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We were amazed to find out this week that Wellington's DHB now has a policy which moves Māori and Pacific patients to the front of their elective surgery queues.
We all pay tax into the health system with the expectation that we will receive help when we need it. This DHB's decision to use skin colour to determine who goes to the front of the queue isn't just racist, it goes against the egalitarian vision of a publicly-funded health system. What would Michael Joseph Savage say?
We say the Health and Disability Commissioner needs to step in to protect the integrity of the health system – taxpayer-funded health resources should be allocated on clinical need, not race politics. We've approached him for comment, and are preparing a complaint to the Race Relations Commissioner. We'll let you know how we get on.
This week our analysts have been going back through the enormous volume of Budget announcements. One thing is clear: the Government's electoral strategy is to do all it can to keep the patient alive until after the election – then it'll send you the bill. Grant Robertson is spending like mad to keep New Zealanders happy... until after the election. To illustrate:
We would hope that, when politicians respond to a crisis with a spend-up costing tens of billions, they do it purely with the public interest at heart. But the timeline above does seem awfully convenient.
Our sister group, the Auckland Ratepayers' Alliance, has been doggedly campaigning to expose the "Rich List" of Auckland Council staff paid more than $250,000.
Thanks to a grassroots fundraising push, they are raising billboards across central Auckland. Pictured is an epic example from Eden Terrace.
After initially opposing and then supporting a rates freeze, Christchurch City Mayor Leanne Dalziel is once again on track to hike rates.
The three options put in front of councillors this week – rate increases of 3.5%, 4.65%, and 5.5% – are offensive to households who've had their livelihoods damaged by COVID-19.
It is especially galling that councillors were swayed by self-interested staff warning of redundancies. Countless ratepayers have lost their livelihoods in the wake of COVID-19. Why should council employees be a protected class?
A rates freeze would have required some tough but necessary cuts to salaries and non-essential spending. But Dalziel is now pushing a budget that includes a massive $118 million discretionary spend on a sports centre! It’s like she’s decided the reality of this crisis is too hard to deal with, and has returned to a dreamworld in which COVID-19 never happened.
We'll be ensuring Christchurch ratepayers submit in favour of a zero rate increase during the consultation period, regardless of the "options" presented by the Council.
We continue to track where each local council stands on our Rates Freeze Dashboard.
Most recently, we've had to change the status of Waitomo District Council: the Mayor had been pushing for a rates freeze, but this week all of his councillors voted against the idea. Shame on them. Our statement is here.
This week public health specialists were touring media studios demanding more taxpayer funding.
This campaign could be taken more seriously if they stopped wasting money on pointless public relations campaigns under the guise of public health.
Here at the Taxpayers' Union we thought we should fact check their claims of poverty.
Public health units get around $440 million annually from the taxpayer. Fair enough. But what are they using it for? In recent years they've used these funds to:
Improve workplace wellbeing with “biophilic office design” (i.e. pot plants)
Imagine if all this time and money had been used for pandemic planning! Public health units could have used their resources to set up contact-tracing capabilities, instead of telling New Zealanders how to live Government-approved ultra-PC lifestyles.
It's been an odd couple of weeks for Dunedin ratepayers.
First, the City Council spent $40,000 on a "street makeover" which consisted mainly of colourful dots painted directly onto the road. This was apparently a response to COVID-19. (We can't figure out how, either.)
Now, the Council has revealed its new tourism campaign:
The slogan is Dunedin – A Pretty Good Plan D. The price tag for ratepayers is $145,000.
I'll admit, I think it's funny. But Dunedin ratepayers are apparently fuming at how much of their money has been spent on a campaign that insults under-sells their beloved town.
And in all seriousness, central government is already devoting funds to a major domestic tourism promotion campaign. What's the value in having every local council spend money to fight over a limited number of domestic tourists?
Here's the sight that greeted Taxpayers' Union staff as we arrived at the office this week:
First we thought it was Wellington City Council trolling us (the ad is literally just outside thr entrance of our building), but it turns out these posters of Jacinda Ardern are rolling out across the country.
The massive posters are reminiscent of Barack Obama's "HOPE" ads and include the Māori word for "love".
Some research eventually revealed the ads are run by billboard company Phantom Billstickers. The art team is Weston Frizzell, who say:
We think Jacinda has done a brilliant job leading Aotearoa though the Covid19 pandemic. We were proud to show our support with an iconic painted portrait.
We've created this giant street poster. For $190 (+P&P) you can buy one hand signed by both of us, and we will paste up another FOR FREE as part of a nationwide street poster campaign to share this message of AROHA.
For the sake of transparency, election advertisements are legally required to carry a 'promoter statement' stating who is responsible. These posters don't.
We'll see what the Electoral Commission thinks!
Have a great long weekend,
This afternoon, Bay of Plenty MP Todd Muller successfully challenged Simon Bridges for the National Party Leadership.
While we don't endorse political parties, we watch National very closely as a party of 'limited government'. Even if they fail to take back the Beehive in September, they have the power to force the Government's hand on policies that seriously impact taxpayers.
With the media focused on the politics and personalities of this saga, there has been next to zero coverage given to what matters: the policies Todd Muller would push as Prime Minister.
Any promises made by Simon Bridges are now effectively void, meaning Muller has to answer questions like:
Does National still pledge to adjust income tax bracket thresholds in line with the cost of living?
Does National still pledge to repeal the Auckland fuel tax, and to not increase fuel taxes if elected?
Does National still plan to make NZ Superannuation more affordable by increasing the entitlement age to 67 in 2040?
We're seeking a meeting with Mr Muller next week to get a steer on where he stands on these issues and more.
Coincidentally, we sat down with Todd Muller for a podcast interview just a few days before he announced his leadership bid. He described himself as "broadly socially conservative, and from an economic perspective reasonably liberal".
If you want a measure of the man, I recommend listening to Islay's interview with Muller here.
It is to Todd Muller’s credit that he is one of the few MPs to have taken a pay cut – in his case of over $600,000 a year – to enter Parliament, having left a high-powered position at Fonterra. This suggests he is motivated by public service rather than raiding the taxpayer’s wallet.
He is one of the few MPs who has paid more tax in this life than he has taken out of the system, unlike most Labour MPs and sadly many National MPs.
This week we revealed that COVID-19 support funding for general practitioners was allocated significantly on the basis of enrolled patients’ ethnicities.
A response we obtained under the Official Information Act showed that GPs received $4.50 in funding per Māori or Pacific patient with any other ethnicities worth only $1.50 – only a third of the amount.
Elderly and individuals from low socio-economic areas were valued at the increased Māori/Pacific amount.
So much for the Government’s COVID-19 slogan that ‘we’re all in this together’. Skin colour shouldn’t be the proxy for how much money the Government allocates for healthcare.
COVID-19 doesn’t spread to Māori and Pacific patients more than other patients. In fact, only 8% of cases in NZ involve someone of Māori ethnicity and 5% for patients of Pacific ethnicity. This is around half their respective shares of the population so in fact they are less affected than other ethnicities, yet they get 200% more funding. This is putting wokeness ahead of public health.
Sometimes Māori and Pacific health is targeted because those communities are generally in low socioeconomic circumstances. But for GPs the Government has all of that socioeconomic data, and could have targeted the money on that basis.
Had the Taxpayers’ Union not sought out clarification over how funding was distributed, the information would never have been available to the public.
An economic crisis is the worst time to increase taxes – and that includes council taxes.
On Monday night Jordan spoke to Q&A making the case for rates freezes: unlike income taxes, the level of rates don’t reflect the ability to pay. This means struggling businesses and households who have lost their livelihoods are still hammered.
We’re tracking the status of all councils on our rates freeze dashboard, with recent significant victories including Taranaki Regional Council and Nelson City Council.
The message is starting to sink in. So far, 14 councils have agreed to our call for a freeze rates. Another 37 have reduced their planned rate hikes.
A minority of councils are still proceeding with their pre-COVID rate hike plans, but I'm confident we can make them flip.
Here's how the regional and unitary councils are tracking:
Find out how where your local council (and its neighbours) stands on our rates freeze dashboard. Please let us know if you have more up-to-date information on your local council.
Our sister group, the Auckland Ratepayers’ Alliance, will soon be rolling out its own campaign for a zero rates increase in Auckland. This will include leaflet drops, yard signs, and a dedicated website through which ratepayers can make submissions as part of the Council's 'emergency' consultation.
We’ve got Phil Goff from a 3.5% rate hike down to 2.5%, but we think he can do better.
The Council’s “2.5% or 3.5%” consultation options are designed so that the Mayor can claim Aucklanders support a rate hike when submissions inevitably favour the 2.5% option. We want to achieve a majority of submissions favouring a zero rate hike (or temporary reduction), regardless of the options currently being put forward by Auckland Council.
Seven weeks ago, Ministers learned that, with butchers closed, a surplus of pigs threatened to create animal welfare problems.
Officials suggested allowing retail butchers to open under COVID-19 rules, but the Government dismissed that advice. As a result, taxpayers are now buying 2,000 pigs a week.
The Government’s determination to shut down butchers against official advice hurt those businesses, damaged the pork industry, and made conditions worse for pigs. Even with the taxpayer footing the bill for 2,000 pigs a week, this only covers up to 40% of the weekly surplus. The other 60% will have to be destroyed. What a waste.
Our mascot, Porky the Waste-hater, asked me to include his thoughts in this newsletter:
Everyone knows how the life of a pig on the farm will end. Pigs are smart and sociable creatures and deserve to be treated with respect. When they do make the ultimate sacrifice, it should be for something noble like a bacon sandwich. Instead, 5,000 pigs a week are being killed for nothing. Where's the kindness in that?
Have a great weekend,
Thursday is Budget Day, when Grant Robertson will decide how to spend around $100 billion of your money.
As usual, we're sending staff to the Budget Day lock-up briefing. This event gives economists, sector groups, and unions a chance to read through the spending documents before the public release, so they can release independent analysis at 2pm to balance out the Finance Minister's spin.
But this year we were almost locked out. Speaker Trevor Mallard tried to use COVID-19 as an excuse to restrict access to the briefing and only invite selected journalists. It was only after we kicked up a fuss that he extended the invitation to 25 independent analysts, including our consulting economist Joe Ascroft.
This means we'll be bringing you (and the media) a taxpayer perspective on Budget 2020 shortly after 2pm on Thursday.
Ideally, the Government would provide economic relief to struggling households with tax cuts.
Slashing fuel taxes, for example, would encourage regional tourism and reduce costs for less well-off households. Another option would be a short term reduction to GST – similar to what Britain did to VAT just after the GFC. Cutting taxes means householders pick the winners (in what they spend the extra money on), not politicians...
However, the Finance Minister hasn't signaled any interest in tax cuts – and it's hard to see him dialling back taxes his Government increased.
So, assuming tax cuts are off the table, here's how we'll be judging the Budget Day announcements:
Principle one: Don’t bed in new spending.
New spending may be justified in the short and medium term but should come with sunset provisions to ensure the liability on taxpayers does not extend past the recovery period, after which we will need to pay down debt. Locking in long-term deficits will mean much more pain later.
Example: The $25 lift in benefit payments should be reversed once GDP returns to that of Q4 2019.
Principle two: Quality of spending still matters.
Spending should not be justified on the basis of 'stimulus' or 'relief' alone. We must demonstrate that new spending is effective and fair.
Example: Wasting money on make-work infrastructure schemes with negative cost-benefit ratios will make New Zealand poorer.
Principle three: Help businesses help themselves.
Many businesses will thrive if the Government simply gets out of the way. The Government should examine areas where regulation and spending projects can be rolled back on a trial basis.
Examples: Encourage development by suspending provisions of the Resource Management Act. Encourage foreign investment by reviewing Overseas Investment Office rules. Reduce uncertainty and protect productivity by deferring low-priority legislative programmes, such as 'Fair Pay' agreements and annual minimum wage hikes.
In the days leading up to the annual Budget, Ministers usually make a few small teaser announcements to warm up the media and plant some feel-good stories.
This morning, Health Minister David Clark emerged from obscurity to announce a $3.9 billion funding injection for District Health Boards. That will cost more than $2000 per New Zealand household, a spending wallop that would have been the centrepiece of a Budget five or ten years ago.
In February, the Health Minister claimed he was putting DHBs 'on notice' for their poor financial performance. But now he's rewarding them.
All but one of our DHBs are racking up significant deficits, necessitating taxpayer-funded bailouts. How can we trust them to manage bigger budgets when they can't manage their current ones?
If this is the teaser, it's safe to say we're nervous about the main show.
At 3pm on Friday, the Government dumped literally hundreds of official documents relating to the COVID-19 response on its official website.
To be honest, it could have been worse: Governments usually do document dumps at 5pm to limit scrutiny and media coverage. It is a time-honoured political strategy because it works.
The 286 documents reveal advice received by the Government prior to 17 April. Assuming it takes an average of 30 minutes to read each document, it would take one analyst nearly 18 working days to read all the papers, far less analyse them. Even a team of five analysts would have had to start reading on Friday afternoon, then worked full days on Saturday, Sunday, Monday, and part of today just to complete reading the dump.
Obviously, such a massive dump of information requires a careful communications plan, particularly when you are the most "open and transparent" Government in history. Thankfully, in the interests of openness and transparency, the plan was accidentally sent to lots of people for whom it was not intended.
A leaked memo from the Prime Minister’s Office told Ministers not to discuss the papers except through short written answers vetted by the Prime Minister’s staff. Ministers should not be interviewed, and any questioning of the response should be “dismissed” because public support is with the Government, meaning it does not need to defend its actions.
This bold (some might say arrogant) strategy went about as well as could be expected. The memo went to the public sector, then spread far and wide, including to the inbox of our friendly mascot, Porky the Waste-hater. An aghast Beehive tried to recall or retract the errant email but that never works. Those who ignored the initial email suddenly become very interested in why the Beehive didn't want them to read it.
Heroically defending the leaked email, the Government spokesman called it a "clumsy instruction", and that the point was media should only talk to “the Ministers involved in all aspects of the response – such as Ardern, Deputy Prime Minister Winston Peters and Finance Minister Grant Robertson – as they were across all the relevant detail.”
That is a very short list of Ministers “across all the relevant detail” for the biggest health and economic crisis of modern times. Notable absentees from the approved list include Minister of Health David Clark, Minister of Employment Willie Jackson, Minister of Tourism Kelvin Davis, and Minister of Small Business Stuart Nash.
We're not talking about the B-52s song. Someone in the highest level of Government seriously loves the rock lobster industry. As an advocate for taxpayers, Porky naturally went to the Economic section of the proactively released documents. There were only 50 of them (three working days of reading). If you only read these papers, you would have to believe that the most valuable industry impacted by COVID-19 was rock lobster fisheries. Seriously, there are seven papers out of 50 devoted solely to the rock lobster (crayfish) industry.
The entire rock lobster industry is valued at $300 million. Rock lobsters got seven papers. Tourism, a $17 billion industry that has been devastated, got two papers. Hard-hit hospitality got no papers at all. Where are the Government’s economic priorities, and who in Cabinet really, really likes rock lobsters? [Porky has a theory. See the image above.]
The papers also reveal the Government is providing “mental wellbeing support to fishers primarily through an independent fishing industry health and safety provider.”
The obvious question is where is the mental wellbeing support for tourism, hospitality, and retail? This is the Government of kindness after all.
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We've had another major win in our campaign for the public sector to share the financial burden of COVID-19.
Last month, we wrote to the State Services Commissioner and all major state sector agencies (including councils), asking if they would commit to a pay freeze and CEO pay cuts.
Remember, despite the fanfare (including from the Taxpayers' Union!) over the Prime Minister's original pay cut announcement, the small print revealed it only applied to a select group of "core public service" CEOs.
That meant that while Director-General of Health Ashley Bloomfield would be taking a 20% pay cut under the PM's policy, the six DHB CEOs paid more than Dr Bloomfield were protected!
On Wednesday night we cracked open the (virtual) bubbly when the State Services Commissioner responded to our letter, saying he's now decided to recommend a pay freeze and CEO pay cuts for the whole state service. That includes DHBs, universities, crown agents (like ACC and Callaghan Innovation), and independent commissioners.
In the Commissioner's words:
I encourage chief executives to consider taking a similar reduction to their colleagues in the Public Service. As you know, the public sector is made up of a wide variety of organisation types. But the public view us all as the government. New Zealanders will be looking to us all to demonstrate leadership at this time.
Crucially, he is also recommending "no pay increases for senior leaders and higher-paid staff and no or minimal increases below that level."
This pay freeze will save far more money than the Prime Minister's original promise. And it couldn't have been done without the support of people like you who signed our petition and donated to the campaign efforts.
Now our campaign has reached the "snowball" stage, as different agencies scramble into action.
Public expectations are so strong now that even agencies exempt from the Commissioner's advice are telling us they'll cut pay!
So we are pleased to reveal that includes New Zealand's highest-paid public sector CEO: Matt Whineray from the Guardians of NZ Super.
Last year Mr Whineray topped our Public Sector CEO Rich List with a salary of $1,065,000. His office has confirmed to us that he will take a six-month 20 percent pay cut.
Meanwhile, MetService has also informed us its CEO will take a pay cut, with pay hikes cancelled for all other staff. This one is significant because MetService is a state-owned enterprise. Now we can put pressure on other SOEs like New Zealand Post, KiwiRail, and Landcorp to follow suit.
Finally, while the State Services Commissioner does not have authority over local councils, the signal for town clerks could not be clearer. If they fail to cut their cloth, they will mark themselves as the most greedy class of bureaucrats. We're currently sorting through where each of the 78 councils stand: we'll be naming and shaming those who fail to share the economic burden of COVID-19.
Tomorrow our sister group the Auckland Ratepayers' Alliance is publishing an 'Auckland Town Hall Rich List' that exposes the 86 Auckland Council staff paid salaries above $250,000 (yes you read those numbers correctly).
Here's a sneak peek of the double-page ad they're publishing in Auckland newspapers:
If you live in Auckland (or pay rates there) I highly recommend signing up to the updates from Jo Holmes and her Ratepayers' Alliance team. To do that, click here and you'll be sent the full Rich List as soon as it comes out.
Our team in Wellington has already started work on a nationwide Town Hall Rich List for other local councils, so watch this space.
The Government’s newly-announced business loan scheme leaves taxpayers exposed to enormous financial risk.
With banks carefully looking to manage risk and putting limits on lending, Grant Robertson has spat the dummy and decided to effectively open a bank of his own by offering interest-free business loans out of Inland Revenue.
The details are unbelievably lenient:
Businesses will not have to justify their plans or the health of their balance sheet before they borrow up to $100,000 interest-free from taxpayers.
There is no need to use existing lines of credit – meaning businesses that don't need the help, can still get it.
The loans are interest-free, then revert to just 3% in a year’s time. Borrowers don’t even have to begin repayments for two years.
To qualify, all you need is 50 or fewer employees, have (or expect) a 30% decline in revenue in any month since January (the same as the wage subsidy), and make a declaration that you think the business will be viable after the coronavirus passes (a bonus for optimists!). IRD will simply assess whether your business is viable based on 2019 income.
You would almost have to question the business acumen of any business which did not take full advantage of the scheme regardless of need. The scheme gives two years to turn a profit on free money from the taxpayer.
The unintended consequences and risks for taxpayers are chilling. If you’re a company director with existing debt or finance, say on a company vehicle, you’re probably obliged to now move that debt onto the taxpayer. Why should taxpayers be forced to take on the commercial risks of almost every small business across the country?
If most eligible businesses take up the loan, our back-of-the-envelope calculation suggests the scheme moves about $6 billion of risk onto the Government's books. $6 billion (or six thousand million) is about $3,200 per Kiwi household.
Labour should have learned their lesson with interest-free student loans. Uptake was far higher than they had anticipated because Labour had only calculated the numbers of students "in need". In real life, most students looked at a deal they would never get from a bank or even their parents and said "I would be an idiot not to take this money even if I just put it in the bank". That is precisely what will happen here.
Because this is a policy targeted at small businesses, we're unlikely to see the National Party heavily criticise it. We exist to speak from a taxpayer perspective when politicians won't.
And from the 'you couldn't make this up' file, we now learn that the enabling legislation (passed under urgency on Thursday night) was mistakenly passed after an error meant that the wrong piece of legislation was introduced to Parliament.
Apparently the loan scheme legislation was just a draft. It hadn't been properly analysed by officials, and (so we are told) even been properly approved by Cabinet.
Think about that for a moment. A piece was legislation passed within a few hours, which accidentally brought into law a multi-billion dollar loan scheme equivalent to about one fifth the total annual spend of the Government.
Simon Bridges has been criticised for travelling to Wellington to do his job. We think the more valid criticism would be how on Earth the opposition didn't notice this monumental error!
ACT's David Seymour at least picked up on the mistake in his speech before the final passage of the Bill. But he didn't realise its significance. And even while criticising the Government's competence for tabling the wrong Bill Mr Seymour implicitly supported the measures, calling the loan package "positive".
Is no one in Parliament there for the taxpayer?
Louis's tweet summed it up:
The 2019 Global Health Security Index (GHSI) concluded that New Zealand scored just 54 out of 100 points for pandemic readiness, which ranked us 30th among the 60 high-income countries reviewed. There is another, local report which might also cast doubt on our preparedness, but it is long overdue, and questions are beginning to be asked.
On your behalf, we've had a researcher laboriously watching all of the meetings of Simon Bridge's Epidemic Response Select Committee. On the 22nd of April, expert witness Sir Professor David Skegg raised the issue of what had happened to the broad review of the health sector which was being led by Heather Simpson, formerly Helen Clark’s long-serving Chief of Staff. The review was conducted before the COVID-19 outbreak. Its cost? A cool $9.5 million.
Professor Skegg noted that the final report was due in March, but it is still nowhere to be seen. Diplomatically, Professor Skegg said he was particularly interested in what the report might have said about the state of our pandemic preparedness before the outbreak. Others have not been so charitable with growing concerns that the Simpson report was going to be critical of our readiness at the time, but is now being sanitised to avoid embarrassing the Government.
We sure would like to see the Tracked Changes on that report when it is released… which will probably be at 5pm on a Friday.
Finally this week, a lighter note:
Observers of politics were shocked when the Hon Dr David Clark was reportedly spotted in Wellington. Dr Clark, who during the COVID-19 crisis has provided Acting Minister of Health Dr Ashley Bloomfield with long distance intangible moral support from his opulent Dunedin bubble, apparently broke his self-imposed strict self-isolation policy to visit the nation’s capital.
For weeks now, Dr Clark has assiduously isolated himself completely from health policy, media, politics, constituents, the Epidemic Response select committee, mountain biking, being a Minister, daily press briefing sessions, and nighttime spear fishing from a homemade microlight aircraft (although the last one was a work in progress).
Here at the New Zealand Taxpayers’ Union we felt that such a momentous occurrence had to be celebrated. In normal times we would have sent Porky the Waste-hater to publicly accost Dr Clark and deliver a petition that he returns his Ministerial salary for the last month. Alas, Porky, like the rest of us, is in lockdown and does not think he could catch Dr Clark on the bike track in any case.
So, the Taxpayers’ Union most senior analyst spun our patented Decision Wheel. It basically is a cheap cardboard wheel covered in obvious suggestions. Using the Decision Wheel takes 30 seconds, costs nothing, and is still more sensible that many Government spending decisions. The Wheel suggested “run a competition”. Our first thought of asking taxpayers’ “if the Minister of Health can effectively disappear during the biggest health crisis of our lifetime, what are we paying the Minister of Health for?” This was disqualified as a trick question because the answer was far too easy.
We then struck on the idea of “Where’s David?” – a game loosely based on “Where’s Wally”, a game which everyone knows but no one over the age of 8 ever plays unless forced to by someone under the age of 8. It is also discriminatory against colour-blind people, according to our junior colour-blind researcher. The consensus is that he must have lost repeatedly to a six-year-old to be so bitter.
So, the rules are simple. We are asking people all over New Zealand to be on the lookout for Hon Dr David Clark (from the safety of their bubbles of course). Send us a verifiable photo of a sighting and be in to win the Grand Prize of a Mountain Bike… ride after lockdown is lifted. To make things easier for contestants, the organisers have published a list of places that Dr Clark will definitely not be sighted:
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