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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.”
The Ministry for Pacific Peoples is once again facing criticism for its seemingly lavish spending habits. Recent figures posted by National's public service spokesperson, Simeon Brown, reveal that over $50,000 of taxpayer money was spent on post-Budget breakfast events this year.
Oliver Bryan, Investigations Coordinator for the Taxpayers' Union, reacted by saying, "Once again, we're seeing evidence of the Ministry for Pacific Peoples operating in a bubble, detached from the realities many New Zealanders face daily. Such expenses are hard to swallow, especially when this Ministry is meant to advocate for some of our most economically vulnerable citizens. The fact that they operate in a manner suggesting indifference to fiscal responsibility is deeply concerning."
“The significant growth in the number of staff at the Ministry, from 34 in 2017 to a current 145, combined with the parties and now this latest revelation, raises further questions. Not just about its operational and fiscal strategies, but about the broader culture of waste that appears to have taken root at the heart of our government. It's imperative for government entities to be judicious in their spending, ensuring they deliver value for money, especially at a time when our debt is soaring.”
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.”
A new Taxpayers' Union – Curia poll in the Northland Electorate has National’s Grant McCallum reclaiming the seat with 43% of the electorate vote. Labour's incumbent Northland MP Willow-Jean Prime is currently on 18%, while New Zealand First's Shane Jones makes up 13%.
Among the other parties’ candidates, Matt King of Democracy NZ and Reina Penney for the Green party sit at 4%, ACT's Mark Cameron is sitting at 2% of the electorate vote as is Te Pāti Māori despite the party not standing a Northland candidate. 12% of voters are still undecided or refused to answer.
As a proportion of the decided votes the breakdown is as follows:
The poll of 400 respondents was conducted on Sunday, 10 September, 2023. The full results, including the most important local issues for voters, are available here.
Taxpayers' Union Campaigns Manager, Callum Purves, says:
"This poll again shows another sharp swing away from Labour, after they unexpectedly won this seat at the last election from the then National Party MP, Matt King. This doesn't necessarily spell bad news for electorate MP Willow-Jean Prime who will likely make it back into Parliament with a high list position but a swing this significant will definitely be a wakeup call for incumbent Labour MPs around the country.
“Compared to previous electorate polling, each of the three top-name recognized candidates has just points between them in one of the most geographically spread electorates in New Zealand, with all three top-polling candidates having over 40% visibility within the electorate.
“With just under three weeks until early voting opens, this seat looks to be safely making its return to National. Even if all of the 11% undecided vote goes to Labour’s Willow-Jean Prime, that won’t be enough to keep Northland red after Election Day.”
Jonesie Waste Awards 2023
In a year fraught with challenges and uncertainties, The Taxpayers’ Union took it upon themselves to shine a light on the spending choices made by our governing entities. Presenting to you, the Jonesies Waste Awards 2023.
Local Government Nominees:
1. Otago Regional Council’s Wallaby Nightmare: Despite pouring more than $2.76 million and dedicating over 26,000 hours, the Otago Regional Council managed to capture only 18 wallabies. Price per wallaby? A whopping $153,422.72. It would’ve been cheaper to send them back to Australia on a private jet each.
2. Far North District Council Has Gone Barking Mad: Far North District Council's transformation of Melka Kennels for 24 dogs, with a budget of $200,000, skyrocketed to $2.4 million for just 10 dogs. That's $240,000 for each dog. And thanks to funds from the Covid “shovel-ready” Provincial Growth Fund grant, we all paid for it.
3. Auckland's Transport Shun Their Services at Our Cost: In 2022, Auckland Transport staff appeared to fly more than they rode their own buses. $189,993.47 went on flights, $27,524.16 on Ubers and taxis, dwarfing the mere $4,778.04 spent on bus services. It seems that Auckland Transport agree with residents that their service isn’t up to scratch.
4. Hamilton's Botched Bus Stop: Hamilton City Council in a joint project with Waka Kotahi, spent $2.5 million on building, tearing down and then rebuilding a bus stop. The project started four months later than planned and went $500,000 over the budgeted cost. Once construction was completed they realised that the concrete path had been laid at the wrong angle making it a risk to wheelchair users. After significant financial investment, they managed to make the bus stop less usable. Eventually, the new bus shelters had to be removed and then reinstalled in order to allow the work to be completed.
5. Horowhenua District Council’s Landfill Liability: Initially estimated at $7,500, the Horowhenua District Council’s consultancy costs for evaluating a landfill's profitability skyrocketed to $895,000 without a formal business plan or contract in sight.
Top Honours for Local Government Wastefulness: The Otago Regional Council!
Central Government Nominees:
1. Ministry of Foreign Affairs and Trade, Private School Privileges: Taxpayers have forked out $4,999,823 for private schooling for diplomats’ kids in many countries with similar or superior state schooling to New Zealand. Despite Kiwi state education in ruins, 63 diplomats sent their kids to prestigious private schools internationally on the taxpayer dollar. $74,776.98 was spent in Australia and $817,410.14 in the US. Other countries included China, Korea, the UK, France, Germany, Netherlands, Japan, Ireland and Canada.
2. Let’s Get Wellington Moving, The Gaff That Keeps on Giving: The Cobham Drive crossing spearheaded by Let’s Get Wellington Moving came with a price tag of $2.4 million, with consultancy fees alone amounting to $500,000.
3. Ministry for Pacific Peoples’ Golden Goodbye Gala: The Ministry for Pacific Peoples hosted a $40,000 farewell bash for its former CEO, a lavish affair during tough economic times. The breakdown of the expenses includes $7,500 on gifts, $3,000 on photographers, drummers and flowers. $7,000 on travel and accommodation for specific attendees.
4. Ministry of Health, Penny For Our Thoughts: The Ministry of Health spent $334,000 seeking public opinions on its performance, and developing graphics highlighting the fact that barely anyone thinks they’re doing a good job. One social media graphic they promoted proudly said that only 6% had a positive view of them.
5. Ministry of Education’s Dot Com Bust: The Ministry of Education spent $100,000 on the development of a new website before deciding it wasn’t necessary and never launched it. It appears they began developing the site before realising they were creating a new online hub this year so the site would become obsolete almost immediately. $100,000 with nothing to show for it.
Lifetime Achievement in Waste:
Donovan Clarke, the former Chief Executive (CE) of Toitū te Waiora, a Government Workforce Development Council, faced scrutiny over extravagant overseas expenditures on the taxpayer's dime. Clarke's expenses included lavish meals like lobster feasts and calamari canapés, daily late-night taxi rides, and considerable room service charges at his four-star hotel. Interestingly, the conference he attended was organized by the Council of Ambulance Authorities, chaired by David Waters, Clarke's own chairman. In one instance, Clarke indulged in an extravagant seafood dinner, followed by a taxi ride at 3:36 am to his hotel, only to leave for the airport just three hours later. After landing, Clarke charged taxpayers $22 for breakfast and $80 for access to Singapore Airlines' luxury sky lounge. Many of his expenses were ambiguously labeled, raising questions about the identity of his dining companions. In his first 11 months as CE, Clarke spent $72,862.03 on his taxpayer-funded credit card, more than double the amount of his five CE counterparts combined. Despite Toitū te Waiora's 2022 Annual Report, which Clarke approved, emphasizing its 'Sensitive Expenditure Policy', questions arose about its enforcement or adherence. Subsequent to the arising queries, Clarke was placed on six months of paid leave before resigning after an employment dispute costing taxpayers nearly $328,000 in various fees. The exact amount given to Clarke as part of a severance deal remains undisclosed. Satirically, there's speculation about a dispute over a taxpayer-funded lobster-bib, which remains unconfirmed. The article concludes by hoping that Clarke stays away from taxpayer-funded roles in the future and jests about his extravagant tastes. His cost to the taxpayer has been truly epic. And we hope you agree that he’s a worthy winner.
The Taxpayers' Union has obtained information through an Official Information Act request (OIA) that the Ministry of Health has spent a hefty $330,000 on a nationwide advertising campaign. This campaign, ironically titled 'Your Views on Health,' was launched in December 2022. Its intention? To engage the public and prioritise their involvement in the health system, all while highlighting how poorly the public thinks the Ministry is performing.
An astonishing $80,000 of the total sum was allocated for social media boosting. Even more shockingly, the Ministry chose to proudly promote a post that exposed the fact that a dismal 6% of surveyed individuals believed they had access to adequate health services.
Oliver Bryan, Investigations Coordinator at the Taxpayers' Union, remarked, “They've not only frittered away taxpayers' money but further tarnished the Ministry's already negative image. They’ve paid through the nose to broadcast their own ineptitude. One has to wonder if they're vying for a comedy award. A post triumphantly crowing about how a pitiful 6% of the public think they've got their act together on healthcare. You couldn't make this stuff up. It's like a chef spending a fortune on ads to tell you his restaurant will probably give you food poisoning.”
Bryan further commented, “It's high time the Ministry centred its efforts on creating tangible solutions to the health system's evident deficiencies, rather than pouring money into such fruitless advertising endeavours.”
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.”
Now that Air NZ is well and truly back in the black, it’s time the Government quit owning a majority stake in our national airline says the Taxpayers’ Union.
Responding to today’s market announcement that Air NZ's revenue has shot back to pre-covid levels, Taxpayers’ Union spokesman Jordan Williams said:
“Back in 2020, right at the beginning of the pandemic, Grant Robertson claimed that his support package ‘protected Air New Zealand’, and essential routes and allows the company to keep operating. In fact, the beneficiaries were foreign bond holders who didn’t lose a cent despite having lent to the airline for above average interest rates – to compensate for the inherent risks of airline businesses. Thanks to Grant Robertson, foreign giants got to have their cake and eat it too, on the back of taxpayers.”
“Across the Tasman, lenders to Virgin, took a bath thanks to the pandemic. But the planes were back in the air just as fast as Air NZ, and it didn’t cost Australian taxpayers a cent.”
“Any frequent flier will attest to the quality of Air NZ’s services having declined since it became a Government-owned company. With the obvious conflict of interest Christopher Luxon has with having worked for the airline and possibly becoming the Prime Minister, National needs to confirm that it is their intention to sell down the shareholding before the next inevitable shock hits the airline.”
Responding to the National Party’s plan to cut red tape for KiwiSavers, Taxpayers’ Union Campaigns Manager, Callum Purves, said:
“New Zealanders should be free to save and invest their money however they see fit, and we welcome this decision by the National Party to go back to treating savers like responsible adults.
“Allowing savers to choose how to invest their savings will not only allow New Zealanders to see greater potential returns on their investments, but diversified investments will allow Kiwis to reward innovation and entrepreneurship. This extra financial freedom will be a tremendous boon to New Zealand’s economy.
“Ineffective red tape which does nothing but invade savers’ privacy and drive up the cost of borrowing should also be resigned to the scrap heap. Hopefully National’s pledge to reform the Credit Contracts and Consumer Finance and Conduct of Financial Institutions Acts is only the first step of many towards getting bureaucracy out of the way of New Zealand’s prosperity.”
Commenting on the news that Climate Minister James Shaw has proposed an inquiry into climate-related community relocation before the passage of the Government’s Climate Adaptation Bill, Taxpayers’ Union Campaigns Manager, Callum Purves, said:
“Delaying climate adaptation legislation until the next parliament so that proper scrutiny can take place and cross-party agreement can be built is the right move. In this instance we welcome the Government’s acceptance that major reform should not be rushed through the House if it is to be effective.
“However, the Climate Adaptation Bill forms just one part of the Government’s misguided attempts to reform the RMA. The Natural Built Environment Bill and Spatial Planning Bill have been forced through Parliament, and they both will do untold damage to New Zealand’s economy and democracy.
“How then can the Government justify the public only being given enough time to properly scrutinize one third of its RMA reforms? Ramming these bills through in the final few days of this Parliament goes to show how little respect Labour have for voting New Zealanders.”
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