Three Waters ‘calculated to deceive’

03/08/2022

The Taxpayers’ Union submission on the Three Waters (Water Services Entities Bill) includes a bombshell legal opinion:

. . . Ministers have repeated assurances that councils will continue to own water assets under the proposed ‘Three Waters’. But those claims are utterly false. Public law firm Franks Ogilvie, in an opinion reviewed by Gary Judd QC, lay out the extent to which these claims have been “calculated to deceive Parliamentarians, and when it becomes law, to deceive New Zealanders generally”. The opinion is being released publicly today.

Taxpayers’ Union Executive Director Jordan Williams says, “It is clear the Government realised that they could not convince New Zealanders that handing over ownership of local assets was a good idea. So they’ve instead redefined ‘ownership’ to mean nothing, so they can promise continued community ‘ownership’ in an incredible display of contempt for the public, the truth and the law.”

The legal opinion is very detailed, but it is not hard to understand. It calls the claims of retention of local ownership “false, misleading and deceptive” as “councils are expressly denied the rights of possession, control, derivation of benefits, and disposition that are the defining attributes of ownership”. Gary Judd QC comments in his review of the legal opinion: “When all the lying statements are put together, as [the] opinion does, the government’s effrontery is breath-taking.”

Ownership confers possession and control, the right to benefit from and dispose of whatever is owned, none of which will be retained by councils and the people who paid for the assets through rates and charges should this Bill proceed.

The legal opinion concludes that despite the obvious dishonesties, ministers are immune to prosecution under the Financial Markets Conduct Act 2013 and the Fair Trading Act 1986 as they are not ‘in trade’.

Mr Williams continues, “But that defence does not apply to people assisting the Ministers in a professional capacity. That would include, for example, members of the Working Group on Three Waters governance that could be held liable as they operated ‘in trade’ as professionals providing a service and could be deemed complicit in making the untrue claims.”

“Additionally, legal experts found that Local Government New Zealand ‘could be found to be acting in trade in its provision of representation and advisory services’, so their public statements promoting the lie that councils will ‘own’ water assets under Three Waters, could make them also liable to prosecution.”

LGNZ supported the legislation even though most of its members do not.

The authors of the legal opinion do not mince words in their assessment of the situation stating: “Ministers appear to have cold-bloodedly decided to confuse Councils and ratepayers with false statements.”

Mr Williams says, “Ministers might dodge prosecution because they’re in politics, not ‘trade’, but the lawyers note the expectations in the Cabinet Manual and Standing Orders. They must not mislead the House and they must act to ‘the highest ethical standards’. However, the consequences for our elected members will not come from the courts, but at the ballot box.”

“It is difficult to see how the Government can proceed with such a discredited abuse of legislative process. The huge public opposition to the Bill came without knowing of such damning conclusions from respected legal experts. This is not a careless, technical, or understandable mistake in legislation. It is intentionally deceptive. The lies have been actively promoted by ministers, Working Group members, LGNZ, and various elected and non-elected officials.”

“We’ll be seeing if anything effective can be done to restore customary honesty among those drawn into this ministerial cheating. If officials were forced to be complicit, they may need better support against ministerial pressure. We’ll be considering carefully whether authorities who punish and deter calculated dishonesty by business people, can do their job when the cheating comes from the top.”

The full legal advice is here and includes .

In our opinion the Claims will remain untrue, misleading and deceptive even after the Bill becomes law. That is because the word “own” and its derivatives, and “share”, have important and well understood meanings. Even the MPs considering the Bill are likely to assume that the words carry in the Bill at least some of their ordinary meaning. But they appear in a Bill that expressly negates or contradicts the essential elements and concepts that define those words in both ordinary and legal usage. 

The government is playing with words, using ownership when what is proposed is not ownership in both legal or generally understood terms.

This opinion is damning and any MP with integrity should ensure on the strength of it that the legislation does not proceed.


LGNZ bans ratepayers & councillor

21/07/2022

Local Government New Zealand has compounded its mistake in backing Three Waters when most of its members don’t, by banning a councillor and ratepayers from its AGM:

Fewer than 24 hours before the opening of the Local Government New Zealand conference in Palmerston North, the Taxpayers’ Union was notified by LGNZ that the Union’s registration to attend the event has been revoked and that all union members, staff and board members are banned from attending the conference on ‘the future of local government’.

With sponsors including Kāinga Ora, Department of Internal Affairs, Waka Kotahi, Ministry for the Environment, and the Ministry of Transport, according to President of LGNZ Stuart Crosby the conference will focus on what the future of local government looks like.

Despite ‘the future of local government’ featuring on the agenda of the LGNZ conference as quoted on the conference website, LGNZ has informed us that our organisation’s criticism of the taxpayer-funded body disqualifies the Taxpayers’ Union from even listening to these vital discussions,” said Union spokesman Jordan Williams.

“They have no sense of irony. LGNZ is banning the largest ratepayers’ group in the country from the discussions on the future of democracy because we don’t agree with LGNZ on these matters. It seems LGNZ are pro-democracy, but only if you agree with them.”

“It is very clear that this is a political decision. In the conversations with our staff, LGNZ cited our opposition to Three Waters as among the reasons. Either LGNZ has been leaned on by the Minister Mahuta’s office, or they themselves have turned into a blatantly political organisation.”

With 180,000 subscribed supporters, the Taxpayers’ Union is the largest ratepayer group by a country mile. Allowing stakeholder groups to attend should not be contingent on holding the same views LGNZ and the Minister.”

“There are obvious questions to be answered around whether the Minister’s office had any involvement in this decision. We note the LGNZ official who notified us of the decision is a recent Ministerial staffer. Given the many criticisms of Stuart Crosby selling out to the Government, this looks like yet another corruption of LGNZ’s purported mission to promote democracy.”

“Astoundingly, when we put to LGNZ that the revoking of our registration was ‘utu’ for past criticisms, the LGNZ representative conceded that it was!”

The charitable might give the representative credit for honesty, but that would be more than cancelled out by the pettiness and sheer vindictivenesses of the ban.

“This is the first time I’ve been banned from anything,” said Mr Williams. “But it’s not just me – LGNZ has said it applies to our nine staff, the board members, and even our members!”

Taxpayers’ Union board member (also a sitting City Councillor) Chis Milne – banned from a attending in any Taxpayers’ Union capacity.

  • Former Minister of Finance, Hon Ruth Richardson – banned.
  • Former Broadcaster, Peter Williams – banned.
  • Political commentator, David Farrar – banned.
  • The Union’s affiliated groups, the Auckland Ratepayers’ Alliance and Tauranga Ratepayers’ Alliance – banned.

Those public sector agencies sponsoring LGNZ need to question why they are funding such blatant politicisation of public money. How can a conference on local democracy be credible, when the democracy only extends to the groups that agree with the views of the LGNZ and the Government?”

LGNZ’s president confirmed to the Taxpayers’ Union that no other group has been banned, and that no other ratepayer groups are attending. Not even one.

The conference event webpage states:
“Approximately 600 delegates are expected to attend, such as mayors, chairs, chief executives, councillors and senior management from New Zealand’s councils, along with key players from the private sector, business, government and non government agencies.”

The event’s website quotes LGNZ President Stuart Crosby saying:
“Te Wā Heke Mai will host local government movers and shakers, influencers, and visionaries alongside outstanding local and international speakers. There will be an opportunity to listen and learn, connect and network, challenge and be challenged.”

The challenging only applies to those LGNZ supports and it is clearly unwilling to be challenged.

LGNZ should be a leading advocate for, and example of, democracy, openness and transparency.

This ban is the antithesis of all that.


Public funding of political parties political poison

26/05/2022

The Taxpayers’ Union says the idea of public funding of political parties must be nipped in the bud :

Responding to the terms of reference for a new review into electoral laws, the New Zealand Taxpayers’ Union is calling on politicians to rule out supporting taxpayer funding for political parties.

Union spokesman Louis Houlbrooke says, “Taxpayer funding for political parties is a terrible idea for a number of reasons. Firstly, the criteria for allocating funding will necessarily benefit incumbent political parties, amplifying those already in power and drowning out political outsiders. This goes against the spirit of our liberal multi-party system.

How would the funding be calculated – the vote at the previous election, the number of members  . . .?

There is simply no way taxpayer funds could be allocated fairly.

“Secondly, shifting away from private funding towards public funding will shield party leadership from accountability to their grassroots supporters who currently pay campaign bills. In other words, politicians will get sucked further into the Wellington bubble.

Good MPs value and listen to party members, understanding the important role they play in helping them win elections and also keeping them in touch with issues and concerns in the real world.

“Thirdly and most simply, taxpayers shouldn’t be forced to fund the promotion of views they disagree with or find abhorrent. It’s one thing to fund MPs to do their jobs in Parliament – it’s another thing entirely to fund their propaganda.

If parties can’t attract sufficient funds from people who support them, there are absolutely no grounds for giving them funds from people who don’t through taxes.

“Instead of pouring more public money into the political process, we should be taking this opportunity to scrap the archaic ‘broadcasting allocation’ which funds election night broadcasts from fringe political parties too hopeless to fundraise for themselves.

Yes. If parties wish to broadcast advertisements they should be able to do so but only at their own expense.

On the potential for restrictions on private donations to political parties, Mr Houlbrooke says:

“Limiting donations to political parties won’t stop the wealthy from influencing elections. It risks the rise of American-style ‘super pac’ organisations with shadowy funding sources campaigning on the parties’ behalf. At the very least, wealthy donors may simply redirect donations to advocacy groups like the Taxpayers’ Union or Greenpeace. Even if we would benefit from such a change, we cannot in good conscience support it.

Current disclosures of larger donations from groups of individuals is part of an openness and transparency in the democratic process, but as long as that is robust, there is no need to place limits on the donations, especially when, as is the case now, there are limits on how much parties can spend in the regulated pre-election period.

Contrary to the concern that money can buy elections, post-election disclosures show that often more money per vote is spent by parties which lose.

Political parties are voluntary organisations.

There are no more grounds for taxpayer funding of them than there would be for funding service clubs or religious groups.

If National and Act are true to their principles they will be opposing this vehemently.

I have no doubt they will because the idea is political poison.

Opponents to it have only to rank the many, many high priorities for taxpayer funding, including the frontlines of health and education, and then ask where taxpayer funding of political parties comes in.

It won’t even make the list.


Bad timing for bad tax

23/05/2022

Just a day after announcing they’ll let people earning less than $70,000 keep $27 a week more of their own money temporarily, Labour pushed legislation that will take much more off all of us permanently.

The Government is using dirty tactics as it pushes through enabling legislation to increase PAYE revenue by 10% under the cover of yesterday’s Budget, says the New Zealand Taxpayers’ Union in response to the Income Insurance Scheme (Enabling Development) Bill.

Union spokesman Jordan Williams says, “This is a tax branded ‘insurance’ by spin doctors to try and make it palatable. They are polishing a stinker. The ‘premium’ is not risk-based or reflective of individual circumstances. It is in practice a massive extension of PAYE, increasing revenue from the PAYE system by 10%.”

“The audacity of the timing cannot be understated. Labour is pushing it through first reading in a special Friday session of Parliament, less than 24 hours after a massive Budget that taxpayers, the media, and the Opposition are still busy digesting. This is cynical politics – Labour is playing dirty to push through a tax it knows will not stand up to public scrutiny.”

“Even worse, the Government is pushing this new tax as the costs of living spikes. The tax on workers will reduce take-home pay by up to $1,820 a year – far more than the temporary cost of living handouts announced yesterday. The additional tax on employers will in practice be passed on to workers, or translate to higher prices adding fuel to the inflation fire.”

“‘Unemployment insurance’ might be the name the PM’s media advisers have come up with, but Kiwis are smart enough to see right through it. It’s a nasty tax on employment, at the worst possible time. It’s also a recipe for rorting: family businesses will manufacture redundancies to take advantage of the generous handouts; and people on salaries as high as $131,000 will take six month sabbaticals between jobs, on 80 percent pay, courtesy of tax-paying workers.” 

Just one day later, Saturday, was tax freedom day and it came 10 days later than last year.

. . . Baker Tilly Staples Rodway has calculated New Zealanders will pay 10 days’ worth of taxes more in 2022 than they did last year, largely because of last year’s reintroduction of the 39 percent top tax rate.

It says the tax increase works out at 15 percent more than last year and brings tax freedom day back to where it was in the early 2000s.

Another significant concern is “bracket creep”, where an individual receives an increase in their salary, pushing them into a new higher tax bracket on their marginal earnings.

“The effects of bracket creep are becoming more obvious as more Kiwis receive pay rises,” Baker Tilly Staples Rodway tax director Mike Rudd said.

“That’s having flow-on effects such as Working for Families payments essentially being paid directly back to the government after tax.” . . . 

That’s two working weeks’ of tax paid before subtracting even more for the insurance scheme, the merits of which are questioned by many accountants:

. . . Chartered Accountants Australia and New Zealand said about half of its members supported the scheme as it could help people in sectors where redundancies were not offered and give people who had lost their job more time to find another role that matched their skills.

But members also had major concerns about the proposed timeframe, its cost, its effects on low-income families and the potential for the system to be gamed, he said.

“Many of our 31,000 Kiwi members have significant reservations about whether the scheme should go ahead, regardless of whether they support the policy rationale in principle,” CA ANZ New Zealand country head Peter Vial said.

Accountants had also been unable to review any of the detailed data and modelling for the scheme, or how it would be funded, Vial said.

“That’s a pretty concerning lack of transparency for a scheme that will impose significant costs on all New Zealand employers and employees – and considerable cost to the public purse. . . 

Vial said it would be “ambitious” to try and have the scheme up and running by the end of 2023 and suggested it would take a couple of years to develop the program to work out details, such as how it would work for low-income employees who would be least able to afford the levies.

“If the government does introduce a scheme, it needs to be as fair and efficient as possible, and economically viable, and must be careful that the proposal does not act as a disincentive for people to go back to work.”

Vial said there were alternatives that could be considered, such as expanding the scope of the Accident Compensation Act to include insurance cover for health events and disabilities that people away from work, as well as implementing an Australian-styled system which would provide minimum redundancy entitlements. . . 

We’re already paying more tax through bracket creep and inflation’s impact on GST. The flawed, compulsory insurance scheme will take even more from us.

It’s doubtful there’s ever a good time to impose a new tax on people.

Doing it now when the economic impacts of Covid and inflation are overstretching so many budgets for households, businesses and charities, would be bad enough. Doing it for a scheme that is unfair on people on lower incomes and so open to rorts is even worse.

This is bad timing for a bad tax that demonstrates yet again how out of touch the government is with how difficult finances are already for so many.


Backwards Budget

20/05/2022

The National Party leader labelled yesterday’s Budget a Backwards Budget:

Budget 2022 confirms that New Zealand is going backwards under Labour faster than ever, Opposition Leader Christopher Luxon says.

“This is the Backwards Budget. Kiwis, the economy and outcomes are all going backwards under Labour and today’s forecasts confirm the situation is only going to get worse before it gets better.

“Labour’s spending addiction means the books are going backward. Not content with a $6 billion spending spree, they’ve also raided future budgets – spending $2 billion from Budget 2023 and $0.4 billion from Budget 2024. And that’s before you count climate spending and the cost of living bandaid – which are on top.

They’re pushing out surpluses and shifting the goal posts to clear the way for more spending by lifting debt limits.

“With inflation at a 30-year-high and prices running laps around wages, Kiwis are experiencing the worst cost of living crisis in a generation. The forecasts today show inflation is rampant for years to come.

“More and more Kiwis are falling behind each week, squeezed by growing costs and a Government that refuses to offer them meaningful income tax relief while ramming through the biggest spend-up in New Zealand history.

“Labour’s cost of living package is a temporary band aid. The squeezed middle are paying the price for Labour’s economic mismanagement.

“And despite smashing the record for government spending, outcomes are going backwards. They’ve added more than 10,000 bureaucrats to the public service, yet outcomes are getting worse.

“Under Labour, wait times for surgery and specialist assessments have blown out, literacy and numeracy achievement rates have hit alarming lows and violent crime and gang numbers have exploded.

“New Zealand is going backwards, fast. We simply cannot afford this Labour Government.”

A transcript of his Budget speech is here.

 We’ve got inflation now at just under 7 percent, we’ve got wage growth only at 3, and that means all Kiwis are going back faster than they’ve been going in the last three decades. Mortgage costs are up because interest rates are up, rents are up $150, food prices are up the highest they’ve been in over a decade, and petrol is up over $3 a litre. And I can tell you, Kiwis up and down this country are feeling that pain. And this Budget will be putting Kiwis backwards into the future. . .

So let me be really clear: the cost-of-living package that this Government announced in the Budget today is just a band-aid on a major wound. It’s a band-aid. They deny that there was, in fact, even a cost-of-living crisis for a long period of time, and now they’ve added a temporary band-aid, which just runs out after three months. And I can tell you, what we just saw was inflation’s going to be running at 3 percent right out to 2025, so Grant Robertson’s big solution to the current cost-of-living crisis is a temporary payment to a small group of people. And I have to tell you: if you’re earning $71,000 a year, you get nothing.

And that means nobody on the average wage gets a cost-of-living payment, because these are the people that would have benefitted from income relief through a very good, sensible, logical plan—our plan, which was just say, “Take the current progressive tax system, and in fairness, why don’t you just live the tax thresholds up by the amount of inflation? And an average Kiwi household would have had $1,600 a year to fight this cost-of-living crisis that they’re facing.” But Grant Robertson said, “No.” And why did he say, “No.”? Because the dirty little secret is that inflation, while it destroys savings, it destroys people’s purchasing power, and it gets into an economy. The dirty little secret is that inflation helps Grant Robertson. Why? Because he’s collected $17 billion more in tax revenue because, as prices go up, taxes go up. And Grant Robertson, as we know, is utterly, totally addicted to spending, and that means that he won’t let Kiwis keep a single cent of their own money, because he thinks he can spend it better than them. And on this side of the House, we know Kiwis with cash in their pocket will spend it and save it a lot better than Grant Robertson. . . 

Let me lay out the facts on why the books are going backwards, because it is very, very important that Kiwis register what has gone on here today because of the economic mismanagement and the lack of economic leadership from this Government. Kiwis up and down this country are tightening their belts at their kitchen tables. They are doing it. Grant Robertson should be doing exactly the same, but he’s not. And what we have seen from this Government is a loss of a culture of financial discipline. We’ve seen a loss of targets. They don’t care about every single dollar being spent as if it’s their own, and they should because it’s not their money—it’s taxpayers’ money. But I’m telling you, Grant Robertson has a problem, and his problem is that he is so deeply and utterly addicted to spending, and I want to say that the impact of his addiction on our fiscal books is incredibly clear, and when you think about it, he’s damaging New Zealand’s economy very strongly. This is—be under no doubt—a massive Budget blowout.

This Government—and I want to just step it through—has increased Government spending since coming to power by 67 percent. You haven’t seen a 67 percent improvement in outcomes or services. And, consequently, we’re spending $127 billion this year in Government spending. That is unprecedented, and that is $51 billion more this year than it was in 2017—$51 billion dollars more. And now, let’s just look at this year, because Grant Robertson said he would spend $6 billion in the biggest Budget spend-up in the history of New Zealand, and he’s actually spending far, far more than that. And I want to take the House and the country through this because it’s actually really important everybody understands what’s going on, because he’s trying to make out that he’s fiscally prudent. And the reality is he’s more addicted to spending than he’s ever been before. There’s the $6 billion he’s already announced, and then you have to remember, earlier in the week, he spent $3 billion from the Climate Emergency Response Fund, earlier in the week—a lot on Labour projects and buzz words and strategies and plans and plans for plans. . . 

 For you to spend money and to deliver outcomes, there’s something in the middle called “implementation, execution, delivery”. Those are the things you need to do. But if you haven’t run anything, you don’t know how to get things done, and that’s exactly the story of all of this front bench: they don’t know how to convert the spending into outcomes. And you can pick any topic you want—any portfolio you want—and you’re going to see a consistent pattern: more spending, more bureaucrats, worse outcomes. 

Let me give you an example; let’s take Chris Hipkins and education because, without doubt, that’s the most damning set of stats I’ve seen since I’ve come into politics, and to this place, 18 months ago. He spent $5 billion more, hired 1,400 more staff—staff earning $120,000 or more has tripled—and yet we have less kids attending school, and we have worse academic outcomes. What we’ve got from Chris Hipkins is more spending, more bureaucrats, and worse outcomes.

Let’s look at Megan Woods and housing, because, if you remember something called KiwiBuild—remember KiwiBuild?—we don’t talk about it anymore, but the flagship KiwiBuild; only delivering 1.3 percent of the promised 100,000 houses. But, even if we put that aside, just think about the four outcomes you actually have to deliver in housing: house prices are up $400,000; rents are up $150; there’s a quadrupling—a fourfold increase—of people wanting a State house; and, sadly, this morning, 4,500 kids woke up in a motel in emergency accommodation. So what I’ve got to say is that from Megan Woods, we’ve seen more spending, more bureaucrats, and worse outcomes.

Let’s talk about Kris Faafoi, because he’s probably going to wake up now. He spent an extra $150 million. He’s hired another 500 people and, on every single visa processing, the wait time has got even longer. What is that? More spending, more bureaucrats, worse outcomes.

I want to talk about Kelvin Davis just quickly, because we should talk about Kelvin and Corrections. He spent $139 million. He increased the back office staff of Corrections by 50 percent, and then those prisoners that desperately need alcohol and drug rehabilitation services dropped from just over 6,000 down to 1,000. More spending, more bureaucrats, worse outcomes.

I really want to talk about Michael Wood and transport—that’s the one I really want to get to, because who would have thought that an $800 million bike bridge across the Waitematā was a killer idea? Brilliant idea. And then you go and spend $55 million on consultants looking at it, and then we’re still hiring an empty office building on Auckland’s waterfront to run a cancelled project for $600,000. He’s tripled the communications staff, we’ve had a tenfold increase in those that are paid over $100,000, and even then they still can’t communicate why you need two props of zeroes for $10,000. I mean, you honestly can’t make this stuff up, and I could go through every single portfolio and the story’s the same: more spending, more bureaucrats, worse outcomes. They don’t know how to get things done.

I just want you to take yourselves back two weeks ago because, two weeks ago, Andrew Little came to this House, and he stood up, and he realised he had a problem with wait-lists on health. And he had a cunning idea, I thought, you know, because the reality is this: there’s been a fifteenfold increase in people waiting more than four months for their first specialist appointment, and that was from when they came to power before COVID in February 2020, and it’s only got worse since then. Anyway, so Andrew Little came to the House and he said, “Look, I can’t just go and create another working group, because that’s what we used to do. We spent nine years in Opposition, we had no ideas, we arrived in Government on day one and we formed 230 plus working groups.” Now, we lost count of them but that’s what they did. So he didn’t just create a working group; he thought about it a bit more and he created what we call a “task force”. That was task force. And the great thing about a task force—this wasn’t just a normal task force, or a bog-standard task force; no, this was a “high-powered task force”, OK. [Cheers from Opposition members] . . .

In closing, let me say that New Zealanders deserve far more than this Government has delivered. Labour has taken so much in taxes, they’ve added so much debt, and they’ve spent so much money, but yet they have delivered so little in public services and outcomes. And this is indeed, sadly, the “backwards Budget”. The books are going backwards, Kiwi households are going backwards, the outcomes are going backwards, and, sadly, the country’s going backwards and we’re heading in the wrong direction. New Zealanders deserve a Government focused on outcomes and getting things done, that listens and works with communities and businesses to do so, and we’re going to do that in the National Party Government that we lead. We do live in the best country on planet Earth. I’m optimistic about New Zealand. I believe we can do so much better than this. I want us to be confident. I want us to be aspirational. I want us to be ambitious. I want us realising our maximum potential—economically, socially, and environmentally. And that’s what New Zealanders can expect, and that’s what they’ll get with a National Government in 2023. Thank you. . . 

 

Nicola Willis says government spending is out of control:

Budget 2022 confirms Finance Minister Grant Robertson’s spending is out of control, National’s Finance Spokesperson Nicola Willis says.

“Not content with a record $6 billion per year spending spree that he planned, Labour has raided future budgets – spending $2 billion from Budget 2023 and $0.4 billion from Budget 2024.

“That’s before you count climate spending and the cost of living payment – which are on top, taking the total spend-up to more than $9 billion per year of government spending.

“At a time when unemployment is very low, Grant Robertson is running a deficit of $19 billion.

“Having announced by far the biggest increase in spending in any Budget, ever, Grant Robertson expects New Zealanders to believe that he will keep his increases to $2.5 billion for the next two years. That is hard to believe.

“Inflation is at a 30-year high of 6.9 per cent, will remain above 5 per cent next year and is expected to stay high for years, not getting back down to below 3 per cent until 2025.

“While Labour might want to blame inflation all on offshore factors, Treasury has confirmed that inflation is being driven by domestic factors.

“Today’s forecast confirm that Labour’s economic mismanagement means Kiwis, the economy and outcomes are all going backwards.” 

The Taxpayers’ Union echoes the backwards theme, recalling Rob Muldoon:

Grant Robertson is the first Minister of Finance since Muldoon to fail to deliver a budget suplus during a time of economic boom, says the Taxpayers’ Union, commenting from today’s Budget 2022 Beehive lockup.

“With Government revenues booming, it is stunning that Grant Robertson has failed to deliver either tax relief or a surplus,” says Jordan Williams, the Executive Director of the New Zealand Taxpayers’ Union.

“The spike to inflation has seen record revenue flooding into the Beehive due to workers paying higher income tax rates and more GST. But despite the inflation, the lowest unemployment since records began, the end of COVID lockdowns, and better than expected economic numbers, Grant Robertson has actually pushed back the return to surplus.”

“It is stunning that, during a cost of living crisis, Grant Robertson has failed to give back any of his windfall gain to the workers who earned it. His failure to deliver either income tax relief or a balanced budget beggars belief: while households tighten belts, Wellington balloons.”

“With Government revenues as strong as they are, the Finance Minister could have today announced both income tax relief and a surplus. Instead, he’s decided to feast on the revenue with a laundry list of spending commitments.”

“The temporary $27-per week ‘cost of living’ payment is a cruel joke. Unlike genuine tax relief, it fails to improve productivity incentives. It’s just a three month handout, and an ineffective one at that. At current prices, it wouldn’t even buy two blocks of cheese!”

“The only silver lining is pushing back by three months the hike to petrol taxes and Road User Charges. With inflation running at 6.9%, the hike to petrol taxes should have been squashed permanently”

And in a touch of irony:

The figures match but a change in tax brackets would continue for much more than the three months the $27 a week will; and the change in tax brackets would help people across the board, not just those earning less than $70,000, excluding superannuitants and beneficiaries.


Redpeace hates cows

17/05/2022

When raging inflation and high debt requires the government to spend every cent wisely, its Emissions Reduction Plan falls short:

National supports the Government’s emissions budgets and emissions targets but is concerned that today’s Emissions Reduction Plan is a poor use of taxpayers’ money, says Opposition Leader Christopher Luxon says.

“We support the goal of reducing emissions in the economy, but see little evidence that this Government will be able to deliver.

“Too much of the new spending will go to corporate welfare and more working groups.

“The Government is proposing to give hundreds of millions of dollars to companies for investments they should be making anyway.

“We expect those companies to be cutting their emissions without help from taxpayers. A significant part of the Government’s plan looks like a corporate carbon bailout.

“There are elements of the plan that we welcome, including investment in research to reduce agriculture emissions and in expanding options for carbons sinks including native forests and blue carbon.

“However, much of the plan lacks the details we would expect to see after more than two years of work.

“This plan is classic Labour. In the middle of a cost of living crisis, Grant Robertson’s big idea is to spend millions of dollars for more consultants, more working groups, and poorly focused initiatives, with no real milestones for success.

“It is disappointing to see poor quality spending and corporate welfare at a time when New Zealanders’ back pockets are hurting and they want assurance their money is being carefully spent.

“Today’s plan will only add to the perception that this Government talks a big game but does not deliver – whether for the climate or housing or mental health or anything else.”

The Taxpayers’ Union makes a similar point about misspending:

James Shaw is exploiting the commentariat’s failure to understand the Emissions Trading Scheme in order to justify costly middle class welfare and handouts for big business, says Taxpayers’ Union spokesman Louis Houlbrooke.

On cash for clunkers:

“This is brazen middle class welfare dressed up as climate action,” says Mr Houlbrooke. “Giving a fat cash enticement for New Zealanders to switch to electric vehicles is unlikely to benefit poorer households, who will not be in the market for an electric vehicle (even a subsidised one). In fact, scrapping used cars will drive up costs for the poor due to reduced supply in the used market.”

“When this policy was tried in the US, it mainly ended up subsidising purchases that would have happened anyway.”

On corporate welfare:

“Shaw has announced he’s sloshing another $650 million into the ‘decarbonising industry’ corporate welfare fund. This is the pot of money that has seen millions handed over to the likes of Silver Fern Farms, ANZCO, and DB Breweries so that they can upgrade their heating systems. Smaller competitors never seem to get a look in. Regardless, as we have previously pointed out, the funding is redundant: based on the Government’s own numbers, big businesses already have a strong enough incentive to replace boilers and avoid ETS levies.”

Handouts from the GIDI fund so far can be browsed here: Round 1Round 2Round 3.

On the elephant in the room:

“The vast majority of interventions announced today will fail to reduce emissions. That’s because, outside of agriculture, New Zealand’s emissions are capped and traded under the Emissions Trading Scheme. Interventions to force down emissions in say, transport, merely free up carbon credits to be burnt in other sectors.”

“As the United Nations’ IPCC put it: if a cap-and- trade system has a sufficiently stringent cap then other policies such as renewable subsidies have no further impact on total greenhouse emissions. Why does James Shaw think he knows better than the UN’s international climate experts? Of course, simply using the ETS to efficiently reduce emissions would make for fewer announcements and fewer photo-ops with schoolkids, cycleways, and electric vehicles.”

Once again the government shows it doesn’t understand the ETS and the waterbed effect of reductions of emissions in one area allowing increases in another for no net improvement.

However, there is some good in the Emissions Reduction Plan:

Federated Farmers is pleased the government has recognised solutions to agricultural emissions lie in new technologies and tools, and is stepping up investment on that front.

“Nitrate and methane inhibitors, gene editing, animals bred for their lower methane ‘burping’ – they’re the kind of advances that will enable New Zealand’s farming sector to continue to perform for the nation’s economy while maintaining our world-leading meat and dairy carbon footprint,” Feds President and climate change spokesperson Andrew Hoggard said.

It will be important to understand how the proposed new Centre for Climate Action on Agricultural Emissions fits with existing bodies such as the NZ Agricultural Greenhouse Gas Research Centre, the Pastoral GHG Research Consortium (PGGRC) and the international bodies New Zealand partners with, such as the Global Research Alliance.

“New Zealand farmers have been funding millions of dollars into greenhouse gas mitigation tools since 2003 via the PGGRC,” Andrew said.

Do we need another organisation when all of these are already doing good work?

It will also be crucial that our regulatory framework is worked on at the same time as acceleration of research and commercialisation of these tools “so that when they’re ready, we can get on with using them.

“At present there is no category to register feed inhibitors for use on our farms, for example,” Andrew said.

“And Feds again make the point we’ve made many times previously – serious investigation and society-wide discussion is needed on the role genetic technologies – particular gene editing – can play in the thorny environmental issues confronting us. Feds supports giving food producers and consumers the choice with gene editing technology.

“If we are not open to all solutions, we risk losing our world-leading emissions footprint as other countries embrace the innovation we are ignoring.”

Andrew said those who continue to claim the answer lies in just cutting fertiliser and going totally organic need to look at what has just happened in Sri Lanka. “That’s the short-sighted path that nation’s government pursued and now they’re in a food and economic crisis they’re desperate to reverse and get back to where they were.”

That short-sighted path is the one that GreenRedpeace wants:

Greenpeace has dubbed the Government’s Emissions Reduction Plan an ‘Omissions Ridiculous Plan’, for its failure to address New Zealand’s biggest climate polluter – the dairy industry.

Lead agriculture campaigner Christine Rose says, “Intensive dairying is the number one cause of climate pollution in Aotearoa, so it’s absolutely staggering to see that the Emissions Reduction Plan fails to include policy that would reduce cow numbers or phase out the synthetic nitrogen fertiliser that drives emissions.””This Emissions Reduction plan is not credible because it fails to deal with the dirty great cow in the room – New Zealand’s biggest climate polluter – intensive dairy,” says Rose.

Where’s the evidence that cows are the number one cause of climate pollution. Does Redpeace understand the difference between methane and CO2?

Despite initial Climate Commission recommendations that New Zealand needed to reduce the livestock herd and area farmed, the Government has not included these policies in the plan. Other nations have been taking such steps, including the Netherlands which plans to cut the herd by 30% by 2030.

The Netherlands aren’t nearly as efficient at producing milk as we are, nor is dairying such a big part of their economy.

The Government’s projections show the ERP will reduce agricultural emissions by as little as 0.33 Mt CO2e over the 2022-2025 period which is less than 1% of the industry’s projected emissions.

The ERP’s approach to agriculture relies heavily on industry self-regulation – through He Waka Eke Noa – which is also expected to reduce emissions by only 1%.

“Instead of just cutting cow numbers, the Government is relying on industry promises, hypothetical, and unproven techno-fixes to agricultural emissions, and the freshwater reforms that the dairy industry is undermining at every step,” says Rose.

The Emissions Reduction Plan gifts $710 million to the agricultural industry – a quarter of the entire Climate Emergency Response Fund which it has not contributed towards.

“Despite the climate emergency, industrial dairy has yet again been given a free pass that now comes with a huge subsidy from the rest of New Zealand.

“This is a kick in the guts for New Zealanders who are effectively subsidising the intensive dairy industry due to the industry’s exemption from the ETS.

“To truly deal with the climate crisis the Government needs a far better plan than they have produced today. A plan that cuts cow numbers, phases out synthetic fertiliser and drives the transition to more plant-based regenerative organic farming,” says Rose. 

Can Redpeace present any reputable science backing their prescription as being both better for the environment and sustainable?

How expensive does Redpeace want food to become?

How much a reduction in export income and consequent reduction in living standards does Redpeace think is acceptable?

The organisation probably hasn’t considered those questions and wouldn’t be interested in the answers.

The diatribe above shows, it simply hates cows, doesn’t care that fewer cows here would lead to more cows elsewhere, where production is much less efficient, and has no idea that the high social and economic costs of its policy would do little for emissions here and lead to an increase globally.


Govt doesn’t understand ETS

09/05/2022

Environment Minister has announced yet another scheme that will make no difference to the country’s emissions:

The Taxpayers’ Union is slamming Climate Change Minister James Shaw’s announcement that the Government is to spend $10 million of taxpayer money to remove coal boilers in New Zealand schools based on a false claim that it will “reduce emissions”.

Reacting to the announcement, Jordan Williams, a spokesman for the Union, explains:

“James Shaw is, yet again, failing to follow the advice of the UN’s Intergovernmental Panel on Climate Change by trying to tinker with emissions already covered by the Emissions Trading Scheme.”

“Mr Shaw claims that this spend will ‘reduce’ emissions by 36,000 tonnes over ten years. That means he’s paying $278 per tonne vs the $76.50 it would cost at the current ETS price.”

“But it’s even worse than inefficient. Because coal burners are already covered by the ETS, the emissions are simply freed up to go elsewhere because the ETS runs on a ‘cap and trade’ principle.”

“When Mr Shaw says that the 36,000 tonnes is the ‘same as taking 1400 cars off the road’, he is just plain wrong. In fact, this announcement is the same as putting 1400 cars onto the road – the government’s spend simply results in a waterbed effect whereby the emissions are simply shifted.”

“It’s time climate change advocates stated calling out James Shaw’s fibs when he says that spending like this is a ‘a win for the climate’. The real cost of spending like this is the projects the money could have been spent on to actually reduce emissions – either by purchasing ETS credits to take them out of the market, or on projects to reduce emissions in sectors outside the ETS.”

“James Shaw’s false claims that his measures reduce emissions, when he knows very well they don’t, are the sort of environmental and financial trickery that give politicians a bad name.”

“Reducing coal burners might have benefits for air quality and health – but the claim that it helps the climate or reduces overall New Zealand emissions just is not true.”

It also shows the government doesn’t understand the ETS and the waterbed effect.

Removing emissions from coal burners doesn’t reduce emissions, it frees them to go somewhere else.

Just like the ute tax, it’s an exercise in virtue signalling futility and, like so much else this government does, it’s spending money that could be far better spent where it could do some good.


Award for most incompetent Minister goes to . . .

07/04/2022

Who is the government’s most incompetent Minister? There’s plenty to choose from.

Transport Minister Michael Woods is a contender for the $50 million spent on the Auckland bike bridge to nowhere and for continuing to work on the far too expensive light rail project:

While New Zealanders are in a cost of living crisis with record inflation, it is unjustifiable and irresponsible for the Government to steam ahead with their plans to build their light rail vanity project, National’s Transport spokesperson Simeon Brown says.

“Documents released by Treasury today show Michael Wood’s commitment to light rail could explode to an eye watering $29.2 billion – nearly double the cost of what was announced in January, which was already a staggering amount of money at almost $15 billion.

“Treasury’s advice was scathing of the project, saying the Government should not pick a preferred option for light rail until further analysis could be undertaken – advice the Government has clearly ignored.

“Labour’s commitment to this vanity project will cost taxpayers a whopping $100 million before the next election, with no guarantee of spades being in the ground.

“The cost for this project is entirely unjustifiable and the Government needs to accept that this project is simply not worth it. Especially when New Zealanders are dealing with a cost of living crisis, which will only get worse if the Government doesn’t rein in its wasteful spending.

Kris Faafoi is a contender for the way Immigration treated families of essential workers stuck overseas and for failing to fast track residency for essential workers already here.

Immigration policies are also likely to lead to job losses in the tertiary sector:

The Government urgently needs to get international students into the country to prevent looming job losses in the tertiary sector, National’s Tertiary Education spokesperson Penny Simmonds says.

“Universities and polytechnics are currently considering staff redundancies as a way of coping with declining enrolments this year.

“Labour is allowing 5000 international students into the country next month – but universities and polytechnics can only access 2150 students, or 43 per cent, with the remainder of students heading to high schools, Private Training Establishments and English language schools.

“This will do little to ease the urgent staffing issues facing the sector.

“Given that student visas are currently taking Immigration New Zealand three months to process, students applying in April won’t be processed in time for semester two, putting further stress on our valuable tertiary teaching staff.

On top of that, international research now shows New Zealand is falling out of favour with international students, being ranked last among the major English-speaking education destinations in a survey of more than 10,000 people from 93 countries.

“And the effects are obvious – according to the Ministry of Education in 2019, New Zealand had about 22,000 fulltime international students paying total tuition fees of $562 million. The figures for 2021 and 2022 are estimated to be 70 per cent of that 2019 figure.

“The Government must explain what the rational is for limiting international student numbers, our fourth biggest export earner, when the border is reopening.

“It is appalling that this Government has allowed international education in this country to decline to this level. We must act urgently to prevent further deterioration in this sector and that means not restricting international student numbers coming here.” . .

He’s also fallen short as Justice Minister:

Victims of crime missed out on support they were entitled to because Justice Minister Kris Faafoi failed to sign off the criteria for a $3 million victim support fund for more than five months after the fund was announced, National’s Justice spokesperson Paul Goldsmith says.

“Earlier this month it was revealed that zero victims were supported by the fund announced in Budget 2021, despite applications being open since July 2021.

“Labour was content to let Victim Support take the blame for this lack of delivery, but it turns out Minister Faafoi didn’t bother to sign off the eligibility criteria until November 2021 – more than five months after the fund was announced and four months after applications opened.

Rather than letting Victim Support take the rap, Minister Faafoi should have fessed up that his incompetence is the real reason why victims are missing out on support the Government promised them.

“Governments spend months finalising the Budget every year so he would have known well in advance that this fund would be open for applications from July. What is his excuse for doing nothing for over five months to ensure victims could access the support? 

“Even worse, the Police Minister has conceded agencies who are meant to advise victims of support they are entitled to were not provided information about the fund until February 2022. . .

That Police Minister Potu Williams is another contender for the silence when police were facing the protesters at parliament, silence over repeated examples of policing by consent that let gangs disregard lockdown rules and terrorise the law abiding while doing it; and her refusal to allow National police spokesman Mark Mitchell to meet the Commissioner or district commanders:

. . . He said: “I don’t think she’s [Williams is] very good at her job and I don’t think she’s across her portfolio, but for her now to use her political power and position in government to start blocking me from meetings – that’s Third World stuff … she may as well go and join the Cabinet in Somalia.” . . 

Trumping that is her denial of an increase in gang violence:

. . .Mitchell asked Williams in Parliament on Wednesday if gang violence had increased or decreased under her watch, to which she replied: “I reject the premise of that question.”  . . .

And this:

Then there’s waste in health with expired vaccines:

Thousands of meningococcal vaccines have been left to expire instead of being given to those most at risk, National’s Health spokesperson Dr Shane Reti says.

“It has been revealed that 17,122 meningococcal vaccines have expired in the last two years, at a cost of $1.6 million, and who knows how many lives.

“The Ministry of Health has a strict eligibility criteria for the meningococcal vaccine, but these vaccines that were left unused could have been made available to those most at risk, to help protect them from this deathly disease.

“The lost opportunity to protect people is a tragedy and that $1.6 million that ended up being wasted could have been spent on other areas of health that desperately need it.

“Last week a meningitis petition was presented to Parliament, pleading to the Government to fund vaccines against the disease. This news will be a cold comfort to those petition supporters.

“This is becoming a concerning pattern of behaviour from Health Minister Andrew Little who has already wasted $8 million worth of measles vaccines in a botched catch-up campaign, and now he can add this one to the growing list.

“Minister Little needs to commit to making expiring meningococcal vaccines available to primary care for use inside and outside of the strict criteria to avoid a tragedy like this happening again.” . .

And the botched measles programme costing $1900 per person:

The botched $20 million measles vaccine catch-up programme is worse than it appears, National’s Health spokesperson Dr Shane Reti says.

“The other week it was revealed that $8 million of measles vaccines were left unused and had expired.

“However, information shows that only 11,206 people of the targeted 300,000 received the vaccine – representing a cost of nearly $1900 per person and reaching only 3 per cent of the targeted population.

“It was also revealed that Labour spent $1.8 million on public relations to frame a campaign ‘with a particular focus on Māori and Pacific people’, yet only 1181 Māori received the vaccine – a PR cost of $1,500 per person.

“Worse still, to date the programme costs show that $2.2 million has been spent on public relations while only $1.61 million was spent on actually delivering the vaccine to Māori.

“Andrew Little seems more interested in PR and spin than actually delivering measles vaccinations to Māori.

“The list of health failures is mounting under Andrew Little’s watch. He failed to deliver any extra ICU beds during a global pandemic, has completely missed every health target set and now he can add a botched measles campaign to his growing list.”

The government put so much effort, and spent so much money, justifying locking us down and persuading us to get vaccinated so that the health system wasn’t over whelmed yet did little or nothing to retain existing staff and recruit more.

That’s left  hospitals understaffed and health professionals overworked :

Their employers have warned them not to speak out but nurses say they won’t be silenced. Overworked and understaffed, they’ve told Sunday that they’ve had enough of a health system under real pressure.

The Omicron surge hasn’t helped, but there was a serious nursing shortage long before Covid struck, and now burnout and resignations are high while the pandemic shut off the supply of overseas nurses.

Nurses still on the job worry patient safety may suffer because they are so short-staffed.

Is the government listening?

No it’s not. Instead it’s going ahead with the complete restructure of the health system that will do nothing to improve pay and conditions for health professionals and nothing to improve services, and outcomes, for patients.

That would be bad enough at the best of times. In the middle of a pandemic it’s a complete waste of scarce funds and people’s focus.

While on health and the pandemic lets not forget the shortage of PPE, the delay in securing vaccines which left the rollout starting late and the RATs debacle.

Then there’s paying more and getting less in several areas.

Carmel Sepuloni has overseen an increase in MSD staff and deterioration in performance:

Our welfare system is less responsive than ever as phone wait times for the Ministry of Social Development (MSD) surge, National’s Social Development and Employment spokesperson Louise Upston says.

“Whether it’s superannuitants, students, people out of work, or a family who needs help to cope with soaring living costs, New Zealander’s deserve timely answers from the department responsible of administering the welfare system.

“Since 2017, the number of MSD staff answering calls has increased from 650 to 1220 people, yet the average wait time has also increased from 4 to 18 minutes, even reaching close to 40 minutes some weeks this year.

“That’s an 88 per cent increase in staff numbers, a large deterioration in performance and no better outcomes for Kiwis.  

“Appallingly, some people have waited longer than three hours while others have reported it took weeks to receive a call back.

“The cost of living crisis has increased demand for hardship grants and there is almost an extra 50,000 people on the unemployment benefit, which means preparations should have been made to cope with more inquiries.

“New Zealander’s deserve a better service given the substantial taxpayer dollars poured into MSD. Simply increasing staff numbers is not going to cut it.

“Minister Sepuloni needs to hold MSD accountable for their plummeting performance and ensures it fulfils its core responsibility to answer New Zealander’s questions and help people access their entitlements.”

Corrections is spending more money on prisoners with worse outcomes:

Taxpayers are spending more money on prisoners, yet violent crime continues to go up, National’s Corrections spokesperson Simon O’Connor says.

“New Zealand taxpayers are now spending $151,000 per prisoner, per year – an increase of over $30,000 per prisoner from 2018/19.

“Overall, there has been an increase of $139 million poured into the Corrections system over the period between 2018/19 and 2020/21, despite fewer prisoners.

“At the same time, there has been a steep decline in the number of prisoners accessing rehabilitation services. Prisoners accessing alcohol and drug programmes alone has dropped from 6311 in 2015/16 to 1065 in 2019/20 – a decrease greater than the drop in prisoner numbers.

“More money is being spent, but we’re getting worse outcomes.

“Rehabilitation is a key way for prisoners to turn their lives around, but in 2019/20 the number of prisoners taking part in rehabilitation programmes plummeted to 2399, from 5845 in 2015/16.

“It can hardly be a surprise then that violent crime is up 21 per cent since 2017, as reported by the Salvation Army, and that we have one of the highest recidivism rates in the OECD.

“This is typical for a Government who are experts at spending taxpayer money with no expectation of results.

“On top of this, Labour is taking soft-on-crime approach which is clearly not working.

“Without effective rehabilitation, re-imprisonment rates and violence will only keep climbing.”

And more is being spent on mental health for no positive results:

The mental health monitoring report out today shows that the Government’s $1.9 billion investment in mental health has delivered no benefit to Kiwis, National’s Mental Health spokesperson Matt Doocey says.

“This is emblematic of a Government that is all spin and no delivery. Labour’s only measure of success is how much it spends on things. But it needs to be about the outcomes that we achieve for New Zealanders.

“The report released today by the Mental Health and Wellbeing Commission reinforces what many mental health groups and services have been telling me for some time – that they’re not seeing any of the money promised for mental health and can’t point to where it’s gone.

“They have been raising these concerns with the Government for months about staff shortages and growing waiting lists, but have not received a response.

“The findings in the report also show that our specialist services are facing increased demand since the beginning of the pandemic, especially from younger people seeking mental health support.

“The Government says it has invested in the sector, yet services are harder to access. They must explain where the money has gone and why it hasn’t made a difference to improving people’s mental health.

“Making announcements with good intentions isn’t going to solve the growing mental health problems that New Zealand is facing, but strong leadership and a well-managed plan to execute change will. We need targeted spending that delivers outcomes for Kiwis.”

Then there are virtue signalling environmental policies that are nothing more than taxes that increase costs but do nothing at all for the environment:

The Government’s car tax comes into force today, piling on yet another cost for Kiwis facing a cost of living crisis, National’s Transport spokesperson Simeon Brown says.

“Hardworking Kiwis will be hoping that this is just an April Fool’s joke, but sadly they will still have to live with Labour’s new car tax after today.        

“The so-called ‘Clean Car Discount’ gives a rebate for expensive electric vehicles while imposing fees of thousands of dollars on many other vehicles. For example, buyers of a Toyota Hilux* will face a $5175 tax when they first register the vehicle.  

“This will have a negative impact on our farmers and tradies who need utes to do their jobs and contribute to our economic recovery.   

“The Government is penalising farmers and tradies for their choice of vehicle despite there being no viable electric ute available. Even Toyota had to correct the Prime Minister last year that it has no plans to bring an electric ute to New Zealand within the next two years.

“LDV will have an electric alternative, the EV-T60, coming from China later this year. But it is two-wheel drive and can only haul a max of 1,000 kgs for 162km. This is not enough to meet farmers’ needs, who need strength and reliability.

“While the Government gives with one hand, by temporarily reducing fuel taxes, it takes with the other by imposing the Auckland regional fuel tax, a car tax, and is now proposing a biofuels mandate which will further increase the cost of fuel. 

“All of these policies drive up the cost of living for motorists struggling to get by under rapidly rising inflation and fuel prices.

An environmental and transport failure is the train from Hamilton to Auckland:

The Te Huia train today marks its first birthday with news that it has spent more time off the tracks than on them, National’s Transport spokesperson Simeon Brown says.

“There is not a lot to celebrate about this service which has failed from day one.

“Not only has the train spent more time off the tracks than on them over the past 12 months, taxpayers have poured $98 million into a service which very few people use and which takes much longer than driving between Hamilton and Auckland.

“Furthermore, research produced by the Waikato Chamber of Commerce shows that based on current passenger numbers the train actually emits more carbon emissions than someone who drives their petrol or diesel vehicle between these two cities.

“Patronage is significantly lower than what it was when the service started despite repeated calls to ‘build it and people will come’.

“This painfully slow train is simply not fit for purpose. It doesn’t achieve the outcomes that the Government claimed it would one year ago.

“The Transport Minister is so completely focussed on his legacy projects, he is prepared to waste almost $100 million of taxpayer dollars on a train that isn’t fit for purpose and hardly anyone wants to use.

“Quite frankly this is an irresponsible use of taxpayers’ money which would be better spent on extending the Waikato Expressway from Cambridge to Piarere.”  

If all this isn’t bad enough, there’s the incompetence with funding the Strategic Tourism Asset Protection Programme (STAPP) 

The Auditor General’s Report on the Strategic Tourism Asset Protection Programme (STAPP) confirmed what many businesses have been saying – that this Labour Government has been biased and unfair, National’s Tourism spokesperson Todd McClay says.

“Every tourism business in New Zealand has done it tough over the last two years and this report has shown that this Labour Government favoured some and left others to suffer.

“In May 2020 the Government and former Tourism Minister Kelvin Davis opened a $290M fund for struggling tourism businesses. When applications opened, some businesses were accepted without any evidence that they were in financial difficulty, and didn’t have to go through the same process as other businesses.

“The Government seems to believe that only Queenstown exists when it comes to tourism in New Zealand, when in reality there are tourism operators up and down the country who are suffering just as much.

“In typical Labour fashion, they simply threw money at a problem without having a well-managed plan. Current Tourism Minister Stuart Nash has blamed the uncertainty of Covid-19 for these mistakes, but the reality is they failed to think things through at a time when tourism businesses needed them most.

“New Zealanders deserve to have a Government who are responsible with their spending, but this Labour Government has proven time and time again that they cannot be trusted to make wise or fair spending decisions.

“I am calling on Minister Nash to find those funds that were given out incorrectly, take them back and redistribute them to all Kiwi tourism operators so that they can open up quickly for international tourists.”

Bryce Edwards says the report raises questions of integrity:

Was political favouritism involved in the dishing out of millions of dollars by government ministers to tourism businesses? We can’t know, because the Government didn’t keep sufficient records or have proper processes for the handouts. That’s the obvious question arising from a scathing report released by the Auditor General on Thursday, which has received far too little attention.

The Auditor General’s report investigates a scheme set up by the Government early in the Covid crisis (May 2020), called the Strategic Tourism Assets Protection Programme. The report is one of many that have criticised government procedures during Covid for their lack of integrity. . . 

Harman draws attention to the fact that there have been a number of other reports from the Auditor General’s office that have pinged the Government for poor processes in regard to government departments dealing with private vested interests during Covid – especially the Ministry of Health and the Ministry of Social Development.

Of course, one of the most problematic has been the multi-billion-dollar Wage Subsidy Scheme, which was seen to be poorly designed and administered.

There’s a theme building up from these reports – that of crony corporate welfare getting out of hand in recent years. This is one of the blind spots in New Zealand politics and society. Recent governments are prone to giving generous subsidies to business interests, often without any great systems of integrity or best practice. And unfortunately, the public never seems to mind much when it becomes apparent.

It could well be that New Zealand is just too eager to believe the annual Transparency International Corruption Perception Index results that show this country to be the least corrupt nation on earth. In ignoring reports such as this latest from the Auditor General, the Government is undermining that status.

On the subject of Ministerial oversight of money wasted, there’s plenty to choose from :

So much incompetence, it’s hard to choose which is worse but there’s one person who is supposed to be on top of all the portfolios and those presiding over them. That’s Jacinda Ardern.

Would any other recent Prime Minister have tolerated this litany of laxness from Ministers? Bill English, John Key, Helen Clark? No.

There’s a lot more to leadership than announcing announcements and serving word salads no matter how caring they sound.

Ensuring Ministers are up to the jobs they’re supposed to be doing and holding them to account if  and when they fall short is a very important one by which measure of competence this PM falls short.


Good use of our money?

01/03/2022

Is this good use of our money?

Breakfast is an important meal and hotel breakfasts are expensive so that probably shouldn’t be criticised but the snacks can be.

MIQ wouldn’t be much fun and I can understand someone wanting some comfort food, but should taxpayers be paying for it?

Try telling someone who doesn’t have enough money to feed their family that their tax helps fund $60 of ministerial snacks.

Parliamentary Services obviously thinks that everything but the deodorant is okay, but if you’re on a ministerial salary wouldn’t you realise this isn’t a good look and pay for it yourself?


Worst time for new tax

03/02/2022

There is no good time to add a new tax, but raging inflation and the Covid threat make this the worst time to tax us more:

The Government’s plan to impose a new tax on every worker and business in the country could not come at a worse time, Opposition Leader Christopher Luxon says.

“With prices growing twice as fast as wages, Kiwi families are worse off than they were 12 months ago under Labour.

“National has big concerns that Grant Robertson’s new unemployment insurance will make the cost of living crisis even worse. It’s a new tax, reducing incomes at a time when with high inflation businesses and workers can’t afford it.

Reduced incomes will exacerbated by increasing business costs that fuels inflation, eats into wage increases and erodes the real value of savings.

“Small businesses have been struggling just to keep the doors open over the last two years. Now, just when Kiwis deserve some relief, the Government wants to hit workers and businesses with a brand new tax to fund a new gold-plated unemployment benefit.

“Calling this new tax a ‘levy’ or a ‘contribution’ doesn’t disguise the fact that this will be yet more money flowing from hard-working New Zealanders and businesses to this big-spending Labour Government.

This is a levy or contribution rather than a tax in the same way requisitioning rapid antigen tests ordered and paid for by businesses is consolidation.

“This ‘Jobs Tax’ is a solution looking for a problem.

“New Zealand historically has very good labour market outcomes and a welfare system that, at least until Labour took office, did a good job of acting as a social safety net to help those who had fallen on hard times get back on their feet.

“But the Government wants to impose yet another centralised, bureaucratic welfare scheme on top of the one we already have.

“The Government should just call this what it is – a Jobs Tax. And then they should abandon it.”

The New Zealand Initiative points out that unemployment insurance is a recipe for more unemployment:

Because New Zealand’s labour market outcomes are generally good, delivering consistently low levels of unemployment and long-term unemployment, the potential benefits of UI appear modest at best. On the other hand, a significant body of empirical work suggests that UI insurance has a detrimental effect on employment. Total unemployment is raised, as is the length of time people spend in unemployment. UI also comes at a considerable fiscal cost. For these reasons, the introduction of UI in New Zealand should be avoided.

You can read the Initiative’s paper on that here.

So much for Labour’s no new taxes promise.

Another downside of the new tax is that it will be a productivity killer:

Grant Robertson’s new tax on employment is a broken promise that will punish productivity and reward the unproductive, says the New Zealand Taxpayers’ Union.

New Zealand’s productivity is already dismal and Labour has already made it too easy to stay on a benefit.

The Taxpayers Union is releasing Curia polling commissioned by the Union that asked respondents: Would you be happy to pay $1,000 a year more in income tax in return for a compulsory unemployment insurance scheme which would see someone made redundant receive 80% of their old salary for six months – only 31% supported this proposal, versus 42% opposed.

Union spokesman Louis Houlbrooke says, “The Government’s ‘social insurance’ proposal is really just a pumped-up new benefit scheme that will pay even wealthy people up to $1820 a week for sitting on the couch. It would be one of the most extreme unemployment insurance schemes in the world, replacing 80 percent of income.” [1]

“This policy is a classic productivity killer: it taxes work and subsidises non-work. Why bother finding a new job when you can sit at home for six months on nearly full pay, courtesy of the taxpayer?”

“The new tax on employment is yet another nail in the coffin of Grant Robertson’s ‘no new taxes’ promise made in 2020. The two 1.39% levies on the worker and employer will effectively stack together as a 2.78% tax on income – an extra $1580 per year for someone on the median wage.”“The tax is especially unfair on workers who have made the choice to pursue stable careers with reliable employers. They’ll pay the tax but may not ever get the payouts.”

“The Taxpayers’ Union will fight tooth and nail to shut down this dumb tax.”

[1] Unemployment insurance schemes around the world: Evidence and policy options (Page 22)

If the government thinks that the threat of redundancy is uppermost among people’s concerns, they are delueded.

Inflation, paying the bills, rising interest rates, high house prices, high rents . . .

There are a lot more pressing concerns than potential redundancy, especially when New Zealanders are already getting poorer under Labour:

New Zealanders are getting poorer under the Labour Government with wage growth figures of 2.6 per cent trailing well behind inflation of 5.9 per cent, National’s Finance spokesperson Simon Bridges says.

“The figures released today show that real incomes are going backwards. More and more people simply won’t be able to afford groceries, petrol or rent under this Government. Their pay packets just aren’t keeping pace with rising costs.

“Despite what he might say, Grant Robertson can’t do much to affect wages in the short term. But he can rein in his big government spending which will ease pressure on high inflation and rising interest rates.

“It’s not credible for him and the Prime Minister to simply blame New Zealand’s rising cost of living on international factors.

“In the last quarter, domestic inflation grew faster than the international components did. Most of the country’s economists have warned of the significance of home-grown factors in our inflation and that high inflation is likely to be more long lasting than originally thought.

“It is now at a thirty-year high and affecting the price of everything across our economy. The Reserve Bank has made clear that with inflation this high, a succession of interest rate hikes will be required this year.

“Grant Robertson’s spending has been 40 per cent higher during his time as Finance Minister than it was under National. This year he’s planning to increase that to a staggering 68 per cent at $128 billion, with $6 billion in new spending.

“The OECD’s Economic Survey of New Zealand, released yesterday, backs up National’s call for the Government to rein in its spending. If they don’t, inflation will be higher for longer and the Reserve Bank will be forced to keep hiking interest rates which will take even more money out of Kiwis’ pockets.

“The Government should listen and bring its spending under control so that New Zealanders don’t keep falling further and further behind.”

The government should also can its plan for its job tax.

It should be concentrating on cutting its own wasteful spending and developing policies which will boost productivity instead of wasting its time and our money on a policy that will add costs to businesses, reduce incomes and incentivise unemployment.


Inflation is theft

28/01/2022

Government spin is trying to tell us that the highest inflation rate in three decades is due to global pressures. It’s not.

Inflation hit a 31-year high at the end of 2021, with a strong rise in domestic costs expected to create headaches for the Reserve Bank.

Statistics New Zealand said the consumer price index (CPI), the official measure of household inflation, rose by 5.9 per cent in 2021, the highest since 1990, shortly after the Reserve Bank was given new powers to use interest rates to keep prices stable.

While the figures were largely in line with expectations – several economists had predicted inflation hit at least 6 per cent last year – the breakdown of the theoretical basket of goods used to calculate the CPI suggested the current wave of increases is more of a domestic issue than some had expected.

Shortly after the figures were announced, Prime Minister Jacinda Ardern told reporters that the rise, predicted by commentators, was largely the result of global inflation pressures.

While tradeable inflation – generally reflecting costs imported from overseas – rose to 6.9 per cent, this was actually below expectations. Non-tradeable inflation, made up of the components of inflation that are mostly domestic, was 5.3 per cent, well above expectations and at the highest level recorded since Statistics NZ began providing a breakdown of local and imported elements. . .

A large contributor to the domestic component is government spending:

The Finance Minister must rein in his spending to avoid adding more fuel to the inflationary fire that is hurting everyday New Zealanders, National’s Finance spokesperson Simon Bridges says.

“At 5.9% for 2021, inflation is the highest it has been in three decades. It’s a thief in New Zealanders’ pockets, and it’s the least well-off Kiwis who will be doing it the toughest.

People on low and middle incomes are already over-stretched. Inflation will make life even harder for them.

Parents will have to put food back at the supermarket, workers will only be able to partly fill up at the petrol station, and there’s even less hope for young people trying to buy their first home.

“With wage growth of only 2.4%, well under half of inflation’s growth, New Zealanders are going backward. At the same time, we’ve got rising interest rates and record amounts of government spending.

“Grant Robertson’s spending has been 40% higher throughout his time as Finance Minister than it was under National. This year he’s planning to increase that to a staggering 68% at $128 billion, with $6 billion in new spending.

“While elevated spending was appropriate through much of the pandemic, some easing off and greater focus on the quality of spending is now required.

The elevated spending wasn’t all appropriate. Some that was authorised for Covid recovery was spent on other much lower priority projects and some, like the $50m on the bike bridge to nowhere, was simply wasted.

The big spend increasingly won’t achieve anything in a constrained economy where each public dollar is just competing with New Zealanders’ investments in scarce resources and workers.

“Even worse, big spending now will simply push inflation higher, which will act as a double whammy, hitting New Zealanders in the pocket twice through the inflation effect and as the Reserve Bank is forced to continue hiking up interest rates, higher than would otherwise be necessary.

Grant Robertson’s glib response on inflation in the past has been that ‘it’s international’. If that’s a complete answer, then he needs to explain why the domestic part of New Zealand’s inflation is also rising and why Australia’s is considerably lower than ours at 3.5% over the same period.

“More importantly though, he needs to act by focusing on the quality of his spending and reining it in so that everyday Kiwis don’t keep getting burnt by price rises that far outstrip wage increases.”

Wages haven’t kept up with inflation but they have pushed some people into higher tax brackets:

Grant Robertson must urgently respond to spiking inflation with an adjustment of tax brackets, says the New Zealand Taxpayers’ Union in response to Stats NZ’s latest inflation figures.

Union spokesman Louis Houlbrooke says, “At the Reserve Bank’s last forecast, inflation was expected to hit 5.7% in March, but inflation has already hit 5.9% – that’s two months early.”

“Inflation doesn’t just hammer New Zealanders with higher prices – it also means we pay more in income tax. As salaries scramble upwards to keep up with rising costs, New Zealanders end up in higher income tax brackets, despite being or worse off in real terms. Workers are whacked once with inflation, and again with a tax hike.”

“The dirty secret of inflation is that Grant Robertson benefits from it. More tax revenue means he can make bigger spending promises – spending that itself serves to bid up the cost of goods and services, fueling inflation further.”

“There is one simple thing the Grant Robertson can do to avoid the perception he’s got a vested interest in driving up inflation – he needs to urgently adjust tax brackets and index them to shift automatically to counter the effects of rising costs.”

Inflation is theft.

It steals the real value of wages and without an adjustment to tax brackets the government will be making life harder for people by taking even more from them


Misusing more money

04/01/2022


Taxing times

16/12/2021

This really is a taxing government:

The Government’s biofuel mandate will be another cost that will see motorists paying twice at the pump for carbon emissions, National’s Transport spokesperson Simeon Brown says.

“Every litre of fuel Kiwis use already faces an 18 cent cost under the existing Emissions Trading Scheme. Adding a biofuel mandate on top of that will simply be another cost for the same outcome already being achieved by the ETS.

“MBIE stated that the introduction of the biofuel mandate will increase the price of petrol by 0.4 cents per litre, diesel by 7.1 cents per litre, and jet fuel by 7.1 cents per litre (or 11.2 per cent).

“Overall, it is estimated the economic cost of the policy will be over $1.2 billion. Yet as New Zealand already has a cap on our emissions, there will be no reduction in New Zealand’s total emissions.

“Essentially, this is a policy to make it more expensive for New Zealand to achieve emissions reduction targets, and to make petrol and diesel more expensive at the pump.

“At a time when Kiwis are paying more for petrol at the pump than ever before, the Government needs to grant relief to motorists by removing the Auckland regional fuel tax at a minimum.

“The mandate will be particularly hard for farmers who are already facing the introduction of the new ute tax, as the biofuel mandate could increase the price of diesel by 7 cents per litre.

“While National is supportive of biofuels and reducing our carbon emissions, the Government cannot double dip into Kiwis’ pockets by taxing them through the ETS and the biofuel mandate.”

The taxing doesn’t stop at the petrol pump:

Grant Robertson is riding inflation to execute an unjustifiable tax grab, says the New Zealand Taxpayers’ Union in response to today’s Half Year Economic and Fiscal Update.

Speaking from the HYEFU Treasury lock-up, Union spokesman Louis Houlbrooke, “The Government is set to increase its tax take by an extra $7 billion each year for the next five years. That’s perverse in the context of a pandemic that has left businesses reeling and households facing rising living costs. New Zealanders deserve tax relief, but Grant Robertson seems proud to be taking more and more.”

“A major cause of Grant Robertson’s revenue bonanza is inflation, which is now forecast to hit 5.6% next year. Inflation this high should be intolerable – there’s a reason the Reserve Bank targets 1-3%. But rising living costs are made even more painful by the Government’s refusal to adjust income tax brackets to keep up.”

“Someone on the average salary ($58,836) is set to pay an extra $955 in income tax next year, assuming they’re lucky enough to get an inflation-level pay rise. Of course, their real pre-tax buying power will be no higher, so eitherway everyone is left poorer.”

“In response to a question from Brad Olsen of Infometrics, Grant Robertson flatly ruled out the adjustment of income tax brackets, and made no apology for his Government’s contribution to inflation via massive spending.”

“Tax brackets haven’t been adjusted for a decade. National and Labour might have thought taxpayers wouldn’t notice slow, inflation-driving tax creep, but with inflation curving up, the elephant in the room is now impossible to ignore.

“Taxpayers need relief from the corrosive effect of inflation. Grant Robertson’s refusal to acknowledge this is cruel.”

The government’s refusal to adjust income tax brackets adds more tax insults to the other taxing injuries it is inflicting on us:

Today’s Half Year Economic and Fiscal Update (HYEFU) confirms that despite a hot economy where everyone is competing for scarce labour and resources, Finance Minister Grant Robertson isn’t easing off his big debt-funded spend up and that will fuel inflation and hurt Kiwis, National’s Finance spokesperson Simon Bridges says.

“Improved macro fiscals like a higher tax take and lower expected net core Crown debt are all well and good, but that doesn’t wash with Kiwi families who are being burnt by price rises that far outstrip wage increases.

“Core government spending is forecast to run a whopping 68% higher since Labour took office this year. The HYEFU reforecast shows government spending remaining high even post-Covid.

“While elevated spending levels were appropriate through much of the pandemic, many economists and the likes of the Reserve Bank now confirm its an overheating economic picture where adjustments and some easing off is required. Otherwise Labour is just outbidding private players for land, building supplies, and motel rooms, and forcing prices up across the board.

“Not all spending is good investment and you can have too much of a good thing. What’s more, an awful lot of it is being funded by borrowing, which means it has to be paid back eventually.

“The real kicker though is that this spending is pushing inflation higher and that in turn is forcing the Reserve Bank to keep hiking up interest rates. More than half our inflation is from the non-tradables sector and so home grown, and at 4.9 per cent its growing faster than it has in over 30 years, much faster than in Australia (3 per cent), and much faster than wages at 2.4 per cent.

“Inflation is literally taking money out of Kiwis’ pockets and making us poorer. Whether it’s the mum at the supermarket, the tradie at the petrol station or the young person trying to buy a first home, inflation is making things much, much harder.

“With all Grant’s spending, it’s up to the Reserve Bank to come to the rescue, pushing interest rates higher than they might otherwise need to go.

“We are saying ‘rein it in a bit Minister’. Take off some of the pressure on inflation and interest rates and give Kiwis an economic fair go. Your hot economy is burning us.”

Inflation is theft – it steals the real value of money including wages and savings.

The government’s low value spending is adding fuel to the inflationary fire and the increase in interest rates that will follow will turn up the heat even more.


Jonsie Awards highlight waste

06/11/2021

The Taxpayers’ Union is often mislabeled right wing.

Championing taxpayers and sensible spending of their money is not partisan.

Wherever you sit on the political spectrum wasteful spending of public funds is abhorrent.

Not convinced? Have a look at the candidates for the annual Jonsie Awards,named after Hon Shane Jones, the winner of the inaugural Lifetime Achievement Award in government waste.

Union spokesman and Jonesies host Louis Houlbrooke says, “Taxpayers are likely to view the wasteful spending presented today in the context of the current pandemic. How, for example, can the Government justify spending $17 million on art therapy programmes when our DHBs are crying out for more resources in intensive care?”

“Similarly, local councils across the country have this year implemented record rate hikes, while failing to make the budgetary sacrifices experienced by households losing income during lockdown.”

“While the presentation of awards is tongue-in-cheek, it does serve a serious purpose: the Jonesies remind those who squander public money that they risk squandering their public reputation, and potentially, their careers. The awards give those who fleece the taxpayer the credit they so richly deserve.” . .

And the Lifetime Achievement Award goes to:

Hon Grant Robertson gained his political experience in student politics, even writing a dissertation on the subject, before graduating to roles at the Ministry of Foreign Affairs and Trade and the United Nations.

After stints advising Helen Clark and working for the University of Otago, he was elected as the MP for Wellington Central, the one seat that doesn’t seem to care about private sector experience.

In 2017 he was appointed Finance Minister for the Labour Government, and maintained a fairly conservative approach to public finances until the COVID-19 pandemic struck.

He announced a $12 billion COVID-19 Response and Recovery Fund and quickly topped it up by another $50 billion. This soon revealed itself to be a Provincial Growth Fund-style slush fund, only at far greater scale.

Examples of spending from the Finance Minister’s “COVID response” fund include $12 million for flood protection in the Far North, $26 million for cameras on fishing boats, $50 million for “regional digital connectivity”, $52 million for the horse racing industry, $55 million for “public interest” journalism, $87 million on internet modems for school kids (including Mike Hosking’s child), $100 million for affordable housing projects, $155 million for “Transformative energy” projects, $200 milion on a new building for the University of Auckland, $210 million for “Climate resilience” projects, $374 million in arts grants (including $17 million for art therapy programmes), $515 million for school lunches, $761 million to support Three Waters reform, and $1.2 billion on “jobs for nature” such as paying people to shoot wallabies.

Only about a quarter of the money was spent on wage subsidies.

Inevitably, the fund ran dry upon the arrival of a second COVID outbreak. Grant Robertson simply announced he would top it up by another $7 billion.

Grant Robertson’s “no new taxes” promise was also jettisoned at some point, with new taxes on housing investments and a new 39 percent tax rate for high-earners.

It is only fair that we give Grant Robertson the 2021 Lifetime Achievement Award for excellence in government waste – for making Shane Jones look like a symbol of lean and efficient government. . .

Nominees and winners in other categories can be found by clicking on the link above.

 


Stop Three Waters

27/10/2021

The Taxpayers’ Union has launched a campaign to stop the government’s three waters reform:

The campaign launch comes on the same day that Local Government Minister Nanaia Mahuta has announced a working group to tweak the reforms with an eye to forcing them on all local councils.

  • The Union has prepared a 30-second television ad and is crowd-funding to air this on prime time television and online. This ad is available to journalists upon request.
  • A campaign hub has been launched at www.StopThreeWaters.nz that presents key reasons to oppose the reforms. This site is supported with Google ads so it appears alongside the Government’s taxpayer-funded campaign site.
  • More than 65,000 New Zealanders have signed the Union’s petition against the reforms. The Union is updating these individuals and is ready to deploy them during any consultation period.
  • More than 20,000 New Zealanders used the Union’s email tool to contact their local councillors about the reforms. The Union will be launching a new email drive in the coming weeks, targeting Government MPs.
  • The Union has commissioned Curia polling showing 56% of New Zealanders oppose the proposed reform, versus just 19% in support and 24% unsure.

Taxpayers’ Union Campaigns Manager Louis Houlbrooke says, “Opposition to Nanaia Mahuta’s multi-billion dollar asset grab is already broad, energised, and well-resourced. With the Government now forcing these changes on local councils, the backlash will only intensify. We are calling on the Prime Minister to read the room and announce a CGT-style captain’s call to eject her Local Government Minister’s reforms entirely.”

New Zealanders concerned about the reforms can chip in to the campaign fund at www.taxpayers.org.nz/donate_three_waters.

The government’s proposals for three waters will add costs and bureaucracy, steal local assets and remove local control.

There are far better and less expensive ways to ensure that we have clean water.


Inflation steals from us all

19/10/2021

The last election took us back more than 25 years to a First Past the Post result and the government that gave us is giving us an increase in inflation from the same era:

The consumers price index rose 2.2 percent in the September 2021 quarter, the biggest quarterly movement since a 2.3 percent rise in the December 2010 quarter, Stats NZ said today.

Excluding quarters impacted by increases to GST rates, the September quarter movement was the highest since the June 1987 quarter, which saw a 3.3 percent rise.

Annual inflation was 4.9 percent in the September 2021 quarter when compared with the September 2020 quarter. This was the biggest annual movement since inflation reached 5.3 percent between the June 2010 and June 2011 quarters.

Excluding periods impacted by changes to GST rates, the September 2021 annual inflation was the highest since it reached 5.1 percent in the September 2008 year. . .

The Prime Minister who promised to address child poverty is leading a government that is fueling a sharp increase in the cost of living:

The Government needs to urgently recognise soaring inflation as the biggest medium-term threat to the New Zealand economy and halt its wasteful spending, says National’s Finance spokesperson Michael Woodhouse.

“Today, StatsNZ has confirmed what Kiwis all across New Zealand already know – the cost of living is rising fast under the Labour Government.

“In the past 12 months, the cost of living has increased by almost 5 per cent, meaning prices are now rising faster than they have at any time in the past 10 years.

“Grant Robertson has increased the size of government spending by more than 40 per cent in just four years. It is no surprise New Zealanders are now seeing costs increase all throughout the economy.

“Labour’s big spending is hurting the very people Labour claims to represent. The cost of renting a house has now increased 7.8% since just September last year, the biggest increase since records began.

“Prices of fresh fruit and vegetables have increased 9.3 per cent in the past 12 months.

“The increase in prices in just the last three months is the highest three-monthly increase since the 1980s, excluding the one-off increase in GST in 2010.

“The next big cost increase is unfortunately likely to now be mortgage costs as the Reserve Bank is forced to painfully increase interest rates as Kiwis and businesses try to recover from the current Covid outbreak.

“Grant Robertson needs to hit pause on any and all of his so-called Covid stimulus spending that is not fully committed. It makes no sense for the Government to be spraying cash at pet projects like the Green School when the biggest problems now facing the economy are inflation, labour shortages and Covid closures.

“The Covid Fund needs to be used to support businesses impacted by lockdowns and to ramp up the health response to Covid, not as Grant Robertson’s personal slush fund.”

The only winner from soaring inflation is the government that will collect more tax as pay increases push people into higher tax thresholds:

Responding to the revelation of 4.9% inflation for the last year, Taxpayers’ Union spokesman Jordan Williams says:

“Skyrocketing prices are an indictment on the Government’s print, borrow, and spend economic strategy. In general, Government spending is more inflationary than leaving money in taxpayers’ pockets, and Grant Robertson needs to shoulder some of the blame for today’s numbers.”

“The need to adjust income tax brackets has now become desperate. Inflation pushes our wages up into higher tax brackets even when we’re no better off in real terms. Grant Robertson might be pleased to get his hands on all this inflation-driven tax revenue, but during a pandemic this tax grab is unconscionable.”

 

 

It steals from us all, devaluing the real value of wages and savings by making everything more expensive.

It creates a vicious circle. When people know things will cost more in the future they are much more likely to buy more today. That feeds inflation which encourages people to buy more . . .

It will almost certainly force an increase in interest rates which will make mortgages unmanageable for the highly indebted and add to the costs of doing business which will in turn push up prices and that will feed into higher inflation and all of this will hit the poorest hardest.


Interest rates rising

07/10/2021

The cost of borrowing is going up:

The Monetary Policy Committee agreed to increase the Official Cash Rate (OCR) to 0.50 per cent. Consistent with their assessment at the time of the August Statement, it is appropriate to continue reducing the level of monetary stimulus so as to maintain low inflation and support maximum sustainable employment.

The level of global economic activity has continued to recover, supported by accommodative monetary and fiscal settings, and rising vaccination rates enabling a relaxation of mobility restrictions. While economic uncertainty remains elevated due to the prevalent impact of COVID-19, cost pressures are becoming more persistent and some central banks have started the process of reducing monetary policy stimulus. . .

This is a response to a steep increase in inflation:

Headline CPI inflation is expected to increase above 4 percent in the near term before returning towards the 2 percent midpoint over the medium term. The near-term rise in inflation is accentuated by higher oil prices, rising transport costs and the impact of supply shortfalls. These immediate relative price shocks risk leading to more generalised price rises. At this time, measures of core inflation and medium-term inflation expectations remain close to 2 percent.

The Committee noted that further removal of monetary policy stimulus is expected over time, with future moves contingent on the medium-term outlook for inflation and employment. . . 

The Taxpayers’ Union lays the blame for the increase at the government’s door:

“Today’s OCR hike – which will see households squeezed with hire mortgage payments, is a direct result of the Government’s reckless spending over the last 18 months. Even worse, with COVID’s economic shock now coming, it comes at the very worst time for households.”

“The Government needs to do all it can to focus on quality, not quantity, of spending. Its programme of money-printing and borrowing for political purposes has pumped up inflation to unacceptable levels and left future generations of taxpayers with a debt monster. Higher interest rates will increase the financial pain caused by that debt.”

It’s a risky move:

Today’s move by the RBNZ to raise the Official Cash Rate by 0.25 per cent to 0.5 per cent shows the bank has been forced to make the risky move despite two major New Zealand cities still being locked down, says National’s Shadow Treasurer Andrew Bayley.

“The Government’s failure to rollout the vaccine and prepare our Covid defences has resulted in the Reserve Bank having to make this decision in the middle of lockdown, which is incredibly risky for the economy.

“Obviously, the Reserve Bank has seen that the cost of living is rising too quickly, and its hand has been forced. This has been exacerbated by huge amounts of wasteful, untargeted spending from the Government on matters entirely unrelated to the Covid response.

“As a result of the Government’s lack of fiscal discipline and failure to prepare for another Covid outbreak, mortgage-holders and businesses are now set to face rising interest costs at a time they can least afford it.

“The Government should now take a cue from the Reserve Bank and rein in its wasteful spending and focus unrelentingly on its Covid response, and ensuring businesses survive the current extended lockdown.” . . 

The announcement has already led to an increase in interest rates:

It took just a few minutes for ANZ to announce it was increasing its floating and flexi rates by 0.15 percent. . . 

No doubt other banks will follow.

It’s a small increase on what was a historically low rate and is unlikely to bring much cheer to savers.

But it could bring woe to some borrowers.

A small increase on a big amount, which many who have bought into the overheated housing market have borrowed, could be more than some can afford.

The younger ones among them might not have seen interest rates in double digits and will have no memory of the 1980s when inflation and interest rates were raging.

Like most conventional sheep and beef farmers then, most of our income came in a couple of big chunks when we sold our lambs and wool. That was always several months after our major costs had to be paid so we survived on seasonal finance and at the peak we were paying around 26% for everything we bought for the farm and household.

Thanks to the “failed” policies of the 80s and 90s, such eyewatering interest rates should be consigned to history.

That won’t be of any comfort to home and business owners whose finances are already stretched and for whom even a very small increase in interest could stretch them too far.


Pravda Project at work

01/10/2021

Is the media biased?

I can understand reluctance to give any oxygen to conspiracy theories, but it is possible to write a story on this extraordinary response without doing that.

 

Could the reluctance to report this have anything to do with the Public Interest Journalism Fund which Karl du Fresne calls the Pravda Project.

. . . Judith Collins and David Seymour were putting the heat on Jacinda Ardern over Labour’s so-called Public Interest Journalism Fund. Collins wanted to know whether the fund – applicants for which must commit to Treaty principles and support for te reo, among other things – was influencing the editorial decisions of media outlets. Seymour more pointedly asked what would happen to a media outlet that had accepted money from the fund but wanted to report something deemed inconsistent with Treaty principles.

Ardern brushed off the questions as if they weren’t worthy of an answer, but that’s by the bye. What interests me is whether the exchange in the House was reported by any media outlet that has accepted, or has its hand out for, money from the fund.

This highlights another potentially disturbing and insidious aspect of the media slush fund. Can we expect mainstream media outlets to report criticism of the fund or possible revelations and concerns about its misuse, or will that be left to independent journalists such as Adams?  

You see what’s happening here? I’m already wondering whether the media are choosing to ignore stories about the fund that might not reflect favourably on it or them. The mere fact that it’s necessary to ask this question shows how media companies compromise their credibility by accepting money from a highly politicised government agency.  

Incidentally, “Public Interest Journalism Fund” strikes me as a bit of a mouthful, and time-consuming to type, besides. So I’m giving it a shorter, punchier name: the Pravda Project, after the old Soviet Union’s esteemed official press organ, on the assumption that the PIJF will exhibit the same fearless independence and unstinting commitment to the truth. 

Michael Basset has similar concerns:

. . . The availability of money, coupled with a completely absent sense of constitutional propriety, appear to offer the divine intervention Ardern and Robertson need going forward. Their gig is to bribe the media in the run-up to the next election in the hope that they will save Labour. This is happening in two ways. First, the direct distribution of cash from the Public Interest Journalism Fund aimed at keeping the media on side until the next election. All the big daily papers have dipped into it already, and applications are now open for a further swag of taxpayer money. The second way the government is trying to keep the media on side is by over-paying them for printing the masses of Covid announcements. I’m reliably informed that the government negotiated none of the regular discounts available to those who advertise on a grand scale in newspapers and TV. The expectation is that none of the media greedies will bite the government hand that feeds them. Or not very hard.

If my information is correct, it is corruption, pure and simple. In normal circumstances there would be rebellion. But in the topsy-turvy world of this pandemic, I’m not sure that anyone any longer cares much about constitutional propriety.

Privately owned media has a lot more leeway in what it chooses to report and how it reports it.

But publicly owned media has a much greater responsibility to be balanced and fair.

Regardless of whether its privately owned or publicly, the Pravda Project makes it look like the media is softer on the government and harder on the opposition which leads it wide open to accusations of bias.


But the $billion bridge

04/08/2021

Every government gets priorities wrong and makes expensive mistakes.

The proposal to build a walking and cycling bridge across Auckland Harbour is one of the stupidest examples of wasting money on a luxury when there are so many necessities going unfunded.

That is was announced when the government is living on borrowed money; had announced it wasn’t funding other previously promised road projects, and flooding had cut the South Island in two at the Ashburton bridge made it even more difficult to accept.

The cost was given as about $700,000 but delays, difficulties and price increases would easily turn that into $1 billion – and that is a billion that is sorely needed elsewhere.

The political problem for the promotors of such a stupidity is that it will be thrown up every time any other plea for funding is turned down.

National’s Finance spokesman Michael Woodhouse points out higher priorities:

The projects Labour is choosing to spend hard earned taxpayer money on speaks volumes around its priorities, National’s Finance spokesperson Michael Woodhouse says.

“Kiwis across the country dealing with potholes and unsafe roads, and Aucklanders sitting in deadlocked traffic, would’ve questioned the reasoning behind investing $785 million on a cycle bridge that will only benefit a small number of people.

“Those same Aucklanders stuck on the harbour bridge will be wondering why the Government is so obsessed with light rail that it would rather spend upwards of $15 billion on it than a much needed second harbour crossing.

“New Zealanders would’ve struggled to understand how the Mongrel Mob, an organised criminal group known for peddling drugs and violence throughout communities, was more deserving of $2.75 million than the ‘I Am Hope’ support group which provides free counselling for youth struggling with mental health issues.

“Our underappreciated nurses are sick of being side-lined while the Government funnels half a billion dollars into a health restructure and bureaucracy. They’ve had enough and they’re striking to show it.

“We’ve got 4000 children being raised in motels exposed to intimidation, violence, drug deals and gang involvement. The Government should be making it easier to build houses and making sure these families have access to safe and secure homes. Instead it’s bought one motel for $8 million.

“The consequences of this poor quality spending by Labour is higher taxes and more debt.

“New Zealanders deserve a Government that prioritises their health, safety and wellbeing.

“Labour has made its priorities very clear, and they involve funding the Mob over mental health support for young Kiwis.”

What does it say about Labour’s priorities when:

Nurses are striking because their case for better pay and conditions has been turned down but the government is going to spend $1 billion on a bridge.

Hospitals are in crisis mode with 30,000 people overdue for treatment but the government is going to spend $1 billion on a bridge.

More than 4,000 children are living in motels but the government is going to spend $1 billion on a bridge.

Except now, maybe because Sunday’s poll showing the government has dropped in popularity, maybe because more than 80% of people polled opppose it,  or maybe just because common sense has asserted itself, it’s probable the government has accept that it’s a bridge too far:

Deputy Prime Minister Grant Robertson wants the Government to bring forward work on a second Waitematā crossing, likely to be a tunnel.

It is understood that the Government is also considering scrapping its $785 million walking and cycling bridge over the harbour.

On Tuesday, Robertson would not confirm that the walking and cycling bridge would definitely be going ahead, only that the bridge was the current proposal.

When asked whether he would renege on building the bridge, Robertson said “we continually look at the network and the programme to make sure that it works well”. . . 

Given there is no doubt that the proposed bridge is deeply unpopular, and so much else in Auckland’s transport system is not working well, this can be taken to mean that the current proposal will be shelved.

The Taxpayers’ Union applauds the probable u-turn:

. . .“This proposal has perhaps been the Government’s worst political misfire. Even Labour supporters don’t want a gold-plated bridge for the sake of the Takapuna lycra mob – especially when other parts of our transport system, used by a wider range of New Zealanders, have gone neglected.”

Given there is no doubt that the proposed bridge is deeply unpopular, and so much else in Auckland’s transport system is not working well, this can be taken to mean that the current proposal will be shelved. . . 

Dare we hope this is the start of the government focusing on high priorities and not other boondoggles like the billion dollar bridge?


Perspective

03/06/2021


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