Stop tax increases by stealth

09/04/2021

National is seeking to stop tax increases by stealth:

National is committed to letting Kiwis keep more of what they earn and has proposed new legislation that will end tax hikes by stealth, Tauranga MP Simon Bridges says.

Mr Bridges’ Income Tax (Adjustment of Taxable Income Ranges) Amendment Bill, drawn from the Member’s Ballot today, will require tax thresholds to be adjusted every three years in line with the cost of living. This will mean that within a year, after every election, Treasury will advise the Government on how much the thresholds should be adjusted for inflation.

“This will stop New Zealanders moving into higher tax brackets even when their income isn’t keeping up with the rising cost of living, putting an end to inflation being an annual tax increase by stealth.

“New Zealanders will be able to keep more of what they earn, helping them stay on top of rising costs for necessities like petrol, rent and electricity.

“The Tax Working Group advised the Government that bracket creep could lead to as much as $1.7 billion in stealth tax increases in a given year. The Government is taking more than it needs, only to waste billions on bad spending.

If passed into law, this change will make a real difference, Mr Bridges says.

“It will mean Kiwis can keep more their own money in their own bank accounts,” Mr Bridges says.

“This law change shows how committed National is to helping New Zealanders get ahead.

“There is widespread agreement that bracket creep is a hidden tax increase on hard working New Zealanders, and I urge Finance Minister Grant Robertson to stop taxing Kiwis by stealth and wholeheartedly support this law change through all stages.”

The Taxpayers’ Union applauds the Bill:

. . . Union spokesman Louis Houlbrooke says, “From a taxpayer perspective, this is one of the most important private members’ bills we’ll see in our lifetime. For decades successive governments have exploited inflation to sneakily increase the average tax rates levied on New Zealanders. It’s a stealthy, dishonest tax hike that makes a liar of any politician who promises ‘no new taxes’.”

The Taxpayers’ Union has campaigned against bracket creep since 2016. In a submission to the Tax Working Group, the Union highlighted bracket creep as the ‘under-arm bowling of our tax system’, explaining: Inflation sees taxpayers’ nominal incomes, but not real incomes, increase. Because income tax thresholds are fixed, taxpayers face a higher proportion of their income lost to income tax, without any corresponding increase to their real income.

“Take our 30 percent income tax rate. When it was introduced in 2010 for income over $70,000, that was the equivalent of $83,000 in today’s money. That meant only high earners were hit. But today, $70,000 is an unremarkable salary. It’s atrocious that middle-income New Zealanders are forced to give up 30 percent of any pay rise to the taxman.”

“Labour has no good reason to block this bill. They’ve already rushed through unannounced taxes on housing, so they don’t need extra revenue. In fact, under Bridges’s bill, the Minister of Finance could still veto bracket adjustments on a case by case basis. Of course, he’d have to explain himself to New Zealanders, but he shouldn’t be afraid of accountability.”

Having no good reason to block the bill might not be enough to stop Labour doing that.

But if it is serious about its quest for wellbeing and the need for kindness, it will do the right thing and back this bill to stop the stealthy tax increases by adjusting thresholds in line with inflation.


Discrimination doesn’t solve discrimination

02/02/2021

The government has major problems to address.

Among them are dealing with Covid-19, including issues with border protocols, shortcomings in MIQ and lack of certainty around when and if we’ll get vaccines; the housing crisis; and increasing numbers of people in poverty.

Is it an admission it has no answers to these problems that instead of focusing on these, it is going to prioritise a law change to take away the right for people to petition against Maori wards on local councils?

The government is to introduce legislation to uphold council decisions to establish Māori wards, said Local Government Minister Nanaia Mahuta who made the announcement in New Plymouth today.  . .

Mahuta said the rules needed to change.

“The process of establishing a ward should be the same for both Māori and general wards. . . “

Maori and general wards are very different – the latter apply to all people in the area, the former doesn’t.

If that difference isn’t a strong enough argument against the change and the issue is that general and Maori wards are treated differently a better solution would be to allow petitions over changes to all wards.

Discrimination isn’t solved by more discrimination, although a lack of Maori wards isn’t discrimination when Maori have the same rights as other New Zealanders to stand in local body elections.

If the issue is that in spite of this there are too few Maori on councils, the solution isn’t special wards, it’s addressing whatever stops more standing for councils in existing wards.

There is no single Maori view that will be given a voice by separate wards but this law change will give some Maori more control over councils with less accountability than general wards provide.

That is another good reason to support the Taxpayer’s Union’s call for the right to petition for recall elections:

Stronger accountability tools for local government will be needed if the Government succeeds in entrenching Māori wards, says the New Zealand Taxpayers’ Union.

Union spokesman Louis Houlbrooke says, “As more councils introduce Māori wards, a significant proportion of our local representatives will be accountable to just one segment of local of voters. This loss of accountability needs to be offset with new accountability tools.”

“An obvious example is recall elections: when a councillor breaks a promise or brings disgrace to their authority, voters shouldn’t have to wait until the next election to vote them out of office. Voters should be able to petition to recall a councillor. Under this model, as practiced in the UK and many parts of the United States and Canada, if the petition reaches a given threshold of signatures a recall election will be triggered for that ward.”

Last year the Taxpayers’ Union, the Auckland Ratepayers’ Alliance, and Northern Action Group jointly released a paper proposing recall elections. It is available at www.taxpayers.org.nz/recall_paper

Disfunction in several councils in recent years provide good arguments for the ability to petition for recall elections. Losing the right to petition against Maori wards is another one.

What makes this worse is that it appears this was on Labour’s agenda before the election but wasn’t in the party’s election policies.

That wouldn’t have made a difference to the outcome but it is a very bad look for a government that aspires to be open and transparent.

 


Pay it back petition – UPDATED

11/12/2020

The Taxpayer’s Union has launched a petition to recoup the public funds used to pay for Trevor Mallard’s expensive misspeaking:

A written Parliamentary question has confirmed the Taxpayers’ Union’s understanding that the Speaker paid a six-figure settlement to a staffer he accused of rape.

Responding to the news, Taxpayers’ Union spokesman Louis Houlbrooke says:

“Taxpayers should not have to cover the bill for Trevor Mallard’s careless accusations. It’s not like making defamatory allegations is part of his job description.”

“Trevor Mallard must commit to paying back the taxpayer money handed over to the accused staffer and the Labour Party’s law firm.”

The Union has launched a petition calling for the repayment at www.taxpayers.org.nz/trevor.

“The Speaker is paid a taxpayer-funded salary of $296,000, so we’re sure he can work out a payment plan with Parliamentary Services.”

“As a gesture of goodwill, if Trevor Mallard repays the money the Taxpayers’ Union will stop hassling him for spending $572,000 on a slide outside Parliament.”

Forgoing the hassling over the slide is a very magnanimous offer by the TU.

The speaker needs to have the confidence of parliament. He was unpopular in the first term and this is a very bad start to his second.

UPDATE:

National has lost confidence in him:

National has lost confidence in Speaker Trevor Mallard following revelations that more than $330,000 of taxpayers’ money was spent on settling the legal dispute he created by falsely accusing a former Parliamentary employee of rape.

The Speaker has revealed to National, in answers to written parliamentary questions, that the total amount of public funds spent as a result of his media comments from May 2019 that resulted in a public apology for “distress and humiliation” was $333,641.70.

Of that, $158,000 was an ex-gratia payment to the former staffer to settle a legal claim, $171,000 was paid in fees to Dentons Kensington Swan and $4641.70 went to Crown Law for advice to the former Deputy Speaker.

“This is unacceptable behaviour from the Speaker of the House. This sheer size of this pay-out illustrates how serious the matter is,” Leader of the Opposition Judith Collins says.

“It is the Speaker’s job to set the standard of behaviour for everyone at Parliament but he has been reckless with his words, resulting in taxpayers footing a bill of more than $330,000 to clean up this mess.

“There has been no formal apology to Parliament for this, despite the National Party encouraging the Speaker to do so on the final sitting day this year.

“Because Mr Mallard has not lived up to the high standards of behaviour that he has set for Parliament, we believe he is no longer fit to hold the role of Speaker.

“The people who work at Parliament, and the taxpayers of New Zealand, deserve better.”

The written answers are here.

Labour has an outright majority so losing National’s confidence might not worry Mallard. But this behaviour ought to worry Labour.


Stick to your word

05/12/2020

The Taxpayer’s Union is calling on Grant Robertson to keep his word :

The New Zealand Taxpayers’ Union has today launched its ‘Stick to Your Word’ campaign calling on Grant Robertson to keep his promise made six weeks ago not to touch the bright line test.

Union Campaigns Manager, Louis Houlbrooke, said: “Despite promising prior to the election not to change any taxes beyond what was in Labour’s election policy, Robertson is now asking Treasury for advice on an extension of the ‘bright-line’ test.”

“Extending the bright line test is effectively imposing a nasty capital gains tax – at a rate of up to 39% – for property owners who sell within ten years.”

“Taxing houses will not make them more affordable. What it will do is hammer people who need to cash out of property for personal reasons. It would reduce liquidity in the market, and could even incentivise politicians to drive up house prices further in order to reap tax revenue from the capital gain.”

“If the Government decides it’s okay to break its tax promises, it won’t stop at the bright line test. A Green Party-style asset tax or even a Michael Cullen-style capital gains tax could be back on the agenda. That’s why we’ve set up a tool for New Zealanders to tell Grant Robertson to keep his promises.”

The campaign advert can be viewed here .

New Zealanders are encouraged to write a postcard to Mr Robertson via the website StickToYourWord.nz

 


Rural round-up

01/11/2020

Shearers remain hopeful foreign workers will be given exceptions as clock ticks :

The shearing industry is nervously waiting to find out if it will be able to bring in overseas shearers to help this season.

The New Zealand Shearing Contractors Association had initially hoped to bring in up to 200 shearers to fill gaps in the local workforce, but with the clock ticking to get people into the country in time, that request has now been scaled back to 40 or 60.

Association president Mark Barrowcliffe said work would ramp up significantly in a month’s time. . .

Farmers need to show vulnerability :

Kane Brisco, who is in his seventh year 50:50 sharemilking at Ohangai near Hawera in South Taranaki, started his own social media page to get farmers talking.

“One of the things I’ve noticed with farmers under pressure is that they withdraw into themselves. I’ve done it myself,” he said.

“So, I think that as a farming community we need to be much more open to discussing the pressures we’re dealing with.

“We need to get better as a community at genuinely finding out how people are doing. The common answer is often ‘yeah good’, no matter how people actually feel, so we need to combat that.  . . 

NZ’s sustainable environment – Mark Chapman:

Freshwater quality and climate change mitigation are inexplicably linked to the whole country creating a sustainable environment. This job is for both urban and rural New Zealand to tackle together. What is often missed is how creating a sustainable environment is linked to businesses being profitable. This is because it is costly to achieve the outcomes that are needed and, where these outcomes reduce productivity and restrict the ability to grow or farm, the required funding becomes very scarce.

This is the conundrum facing the nation and not just rural New Zealand: how are we as a country – as we recover from Covid – going to finance the next steps to environmental sustainability?

It may well be a surprise to urban New Zealand that environmental sustainability is something growers and farmers have been committed to, intergenerationally, for decades. As a result, the rural sector has a significant head start on urban New Zealand.

Overriding these concerns is the need to feed New Zealand as well as keeping businesses profitable, to enable activities that support environmental sustainability. So, there is a balance to be reached: maintaining businesses profitability, feeding the country and making environmental enhancements. . . 

Revealed: taxpayers Cover animal welfare fines For Landcorp farmers:

The New Zealand Taxpayers’ Union is today calling on Landcorp to stop reimbursing farmers fined for animal welfare offences.

The Taxpayers’ Union requested correspondence pertaining to staff reimbursements of fines paid by Landcorp over the last three years. Landcorp provided information revealing the following:

• A $500 reimbursement for an animal welfare fine for transporting a cow that birthed a calf en route to slaughter on a moving truck. . . 

Science’s major role in our farming future – Neville Wallace:

I grew up during rapid changes in farming techniques from Blue Stone drenching of sheep for parasite control to anthelmintics, rubber rings for animal castration and tail removal. The wool boom of the late forties and fifties led to dramatic changes in farming practice such as the application of fertiliser by Tiger Moth biplanes, which could only carry a eight-hundred weight payload.

Our schooling was scientifically orientated so that we were taught horticulture by the late Rod Syme, who’s career as a horticulturist was to visit schools and demonstrate how to grow a vegetable and potato garden, and the science included how to use artificial fertiliser to increase crop growth and production. 

A leading Taranaki dairy farmer was at the forefront of developing the plastic ear tag for cattle, which ultimately led to the electronic ear tag of today. . . .

Bushfires Royal Commission doesn’t have the answers – Vic Forbes:

Experienced land and fire managers from eight community groups across Australia have jointly written to the Prime Minister urging the restoration of healthy and safe rural landscapes. The grass-roots organisations represent more than 6,000 members and 14 regional councils. They have called for an end to the ongoing loss of human life and the socioeconomic and environmental destruction caused by extreme bushfires.

Former Chief of CSIRO Bushfire Research, Phil Cheney, says that a focus on emergency response at the expense of land management has created an unstoppable monster. Expenditure on firefighting forces is ever-increasing whilst volunteers are being cynically used to deflect criticism away from failed government policies. Land management agencies no longer have primary responsibility for suppressing wildfires. Consequently they have little incentive for stewardship and fire mitigation. Cheney is a scientific advisor to Volunteer Fire Fighters Association.

Chairman of Western Australia’s Bushfire Front, Roger Underwood, points to the stark contrast in historical fire management policies and outcomes on either side of the continent.   Seventy years of data from WA show a strong inverse relationship between the area maintained by mild burning and the area subsequently damaged by high intensity fires. This relationship is especially apparent in extreme fire seasons. . . 


Debt clock launched

14/10/2020

This is frightening:

The official ‘New Zealand Government Debt Clock’ has been launched this morning to track in real time the money politicians are borrowing on taxpayers’ behalf at www.debtclock.nz.

“Based on official Treasury figures, just the speed of the debt clock is terrifying,” says Jordan Williams, a spokesman at the Taxpayers Union.  “Every day the Government is piling on another $128 million dollars.  By 2024, every kiwi household will effectively have another $112,000 on top of their mortgage.”

“One day all this money will need to be paid back – with interest.  That’s why we need to ‘stop the clock’ and force politicians to balance the government budget.”

The development of the debt clock has been funded thanks to the generous donations from members and supporters of the Taxpayers’ Union. Join or support the Taxpayers’ Union at www.taxpayers.org.nz

It’s not just the amount of debt but the poor quality spending on which too much of the money is being spent that is so concerning.


Business confidence tanks

29/09/2020

Business confidence has plummeted:

The New Zealand Herald’s  2020 Election Survey has been released with top business leaders saying New Zealand’s Covid-19 recovery is in peril – and they want a decisive role with Government in the country’s future.

The annual boardroom barometer of 165 CEOs and high-profile directors has business confidence at the lowest it’s ever been in the survey’s 19-year history.

When asked to rate their level of optimism in the New Zealand economy the CEOs surveyed collectively scored it a 1.36 out of 5.

These are bigger businesses and predominantly urban.

I doubt if farmers are any more confident given the fear and uncertainty around added costs and complexities that are being imposed on primary production.

Westpac CEO David McLean says the future has never been so uncertain, but that means that the need for crisp and clear policies and plans has never been greater.

“We need to see pathways mapped, not just for how to escape from the current Covid-19 crisis, but to take us toward a better future by addressing some of the big challenges we face beyond Covid-19, such as increasing our productivity and tackling climate change,” said McLean.

Many, like Mainfreight’s Don Braid, question Prime Minister Jacinda Ardern’s heavy reliance on Government bureaucrats for advice and execution and her apparent unwillingness to listen to the private sector for ideas.

“There are many willing to devote time, energy and ideas in areas that allow New Zealand to find the right environment to operate in a post-lockdown economy,” said Braid.

The New Zealand Herald’s Mood of the Boardroom 2020 Election Year survey, taken in association with BusinessNZ, provides an in-depth assessment of CEO opinion at what is the most concerning time in the survey’s long history.

“It’s heartening that a record number of CEOs took part in the 2020 survey against a background of the Covid-19 pandemic. Optimism may be at the lowest levels seen in the survey’s history, but the CEOs’ responses demonstrated their own commitment to turning the economy around,” said says Mood of the Boardroom executive editor and NZ Herald’s Head of Business Content, Fran O’Sullivan.

With the General Election just weeks away business leaders are looking for more from both Labour and National.

Deloitte CEO Thomas Pippos points to tax policy being a key issue.

“Though Labour’s proposal to increase the highest personal tax rate doesn’t impact on the majority, National has upped the ante by helicoptering in temporary tax relief across the board to stimulate economic growth. Tax therefore promises to be a very complicated and emotive topic, that will either be centre stage this election or not far from it,’’ says Pippos.

BusinessNZ CEO Kirk Hope said Labour’s economic policy response to Covid has underpinned the economy in a challenging time.

“However, the long-term plans are less well understood. They will need to do a hard sell. National’s plans are slightly more pro-business. But both parties need to talk about how quantitative easing enables them to maximise a reduction in borrowing costs to help grow the economy.” . . 

You can read more about the Mood From the Boardroom at the NZ Herald here.

Confidence isn’t helped by the fact that Labour hasn’t released its fiscal plan:

The New Zealand Taxpayers’ Union is calling on the Labour Party to immediately release their fiscal plan, so it can be subjected to the same scrutiny as the National Party’s fiscal plan.

Union spokesperson Louis Houlbrooke said: “The National plan was found to have a few holes after analysis by Labour and independent economists. The Nats admitted to one $4 billion mistake but denied another. It is healthy that major spending plans are put under intense investigation before an election.”

“That is why the Taxpayers’ Union is calling on Prime Minister Jacinda Ardern to immediately release Labour’s own fiscal plan. She has told the nation that her numbers ‘stack up’. That clearly means their plan is finished, fact checked, and ready to go. There is no need to wait for a September Treasury data release to unveil the plan – the Pre-Election Economic and Fiscal Update (PREFU) was reported a little over a week ago. All the fiscal data is there.”

“Let people like Paul Goldsmith, David Seymour, Cameron Bagrie, and your humble Taxpayers’ Union check that Labour’s numbers really do stack up. Then, taxpayers can make an informed choice about who should manage our economy in a post-COVID recession.”

It’s not just a fiscal plan that hasn’t been released, Labour keeps telling us it has a plan for recovery but has given scant details.

Uncertainty is one of the bigger drags on business confidence.

That matters because businesses that lack confidence at best don’t invest and don’t hire more staff, at worst they retrench and make staff redundant.

That so much about Covid-19 and how it will impact the country and the world is uncertain, and to a large degree uncontrollable, makes it even more important that politicians are upfront about their plans and what they can control.


This isn’t best use of borrowed money

25/09/2020

Look what the government is spending borrowed money on:

The New Zealand Taxpayers’ Union is questioning the value of the Arts Continuity Grant, a COVID-19 response fund which has so far paid out $16 million in grants to a variety of questionable short-term arts projects.

Since March, Creative NZ has offered grants of up to $50,000 for ‘a short-term arts project, or the stage of a project, that can be delivered within a changed and evolving environment as a result of COVID-19.’

Many of the descriptions of these projects are, frankly, incomprehensible. It’s hard to see how bureaucrats in Creative NZ can make an objective judgment on which projects are worthy of funding, and which aren’t.

The resulting handouts speak for themselves. Creative NZ is fighting COVID-19 by spending taxpayer money on plays about menstrual cycles, Māori ‘healing theatre’, and ‘Indigenised Hypno-soundscapes’. That’s madness and it reflects terribly on the Minister of Arts Culture and Heritage – who happens to be Jacinda Ardern.

These grants are massively unfair to taxpayers, with the benefits skewed toward politically-connected Wellington weirdos. Handouts for fringe interest groups mean less money is available for tax relief that would reward productive work. . . 

Here’s a selection of projects on which this money is being spent:

Every cent of money spent on these projects is borrowed, accruing interest (albeit rates are low) and must be repaid.

Does anyone, except perhaps the recipients, think this is the best use of borrowed money when the country is in recession and facing decades of deficits?

People who can’t get the health care they need, whose schools are in disrepair, and who care about worsening deprivation for far too many children won’t.


Decade of deficits

17/09/2020

Treasury is forecasting more than a decade of deficits:

With deficits projected out to 2033/34, there needs to be urgent action from all political parties on addressing the national debt, says the New Zealand Taxpayers’ Union. 

Taxpayers’ Union Campaigns Manager Louis Houlbrooke says “After many years of prudent fiscal management from National and Labour, it Treasury is now projecting 15 years of deficits in a row. As a result, net debt will be $31 billion higher – or $17,000 a household – in 2033/34 compared to the Budget 2020 projection. The Government needs to give us a credible path back to surplus rather than leaving taxpayers on the hook for a never-ending accumulation of debt.”

“The major reason for the more than a decade of deficits ahead is Treasury’s belief that our economic recovery from Covid-19 will be more anaemic than previously expected. The message is clear: our recent track-record of weak economic growth isn’t just hurting incomes and entrepreneurship; it’s going to have a serious impact on our public debt.

“The solution to the forecast decade of deficits is to cut wasteful spending, end regulatory taxes on business which stifle growth and employment, and deliver modest tax relief to households and employers to get the economy growing again.” 

It’s 12 years since Treasury last forecast a decade of deficits.

That was when a Labour-led government propped up by New Zealand First was on its last legs. It was also before the global financial crisis hit.

National came to power and in spite of the GFC and Canterbury earthquakes, returned to surplus in less than 10 years.

Who will you trust to turn the Treasury forecast round this time – the government that squandered the surplus and had the country back in deficit before Covid-19 hit, or a National-led government that understands that the quality of spending is far more important than the quantity?

Today’s Pre-election Economic and Fiscal Update forecasts a longer and more painful economic crisis than earlier forecast and requires a serious growth plan to get New Zealand back on track, National Party Leader Judith Collins and Finance spokesperson Paul Goldsmith say.

“Our economy is forecast to have shrunk by 16 per cent in the June quarter, and we will be taking on even more debt, an extra $200 billion. Every dollar and cent of this will have to be paid back by our children and grandchildren,” Ms Collins says.

“Unemployment will be substantially worse in 2022 and 2023. Treasury predicts 100,000 more New Zealanders will lose their jobs in the next two years.

That’s more than 10,000 more than the total population of Palmerston North.

“The Minister of Finance shouldn’t try to sugar coat these figures. He has taken a rose-tinted glasses view at a dreadful picture that cannot be described as anything other than catastrophic. Any short-term improvement on the Budget forecasts is far outweighed by the worsening picture past 2021.

“The contrast between Treasury’s estimate of more than 16 per cent contraction in our economy in the June quarter compared with 7 per cent in Australia shows he should be careful about making comparisons,” Ms Collins says.

“Grant Robertson’s only plan is higher taxes, and no country has ever taxed its way out of a recession, and this a huge one,” Mr Goldsmith says.

“Treasury is forecasting that under Labour New Zealand will be in deficit every year for at least the next 15 years. Grant Robertson and his Government have no plan to get New Zealand back into surplus. Ever.

“New Zealanders have a choice for our economic recovery: more government programmes, welfare and costs for business under Labour or lower taxes, more business investment and quality infrastructure under National.

“National has a comprehensive plan to secure our border and prevent New Zealand from yo-yoing in and out of lockdown. Effective border management, coupled with common sense and pragmatism around the rules, is an important aspect to help our economy can recover.

“We will do everything we can to make it easier for businesses to hire – 90 day trials, flexible employment laws, low taxes and innovative policies like JobStart and BusinessStart.

“Our economic plan of job friendly policies and investment in quality infrastructure will grow our economy, give businesses the confidence to grow and restore household incomes for New Zealanders,” Mr Goldsmith says.

“National will release our fiscal plan soon which will carefully balance the need to inject stimulus, increase investment in core public services and restore Government debt back to prudent levels,” Ms Collins says.

We couldn’t afford the current government before Covid-19 hit, we certainly can’t afford another three years of mismanagement.

 


Shareholders should be first call

16/09/2020

The Taxpayers’ Union says the taxpayer funded lolly scramble for tourism ventures is morally wrong:

New Zealand Taxpayers’ Union spokesman Louis Houlbrooke says, “The latest round of funding by the Government’s COVID-19 tourism rescue package demonstrates how completely arbitrary, unfair, and wasteful this corporate welfare programme is.”

“The lucky recipients include river cruise companies, spa resorts, and helicopter tour operators. While we’re sure these companies have struggled with effects of the pandemic, so have their competitors who aren’t getting handouts.”

“While 130 applicants were successful, another 170 were turned down, and many more potential applicants would have lacked the knowledge or confidence to navigate the bureaucratic grant process. When politicians give taxpayer money to select grant applicants, they distort the market, rewarding companies that devote resources to impressing bureaucrats, and making it easier for those companies to put their self-sufficient competitors out of business. That’s not just wasteful, it’s morally repugnant.”

“We’re calling on all political parties to pledge an end to ad hoc COVID handouts, and instead introduce fairer, less discriminating measures. For example, a temporary cut to GST could motivate New Zealanders to bring forward their holiday plans and spend more. Alternatively, lower excise tax on petrol could make the Kiwi road trip great again.”

A government who took seriously the knowledge that every cent it’s spending is borrowed would not be throwing money at businesses in this way.

Most businesses involved in tourism will have been, and continue to be, hard hit by the impacts of Covid-19 and our closed borders. That isn’t an excuse for giving some money that allows them to compete unfairly with others that missed out on, or didn’t apply for, grants.

What will the money do and what will the businesses do if/when it runs out and the border is still closed?

The responsibility for the viability of these companies is first and foremost that of their shareholders, not taxpayers.


Just wondering

03/09/2020

Just wondering:

Why did James Shaw decide the Taranaki Green School was of sufficient merit to prompt him to issue an ultimatum?

. . .Newshub has obtained an email that went to Government ministers and the Treasury from Shaw’s office and it included a stark ultimatum.

“Minister Shaw won’t sign this briefing until the Green School in Taranaki is incorporated.”

The email said Shaw discussed the ultimatum with the Education Minister. 

“Minister Shaw has also discussed this one with Minister Hipkins.

“Sorry to be the spanner-in-the-works, but if we can get the project included, he’ll sign everything this afternoon,” the email said. . . 

Just wondering:

After all the dead rats he and his party have had to swallow in contravention of their policy in the last three years, why on earth would he make such a strong stand over  this?

Just wondering:

Who leaked the email, and why?

Just wondering:

Why did the other Ministers give in to the greenmail?

Just wondering:

What does it say about a party leader who didn’t remember his party’s policy against all state funding of private schools and what else has he forgotten about his party policy?

Just wondering:

If he’ll read this from the Villa Education Trust:

There are more reasons for dismay than immediately strike home with the Green School $11.7million debacle.

Plenty has already been said about the “greenmailing” of James Shaw over signing off on the rest of the $3 billion. The hypocrisy of the move. The passing the buck by the Minister of Finance and Minister of Education. Etc. We then had Chris Hipkins – Minister of Health, Education, State Services and Leader of the House – reverting to nonsense around Charter Schools and stating that at least the Green School kids won’t be learning in shipping containers.

The first missed point of despair is that the entire response to this spend from the perspective of other schools has been around property. One question you can always ask the Boards of dilapidated schools is how have managed their maintenance budget over the last 12 years. If they are honest you will get a range of answers. The second point is that our genuine crisis in education is student achievement and it is not highly correlated to the buildings they learn in (within reason of course). We have gone educationally insane of we think that flash buildings with close the MASSIVE U.E. gaps for Maori and Pasifika (compared to Asian and European) and reverse the decline against international measures. The NCEA results have already started to slide after 2 years under Labour. With the amount of absenteeism currently happening and the level of online engagement for many this year’s results could be a massive disaster for marginalised groups. However – educators are prepared to make a spectacle of themselves for spouting and a dab of paint.

What’s more important, flash buildings or student achievement?

The injustice our Villa Education Trust feels is around a second hidden effect. In the Learning Support Action Plan 2019-2025, Minister Hipkins acknowledged “one in five children and young people need some kind of extra support for their learning. This might be because of disability, learning difficulties, disadvantage, physical or mental health or behaviour issues” and “New Zealanders want an education system where all children and young people can take part in education and can learn and achieve, whatever their needs.”

In the Plan, Minister Hipkins goes on to say “This Government has a vision for an inclusive education system where every child feels a sense of belonging, is present, makes progress, where their wellbeing is safeguarded and promoted, where learning is a lifelong journey, and where children and young people with learning support needs get the right support at the right time.”

During 2019 we took the Minister at his word – as we are – according to all external reviews (e.g. “In summary we find and conclude that in both schools, the management and staff are actively involved in continuous development, and the delivery, of a unique programme of teaching and learning which is based on a comprehensive ‘local’ curriculum that is aligned with the New Zealand Curriculum, and which provides for the personalised needs of priority learners ‘many of whom have been failed by the current education system” Cognition Education) Hence we proposed to close our small private school and open a non-zoned, 240 student State Designated Character School, near a transport hub for a wide range of Auckland families to access. The Prime Minister had told the country she wanted more options like this and the “work was being done.”

Our school community has been exceptionally poorly treated by Ministry through a process that, so far, resulted on July 7th with Hipkins saying “no” with him blaming his officials and his officials blaming him.

So – while 25 students benefit by $11.7 million at The Green School … 240 students per year with diverse needs will miss out. To rub salt in Minister Hipkins publicly mocked our efforts in the House yesterday. Class, kindness and compassion.

This whole debacle illustrates the problem with politician’s making individual funding decisions:

The Taxpayers’ Union is calling for the abandonment of grant decision making by politicians and Cabinet committees, and a return to the tradition of these being made by officials using objective and transparent criteria.

The following can be attributed to Jordan Williams, a Spokesman for the Taxpayers’ Union:

“The spectacle of politicians horse-trading individual funding decisions is something we expect to see in smoke-filled rooms of yesteryear, not a modern day New Zealand with a reputation of being corruption-free.”

“The Provincial Growth Find, and now the COVID ‘shovel ready’ fund, are normalising a process of decision making that rewards companies which are politically connected. It is a dangerous path.”

“Steven Joyce reintroduced the sort of corporate welfare largess not seen in New Zealand since the Muldoon Government. But instead of fixing the problem, the current Government has doubled down and we have now returned to politicians making funding decisions for individual projects and pet causes.”

“Enough is enough. Now we are seeing the warts and all flaws in the process, New Zealand should return to a transparent process of the politician’s job being limited to setting criteria and objectives, and leaving it to officials to make the individual grant decisions.”

There is a case for Ministers to have a role when decisions are finely balanced.

This wasn’t.

Treasury opposed the grant:

The Treasury advice to Shaw and the others ministers who signed off on hundreds of projects for infrastructure investment says the Green School does not have “full private school registration” and would be unlikely to get that until mid 2021.

“We believe it would be inappropriate to announce or provide government funding for a project that does not yet have the necessary education approvals,” the advice says.

Furthermore, it says even if it had the “necessary” approvals, “we do not recommend funding for this school”.

Treasury also objected to the project being overseen by the Provincial Development Unit saying it was not the “appropriate agency for this school”. . . 

Shaw has accepted responsibility for the debacle but whoever gave into his greenmail is just as culpable.

This isn’t just a waste of money, it’s also a poor reflection on the whole government  its processes and priorities:

The murky brinksmanship revealed in the decisions to fund the Green School suggest the $3 billion shovel ready fund is operating like a slush fund by the Government, National’s Finance spokesperson Paul Goldsmith says.

“Grant Robertson needs to come clean about the deals being done between Ministers. How is it that one Minister could hold up shovel ready projects unless the Green School was signed off?

“It’s clear the Government doesn’t have its priorities in order. These projects are supposed to be about investing in infrastructure to create jobs and grow our economy.

“But the impression left is that the shovel ready fund is operating as yet another $3 billion slush fund with different projects carved out by Government parties for their political wins.

“No matter how hard he tries, Grant Robertson cannot wipe his hands of this decision. He is the Minister of Finance, it is his job to make sure every taxpayer dollar is spent wisely. Instead he signed off on a private school receiving millions of taxpayer dollars.

“With the scale of debt-fuelled Government spending right now, it is more important than ever that the Government demonstrates to New Zealanders that decisions are made on the basis of need and effectiveness rather than ‘wins’ for different Government parties.

“The whole episode makes a mockery of the Prime Minister’s claim there is no politics in Covid.

“The Government can’t claim ignorance, Treasury told it not to give any funding to the Green School because it didn’t have the full education approvals needed for a private school.

“Grant Robertson needs to front up and explain exactly what happened and why he’s allowing himself to be held to ransom by his own Associate Minister of Finance.”

Just wondering:

Does Grant Robertson need reminding of his own words: that every dollar the government pays out is being borrowed?

Just wondering:

What were the merits of the ‘shovel ready’ projects that were put forward for grants and missed out?

It would be difficult to believe that at least some didn’t have a much better cost-benefit ratio than this one.


No indexation = tax increase

11/08/2020

Labour’s wrong on tax – again:

The New Zealand Taxpayers’ Union is slamming the claim by Labour Party finance spokesman Grant Robertson that the National Party’s policy to index tax brackets to inflation is a “tax cut”.

Taxpayers’ Union Executive Director Jordan Williams says, “It’s dishonest to frame indexation – adjusting income tax thresholds to inflation – as a ‘tax cut’, like Mr Robertson did today.”

“Adjusting tax brackets so that people are not artificially pushed into paying higher marginal tax rates isn’t cutting tax. By definition, it’s keeping the rate of tax paid the same.”

“Mr Robertson is trying to cloud the issue so he’s not held to account for the dishonest way he, and successive Ministers of Finance, have increased tax by stealth through wage inflation. It’s a shame he is choosing to be so misleading about tax at a time many households are facing fiscal crisis.”

Adjusting tax thresholds to account for inflation is not a tax cut but failing to do so pushes people into a higher bracket  and subjects them to paying more which is in effect a tax increase.

Given Labour’s big spending plan with borrowed money is not matched by plans to reduce spending anywhere, encourage growth nor to repay the debt it will almost certainly increase some taxes.

Even if it does nothing more, by refusing to index brackets to inflation it will be increasing tax for everyone who is pushed into a higher threshold.


2020 Jonesies

15/07/2020

The Taxpayers’ Union has announced its Jonesies Awards for 2020:

The third annual Jonesie Awards were hosted at Parliament today, celebrating the best of the worst of Government waste. Watch the video at www.taxpayers.org.nz/2020_jonesies.

New Zealand Taxpayers’ Union spokesman Louis Houlbrooke says, “Every year, we host a glamourous Oscars-style award ceremony to highlight and lament the most absurd examples of wasted taxpayer money to emerge in the last 12 months.”

“Behind the tuxedos and gilded statuettes is a serious message: politicians and bureaucrats in both local and central government happily fritter away your hard-earned money on bizarre pet projects and ill-planned schemes without fear of consequence.”

“The Jonesies serve as a shot across the bow for anyone in charge of a government chequebook: rein in the waste, or see your name up in lights at the next Jonesie Awards.”

Local government nominees

Dunedin City Council: Responding to COVID-19 with dots

Dunedin City Council responded to COVID-19 by spending $40,000 on red and blue dots for its main street. The dots were variously justified as a tool to assist social distancing, a way to attract people to the city, and as a “traffic calming” device. The Council also spent $145,000 on a new tourism slogan: “Dunedin, a pretty good plan D”.

Napier City Council: Golden handshakes for a failed CEO

After a series of headline-grabbing failures, Napier City Council gave its CEO Wayne Jack a reported $1 million payout to leave before his contract expired. Mr Jack’s final official act was to throw himself a $4,000 farewell tea party. The Mayor complained that she was not invited.

Wellington Mayor Andy Foster for Extraordinary Leadership

When nine-term councillor Andy Foster was unexpectedly elected Mayor last year, he promptly enrolled himself in a $30,000 leadership course at Arrowtown’s Millbrook estate. However, he has refused to say what, if anything, he learned – and has since spent more money on a team facilitator to smooth over problems on his Council.

Auckland Council: Temporary cycleways for COVID-19

Auckland Council installed 17 kilometres of temporary cycleway in response to COVID-19. Like Dunedin’s dots, the initiative was intended to assist social distancing. All works had to be reversed in a matter of weeks. The total cost is estimated to be more than a million dollars.

Rotorua Lakes District Council: $743,000 for the Hemo Gorge sculpture

Rotorua’s 12-metre, 3D printed Hemo Gorge sculpture was initially planned to open in 2017 at a cost of $500,000. Three years later, it is still under construction, and costs have blown out to at least $743,000.

WINNER: Wellington Mayor Andy Foster for Extraordinary Leadership

Central government nominees

Rt Hon Winston Peters: Responding to COVID-19 with horse tracks

The Deputy Prime Minister and New Zealand First Party Leader led the Government’s COVID-19 response by announcing a $72 million funding package for the racing industry. This package included two synthetic horse tracks. No-one has been able to establish how horse tracks relate to coronavirus.

Rt Hon Trevor Mallard: $572,000 for a Parliamentary slide

As part of his initiative to make Parliament more “family-friendly”, the Speaker of the House commissioned the construction of a playground on Parliament’s lawn. The playground, which essentially consists of a slide and some stepping stones, was budgeted at $400,000, but ultimately cost $572,000.

Hon Chris Hipkins: $87 million for unwanted internet modems

An $87 million package to give students the means to study remotely during COVID-19 lockdown resulted in thousands of unwanted modems being sent to wealthy schools. Epsom’s Auckland Grammar alone received 137 unwanted modems, and even Mike Hosking’s child was a beneficiary of the policy.

Hon Shane Jones: Three train trips for $6.2 million

The Regional Economic Development Minister re-opened the Wairoa-Napier rail line last year, predicting that up to six train services would run per week. As of last month, only three services had run in total: a cost of more than $2 million per train trip.

Hon Kelvin Davis: $10 million for AJ Hackett Bungy

In response to a tourism downturn due to COVID-19, Tourism Minister Kelvin Davis singled out one of Queenstown’s most successful businesses – AJ Hackett Bungy – for a taxpayer handout. AJ Hackett received a $5.1 million grant, plus a potential $5.1 million loan, all on top of its substantial payout received under the COVID-19 wage subsidy scheme.

WINNER: Rt Hon Winston Peters for responding to COVID-19 with horse tracks

Lifetime Achievement Award

Hon Phil Twyford is this year’s Lifetime Achievement Award Winner for excellence in government waste.

First elected as a list MP in 2008, Phillip Stoner Twyford was thrust into power as Minister of Housing, Urban Development, and Transport in 2017.

His most high-profile election promise was to build 100,000 KiwiBuild homes in 10 years, with an initial investment of $2 billion. Two years into that period, KiwiBuild has delivered just 395 houses – fewer than the number of houses blocked by protestors at Ihumātao. At the current rate, Phil Twyford’s promise will be fulfilled in 436 years.

Even with the taxpayer subsidy, these homes are too expensive or located in places people don’t want to buy. As a result, many finished homes have sat on the market for six months or more, and the Government has promised to buy back homes that do not sell.

Last year, the Prime Minister finally removed Phil Twyford from the Housing portfolio.

However, his record of waste now extends far further than KiwiBuild. As Transport Minister, Twyford blew out the cost of SkyPath – a cycleway across Auckland’s Harbour Bridge – from $67 million to $360 million, with more cost increases expected once construction actually begins.

Twyford has also increased fuel taxes by 12 cents per litre – and even more in Auckland – across three years.

This tax hike was justified on the basis of paying for light rail from Auckland Central, down Dominion Road to the airport. Last month, after two and a half years and $5 million was spent investigating the project, the light rail proposal was shelved.

Despite the main justification for fuel tax hikes being void, Twyford has no plans to reverse his increases to the tax on commuters.

In his maiden speech in Parliament, he remarked: “At the end of our times here, some of us will be remembered, but most of us will not.”

He need not worry. We are confident that taxpayers will never forget Phillip Stoner Twyford.

x


App another govt fail

02/07/2020

The government’s tracing app is another addition to the list of its Covid-19 response failures:

The New Zealand Taxpayers’ Union has slammed the Government’s controversial COVID-19 tracing app as a monumental failure on every possible measure.

Union spokesperson Louis Houlbrooke says: “The Government’s NZ COVID Tracer is a lacklustre yet expensive app which was late to the pandemic, and then hardly used. The Ministry of Health slowly developed it in secret, excluding the private sector which repeatedly offered to help. By the time the official app came out there were already better apps on the market which had been quickly developed by technology companies.”

Data now reveals that people who downloaded NZ COVID Tracer checked in around two times. Only 10,000 out of 800,000 Kiwi businesses signed up to the app. It was a digital diary, rather than a genuine tracing app like the ones operated by the Governments of Australia and Singapore. Both of those were offered to the Government, but it seemed obsessed with developing its own app from scratch. Government essentially reinvented the wheel, and when the wheel eventually turned up, it was wonky.”

Why reinvent the wheel when there was a locally made one that was working?

“The Government should have swallowed its pride and adopted the same approach as Wellington City Council and Dunedin City Council. They endorsed – and invested – in the Rippl tracing app, made by Wellington-based software company PaperKite. That app was released well before NZ COVID Tracer and is widely considered superior. PaperKite offered to collaborate with the Ministry of Health but was declined. Data from Rippl is stored in the Kiwi Cloud while data from NZ COVID Tracer is held in Sydney.”

Another case of government-knows best when it doesn’t. The private sector had released a superior product And using it would have saved both time and money.

“In a pandemic, the Government should have quickly adopted the best technology, no matter who developed it. In this case, the private sector was demonstrably quicker and more effective than the Ministry. NZ COVID Tracer will be remembered as an expensive failure,” says Mr Houlbrooke.

The total cost of developing NZ COVID Tracer is not yet known.

There is no doubt that New Zealand has had relatively few cases of and death from Covid-19 but each addition to the list of response failures confirms that good luck has played a big part in that, possibly a bigger part than management much of which has been less than good.


Reds’ policy path to poverty

29/06/2020

The Reds have announced an $8 billion tax grab:

The Green Party have unveiled a sweeping new welfare policy that would guarantee a weekly income of at least $325, paid for by a wealth tax on millionaires and two new income tax brackets on high-earners. . . 

The $325 after-tax payment would be paid to every adult not in fulltime paid work – including students, part-time workers, and the unemployed. The student allowance and Jobseekers benefit would be replaced. . . 

It would be topped up by $110 for sole parents, and the current best start payment would be expanded from $60 per child to $100 per child, and made universal for children up to three instead of two.

This guaranteed minimum income plan would cost $7.9b a year – roughly half what is spent on NZ Super, but almost twice what is spent on current working age benefits.

Paying for all this would be a wealth tax of one per cent on net wealth of over $1 million and two per cent for assets over $2 million. The party expects this would hit only the wealthiest 6 per cent of Kiwis.

This would take the form of an annual payment and would only apply to those who owned those assets outright – not someone who still had a mortgage on their million-dollar home, for example.

That looks like everyone could avoid the tax by never paying off their mortgage, but the party wouldn’t be that stupid, would it?

Any party that thinks up this sort of economic vandalism could be.

The Taxpayers’ Union is slamming the Green Party’s proposed wealth tax as bureaucratic economic vandalism that would hammer job creators.

Taxpayers’ Union spokesperson Jordan Williams says, “The proposed wealth tax would mean the return of the dreaded compulsory asset valuations that made a capital gains tax so unpopular. A bureaucratic valuation scheme would incentivise people to hide their wealth, or shift it offshore. It would be a dream for tax accountants but hell for small business owners.”

“The policy also appears not to differentiate between asset types.  It would tax entrepreneurs creating jobs the same as someone sitting on an art collection. Ultimately it would cost jobs at the very time New Zealanders need entrepreneurs to create them.”

“Wealthy iwi groups sitting on often unproductive land would also be smashed under this scheme.  It’s bumper sticker type policy which is poorly thought through.”

“Any party that says you should raise taxes in the middle of a recession is divorced from reality. It is scary that all the work James Shaw has done to try and make the Greens more economically credible appears to be for nothing.”

Commenting specifically on the Green Party’s income support policy, Mr Williams says, “Under the Greens’ policy, a family of five with both parents on the dole would receive $1180 a week in taxpayer funds, assuming one of the kids is younger than three. That goes beyond generosity: it is using taxpayer funds to encourage long-term unemployment. Combined with the policies to tax job creators, this package would take a sledgehammer to New Zealand’s productivity.”

There’s no good time to increase taxes and a recession is an even worse time.

Recovery from the economic carnage wrought by the Covid-19 response requires investment, expansion and increased employment opportunities.

This policy will be a handbrake on all of those and an accelerator for benefit dependency which is a pathway to increased poverty.

This policy is typical of a party that’s more red than green and doesn’t understand that a greener country has to be well and truly in the black and you don’t there by taxing more.

New Zealanders gained a glimpse today of what a Labour Greens government would look like, and it involves a lot more taxes, National’s Finance spokesperson, Paul Goldsmith, said today. . . 

At a time when we need our successful small business people to invest and create more jobs, the Greens want to tax them more.

Rather than celebrating Kiwis doing well, the Greens seem to want to punish them.

The Greens never have the influence to get their way entirely, but they would push a Labour Greens coalition in the direction of higher taxes.

Labour have so far refused to rule out taxing people more if they win the election.

The very real fear many New Zealanders have is that this current government, which has $20 billion available for election spending, will spend whatever it takes to try to keep its poll numbers up until the 19 September election.

Then on the 20th, if they win, the smiles will drop and New Zealanders will be presented with the bill – higher taxes.

National has committed to no new taxes for Kiwis in our first term.

While the economy is going down, the Greens want to tax us more, and Labour haven’t ruled out doing the same.

That’s another very good reason to vote for a National/Act government that will focus on policies which foster the economic growth necessary to provide a pathway for progress.


About that fuel tax

26/06/2020

The Taxpayers’ Unions is calling on the government to scrap the increase in the fuel tax which is due to take effect next week.

Union spokesman Louis Houlbrooke says, “The Government justified its annual hikes to fuel tax on the basis of funding infrastructure projects – the biggest one being Auckland Light Rail.”

“Now that light rail is canned, there is no excuse for next week’s hike to fuel tax. In fact, during an economic recession, hiking a tax on productive travel would be madness.”

“If Phil Twyford forges ahead with his planned tax hike, it should be seen as nothing more than a cynical revenue grab.”

And what about the tax already taken?

With plans for light rail from Auckland CBD to the airport abandoned. Gull asks what happens to the 11.5 cent per litre and an estimated $150 million annual tax take from the Auckland Regional Fuels Tax?

Gull, New Zealand’s leading innovative energy retailer, today questioned what happens to the Auckland Regional Fuels Tax levied at 11.5 cents per litre including GST on each litre of petrol and diesel delivered into the Auckland area. This Tax introduced in July 2018 raises an estimated $150 million dollars per year and would be happily welcomed back into the wallets of stretched households and businesses.

If the $300 million Taken over the last two years hasn’t been spent on light rail, where has it gone?

Dave Bodger General Manager Gull New Zealand says “we support greater investment in public transport, but with one of the largest projects now reported in the media as abandoned what happens to the tax that was imposed on Aucklanders to help fund this infrastructure? In tough times is this an opportunity to halt the tax while there is no plan? To reduce the tax? If that is not on the cards, then can we have a plan as to where this significant slice of the motorist’s pay-packet is now being spent or planning to be spent? “

If a tax can be increased it can be decreased.

“All motorists are watching every dollar they spend and with a major economic slowdown looming, returning this into the economy would be a welcome relief for each family’s budget,” notes Bodger.

He continues “If the motorist has the opportunity to spend or save this money, people with better abilities than me and access to data could probably estimate how many jobs this type of stimulus boost may create. In our view Kiwis need every piece of help available right now. Can a change in this tax, that appears to be in the main not needed right now, be part of economic support packages? “

Fuel taxes are inflationary. They hit all goods and every service with a transport component, chief of which is food, and they hit the poorest hardest.

If a private business took money from a customer for a particular purpose and used it for another it would be guilty of misappropriation.

If the government continues to inflict the fuel tax for public transport when it’s major project has been canned it will be misappropriating money that every individual and business hit by the recession needs for their own purposed and to help with the recovery.


Curate’s egg package

18/03/2020

The key parts of the Covid-19 coronavirus economic package are:

Extra spending of $12.1 billion for businesses, beneficiaries, pensioners and the health system.
• $8.7 billion in support for businesses and jobs.
• $2.8 billion for incomes support.
• $500 million for health.
• Wage subsidy for employers up to 12 weeks and up to $150,000 if they have suffered a 30 per cent decline in revenue compared to last year, $585 a week for full-timers, $350 a week for part-timers, available to all employers and self-employed.
• Leave and self-isolation support for eight weeks people with Covid-19, caring for people with it or people in self-isolation up to eight weeks at same rates as wage subsidy but not for those who can work from home.
• Self-isolation payments not available to people who leave NZ after March 16 and return.
• Permanent increase of $25 a week in main social welfare benefits after increases from indexation on April 1, likely to affect 350,000 low income families.
• One-off doubling of winter energy payment to $1400 for couples and $900 for singles, likely to affect 850,000 people.
• Families with children not receiving a main benefit but are in work will no longer have to satisfy the work test of 20 hours a week for sole parents or 30 hours for couples, likely to benefit about 19,000 low-income families.
• $50 million extra for GP and primary care and $20 million for videoconferencing consultations.
• $32 million for extra intensive care capacity and equipment in hospitals.
• $40 million for public health units mainly for contact tracing.
• $100 million set aside to support work deployment.
• Provisional tax threshold will lift from April 1 from $2500 to $5000 allowing an estimated 95,000 business to defer tax payments and possible waiving of interest on late payments.
• Reinstatement of depreciation deductions for commercial and industrial buildings at an estimated cost of $2.1 billion to 2024.

This is, like the curate’s egg, good in parts:

The boost in health funding, assistance for business and payment for leave for self-isolation and sickness are welcome.

However, the wage subsidies only apply to businesses with 20 or fewer staff. Businesses with more than that are still vulnerable. Jobs, and those businesses themselves are at risk.

The risks are greater because the government mandated increase to the minimum wage is till going ahead.

And what’s what’s the rationale for permanent increases in benefit payments?

There is a case for a temporary increase but if a permanent increase has nothing to do with covid-19 and should have been left for the Budget.

As Jordan Williams from the Taxpayers’ Unions says:

. . .“However, it’s disingenuous for the Government to use this crisis as an excuse to make a permanent increases in benefit rates, which are automatically ratcheted up for wages and inflation. This looks like ideological opportunism at a time when no one knows whether higher benefits will be affordable in years to come.”

“We’re open to increasing benefits for duration of the pandemic, but it’s not an excuse for locking it in. For context, the cost of the benefit hike is around $2.3 billion – almost five times as much as the boost to the health system. Every extra dollar means less for the productive sector and frontline health services.”

What would do more good – more than $2 billion for health or the increase in benefits?

Three more cases of Covid-19 have been confirmed.

So far none of the cases has been fatal and none has required prolonged hospital care.

But that may not last and equipping the health system should be the priority.

The $500m is welcome but it may only be the start of what is needed.

 

 

 


Taxes for public services, not propaganda

28/02/2020

How would you feel about the tax you pay funding a political party?

An email from the Taxpayers’ Union explains:

The Government are gearing up to use Winston Peters’s and Jami-Lee Ross’s donation scandals to justify replacing electoral donations with taxpayer funded political parties.

Here’s a different idea for cleaning up political donations, which is similar and more cost-effective than taxpayer funding: obey the law.

It’s that simple.

The law is clear. If there is a problem it is politicians and parties not obeying it, and possibly the powers the Electoral Commission has to ensure they do.

Taxpayer funding wouldn’t solve that.

Politicians should let the Serious Fraud Office do its job, instead of exploiting the situation to get their hands on more of your money.

Just this morning, the Greens were on Radio New Zealand calling for reform. Labour’s friendly activists have been in the media calling for the same. And it’s no pipe dream: the Prime Minister Jacinda Ardern has previously said she’s keen on the idea.

Oh yes. These parties never let an opportunity to try to get taxpayer funding for themselves go by.

James Shaw says “We have a donor-driven democracy, and we’ve got to get rid of that.” That’s code for the Greens taking your money.

Democracy is supposed to be of the people, for the people, by the people; not of the politicians, for the parties, with the people’s money.

It’s not donors funding parties that’s the problem, it’s too many parties with too few members and supporters. That would only get worse if parties could rely on taxes rather than members and supporters for funds.

We pay taxes for public services, not propaganda. 

In a democracy we have to accept governments that gain power legitimately spending taxes on policies we don’t support. We should not have to support our taxes going to support parties, whether or not we support them and what they stand for.

Taxpayer funding for political parties cements the status quo and makes it even harder for new political parties, or groups outside of Parliament, to hold politicians to account.

State funding would also negate the need for parties to build broad membership bases. This is particularly important under MMP because nearly half our MPs are elected through party lists, rather than directly by voters. Taxpayer funding would let parties ignore their members’ views when selecting candidates.

Taxpayer funding would also make it even easier for parties with very few members to thrive.

Like MPs’ pay increases, taxpayer funding of parties could come from nowhere, and be passed through Parliament very quickly. That’s why we need your financial support now to ensure there is a strong voice ready to campaign against these proposals.

The Greens and Labour could try to campaign on taxpayer funding.

That would almost certainly ensure they wouldn’t be returned to government with the power to make that happen.

You can donate to the Taxpayers’ Union to help them campaign against this and other abuses of public funds by going here.

 

 


False kindness is cruel

26/02/2020

Benefits have been indexed to inflation rather than wages for good reason – to ensure there is a big enough gap between the two to make work more attractive than a benefit.

Lindsay Mitchell points out that the previous government understood the danger of this:

 “…it is desirable to create a margin between being dependent on a benefit and being in employment….
The Labour Party isn’t the party that says living on a benefit is a preferred lifestyle. Its position has always been that the benefit system is a safety net for those who are unavoidably unable to participate in employment. From its history, the Labour Party has always been about people in employment.”
Michael Cullen, 2008

This is supposed to be a government of kindness but linking benefit increases to wage rises is false kindness, cruelly disincentivising work and trapping more people in poverty.

The Taxpayers’ Union points out that beneficiaries are getting something denied to the people who pay the taxes that fund the benefits:

The indexation of benefits to wages means that taxpayers are treated less fairly than ever, says the New Zealand Taxpayers’ Union.
 
Taxpayers’ Union spokesman Louis Houlbrooke says, “The Government says it’s fair to index benefits to wages because we already do this with superannuation. So about tax brackets? These aren’t indexed to inflation, let alone wages. The result is that each year, taxpayers keep less, while beneficiaries get more.”
 
“Politicians often say we cover the costs of super and benefits by increasing productivity. But under this Government’s policies, increases in productivity will automatically trigger hikes to benefits and super, meaning we can never dig ourselves out of this spending hole.”

 

Mike Hosking also raises the issue of productivity:

Most who got a three per cent wage rise did so because they did something productive. They made more, produced more, worked more – that’s the productive side of the economy. That’s how you incentivise people: there is reward for work

Beneficiaries got the same rise, that’s the non-productive side of the economy. Nothing more was produced, but more was put into it. And that is why the money is gone and we are borrowing.

Economies grow because of productivity, not because of non-productive spending. You need one to fund the other, and one must be stronger than the other. That’s how you move forward, run surpluses, and afford to cover difficult days.

A level of redistribution, the likes of which we are currently experiencing, leads nowhere sound fiscally. It makes us increasingly vulnerable to global shocks, and we are too small to be running that risk.

The spread of coronavirus (COVID-19) is bringing a global shock ever closer, threatening jobs and increasing the likelihood of more people on benefits.

It is neither kind nor sensible to be doing anything that will discourage work and add to the burden placed on taxpayers.

 


Honest people keep rules

20/02/2020

Serious Fraud Office investigations into political donations has prompted the inevitable calls for taxpayer funding of political parties.

The arguments the Taxpayers’ Union made against that six years ago still stand:

. . . “Politicians having to justify their work to supporters, members, and donors is healthy. Public funding would give a huge advantage to the established political parties. It professionalises politics and stamps on the grass roots.”

“The vast majority of donations made to political parties are small. That is a good thing. It means politicians and party bosses are accountable to many.”

Besides, whoever the funder is, there will have to be rules and where there’s rules there will be honest ones who keep them and dishonest ones who will break them.

The furor over alleged funding impropriety has also led to calls for full disclosure of every donation.

That is unnecessary.

People who donate to all sorts of causes, political or not, choose to do so anonymously for a variety of reasons including not wanting to show off their generosity.

A charitable trust of which I am a trustee has received a $20,000 donation this week and a $10,000 donation a couple of weeks ago. The donors in both cases prefer to keep their philanthropy quiet.

Charitable donations are different from political ones, but the right to privacy for donors of smaller amounts still stands.

If politicians can be bought for the amounts under the threshold for disclosure, it’s the politicians who are wrong not the threshold.

That said, the SFO investigations provide grounds for a look at current rules governing behavior of political parties including the powers and capacity the Electoral Commission has to initiate investigations and deal with complaints.

Election after election there are complaints that one party or another has breached the rules and election after election nothing is resolved until well after polling day.

If the commission had much stronger teeth and the capacity to investigate and, should it be necessary, act expediently

It might not stop the dishonest bending or breaking the rules but it would increase the chance of them being caught, should it be likely to influence an election, caught in time to ensure voters are informed before they vote.


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