Outrageous that ‘super rich’ getting winter energy payments to warm pools

The Taxpayers’ Union is accusing Government Ministers of crocodile tears about the so-called ‘super rich’ inequality given their defence of the winter energy payment going to those who clearly don’t need it.

Taxpayers' Union spokesperson, Jordan Williams, says:

“Taxing those struggling with the cost of living in order to subsidise the super wealthy to heat their pools is disgraceful.  Government support should be laser focused on those who need it most.”

“The ‘universality’ Chris Hipkins is defending means that less is available for those who most need support.”

Tax hike to fund Teslas a kick in the guts to the provinces recovering from flooding

In the middle of a cost of living crisis, today’s move to hike the taxes on utes and other, so-called, gas guzzler vehicles is a kick in the guts to provincial and rural communities who already have it tough post-cyclone Gabrielle, says the Taxpayers’ Union. It’s calling for Hawke’s Bay, East Coast, Northland, and the Coromandel to be spared from the Ute Tax to allow those needing to replace work vehicles to do so affordably.

“There still not a practical electric ute,” points out Jordan Williams, a spokesperson for the Taxpayers’ Union.  “That means those importing a second hand ute to replace one of the hundreds lost due to the flooding, are now forced to pay even more for it. This is a kick in the guts to those who can least afford it, for the sake of politicians and the urban elite who are eyeing up a Tesla.”

“Carmel Sepuloni demonstrated the fundamental flaw in the policy this morning when she told Mike Hosking that the policy is about reducing emissions and climate change.  This is demonstrably false.  While the clean car discount does encourage low emissions vehicles,  therefore reducing transport emissions, because of our ‘cap and trade’ emissions trading scheme, those emissions simply become available for cheaper emitters elsewhere.  This ‘waterbed effect’ means that the Ute Tax and Clean Car Discount Scheme does nothing to reduce overall emissions, or climate change. The emperor has no clothes.”

The New Zealand Taxpayers’ Union has today released its annual review, covering the last 12 months of operations.

The report is available online here. Hard copies are also available on request.

Taxpayers’ Union Chairman, Laurence Kubiak, says:

“Between the New Zealand Taxpayers’ Union and our sister group, the Auckland Ratepayers’ Alliance, our campaigns in the last 12 months have attracted more than 200,000 subscribed members and supporters. While we are proud of the work standing up for taxpayers, there is still a lot more to be done.”

The Union’s Executive Director, Jordan Williams, says:

“There are hundreds of organisations that campaign for more government spending and a higher tax burden. The Taxpayers’ Union helps balance that debate by exposing government waste, fighting for more effective government spending, promoting the benefits of lower taxes, and championing more transparent government.”

“This Annual Review reflects our change in mission late last year – from Lower Taxes, Less Waste, More Transparency to Lower Taxes, Less Waste, More Accountability.  Without democratic accountably efforts of pressure groups to change the hearts and minds of New Zealanders – not just for the Taxpayers’ Union but our equivalents on the Left of politics – are useless.  For the Taxpayers’ Union, like many who rely on persuasion and leading public debate, proposals to decouple public policy and public services from democratic accountability represent an existential threat.  We are proud of the work we have done in Three Waters, for example, to defend democracy.”

The Taxpayers’ Union is slamming the National Party’s commitment to continuing government contributions to the NZ Super Fund, despite growing public debt and economic headwinds.

Taxpayers' Union Executive Director Jordan Williams says:

“Let’s be very clear what this policy involves: the National Party are saying they will continue to borrow in order to stuff money into a risky sharemarket scheme.”

“Government debt is forecast to be nearly 42% of GDP by next year. The National Party should be solely focused on getting the books back into the black, not signing up for a policy that only made sense when Michael Cullen was running record surpluses.”

“Borrowing money to put money on the stock market makes no sense. John Key and Bill English acknowledged this when they paused payments following the 2008 global financial crisis. The National Party was right then, and its change in stance risks people questioning their reputation as prudent fiscal managers.”

Taxpayers’ Union welcomes ‘no new taxes’ budget pledge but devil will be in the detail

Commenting on the Prime Minister’s pre-budget speech, Taxpayers’ Union Campaigns Manager, Callum Purves, said:

“While the cyclone recovery will be costly, hiking taxes on hardworking New Zealanders during a cost of living crisis would have been the wrong approach. We also welcome the ruling out of a capital gains tax or wealth tax for this year's budget, which would have stifled investment and driven high-net worth individuals abroad who make a large contribution to the funding of our public services.

“But the Prime Minister’s ‘no new taxes’ pledge must not ring hollow. After all the talk yesterday of the wealthy not paying their ‘fair share’ in tax, it is disappointing that the Government has not yet dropped its plans for a regressive fuel tax hike in June that will disproportionately hit poor and rural communities.

“Moreover, with inflation continuing to run high, the problem of bracket creep means that many Kiwis are paying an ever higher share of their income to the Government. This particularly hurts those on middle incomes.

“No new taxes might be a good election slogan, but for it to be true, the Government must refrain from hiking fuel taxes and address the inflation tax.”

What a waste of time and money to tell Kiwis what we already know

The Government has wasted $5 million dollars, abused the information gathering powers of the IRD, and politicised officials, for the sake of a report that tells us nothing we don’t already know, says the Taxpayers’ Union.

Responding to the High Wealth Individuals Research Project report just released by IRD, Taxpayers’ Union spokesman Jordan Williams said:

“There’s nothing new in here. The report confirms that we have a highly progressive income tax system, compliance is good, and those who can afford to pay a lot more do so.  Thanks for the newsflash, Captain Obvious”

“It also confirms that the wealthy obtain most of their economic income from capital gains that are not taxed. A fifth-form economics student could have told David Parker that.”

“Fundamentally, the report concludes that high net wealth families are only paying 9% of their economic income in tax.  But the report shows that most of that economic income is unrealised capital gains.  No one in the world taxes that, and it is disinformation to encourage comparisons to those primarily earning PAYE income.”

“The report totally ignores the risky nature of capital gains.  The short point is that investing in a business is more risky than turning up to a job and demands appropriate returns to encourage much needed investment.  Tax rates need to reflect that, as well as the fact that New Zealand, like all countries, compete for capital.”

“Everyone supports evidence-based public policy. This report is policy looking for evidence and its timing is clearly designed to stoke resentment and justify an envy tax that will make New Zealand poorer.”

This month marks the 25th anniversary of the Belfast/Good Friday Agreement that brought peace to Northern Ireland. It ended a decades-long conflict between Irish Republicans and British Unionists.

As a relative newcomer to New Zealand and someone who spent time working in Northern Irish politics, I have noticed political parallels between the two. Both are dealing with issues such as addressing the wrongs of the past, the politicisation of language, upholding minority rights and the best form of governance to do this.

Like the Treaty of Waitangi, Northern Ireland’s peace agreement took steps to acknowledge the different aspirations of its communities – in their case, British Unionists and Irish Nationalists – under a common framework.

The agreement is, however, much more prescriptive than the Treaty. One of its key components was the re-establishment of a devolved assembly and executive. The Northern Ireland Executive requires mandatory power-sharing with the First and deputy First Ministers appointed by the two largest blocs and all major parties are entitled to seats around the table.

The problem is that Northern Ireland does not have a government.

Since the agreement was signed, it has been without one for more than nine of 25 years. This is because, to form an Executive, both First and deputy First Minister roles must be filled and either bloc can collapse the government by withdrawing their nominee.

Unionists and Nationalists have done so multiple times, most recently Unionists over post-Brexit trading arrangements. Each time this happens, unelected civil servants take charge but without the ability to progress essential reforms. In some cases, the UK Parliament must step in.

Either community can also invoke a “petition of concern” to block policies even when they command majority support in the Assembly. While this was designed to protect the interests of each group, it is open to abuse and often enacted simply to stop legislation with which they disagree.

The ability to collapse the government and the petition of concern are examples of veto power – an inherent flaw in systems of co-government.

This veto power has fostered resentment and led to a growing rejection of the traditional dividing lines between Unionist and Nationalist. Assembly seats held by those designated as neither have grown from 7 per cent in 1998 to 20 per cent today. Co-government is, however, binary and struggles to accommodate this shift.

Mandatory coalition also leads to an undesirable situation where – when it was last functioning – 85 of 90 Assembly members were in government. There is effectively no opposition, and this lack of scrutiny has been a big factor behind local political scandals.

More concerning, however, are the implications for democratic accountability. Even if there are big shifts in how people vote in an election, the result is the same: a perpetual coalition. There is little prospect of a major party not being in government.

Given these many problems, four of the five main parties – including Nationalists, Unionists and Others – now want the system reformed although they struggle to agree on what that might look like.

While the agreement and the Treaty are different documents, recent proposals for co-governance of New Zealand public services bear striking similarities with the system in Northern Ireland.

Take the example of Three Waters. While we await the announcement of the promised refocus, the model as proposed would face similar problems to the Northern Ireland Assembly. The Regional Representative Groups would have 50 per cent representation from each of mana whenua and local councils with the requirement for 75 per cent majorities where consensus cannot be reached. This would give veto power to both groups and all the problems that come with that.

Similar proposals to require the introduction of unelected mana whenua representatives on Regional Planning Committees and local councils undermine democratic accountability. It would mean that New Zealanders would not be able to effect meaningful change through elections. Like in Northern Ireland, however people vote would make little difference as the result would always be the same: a perpetual coalition with seats reserved but no ability to hold the representatives filling them to account. Over time, this would simply serve to foster resentment and rejection of the system.

The Northern Irish Agreement and its protection of the rights of all communities in law were undoubtedly necessary to bring an end to the bloodshed, but the system of government it delivered is neither democratic nor effective and is losing public and political support.

The lesson from Northern Ireland is, however well-intentioned, co-government rarely works in practice. It can bring government to a standstill, undermines democratic accountability, and often exacerbates the divisions it is designed to heal.

If New Zealand wants to avoid similar paralysis, it should think twice before embarking on this path.

Callum Purves is the Taxpayers’ Union national campaign manager who has run campaigns for the Conservative Party in Scotland and Northern Ireland and served as a unitary authority councillor in Scotland.

This column first appeared in the New Zealand Herald on Thursday, 13 April 2023.

Misleading statements used to justify another $16 million in corporate welfare for big business

The Taxpayers’ Union is calling out Minister of Energy and Resources, Megan Woods, for her claim that the Government Investment in Industry Decarbonisation Fund (GIDI) will reduce New Zealand’s emissions.

Announcing the Round Four recipients of the GIDI fund, including the likes of Fonterra, AFFCO and Ovation, Minister Woods claimed that the $16 million taxpayer subsidy “will reduce carbon emissions by 38,354 tonnes each year.”

Taxpayers’ Union Campaigns Manager, Callum Purves, says:

“This is a blatantly misleading statement and will not reduce New Zealand’s net emissions by a single gram.

“As we have previously noted, New Zealand’s emissions are already governed by the capped Emissions Trading Scheme (ETS) meaning that any emissions reduction from these businesses will simply free up carbon credits for other businesses to emit instead.

“Taking into account the co-funding from these businesses, the cost per tonne of gross emissions reduction is $52. That is less than the current carbon price so these businesses should already have the financial incentives to invest.

“The taxpayer is not a piggy bank. These are large, profitable businesses, if they need money, they can go to a real bank like any other business.

“The Minister needs to front up to the taxpayers who, during a cost of living crisis, are being forced to fork out millions to subsidise some of our largest businesses. With another $570 million in corporate welfare yet to come, this fund should be immediately scrapped rather than further fueling inflation.

Waka Kotahi’s fee changes a blatant tax grab and additional barrier to upskilling

Changes to motor vehicle licensing and registration fees will whack productive New Zealanders with higher costs while Waka Kotahi (New Zealand Transport Agency) continues to grow its backroom bureaucracy warns the New Zealand Taxpayers' Union.

When the proposed changes were announced for consultation last year, the Taxpayers Union warned against the changes. Waka Kotahi is expected to collect an additional $66 million in annual revenue as a result of the changes plus any additional money taken from the National Land Transport Fund — $35 million was the figure proposed last year.

Winners from the changes:

• Convicted drink drivers: (84% decrease alcohol interlock license cost)
• Collectors of exotic vehicles (87% reduction in fees for Category A special interest left hand drive light vehicles)
• Drivers who fail their license tests (removal of resit fees)
• Waka Kotahi ($66 million increase in annual revenue).

Losers from the changes:

• Uber and taxi drivers (193% increase in the cost for a 1-year P endorsement)
• Tow truck drivers (172% increase in 1-Year Vehicle Recovery endorsement)
• Forklift drivers (41% increase in endorsement fees)
• All motorists (Increase of between 71% and 374% for everyone renewing their vehicle rego)
• Older siblings (268% increase in the exemption fee for restricted drivers carrying passengers)
• Night-shift workers (268% increase in the exemption fee for restricted drivers driving to work between 10pm and 5am)

Taxpayers’ Union Campaigns Manager, Callum Purves says:

“We warned against these changes last year when the consultation was announced. Jacking up fees for hard-working New Zealanders while reducing costs on convicted drink drivers and collectors of exotic vehicles is neither fair nor necessary.

“The real winner from these changes is Waka Kotahi’s bureaucracy which, based on the consultation document, plans to employ an additional 265 full-time equivalent staff – a 55.6% increase on 2018 numbers.

“Particularly concerning is the increased license endorsement costs for Uber, taxi, forklift and tow-truck drivers. These endorsement fees act as a barrier to low-income New Zealanders considering upskilling and will simply exacerbate the cost of living crisis for these individuals."

Commenting on today’s inflation figures announcement, Taxpayers’ Union Campaigns Manager, Callum Purves, said:

“The overall rate of inflation remains stubbornly high despite an aggressive tightening of monetary policy by the Reserve Bank. The fact that non-tradable inflation is at its highest level since the series began demonstrates that the problem is primarily being driven domestically.

“The double whammy of rising interest rates and high inflation is compounding the hardship already facing Kiwis. The Government says that the cost of living is its top priority but it needs to take its share of the blame for getting New Zealand into this mess with its profligate spending.

“Grant Robertson has an opportunity for a proper reset in next month’s budget. He should give Kiwis a reprieve by compensating them for the effects of income tax bracket creep at least since Labour came to power while dramatically slashing wasteful spending, including the ballooning budget for consultants, Three Waters and Auckland Light Rail.”