More tax and bigger budget hole

September 14, 2017

Labour has been frightened into saying it won’t implement any recommendations of its tax working group until after the 2020 election.

But a Labour led government would still add the water,  regional fuel and visitor taxes; reverse the income tax cuts that every party but Labour voted for; and bring farming into the ETS.

And if they don’t introduce new taxes their Budget will have a bigger hole.

A Taxpayers’ Union media release points out:

The Taxpayers’ Union says Labour can’t have it all ways, pointing out that Labour’s manifesto is costed at $23 billion over the next Parliamentary term, second only to New Zealand First.

“Labour have done the right thing in committing to put any capital gains or land tax to the vote,” says Jordan Williams, the group’s Executive Director. “But without new revenue, and having promised new spending of $13,287 per New Zealand household, Labour need to explain what spending they’ll cut in order for Grant Robertson to keep to the Party’s debt targets.”

“Two plus two doesn’t equal five.  Labour can’t credibly promise to hike spending, keep to their debt limits, but also say they won’t hike taxes.  It just doesn’t add up.” . . 

The only way to spend more without taking more in tax is to increase debt.

Labour’s fiscal plan shows it would reduce debt more slowly than National would.

The plan also had a hole, unless you believe a Labour-led government would run zero Budgets.

Ruling out a Land and Capital Gains Tax in the next term is the right thing to do but it will make the hole in Labour’s budget bigger.

 

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Rob today’s poor to pay tomorrow’s rich

August 30, 2017

A leaves school and gets a job. A doesn’t have much in the way of qualifications or experience and the pay reflects that.

B leaves school and goes to university. B isn’t sure why s/he’s there, what to study or what s/he wants to do, mucks around and drops out.

C leaves school and goes to university. C loves to party and does, work suffers, s/he fails and drops out.

D leaves school and goes to university. D studies well enough, graduates and goes overseas.

E leaves school and goes to university. E loves to party but manages to do enough work to get by, graduates and gets a job, parties less, works more and gets well paid.

F leaves school and goes to university. F gets a qualification which doesn’t provide a meal ticket but manages to find a job with average pay.

G leaves school and goes to university. G works hard, gets well qualified, gets a good job and earns well above the average income.

H leaves school and gets a job, works hard, saves hard, decides s/he needs a qualification, goes to university, works hard, graduates and sets up a business which booms.

I could continue through the alphabet with the many and varied scenarios about people who choose to get a tertiary education.

Not one of them would provide a good reason why A should pay more tax to help people who don’t know why they are at university, don’t work and drop out; or do graduate and leave the country, or graduate and earn $1.6 million more on average over their lifetime than those who do not:

 That is a huge personal benefit which is why we say that they should contribute something towards the cost of that degree. Not a huge amount – usually $20,000 or so. A great investment for a $1.6 million return.

That is an average of $40,000 more a year for a 40-year working life than someone who doesn’t have a tertiary qualification.

Why should a waitress, truck driver, tradesperson, receptionist or anyone else pay more tax to give even more help to people who will go on to earn so much more?

Fee-free tertiary education is Robin-Hood reversed:

The implementation of a zero fees policy for tertiary education would reach into the pockets of the disadvantaged, to line the wallets of the future’s wealthy, according to a briefing paper just published by the Taxpayers’ Union.

‘Robin Hood Reversed: How Free Tertiary Education Robs Today’s Poor for Tomorrow’s Rich’ assesses the impacts of free tertiary education policies, like that announced today by the Labour Party.

Jordan Williams, Executive Director of the Taxpayers’ Union said, “We found that similar policies overseas have led to job shortages in crucial areas, and poorer quality courses.”

“Contrary to claims that zero tertiary education fees help the poor, in Scottland, which introduced zero fees in the early 2000’s, students from low socio-economic groups were the first to be shut out. This contradicts the political ideology of those who advocate for it, because the policy hampers social mobility, and actually increases barriers to reducing inequality.”

“The costs of such a policy are borne by low and middle-income earners, to help tomorrow’s rich get a free ride.”

The briefing paper, Robin Hood Reversed: How Free Tertiary Education Robs Today’s Poor for Tomorrow’s Rich, is available for download at: www.taxpayers.org.nz/robin_hood_reversed.

Key findings: 
• Taxpayers already cover 84 percent of the cost of obtaining a tertiary degree.
• The average household currently pays $2,456 in tax per year to fund tertiary education.
• Fully implemented, Labour’s proposal would increase that cost by $852.57 per year.
• Low and middle-income earners will pay more to subsidise tomorrow’s rich.
• Likely effects of the policy, based on the experience in Scottland with its zero fees policy, include:
o more job shortages in crucial skills-based areas;
o lower quality tertiary education;
o less access to education for students from disadvantaged or low socioeconomic backgrounds; and
o less social mobility and entrenched income inequality. 

A better educated population benefits a country, but there is also a considerable personal benefit from an education.

There’s a choice – students can continue to pay a small proportion of the cost of their education while they’re studying or everyone pays more tax forever.

Anyone with the intelligence to get a degree should be able to work out that they, and the country would be better off paying a little more for the few years while they’re studying than a lot more for the many years ahead when they’re working.


About the $158,000

August 28, 2017

Winston Peters has admitted to a mistake he said was fixed:

Some media contacts have called to alert me about a possible story about superannuation.

“From what I can glean it is about the following:

• In early 2010 I applied for superannuation, in the company of my partner, and in the presence of a senior official at the Ministry of Social Development.
“In July of this year, I was astonished to receive a letter from the Ministry to advise there was an error in my superannuation allowance and a request that I meet with them.

“I immediately contacted and met the area manager of MSD.

“It was unclear on both sides how the error had occurred leading to a small fortnightly overpayment.

“Suffice to say, we agreed there had been an error.

• Within 24 hours the error and overpayment had been corrected by me.
• I subsequently received a letter from the area manager thanking me for my prompt attention and confirming that the matter was concluded to the Ministry’s satisfaction.

“I am grateful to the Ministry for their courtesy and the professional and understanding way they handled this error.

“Like the Ministry I believed the matter had been put to rest.”

Newshub reports that in typical Peters fashion he refused to answer questions on the issue when it was first raised with him.

A transcript of the conversation is here.

The Social Development Ministry says it cannot comment until it gets a privacy waiver from Mr Peters.

If his past behaviour is any guide he probably won’t give it.

But on the face of it, this appears to be a mistake although it’s not clear whether it was the Ministry’s mistake of Peters’.

If it was his, it’s not a good look for a man who wants to be a Minister. If it was the Ministry’s they need to improve their systems.

Whoever made it, no-one is saying it was deliberate and Peters has paid back whatever he was overpaid.

The Taxpayers’ Union has congratulated him for doing that but adds:

But while we’re on the subject of repaying public funds – that $158,000 of taxpayers’ money NZ First illegally spent in the 2005 election, can we have that paid back too?”

He has in the past said he paid the money to charity. Whether he did or not, and there are doubts over that,  the money wasn’t owed to any charity, it was owed to the public purse from which it was wrongly taken.

UPDATE:

Newsroom reports:

New Zealand First leader Winston Peters took higher superannuation payments than he was entitled to for seven years – while living with his de facto partner – and has been required to pay back $18,000 to the state.

Peters filled out forms when he turned 65 that qualified him for the single person’s superannuation rate, which is about $60 a week higher in this case than a person would receive if declared to be living with a partner, which he was. . . 

The application form asks:

Do you live alone?
I live with my partner Go to question 32
I live with other people Go to question 28

Questions 32 – 36 ask:

What is your partner’s full name?
What is your partner’s date of birth?
Day Month Year
Is your partner:
Male Female
What is your relationship status with your partner?
Tick one of the following boxes
Married In a civil union In a relationship

Are you living at the same address as your partner?
No Yes Go to question 38
Where does your partner live?

At the very best getting the answers to those questions wrong was very, very careless.


Bribe-o-meter

August 16, 2017

The Taxpayers’ Union has updated its Bribe-O-Meter which costs party policies;

Opposition parties appear to be spending up to the rafters with sets of policies many times more expensive than the last election. New Zealand First is pushing the boundaries of fiscal free-spiritedness, so far promising $22.9 billion in new spending over the next electoral term. Labour is close behind with $18.9 billion, followed by TOP at $10.7 billion and the Green Party with $8.1 billion.
 
The incumbent governing parties have been much more controlled. Somewhat surprisingly, given the size of the party, United Future has promised the most with $4.7 billion in new spending. The National Party are still keeping the powder dry, promising just $2.5 billion of new spending over the next Parliamentary term.
 
The Maori Party are still yet to release their manifesto, so the costings to date only include IwiRail – estimated at $1.6 billion. ACT is the only party who have promised a net cut in government spending. Its manifesto would see a reduction in spending of $5.4 billion over the next three years.

KEY FINDINGS (AS OF 14 AUGUST):

  • National has promised $2.5 billion in new spending over the next parliamentary term. This equates to $1,453 per household.
  • Labour has promised $18.9 billion in new spending over the next parliamentary term. This equates to $10,952 per household.
  • The Greens has promised $8.1 billion in new spending over the next parliamentary term. This equates to $4,692 per household.
  • New Zealand First has promised $22.9 billion in new spending over the next parliamentary term. This equates to $13,291 per household.
  • ACT has promised $5.4 billion in taxpayer savings over the next parliamentary term. This equates to $3,103 in savings per household.
  • United Future has promised $4.7 billion in new spending over the next parliamentary term. This equates to $2,737 per household.
  • The Maori Party has promised $1.6 billion in new spending over the next parliamentary term. This equates to $899 per household. Although this only includes one policy (the Maori party manifesto is yet to be released).
  • The Opportunities Party has promised  $10.7 billion in new spending over the next parliamentary term. This equates to $6,199 per household. . . .

Labour wants consent to farm

August 12, 2017

Labour’s water tax policy holds a sting in its tail:

Farmers and horticulturalists face the prospect of resource consents if they want to make a shift in land use under a Labour government.

Buried in Labour’s water policy announcement was its intention to dump the National Policy Statement on Freshwater Management and replace it with a policy based on recommendations made by Environment Court judge David Sheppard in 2010.

Sheppard’s recommendation was any increase in farming intensity including more livestock, irrigation or fertiliser would no longer be permitted under the Resource Management Act unless a resource consent was obtained.

That suggestion was shelved by National when it instead opted for the policy statement on freshwater management now in play.

Federated Farmers water spokesman Chris Allen said he was surprised to learn about the resource consent provision in Labour’s policy, which had less profile than the water royalty charges mooted.

“But take that along with the water charges and they have just added another level of burden and cost on producing food in this country.

“It would seem the $18 cabbage will become more of a reality.”

He also challenged the costs the consent conditions would bring.

“This will require a significant increase in the number of people skilled to work in this area of consenting.

“Even here just in Canterbury right now we cannot get enough of those people, let alone throughout NZ.”

He said Labour’s water package taken in its entirety should have all New Zealanders concerned. . .

Water New Zealand has joined the critics of the policy:

. . . “It is only fair that some of the profits from the taking of water are returned to communities to help restore degraded water quality,” says Chief Executive John Pfahlert.

But it’s not fair that people who are already doing everything they can to protect and enhance waterways and in areas where there aren’t quality problems should pay for clean-ups elsewhere.

In principle it acknowledges the value of water and its huge contribution to our economic security and way of life.”

He says he can understand why voters would be attracted to policies that include charging big commercial users such farmers who rely on irrigation and water bottling companies. But he believes a fairer approach would be to charge everybody who uses water.

“Why target farmers and water bottlers and not industrial and domestic users in order to ensure that water is used efficiently across all sectors?”

John Pfahlert says it is important that there is a consistent approach to any policy on water and water pricing and not a knee-jerk response to opinion polls.

He says although publicly appealing, this policy raises many difficult questions.

“Currently the Government’s view is that nobody owns water. This policy takes the view that everybody owns the water.

“This shift in ownership status would raise questions of the rights of Maoridom who could legitimately claim a share of ownership under the Treaty of Waitangi.”

John Pfahlert says there are also questions around the mechanisms that would be used to impose a charge on water consent holders and irrigators.

“It would probably mean there would need to be retrospective legislation and this would raise many fish hooks for farmers and for the government.”

Massey University agribusiness expert Dr Jame Lockhart says the policy is the wrong solution to the wrong problem:

Dr Lockhart says the policy has been borne out of unsustainable growth by the dairy industry and foreign-owned bottling plants exporting water at no cost and creating little, if any, benefit to New Zealand.

“There is no doubt that some of our waterways have degraded with the intensification of land use,” he says. “This is due to many things – water extraction for irrigation, reducing flow levels, is only one. But if these are the problems that Labour is trying to solve, then the policy cabinet is full of tried and true methods to rectify them.”

He says the impact on farmers will be immense, especially those in regions where water supply is at risk, including the Heretaunga Plains, Marlborough, Nelson, Canterbury in particular and North and Central Otago.

“If this tax, and it is a tax, is at the levels being mooted, there could be as much as $500-600 billion to be paid by irrigation users, including vegetable growers, vineyards, and orchardists. Agriculture and horticulture is being asked to bear the entire burden for the nation’s water use and the degradation of its waterways.” . . .

The policy also raises questions over property rights and Treaty claims.

“Due to the abundance of water in New Zealand, we have not assigned value to it in the way we should. That means New Zealand has built an agricultural and horticultural sector around water being free, while the volumes used are regulated to some extent, all the costs to date are around access and application, such as storage, pumping and distribution.

“So, if a business has its own harvesting and storage, does it pay the same royalty as a business that takes artesian groundwater or surface water? At that point some fundamental property rights are being removed from those who have invested in their own systems.”

He says the thorny issue of who owns water in New Zealand has, until now, been something that successive governments have tried to avoid.

“Who owns water in New Zealand? Right now, Labour is saying that if they become government they do. At that point, water ownership becomes highly contestable and immediately opens the door for another round of Treaty claims.”

There are also anomalies in the policy, Dr Lockhart says, including during periods of drought.

“Labour appears to be offering some leniency during drought events so when water has the most value to the agricultural and horticultural sectors, and the environmental consequences are greatest, the tax will be either lowered or removed completely. That shows it is not an environmental issue they are trying to solve at all.

“Labour is boldly going where no government has gone before – but this is looking largely punitive as opposed to being a deliberate effort to restore the quality of our waterways.

“The policy simply has not been thought through as anything other than a vote gathering exercise. Our tax system should not be built on the principle that someone has to do worse for you to do better.”

This is echoed by the Taxpayers’ Union:

Labour’s Water Tax policy is quickly becoming the laughing stock of public policy circles with parallels being made to its infamous 2014 NZ Power policy – which, ironically, saw the very industry which escapes the Water Tax whacked with an economic gorilla.

Jordan Williams, Executive Director of the Taxpayers’ Union says, “Three week’s ago, if Andrew Little got up and announced a new water tax, but couldn’t answer how much it is, he’d have been laughed off the stage”.

“How can Labour credibly protest against industry claims that cabbages will cost $18 and grocery bills will sky-rocket when they can’t put a single number next to their policy?”

“As much as NZ Power was laughed at, at least David Cunliffe had some numbers.”

Minister for Primary Industries said the policy is like sending farmers a blank invoice.

Labour has little understanding of farming and very few MPs outside Auckland and Wellington.

Perhaps that’s why they haven’t joined the dots between the profitability of farming and those who service and supply the industry, nor between the costs of food production and the cost of food.

 


One week two taxes

August 10, 2017

It’s just over a week since Jacinda Arden took over as leader of the Labour Party and she’s already announced two new taxes.

The first was a fuel tax :

The Labour Party might have changed its leaders but where it wants to take New Zealand hasn’t changed, National Party Campaign Chair Steven Joyce says.

“By resurrecting a decade-old idea of charging Aucklanders another tax it’s now clear why they had to abandon the “fresh approach” line,” Mr Joyce says.

“Regional Fuel Tax was Labour Party policy back in 2007 and it has been rejected by voters many times since then. It’s about as tired as R&D tax credits.

“Labour would make Aucklanders pay at least another 10 cents a litre every time they fill up their tank and that’s just for starters. That would have a real impact on the cost of living for hard-working Aucklanders.

“And it would probably spread around the country. Last time around, Wellington and Canterbury were lining up for regional taxes too. There is also no national price so fuel companies could easily transfer the cost to motorists around the country.” . .

The second is a water tax.

 A Labour-led government would implement royalties for bottled water, irrigation schemes and other commercial uses, leader Jacinda Ardern told the Environmental Defence Society’s annual conference in her first major policy speech on environmental policy since becoming party leader last Tuesday.

Drinking water, stockwater for farms, and ‘non-consumptive’ uses such as hydroelectricity generation would not face the charges, which would be set following a national conference of affected industries and water users within the first 100 days of the new government, Ardern said. . .

What happens when irrigation water is also used for stock?

Why is water for stock to drink seen as a more virtuous use than water to grow grass for stock to eat?

Farmers are understandably worried:

Pledges from Labour to consult on a “proportionate and fair” royalty for irrigation water have eased the concerns of farmers – but only by a tiny margin.

They remain terrified by the potential impacts on farming families, rural communities and the entire economy.

Federated Farmers water spokesperson Chris Allen said consultation is welcome “but talking won’t allay the fears of farmers of where this could go”.

The Federation remained opposed to any royalty on irrigation water, especially when it remains unclear what purpose it would serve, other than adding another tax.

“At least Labour appears now to be proceeding with caution, recognising the considerable risks. They’ve promised that if they are part of a new government, deciding the levels of any royalty on commercial use of water will be preceded by consultation.”

Mr Allen said the 10 cents a litre figure some had bandied around would bankrupt farmers and cripple our export competitiveness and regional economies. Even one thousandth of that figure, if that’s a level Labour has in mind, would be “eye-watering” given the volume of consumptive water use.

“With any royalty, farmers and growers would have little choice but to pass on the extra cost, if they could, meaning New Zealand consumers would pay more for food, and our products would be at a disadvantage against imports.”

Farmers recognised some positives in the Labour policy announcements. They would applaud that riparian planting would qualify for carbon credits under the Emissions Trading Scheme, “but we hope this is not a hint of a policy announcement to come on including animal emissions in the ETS”.

And the idea of activating young people who are out of work to join water quality improvement projects is worthwhile.

“That will get young people out on the land and more familiar with the farming sector, and they’ll get to experience – and help with – the large amount of environmental enhancement work farmers are already doing.”

But the whole exercise of adding a new tax on water, even if the revenue is shared with regional councils for water quality work, “is counter-productive, and a money-go-round with administration costs added in.

“Farmers are working hard to live within the limits imposed by environmental standards and the desire by all New Zealanders – farmers included – to clean-up water quality hot-spots.

“Adding an extra cost in the form of a water tax drives a perverse incentive for farmers to intensify their activity, and deprives them of income that at worst puts them out of business and at best leaves them with less money to spend on environmental protection work.”

Labour has pledged to consult, and Federated Farmers would take that opportunity, Mr Allen said.

“If we can get round a table with them, we’ll be able to talk them through all the downsides of what they’re proposing in a rational way. This needs to be done without the distraction of a general election.”

Federated Farmers believes an important principle is that if there’s to be a charge for commercial use of water, it should be paid by all, with no room of discrimination.

“If you’re going to be stupid enough to bring this in, it’s got to be fair.”

DairyNZ chief executive Dr Tim Mackle said Labour’s proposal to introduce a water royalty for commercial water users would be difficult and require extensive consultation around the regions.

. . .“Within a farming business, just like any business, commercial water rates already apply. Our farmers also pay for access to irrigation, and access to water on their land through council consents. Water royalties could potentially duplicate these costs.

“Labour earlier hinted that such a levy wouldn’t result in a cost increase for farming, but without a robust conversation about how their water royalty policy will work we can’t know exactly how this would affect dairy farmers.” . .

Horticulture NZ says “Let’s not do this“:

“Extra costs on growers of fresh, healthy fruit and vegetables will make healthy food more expensive,” Horticulture New Zealand chief executive Mike Chapman says.

“This seems incongruous with policies around alleviating poverty and the benefits of healthy eating to reduce the economic burden of secondary health issues as a result of obesity.

“Horticulture New Zealand supports sound, consistent water policy to support efficient use of water and we have issued our own such policy (available here).

“But we do not support a blanket tax without due consideration of New Zealand’s water priorities as a nation. These priorities must include water for drinking, sanitation and food production.

“Today’s statement does not provide sufficient detail about Labour’s intentions, which should be made clear prior to the election. We don’t feel it is enough to say that if Labour forms the next Government, there will be a conversation about water within the first 100 days.

“There is already the Land and Water Forum which has been working on the wider issues of water allocation, rights and use for some time.

“Horticulture is a rapidly growing industry, contributing significantly to the economic wellbeing of New Zealand. Our vision is healthy food for all forever. We do not want to see the cost of fruit and vegetables grown in New Zealand, supporting local economies and providing jobs, pushed up higher than the cost of imported or processed food. We do not believe the long-term outcomes from a blanket water tax would benefit New Zealanders.”

The Taxpayers’ Union says a water tax shouldn’t pick and choose:

“Picking and choosing who pays what ‘water tax’ and changing the tax rate based on its use, is economic silliness,” says Jordan Williams, Executive Director of the Taxpayers’ Union

“In principle, a case can be mounted for charging users of water. However, Labour’s proposal seems more focused at the users, than the actual use.”

“If Labour is genuine in charging a ‘fair’ amount for water, why hasn’t it backed tradable permits for water? That’s a far more efficient, fair, and environmentally beneficial system than royalties payable by some users.”

“Jacinda Ardern comparison to royalties on oil and gas is a bit silly. Labour’s water royalty policy is akin to saying, they’ll charge oil drillers if the oil is used to make asphalt, but not if it’s used for plastics. Our point is that a water royalty should treat industries the same – rather than pick and choose.”

“The most disappointing thing about today’s announcement is that it’s really just another tax on business and entrepreneurship.

With the Treasury swimming in money, Labour should be explaining how it will lower the tax burden to get Kiwi businesses ahead – not saddling industry with even higher tax bills.”

Taxing water for bottling will be popular with voters even though a tiny amount of available water is involved and there’s a danger of it being regarded as an export tariff.

But why tax water for bottling unprocessed but not the water that is processed into beer, wine and other beverages? Or will the spring water at Speights be taxed too?

Taxing irrigators might be popular in some places until the consequences become apparent – higher costs for milk, meat, fruit and vegetables.

But popular isn’t necessarily good and the water tax is unfairly targeting a small number of businesses, most of which are in Canterbury and Otago.

Most of these will have fenced and planted waterways and already be doing everything else they can to protect and enhance water on or near their farms. It is unfair and unreasonable to take money from them to clean up other people’s messes elsewhere.

It is especially unfair for those of us who have to adhere environmental farm plans which are independently audited each year, where the only problem with nearby water is E.Coli from seagulls and where we pay the costs of water to provide environmental flows in the Waiareka Creek.

Some of the money would go to regional councils the rest would be absorbed into the consolidated fund, to be used for Treaty settlements, where there is no need for it.

The government is forecasting surpluses for years ahead, there is no need for any new taxes unless there are compensatory cuts elsewhere.

The water tax is Labour’s attempt to hide its economic profligacy under environmental camouflage.

Two new taxes in one week prove that the party has a new leader but nothing else has changed including its tax and spend policies.


Woolly thinking isn’t answer to wool woes

July 11, 2017

New Zealand First is trying to court farmers and has come up with a policy that takes us back to the 1970s:

Clearly Winston Peters has had a flashback to the 1970s when he was MP for Hunua under Rob Muldoon with this ‘Fortress New Zealand’ proclamation that under his watch no civil servant would walk synthetic again.

Earlier today, Peters issued a press release setting out NZ First’s ‘carpet policy’which favours wool and fibre over everything else.

Taxpayers’ Union, Executive Director, Jordan Williams says “While some will be scratching their heads that 76 days out from the election Winston Peters’ priority is the carpets, the issue is actually an important reminder of why taxpayers must be ever-vigilant”.

“Carpets, as well as all other government supplies, should be selected on value for money alone. This sort of crony favouritism by politicians is exactly the sort of thing which sent New Zealand bust in the early days of Peters’ career”.

“Here’s hoping Peters’ release is merely an ill-timed joke and that he hasn’t come full circle”.

It isn’t a joke. It’s a policy and one farmers don’t want.

Wool is in the doldrums but a return to the woolly thinking of the past when political interference and subsidies were the norm is not the answer, especially when the $120 million it would cost would be better spent elsewhere:

NZ First’s ‘carpet policy’ announcement this morning, to line all Government offices with woollen carpets, would cost approximately $120 million, based on the Government Property Group’s estimate of Government floor space.

Executive Director of the Taxpayers’ Union, Jordan Williams, says “While smarter carpets for government bureaucrats may be appealing to some, in comparison to what $120 million will buy you in nurses, policeman or teachers, we’re not so sure.”

“In another context, $120 million is the income tax take of over 6,000 average New Zealand households. The Taxpayers’ Union questions whether taxpayers would really get $120 million of value for bureaucrats having woollen carpet and a more comfortable walk around their office.”

“In the lead-up to the election, we would encourage all political parties to provide costings with their policy announcements. If not, the Taxpayers’ Union will be here to help.”

Notes:
• Using a standard price of a woollen carpet of $79 per square metre, and a floor space of 1,524,524 metres squared, the total cost is $120,437,396.
• If new carpets were only installed as part of usual replacements, the marginal cost of wool is $60 million to $93 million (in today’s dollars) more than usual synthetic commercial carpets.

We have only wool carpet in our home but that’s our choice and paid for with our own money.

The decision on what carpet to use in Government offices is one for the chief executive, not politicians.

It should be based on the best value for the taxpayers’ money, not political direction from an opportunist trying to court voters.

Political interference and subsidies got farming and farmers into a mess. Getting out of it through the reforms of the 1980s and 90s came at considerable financial and emotional cost.

We don’t want policy based on woolly thinking that will take us back to the bad old days when political whim rather than commercial reality drove business decisions.


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