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Dear Friend,

Quite rightly, the focus of the media this week has been the terrible flooding situation in Auckland – for those affected by the flooding, our thoughts are with you.

It's also been a a busy week in politics. We are delighted that more than 11,000 of our supporters have written to Chris Hipkins to tell him which policies they think he should drop using our online tool: BriefThePM.com

While decisions on Mr. Hipkins's full "policy reset" are still being made (especially on Three Waters!) – the signs this week suggest that he is responsive to people power.

Taxpayer Victory: Hipkins extends tax relief at the pump ⛽💸

You will recall last year that your humble Taxpayers' Union exposed Jacinda Ardern and Grant Robertson for their outrageous price gouging at petrol pumps around the country. While the Government blamed the Ukraine war for high petrol prices, we pointed out that more than half the cost of petrol is tax!

Since Grant Robertson announced in December that the Government planned to hike fuel taxes back up, we have been campaigning hard to change his mind. 

And it worked! Earlier this week, the new Prime Minister announced that the diesel-road user charges reduction and petrol excise tax cut would be extended. This will come as a welcome reprieve to families and businesses who are already struggling with the cost of living given the record high levels of inflation. 

Fact check: Petrol tax is used to pay for roads ⚠️

New Zealand's fuel taxes go into a big pot called the National Land Transport Fund (NLTF), which was set up to fund roads maintenance. Opponents of the fuel tax cut argue that the extension will force non-drivers to subside drivers, but, in fact, the opposite is true.

Drivers are actually subsiding non-drivers. Under this – and the last National-led – Government, more and more of the NLTF has been being spent on public transport, uneconomic rail services, walking and cycling routes, and even the Road to Zero advertising campaign. Drivers of electric vehicles do not currently contribute into the Fund. 

Currently, the Government is siphoning off almost a third of the funding from fuel taxes for pet projects like cycleways and advertising campaigns!

We are calling on the Government to return the NLTF to its original purpose – paying for our roads. This would allow for fuel taxes to be kept lower than they were before, and still increase investment in our roads.

What's next? 🗳️

The fresh extension lasts until 30 June, which just a few months out from the election... Will Wellington really hike taxes then? 

A new Local Government Minister, a new approach? 💼💦

Whether it is seizing water assets or removing planning powers from councils, denying ratepayers in Tauranga the right to choose their local representatives or abolishing district health boards, the current Government's record on localism is poor.

This week's new cabinet saw a new Local Government Minister appointed. As was widely expected, brief was removed from Nanaia Mahuta and handed to Kieran McAnulty. We hope that this new minister signals a new approach from the Government but remain sceptical. 

The first big test will come when the Government announces what it plans to do with Three Waters in the coming weeks. The current proposals must be ditched: They will lead to water services that cost more and that are managed by unelected and unaccountable entities.

But there are viable alternative models of water reform like the one put forward by "Communities4LocalDemocracy" that would keep water assets in community control and ensure that they remain accountable to ratepayers. This proposal already has the backing of 31 councils and the mayors of our two biggest cities.

If the Government thinks it can get away with a few cosmetic changes, it should think again – we will oppose any proposal that does not meet our red lines of ensuring local ownership, control and accountability while driving efficiency and allowing councils to opt out of multi-council models in the long term if they do not deliver for their ratepayers.

Turning taxpayer dollars into stone 💰🪨

Our research interns scour the public service for examples of wasteful and excessive government spending. One of the oddest examples recently has come from Callaghan Innovation. If, like me, you had never head of this obscure Government agency before, its purpose is to provide grants to hi-tech businesses to support innovation opportunities. 

Examples of funding awards included $2,000 for a paint brush and sleeve wash system, $3,000 for the development of a low-calorie, refreshing, non-alcoholic RTD, and $4,375 for a pre-mixed cava beverage company. But the prize for sending taxpayer dollars up in flames has to go to the $5000 grant to a company that will turn the ashes of a deceased pet or family member into a stone.

The amounts here might be small but the lesson is a simple one. If these proposals were viable and enough people wanted to buy these products, they should be able to secure private investment without the need for Government support. Especially given the current cost of living crisis, it is difficult to see why this is deemed to be a good use of taxpayer dollars.

Taxpayer Talk with Peter Williams: Stephen Franks 🎙️

In our first episode of Taxpayer Talk for 2023, Peter Williams is joined by lawyer Stephen Franks. Stephen is a founding director of the commercial and public law firm Franks Ogilvie, a former member of Parliament and spokesperson for the Water Users' Group. 

Stephen joins Peter to discuss why the Water Users' Group, backed by the Taxpayers' Union, is taking a Government minister to the Court of Appeal and what any alternative Three Waters legislation might look like. The Government has claimed that Crown Law told the former Minister for Local Government Nanaia Mahuta that co-governance of our water services is required under Treaty of Waitangi. The new Water Services Entities Act means the country’s water infrastructure will be co-governed by iwi and local authority representatives, but at what cost to water users?

Listen to the episode | Apple | Spotify | Google Podcasts | iHeart Radio

Thank you for your support.

Yours aye,

Callum Purves Campaigns Manager New Zealand Taxpayers’ Union.

Media coverage:

NZ Herald Prime Minister Chris Hipkins extends fuel tax cuts, half-price public transport: ‘It’s been a lot’

Stuff PM Chris Hipkins set to reverse petrol tax hike, retain half-price public transport fares
 
TodayFM Tova: 30 January 2023 – Recall Elections (1:47:00)

Stuff Deposit guarantee scheme in place for 2024? Don't bet on it.

NewstalkZB Morning Edition: 26 January 2023 - Fuel Taxes (00:42)

Stuff Could Three Waters be on the chopping block? Here's what Prime Minister Chris Hipkins could do

NZ Herald The Front Page: What to expect from new Prime Minister Chris Hipkins (07:20)