Taxpayer Update: NEW POLL: Hipkins preferred PM 📈 | Best policy you've never heard of 🏆| $85k gecko hunt 🦎
Going for Growth
What gets us up in the morning is a determination to put a stop to the economic drift - and the low productivity - that New Zealand's had for a generation.
Economic growth isn't the silver bullet to all New Zealand's problems, but it comes close! Only with growth can we afford world-class public services, to protect the environment, and economic opportunities so our kids (and grandkids) can thrive.
And with the Prime Minister now 'talking the talk' on growth, our job is to ensure the Government 'walks the walk'.
That's why, today we are launching the first of a series of Taxpayers' Union Briefing Papers: Going for Growth: Full Expensing of Capital Expenditure.
The best tax policy you've (probably) never heard of: Full Expensing 🚜🖥️
>> Read the Briefing Paper <<
Simply put, Full Capital Expensing lets businesses write off the cost of new equipment, machinery, and technology immediately, instead of dragging it out over years through depreciation schedules.
In other words, it puts money back into businesses faster, allowing them to invest, expand, and create better jobs and higher wages for hardworking Kiwis.
Here at the Taxpayers' Union, you'll understand that we love tax relief (no kidding). But this is, we think, the best type of tax relief in terms of promoting economic growth, and its driver: productivity.
Politicians often like to dangle personal tax relief (National) and entitlement handouts (Labour) in front of voters as a sweetener to get people to rush down to Harvey Norman for big-screen-TV-fuelled economic sugar hits.
In comparison, Full Capital Expensing promotes the very type of spending that serves to make New Zealand's economy more productive and labour more efficient (which is the key driver of wages).
And the best part: if introduced as part of Budget 2025 (which is less than three months away) it could serve to boost the economy immediately. Unlike most tax changes, it could come into effect straight away...
And this policy has form! As covered in the Briefing Paper, it's proven effective in the UK and the USA. More investment means more productivity, higher wages, and more tax revenue in the long run.
The 'use it or lose it' approach 😉
We think Full Capital Expensing is such a good idea, it should be done right now, and made permanent.
But if the Government wanted to really put a rocket under the economy in the short term, Nicola Willis could tell firms that Full Capital Expensing is time-limited (as happened in the UK and USA, originally).
Think about what that would mean. Say you're a business owner looking to upgrade machines or build a factory later this decade. If suddenly you could deduct the cost from taxable income (rather than do the same over a decade or more under IRD's complex depreciation rules) you'd bring the investment forward to take advantage of Full Expensing, right?
That's what makes this tool so powerful in boosting capital spending and productivity.
We set out this option in the Briefing Paper.
War on Waste 🎯 NZTA's $85,000 golden gecko wild goose chase 🦎🪿
From the 'you couldn't make this up file', the team have uncovered that Waka Kotahi NZ Transport Agency (NZTA) has shelled out $85,000 to catch and relocate just one lizard in Taranaki!
Since one skink was found back in 2023, NZTA have been waiting for sign-off to send in the lizard life-savers – and we wonder why infrastructure takes so long and is so expensive...
The $85,000 includes travel and accommodation costs for our gecko guardians - because for a project in Taranaki, a Rotorua-based company was contracted to conduct the gecko hunt in New Plymouth, employing contractors from as far afield as Wellington.
We're all for conservation, but not wild goose gecko chases. But to be fair to NZTA, they've got some catching up to do – remember when we uncovered Otago Regional Council's $2.76 million hunt that nabbed just 18 wallabies?
The Reserve Bank's Orr-deal is over (finally)! 🥳🎉
Reserve Bank Governor Adrian Orr is finally out the door, and his resignation couldn't come soon enough. Think we’re overstating things? Buckle up.
Orr's "Large Scale Asset Purchase (LSAP) programme" (effectively, a fancy name for money-printing) lost taxpayers $11 billion because when interest rates rose after COVID the value of the bonds plummeted. Those losses (underwritten by Grant Robertson the taxpayer) could pay for four Dunedin hospitals. Per household, it's five and a half thousand dollars!).
Then there's the extreme capital rules (applicable to how banks finance themselves) that spiked mortgage costs, putting an extra $3,750 on the annual interest bill for a $1 million home loan.
And being too slow to ease up on interest rates plunged New Zealand into the worst economic downturn in thirty years.
Under Orr, the Bank's staff numbers increased 2.5x between 2018 and 2024, and the cost to taxpayers climbed with it. No wonder Nicola Willis refused Orr's demands for $1 billion of funding for the Reserve Bank over the next five years.
Good riddance.
We say the next Reserve Bank Governor needs to cut through the distractions and focus on one thing, and one thing only: keeping inflation in check.
SHOCK POLL: Chris Hipkins is now the preferred PM 🛑
The news keeps getting worse for the Government in the latest Taxpayers' Union-Curia Poll, as the Centre-Left bloc increases their lead. Labour, the Greens, and Te Pāti Māori could form a government.
The combined projected seats for the Centre-Right of 58 is down 1 seat from last month. The combined seats for the Centre-Left is up 1 to 62. On these numbers, National and ACT could not form a government even with the support of New Zealand First.
In the Preferred Prime Minister rankings, Christopher Luxon is down from last month at 20.3% (-0.4 points) while Chris Hipkins is up 3.1 points to 20.7%. For the first time since the election, Hipkins has overtaken Luxon as top choice for Prime Minister.
In fact, it is generally highly unusual for Opposition Leaders to top "preferred Prime Minister" polls outside of an election period.
>>See the results on our website here<<
What do voters want? 🏭🤔
In last month's poll, our pollsters dug into voters' views on economic growth and policy reform. They found Kiwis are overwhelmingly in favour of boosting tourism, more international students, and (the important one) cutting taxes to drive growth.
65 percent want income tax slashed, with just 15 percent opposed.
The country’s less keen currently on asset sales. Although, as a recent report by our friends at the NZ Initiative think tank shows, there is plenty of room to recycle capital and avoid selling the family silver while increasing New Zealand's prosperity by having the Government sell off the clapped-out old car rusting in the driveway underperforming assets.
We say, all options need to be on the table in Nicola Willis’ next budget to get the country growing again, and Mr Luxon "back on track".
NZTA's $1.338 billion ticket to nowhere 🚌🎫
16 years since the Transport Agency agreed to a National Ticketing system (Motu Move), it's still nowhere in sight. An investigation by the Taxpayers' Union has revealed the scheme has already cost taxpayers $146.4 million with nothing to show for it!
All we've had so far is a test run in Christchurch, and a planned rollout in Timaru – which has once again been pushed back. What's worse – the total cost of the project is set to hit $1.338 billion - that's $700 for every New Zealand household!
All of it would be solved if we could just tap on with PayWave like most of the developed world. Nicola Willis needs to find $12 billion of savings in May's Budget to get the books back in the black - scrapping this programme would put a big dent in that target.
Enjoy the rest of your Monday,
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