NationBuilder

Last week, Christopher Luxon had a good go at wasteful local councils, telling them that the big spending 'party is over'. And boy, did they take it personally!

Ever wondered why everyone who works in local government always has such a perfect tan? 🤔🏝️

Scores of councillors took to social media crying that there is "no more fat to be trimmed", and who was leading the charge? Greater Wellington Regional Council's Transport Committee Chairman, Green Party Councillor Thomas Nash.

In just 2 years, Cr Nash and his gang have spent more than $200,000 jet-setting around the world. In fact, the Greater Wellington Council is so generous with the business class travel, it appears to spend more than every other Regional Council combined.

Las Vegas, Spain, Germany. You name the place and they were there spending ratepayers' money, but the undisputed pièce de résistance was a $900-a-night stay in London's glamorous Hyatt Regency.

While ratepayers might be having sleepless nights, no such fears for Councillor Thomas "no fat to be trimmed" Nash who we assume sleeps like a log. Perhaps wrapped up in the Hyatt Regency's Egyptian cotton in those super-king-sized beds...

Creative NZ change funding rules to draw curtain on accountability? 🤫

Rather than make more sensible decisions, the boffins at Creative NZ are living up to their name: they have changed the official funding rules so that instead of funding projects they are now just funding organisations (nudge, nudge, wink, wink) and only publicising the total amount funded not the amounts applicable per project, organisation, or artist.

Here at the Taxpayers' Union, we say you are entitled to know where your money is going and what for

We have written to Creative NZ's bosses, and the Auditor General who has the power to demand more clarity. We'll keep you posted.

"Danger, danger, danger!" 🚨🚨🚨 Government owned banks pose increased risks for taxpayers

The Commerce Commission has released a report on banking competition in New Zealand and it’s pretty clear that things aren’t as competitive as they should be. A big part of the problem is the tangle of red tapes that make it almost impossible, and far too expensive, for new entrant to get a foothold in New Zealand, even if they already operate banks overseas.

But one of the recommendations in particular rang alarm bells at the Taxpayers’ Union. The report calls on the Government to look for ways to pump more money into Kiwibank, hoping that with more cash, Kiwibank could grow, compete better, and push other banks to offer Kiwis a better deal.

If economic and finance history has taught us anything, it is that from a taxpayer perspective, government-owned banks are inherently risky. They are vulnerable to political pressure to make dumb uneconomic decisions.

But the way to help Kiwibank grow is not to pump more taxpayer money into it. Instead, the Government should sell Kiwibank to private investors who can fund this growth themselves and focus on long-term success rather than just the relatively short political cycle. Former Minister for State Owned Enterprises, Richard Prebble, wrote about that in the Herald – we reckon he’s bang on.

New Zealand has had many bank failures.

The BNZ has failed multiple times. The 1894 bailout of the BNZ cost 46.5% of the government’s annual revenue representing 6.1% of the country’s GDP.

Every government venture into banking has been a failure.

When I was a finance minister, we discovered all the government-owned banks were insolvent.

Inflation was in double digits. The Post Office Savings Bank paid its mainly low-income customers just 3% and would not lend to them. The bank required a cash injection. Selling to a bank that would treat customers better was a no-brainer.

The Rural Bank was a mess with many bad loans. Selling the Rural Bank to Fletcher Challenge in 1989 was a great deal for the taxpayer but awful for the buyer.

The Development Finance Corporation, DFC, had engaged in reckless high-risk lending. The DFC needed capital. The Japanese who bought the DFC were horrified at what they found. To avoid reputational damage the government made a multi-million settlement.

The BNZ had engaged in risky lending to companies like Equiticorp. It was also insolvent. This time the bailout cost the taxpayer around 2% of the GDP of the country.

The government is hopeless at running a bank.

Banking is a risky business, borrowing short and lending long. During the GFC, the world’s largest bank, the Bank of Scotland, failed. In this country, most of our finance houses collapsed.

New Zealand’s small economy is vulnerable to external economic shocks. Our history tells us that when the owners of a bank are New Zealanders when the bank is in financial difficulty the shareholders are also in trouble and cannot help.

Suggestions that the government should bank with Kiwibank or that school children be encouraged to be depositors would mean any crisis in Kiwibank would have a bigger impact. [continue reading]

We agree with the Commerce Commission that the Government should promote more banking competition. But we also agree with Prebble that government-owned banks are a nightmare.

The solution isn't too hard: Sell Kiwibank and cut the regulatory red-tape that is keeping out competition.

Since 2016, Kiwibank has only paid taxpayers a dividend once, and that was just $14 million. Considering the bank is worth around $2 billion, that’s a terrible return for taxpayers—we’d actually earn more if we just left that money in a basic savings account!

Selling Kiwibank could allow the Government to pay down debt (tick tock, tick tock, goes the National Debt Clock), saving Kiwis hundreds of millions of dollars in interest payments, while also creating a more innovative, privately-owned Kiwibank that’s more motivated to offer better services.

Te Mana o te Wai (the mana of the water) still costing ratepayers millions 💦

With ratepayers on the hook for thousands each to protect water’s spirit and lifeforce, your humble Taxpayers’ Union has been banging the drum for months about the enormous costs of Te Mana o te Wai.

With households in towns like Alexandra and Clyde potentially getting stung by up to $50,000 per household, to comply with cultural requirements (such as not letting water bodies mix), these new requirements cannot be ignored.

But these costs aren’t going away. We’re making steps in the right direction, but clearly it’s time to just chuck Te Mana o te Wai on the scrap heap.

Taxpayer Victory: Judith Collins cuts funding to space programme

Despite $30 million in handouts so far, based on wild promises of 1300 high-paying jobs and $2.4 billion in economic benefits, the centre has failed to attract international customers and risks becoming an even bigger money pit.

The crazy thing is that much of the taxpayer-funding this 'spaceport' has received to date should never have occurred because it wasn't eligible. The 'Regional Strategic Partnership Fund' was a slush fund intended to go to regions outside of Auckland, Wellington and Christchurch. But given that rocket launches make great photo opportunities, the Cabinet at the time decided to bend the rules and fund a runway to the tune of $5.4 million anyway despite the site being located in Christchurch.

The failure of this supposed 'investment' to deliver any returns to the taxpayer highlights exactly why it's never a good idea to let politicians and bureaucrats gamble taxpayer money on private ventures.

Taxpayer Talk – MPs in Depth with National Party MP Rima Nakhle🎙️🎧

This week on Taxpayer Talk, we sat down with National Party MP Rima Nakhle.

Rima was elected as the MP for Takanini in the 2023 Election. She was born in Australia where she graduated from Western Sydney University with a Bachelor of Laws and was admitted to practice in New Zealand in 2014. Rima shares her journey into New Zealand politics and discusses her proud Lebanese ancestry and her role in running a successful emergency and transitional housing service.

Listen to the episode on our website | Apple Podcasts | Spotify | iHeart Radio

Enjoy your weekend.

Ever wondered why everyone who works in local government always has such a perfect tan? 🤔🏝️

Creative NZ change funding rules to draw curtain on accountability? 🤫

"Danger, danger, danger!" 🚨🚨🚨 Government owned banks pose increased risks for taxpayers

Te Mana o te Wai (the mana of the water) still costing ratepayers millions 💦

Taxpayer Victory: Judith Collins cuts funding to space programme

Taxpayer Talk – MPs in Depth with National Party MP Rima Nakhle🎙️🎧