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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.”
The Taxpayers' Union has once again highlighted the Ministry of Business, Innovation, and Employment (MBIE) for its overseas excursions. The New Zealand Space Agency embarked on another trip to the USA, racking up a bill of $36,075.62. An Official Information Request has unveiled that the NZ Space Agency covered the flight costs for three of its staff members to participate in an annual space symposium in Colorado.
Oliver Bryan, Investigations Coordinator for the Taxpayers' Union, remarked, “The New Zealand Space Agency's constant overseas jaunts on taxpayer dollars are beyond tedious. Spending $11,427.39 on just one flight, representing over 30% of the total trip cost, underscores the lavish tendencies of one of New Zealand's most pointless agencies.”
“Given today's technology that facilitates seamless and accessible online meetings from anywhere globally, frequent international travel should be reconsidered across all government departments, especially as we confront the imperative to rein in our escalating national debt.”
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.
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.”
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.”
Reacting to the announcement that the Government intends to establish a climate infrastructure fund in partnership with Blackrock, Taxpayers’ Union Campaigns Manager, Callum Purves said:
“This appears to be another Government corporate welfare slush fund that will cost taxpayers greatly without actually delivering net emission reductions. Because emissions are capped under the Emissions Trading Scheme (ETS), any reduction in emissions in the electricity sector will simply free up carbon credits to be used for emissions elsewhere in the economy, such as manufacturing, leading to no net reduction.
“If the projects this fund invests in are worthwhile, this investment will occur in the private sector without the need for government involvement. Price signals from the ETS already encourage emissions reductions and investment in technologies where it is most financially viable to do so. This fund simply puts some of this risk on taxpayers rather than leaving it with private businesses who are best placed to make decisions around what investments are financially viable.
“It seems the Government has been deliberately unclear as to the extent for which taxpayers will be contributing to the fund in order to shy away from how much ordinary New Zealanders will be paying for this climate virtue signal. Blackrock could set up this fund without government involvement; it is unclear why taxpayers should be on the hook for a scheme which will likely end up socialising the costs and privatising the benefits of the investments made through the fund.”
Reacting to news that former Toitū te Waiora CEO Donovan Clarke received a taxpayer-funded settlement valued at almost $500,000, Taxpayers' Union Investigations Manager Oliver Bryan said:
"The wasteful spending that has transpired at Toitū te Waiora is a bitter pill to swallow for the New Zealand taxpayers who are unwittingly bearing the brunt of this debacle. It is utterly unacceptable that over half a million dollars have been drained from public coffers to settle a single employment dispute and foot the bill for questionable personal expenses. This is not the kind of financial stewardship that taxpayers expect from those in charge of public entities.
"In the midst of immense pressure on our vocational sector, it's staggering that such gross mismanagement is allowed to occur within an entity that was established to bolster this very sector.
"The public trust is not a limitless resource, and each of these incidents erodes that trust further. It's high time for stringent measures to be implemented to prevent such costly blunders in the future. Taxpayers expect and deserve better."
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