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Taxpayer Update: Politicians kill jobs | MP's office rort | Goodie bags

New paper reveals how 'job creation' projects destroy jobs

Too often, our politicians fall into the trap of thinking they can create jobs by piling on more and more government taxpayer spending. But if that were true, high-spending countries like Greece and Spain wouldn't be facing a decades-long employment crisis.

The Taxpayers' Union's latest briefing paper reveals how Government spending – including projects intended to create jobs – destroys productivity and employment.

We draw on work from Treasury and New Zealand economists estimating the 'deadweight loss' of our tax system  this is the way taxation motivates people to work less, and spend and invest less, leading to economic distortions. Applying it to some recently announced pet projects is sobering:

Jobs cost image

Because government spending projects are funded via taxation, we can use what economists call the "deadweight loss" to see how many jobs are killed by handouts such as James Shaw's $11.7 million grant to a "Green School".

Click here to read the paper.

While it's true that economic stimulus is needed in the era of COVID-19, this needn't come in the form of giant cheques. Leaving this money in the economy via lower tax rates will allow money to circulate in a way that creates jobs passively, without costly perverse incentives.

Taxpayers rorted by Labour MP's electorate office deal

Ginny  + Monster

The cozy deal between list MP Ginny Anderson (pictured above with the Debt Monster), the Labour Party, and the NZ Professional Firefighters Union is a rort on taxpayers.

As Stuff explains, Labour gets cheap rent on office space off a local union, sublets the rooms to Andersen, and then bills parliament (i.e. taxpayers) at a markup, pocketing the difference.

Taxpayer funding for offices is meant to cover the costs of being an MP and servicing constituents. Here, Ginny Anderson has abused that trust to line the pockets of her political party.

This sort of union backhander is what we’d expect to see in the corrupt unions of Australia. Here in New Zealand, we expect such favours to be disclosed as donations, so why weren't they?

With the discounted rent not being disclosed as a political donation, we've referred the matter to the Electoral Commission. We're also writing to every other MP to ensure they're not funneling their office funding to political mates or their business interests.

"Green School" handout shows dangerous trend of horse-trading over funds

James Shaw

It's been revealed that James Shaw put billions of dollars in infrastructure funding on the line in order to negotiate his $11.7 million handout for a private "Green School".

This is a perfect example of a worrying trend in the way the Government makes funding decisions. Here's what Jordan had to say:

The spectacle of politicians horse-trading individual funding decisions is something we expect to see in smoke-filled rooms of yesteryear, not a modern day New Zealand with a reputation of being corruption-free.

The Provincial Growth Fund, and now the COVID ‘shovel ready’ fund, are normalising a process of decision making that rewards companies which are politically connected. It is a dangerous path.

Steven Joyce reintroduced the sort of corporate welfare largess not seen in New Zealand since the Muldoon Government. But instead of fixing the problem, the current Government has doubled down and we have now returned to politicians making funding decisions for individual projects and pet causes.

Enough is enough. Now we are seeing the warts and all flaws in the process, New Zealand should return to a transparent process of the politician’s job being limited to setting criteria and objectives, and leaving it to officials to make the individual grant decisions.

State Services Commissioner responds to our complaint regarding the Ardern-Bloomfield ad

Bloomfield ad

Remember the Labour Party's ad featuring Dr Ashley Bloomfield and other public servants? We complained to the State Services Commissioner that it was an improper use of taxpayer-funded staff.

Now, the Commissioner has responded:

It would not be appropriate for a public servant to agree to feature in party political electoral material in their official capacity where this implies endorsement by the public servant of the political party. To do so would compromise their political neutrality and by implication that of the Public Service as a whole.
Placing footage of Ministers and public servants doing their official work on a political party branded platform could create confusion about the motivations and political neutrality of the public servants concerned. ... In this instance, and having regard to all the circumstances, my judgement is that on balance there is potential for questions to be raised regarding the participation of the public servants in the video

The Commissioner isn't taking further action (the video has already been removed) but at least he's has sent the message to bureaucrats that it is totally inappropriate for public servants to feature in a party political advert. Taxpayers pay public servants to do their jobs, not to aid their political masters in re-election campaigns.

The Commissioner also said, “I understand that none of the public servants involved were aware that the footage would be used in the way that it was.”

Based on this, it appears there has been a clear breach of the Cabinet Manual, which states ‘Ministers must uphold the political neutrality of the public service and not ask officials to act in any way which would conflict with their obligation of neutrality.’ But enforcement of the integrity of the Manual is ultimately up to the Prime Minister. Some would say that’s a case of the fox guarding the henhouse!

Revealed: Taxpayer-funded ‘wellbeing’ goodie bags during lockdown

Goodie bags

Our research team recently revealed that the NZ Super Fund spent over $15,000 on “COVID-19 well-being parcels” from designer supermarket Farro Fresh for its highly-paid staff over lockdown.

According to NZSF, the parcels included ‘sundry goods’ such as coffee and hot cross buns.

Forty-five of the Super Fund's staff are paid more than $300,000. Pretty much everyone else is paid more than $100,000.  As I told the Herald, these people do not need care packages paid for by taxpayers who are going without during COVID-19 lockdown.

The Taxpayers’ Union requested the credit card statements of the NZSF from the 1st of March 2020 – 31 May 2020 under the Official Information Act. In addition to the goodie bags, other interesting payments included:

  • Inspired Accountants team building trip for corporate strategy team for $1359.90 paid for during Level 3 lockdown.

  • A canoe hire for $794.00.

  • Hand sanitiser for $568.80.

  • Renewal of a practicing certificate with the NZ Psychologists Board for $550.85.

  • A 10-year anniversary gift for a staff member for $515.

  • Lunch at White & Wongs for $156 the day it was announced New Zealand would enter Level 4 lockdown.

  • “Motivation morning tea” before working from home for the investments team, for $107.61.

Have a great week,

Louis circle

Louis Houlbrooke
Campaigns Manager
New Zealand Taxpayers' Union

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