OCR freeze is little comfort to Kiwis already struggling with the cost of living

Commenting on the Reserve Bank’s decision to leave the Official Cash Rate (OCR) at 5.5%, Taxpayers’ Union Campaigns Manager, Callum Purves, said:

“Today’s OCR freeze will be of little comfort to Kiwis who are already struggling with the cost of living. While businesses and homeowners facing mortgage renewals will be relieved not to be paying even higher rates on their debts, the current levels of interest rates remain painful.

“A high OCR has been necessary to tackle the level of inflation driven in large part by the Government’s excessive spending. Even the International Monetary Fund has pulled Grant Robertson up for this calling on him to limit discretionary spending.

“Unless the Government acts quickly, it does not look as if things are set to get much better soon. Recently released Government financial statements show borrowing is $10.6 billion more than forecast just back in May – that’s an extra $5,389 of debt for evert household in the country.

“The Government needs to get its house in order and significantly strip back wasteful spending, to dampen inflation, and ease cost of living pressures for families.”

The 2023 Census – a complete failure or an absolute disaster?

It was a census that Statistics Minister Deborah Russell said she would ‘absolutely’ stake her job on if there wasn’t a 90% response rate or higher. But as the collection process officially came to an end, and the raw figure putted out at just over 89%, not only did Russell keep her job, but she even had the nerve to call it all a ‘success.’

Maybe ‘success’ is in the eye of the beholder, but how anyone can look at this year’s edition and call it anything other than a disaster, frankly, is unfathomable.

For starters, the cost has been enormous. Initially, the budget was $210 million. That was already a significant jump from the funding used in 2018, but Stats NZ advised that it would only barely be enough to provide data in line with statutory requirements. As a result, the Government injected the Census with extra funding to combat growing operational costs and threw even more at it to mitigate the effects of Cyclone Gabrielle. Somehow, all up, the total figure ballooned to well over $300 million.

With the vast amount of funding available to Stats NZ, you’d think they would comfortably have enough to deliver a Census with excellent data and an efficient delivery process. As it turns out, apparently not…

The raw individual response rate ended at a meagre 89% meaning it falls under the 90% target set by Stats NZ through their KPIs. That figure could be even lower too given that the raw rate is calculated using duplicate responses and outdated population statistics. For context, the 2018 figure ended at an embarrassing response rate of 82%, a truly pathetic outcome given the cost. This year’s census has only provided marginally better results on a budget of nearly $200 million more.

It looks worse still when you compare these results to the censuses prior to 2018. In 2013 the national response rate was 92.9%, done on a third of the budget, and in 2006, the response rate was 94.8%. Consider that Stats NZ’s most expensive proposal for the 2023 Census of over $280 million aimed for an individual response rate similar to 2006 figures. With a budget of almost $40 million more than that, the 89% response rate we got isn’t just underwhelming, it’s appalling.

And not only did this census fail to deliver for New Zealand as a whole, it also disproportionally failed to appropriately count Māori and Pasifika for the third time running. In 2013 the response rate for Māori and Pasifika was under 90%. That was concerning enough, but nowhere near as bad as it was in 2018 where response rates fell to below 70% for both groups respectively. Stats NZ prioritised shifting that disproportion for the 2023 edition, yet the response rates in these communities have barely improved.

One might claim that the collection process was hampered by Cyclone Gabrielle, a disaster which tore right through Hawke’s Bay and Gisborne. But whilst that may excuse the disappointing outcomes through those regions, it fails to explain the lack of response elsewhere. Northland and Waikato were notably poor, and almost the whole North Island had responses below 90% going into the final week.

Despite these clear failings, Russell will pretend the KPIs don’t exist and continue to compare the results solely against the mess that was 2018, but this couldn’t be more misleading.

For context, the 2018 census was an experiment gone disastrous. It implemented a completely new design from its predecessors aimed at reducing costs and expediting the transition towards digitalization. Delivery was almost entirely structured through online access codes and distributed and collected using a heavily reduced ground crew. Not only did the team fail to keep costs down, but the online approach didn’t work…at all. Almost a fifth of New Zealanders failed to complete the census and nearly a third of all Māori and Pasifika

As a result, the independent review of the Census was scathing of the process. It was so damning that even Stats NZ’s Chief Executive, Liz MacPherson, couldn’t defend it and resigned. Core to its message was how the model undervalued the importance of paper in the delivery process and focused too much on the online-first approach, but it also acknowledged how the “aggressive reduction in the field workforce meant Statistics NZ had a reduced capacity to respond when the response rate began to fall below acceptable tolerance levels.” The review recommended that both points were addressed for future versions of the Census.

Consequently, changes were made to this year’s model. The number of paper forms initially deployed was increased and the field staff capacity boosted. Still though, 56% of households only received online access codes and the expansion of ground crew was well short of what was required. In the end, only 3500 workers were deployed making it barely half the size of the number in 2013.

Material and operational costs of delivering a traditional census have increased over the years, but the importance of quality data has never been more paramount. Given that the budget was well over twice the price of 2018 and 3 times more than 2013, why didn’t the team go back to basics? In all five of the initial proposals, Stats NZ had virtually the exact same delivery model. Given that resourcing ended up being practically infinite, Stats NZ could have sent paper forms to all households by default and possibly even doubled their ground crew.

Regardless of poor response rates and an inadequate delivery model, it was how Stats NZ incentivized people to complete their forms which was arguably the most concerning.

In May, Stats NZ partnered up with Warriors NZ using $150,000 of taxpayers’ money to provide free tickets and food to those who attended one of the games and filled out their Census form. It gave those stragglers a chance to complete their census and earn a prize and it was rightly denounced as incredibly unfair.

As it turns out, though, the Warriors Campaign wasn’t the only form of bribery used by Stats NZ. The New Zealand Taxpayers’ Union asked for costings on all incentives used to promote the Census. According to our OIA, both food and fuel vouchers were given out at up to $100 a head with a total budget of $1 million to support communities nationally and another $1 million for households in the Auckland region.

On the one hand, rewarding those who were too lazy to complete their forms on time is an insult to those who had already done so. More concerningly, though, it makes a mockery of the importance of completing the census. If people think that the only consequence for failing to fill in their forms is free food, why would anyone take it seriously.

Enforcing hefty fines on those who reject the Census is paramount for maintaining its national significance. Throwing millions of dollars at bribing those who have failed to complete what is legally required of them will only reinforce the apathy some New Zealanders already have towards completing their forms.

If providing an excellent Census wasn’t pivotal enough this year, then 2028 will absolutely be make or break. We cannot have our most important source of statistics be derived from poor data once again.

Russell will continue to hang her hat on the improvement from five years ago. Frankly though, for $317m, New Zealanders deserve much better.

The Taxpayers’ Union has welcomed today’s announcement from Chris Hipkins ruling out a wealth or capital gains tax under any future government he leads, but is calling on him to extend this commitment by promising no new taxes whatsoever.

Reacting to the announcement, Taxpayers' Union Campaigns Manager, Callum Purves, said:

“This is the announcement many New Zealanders and overseas investors have been waiting for and we are glad the Prime Minister has recognised how economically – and politically – unviable these two proposals are.

“Countries cannot tax themselves to prosperity. Now it is time for Mr. Hipkins to outline his vision for a high-growth, high productivity New Zealand that makes this country an attractive place to live, work and invest.

“Part of this vision must firstly be a commitment to no new taxes, a promise made (but not kept) by his predecessor Jacinda Ardern. Business owners, investors and workers need certainty that there is a future of opportunity and reward for those who work hard, something that is not tenable when new taxes are imposed.

“A commitment to no new taxes must be clear that this also means not extending any existing taxes such as those on incomes, companies or trusts."

The Taxpayers’ Union is calling today’s revelations that at least a quarter of a million dollars from the Ministry of Health were given to a company run by the Associate Minister Peeni Henare’s partner “banana republic stuff”.

Responding to the Parliamentary questions released by the National Party, Taxpayers’ Union Executive Director, Jordan Williams, said:

“Taxpayers are entitled to know that conflicts of interests are, at minimum, truthfully disclosed. Why has, yet again, a senior Minister been caught short?”

“The first question we have for the Minister is whether all of the relevant contracts were tendered. If not, that would be an astonishing failure by the Ministry, and heads should roll.  New Zealand is not a family affair at the bottom of the Pacific.  High standards must be applied, and seen to be, to avoid slipping into banana republic territory.”

Education Mandarins Put Taxpayers Before Farming Lobby

Commenting on the news that the Ministry of Education has chosen to use cheaper imported carpet rather than use more expensive alternatives made from domestically produced wool, Taxpayers' Union spokesman, Jordan Williams, said:

"We commend the Ministry of Education for prioritising value for money over politics and special interests. Year on year, billions more are chucked at the Education Ministry, and yet education standards continue to fall.

"Education mandarins have rightly resisted pressure from the farming lobby, and should be using every cent of taxpayer funding to improve our dismal and declining literacy and numeracy rates."

Almost ten years after co-founding the NZ Taxpayers’ Union with Jordan Williams, David Farrar is retiring from the board.

“When Jordan and I set up the Taxpayers’ Union in 2013, I never imagined that almost ten years on we would have attracted 200,000 supporters and would have had so many successful campaigns." says Mr Farrar. "I have been humbled by the number of New Zealanders who have joined, donated, and support our vision for a prosperous New Zealand with efficient and accountable government."

"We have a top class board and excellent staff who, combined with our supporters, have the Union’s future in good hands.”

“I’m over-worked with my current commitments and most importantly am the parent of two young kids. I want to prioritise my family, so I am cutting down on a number of my non-commercial activities. I will of course remain an active supporter and donor to the Taxpayers' Union."

Jordan Williams says, "David has put up with me and the highs and lows of governing what is a unique organisation –at least in New Zealand. I could not have have asked for a better side-kick in the journey we've been on.  I know David has more ideas in the pipeline, and I am sure the Taxpayers' Union will only be one of many organisations he is involved in establishing that will make their mark for a better New Zealand."

"On behalf of the Board, the staff, our tens of thousands of donors, and hundreds of thousands of subscribed supporters, David deserves a big thanks.  We certainly look forward to marking his efforts in a few months, at the ten year mark."

Responding to the Green Party’s proposal to cap rent increases to a maximum 3% per year, Taxpayers’ Union Deputy Campaigns Manager, Connor Molloy, said:

“There have been countless attempts to introduce rent control in countries all over the globe, and the evidence is clear as day; rent control does not work.

“Wishful thinking that this policy will guarantee safe and affordable accommodation for low-income households isn’t enough, when time and again it has been shown to have exactly the opposite effect.

“By destroying any incentives for law-abiding landlords to invest, rent control reduces the number of properties which are available to rent and removes any incentive for landlords to maintain properties to a liveable standard. Black market rental properties inevitably fill the gaps, leaving renters with even less legal protection.

“There is a housing crisis in New Zealand that desperately needs tackling, and the key to that is removing overly restrictive planning constraints which stifle supply and drive up prices. Restricting supply through rent control will make the crisis worse.

“All this cheap populism from the Greens will achieve is driving New Zealanders’ living standards down even further, and if their plan to end poverty is condemning generations of Kiwis to living in squalor then they have missed the mark by a mile.

“Economist Assar Lindbeck put it best: “Rent control appears to be the most efficient technique presently known to destroy a city – except for bombing.”

Government must stop giving handouts to universities returning surpluses

Responding to news that a number of universities returned significant surpluses last year while still calling for government handouts, Taxpayers’ Union Campaigns Manager, Callum Purves, said:

“Universities across New Zealand have been crying poverty for months, and in response this week the Government announced it would be handing universities another $128 million of taxpayers’ money.

“As it turns out, a number of universities were not being particularly upfront with the public.

“For example, Victoria University has been one of the squeakiest wheels, when it turns out that last year they returned an operating cash surplus of $31.4 million. Worse still, last year they also found the spare money to spend a net $44.8 million on land and new buildings.

“Clearly this shows that some cash-grabbing unis are not in anything close to the financial dire straits their PR teams would have you believe.

“Rather than caving in to such demands, the Government should do its due diligence before throwing away hundreds of millions of hard-earned taxpayer dollars.”

Taxpayers’ Union exposes hypocrisy of High-Tax Campaigners

The Taxpayers’ Union can reveal that none of the various wealthy people, celebrities, and former civil servants who signed a letter calling for higher taxes have put their money where their mouth is and contributed further from their own pocket to fuel Grant Robertson’s out of control spending.

Taxpayers’ Union Executive Director, Jordan Williams, said:

“As signatories of a May letter that begins, ‘We write as people who are frustrated with how much tax we pay. We want to pay more.’, these people are clearly not as willing to pay more as they say they are and this whole exercise was cringy virtue signalling to gain public attention.

“When the letter was published, we kindly wrote to them with details on how they could do so via direct transfer into Crown treasury bank account to make the process as easy as possible. More than a month later, not a single one of them has donated as confirmed by the Treasury.

“The rhetoric of these individuals has proven to be nothing more than empty words. As we said at the time, we agree that good public services are important, but until it is clear that public money is being spent well and efficiently, it is not fair to demand fellow citizens pay more.”

Farmers need less red tape, not taxpayer handouts

The Taxpayers’ Union is calling on the Government to prioritise reducing unnecessary and costly regulations for those growers, farmers and businesses affected by North Island weather events rather than providing them with taxpayer-funded handouts.

Commenting on today’s support package announced by the Government, Taxpayers’ Union Deputy Campaigns Manager, Connor Molloy, said:

“While we acknowledge that many farmers, growers and businesses have been badly affected by the recent weather events, today’s support package will significantly reduce the long-term viability of the farming sector by leading to increased costs and regulations in the future.

“Rather than playing the role of the bank, the Government should be speaking with farmers to see what red tape needs to be cut to make it easier for these businesses to do what they do best. Significant cutbacks to costly red tape would make farms more viable for the future and, in turn, would lead to an increased willingness for banks to lend right now.

“Minister McAnulty’s claim that ‘[m]any businesses severely affected by the weather events are likely to be commercially viable with the right support’ seems to espouse a view that Government is the only one who can provide support and banks are too short-sighted to look beyond the present situation. The whole purpose of a bank is to take well-informed investment decisions that look not just at the immediate term but also, in many instances, decades into the future. If these farms are likely to be commercially viable in the future, banks will recognise this and adjust their lending conditions appropriately.

“The Government may try to claim that taxpayers aren’t paying for this because much of the support is in the form of loans, or underwriting loans. For commercially viable farms, banks are already fronting up. The only loans that the Government could underwrite that a bank wouldn’t otherwise provide are those that are inherently the most high-risk. The Minister seems to think he knows more than the banks but it is ultimately taxpayers who will have to foot the bill in the event of default.

“We are concerned that this could lead to a similar situation as the leaky buildings debacle where the Government, knowing it will be expected to bail out farmers, will make even more costly and over-the-top red tape and levies for farmers to reduce the financial risk for the Government. This will only make farming harder and more costly in the future, jeopardising the long-term viability of one of our greatest industries and provide even more need for taxpayer bailouts in the future. Responsible farmers plan for events like this and should be able to work with their bank who has a vested interest in the long-term success of the business.

“If the Government really wanted to help farmers, they would start by cutting back on existing red tape that stops farmers getting on with the job and withdrawing their proposed replacement to the Resource Management Act, which would lead to even higher farming costs and even more red tape.”