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Hi Friend,

As predicted by your humble Taxpayers' Union last week, the Government is well and truly 'taking out the trash' with bad news – and Nicola Willis is hoping that with the festive season in full swing, you don't notice!

But before we get to the depressing fiscal news bundled into the half-year opening of the books, we need to tell you about another set of policy wins in local government.

So let's start this Taxpayer Update with the good!

Yet More Policy Victories: Simeon Brown gives ratepayers an early Christmas Present 🎁🎉

Yesterday's final Cabinet Meeting of 2024 delivered much Christmas joy here at the Taxpayers' Union  (we watch the weekly livestream – so you don't have to 🤓 ).

The Prime Minister and Local Government Minister announced a new reform package for local councils to get local government "back to basics".

Friend, the announcements go even further than the PM's speech back in August to the Local Government NZ conference. The package is a huge win for our Local Government Campaigns Manager, Sam Warren.

Just a few weeks ago, Sam and Jordan (pictured) went to see Local Government Minister Simeon Brown with the Taxpayers' Union wish list of local government reform, including: 

- Adopting a UK or Australian-style rates cap connected to inflation, population growth (or both). This is a no brainer. While households have struggled with the cost of living crisis, town halls haven't cut back at all. This year, the average rates bill is being hiked by 14% and most of the extra money isn't even going on infrastructure, but rather unaffordable nice-to-haves.


- Scrapping the "four well-beings" in the Local Government Act. These have lead to an explosion in the scope of what councils have been doing (you can fit almost any boondoggle within the excuses, sorry, well-beings of social, economic, environmental, and cultural.


- Changes to council financial disclosure requirements to enable better accountability and enabling better benchmarking and financial comparisons between councils. Since 2014, the Taxpayers' Union has published league tables of councils financial and democracy data.

While some councils use the Taxpayers' Union data to benchmark, unfortunately many others do their darnedest to obfuscate and undermine the process. For example, the Minister did not know that there is not a uniform expenses classification or general ledger accounts across different councils. Nor are the councils even applying the same accounting policies (such as how assets are valued in their annual accounts) which makes it far, far harder to do meaningful comparisons.

We think a lot of that is not by accident, and needs central government to come in over-the-top and set a uniform set of accounting, classification, and asset valuation policies across the sector.


- Giving elected officials the ability to require information from council CEOs and officials. It is difficult to expect good governance when, unlike company directors, local councillors do not currently have statutory rights to demand information from the organisations they are supposed to be governing.

Friend, the very policies announced yesterday are the same policies your humble Taxpayers' Union have been championing for ratepayers!

And not only has the Government listened, officials have even been instructed to work with the Taxpayers' Union to develop some of the finer details of new information disclosure and benchmarking requirements given our staff's experience in local government freedom of information and league table benchmarking.

I call that a nice Christmas win! 

If you're facing rates bills that are eye watering, you may want to watch the full Post-Cabinet press conference available here <[link removed]>.

Journalists question whether local government is actually wasteful 🤣🤣🤣

You can imagine the astonishment in our office when the PM struggled to give examples of local government 'white elephants' and waste <[link removed]>. 

Yes, seriously, Wellington's journalists were really questioning whether local government is 'wasteful'. Wellington, of all places...

Rest assured Sam is printing out just the first [million?] examples to rush down to the Beehive – and we'll be sure to invite Mr Luxon to our Jonesie Government-Waste Awards <[link removed]> scheduled for early in the New Year...

Simeon Brown's media release summarising the reforms is here. <[link removed]>

Also, we are reliably informed from a very senior source in the Minister's office – which may or may not be the Minister himself – that further Cabinet decisions regarding the disclosures are to be made in February. Sam and the team will be working over the summer for a good cause then! 😉

Now for the bad news:

Nicola Willis gets petty: tells Treasury to ban CTU economist she doesn't like from Treasury briefing lock-ups 🤪

This morning a small group of media (and a few analysts from the Australian banks) were at Treasury's half year "lock-up" to work through the latest Treasury forecasts in the Half Year Economic and Fiscal Update (HYEFU).

We would normally be in the room, and asking questions of the Minister and senior Treasury Officials.  But, having been invited to submit names, last week we learned that having 'consulted' with the Minister, Treasury had decided to ban all of those who might criticise the Government's fiscal management pressure groups, unions, universities, NGOs, major corporates (except the banks), and think tanks.

Reliable sources in the Treasury tell us that the Minister specifically wanted the Council of Trade Unions' Economist Craig Rennie (who used to work in Grant Robertson's office under the last Government) from being in the room and able to easily give commentary to media.

But the only way Treasury could justify that was to ban every one of the groups who provide expert analysis to the media: including Business NZ, Federated Farmers, the NZ Initiative, and us!

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Basically, the Minister's thrown us (and others) under the bus to avoid a critic having early access to the information designed to ensure the Government's fiscals are transparent!

It's not often we agree with the Council of Trade Unions, but here we are...

Earlier today, we wrote a joint letter with the NZ Initiative think tank <[link removed]>, echoing the CTU's own letter sent yesterday <[link removed]>.

Seriously Nicola, New Zealand deserves better. 

The Minister is, at best, employing a cheap PR ploy to attempt to control today's media narrative. At worst, it’s a petty and vindictive move to exclude a Labour Party-aligned economist the Minister has taken umbrage with.



It doesn't come easy to say this, but we need Nicola Willis to get over herself and stop being so, well, political.

Instead, New Zealand needs a Minister of Finance to get on with the job: cut wasteful spending to balance the books.

In an interview last week, Nicola Willis said that she does not want to be "slave to getting back to surplus". That's a cute line, but unless she cuts spending, all New Zealanders will soon be a "slave to debt".  I know which one I'd rather...

Even before today's new figures, for every New Zealand household the Government, sorry, taxpayers, are paying more than $5,000 in interest this year alone.

And it's getting worse. Nicola Willis is borrowing at an even faster rate than [yes, that's right] Grant Robertson.

We know the Minister of Finance reads these Taxpayer Updates, so we have a message for her: Minister, banning critics is not a path back to surplus.

What Willis was hiding: a worse fiscal strategy than Grant Robertson 🤫💸



Friend, because of Nicola Willis's pettiness we don't have our usual comprehensive report to cut through the spin and highlight what the Minister's press releases are deliberately not mentioning. But that's the way Nicola Willis wanted it today.

So with the very limited time, here are the immediate take aways:

❌ The surplus has been pushed back, yet again. It's now at the very end of the forecast period (2028/2029).

❌ Total government spending has gone up - and Nicola Willis is choosing to continue to increase it each and every year in cash terms. Total government spending is 43.6% of GDP this year (compared to 'just' 41.0% last year and 35.9% in 2017).

❌ Net Core-Crown Debt has exploded. It is now forecast to peak at at at least $115,000 for every NZ household by 2028/2029.

❌ Interest costs will be just shy of $7k per household by 2028/2029.

❌ All of this is despite revenue being a higher proportion of the economy than in at any point under the six years of the last Labour Government. It now sits at 40.5% of GDP. Under Ardern/Hipkins, it never topped 39% of GDP.

❌ There are no signs of meaningful reform that would boost New Zealand's lagging productivity in both the government and private sectors.

And the ugly:

Cooking the books: Willis changes how surplus is calculated 🧑‍🍳📚

But the real news is that Nicola Willis has instructed Treasury to change the way surplus/deficits are measured using what's called "OBEGAL" (the Operating Balance Excluding Gains and Losses). 

Despite the union "lock-out" a concerned source within Treasury gave us the heads up that Nicola Willis was working with the Treasury Secretary to change the calculation so it all doesn't look quite so bad. Basically, because ACC's books are in dire straits, instead of confronting the problem, Nicola Willis is pulling a sleight of hand and excluding it.

Make no mistake Friend, this is the Public Finance equivalent of cooking the books.

When Grant Robertson manipulated the fiscal indicators back in 2022 (changing how Net Core-Crown Debt was calculated to make the debt numbers look better), the then Opposition Finance Spokesperson jumped up-and-down.

And to give Grant Robertson some credit, at least he had the excuse of coming into line with international precedent.

But who was that Opposition Finance Spokesperson? One Nicola Willis. 😱

The fact is, despite the Government being elected on a platform of cutting spending, they continue to spend even more than Grant Robertson, and kick the fiscal can down the road.

In the coming days, our economic team will work through the material and give you a more thorough analysis.

Another Minister takes out the trash: announcing a tax hike just in time for Christmas 🎅💵👆



Speaking of ACC, ACC Minister Doocey is set to get coal in his stocking this Christmas, after a massive ACC levy hike was announced this week effective from 1 April. <[link removed]>

So if you get a crisp $20 in any Christmas cards, hold on to it, because next year's looking like it's going to be a tight one, and the hikes keep coming until at least 2027.

By 2027, ACC's jobs tax will be another $140 per employee. <[link removed]>

As ever, small businesses are going to get hammered because a ACC can't keep costs down.

So much for 'no new taxes'...

At least Judith Collins makes Santa's good list...🎅🏻🛷

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Marsden Fund grants have long been a woke slush fund. You know it, I know it, and thanks to our taxpayer-hero of the week Judith Collins, everyone knows it.

Incredibly, the Government's decision to take up the Taxpayers' Union's call and narrow the remit of the Marsden Fund <[link removed]> – returning it to focus solely on science rather than the social science nonsense of (to pick just one example) $360,000 study of “big things” such as large vegetable sculptures placed next to state highways – hasn't been supported by all.

The media ran with the usual complaints from self-entitled academics and their proxies <[link removed]>. But, sadly, the Opposition followed suit.

In Parliament, the Science Minister was able to easily knock it back – using the example above, Judith Collins appeared to have been forwarded this and other grants highlighted by the Taxpayers’ Union to supporters calling for the very change in policy Labour was criticising.

Check out the video of Judith Collins using our examples of waste here. <[link removed]>

Enjoy the rest of your week.


James Ross
Policy and Public Affairs Manager
New Zealand Taxpayers' Union

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In the Media:

Spinoff A tale of two polls <[link removed]>

RNZFinance Minister on changes to the banking sector <[link removed]>

The KakaGovt eyes ‘PPP-lite’ for health centres <[link removed]>

ACTNew poll: Kiwis favour referendum to resolve Treaty principles <[link removed]>

The PlatformCuria Market Research’s David Farrar breaks down the latest polling <[link removed]>

The PlatformMichael Laws on what polls reveal about New Zealand’s future <[link removed]>

NewstalkZB The huddle: What do we make of the greyhound racing ban? <[link removed]>

The HeraldMFAT needs more money for India push, Winston Peters says <[link removed]>

Otago Daily TimesES defends Hunt <[link removed]>

NewstalkZB Chris Hipkins: Labour Leader on ferries, boot camps and whether he’ll still be leader in 2025 <[link removed]>

NewstalkZBThe huddle: What does the ferry announcement mean for the coalition? <[link removed]>

NZ InitiativeUndue restrictions on restricted briefings <[link removed]>

Waikato Times, The Post, The Press When New Zealand needs growth, Labour offers taxes <[link removed]>

The PostIn the age of meh, voters are sending a message loud and clear <[link removed]>

New Zealand Taxpayers' Union Inc. · 117 Lambton Quay, Level 4, Wellington 6011, New Zealand
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