Dear Supporter,
State Services Commissioner throws his weight behind our pay cut
campaign! đ
We've had another major win in our campaign for the public
sector to share the financial burden of COVID-19.
Last month, we wrote to the State Services Commissioner and all
major state sector agencies (including councils), asking if they would
commit to a pay freeze and CEO pay cuts.
Remember, despite the fanfare (including from the Taxpayers'
Union!) over the Prime Minister's original pay cut announcement, the
small print revealed it only applied to a select group of "core public
service" CEOs.
That meant that while Director-General of Health Ashley
Bloomfield would be taking a 20% pay cut under the PM's policy, the
six DHB CEOs paid more than Dr Bloomfield were protected!
On Wednesday night we cracked open the (virtual) bubbly
when the State Services Commissioner responded to our letter, saying
he's now decided to recommend
a pay freeze and CEO pay cuts for the whole state service. That
includes DHBs, universities, crown agents (like ACC and Callaghan
Innovation), and independent
commissioners.
In the Commissioner's words:
I encourage chief executives to
consider taking a similar reduction to their colleagues in the Public
Service. As you know, the public sector is made up of a wide variety
of organisation types. But the public view us all as the government.
New Zealanders will be looking to us all to demonstrate
leadership at this time.
Crucially, he is also recommending "no pay increases for senior
leaders and higher-paid staff and no or minimal
increases below that level."
This pay freeze will save far more money than the Prime
Minister's original promise. And it couldn't have been done without
the support of people like you who signed
our petition and donated
to the campaign efforts.
Top bureaucrats scrambling to respond đđ˝
Now our campaign has reached the "snowball" stage, as
different agencies scramble into action.
Public expectations are so strong now that even agencies exempt
from the Commissioner's advice are telling us they'll cut pay!
So we are pleased to reveal that includes New Zealand's
highest-paid public sector CEO: Matt Whineray from the
Guardians of NZ Super.
Last year Mr Whineray topped our Public
Sector CEO Rich List with a salary of $1,065,000.
His office has confirmed to us that he will take a six-month 20
percent pay cut.
Meanwhile, MetService has also informed us its CEO
will take a pay cut, with pay hikes cancelled for all other staff.
This one is significant because MetService is a state-owned
enterprise. Now we can put pressure on other SOEs like New Zealand
Post, KiwiRail, and Landcorp to follow suit.
Finally, while the State Services Commissioner does not have
authority over local councils, the signal for town clerks could not be
clearer. If they fail to cut their cloth, they will mark themselves as
the most greedy class of bureaucrats. We're currently sorting through
where each of the 78 councils stand: we'll be naming and shaming those
who fail to share the economic burden of COVID-19.
Council fat cats set to be exposed đł
Tomorrow our sister group the Auckland
Ratepayers' Alliance is publishing an 'Auckland Town Hall Rich
List' that exposes the 86 Auckland Council staff paid salaries
above $250,000 (yes you read those numbers
correctly).
Here's a sneak peek of the double-page ad they're publishing
in Auckland newspapers:
If you live in Auckland (or pay rates there) I highly
recommend signing up to the updates from Jo Holmes and her Ratepayers'
Alliance team. To do that, click
here and you'll be sent the full Rich List as soon as it comes
out.
Our team in Wellington has already started work on a nationwide
Town Hall Rich List for other local councils, so watch this space.
A terrible policy: interest-free business loans đ¤Ż
The Governmentâs newly-announced business
loan scheme leaves taxpayers exposed to enormous financial
risk.Â
With banks carefully looking to manage risk and putting limits on
lending, Grant Robertson has spat the dummy and decided to effectively
open a bank of his own by offering interest-free business
loans out of Inland Revenue.Â
The details are unbelievably lenient:
-
Businesses will not have to justify their plans or the health of
their balance sheet before they borrow up to $100,000 interest-free
from taxpayers. Â
-
There is no need to use existing lines of credit â meaning
businesses that don't need the help, can still get it.Â
-
The loans are interest-free, then revert to just 3% in a yearâs
time. Borrowers donât even have to begin repayments for two years.
To qualify, all you need is 50 or fewer employees, have (or expect)
a 30% decline in revenue in any month since January (the same as the
wage subsidy), and make a declaration that you think the business will
be viable after the coronavirus passes (a bonus for optimists!). IRD
will simply assess whether your business is viable based on
2019Â income.
You would almost have to question the business acumen of
any business which did not take full advantage of the scheme
regardless of need. The scheme gives two years to turn a profit on
free money from the taxpayer.
The unintended consequences and risks for taxpayers are chilling.
If youâre a company director with existing debt or finance, say on a
company vehicle, youâre probably obliged to now move that debt onto
the taxpayer. Why should taxpayers be forced to take on the commercial
risks of almost every small business across the country?Â
If most eligible businesses take up the loan, our
back-of-the-envelope calculation suggests
the scheme moves about $6 billion of risk onto the Government's books.
$6 billion (or six thousand million) is about $3,200 per
Kiwi household.
Labour should have learned their lesson with interest-free
student loans. Uptake was far higher than they had anticipated because
Labour had only calculated the numbers of students "in need". In real
life, most students looked at a deal they would never get from a bank
or even their parents and said "I would be an idiot not to take
this money even if I just put it in the bank". That is precisely
what will happen here.
Because this is a policy targeted at small businesses, we're
unlikely to see the National Party heavily criticise it. We exist to
speak from a taxpayer perspective when politicians won't.
And it was an accident of Parliament?! đ¤Ś
And from the 'you couldn't make this up' file, we now learn that
the enabling legislation (passed under urgency on Thursday night) was
mistakenly
passed after
an error meant that the wrong piece of legislation was introduced to
Parliament.Â
Apparently the loan scheme legislation was just a draft. It
hadn't been properly analysed by officials, and (so we are told) even
been properly approved by Cabinet.
Think about that for a moment. A piece was legislation
passed within a few hours, which accidentally brought into
law a multi-billion dollar loan scheme equivalent to about one fifth
the total annual spend of the Government.
Simon Bridges has been criticised for travelling to
Wellington to do his job. We think the more valid criticism would be
how on Earth the opposition didn't notice this monumental
error!
ACT's David Seymour at least picked up on the mistake in his
speech before the final passage of the Bill. But he didn't realise its
significance. And even
while criticising the Government's competence for tabling the wrong
Bill Mr Seymour implicitly supported the measures, calling the loan
package "positive".
Is no one in Parliament there for the taxpayer?
Louis's tweet summed it up:
Whereâs the $9.5 million Heather Simpson report? đ¤ˇââď¸
The 2019 Global Health Security Index (GHSI) concluded that
New Zealand scored just 54 out of 100 points for pandemic readiness,
which ranked us 30th among the 60 high-income countries reviewed.
There is another, local report which might also cast doubt on our
preparedness, but it is long overdue, and questions are beginning to
be asked.
On your behalf, we've had a researcher laboriously watching
all of the meetings of Simon Bridge's Epidemic Response Select
Committee. On the 22nd of April, expert witness Sir Professor David
Skegg raised the issue of what had happened to the broad review of the
health sector which was being led by Heather Simpson, formerly Helen
Clarkâs long-serving Chief of Staff. The review was conducted before
the COVID-19 outbreak. Its cost? A
cool $9.5 million.
Professor Skegg noted that the final report was due in March,
but it is still nowhere to be seen.
Diplomatically, Professor Skegg said he was particularly interested in
what the report might have said about the state of our pandemic
preparedness before the outbreak. Others have not been so charitable
with growing concerns that the Simpson report was going to be critical
of our readiness at the time, but is now being sanitised to avoid
embarrassing the Government.
We sure would like to see the tracked changes on that reportâŚ
which will probably be released to media at 5pm on a
Friday.
Whereâs David? - the fun nationwide search for David Clark
launchedâââ
Finally this week, a lighter note:
Observers of politics were shocked
when the Hon Dr David Clark was reportedly spotted in Wellington. Dr
Clark, who during the COVID-19 crisis has provided Acting Minister of
Health Dr Ashley Bloomfield with long distance intangible moral
support from his opulent Dunedin bubble, apparently broke his
self-imposed strict self-isolation
policy to visit the nationâs capital.
For weeks now, Dr Clark
has assiduously isolated himself completely from health policy, media,
politics, constituents, the Epidemic Response select committee,
mountain biking, being a Minister, daily press briefing sessions, and
nighttime spear fishing from a homemade microlight aircraft (although
the last one was a work in progress).
Here at the New Zealand
Taxpayersâ Union we felt that such a momentous occurrence had to be
celebrated. In normal times we would have sent Porky the Waste-hater
to publicly accost Dr Clark and deliver a petition that he returns his
Ministerial salary for the last month. Alas, Porky, like the rest of
us, is in lockdown and does not think he could catch Dr Clark on the
bike track in any case.
So, the Taxpayersâ Union most senior
analyst spun our patented Decision Wheel. It basically is a cheap
cardboard wheel covered in obvious suggestions. Using the Decision
Wheel takes 30 seconds, costs nothing, and is still more sensible that
many Government spending decisions. The Wheel suggested ârun a
competitionâ. Our first thought of asking taxpayersâ âif the Minister
of Health can effectively disappear during the biggest health crisis
of our lifetime, what are we paying the Minister of Health for?â This
was disqualified as a trick question because the answer was far too
easy.
We then struck on the idea of âWhereâs David?â â a game
loosely based on âWhereâs Wallyâ, a game which everyone knows but no
one over the age of 8 ever plays unless forced to by someone under the
age of 8. It is also discriminatory against colour-blind people,
according to our junior colour-blind researcher. The consensus is that
he must have lost repeatedly to a six-year-old to be so
bitter.
So, the rules are simple. We are asking people all over
New Zealand to be on the lookout for Hon Dr David Clark (from the
safety of their bubbles of course). Send us a verifiable photo of a
sighting and be in to win the Grand Prize of a Mountain Bike⌠ride
after lockdown is lifted. To make things easier for contestants, the
organisers have published a list of places that Dr Clark will
definitely not be sighted:
- A COVID-19
press briefing
- A
hospital
- The cafĂŠ
at Police National Headquarters
- Road trip
with Hone
- His
Ministerial office
- Muddy
tracks suitable only for bicycles with off-road capacity
- In a car
adorned with his name, photograph, and cellphone number.
UPDATE: #WheresDavid
(house-moving edition)
Have a great weekend,
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Jordan
Williams Executive Director New Zealand Taxpayersâ
Union
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