App another govt fail

July 2, 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

June 29, 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

June 26, 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

March 18, 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

February 28, 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

February 26, 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

February 20, 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.


Don’t waste it

January 24, 2020

The Taxpayers’ Union has submitted a design proposal for a 3.5-metre artwork in the Beehive entrance.

 

The Union will save taxpayers money by refusing the $15,000 commission fee should its submission be chosen.

Taxpayers’ Union spokesman Louis Houlbrooke says, “Perfectly placed to greet MPs and Ministers arriving for work, Don’t Waste It serves as a warning to would-be money-wasters in the heart of government.”

“For those New Zealanders not lucky enough to earn a politician’s salary, a five dollar note represents a meal, or the bus fare for a job interview. That small sheet of polypropylene can be the difference between hunger and happiness, poverty and opportunity.”

“Taxpayers understand the value of money, because they work for it. But too often, politicians take money from us only to fritter it away on pet projects, political fads, and minor extravagances. The taxpaying public can never be too firm in its opposition to government waste. It is in this spirit that we submit our proposal.”

Former MP Eric Roy used to have a shearing hand piece in his office in parliament to remind him where he came from.

It would be good for everyone who works in parliament – MPs and staff – and everyone who visits, especially those who come to lobby for funding to have this reminder that no money should be wasted.

 


KiwiBuild failed

September 5, 2019

The government’s KiwiBuild reset is an admission of how flawed the policy was in the first place.

The 10,000 houses it said it would build wasn’t a target, it was a figure plucked out of the air, completely distanced from reality.

Worse than the unrealistic number, was the money wasted on houses no-one wanted to buy and houses sold to people who should not have been beneficiaries of taxpayer assistance.

Now Housing MInister Megan Woods has announced another plan, with no targets, which includes selling the houses no-one wanted – almost certainly to be a win for the buyers and a lose for the public.

There’s also a government backed low equity scheme that sounds horribly like the Fannie Mae and Freddie Mac scheme in the USA that precipitated the Global FInancial Crisis.

The Taxpayers’ Union points to the potential  dangers that poses to taxpayers:

Replacing KiwiBuild with easy credit policies for first home buyers places significant risk on taxpayers, says the New Zealand Taxpayers’ Union. 

Taxpayers’ Union Economist Joe Ascroft says “The American housing crash and ensuing Global Financial Crisis was driven in part by the American Government’s decision to offer subsidized mortgages to low income households, who then failed to meet debt repayments when interest rates increased. Our Government’s decision to adopt a similar approach by offering taxpayer-backed mortgages to households who can only scrape together a 5 percent deposit is an uncomfortable echo to those easy credit policies which induced a housing crash overseas.”

“If households on ultra-low deposits ever failed to meet repayments due to rising unemployment or interest rates, either taxpayers or the banking system would be put under significant pressure.”

“Of course, the best approach to housing unaffordability isn’t to load on more debt and subsidies – which will inevitably push housing prices higher – but to enact meaningful supply-side reform. Allowing our cities to become more dense and removing the rural-urban boundary would be good places to start.”

The new policy, like many of this government’s lack details and the Minister’s repeated “we’ll build as many as we can as quickly as we can” is no substitute for a target tand a concrete plan to get there.

The root of the housing problem is simply one of supply not keeping up with demand, this hasn’t been helped by Prime Minister Jacinda Ardern’s calling a halt to development at Ihumātao.

The solution is more houses, faster which requires sorting out the infrastructure restraints, regulations that make the consent process so long and costly, and building here so much more expensive than in many other countries.

Anything which gives people more money without increasing the supply of houses will only make them more expensive.

KiwiBuild failed because it didn’t deal with the underlying causes of the problem and the so-called reset will do very little, if any, better.

We’d all benefit if the government set about addressing the constraints on supply rather than throwing more taxpayers’ money at policies that will benefit a relatively few people at considerable cost and risk to all of us.


Houses bad, trees good?

August 15, 2019

The government has launched a draft National Policy Statement for Highly Productive Land (NPS-HPL) that proposes a nationwide approach to protecting our most productive land.

New policies and standards could protect the most fertile and versatile land as soon as next year.

Agriculture Minister Damien O’Connor and Environment Minister David Parker have put out proposals to value high-quality soils as a resource of national significance.

“The threat to elite soils in this country has been very real,” O’Connor said. 

“We’ve been losing soils for the past 20 years at an alarming rate.

“You don’t have to be a rocket scientist to visit Pukekohe and see what is happening.

And not only Pukekohe. Urbanisation creep and the development of lifestyle blocks have been encroaching on productive land all over the country.

The Government has released a draft National Policy Statement for Highly Productive Land that proposes a nationwide approach to protecting NZ’s most productive land for future generations . . .

It is intended to target the high-value classes 1 and 2 soils that account for 5% of NZ’s soil profile but almost 85% of high-value crop production.

“One of the greatest challenges facing the world right now is the need to feed a growing population. 

“We have a well-earned reputation for producing some of the best food in the world,” O’Connor said.

“Continuing to grow food in the volumes and quality we have come to expect depends on the availability of land and the quality of the soil. 

“Once productive land is built on we can’t use it for food production, which is why we need to act now.” . . 

These are exactly the arguments farmers, councils and other advocates for rural communities have been using against the government’s policy that incentivises planting pine plantations on land better suited for cattle, deer and sheep.

We can’t eat trees and once farmland is converted to forestry it is both difficult and expensive to convert it back.

“We appreciate the balance for councils between the need to provide more houses and the need to protect their soils and economic activity,” O’Connor said.

Since April last year the Government has been looking at the best options for the protection of NZ’s high-value soils.

“This is not about spatial planning.

“It doesn’t dictate exactly what will happen.

“But it does place an obligation on councils to ensure there is enough highly productive land available for primary production now and in the future and to protect it from inappropriate subdivision, use and development.”

Councils will have to complete a cost-benefit analysis of using land for growing fruit and vegetables, assessing that against the short-term value of converting it to housing.

The criteria will be consistent nationwide but be flexible enough to allow councils to take into account their local situation and circumstances. 

“The NPS is not absolute protection for all soils. 

“It does consider local growth aspirations and the reality of where urban growth is now but it does force the councils to recognise the value of this soil for its productive capacity not just its subdivision capacity.”

Until now councils have not always had to consider the productive value – decisions have simply been based on market value and the potential for subdivision. . . 

All of that sounds vague enough to drive several tractors through especially if people who have bought land on the edge of urban areas at prices that reflect development potential seek to prevent the loss of value if it has to kept for food production.

The Taxpayers’ Union points out:

The Government’s plans to prohibit housing on ‘productive’ farmland will serve as yet another regulatory tax on housing, and is a shameful breach of Jacinda Ardern’s promise to fix housing supply, says the New Zealand Taxpayers’ Union.

“Maddeningly, Government is now introducing even more restrictions on housing, ensuring prices will continue to rise, all for the sake of a small gang of potato-growers who want to keep urban farmland prices artificially low. This is a slap in the face for aspiring homeowners, and makes a joke of the Government’s claimed concern over housing affordability.”

“There is no need for the Government to intervene here, because the market already works to allocate land to its most productive use. If the land is more productive as farmland then farmers will outbid housing developers, and vice versa.” . . 

Ending the incentives for forestry on farmland could happen immediately without providing anyone with viable reasons to oppose the move.

It must happen for exactly the same reasons the government wants to protect class 1 and 2 soils – so we can keep growing the quantity and quality of food the country and the worlds needs.


Are electric vehicles as green as they’re painted?

July 10, 2019

Stuff asks which are the cleanest and dirtiest car brands in New Zealand?

. . .Actually, the car brand currently on sale in NZ with the lowest emissions of all is Tesla, which boasts an unbeatable CO2 output (or non-output?) of 0.0. Obviously that’s because they are fully electric, which means the only connection with CO2 these cars might have, would be from what emerges from any gas or coal-fired power stations that generate the electricity in the first place.

But, as so often in the climate change argument, this doesn’t give the whole picture. It counts only the emissions from running the car, what about the emissions in making it, in particular the battery?

A friend has recently returned from Africa where he saw a continual procession of fuel tankers making the journey from the coast to supply mines in the Congo so that cobalt and lithium can be exported to allow people in rich countries to buy electric cars to save the world.

If you take into account the emissions from the many thousands of kilometres those tankers travel and everything else involved in their manufacture and disposal when judging the CO2 output of electric and hybrid cars, would they still be as green as they’re painted?

I don’t know the answer to that question and it raises another: how can we know what is green and what is greenwash if only the emissions from running vehicles are quantified and not those from their manufacture to their eventual end?

The answer to those two questions is even more important now the government is proposing a ‘feebate’ scheme on the sale of new vehicles.

The Government’s proposal for a sweeping fuel-efficient vehicle policy is being criticised because it doesn’t apply to the majority of cars being sold.

It would only apply to newly-imported used and brand new light vehicles from 2021 onwards, and would only hit those vehicles when they are sold for the first time – taking in about only a quarter of vehicle sales.

School Strike 4 Climate NZ criticised the proposal and said all vehicle sales should be affected by fuel efficiency standards.

The “feebate” scheme wouldn’t cost the taxpayer anything, instead using money gained by putting a fee on imported high-emissions cars in order to make imported hybrids, electric cars, and other efficient vehicles cheaper with a subsidy. . .

It wouldn’t cost the taxpayer anything but who would it help and who would it hurt?

The proposed penalty on ‘gas guzzling’ vehicles is a painful, regressive tax, says the New Zealand Taxpayers’ Union.

Taxpayers’ Union Executive Director Jordan Williams says, “Let’s be very clear: this is a tax on Otara vehicles to subsidise Teslas in Remuera.”

“Only a few, largely high-income, motorists will benefit from this subsidy, while many more low income motorists will have to choose between a nasty penalty or delaying the purchase of a new car. And as this tax leads driver to hold on to their existing vehicles for longer, we’ll miss out on improvements to safety and environmental standards.”

Older cars are less efficient and also not as safe as newer vehicles, but what’s the environmental impact from holding on to them longer?

Would spreading the emissions from making them over a longer period compensate for the emissions from driving them?

What about utes and trucks that are used for business and transporting goods and for which there are no hybrid or electric alternatives.?

“Successive Governments have already whacked motorists hard with hikes to petrol tax. Now Julie-Anne Genter is mixing it up with scheme to ‘take from the poor, give to the rich’.”

“Just because something is shrouded in environmental branding doesn’t make it any less nasty to the poor.”

Electric and hybrid cars cost less to run than petrol or diesel ones and newer vehicles are more efficient than older ones so  people who can’t afford newer, more expensive vehicles will be paying a bigger proportion of the fuel tax.

London has emission charges and diesel vehicles, including taxis, have to use AdBlue  to their fuel. When we were there recently we noticed the air was much cleaner than it had been several years earlier.

Clean air is to be encouraged but until the total lifetime emissions, not just from driving vehicles, but from their conception to their ultimate end, are quantified, we won’t know if the policy will make a positive difference or not to global CO2 emissions or not.

The emissions picture is a very complex one to which the ‘feebate’ policy, like so many other climate change ones, provides a simple answer but we don’t have enough information to know if it’s the right one.

The push towards electric vehicles raises two other questions: does our electricity generation and transmission have the capacity for a significant increase in electric vehicles?; and what will replace fuel taxes when the uptake of hybrid and electric vehicles reduces them to the point a replacement is required?


Tax Freedom Day at last

June 1, 2019

We’re nearly half way through the year and have only just got to Tax Freedom Day:

A media release from the Taxpayers’ Union says:

From today until the end of the year you are finally working for yourself, and not the taxman, says the New Zealand Taxpayers’ Union.
 
‘Tax Freedom Day’ marks the day on which New Zealanders have collectively worked enough to pay off the cost of government for the year.
 
Taxpayers’ Union spokesman Louis Houlbrooke says, “For the average New Zealander, getting to work on Monday represents the first day they’re working for themselves.”
 
“This year’s total government expenses have been forecast to suck up 41.5 percent of the economy. That means, if a taxpayer wanted pay off their share of government expenses as soon as possible this year, they would have to work sacrifice all their wages from January the 1st, until today, June 1st.
 
“Today is worth celebrating, but it’s a shame we had to wait so long to pay off the politicians’ expense card. Unfortunately, government spending increasing faster than economic growth means the continuation of the trend of a later Tax Freedom Day.”
 
“Some other groups chose to observe Tax Freedom Day earlier this year. But our chosen date – based on OECD figures – takes into account local government and spending paid for with debt, meaning it reflects the full burden of government on taxpayers.”

And on the eve of Tax Freedom Day, the government pushed through an increase to fuel taxes under urgency:

The Taxpayers’ Union is slamming the passage of legislation hiking the price of petrol at the pump to see that more than 50 percent of the price paid will soon be tax. Union spokesperson, Jordan Williams says:

“Clearly ‘wellbeing’ is just marketing fluff.  Petrol taxes are highly regressive – they hit the poor, those in regional New Zealand, and those who live on outer suburbs the hardest. It’s one of the cruelest forms of tax.”

“Rushing these new petrol taxes through Parliament under urgency is disgraceful. They are a total breach of the Prime Minister’s ‘no new tax’ election promise.  And Labour know it.”

“Pain at the pump underscores the fact that big-ticket Budget announcements come at a real cost, regardless of the fuzzy wellbeing language the politicians use to promote them.”

Petrol was more than $2.45 a litre when we passed through Omarama earlier this week. Tax is already too big a contributor to that.

Taking more money from everyone and adding to the cost of everything will not contribute to wellbeing.


CGT would hit middle hardest

February 22, 2019

It there’s such a thing as a fair tax, it’s not one based on misplaced envy as the Tax Working Group’s capital gains tax appears to be.

No photo description available.
Fairness is desirable but not at any cost and  it’s best achieved by helping the poor up not pulling the better-off down, especially when those who will be hit hardest are those with modest investments, not the really wealthy, and worse still, they’d be hit by one of the most penal CGTs in the world:

The Tax Working Group’s report released today proposes a broad-based top rate of 33% capital gains tax (CGT).

The New Zealand Initiative argues in a new policy note, The Pitfalls of CGT, that headline rate would immediately push New Zealand to the top of the international CGT rankings among industrialised economies, just behind Denmark and Finland.

“The proposal is conspicuous by a lack of exemptions and concessions around business investment, so a full rate would arguably qualify New Zealand’s CGT regime as one of the harshest in the world,” said Dr Patrick Carvalho, Research Fellow and author of the note.

“Worse, given New Zealand’s recognisably low-income tax thresholds by international standards, a new CGT would disproportionately hit middle-income earners already struggling to invest for retirement.”

“New Zealand should be cautious about siren calls for a top-ranking CGT. Trying to punch above our weight can sometimes place us in the wrong fight category,” concludes Dr Carvalho.

A good tax would foster investment that would help businesses grow, produce more and employ more.

A good tax would encourage and reward thrift and delayed gratification.

A good tax would improve productivity and promote growth.

The CTG as proposed would do the opposite.

New Zealand needs foreign investment because we don’t have enough of our own capital. The CGT would aggravate that by making investing overseas more attractive than investing domestically:

The Tax Working Group (TWG) proposals released this morning would skew New Zealand investors away from local assets, distort the KiwiSaver market and mangle the portfolio investment entity (PIE) regime if introduced, according to the founder of the country’s largest direct-to-consumer managed fund platform.

Anthony Edmonds, InvestNow founder, said while the TWG final report includes some welcome reforms, overall the capital gains tax (CGT) recommendations would add cost, complexity and confusion to New Zealand’s relatively efficient managed funds market.

“For example, the TWG’s plan to increase tax on New Zealand shares by applying CGT while leaving the fair dividend rate (FDR) tax for offshore shares unchanged would naturally drag capital offshore at the expense of local assets – at a time when New Zealand needs to fund major infrastructure projects,” Edmonds said. “In trying to discourage people from investing in residential property, the TWG has created a tax disincentive for Kiwi shares, which can only distort investment allocation decisions.”

Essentially, the TWG recommendation to tax unrealised capital gains on PIE funds marks a return to the ‘bad old days’ when Kiwis paid more tax on managed funds than direct share investments. . .

Concern over the housing shortage is one of the motivating factors for a CGT but It won’t improve home affordability in the long term:

Bindi Norwell, Chief Executive at REINZ says: “In the short-term there may be some initial relief in house price affordability as investors look to sell their property to avoid paying CGT. This may create opportunities for first home buyers.

“However, in the long term it’s likely to push house prices up as people look to invest more money in the family home, as there will be less incentive to invest in rental properties or other forms of investment e.g. equities.

“This will also have a flow on effect for the rental market with fewer rental properties available for tenants, thereby further pushing up weekly rental prices when they are already at an all-time high.

“The report even recognises that any impact on housing affordability could be small, therefore, we question whether all of the administrative burden and cost to implement GCT is worth it? Especially as CGT coming at the end of a raft of legislative changes the housing market has faced recently including the foreign buyer ban, ban on letting fees, insulation, healthy homes and ring fencing. . .

A tax that results in fewer and more costly rentals and more expensive homes is not a good one.

Nor is a tax that is fatally flawed:

Today’s Tax Working Group report recommendation for a new capital gains tax will not address residential housing affordability but it will penalise business owners and create costly complexity in our tax system, meaning it is fatally flawed, according to Business Central.

“New Zealand’s tax system is envied worldwide. The proposed capital gains tax increases compliance costs without boosting productivity,” says Business Central Chief Executive John Milford.

“Business Central agrees with the conclusions of the minority view on the Tax Working Group.

“A capital gains tax is just another cost on business, nothing more. . .

It would hit small and medium businesses hardest:

Key areas of the Tax Working Group Final Report released today were disappointing, says Canterbury Employers’ Chamber of Commerce Chief Executive Leeann Watson. . . 

Ms Watson says the proposed capital gains rules should not be implemented because of the significant impact on small and medium-sized enterprises (SMEs).

“We support the Government’s review to ensure that our tax system is fit for purpose for a changing business environment. However, there is very real concern that taxing both shares and business assets under a comprehensive capital gains tax regime would create double taxation.

“This could disadvantage New Zealanders owning shares in New Zealand and create inconsistencies around overall taxation on investment.”

Ms Watson says a capital gains tax would be unlikely to achieve the desired outcome for business.

“There is concern around the effect for capital markets in a capital constrained economy with a long-term savings deficit. Adding further tax on the savings and investment of those New Zealanders in the middle-income bracket won’t drive the deepening and broadening of the capital base that we need for business investment, which is higher productivity and wages.

“While the impetus behind the changes are aspirational, there is little to indicate they would significantly reduce overinvestment in housing or increase ‘tax fairness’. In addition, there is concern that additional administration costs and investment distortions could outweigh any benefits and potentially discourage much-needed investment and innovation by locking businesses into current asset holdings.

“It is vitally important that we remain competitive as a country and are not continuing to add further compliance for business and in particular small business, who represent 97% of all businesses in our economy.”

Ms Watson says there needs to be a viable business case for any changes to the current tax system.

“There seems to be a real focus on ‘fairness’ in the system design, as opposed to revenue-building, so we need to be careful that any tax changes are for the right reasons and are backed by a clear, practical and sustainable business case. We currently have a fairly simple and efficient tax system that should be kept and better enforced, with changes to specific rules where needed.” . . 

The costs of a good tax would not outweigh the benefits:

The Employers and Manufacturers Association (EMA) says the key issue in the Tax Working Group’s proposal released today is that the cost of its capital gains tax rules will outweigh any benefits.

Chief executive Brett O’Riley says any gains from such a broad-based capital gains tax would be eaten up by administration and other costs, leaving little revenue.

“Fundamentally the proposed capital gains rules don’t address the Tax Working Group’s objectives of reducing over-investment in housing and increasing tax fairness,” he says.

Mr O’Riley is also concerned that capital gains tax on business assets could discourage investment and innovation, locking businesses into their current asset holdings. He says there are other policy settings that could be changed to increase investment in different asset classes, away from property.

“I also fail to see how taxing growth on the value of assets from the proposed commencement date of 1 April 2021 would work, because it would be open to conflicting valuations,” he says. “It could also act as a further disincentive to growth when New Zealand already has issues with business not growing from SME’s into larger scale operations and a CGT may also limit the availability of capital to reinvest in businesses as smaller businesses face an additional tax bill.

“It’s difficult to see any benefits for the business community from implementing the proposed capital gains tax rules, as taxing both shares and business assets appears to be double taxation,” says Mr O’Riley.

It is relevant to note that a number of the Tax Working Group do not favour its recommendations on capital gains tax. The minority view summary is available here

One reason for dissension was compliance costs:

Former IRD Deputy Commissioner Robin Oliver was one of the 11 in the Tax Working Group.

Along with two others from the group, he believes the costs and bureaucratic red tape involved in adopting all the capital gains options outweigh the benefits.  

“We didn’t agree that this was in the best interest of the country to go the full extent, particularly in the business area, taxing share gains which result in double taxation,” he said.

“To get a valuation for all business assets in all parts business and all business will easily cost over a billion dollars in compliance costs. The amount of revenue you’ll get is relatively minor.”

As for taxing shares, Mr Oliver said it would result in New Zealanders who invest in New Zealand companies paying more tax when foreigners investing in New Zealand companies will pay no more tax. Furthermore, New Zealanders investing in foreign companies will pay no more tax.

“The obvious conclusion is New Zealanders will own less New Zealand companies and more foreign companies, and foreigners will own our companies,” he said. . . 

The proposed tax is no panacea for fairness:

Deloitte tax partner Patrick McCalman warns that a CGT is not a panacea for tax fairness.

“At one level, there is an attractiveness in the argument that a ‘buck is a buck’ and everyone should bear the same tax burden on every dollar earned. However, when one delves into the detail of the design, other issues of fairness emerge,” says Mr McCalman.

“For example, is it fair that property could pass on death without an immediate CGT cost, while gifts made during one’s life would be taxed? For family businesses, wouldn’t it be more productive to be able to pass assets from generation to generation before death,” he says.

“Accordingly, we need to be cautious as to how much ‘fairness’ a CGT will introduce. It may simply change where the ‘unfairness’ is perceived to sit within the tax system, creating new tax exemptions that would distort where investments are made.”

Complicating matters further is the political dimension. And MMP only exacerbates the political difficulty and increases the likelihood of whatever ultimately sees the light of day being less coherent from a policy perspective. . . 

The Deloitte paper raises several questions about fairness:

At one level there is an attractiveness in the argument that a “buck is a buck” and everyone should therefore bear the same tax burden on every dollar earned. However, when one delves into the detail, other issues of fairness emerge including new tax exemptions which would distort where investments are made – in effect, in seeking to create fairness, the proposal creates a number of layers of unfairness. For example:

    • With a CGT applying at full rates with no inflation indexation, is it fair that someone who buys an asset is taxed on the full amount of any gain when part of that gain is simply inflation? How will they be able to re-invest in a new asset if the inflation element is taxed?
    • Is it fair that the family home and artwork are excluded but most other property is not? Consider a plumber who has a $500,000 house and a $500,000 commercial building who would be taxed on the disposal of the commercial building. Should they have instead bought a $1,000,000 house, rented a business premise and enjoyed a tax free capital gain?
    • Is it fair that that investors in New Zealand shares would pay tax on capital gains but investors in foreign shares would continue to be subject (as they are presently) to the 5% FDR rate (even if gains are less or more)?
    • Is it fair that small business (turnover less than $5 million) could sell assets and defer the CGT bill if they reinvest the proceeds, while medium and larger size business cannot?
    • Is it fair that property could pass on death without an immediate CGT cost but gifts made to children during one’s life would be taxed?
    • Is it fair that there are proposed tax reductions for KiwiSaver to compensate for CGT but not for other forms of investment?

At one level, true fairness can only exist if all asset classes and forms of remuneration are subject to the same tax rate. But even then, anomalies will always arise. . . 

The proposed tax would be especially bad for farming and farmers:

Federated Farmers has said from the outset that a capital gains tax is a mangy dog, that will add unacceptably high costs and complexity.

“There is nothing in the Tax Working Group’s final report, released today, that persuades us otherwise,” Feds Vice-President and Commerce spokesperson Andrew Hoggard says.

“A CGT would make our well-regarded tax system more complex, it will impose hefty costs, both in compliance for taxpayers and in administration for Inland Revenue, and it will do little or nothing to ease the housing crisis.”

It is notable that even the members of the working group could not agree on the best way forward, with three deciding a tax on capital gains should only apply to the sale of residential rental properties and the other eight recommending it should be broadened to also include land and buildings, assets, intangible property and shares.

“Federated Farmers believes that the majority on the tax working group have badly under-estimated the complexity and compliance costs of what they’re proposing, and over-estimated the returns.”

The recommended ‘valuation day’ approach to establishing the value of assets, even with a five-year window, will be a feeding frenzy for valuers and tax advisors, “and just the start of the compliance headaches for farmers and other operators of small businesses that are the driving force of the New Zealand society and economy. . .

Farm succession is difficult enough as it is.

A CTG would make it harder still and encourage older farmers to hold on to their farms. That would lead to more absentee ownership and leasing with less investment in improvements as happens in other countries.

New Zealand doesn’t have a lot of many wealthy people and while those relatively few would pay more with the CGT as proposed, if their accountants and lawyers didn’t help them find ways to minimise their liability, they’d still be wealthy.

The many small business owners and more modest investors would not. They’d have the reward for their hard work and thrift cut back and lose enough of the value of their investments to hurt – unless they’d invested in art, cars or yachts which would be exempt.

That sends the message that such luxuries are good while investing in businesses and productive assets is not.

Where’s the fairness in that?


KiwiBuild is KiwiFail again

January 24, 2019

A report from the New Zealand Initiative calls KiwiBuild Twyford’s tar baby:

  • Relative to income, dwelling prices in New Zealand are among the highest in the OECD. This is New Zealand’s housing affordability problem in a nutshell.
  • High population-driven demand growth has collided with inflexible supply-side constraints.
  • Land prices have sky-rocketed, but construction costs are also too high.
  • KiwiBuild cannot hope to materially increase home ownership proportions – the original 2012 objective. Additional housing, if achieved, will likely lift renting and ownership more or less in tandem.This report explains why KiwiBuild – defined as the government’s pledge to build or deliver 100,000 homes within a decade – fails against all the objectives set for it:
    • It is not about social housing to help those at the bottom.
    • Nor is it about helping struggling first-home buyers. They cannot afford KiwiBuild homes at current costs. KiwiBuild is for the relatively well-off.
    • It is intended to be subsidy free, since wealth transfers to the well-off are hard to justify. But its inducements to attract private developers are subsidies.
    • Even more paradoxically, if there were no subsidy, there would be no gap for KiwiBuild to fill. Private developers will meet unsubsidised market demand.
    • It cannot hope to increase the housing stock sustainably. Only enduring lower property prices can induce people to own more dwellings than otherwise. KiwiBuild reduces neither land values nor construction costs at the margin.
  • The enduring effect of the policy is a changed composition of the housing stock by decree rather than by public demand.
  • KiwiBuild is floundering having no clear public interest objective. It constitutes a massive political and bureaucratic distraction from what is really needed – direct action to reduce land values and construction costs.

The government should not be in the business of subsidizing property developers and people on well above average incomes.

It purports to be focused on helping the poorest and most vulnerable.

Instead, policies like KiwBuild and fee-free tertiary education waste millions on people who aren’t poor, many of whom are or will be wealthy.

Not only is it a bad policy, it hasn’t a show of meeting its target to build 1000 houses by July.

KiwiBuild is KiwiFail again.


Tax cuts could cut strikes

January 17, 2019

The Taxpayers’ Union has a simple way to reduce strikes:

Implementing tax relief would relieve the pressure of low take-home pay and resolve much of the current industrial action, says the New Zealand Taxpayers’ Union.

Taxpayers’ Union Executive Director Jordan Williams says “It’s understandable that junior doctors and the Wellington bus drivers feel under pressure – no Government has delivered a tax cut since the 2010 Budget. If the Government delivered tax cuts, take-home pay would increase and workers would feel welcome reprieve.”

“Tax cuts would help all workers. The Taxpayers’ Union is calling on our union allies to help back collective action for tax cuts. Acting together, the union movement could put pressure on the Government to boost pay for everyone and end the pressure of industrial action on our heath and transport sectors.”

The Government surplus is running ahead of forecasts which means it’s taking more tax than it needs.

Tax cuts would boost take home pay for workers and increase pensions which are based on after-tax income.

The government should be letting us all keep more of our own money.

It should throw out whatever suggestions the Tax Working Group has for introducing any new taxes – especially a Capital Gains Tax.

It should end wasteful spending.

And if it can’t bring itself to cut taxes, at the very least t should increase tax thresholds so modest pay rises don’t push people into higher tax brackets.

 

 


Political meddling danger to super fund

November 22, 2018

The Suerannuation Fund is at risk from political meddling:

Now, Labour appears to be considering taking steps to require NZ Super to invest in a very specific way in a way no politician has tried to do before.

While no one from the Government is prepared to discuss the plans, it is understood that Economic Development Minister David Parker wants to carve off hundreds of millions of dollars of the Governments contributions to the Super Fund to be specifically invested into early stage companies.

This is often referred to as angel investment. . . 

Angel investment is fine for individuals or private businesses it’s not appropriate for the Super Fund at the directive of politicians.

Leaving aside whether there is a lack of money for early stage companies, a view which is not universally held in the industry, there are bigger issues at play. Having politicians direct the investments of NZ Super is dangerous territory.

Carving up the Government’s contributions to the fund, and earmarking parts for specific areas appears to be a subtle way to direct the Super Fund’s investments. It could easily become a political tool if politicians were able to use their influence to change investment decisions.

Once the door to political influence is opened, it will be difficult to close again, and each idea from Parliament is likely to be more questionable than the last. . .

This is very dangerous territory:

The security of New Zealanders’ pensions is at put at risk if Economic Development Minister David Parker opens up the Super Fund to political interference, says the New Zealand Taxpayers’ Union.

Taxpayers’ Union spokesman Louis Houlbrooke says, “For seventeen years, the Super Fund has been managed independently from the politicians, invested with the sole purpose of maximising returns for the Kiwi taxpayer. This independence has served the Fund well, and increased the security of our pensions.”

“The news that David Parker wants to fiddle with the Fund to skew investment towards particular types of companies should send a shiver down the spines of taxpayers.”

“If David Parker was some kind of investment guru, he’d be making millions in the private sector, not pursuing a career in politics. In fact, his investment decisions are guaranteed to be distorted by political motivations. This conflict of interest puts the security of our pensions at risk. The politicians need to stick to their core responsibilities and keep their grubby mitts off our Super!”

Putting money into the Super Fund instead of paying down debt is questionable.

But once it’s there, it needs to be invested wisely, not at political whim.

Having politicians direct where funds should be invested puts the Super Fund at risk and should not be countenanced.


Taxpayer paying business to compete with other business

November 16, 2018

An advanced Aviation Hub at Whanganui Airport is the latest beneficiary of taxpayer largesse through a donation from the Provincial Growth Fund.

The Taxpayers’ Union says the government is picking winners:

The Government should be delivering tax cuts to all businesses, not spending $48 million picking winners says the New Zealand Taxpayers’ Union, responding to the Government’s announcement of Provincial Growth Fund spending in the region.

The Union’s Executive Director Jordan Williams says “Government should not be in the business of picking winners. Instead of spending $48 million on an array of projects in Manawatu-Whanganui, the Government should give all businesses tax relief.”

“If the business case for projects receiving funding from the Government stands up, they should be able to secure private finance. Taxpayers should not be forced to subsidise businesses that cannot stand on their own two legs. Taxing more for Shane Jones to play Father Christmas is just a provincial merry-go-round.”

It’s worse than picking winners – it’s using taxpayers’ money to fund a business that is competing with another existing one.

An international flight school started operating at Oamaru airport a few months ago.

. . .Students from ”all over” would train in single-engine Tecnam aircraft, with one plane for every five students.

Waitaki Mayor Gary Kircher said he was ”very pleased” the airline academy chose the Waitaki district ”to kick-start their operation”.

”As there’ll be a significant number of trainees and staff living and learning here, this is a win-win for everyone.”

Ten jobs would be created and up to 50 commercial pilot trainees would be in the Waitaki district over the next three years.

Council chief executive Fergus Power said each trainee would add an estimated $20,000 to Oamaru’s economy while living in the district for up to a year. . .

If a flight school can be established at Oamaru Airport without subsidies the Whanganui one shouldn’t need government assistance and it certainly shouldn’t be getting taxpayers’ money to compete with an existing business.

 

 


Participation best protection from corruption

October 23, 2018

Taxpayer funding of political parties has raised its ugly head again:

“The Greens are cynically taking advantage of this week’s political scandal to push their agenda of taxpayer funding for political parties,” says New Zealand Taxpayers’ Union spokesman Louis Houlbrooke, responding to Marama Davidson’s statement today.

“Introducing ‘state money for electioneering’ (which is currently illegal) will only entrench the position of incumbent political parties like the Greens, and suppress political start-ups that could challenge existing powers.”

It will also further erode grassroots participation in the political process and reduce the importance of party membership.

“We must not replace the right to independently, privately fundraise with a system where unaccountable bureaucrats decide what makes political groups eligible for funds.”

“Finally, there’s the powerful moral argument that taxpayers shouldn’t be forced to promote ideas that they disagree with or even find morally reprehensible.”

“The proposal is opportunistic, self-interested, objectionable, and would have a corrosive effect on our democracy.”

Amen to that.

If parties can’t attract enough members and supporters to fund themselves the solution isn’t taxpayer funding.

It is sadly ironic that MMP which gives parties far more power has coincided with a serious decline in party membership and participation.

Other parties, and some media, question National’s fundraising. They either don’t understand, or ignore, the fact that the bulk of the money the party gets comes from members through subscriptions and relatively small fundraising activities.

That’s a very real strength of strong membership.

However, like every other party, and most if not all voluntary organisations, National’s membership is well below its peak. That, and the inability of any other party in the country to count its members in the 10s of thousands is a very real risk to democracy.

Democracy by definition should be participatory and strong participation is the best protection from corruption.


Value for tax $s isn’t partisan

October 22, 2018

The Taxpayers’ Union is encouraging people to celebrate Labour Day by joining them:

 The Union’s Executive Director, Jordan Williams, says, “With the events of the last seven days seeing the Opposition distracted, and the Government using the opportunity to rule out tax relief for New Zealand workers, external pressure groups fighting to hold the Government to account are as important as ever.”

We are using this important day to step-up our efforts fighting for Lower Taxes, Less Waste, and More Transparency.”

Tax is by far the largest cost imposed on New Zealand workers and their families. Every dollar wasted by politicians and bureaucrats is one less for the hard working taxpayer who earned it.”

The Taxpayers’ Union relies on support by its members and subscribed supporters to fund its work. Becoming a supporter is free, with membership from as little as $5 at http://www.taxpayers.org.nz/join.

The NZTU is often described in the media as right wing it’s not, and working for lower taxes, less waste and more transparency is not politically partisan.

I don’t buy into the line that parties on the right of the political spectrum don’t care about the poor but parties on the left purport to champion them.

The poor have most to gain from lower taxes and less wasteful, more transparent governments.

Wealthy people don’t like higher taxes but they don’t have to worry about every dollar the way poor people do and every dollar taken in tax and wasted by government misspending is a dollar they need more.

The NZTU was launched when National was in power and held it to account. It is continuing to hold this government to account and that brings benefits to us all.

I joined the NZTU when it was launched and continue to support it as the only organisation that seeks to ensure better value for taxpayers’ money.


Government’s don’t have magic money tree

September 10, 2018

The Taxpayers’ Union correctly points out that doling out public money will destroy jobs not create them:

Shane Jones’ spending in Kawakawa will destroy jobs, not create them, says the New Zealand Taxpayers’ Union.

Taxpayers’ Union spokesman Louis Houlbrooke says, “Taxpayers might think that $2.4 million for three jobs is a bad deal. Actually, it’s far worse than that. Taking this much money out of the private sector destroys jobs. It’s $2.4 million fewer dollars that taxpayers could have spent in their communities.”

That’s money that individuals could have used to create, expand or support businesses; provide for their futures, give to charity or simply choose to spend as they wished.

“What’s most terrifying about the Provincial Growth Fund is that, so far, Shane Jones has only spent four percent of his $3 billion. There is so much more spending to come that the public risks becoming desensitised to Shane Jones’ flagrant waste, when we should be outraged.”

“It looks like Shane Jones actually has far more money in the Provincial Growth Fund than he knows what to do with. In that case, he needs to simply give the money back.”

Councils and businesses in the provinces are doing their best to come up with ideas to get their share of this money and they can’t be blamed for that.

If money is being given away, why wouldn’t they try to get some for their pet projects?

But government’s don’t have a magic money tree. Every dollar a government spends comes from taxpayers.

The $2.4 million being splurged on the Kawakawa cultural centre in Northland will create just three jobs.

It could have been spent on health, education, crime prevention, infrastructure or any number of other ways that would give better value for money and a better return on investment.

It could also have been left in the pay packets of the people who earned it.


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