Paying more for government’s spending

24/11/2022

The Reserve Bank announced yesterday it would increase the Official Cash Rate by  0.75 basis points to 4.25%.

That’s the biggest increase New Zealand has ever had and it could get worse:

This increase will push up mortgage rates for Kiwi households, many of which are coming up for renewal in the next few months. New Zealand families are already facing significant pressure on their household budgets due to the extremely high levels of inflation.

The Bank’s Funding for Lending programme—which allowed banks to borrow from the Reserve Bank at the Official Cash Rate to offer cheaper mortgages—also runs out next month. Kiwibank has estimated that this could be the equivalent of a further Official Cash Rate hike of between 15 and 50 basis points.

New Zealand Taxpayers’ Union Campaigns Manager, Callum Purves, says:

“The Reserve Bank has been forced to put up the Official Cash Rate because of its failure to keep inflation below 3%.

“The extremely high levels of inflation we are facing are in no small part down to the double whammy of reckless Government spending that went well beyond what was necessary to respond to the pandemic and the Reserve Bank’s own money printing programme that is already forecast to cost the taxpayer billions in losses.

“Government tax revenues and expenditure are at record highs. The Government urgently needs to reign in its addiction to excessive spending and bring expenditure back down to pre-pandemic levels at the very least. New Zealanders cannot continue to afford this toxic combination of high taxes and high inflation.” 

Tax revenues are high because inflation pushes up prices, which increases the GST take. It also leads to higher wage increases which pushes people into higher tax brackets.

Some of the blame can be laid at international factors, but Labour’s addiction to spending is also responsible.

It’s not just the poor who are struggling with the cost of living crisis, middle income people are too and increased mortgage rates will add to the pain.

Much more pain is on the way for Kiwis as out of control inflation has forced the Reserve Bank into New Zealand’s first ever 75 basis point Official Cash Rate hike, National’s Finance spokesperson Nicola Willis says.

“Never before in the history of the OCR have we seen such a dramatic interest rate increase. This comes as the ninth rate hike in a row, as the Reserve Bank is forced to screw ever tighter on interest rates to try and put a lid on rampant inflation.

“Ominously, the Reserve Bank is not only forecasting a year-long recession, but it believes inflation has not peaked, and will still be higher at the start of next year than it is now.

“This spells yet more worry for the growing group of Kiwis being kept up at night concerned about the growing size of their mortgage payments.

“Kiwis are now paying the price, literally, for Labour’s ‘fire-hose’ approach to government spending.

“Half of the mortgages in New Zealand will come up for refixing in the next 12 months. Many already stretched New Zealanders will now have to find hundreds of extra dollars a week to meet their payments.

“Kiwis are getting squeezed in all directions – rent, groceries, and mortgage payments. Under Labour, the only way these costs are going is up.

“New Zealand needs careful economic management and fiscal responsibility to get us through this difficult period.

“National has a plan. We would rein in wasteful spending, stop adding new costs and taxes, refocus the Reserve Bank on price stability, let Kiwis keep more of what they earn, and remove bottlenecks in the economy like Labour’s overly restrictive immigration settings.”

The election could be a year away.

How much harder will life be for far too many people by then?


More Orr, poor decision

09/11/2022

Could this be one of the government’s worst decisions?

The Taxpayers’ Union has condemned the Government’s decision to reappoint Adrian Orr for another five-year term as Reserve Bank Governor despite having failed to keep inflation under control.

Taxpayers’ Union Campaigns Manager, Callum Purves, said:

“It is shocking that the Government thinks it appropriate to reappoint Adrian Orr for another five-year term. He has singularly failed in his objective to keep inflation between 1 and 3%. 7% inflation is costing New Zealand families dear. While inflation caused by international factors may have peaked, domestic causes continues to rise.

“This hasn’t been helped by Mr. Orr’s colossal bond-buying programme during the pandemic that has resulted in a staggering $8.46 billion loss. The Treasury is spending between $150 and $200 million a month trying to rectify this cock up. Our children and grandchildren will be paying for his mismanagement of the economy for years to come.

“Perhaps if Mr. Orr had spent more time tackling inflation than redesigning the Reserve Bank’s website at a cost of $6 million and comparing himself to a god, we might be in a better position.”

Orr, and the RB under his leadership, has been far too focussed on climate change and Maorification and far too little on what is supposed to be its core function – keeping inflation under control.

National is unimpressed by the reappointment:

National is criticising the long-term reappointment of the Reserve Bank governor, saying an internal review amounts to the regulator marking its own homework. . .

Minister of Finance Grant Robertson said stability and continuity were important considering global conditions, which included high inflation, and defended the decision to reporters this morning.

“We do need continuity and stability at this time,” he said. “New Zealand’s overall performance when it comes to the issues that the bank is responsible for does compare well with the rest of the world. I’m happy to have reappointed him.”

The highest inflation rate for several decades is not a recipe for stability.

However, National’s finance spokesperson Nicola Willis had written to Robertson at the end of September, saying the party did not support Orr’s reappointment for a five-year term and repeating calls for the central bank’s performance to be reviewed independently.

Willis told reporters this morning her concerns about the independence of a review by RBNZ still held.

“They hand picked those experts. It’s a bit like saying to someone, ‘look, you mark your own homework, and then pick your favourite teacher to tell you whether or not you’ve done a good job’. And we think we think a more robust approach as necessary,” she said.

“There’s been extraordinary decision making in the past couple of years. The Reserve Bank printed tens of billions of dollars, had a lending program that made money virtually free for the commercial banks, and all we’re saying is – don’t you should think you should take a look at whether the right decisions have been made here?

“When New Zealanders are suffering from a cost of living crisis, they expect some accountability. We think the government should answer questions about whether the Reserve Bank got its decision making right.”

The government wins from inflation in the short term as its tax take goes up but inflation is a thief which makes us all poorer.

The government’s unwise spending and Orr’s failure to react fast enough to rising prices are responsible for it.

In her letter, Willis had also highlighted the six-month appointment of an acting governor by the previous National government leading up to the 2017 election, “taken out of respect for the bipartisan consensus that underpins New Zealand’s monetary framework”.

National’s leader Christopher Luxon doubled down on that when asked about Orr.

“Nicola expressed that I thought incredibly well in her letter to Grant Robertson, saying ‘Hey, listen, we think it’s appropriate that you follow convention, which would be appoint him for a year so we can get through the election period of time”. . . 

Orr blames New Zealand’s inflation on Russia’s invasion of Ukraine but Oliver Hartwich writes:

. . . The RBNZ’s monetary policy was so far removed from where it should have been under the Taylor Rule, there was no chance the Bank could have achieved its inflation target.

Never in the past two decades has the RBNZ deviated so much from where it should have set its OCR. The difference is so enormous, it calls into question the RBNZ’s professional judgment.

Perhaps that is the real reason Governor Orr now tries to distract from his Bank’s disastrous policy decisions. By blaming Putin, he has found a convenient scapegoat – and it even sounds halfway plausible.

Once you go through his claims, however, Orr’s fairy tale falls apart. What remains is the story of a Reserve Bank that completely lost the plot and caused one of the most severe inflation outbreaks New Zealand has witnessed in recent decades. . .

If the RBNZ’s deviation so far from where it should have set the OCR calls into question its judgement, reappointing Orr calls into question Robertson’s professional and political judgement.

It was was a very poor decision.

He has been reappointed for five years but if the government changes next year, he would be wise to resign.


Squandering borrowed money

04/11/2022

How can the government justify this?

The Government has tapped some $70m of Covid Response and Recovery money to bolster the dwindling coffers of its Three Waters Reform Programme, including the purchase of ongoing policy and communications work, much of it done by consultants.

Cabinet redirected the unspent Covid-related funds in April this year, Cabinet documents show, despite an earlier promise by Finance Minister Grant Robertson to focus the Covid-19 Response and Recovery Fund (CRRF) funds specifically on meeting the direct costs of responding to Covid-19 and the economic recovery from it. . . 

Despite the CRRF’s Covid specificity, it has been used to cover a wide range of unrelated expenses including free school lunches and cameras on fishing boats. . . 

However in April this year, some $84.7m of the original Covid fund envelope remained unallocated and unspent.

Of that, Cabinet agreed to drawdown and redirect $72.3m to help cover considerable unfunded DIA Three Waters work including $21m for policy and communications work; $14.6m to increase iwi/Māori understanding of the changes and their capacity to contribute to them and $32.8m to cover councils’ costs in working with the “transition unit”, situated within DIA, to hand their assets over to create the proposed four new Water Services Entities. . . 

Spending $14.6m to increase iwi/Maori understanding? What is it that they need to understand that the rest of us don’t? How on earth could it cost so much? And who did the work? Let us hope it was no-one related to a minister.

The Covid fund was supposed to do what its name suggests – assist with the response to and recovery from the pandemic.

Using it for anything else is bad enough, that so much has been spent on propaganda to persuade people to support Three Waters makes it worse:

The Government’s decision to quietly raid the Covid-19 Response and Recovery Fund to gussy up its controversial Three Waters plan was sneaky and wasteful, National’s Finance spokesperson Nicola Willis says.

“Today the New Zealand Herald revealed that in April this year Cabinet explicitly changed the rules for the Covid fund so that it could spend $70 million more on Three Waters costs, including millions on yet more public relations and policy advice from private contractors.

“The Government kept this move under wraps – a decision that shows contempt for taxpayers’ right to know how their money is being spent.

“This is a shocker. Finance Minister Grant Robertson is back to his old trick of using the Covid fund as a slush fund for the sneaky little projects he wants to keep off the books.

“Cabinet must have been desperate to throw more taxpayer funds at its doomed Three Waters pet project, but knew the wasteful spending wouldn’t survive normal public scrutiny. So, it came up with a dodgy work-around instead.

“The arrogance of the move is breath-taking, and makes a mockery of both the Budget process and the Public Finance Act.

“Prior to the Jacinda Ardern-led Labour Party coming to office, $70 million was considered a lot of money. Now, Labour throws it around like confetti.

“This misuse of Covid money was essentially a Hail Mary pass aimed at getting a doomed project over the line.

“The Office of the Auditor-General, which in May stated that there needed to be more transparency and reporting around the Covid fund, will no doubt be interested in the latest revelations.

“Grant Robertson must apologise for this sneaky use of taxpayer funding and commit to treating taxpayer funds with more respect in future.”

Squandering money on projects unrelated to the purpose for which it was originally intended is at the very least imprudent.

That the money is borrowed and will have to be repaid with interest makes it worse.

Apropos of squandering borrowed money, former Speaker Trevor Mallard is off to a diplomatic post in Ireland, leaving a $55,000 legal bill in his wake.

. . . This bill tops the $330,000 in legal fees taxpayers also had to cough up after Mallard falsely accused a Parliamentary staff member of rape. . . 

Has any other Speaker been so poor in the role and cost the country so much?


Funding programmes that work

20/10/2022

National plans to fund a programme that delivers positive social change:

Social investment will be the organising framework for the next National Government’s approach to the funding and delivery of social services, said National’s Social Investment Spokesperson Nicola Willis in a Guest Lecture hosted by Victoria University today.

“Kids ram-raiding shopping malls, thousands of families living in motel rooms and cars, soaring truancy rates, and a growing list of social problems are of great concern to New Zealanders.

“Despite the increasing billions spent on well-intended programmes, endless Government strategies and thousands more people employed to help, traditional public systems and services are still failing many New Zealanders in most need of community support.

Labour mistakes throwing money at problems, and a growing bureaucracy to address them, for solving them.

“I’m determined that the next National Government will bring the Social Investment approach back to life. The basic idea underpinning Social Investment is that if Government intervenes earlier and more effectively for our most disadvantaged citizens then their lives could be so much better. 

“National’s Social Investment approach will identify, fund and scale up the actions that will have the most positive impact on people in the long run. It will make use of sophisticated data and evaluation approaches to identify what works and, crucially, what doesn’t.

This is very different from Labour’s approach which, in spite of it trumpeting a Wellbeing Budget, is overseeing a deterioration in every wellbeing measure.

“This bold new approach to delivering social services will be supported by a new Social Investment Fund. The Social Investment Fund will invest in programmes that promise to change the lives of New Zealanders with the greatest needs. It will start small and scale up over time.

“Initial funding would be provided by Government through the Budget process, and would be topped-up each year, including by redeploying funding from any Government initiatives that may have received disappointing social impact evaluations.

“I can imagine, for example, a National Government might deploy the Social Investment Fund to tackle the task of delivering secure, sustainable housing for people currently living for extended periods in emergency housing. 

“My hope is that the Social Investment Fund would become so effective at delivering results that ultimately New Zealanders seeking positive social change for the disadvantaged might choose to invest their funds with it. 

“There could be huge power in combining the forces of Government social investment experience with the capital and expertise of the philanthropic and charitable sector.

“I want results. If private capital can be better deployed to help change the lives of more New Zealanders, then I will not be afraid to use it. The next National Government will be focused on doing what works.” 

Results. That will be a welcome change from announcements and announcements of announcements and promises with no targets and an inability to deliver.

It is also refreshing that this policy will help people on need.

Bill English introduced social investment which was resulting in positive changes to people’s lives under the last National government.

It is to Labour’s shame that it abandoned the policy for purely political reasons for which we’re all paying the price.

A change of government will bring a welcome and much-needed change of focus, using earlier intervention and targeting assistance at those who need it most.


“I would expect there to be specificity and certainty when spending public money.”

30/08/2022

Auditor General, John Ryan, has raised serious concerns about the government’s cost of living payment:

. . .I have concluded that the payments made to ineligible people do not constitute unappropriated expenditure. However, in my view, good stewardship of public money required greater care when designing and implementing the COLP – ensuring that the criteria were clear and that the data used by Inland Revenue was adequate. I have a number of concerns about these matters.

In this letter, I outline that:

  • Speed and expediency were prioritised over certainty and accuracy.
  • There is a lack of clarity about what “present in New Zealand” means.
  • Using a physical address in New Zealand as a proxy for being present in New Zealand is problematic.
  • Inland Revenue does not know, and has said it may never know, how many ineligible people might have received the payment.

In my view, Inland Revenue should now consider what steps it can take to identify how many ineligible people have already received payments. I encourage Inland Revenue to also focus on future payment tranches to ensure that payments are reaching only the people the Government intended them to go to. I also encourage Inland Revenue to remind ineligible recipients that they are obliged to repay any payment received immediately. . .

The Ag said payments made to people not present in New Zealand wasn’t unappropriated expenditure, but he added a big but:

In reaching this view, however, I had a number of concerns about the lack of clarity in the criterion used, the inadequacy of the evidence to establish whether the payments were being made to individuals who met that criterion, and that public money has been paid to people who were not eligible to receive it.. . 

Recently I have commented on the Strategic Tourism Assets Protection Programme that prioritised speed and expediency over certainty and accuracy. There may be justification for doing this, but it is still important to be sure that public money is being spent appropriately, and in accordance with the key policy intent.

As I outline below, I am concerned about the uncertainty of what “present in New Zealand” is intended to mean, and the accuracy and fitness for purpose of the information used to determine that. I would expect there to be specificity and certainty when spending public money.

Taxpayers deserve specificity and certainty when the government spends our money.

As I have said recently in relation to the Strategic Tourism Assets Protection Programme, where there are criteria, it is important that they are sufficiently clear to enable decision makers to apply them accurately and to assess whether they have been met. . . 

The government didn’t learn, or didn’t apply the lessons, from mistakes which paid money to tourists operations that didn’t need it.

I am concerned that the Government does not know how significant the scale of payments to ineligible people is. The Minister of Revenue has been quoted by media as saying that it could be around 1% of payments. Inland Revenue told my staff that it is doing some work to improve the accuracy of future payments, but does not know, and may never know, how many ineligible people might have received the payment. This is, in my view, unacceptable.

Inland Revenue is not able to provide assurance that it has paid the COLP only to those individuals who were intended to receive it and not to those who were ineligible. In my view, the public can reasonably expect Inland Revenue to consider what steps it can take to better identify the scale of any payments to people who may not have been eligible.

Cabinet agreed that the Commissioner of Inland Revenue would not actively pursue repayment of any mispayments unless fraudulent or wilfully misleading information was provided. Section 7AAA of the Tax Administration Act requires that ineligible people who receive the payment immediately repay it. The Inland Revenue website does state this, but in my view, Inland Revenue might want to consider whether to communicate this message and its expectation for repayment more proactively.

No-one had to provide any information so those who got it and shouldn’t weren’t acting fraudulently or wilfully, but people who now live overseas, or are dead, are unlikely to be regular readers of the IRD website.

Concluding comments

The COLP was developed to achieve the Government’s objective of supporting low- to middle-income workers experiencing increased living costs due to inflation. Although criteria were set to manage the scope and scale of support that would be provided, for the reasons set out above they have not resulted in the funding being provided only to people who met the eligibility criteria. In my view, good stewardship of public money required greater care when designing and implementing the COLP – ensuring that the criteria were clear and that the data used by Inland Revenue was adequate. . . 

This isn’t a government that demonstrates good stewardship of public money.

It gave the money to anyone earning less than $70,000 not on a benefit,  and in doing so not only people living overseas and dead people got it, so too did people with high-income earning partners.

The National Party’s Finance spokesperson, Nicola Willis, who made the complaint to the AG has been justified:

The Auditor-General’s damning investigation into the cost of living payment has embarrassed the Government into making changes to the rollout of the scheme, National’s Finance Spokesperson Nicola Willis says.

“It was obvious from the start that the cost of living payment had been desperately rushed out with no attention to detail. That’s why I wrote to the Office of the Auditor-General earlier this month to ask them to examine the delivery of the cost of living payment.

“Today it’s been confirmed that the Auditor-General did carry out an investigation of the scheme.

“The letter released today following this investigation is damning and confirms that the cost of living payment has been an expensive failure, stating that ‘good stewardship of public money required greater care when designing and implementing the [cost of living payment]’.

“It is clear that the Auditor-General’s investigation has forced the Government into making changes to the cost of living payment.

“It was obvious after the first payment ended up in the bank accounts of London expats, French backpackers and dead people that the Government had not done the work to ensure that only eligible New Zealanders could get the payment.

“The Auditor-General makes a good point, but one that should have been obvious to any responsible government, in suggesting changes be made to future payments to ‘ensure that the payments are reaching only the people the Government intended the payment go to’.

“The Government has been unable to answer questions about how many ineligible people received the first payment, and has shown little interest in finding out.

“Rightly, the Auditor-General is asking Inland Revenue to ‘consider what steps it can take to identify how many ineligible people have already received payments’.

“It’s shocking that it took a stern word from the Auditor-General for the Government to take taxpayers’ money seriously.

“Labour has a complete and utter disregard for taxpayer money. Kiwis deserve a government that treats public money with respect and don’t need a public slap-down to do so.”

The $350 payment would make a small and only temporary difference to people who were struggling to buy bread and enable a bit of jam and cream for those who didn’t need it.

National’s plan for tax cuts would give permanent help to everyone.

It would also be less inflationary because it would take some pressure off the need for pay increases.


How many bureaucrats . . .

19/08/2022

Does any child say when I grow up I want to be a bureaucrat?

Probably not for bureaucrat is more often than not regarded negatively as these answers to the question how many bureaucrats does it take to change a lightbulb  show:

* Two. One to assure everyone that everything possible is being done while the other screws the bulb into the a tap.

* Two; one to change it and one to carry out a risk assessment.

* 100. One to change the bulb and 99 to write the environmental impact report.

* Two. One to screw it in and one to screw it up.

A more serious question requiring a serious answer, is how many bureaucrats does it take to deliver on a Budget?

An additional 3,423 full-time staff and contractors are required to fulfil commitments the Government made in this year’s Budget, released on May 19.

The Treasury estimates this will see the public service workforce grow by 6 per cent.

This is more than the average annual growth rate of 4.1 per cent over the past decade, and 4.6 per cent over the past six years.

If Government ministers had all their Budget bids fulfilled, an extra 7,887 staff would’ve needed to have been hired.

The Treasury, in a report presented to Government on February 4, said demand for staff was so high because “significant reform programmes and new functions being established have created public service workloads that exceed business as usual delivery for many agencies”. . . .

That is expensive for taxpayers’ and is competing with the private sector that pays the taxes.

However, the Treasury, in a February 25 briefing, warned hiring 3,423 staff when the labour market is as tight as it is, will still create competition, which is “likely to contribute to wage inflationary pressures”, including higher consultancy costs.

However, the Treasury, in a February 25 briefing, warned hiring 3,423 staff when the labour market is as tight as it is, will still create competition, which is “likely to contribute to wage inflationary pressures”, including higher consultancy costs. . . 

The public service had already grown exponentially since 2017 and this is yet another example of the government fueling inflation, and reinforces the high cost of its centralisation agenda.

National Finance spokeswoman Nicola Willis supported the Treasury’s suggestion to have a “workforce constraint” but said it should only be for “back office” roles, including policy, human resources and communications staff.

“There is a widespread view that the Government’s insatiable appetite for hiring new officials has added to current worker shortages, making it hard for many businesses and community organisations to retain and recruit staff as they’re forced to compete with a taxpayer-funded Government recruitment drive,” Willis said.

“The danger here is that the Government is so busy hiring staff for its own pet projects that businesses miss out.”

Ballooning staff numbers aren’t just in Ministries, Michael Reddell has noticed an expanding empire at the Reserve bank:

. . . But what really caught my eye was the “Growth of RBNZ” request/answers, where the requester had asked for breakdowns of staff numbers over the last 10 years. They didn’t really need to go back that far – all the 200 FTE growth in staff numbers has occurred since Orr took office (up from 255 then to 454 on 30 June 2022) but it was interesting nonetheless. One gets a very clear sense of the bloat. Here for example

That’s a very steep increase and more concerning is that many of the new employees are in communications.

The Bank’s functions haven’t changed but – like too many public agencies – the number of “communications” staff has increased hugely

An OIA I’d lodged a couple of years ago (and written about here) gives a bit more background on that function (although numbers have grown more since).

We know there has been senior management bloat – a whole new lawyer of second tier appointees (Assistant Governors) most of whom seem to have little subject expertise to offer)

On the other hand, there are the Bank’s core economics functions. Until very recently, monetary policy was by statute the primary function of the Bank. That has changed (reasonably enough) but it is still a key core function. But here are staff numbers in the Economics Department

. . . Orr has long had something of a reputation as an empire-builder, and in his first four years at the Bank that seems to have been amply warranted again. This is scarce taxpayers’ money and yet Orr (facilitated by the Minister and the Board) flings it round with gay abandon……without even the consolation of better quality research, analysis, policy design, let alone policy outcomes. But it has been a windfall for HR people and former journalists.

Nicola Willis has also noticed the expanding empire:

Despite a huge increase in the Reserve Bank budget and runaway inflation, the Bank has massively increased its central office communications functions while failing to bolster its core economics function, says National’s Finance Spokesperson Nicola Willis.

“Data released to National under the Official Information Act shows worrying trends in where the Reserve Bank is focusing its money and resources.

“Total staff numbers at the Bank have exploded from 255 in June 2018 to 454 in June 2022. 

“Despite this hiring spree, the core economics function of the Bank is receiving less money this year than it did in 2013.

“The number of economics staff employed by the bank is now lower as a proportion of total staff than at any time on record. In 2013, 34 economic staff were employed by the Bank, whereas today that number is 32.

“The Reserve Bank has instead more than tripled the number of communications staff, up from six in 2013 to 20 today. Similarly, the number of staff in the HR team has leapt from five in 2017 to 24 today, while staff in the Governor’s office has increased from six in 2017 to 21 today.

This is a bit like a hospital cutting medical staff or a school reducing the number of teachers and replacing them with HR and PR people.

“New Zealanders are suffering from the double whammy of rapidly rising prices and interest rates climbing more steeply than at any time in 30 years. These issues should be the Reserve Bank’s focus. I’ll bet taxpayers would prefer their money being spent on economics advice rather than spin and corporate PR.

“These staff numbers raise serious questions about the Reserve Bank’s priorities in the midst of a cost of living crisis. New Zealanders have a right to expect the Reserve Bank will be focusing its resources on the best advice possible for getting inflation under control. 

“National repeats our call for an independent public inquiry into decisions made by the Bank since March 2020. 

“Inflation has exceeded the Bank’s target for more than a year, and by the Bank’s admission won’t be under control until at least March 2024. There must be an examination of how we got here and accountability for any failures.”

Perhaps it’s time to be asking how many communications staff does it take to explain why the Reserve Bank has missed its inflation target so badly? and how expensive will it be to correct that?

Bureaucrats are a necessary, and useful, part of good government but the steep increase in their number, especially in communication roles, and such poor delivery on government policies in so many areas is proof that, just like so much of this government’s spending, more isn’t always better.


Public support spending cuts

18/08/2022

Yesterday’s increase in the official cash rate (OCR) was expected and unwelcome::

In a massive blow to homeowners, out-of-control inflation has pushed the Reserve Bank into once again hiking the Official Cash Rate by a dramatic 50 basis points, National’s Finance Spokesperson Nicola Willis says.

“Today’s statement is yet more bad news for New Zealanders, confirming inflation is set to stay higher for longer, growth will be lower and interest rates will have to be hiked even higher to bring things under control.

“The cost of living crisis is hitting everyone across the country and it’s not going away anytime soon. Runaway prices are crushing household budgets. Rapidly rising interest rates are crushing mortgage-holders. Today’s statement confirms both these things are set to persist for many months ahead.

“Concerningly, today’s forecasts from the Reserve Bank suggest inflation now won’t return below 3 per cent until the middle of 2024 and won’t get back to its target midpoint until 2025.

“Instead of throwing up their hands and blaming international factors, the Government needs to take action to bring inflation under control. Broken immigration settings and runaway spending are choking off supply while overheating demand – a recipe for more inflation.

“The Reserve Bank acknowledged ‘labour shortages are a major constraint on business activity’, but the Government is still failing to fix our broken immigration settings. Businesses and consumers will continue to be squeezed by widespread skills shortages until that changes.

“The Government should adopt National’s five point plan to fight inflation – return the Reserve Bank to a single focus on price stability, reduce costs on businesses, remove bottlenecks in the economy, rein in government spending, and prioritise tax relief for workers.”

Labour MPs are always critical of National’s calls to rein in government spending, but the policy has public support:

The Taxpayers’ Union says that cuts to Government spending are a far better way to deal with the inflation crisis than the Reserve Bank of New Zealand hiking the Official Cash Rate – and the public agree. Kiwi voters understand the drivers behind inflation and the latest Taxpayers’ Union Curia Poll demonstrates that they want cuts to Government spending.

Responding to today’s OCR announcement, Taxpayers’ Union Executive Director Jordan Williams said:

“As part of this month’s Taxpayers’ Union-Curia poll, we asked New Zealanders if the Government should be increasing, decreasing, or maintaining spending levels in response to high inflation. The most popular response – 45% of respondents – was that Government should decrease spending.”

“Only 12% of respondents thought increasing spending was the right idea and 27% said spending should be kept the same.”

“Next time Labour MPs try to troll National Party leader Christopher Luxon with claims he will ‘cut spending’ Mr Luxon should say he will. This poll shows that it is precisely what most voters want him to do!”

“We also asked about tax cuts and 59% of voters support a temporary 10% reduction in overall income tax for all families to help with the increased cost of living.”

“As Grant Robertson recently acknowledged, tax relief is less inflationary than Government spending. Swapping out Government spending to leave more money in taxpayers’ pockets would both help with the costs of living and ease the pressure on inflation.”

“Something that the Beehive should take note of is that Labour voters are the most in favour of a temporary package for across-the-board tax relief!” 

The results for the August Taxpayers’ Union Curia Poll can be found here – https://www.taxpayers.org.nz/inflation_polling

This government has demonstrated time and time again that more spending doesn’t always result in better outcomes.

Time and time again they’ve shown that they are not good managers of other people’s money.

The TU poll shows the public understand that and favour being able to keep more of their own money.

 


KiwiSpray

09/08/2022

Nicola Willis had a name for the government’s bungled cost of living payment in her speech to National’s conference – KiwiSpray.

That could be applied to far too many of Labour’s policies that show they don’t understand that spending more is very different from doing more effectively.

There were plenty of other gems in her speech:

. . . And thank you to our Leader, Christopher Luxon, for driving that mission. For uniting our team, for growing our support, for bringing his immense work ethic, integrity and enthusiasm to the leadership of our Party.

I’ve so enjoyed getting to know Chris better these past few months, seeing his deep care for people, his commitment to get the best out of every player in the team, his depth of knowledge and his global perspective. His pride in New Zealand and his optimism for what we can achieve.

Together, we’re going to turn this country around.

Our first task is to win an election, that’s true, but our ultimate task is to take New Zealand forward.

Now more than ever, New Zealand needs a National Government with a positive vision for the future.

Because as resilient and tenacious as we Kiwis are, and as great as this country of ours is, there’s no denying how tough things have become.

New Zealand is facing the most challenging economic conditions many of you will have experienced in your lifetime.

The cost of living crisis is making everything more expensive.
Prices are growing faster than wages, meaning your pay gets you less this month than it did the month before.

Interest rates are climbing fast, rents have exploded, and mortgage payments are costing more.

Businesses can’t find workers, so they’re letting down customers, compromising quality and giving up on growth ambitions.

The hotel I stayed in at the weekend had a sign at reception explaining they didn’t have enough staff to service rooms every day.

The people covering the vacancies feel exhausted, like the small business owner I spoke to recently who’d worked 152 days in a row without a break, like the nurses in our hospital doubling down on overtime and the farmers who can’t remember the last time they did less than a ten-hour day.

With Labour in Government many hardworking people can’t see a way out of these tough economic times. They are despondent about the future and fear it’s only going to get worse.

My message today is simple: National has a better way. We will get the economy working for you once more.

The Cost of Living Crisis: How did we get here?

To get out of our economic malaise we must first understand how we got in it.

Yes, COVID-19 has a lot to answer for.

And yes, New Zealand wasn’t the only country that responded to the pandemic with large amounts of borrowing, spending and money-printing.

But let’s be clear: New Zealand did a lot more of it than most. While all countries put their foot on the accelerator to some extent, our Government put its pedal to the metal.

New Zealand’s COVID-19 spend-up, relative to the size of our economy, was second to only one other country: the United States.

Meanwhile, our Reserve Bank’s monetary response to COVID was the fifth largest in the world, relative to the size of our economy.

We simultaneously had our Finance Minister pumping the accelerator while our Reserve Bank reached for over-drive.

No car can drive that fast without a moment of reckoning, and no economy can either.

Today, we are living with the consequences: Prices are rising faster than they have in 32 years, inflation has got a grip on our economy and its eating a hole in every pocket.

Reality bites. Inflation, like a debt collector in the night, is extracting a price from all of us.

National, along with every other Party in Parliament, is calling for an independent inquiry into the economic response to COVID-19. Labour says no.

I simply say this: Those who ignore the lessons of history are doomed to repeat their mistakes.

The Cost of Living Crisis

Labour’s first approach to managing the cost of living crisis was denial. Now its magical thinking.

Instead of presenting a plan to restore productive growth to our economy and to address the underlying drivers of inflation, it has dialled up its spending, choked access to new workers, and lurched from one temporary band-aid policy to another.

Its signature move, the ‘cost-of-living payment’ has been a spectacular failure, resulting in taxpayer dollars going to ex-pats in London, French backpackers and dead people.
It’s so bad I think it’s earned itself a nickname: I’m going to call it KiwiSpray.

It’s like KiwiBuild only instead of being 99,000 houses short, it’s 800,000 payments short.

National on the other hand has a sensible, common-sense plan to beat inflation.

We will bring an end to Labour’s failed policies of high-taxing, big spending, big Government, with no accountability for failure and no focus on results.

We will restore careful economic management to this country so that prices stop rising so fast, Kiwis can get ahead and businesses can grow.

• We will reduce the tax burden on New Zealanders.
• We will restore discipline to Government spending
• We will reduce the regulation and costs imposed by Government
• We will ensure New Zealand has the workers needed to deliver services and grow businesses
• We will return the Reserve Bank to a single mandate

Tax

I want to make a few comments about why tax reduction is important to us.

As our first Leader Adam Hamilton said when National was founded: “[National stands] for a reduction of taxation so that enterprise may be encouraged, industries established and living costs reduced.”

National wants to leave as much spending power as possible in the hands of those earning the money. We want New Zealanders to keep more of their pay so that they can save for that first house, invest in that start-up, expand that small business, hire that new worker, take the kids to the movies or have the security of money put aside for a rainy day.

This highlights an important difference between National and Labour – one trusts us with our own money, the other thinks it knows how to spend our money better than we do.

Labour on the other hand believes bigger Government is the solution to every problem. Despite failing to deliver time and time again, they think things will miraculously get better if only they could spend more of your money. Like a gambler at the track, they throw good money after bad, and take no accountability for the results.

The result is that Government is now collecting $41 billion more a year in tax than when Labour first came to office.

It’s gone too far, and National will ensure a fairer deal.

• We will scrap the Auckland Regional Fuel Tax. It’s hurting Aucklanders every time they fill up at the pump. It has to go.
• We will scrap Labour’s plans for an Auckland Light Rail Tax.
• We will scrap the Ute-Tax. It’s nothing but a punishment to farmers and tradies and you deserve better.
• National will scrap the 39 per cent top tax rate. It’s an envy tax.
• National will scrap the 10 year Brightline test extension. It’s a capital gains tax by stealth. Labour didn’t campaign on it, didn’t have a mandate for it, and did it anyway.
• National will scrap the rent-hiking Tenant Tax. We will bring back interest deductibility for rental properties.

National will also deal to Labour’s stealth tax: inflation-driven bracket-creep.

Inflation has helped fund Labour’s tax and spend binge.

You see, when inflation increases, people’s wages go up on paper. In theory you may be earning more, but in reality the pay rise isn’t helping much because prices are gobbling it up. You’re probably going backwards.

But the IRD doesn’t care. It just sees a higher pay rate, and if you find yourself in a higher tax bracket, you get taxed at the higher rate.

National will index tax thresholds to inflation. We detailed our plan for doing this in March. We will deliver those tax reductions in our first term of Government. It’s our commitment to you.

You can expect to hear more from us on tax reduction next year. Our vision is to go further still.

National is committed to providing as much tax relief to working New Zealanders as we responsibly can.

Labour on Tax

Labour meanwhile is busy designing new taxes.

The Finance Minister, Grant Robertson, is quietly setting up a new unit in the ACC for his latest pet project, a social insurance scheme. He has a plan to pay for it too – a Jobs Tax. That’s right, the Finance Minister is planning a new tax on every single employer and every single employee.

National will scrap Labour’s Jobs Tax.

The Revenue Minister, David Parker, is also up to mischief.

Like many of his Labour colleagues, he fantasises about a capital gains tax.

He’s created his own new unit at the IRD. Sometimes referred to as the “Piketty Unit” after his idol, the socialist economist and wealth-tax advocate Thomas Piketty. The Piketty unit is working at pace, collecting data about New Zealanders assets and incomes, their taxes and business arrangements.

It’s not clear exactly what this will lead to but I do know this:

More tax is in Labour’s DNA, and they’re dreaming up new ways to take it.

Mark my words, Labour will put a capital gains tax back on the table. The name may change, it might be in disguise, but it’s coming.

Disciplined Government Spending

The more Labour spends, the more tax it needs.

And Labour is on a spending spree.

In December, the Government forecast it would spend $120 billion in the 2023 financial year.

Then the Budget rolled around and Labour just couldn’t bring itself to stick to its spending limit.

Instead of spending $120 billion this year, its spending $127 billion. That’s 70 per cent more per year than when it first came to office.

Ask yourself this: Are you spending 70 per cent more today than you were five years ago? I doubt it. Well, the Government is. Are they getting 70 per cent better results? Of course they aren’t.

They’re simply addicted to spending.

National will bring discipline to spending by stopping Labour’s worst projects, reducing backroom bureaucracy, eliminating waste and driving better results from existing Budgets.

Let me give you some examples of poor projects that Labour has been splashing the cash on.

-Three Waters Reform: Labour’s Three Waters plan to do a mega-merger of council owned water assets is undemocratic state centralisation at its worst. It also comes with a $3 billion price tag. National will repeal and replace Three Waters.
– The TVNZ-RNZ Merger: Labour has inexplicably decided to embark on a mega-merger of the two state broadcasters. It comes with a $370 million price tag. National opposes it.
– Labour have also ploughed $200 million into the creation of Te Pukenga, the mega-merger of New Zealand’s polytechnics and institutes of technology. National opposes it.

National will not pour billions of dollars into centralisation and bureaucracy.

National will instead focus on doing the basics better.

We value the vital role Government spending plays in delivering essential public services: providing healthcare and education, ensuring support for the vulnerable, keeping our communities safe, building and maintaining the physical and social infrastructure we all rely on.

That’s why National has committed to increasing health and education spending every year we are in office, matching increases to the rate of inflation at a minimum, but allowing also for population growth and other pressures.

But we know spending more will not in itself deliver better results. If it were that easy, then why is Labour overseeing an explosion in truancy, declining literacy achievement, and a health system in crisis?

National will set public service targets for the better health and education services New Zealanders deserve, drive better delivery, and demand accountability for results.

We will push for more value from every buck. We will ask every Minister to examine spending in their agencies line-by-line with a focus on eliminating waste.

Just as households are having to carefully evaluate their budgets to cope with rising costs, so too should public agencies.

National is wary of the insatiable appetite Government has for growing itself.

We will stop the explosive growth in the backroom bureaucracy and move more resources to the frontline, away from Departments and into communities.

National won’t tolerate a New Zealand where inter-generational poverty is normalised, where Government Departments service misery but repeatedly fail to solve it and where good intentions are seen as a substitute for good results.

National will revive Sir Bill English’s social investment work. We will use his social investment approach to solve our deepest social problems, getting Government agencies out of the way, investing not for narrow outputs tomorrow but for long-term impact, measuring results and changing lives.

We are determined to do better for the New Zealanders whose lives are complex, but whose potential is great. Social investment’s time has come.

National will stop the tide of Government costs and regulations.

As Sidney Holland, National’s first Prime Minister said in 1943 “National believes in individual freedom, a competitive economy, and the minimum of bureaucratic intervention, restriction and regulation”, “ less red tape”.

Our vision is to reduce red tape to ensure Kiwi firms can spend less time and money on compliance and form-filling and more time innovating and growing.

We will restore the right of employers and employees to negotiate freely and not to be bound by new compulsory, nationwide, sector-wide collective agreements.

The 1970s have called and they want their policy back. So-called Fair Pay Agreements have no place in 2022, and no future under National.

There’s nothing fair about the imposition of pay and conditions nationwide.

National will ensure New Zealand has the workers needed to deliver services and grow businesses

We will stop Labour’s experiment of seeing what happens when you starve an economy of migrant workers. We know what happens – fruit rots on the vines, hotel sheets go unchanged, manufacturers cancel orders, exporters leave value on the table and new customers go elsewhere: all for lack of people to do the job.

National will fix our immigration service. We will take it from the bureaucratic Police Force its become and turn it into the Recruitment Agency New Zealand needs it to be.

Finally, National will return the Reserve Bank to economic orthodoxy with a singular mandate to manage inflation

Ladies and gentlemen, the commitments I have outlined to you this morning will ensure our economy works better for you and all New Zealanders.

National is ambitious for this country, and our sights are raised high, so you can be sure we will work relentlessly on the long-time drivers of economic growth:

• unlocking the potential of our people through better education;
• delivering growth-enhancing infrastructure; including the infrastructure New Zealand will need to adapt to climate change
• attracting new sources of capital;
• embracing science and technology, including to reduce greenhouse gas emissions and
• growing our connections with the world;

Conclusion

National has what it take to get this economy off its knees. We can bring hope back to every Kiwi slogging it out day after day, paying the bills, not asking for favours but desperate for a fair go; some reward for your efforts.

We hear the pleas of struggling Kiwis and we say: National has your back.

We won’t sit back and let inflation fleece you every time you open your wallet.

We will back you to get ahead, we will back your family with the better public services you deserve and we will back New Zealand businesses with the freedom and workers you need to succeed.

As Sidney Holland once said: the essence of the National Party philosophy is “fewer restrictions and greater opportunities”, “greater freedom to follow one’s own star”.

National will lift New Zealanders sights to those stars once more. We’ll get the country moving in the right direction again.

Ladies and gentlemen, it’s time to bring some aspiration back to New Zealand. With Christopher Luxon as our Leader, and the people in this room as our support, come next year’s election, that is exactly what National will do.

Last night’s poll showed the country is ready for change and National is working to ensure it’s change for the better.


Labour’s hand out for hand out

04/08/2022

The Labour Party has its hand out for some of the money the government is handing out:

The Labour Party is using incorrect and misleading information about the cost of living payment to try to raise funds, National Party Finance Spokesperson Nicola Willis says.

“Inland Revenue confirmed this morning that a total of 1.3 million people have received a cost of living payment, about 800,000 fewer than promised by the Government.

“Labour representatives have consistently repeated, including on social media, that the cost of living payment would be supporting 2.1 million New Zealanders.

“Despite that number being proven to be grossly wrong, Labour is still making this claim, and using it to solicit political donations.

“This evening Labour sent out a fundraising letter claiming ‘more than 2 million New Zealanders received $116 from the new Cost of Living Payment’, and then asked for donations: ‘if you were proud of this initiative, too, please consider chipping in $10 today’.

“It is entirely inaccurate for Labour to seek political donations on the basis of this untrue statement. Serious questions need to be asked of the Labour Party and its head office.

Not only inaccurate but inappropriate.

The delivery of the cost of living payment has been a debacle. It’s borrowed money that has been going not only to people who need it but some who don’t, including partners of high earners people living overseas.

That’s bad enough without this demonstration that it’s not just for people who need it for necessities but those who have money to spare to give away.

“The truth is that while many people overseas have benefited from this payment, many more at home have missed out. Labour cannot deliver anything.

“Labour’s cost of living payment was only proposed because the Government’s mismanagement of the economy has created a cost of living crisis. But the scheme was doomed from the start, with officials warning the Government against it.

“A National Government would have taken the much fairer course of simply adjusting tax thresholds for inflation, allowing people to keep more of the money they had already earned.”

What’s worse, using incorrect and misleading information or seeking to be rewarded for giving out public funds to people who may, or may not need them?

This money is borrowed and has to be paid back. It was supposed to help people cope with the impact of inflation and the cost of living crisis, not prop up the Labour Party.

It’s not direct public funding of a political party and I don’t think there’s any question of rule-breaking.

But there’s something unsavoury about the opportunism in the give-us-some-of-what-we-gave-you message.


Another delivery failure

01/08/2022

If only this was a script for a satirical political television show :

Overseas-based Kiwis are “confused” and “embarrassed” at being told they would receive the Government’s cost-of-living payment tomorrow and critics say including those living out of New Zealand in the scheme is “disrespectful” to hard-working taxpayers.

Kiwis as far afield as the Netherlands, Sydney, London and Dubai have expressed their concern to National’s Nicola Willis, who said many of them felt guilty and that they did not deserve the money.

One man working in Dubai had not been a New Zealand resident for nearly 22 years, yet received the same email as more than 2.1 million Kiwis: that his first payment would be in his account within the next two days. His mother contacted the Herald irate at what she said was “incredible wastage of our taxpayers’ money”.

Numerous members of a Facebook group for French travellers in New Zealand also received the payment email despite no longer being in the country. One person had been away for 13 months while others’ visas had been cancelled so they couldn’t see how they were eligible. . .

If the government had developed its policy with the necessary rigour and regard for careful spending they wouldn’t be eligible.

Labour’s Band Aid cost of living payment is so badly designed that people living and paying tax in other countries woke up this morning to a letter from IRD saying Kiwis’ cash is on its way, National’s Finance spokesperson Nicola Willis says.

“I have been inundated with messages from people around the world who have been shocked to learn, by way of letter from the IRD, that they will be getting a cash handout courtesy of the Kiwi taxpayer.

“Many of these people are New Zealanders who’ve been working and paying tax overseas for many years. Others are migrants, who came to New Zealand on a working visa, but have since returned to their home country. They didn’t expect the payment, they didn’t ask for it and most are stunned at the suggestion they’ll be receiving it.

“This is another shambolic rollout from a Labour Government that repeatedly treats taxpayers’ money with disrespect.

“New Zealanders will be shocked to learn that their hard-earned dollars are being sprayed around the world in a surprise lottery.

Would there be any other use of scarce public funds than this?

“The Band Aid payment was a policy made on the fly, belatedly responding to the cost of living crisis Labour had previously sought to deny.

“Both the Treasury and IRD warned Ministers not to go ahead saying it would be administratively complex.

“Despite the warnings, the Government pressed go regardless and Kiwis are now paying the price for that arrogance.

“The Minister of Finance is accountable for this debacle. How many people are getting this payment who shouldn’t be and what will the Government do about it?”

If the scriptwriters for Yes Prime Minister are looking for inspiration they would find plenty in New Zealand.

But this is no laughing matter.

It’s yet another example of the government’s wasteful spending, disregard for taxpayers’ money and inability to develop good policy and deliver on it.

We can’t afford this government.

 


Record rate rise

14/07/2022

The Reserve Bank has set a new record – raising the cash rate by 50 basis points three times in a row:

Today’s increase in the Official Cash Rate and new food price data show the cost of living crisis is getting worse, National’s Finance Spokesperson Nicola Willis says.

“Inflation under this Labour Government is so out of control that the Reserve Bank is having to increase interest rates faster than at any previous time in New Zealand’s history. This is the first time ever that the Bank has increased the Official Cash Rate by 50 basis points three times in a row.

That’s not a record the bank can be proud of.

This dramatic tightening means anyone due to re-fix their mortgage in the coming months will get hammered by rapidly rising borrowing costs. Under Labour, a family with a 80% mortgage on an average priced home will pay nearly $350 more per week in interest payments today than when Labour came to office. 

“Adding to the stress for families, Statistics New Zealand food price data out today shows grocery prices up 7.6 per cent compared with a year ago. Milk now costs 10.4 per cent more than last year, yoghurt 14.4 per cent more and potato crisps are up 11 per cent.  

We can all live without crisps but dairy products are important ingredients in a healthy diet.

The price increase will be partly due to the high farmgate milk price, but they’re also due to inflation’s impact on fuel, energy and other inputs, as well as the inflationary impact of steep minimum wage increases.

Wage growth is not keeping up with rapidly rising prices meaning Kiwis are going backwards under Labour, with the cost of living crisis set to bite deeper.

I used to have a reasonable idea of what I’d be paying at the supermarket checkout. Now it’s always more than I expect and seeing people leave something’s behind at the checkout because they can’t afford them is happening more often.

“Labour has no plan to do its bit to address the domestic drivers of inflation. Instead its economic mismanagement has made the cost of living crisis worse.

“Documents I have obtained show Treasury warned the Finance Minister in March that if he further ramped-up government spending that would worsen inflation and drive up interest rates. Instead of heeding this advice the Finance Minister launched a record spend-up in the May Budget.

The record spend-up would be bad enough if it was on necessities, but far too much of it is not.

“The Government’s addiction to spending and its unwillingness to fix immigration settings are making things worse for struggling Kiwis, putting more pressure on inflation and interest rates.

“The Government should adopt National’s five point plan to fight inflation – return the Reserve Bank to a single focus on price stability, reduce costs on business, remove bottlenecks in the economy, restore discipline to  government spending, and prioritise tax relief for workers.”

Our Reserve Bank used to be a model for the world, now the governor seems to spend far more time and energy on te ao Māori – a Māori world view than what ought to be his focus – reining in inflation.


$1 billion bandaid

01/07/2022

Remember how Labour was going to solve the housing crisis?

It’s got much worse on their watch and  they’ve spent $1 billion on a bandaid:

The Government’s housing failure has clocked up a new milestone: $1 billion has been spent on emergency housing, National’s Acting Housing spokesperson Nicola Willis says.

“This is a staggering amount of money and is emblematic of Labour’s complete and utter failure on housing.

“Labour promised they would solve New Zealand’s housing crisis. Five years on, taxpayers have paid more than $1 billion in Emergency Housing Special Needs Grants, mainly to motels, with thousands of people living in motels for months at a time.

“Rapidly rising rents and unaffordable housing have pushed thousands more New Zealanders onto the state house waiting list and into emergency housing motels.

“Motels were meant to be a short-term fix to New Zealand’s housing problems. Under Labour motels have become the solution. Emergency housing has become a get-rich-quick scheme for motel owners, and has proven to be disastrous for vulnerable New Zealand families.

Many motel owners would have welcomed the government money when borders were closed and domestic travel was severely restricted.

Motels are better than no house but they’re a very poor substitute for proper homes for families.

“It is just shameful that around 4,500 New Zealand kids wake up every morning in a motel room.

“The Government seems to have given up on solving the underlying drivers of emergency housing need, instead opting for the short-term approach of writing a big cheque and looking the other way.

“The Government says state houses are the solution, but have allowed the state house waiting list to explode from fewer than 6000 people when National left office to more than 27,000 today. Meanwhile its state-house builder, Kainga Ora, has demolished or sold more houses this year than they’ve actually built, while only 1365 of the 100,000 Kiwibuild homes promised have been delivered.”

Demolition of selling houses isn’t necessarily bad policy if the houses are in the wrong place, poor condition or otherwise unfit for purpose.

But it’s hypocritical for Labour to be so eager to highlight the state houses sold or demolished when National was in government when they’re doing it too.

National would:

  • Take pressure off rapidly rising rents (up $50 a week in the past year) by removing Labour’s “Tenant Taxes”, restoring interest deductibility for private rentals and taking the 10-year brightline test back to two years.
  • Fund community housing providers to build new social homes and provide targeted support to vulnerable tenants. The community housing sector is ready and willing to grow, they just need a Government that will back them.
  • Using a targeted social investment approach to support vulnerable individuals with effective interventions that get results.
  • Support more housing supply by removing RMA barriers and working with local government to fund infrastructure needed for growth.

“Labour has failed on housing. The state house waitlist has quadrupled, rents are up $150 per week and now the Government has spent $1 billion on housing people in motels.

That’s a very expensive and inferior bandaid.

 


Food inflation 6.8%

15/06/2022

StatsNZ confirms what everyone who eats  knows:

The annual rate of food price inflation increased between April 2022 and May 2022, Stats NZ said today.

Food prices were 6.8 percent higher in May 2022 compared with May 2021, up from an increase of 6.4 percent in April 2022 compared with April 2021.

In May 2022, the annual increase was due to rises across all the broad food categories we measure: 

  • grocery food prices increased 7.4 percent
  • restaurant meals and ready-to-eat food prices increased 6.0 percent
  • fruit and vegetable prices increased 10 percent
  • meat, poultry, and fish prices increased 7.0 percent
  • non-alcoholic beverage prices increased 2.7 percent.

Grocery food was the largest contributor to this movement, with increasing prices for restaurant meals and ready-to-eat food providing the second largest contribution.

“Average prices for grocery food items like yoghurt, milk, and cheese were all notably higher than they were in May 2021,” consumer prices manager Katrina Dewbery said. . . 

The price of dairy products doesn’t always mirror the farmgate milk price, but record payouts from dairy companies will sooner or later lead to higher prices for milk and milk products.

With milk swaps for this season at more than $10 and the cost of fertiliser, fuel and labour increasing there’s very little likelihood that prices for dairy products will be decreasing soon.

Nor is there any hope of imminent relief for the cost of living crisis:

Kiwi families keep going backwards with food prices continuing to rise rapidly, National’s Finance spokesperson Nicola Willis says.

“Latest numbers from Stats NZ show food prices climbed 6.8 per cent higher over the past year, accelerating beyond the 6.4 per cent rate seen the month prior, with grocery prices now rising at their highest level in a decade.

“These rapidly rising prices are part of the wider inflation tsunami hitting our economy, with hard-working Kiwis left swamped in its wake, as their wages rise slower than prices.

The temporary reduction in fuel tax and extra $27 a week for some have already been more than swallowed up by rising prices for basic necessities.

“While Labour likes to put this all down to pricing decisions made by supermarkets, the truth is New Zealand’s inflation problem is far more widespread.

“Restaurant prices are rising at their highest rate since 2009, with ready-to eat food prices rising 6 percent in the year to date, as inflation gets a grip beyond supermarket shelves.

“Grant Robertson has no plan to tackle inflation. The Government has instead poured more fuel on the fire with more government spending, pushing up interest rates and worsening the cost of living crisis.

“The Government should adopt National’s five point plan to fight inflation – refocus the Reserve Bank on price stability, stop adding unnecessary costs to businesses and employers, reduce the bottlenecks that are holding back growth, including addressing labour shortages, restore discipline to Government spending and inflation-adjust tax brackets to increase Kiwis’ disposable incomes.

“This week many families will bypass the yoghurt in their weekly shop, put off by the sky-high cost. It’s time the Government stopped blaming the war in Ukraine, stepped up and delivered a plan to fight inflation.

Inflation isn’t solely and New Zealand problem and higher prices of imports is a contributing factor, but the government can’t control that.

It can and must control it’s own spending and require the Reserve Bank to do what it’s supposed to do – keep inflation between one and three percent.


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.


Five ways to counter inflation

26/04/2022

Finance Minister Grant Robertson is washing his hands of inflation, blaming it on overseas factors out of his control.

He’s wrong and National’s finance spokesperson has five ways he could help:

. . . One: Stop adding costs to business that end up being passed-on to the rest of us, as we’ve seen with new taxes on rental properties. Halt plans for proposals such as a jobs tax and new union-mandated industry-wide employment agreements.

Two: Remove bottlenecks in the economy that are constraining productive growth. Begin by fixing immigration settings that are causing some highly skilled workers to pack their bags and preventing others from coming at all.

Three: Take a more disciplined approach to Government spending. This year, Government spending will be around $128 billion, around $52b more than the Government spent in 2017. More than ever, ministers have a solemn responsibility to get maximum bang for every buck, ensuring that money is delivering more services and better outcomes and not just pumping up prices across the economy.

Four: Re-visit plans to go on the biggest Budget spend-up in history. The Finance Minister has foreshadowed a record-breaking amount of new operational spending in an overheated economy. Carefully assess each proposal to ensure it won’t add fuel to the inflation fire.

Five: Prioritise income relief for workers. Inflation has pushed people into higher tax brackets, piling billions more into the Government coffers, when Kiwis need that cash more than ever. The Government should follow National’s plan to inflation-adjust tax brackets, so that taxpayers can hold onto a bit more of what they earn, with $1600 more a year for a household on an average income. . . 

The government can’t do anything about imported price rises but it is partly responsible for the domestic component which makes up around half the 6.9% inflation.

It purports to care about the poor but failing to deal with inflation will everyone poorer, hitting those who can least afford it hardest.


Theft as servants

19/04/2022

A letter from the bank told me the supposed good news.

The interest on my savings account is going up from not very much to a little bit more.

I don’t expect a letter form my bank to talk about tax and inflation and it didn’t mention that the government will take tax off the interest nor did it say that inflation will take even more not just from the interest but the real value of the money invested.

When that money is for extras, that’s unfortunate. When it’s for rainy days, it undermines security and feeds uncertainty, and when, as it will be for a lot of people, it is for necessities it will lead to hardship.

Inflation is even worse for people with no savings as it feeds the cost of living crisis:

New figures on food prices from Statistics New Zealand confirm the cost of living crisis is only getting worse on Labour’s watch, says National’s Finance Spokesperson Nicola Willis.

Data released today shows the highest annual food price increase in a decade at 7.6 per cent, with fruit and vegetable prices increasing a staggering 18 per cent in the past year.

“These numbers confirm what Kiwis already know: New Zealand is experiencing a worsening cost of living crisis, with prices running laps around wage growth.

“Meanwhile the Minister of Finance continues to pat himself on the back, telling Kiwis they are better off, while in reality many Kiwis are slipping further behind each month as they struggle to keep up with skyrocketing costs.

“Labour needs to stop playing the blame game on inflation and do their bit to rein in costs.

“The War in Ukraine isn’t to blame for fruit and vegetables going up by 18 per cent in the last 12 months.

“The Government should rein in its big spending plans, hit pause on plans to add more costs to business and prioritise tax relief for the squeezed middle.

“Right now the biggest beneficiary of runaway inflation is the Finance Minister – who will rake in billions more in tax receipts as a result.  He should put New Zealanders first and give them some relief. 

“Kiwi families deserve relief. Under National’s tax plan, a family with two earners each on the average wage would receive $1600 a year in tax relief. In contrast, Labour is doing nothing for the squeezed middle and their failed policies are pushing everyone further behind.”

Last week Minister of Commerce and Consumer Affairs David Clark blamed supermarkets for inflation but as Eric Crampton pointed out, that’s economic nonsense:

. . . Greed is a poor explanation for inflation, not because companies are altruists, but because greed is always with us. It isn’t cyclical.

Should we credit corporate public-spiritedness for the five years from December 2011 through December 2016 when inflation ran well below the midpoint of the RBNZ inflation band?

Of course not. Monetary policy drives inflation, not changes in greed. . .

And whose responsible for monetary policy? The Reserve Bank. And whose responsible for the Bank’s target and ensuirng it meets it? The government.

. . . In short, the minister was wrong from beginning to end. Absolute economic ignorance would be the most charitable explanation, but even then he might have considered asking Treasury’s advice.

More plausibly, Clark was scapegoating the supermarkets to justify populist measures against them, or to deflect attention from his government’s failure to keep the Reserve Bank on target, or both.

Voters should be wary of policies justified by scapegoating.

The government’s excessive borrowing, reckless spending and the RB’s missing its target are to blame for inflation that is well above the bank’s targetted range.

Theft as a servant is a serious criminal offence. It doesn’t apply to public servants in this context but inflation is theft and they – the government and RB are responsible for it.


Wellbeing $s not well spent

25/03/2022

How many households can afford another $150 a week?

The cost of living crisis is set to get even worse, with ASB today signalling the average household could be $150 worse off a week by the end of this year, National’s Finance spokesperson Nicola Willis says.

There’s a lot of households that don’t have any spare money every week, now. They can’t possibly find an extra $150.

“With inflation already at a 30-year high and forecast to keep climbing, wages not keeping up with costs, and interest rates set to bite, struggling Kiwi families are becoming increasingly short of cash for the essentials.

“It’s not just petrol prices that are going up – food, housing and borrowing costs are soaring too. Many families will be facing difficult choices in the year ahead.

“For some, the increase in the cost of living will be much more than $150 a week. Things are going to get particularly tough for young families who had to take on large mortgage debt just to get their feet on the property ladder.

“The Government’s only response has been the re-announcement of already scheduled changes to benefits and a three-month petrol tax tweak. Those measures will provide small relief for some, but won’t help the vast majority of Kiwis who are worse off under Labour.

“The Government must set a very high bar for any additional spending. At a time when Kiwi families are being forced to tighten their belts, so too should the Government.

“Labour needs to rein in their big new spending plans to take some pressure off prices and interest rates, and then deliver meaningful tax relief to the squeezed middle.

Labour must also take a very strict look at existing spending and take a very sharp scalpel to any and all waste.

“National’s proposal to reset the tax brackets for inflation back to where they were in real terms in 2017 would mean that someone earning $55,000 a year would pay $800 less tax. It would also mean another $546 for a couple on NZ Super.

“When inflation is the highest in three decades, now more than ever is the time to adjust tax brackets for inflation and give Kiwis some of their own money back.”

Refusal to adjust tax brackets for inflation is increasing taxes by stealth.

Leaving people with more of their own money is a start.

It is however, one which this government is unlikely to find attractive.

It also doesn’t have any appetite for reducing waste, even if it could start with ensuring its agencies aren’t profligate with expenditure on furniture:

The New Zealand Taxpayers’ Union can reveal how the Department of Internal Affairs (DIA) spent $2,047,388 on furniture in just 18 months.

Last month, National MP Melissa Lee grilled the DIA for an apparent furniture blowout in 2020/21, but now we learn that she wasn’t given a full accounting of the Department’s shopping spree.

An official information response obtained by the Taxpayers’ Union shows that the DIA spent $1,935,674 million on furniture for its offices in the 18 months to the end of 2021. The major expenses included workstations (desks), chairs, and ‘collaboration furniture’ for shared spaces.

Additionally, $111,714 was spent on furniture for use in employees’ homes. Two hundred and forty-eight employees received office chairs to use at home, at an average cost of $431 each. Some staff were even given adjustable foot rests, and one received a $115 floor mat.

The spending figures exclude installation costs and IT equipment.

Union spokesman Louis Houlbrooke says, “The spending works out at $1,048 for every permanent employee. Are we expected to believe that every desk, chair, locker and beanbag all went kaput at once? Remember, this was a period in which a large portion of DIA’s staff were working from home.”

“It appears that DIA has pressed ahead with a department-wide furniture revamp instead of simply replacing items on an as-needed basis. This is egregious during a cost of living crisis when taxpayers are tightening their belts and making sacrifices.”

“The Department even forked out for 3,526 workstations despite only employing 1,954 permanent staff. This kind of spending raises the question of whether DIA is in fact over-funded. If the Government is serious about reining in debt, it should take a close look at the budgets of DIA and other major public service entities.”

More detailed descriptions of a selection of DIA furniture purchases can be found in a response to Select Committee questions by Melissa Lee (page 23). The breakdown reveals a strong proclivity for standing desks.

The sum itself, $2 million, is small change in the grand scheme of government finances.

There’s a far bigger number of far greater concern –  $1.9 billion that hasn’t resulted little improvement in mental health.

A report released today questions why $1.9 billion of investment in the 2019 Wellbeing Budget has not seen improvements materialise as hoped.

The Mental Health and Wellbeing Commission has found long wait times for specialist support, more prescriptions being handed out for anti-depressants, and more Māori being put into solitary confinement.

Its chief executive, Karen Osborn, said there had been some improvements to primary and community services, but “the specialist end of the services are still under a lot of pressure”. . . 

National Party MP Matt Doocey said the mental health services he had talked to did not know where the government’s $1.9b investment had gone.

“You’ve got to ask yourself – where has all the money gone, why is it not making difference, and why are services harder to access?” he said. . . 

Whether  it’s one agency spending a couple of million on furniture or nearly two billion that’s doing little to address major problems, they’re signs of government that is much better at taking money than ensuring it’s well spent.

 


Nicola Willis takes on Finance

16/03/2022

National leader Christopher Luxon has appointed Nicola Willis as Finance spokesperson.

Luxon announced it this morning after Bridges’ resignation yesterday, saying Willis was the right person to take the Government to tack over the cost of living and “wasteful spending decisions.”

It is a return to the days of the deputy also holding the finance role – as was the case when Sir John Key was leader and Bill English his deputy.

“Nicola has an incredible intellect, prodigious work ethic and proven ability to hold the Government to account as we’ve seen her do on housing. She will build on National’s track record as the best economic managers to help Kiwis get ahead.”

He pointed to Willis’ background as a member of Parliament’s Finance and Expenditure Select Committee and previously held a number of senior management roles at Fonterra.

He said she also understands how finance interacts with the other portfolios across Government – and prior to politics had a good business and commercial orientation after working at Fonterra.

Willis said it was important to have good people around you, and National had a good team of advisers to develop a fiscal “and most importantly an economic growth plan”. . . 

Chris Bishop takes on responsibility for housing infrastructure portfolios and moves up one place to number three in the caucus. Shane Reti moves up to four and Paul Goldsmith climbs seven places to five.

National lost a lot of political experience last election but a team with the right skills, ability and financial acumen will make a better government than one full of political and bureaucratic experience but little knowledge or experience of life and business outside politics which is what we’ve got now.


Cut waste not services

15/03/2022

Critics of National’s plan to adjust tax thresholds and reverse all Labour’s new taxes have resorted to the tired old criticism that will mean cuts to essential services like education and health.

The idea that there is waste to be cut that would reduce costs without impacting services doesn’t occur to them, but there are rich pickings.

They could start with saving $29 billion:

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.

If history is any guide, the explosion won’t stop at $29.2 billion. Projects like this always take longer and cost more than budgeted.

“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.”

It’s too late to save the $24 million Kāinga Ora spent on office renovations:

Kāinga Ora’s spent $24,354,759 of taxpayer money over the past four years on itself on office renovation.

The biggest spend ups were in the last financial year:

    • $230,661 went on signs
    • $829,797 on a complete fit-out and renovation in Christchurch
    • $5.5 million for a complete fit-out of the Newmarket offices
    • $12 million on a total renovation of its Wellington headquarters.

“I think New Zealanders will struggle to see why this Government is prioritising multi-million-dollar upgrades for swanky new offices,” says National’s housing spokesperson Nicola Willis. . . 

That money has been spent but it indicates a poor regard for public money that must stop.

A change of policy to ensure no money is spent on boondoggles like the light rail  and that government departments and ministries cut all the fat out of their operations would be a very good start to help pay for the tax cuts without reducing any essential services.


Political PR is not public service

04/03/2022

Public Service Commissioner Peter Hughes has rebuked Kaianga Ora for acting politically:

Public Services Commissioner Peter Hughes has reprimanded the Government’s public housing agency Kāinga Ora after Newshub revealed a cover-up in 2021. 

Newshub revealed last year that Kāinga Ora brazenly took steps to cover up the fact it was using a Labour Party candidate in its taxpayer-funded advertising, risking political neutrality. 

While the agency knew Arena Williams – now MP for Manurewa – was planning to run for Labour in 2020, emails showed it hid the fact, choosing to act like it was unaware.  . .

Hughes said in a statement that Kāinga Ora got it wrong when it considered the principle of political neutrality, which he said was fundamental in the New Zealand Public Service.

“Kāinga Ora failed to do the right thing when it became aware the person it was to feature in a Kāinga Ora sponsored article was a candidate,” Hughes said. 

“The email suggesting the agency pretended it did not know about Ms Williams’ candidacy was unacceptable. All parties agree.

“I expect Public Service agencies to consider whether it is appropriate for public funds to be used to give positive exposure to a political candidate in this way. Government advertising must always be impartial and free from partisan promotion of government policy and political argument.” . . 

Not only was it acting politically, it was paying to promote itself in what looked like news stories:

The Housing Minister must act to restore confidence in Kāinga Ora after a Public Service Commission investigation concluded that the agency repeatedly failed to meet the standards expected of a public service agency, National’s Housing spokesperson Nicola Willis says.

“The release of this report by Peter Hughes responds to concerns I raised last year about Kāinga Ora’s use of public money to promote a Labour Party candidate and the subsequent cover-up.

“I revealed this conduct following my discovery of a $25,000 per month contract Kāinga Ora entered into with a media entity through which it promoted itself through paid content designed to look like news stories.

How could public servants think self publicity was good use of scarce funds?

“The investigation by the PSC confirms my grave concerns, stating these events ‘demonstrated a misunderstanding of the principle of political neutrality at all levels within the organisation’, with their response to the airing of these issues showing a ‘pattern of minimisation’ and was below the standards expected of a public service agency.

The Public Service Commissioner found, among other things, that:

    • Kāinga Ora’s actions had the ‘effect of providing positive publicity for a political candidate, just before and during an election period’.
    • Kāinga Ora failed to acknowledge their mistake, instead ‘maintaining a position that minimised the issues and contained some factual errors’.

“I am astonished that despite this damning report, no one at Kāinga Ora has been held accountable for its failure to meet its duties as a custodian of taxpayer money.

“Kāinga Ora is a key public service agency, having more than doubled in size since Labour came to power, with 2560 employees and an annual operating revenue of $1.7 billion.

How many of those new employees are paid to do public relations and political activism rather than core business?

“It will be of serious concern to all taxpayers that despite these massive responsibilities Kāinga Ora failed to meet standards of political neutrality, and then when these failings were revealed did not front up but instead sought to cover up.

“Minister Woods must explain why she continues to have confidence in the leadership of Kāinga Ora when not one person has been held accountable for these extraordinary failings.

“Kāinga Ora’s response to this investigation has been extremely weak and amounts to little more than the formation of a government relations team (within the government agency) and an offer from the PSC to hold the hand of executives on future issues.

“New Zealanders deserve much better from an agency that employs more than a dozen people on salaries in excess of $300,000 a year.

“The standard you walk by is the standard you accept. Minister Woods must not walk past this report. She must act.”

Political PR is propaganda not public service.


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