since at least 2019. Waka Kotahi had also only completed 8 of 117 tests at the time of opening. 

Let's not forget that at the start of this month, the Government hiked taxes on petrol by 29 c/litre and road user charges by 56%. Motorists can rightly be annoyed that during a cost of living crisis, these tax hikes are paying for, well, parties. 

Reel Waste: Film Commission splashes out on another foreign jaunt 📽️🏖️

It is time again to roll out the red carpet for another instalment of 'Reel Waste', brought to you by the New Zealand Film Commission (NZFC). Earlier this week, Taxpayers' Union Investigations Co-ordinator, Oliver Bryan, pulled back the curtain on their recent Cannes trip.

Four members of the NZFC's staff embarked on a jaunt to the French Riviera, courtesy of your hard-earned money, costing $73,000. They spent $31,000 on plane tickets, $24,000 on wining and dining in style, and hosting a series of events, including 'producer speed dating', and $17,000 on lavish accommodation.

And guess what? They arrived in Cannes five whole days before the festival officially kicked off and stayed for three days after it wrapped up! Now, call me a sceptic, but this sounds more of a holiday to me than a work trip. Something smells a bit off, and it isn't just the scent of croissants and escargot.

NEW REPORT: Wealth tax bad for savings, innovation and entrepreneurial growth 🤑📉

Chris Hipkins is trying to rule out introducing a capital gains tax or a wealth (i.e. asset) tax under his leadership. While he may have ended up with a few disgruntled caucus members, as the leader of a majority government, that is a promise he can make with reasonable certainty. If the Prime Minister does manage to hang on after the election, however, he will undoubtedly require the support of the Green Party who have very different ideas. 

This week, we published a new report by our Research Fellow, Jim Rose, on the Green Party's proposals for an asset and trust tax. 

Pulling together the world’s leading economic research on the effects of asset taxes, the report finds that the Greens' proposals would be seriously damaging for our economy and would discourage savings, innovation and entrepreneurial growth.

Jim gave an overview of the key findings of his report in yesterday's edition of The Post.

Resource Management Act Reforms: What you need to know 🏘️🗳️

David Parker's radical reforms to the Resource Management Act were back in Parliament this week. Despite the increasing public opposition to this 'Three Waters 2.0', Labour rammed the undemocratic proposals through their second reading just three weeks after the whopping 1,377 page select committee report was released. How many MPs do you think actually read, and fully understood, the recommendations in that time?

Our campaign against the Government’s proposed replacement to the Resource Management Act has been going strong with more and more people and politicians starting to take notice. Earlier this month, our Deputy Campaigns Manager, Connor Molloy, released a video outlining the problems with the proposed reforms and why they are destined to be a costly failure.

While proponents of centralization often make wild claims of efficiency gains through economies of scale and a more streamlined decision-making process, this is far from the reality. As Connor explains well, every time in recent history that a Government has tried to centralize power, we end up with higher costs, worse decision making and less accountability for those making bad decisions.

Resource management and urban planning is one of the key factors that will either stifle or power-up productivity and so it is fundamentally important that it is done well. You can help spread the word by taking a moment to share Connor’s video on Facebook so we can alert as many people as possible to what the Government is doing. 

Thank you for your support.

Yours aye,

Callum Purves Campaigns Manager New Zealand Taxpayers’ Union.

Media coverage:

NZ Herald New Taxpayers’ Union – Curia poll delivers more bad news to Labour’s Chris Hipkins and National’s Chris Luxon, but a boost for Te Pāti Māori

Stuff Labour hit with second bad poll result in as many days

The Daily Blog BOOM: NEW POLL – HUNG PARLIAMENT

NewstalkZB Barry Soper: ZB senior political correspondent doubtful Taxpayers' Union – Curia poll will be reflected in election

NewstalkZB The Huddle: Did the Government think they could get away with a wealth tax in an election year?

NZ Herald Labour’s Chris Hipkins eyes new tax policy as poll struggles bite, rules out wealth, capital gains tax

NZ Herald Editorial: A tale of tax reform and two new polls

Newshub Election 2023: Political pundit Bryce Edwards says back-to-back bad poll results will have Labour 'very worried'

The Kaka by Bernard Hickey The Kākā by Bernard Hickey

NewstalkZB Afternoon Edition: 13 July 2023 (Poll)

Waatea News Support for Māori Party widens

The Listener Political week in review: Labour polling down as Chris Hipkins missing vision

Hawke's Bay Today Canny View: Don’t let tax creep get you down

RNZ Week in Politics: Hipkins makes a captain's call as Labour slides in the polls

Gisborne Herald Wealth tax call a high-risk strategy

NZ Herald Poll of polls: Race tightens with National only just ahead of Labour

NewstalkZB The Huddle: Are the Commonwealth Games worth preserving?

The Post The risk the Greens’ wealth tax poses to our economy