Taxpayer Update: National’s App Tax U-turn📱🤑 | The cost of COP 🌬️💸 | Brooke vs. The Blob 🩷👾

December 11, 2023 Callum Purves

Nicola Willis adopts 'App Tax' policy previously slammed by Nicola Willis 👀📱

Well, that didn't take long, did it? The new Government's backsliding has begun in earnest. Despite comments as recently as last week that "except for" the changes made in the coalition agreements, the National Party was sticking to its pre-election "fiscal plan".

But apparently not... A wise woman once said:

“Airbnb have estimated that Labour’s new tax could have a half-billion dollar hit on the New Zealand economy. A $400 accommodation bill for a weekend away booked through a digital provider could be up to $60 more expensive.

“Rather than hitting multinationals as Labour claimed it would this tax will instead hit Kiwi app users and the Uber drivers, Bookabach providers and the like who use apps to connect with their customers.

“We will fight against this new tax every step of the way. National opposes the App Tax and if elected we will reverse it.”

Those were the words of one Nicola Willis just prior to the election. But the newly minted Minister of Finance has made an about turn and is set to pass legislation to enable the App Tax from 1 April.

This isn’t a tax on the big players like Uber and Airbnb as they already charge GST on their service fees – this new tax is set to be charged to the little guy (the Uber drivers etc). Inland Revenue has told the Government that this cost will be passed entirely onto consumers, which means higher prices for you.

How the new tax will work 🤑

Businesses are only required to register for and charge GST when their revenue is more than $60,000. The new tax will force providers of app-based services (such as ride-share drivers and Airbnb hosts) to charge GST even if a provider earns just a few hundred dollars.

For many, being an Uber driver or Airbnb host is a side hustle to help make ends meet, not a full-time gig. Higher prices will see less people using these services and is economically unprincipled. How is it fair that a taxi driver earning $50,000 isn’t required to charge GST but a part time Uber driver earning $10,000 will?

While in opposition, Nicola Willis labeled the tax as “simply another tax grab from Labour to fuel their wasteful spending.” So much for tackling the wasteful spending!

What about sales of goods through apps such as Trademe and Facebook Marketplace? 🧾

This is a question we are already fielding and the answer remains unclear (the IRD are still working on the details!). While there is a carve out for second-hand goods, those who sell even a small amount of new goods through online auction sites, or intermediaries such as Shopify, appear to be caught by this new tax.

That means that a part-time home baker who sells a few thousand dollars of jam at a stall doesn't have to register for GST, but the moment they do so online through an app, they will have to charge GST. How is that fair?

Nats caught trying to rewrite history? 🤐

Hypocrisy in politics is one thing, but it's the coverup that always comes back to bite. National hasn't just made a screeching U-turn, it is trying to purge the internet of references to its previous opposition to the App Tax.

The National Party even set up a petition against the change.

But don't look now...

Here's an alternative to the tax grab ✂

Here at the Taxpayers' Union, we always aim to be helpful. Today we are writing to Ms. Willis to point out that if she needs the money, she could, for example, get the same amount of savings that revenue from the new tax will generate by sacking slightly over half of the extra 661 bureaucrats hired just at the Ministry for the Environment since 2017. You're welcome! 💁‍♂️

Hot AIR: More climate hypocrisy from the previous Government 🌬️💸

Just like Christmas, the annual COP climate jamboree seems to roll around quicker each year. While this year's delegates are sunning themselves in Dubai, we can reveal the bill for last year's trip.

MFAT sent a delegation of ten to the COP27 climate conference for the princely sum of $201,496.59, complete with business class flights and accommodation costs ranging from $10,762.95 to $12,781 each.

Without commenting that it now takes nearly a year for this sort of information to come to light, the irony is that the official government guidance that comes from these climate conferences on international travel suggests that New Zealanders (by that, they mean you!) should avoid business class travel due to its larger climate footprint.

Brooke versus The Blob 🩷👾

You may remember from back in June that Department of Internal Affairs officials had been found secretly altering Three Waters legislation to suit their own agenda. Parliament be damned!

Just 10 days in to the new Government, it seems the mandarins are at it again and are already trying to play puppet master by leaking the Cabinet Paper on Fair Pay Agreements in an effort to undermine democratic decision making.

Let’s be clear: Ministers are elected representatives with a democratic mandate, and officials, no matter how highly they think of themselves, are there to facilitate that. Nothing more, nothing less. And it’s certainly not to dictate policy from their Ivory Towers.

We say heads should roll over this to send a message to the bureaucrats that they don’t run the show anymore. With Three Waters, central planning committees, and public sector cuts still to battle over, Ministers are going to have a tough fight against the blob over the next three years.

Congrats to Brooke van Velden for leading the charge.

One for the Price of Two? Seems about right for Wellington 🧐💰

Julia Amua Whaipooti

Why have one person running the utterly useless and unnecessary Human Rights Commission when you can have two? Well, that's exactly what they did this week with the appointment of Julia Amua Whaipooti to 'share' the role of chief executive with the one they already have to, in their view, uphold the Treaty.

Two shared CEOs will now be overseeing such vital rights-protecting work as demanding economically-illiterate rent controls and establishing a cloak-and-dagger Independent Accountability Group charged with snuffing out free speech online.

Two people are sharing a role, but at least they’ll be sharing a salary, right? Don’t be silly, this is Wellington we’re talking about. The half-job was advertised with a gob-smacking salary of $287,000, almost two-thirds more than a MP. It’s good work if you can get it, eh...?

Our policy man, James, spoke to Stuff about the appointment.

While new Justice Minister, Paul Goldsmith, has condemned the appointment and said he will not re-appoint the Human Rights Commissioner, ACT's policy of scrapping the Commission all together did not survive their agreement with National. The coalition should get real on this one and abolish the taxpayer funding of the far-left campaign hub named the Human Rights Commission.

News in Brief ⏰

Hamilton City Council had the bright idea to put a bus stop used by children right outside an adult toy store. When parents were unsurprisingly unhappy about this, the Council had to spend an eye-watering $700,000 moving the bus stop 100 metres up the road. Connor called out this monumental cock up.
This week saw the release of the international PISA scores that see how we rank compared to other countries on the education basics: reading, writing and arithmetic. It's fair to say that the results weren't good. Ollie asked why taxpayers' are paying more for education yet getting less.
The Government confirmed plans to do away with bonuses for fluency in te reo in the Public Service. James argued that while it makes sense to hire fluent speakers for jobs that require proficiency in te reo, we shouldn't be paying bonuses for skills unrelated to a person's actual job.

And one more thing: Still looking for that Christmas stocking filler? 📖🎄

TU@10 Book

Last week we launched a book to mark our 10th anniversary: The Mission – The Taxpayers’ Union at 10. With your support, together we have grown the Taxpayers' Union to the largest centre-right pressure group in New Zealand. This book by political author and journalist David Cohen gives you a behind-the-scenes look at how we made this happen.

This warts-and-all book charts our highs and lows with insights from our co-founders, key staff, and high-profile board members, including new cabinet minister Casey Costello and former finance minister Ruth Richardson. The book also features a foreword by former Finance Minister and Prime Minister Sir Bill English.

If you have family or friends who are supporters of the Taxpayers' Union or simply buy into our mission of lower taxes, less waste, and more accountability, then this would be a great stocking filler. Order now to get your copy in time for Christmas.

Yours aye,