Taxpayer Update: NZ's Debt Crisis 🛑⏰ | Labour's GST Hole Crisis 🥬🕳️ | Creative NZ's Crisis 😢✈️

September 23, 2023 Jordan Williams

It's foot to the floor here at the Taxpayers' Union – even Porky the Waste-hater student interns are working overtime this weekend.

As well as the the campaigns detailed below, we're still business-as-usual exposing government waste. This week, we take a look at the world through the eyes of those poor bureaucrats at Creative NZ. The staff have received a formal health and safety apology because [I'm not making this up] staff suffered flight delays due to the flooding in Auckland back in January! The formal apology related to some souls not being given money to get into the Koru lounge which, apparently, resulted in 'emotional trauma'. (yes, seriously – details below).

But first, we tackle the big numbers.

New Zealand's Debt Crisis: We need to 'Stop the Clock!' 🛑⏰

Thanks to those who came along to Parliament and bought a sausage as part of our fundraiser to help Grant Robertson pay back the debt!

Here's a video on the event and just how bad the debt now is.

Great to see 1News pick up on the concept in the 6pm bulletin, and Newshub run my interview with Christopher Luxon earlier in the day (skip forward in the Newshub video here or watch our captioned version over on our Facebook page here).

David Seymour also popped down to grab a sausage and helped reset the clock after the disturbingly high new debt figures were released in Treasury's Pre-election Economic and Fiscal Update.

David Seymour

Sadly, we didn't hit our target of selling 80 billion sausages @ $2 each to pay back the debt. We worked it out though, that it's enough snags end to end to get to the moon and back 14 times!

In the 12 days since launching the Debt Clock, New Zealand’s Government Debt has grown by more than $865 million. And the online version of the Debt Clock continues to spin. Right now, government debt sits at more than $161 billion – that's basically a $81,633 (and growing) credit card bill for every NZ household.

In the coming weeks we'll be putting in the miles to make sure the Debt Clock gets in front of as many eyes as possible. We need to ensure the politicians are forced to grapple with the cost of government crisis.

The Debt Clock will be outside TVNZ for tomorrow morning's Q&A debate, at our Auckland Central electorate debate on Tuesday, and The Press Leader's Debate in Christchurch on October 3.

Grant Robertson's deficit now the second largest in the world 🧨

Some government apologists try to pretend these debt numbers aren't that bad. But despite COVID having passed, Grant Robertson's $72 million per day borrowing is, according to the International Monetary Fund, the second highest cyclically-adjusted fiscal deficit in the OECD.

Click for larger image

Hear that, kids? Tick tock, tick tock...

Labour's GST claims are cabbage: If Hipkins' claims about us eating more fruit and vege are right, there’s a $411m hole in Labour's GST costings 🕳️🥬

As the NZ Herald reported yesterday, a certain "Low Tax Lobby Group" (their words) has found a fiscal hole in Labour's GST-free fruit & vege policy costings

Despite Labour's policy document stating that taking GST off fresh fruit and vegetables “will have the additional benefit of encouraging Kiwis to purchase more healthy fruit and vegetables in their weekly shop”, the Party's costings assume not one more fresh or frozen carrot or blueberry is consumed!

You will recall Labour has been jumping up and down about National apparently not factoring in enough demand change in relation to its budgeted revenue from Nicola Willis's proposed foreign buyer's tax. But that is more of a debate of whether it was factored in enough – here Labour has ignored dynamic effects entirely.

Labour's GST policy has already been roundly rejected by economists and pundits across the political spectrum. But now we know that GST-free cabbages can't count either.

Using economic modelling based on what happens when food is subsidised, we can estimate that Labour has a budget hole of around $411 million if the GST reduction is passed on in full (as suggested by Labour’s election advertisements).

But if only 30 per cent of the GST reduction is passed onto consumers (as the Tax Working Group’s expert advice suggests – advice uncovered by your humble Taxpayers' Union last week), there is still a $123 million gap in Labour’s costings.

Labour is effectively saying its plan to destroy the best GST system in the world will not result in Kiwis eating one more carrot. Either Labour’s got a big hole in its costings, or the Party know its key sales pitch (that it's good for shoppers) is fresh baloney.

We say that dodgy costings like these show yet again why an independent costings unit to audit the spending promises that political parties put forward during elections is a no brainer. On that subject, I joined Heather du Plessis-Allan Drive recently to argue for just this type of office.

On Labour's costing hole, you can read the coverage over on the NZ Herald here, or our full explanation in the media release here.

Tackling co-governance in fiery post-1News Leaders' Debate panel 🗣️🔥

Tuesday brought with it the first head-to-head Hipkins v Luxon leaders' debate. Neither landed a knock-out blow or dropped a major clanger. The real fiery exchange came in our post-debate analysis show where Simon Wilson, Fran O'Sullivan, and I locked horns on co-governance.

Host of The Working Group podcast Martyn Bradbury moderated the, errr, spirited discussion with Fran O'Sullivan and Simon Wilson from the NZ Herald, Dr Bryce Edwards of Victoria University, Stuff columnist (and big Taxpayers' Union supporter) Damien Grant, and yours truly.

Unlike some mainstream media outlets (we are looking at you TVNZ!), at the Taxpayers' Union, we believe in giving a platform to people with a diverse range of views if we are going to have a worthwhile debate – even to people we strongly disagree with. The fiery discussion on co-governance is particularly worth a watch.

On Tuesday, we host our next electorate debate in the Auckland Central. We'll also be releasing our exclusive Taxpayers' Union – Curia Auckland Central poll. Will Chlöe Swarbrick be on track to hold the seat?

If you're in Auckland, make sure you get your hands on one of the last of tickets still available.

Hipkins wants to hike fuel taxes 🤯⛽️

Great to see the Stop Higher Fuel Taxes campaign is getting cut through. Thank you for those who have bought "Wants to hike fuel taxes" signs – please keep those photos coming! We still have a few dozen in the office, so to get yours head over to our store (you only need to pay the postage).

Cry Me a River: Stranded Creative NZ staff "betrayed" by lack of airline lounge access 😢✈️

In one of those stories that makes you double check the date is not 1st April, we noticed a Stuff story this week that Creative NZ had commissioned an independent reviewer to investigate apparent mistreatment of staff who were stranded at Auckland Airport during the flooding back in January.

Here's my email to Creative NZ's media team which speaks for itself (click here for larger version):

Initially they would not reply, but after following up yesterday we got the answer: it was a staff hui.

Grant's mismanagement sees ACT pull back tax relief promise 🟡💸

While no one wants to see tax relief more than the Taxpayers' Union, it is important to recognise that spending needs to come down dramatically first. The only true tax cut is a spending cut – the rest is just timing. Any tax relief or spending promises that don't come with matching spending reductions, simply means more borrowing today (and more taxes tomorrow).

David Seymour On Thursday, the ACT Party released its amended Alternative Budget factoring in the updated Government's books. The party has watered down its previous tax reform package. Kiwis will still be at least a few hundred bucks a year better off under this new plan, but it keeps (at least in the short term) the 33% tax rate.

Grant Robertson's economic mismanagement got us into this mess with public spending increasing by 68 percent in just six years, resulting in the second largest budget deficits in the developed world (see above). ACT says that damage can't be fixed overnight and wants to prioritise getting the books back in order.

The 'alternative budget' has some other measures that we quite like the look of, including:

Introducing a carbon dividend from Emissions Trading Scheme revenue
Abolishing the bright-line test in its entirety
Reintroducing interest deductibility for residential landlords
Scrapping corporate welfare and Government picking winners
Means testing or targeting more welfare spending
Abolishing ministries based on demographics
Introducing sharing with councils for construction GST revenue

Taxpayer Talk: Phil Barry On The Real Cost Of The Coming Crackdown On Smokers 🎙️🎧

A radical set of new anti-smoking measures is set to bring New Zealand close to a de facto prohibition on smoking. But with the black market rearing its head, what is the real cost of this crackdown for taxpayers, businesses and the economy? Ironically, our health's finances rely on those few who still smoke. For a decade smoking taxes have paid more than four times over the health costs of lighting up.

A major new analysis of Ayesha Verrall's Smoked Tobacco Amendment outlines $1.3 billion in new costs, and argues the legislation is "largely, if not entirely, redundant".

This week on Taxpayer Talk, Taxpayers' Union outgoing spokesman for lifestyle economics Louis Houlbrooke is joined by Phil Barry, a director of TDB Advisory who worked with Infometrics to produce the new report.

Listen to the episode on our website | Apple | Spotify | Google Podcasts | iHeart Radio

You can also read the full TDB analysis of the Smoked Tobacco Amendment here.

One more thing... 😕

Next week we will be finalising our ad-spend and campaign budget through to voting next month. I'll admit we've been so busy campaigning, we are well below budget to book the advertising and events we had originally planned for the coming weeks. This work is fuelled by New Zealanders like you who back our work for Lower Taxes, Less Waste, and More Accountability. To join up as a member click here, or to make a secure and confidential donation, click here.