The Taxpayers’ Union is slamming Cabinet's decision to provide yet another taxpayer-funded handout to Ruapehu Alpine Lifts (RAL), this time to the tune of $7 million.

Taxpayers’ Union Head of Campaigns, Callum Purves, said:

“We warned earlier in the year that taxpayer-funded bailouts for failing businesses would be a slippery slope and unfortunately we have been vindicated.

“Every dollar that the Government wastes on corporate handouts is a dollar that first had to be taxed from someone else. While the Government may claim that they are protecting jobs in the ski industry, the taxes to pay for this corporate welfare costs jobs in other industries.

“The Government would be better to let RAL go under and allow a new buyer to come in as a replacement – including leaving the door open for an international investor. This would allow a financially viable operator to take over the ski field while also saving taxpayers from funding unnecessary corporate welfare in the middle of a cost-of-living crisis.

“Once businesses realise that they can get money by coming cap in hand to the Government, the potential for pork-barrel politics and back-room deals is increased as businesses begin to respond to Ministers instead of markets.”

The New Zealand Taxpayers’ Union is calling on New Zealand First to release costings for each of their policies citing fears that they could cost more than Labour’s election spending spree.

When questioned by Jack Tame on TVNZ’s Q + A yesterday about the lack of fiscal detail in NZ First’s policies, Winston Peters said “Well our manifesto comes out later today. Why don’t you wait. We've made sure that were gonna have it out given the huge PREFU gaps and holes there are. We made sure ours stacks up.”

Despite early voting now being open, New Zealand voters are none the wiser as to how much NZ First’s policies will cost taxpayers and what new taxes will be levied to pay for them.

Taxpayers’ Union Head of Campaigns, Callum Purves, said:

“New Zealand First has to date been the least transparent out of all the parties likely to get into Parliament in relation to how much their policies would cost taxpayers.

“In 2017, New Zealand First was campaigning on more spending than any other party and it appears this could be the case again this time around. Unfortunately, the lack of detail in the announced policies make it near impossible for us to independently cost the proposals.

“Included in the policy list is a number of eye-wateringly expensive proposals including $100 million on 'transmission upgrades', moving the Port of Auckland and establishing a naval base, establishing a new Ministry for Energy and a vague promise of corporate welfare in the form of tax incentives.

“This is on top of the policy to remove GST off ‘basic foods’ – a policy that will not only cost significantly more than the $2.6 billion needed for Labour’s GST proposal but will also require an even bigger army of bureaucrats to determine what is and isn’t basic foods.

“Winston Peters is trying to frame his party as one fit for Government yet to date we have had more clarity from Labour, the Greens and Te Pāti Māori. Voters deserve answers now.”

Grant Robertson’s claim that there is a ‘hole’ in the funding as of a result of scraping Three Waters is nonsense on stilts.

Taxpayers’ Union Executive Director, Jordan Williams, says:

“Grant Robertson is trying to frame opponents of Three Waters - including the National Party - as not having an alternative. Nonsense. There is an off the shelf solution that has the broad backing of the countries largest two councils, Communities4Local Democracy, the Taxpayers’ Union, and ACT. The National Party’s policy is nearly identical.

“Unlike Three Waters, the Local Water Infrastructure Bill, doesn’t just splash cash and bureaucracy.  No government funding is required within the budget forecast period, and any that subsequently is needed requires disciplined analysis showing investment is justified before amounts are committed - similar to the tests for investment Transpower is subject to.

“The only hole here seems to be Grant Robertson’s knowledge about the alternative to Labour expensive, bureaucratic, undemocratic Three Waters.”

As per the Q&A released on 11 August when the Taxpayers’ Union announced that it had earlier appointed an expert group to develop the Three Waters Repeal And Replacement Bill:

Cost for water utilities and for communities depends on how much investment is needed and how much has been delayed. That differs from council to council.

But the government has promoted unrealistic estimates of costs and promoted the idea that somehow essential upgrades and replacements can only be afforded if everything is centralised and overseas savers’ funds can be accessed to pay for our water services. Castalia says that the investment plans for water infrastructure of most of the sample of councils they have audited appear prudent and readily fundable. They found that the consultants engaged by DIA wildly overstated investment needs.

As Castalia explains it “the government has assumed that one factor, scale, will deliver fantastical cost savings. This is plain wrong and the international evidence confirms this. Because the government’s consultants could claim such big cost savings from scale, they were able to include enormous estimates of needed capital expenditure”.

Responding to the Labour Party’s announcement that they intend to subsidise grocery stores to try and enable competition in New Zealand’s grocery sector, Taxpayers’ Union Policy Adviser, James Ross, said:

“There is a lack of competition in New Zealand’s grocery sector, and that does lead to extortionate food prices. But Labour seem to have missed that the reason for this is that the Government keeps propping up the big two supermarket chains.

“There is a massive contradiction in Labour’s story here. Given the enormous profits generated by the big two grocery chains, if there was an opportunity for foreign competition to establish themselves here than they would jump at the chance regardless of whether they received taxpayer-funded handouts. The fact that they haven’t just goes to show that, thanks to the Government interfering in the market, competing with Foodstuffs and Woolworths is not currently possible.

“Overly restrictive resource management under the RMA and restrictions on foreign investment make it nigh-on impossible for competitors to establish themselves in New Zealand. Coupled with Labour’s bizarre ruling that new grocery chains will have to supply their competition at wholesale prices should they be successful, this sends investors running. Just chucking more taxpayer dollars away in corporate welfare isn’t going make these problems go away, and so food prices will stay sky-high.

“Labour must at least be commended for their new-found transparency. Rather than just subsiding grocery store owners by stealth with their GST fiasco, at least with this new policy they’re being open with the public about their plans to line the pockets of grocery chain fat cats.”

Commenting on the National Party’s re-affirmation of their pledge to scrap the Clean Car Discount, Taxpayers’ Union Policy Adviser, James Ross, said:

“Under Labour’s Ute Tax, families, farmers and tradies have been subsidising the lifestyle choices of wealthy urban professionals. Robbing from hardworking people to the tune of half a billion dollars so that middle-class Kiwis can save a few bucks on a shiny new set of wheels is both immoral and unsustainable.

“National’s plan to scrap the Ute Tax by the end of the year will be a welcome Christmas present for Kiwis struggling under the cost-of-living crisis. However, rather than swapping one middle-class subsidy for another, National also need to commit to scrapping their plans to waste even more of the taxpayers’ money propping up the electric vehicle industry.

“Given Treasury’s recent update on the dire state of our nation’s finances, it is woefully irresponsible to commit to spending $257 million in taxpayers’ money on EV charging points. The market has been perfectly adequate at providing petrol pumps across the country without the need for the government to build, own, and operate them. If New Zealanders want to switch to electric vehicles, then the same will be true of charging points.

“Once again, when drafting this policy National seem to have completely missed the fact that this subsidy won’t reduce emissions by even a single gram. As net emissions are capped under the Emissions Trading Scheme, any reduction in car-related emissions will simply free up carbon credits to be used in other sectors.”

Download the spreadsheet containing our modelling of the cost of Labour's GST policy here.

Following recent concerns raised by the Taxpayers’ Union that Labour’s GST-exempt policy would leave a revenue hole of up to $411m because, as Labour have claimed, more people may eat fresh fruit and vegetables if they were cheaper, yesterday Chris Hipkins told media “We’ve already banked the savings that people make. So when people get their GST off their fruit and vegetables, we’ve assumed that 100% of the savings they get from that are going to be spent on more fruit and vegetables.

“If they spend that on something else then actually, our costings are overly conservative because they’ll pay GST on the other stuff. The Taxpayers’ Union beat-up is just fictional. It doesn’t make sense. They haven’t actually got their numbers right.”

To call the Prime Minister’s bluff, the Taxpayers’ Union is releasing the excel spreadsheet and is inviting journalists and analysts to come to their own conclusion on Hipkins’ version of ‘fiction’. The spreadsheet is available to download here.

“It’s certainly a big coincidence that Labour’s numbers match, almost exactly, our figures before we adjust them for behavioural changes. After this behavioural adjustment, Labour is left with a $411 million hole which they are yet to explain.

“Now that we’ve done so, Mr Hipkins and Robertson should release their spreadsheet showing how they came to the same number, but – as Hipkins claims – accounting for the substitution effect on demand for fresh fruit and vegetables from his GST-free policy.

“Either it’s an almighty coincidence, the Labour Party leader is being misled by his advisors, or Mr Hipkins is misleading voters. We are pretty confident it’s not the first one.

“It’s time for Mr Hipkins to put his money where his mouth is and release Labour's own costings.”

NOTES:

A downloadable copy of the spreadsheet can be accessed by clicking here.

The Taxpayers' Union is willing to sit down with any journalists, analysts or Labour MPs to explain how we came to our costings.

Further explanation of our analysis can be found in our earlier press release at: https://www.taxpayers.org.nz/gst_policy_hole

Responding to the release of the OECD’s latest Education at a Glance report, Taxpayers’ Union Policy Adviser, James Ross, said:
 
“Since 2018, investment received by the Ministry of Education has increased by nearly 75%. Despite this, outcomes for our children are getting worse and worse by the year. Like with so many other departments across the public service, serious questions need to be asked about where this extra money has gone.
 
“Chucking billions upon billions more into the bureaucratic black hole clearly hasn’t been working, when this increasingly seems to be wasted on a growing culture of inefficiency across the public sector. With the Ministry of Education unable to tackle core problems like 40% of schoolkids still failing to regularly attend school, it’s no wonder Kiwi kids are being left behind.”
 
“Any incoming government needs to take a long, hard look at how taxpayers’ money is being spent, zero-base funding and do much more than just pay lip service to getting essential services like education working again.”

Commenting on the Grocery Supply Code of Conduct coming into force, Taxpayers’ Union Policy Adviser, James Ross, said:

“The grocery supply code of conduct has completely missed the root causes of New Zealand’s sky-high grocery prices. Lack of competition in the sector is absolutely the main driving factor behind this, but rather than bringing prices down this code will only make things worse.

“The Government props up food prices by refusing to allow competition to spring up, through both its overly restrictive planning regulation and making it nigh-on impossible to attract competition from overseas. A law which requires any competitors which spring up to supply their competition with produce at wholesale prices is of course going to send foreign investors running.

“Rather than answering every problem with soundbite policies promising more bureaucracy, if the Government really wants to help Kiwis struggling under the cost-of-living crisis then it needs to cut the red tape and allow proper competition to the grocery duopoly.”

Responding to the Labour Party’s Fiscal Plan, Taxpayers’ Union Head of Campaigns, Callum Purves, said:

“Labour’s current economic plan of overtaxing hard-working New Zealanders just to waste money on middle-managers, consultants and vanity projects clearly isn’t working. With the highest level of Government spending we have ever had, Labour is robbing our children by racking up billions upon billions more in debt every year.

“In its latest fiscal plan, Labour has doubled down on its high tax, high borrowing, and high spending model. When Treasury noted only two weeks ago that a razor-thin increase in borrowing would see New Zealand unable to return to surplus within the forecast period, for Labour not to announce significant cuts to Government waste is deeply irresponsible.

“When asked how Labour planned to deal with any large unexpected costs, as expected Robertson’s reply was “through the balance sheet.” In other words, Labour is already planning to borrow more to make ends meet. With every household’s share of this debt now at nearly $82,000 and rising fast, New Zealand can’t afford more of the same.

“Wasting billions on a GST policy that economists almost universally call inefficient and ineffective is bull-headed to the extreme. New Zealanders deserve sound, properly-costed policies and unfortunately that is not what they’re getting with this GST fiasco. The Taxpayers’ Union is once again calling to establish an independent electoral policy costing body so Kiwis can make informed choices at the ballot box.”

Responding to National’s plans to reverse Labour’s blanket speed reductions, Taxpayers’ Union Policy Adviser, James Ross, said:
 
“The real cost of reducing speed limits is far more than just changing some signs, and it is not a policy which comes cheap. Trucks, buses and cars rely on being able to get from A to B as quickly as possible to keep the country ticking over. Longer travel times for transport and freight lowers productivity, which in turn means less growth, higher prices and lower wages.
 
“Where there is clear evidence that reducing speed limits on a specific section of road will have a significant effect on road safety, then this option should of course be considered. However, hobbling the economy with blanket reductions is a decision which has been taken far too lightly.
 
“At a time when improving our productivity is more important then ever, we should be looking for ways to safely allow people to travel faster, not slow them down. A return to evidence-based highways policy which makes full use of proper economic assessments will be a welcome change for Kiwis struggling under the cost-of-living crisis.”