Taxpayers’ Union pet policy to cost taxpayers billions, again

I did not want to take this newsletter out of hiatus. I really didn’t! I have my kids to look after, I have projects to do, I have lawns to mow. As I write this my absurdly cute 8 month old daughter is chasing my laptop around the house, as she has picked today to learn how to crawl. As much as I’d like to I do not have time to fish around in the incredibly depressing minutia of New Zealand’s one-degree-of-separation think-tank powered politics.

But I have to, because the think tanks are at it again, and somehow the media is mostly neglecting to mention it.

In its latest deeply neoliberal austerity Budget, the Government has managed to find billions – potentially tens of billions, or more – for big businesses, in the form of capital expensing. As usual all this is hidden behind frustrating obfuscatory language, but what it means is that if you’re a mining company that wants to buy the Leveller from Fern Gully you can now claim 20 percent off the cost of the thing upfront, against the taxes you’d otherwise have paid. Tax deductions for depreciation already existed, of course, but depreciation is a recognition that things slowly break down and have to be fixed or replaced and this costs businesses money – as time passes. Capital expensing is going “oh, this would have broken or worn out at some point in the future, so look, why don’t we just kind of buy a bunch of it for you?” And that I suppose is fine if you’re a small or medium business. The issue here is that – as per Marc Daalder’s excellent reporting – there appears to be no limit to how much this misbegotten corporate tonguing will cost the country which means that we’ll soon start subsidising, oh I don’t know, oil rigs.

This is largely the result of months of Taxpayers’ Union lobbying. They’ve been in the ears of MPs, sending them asinine “briefing papers” (their latest is a frothing neoliberal wet dream dripping with outright disinformation about government debt¹ that can be summed up by the words “PRIVATISE EVERYTHING”; naturally, it landed TPU Executive Director Jordan Williams a spot on 3 News). They then spruik these efforts in their horrible newsletters that go out to all their members and anyone who thought they were getting a Ratepayer’s Report from Stuff, and in these missives they meticulously document their policy and public discourse wins.

The TPU’s position was for full capital expensing; that the government should rebate the total cost of the Leveller, not just 20 percent of it. They are calling the upfront rebate – which is, to reiterate, a gigantic sweetheart deal, just imagine if you could write off 20 percent of a shiny new flatscreen TV against your next tax bill! – a flop.

This is posturing. For the TPU and its junk-tank Atlas Network fellow travellers like the New Zealand Initiative, anything other than total victory will always be a flop, and for them total victory would be the government abolishing all taxes and public services, and ceding sovereignty to a consortium of noble captains of industry. They will be privately pleased with the developments in this miserable budget. For them, they represent progress. What bothers me, as always, is that these groups are deeply entrenched in business, media and Government decision making; their policy prescriptions are often picked up either piecemeal or wholesale, and despite this (or because of it) the media tends to take their pronouncements about fiscal responsibility at face value while ignoring the catastrophic cost of the policies they’ve advocated for.

Let’s recap some of those, shall we? Before the latest boondoggle, the TPU took full credit for torching Labour’s 3 Waters, legislation that aimed to take the (very high) capital costs of water infrastructure off ratepayers and on to Government books. Achieved through a racist whataboutism campaign aimed at Maori, the TPU’s successful campaign meant that many councils were forced to massively hike rates to pay for their decaying infrastructure instead of handing it off to Government. Thanks for the enormous tax hike, Taxpayers’ Union!

Before this, the TPU embedded their chair Casey Costello – also formerly an Act party candidate – on the NZ First party list. Upon her election to Parliament, she immediately set out doing practically everything the TPU (and NZI) had lobbied for around tobacco policy; scrapping world-first tobacco legislation, cancelling excise tax increases on tobacco products, and purchasing vapes from tobacco companies to hand out to smokers – policies that came out of mysterious anonymous briefing papers that spontaneously manifested on her desk. The cost of the thwarted and introduced policies once again runs into the billions; the cost of healthcare for smokers, the lost revenue from excise taxes, the subsidies for the tobacco industry’s addictive, environmentally ruinous products, and the deaths of an estimated 5000 New Zealanders each year.

Some media, to their credit, tried to identify links between the TPU and Costello, despite widespread and illegal stonewalling. But in doggedly searching for or turning up the usual paper trails – names on briefing papers, emails, overt commonalities between Costello’s mysterious documents and tobacco industry propaganda – they missed the wood for the trees. Costello is the Taxpayers’ Union! She stepped down as chair of the TPU to be parachuted into a job as an MP, doing many of the exact things the TPU advocated for during her tenure as chair, and once she finishes her catastrophic innings, she’ll be launched right back into the loving arms of some cosy industry body or lobby group. This is New Zealand politics; everyone knows everyone else, and they all gets a sweet job after their time in the trenches is up. (The media are not exempt from the merry-go-round; political journalism is practically a job interview for the job of a party comms person or corporate executive. If you’ve ever questioned the weirdly out-of-touch, navel-gazing, anodyne, optics-obsessed quality of the Labour party’s public statements, you will find your answer in the fact that a chunk of their comms team consists of ex-Press Gallery journalists.)

Given the state of things, it is probably folly for me to beg the media to make the link between the think tanks, the ruinous policy they so successfully advocate for, and the resultant costs to the country – or, to put it another way, the cost to taxpayers. But I’m going to do it anyway. The Taxpayers Union, NZI, and others dress up their advocacy for greater corporate control of the commons in the language of freedom and choice. They are frequently platformed and even embedded in our media, often for sneering at public projects like overly-expensive playgrounds or a set of steps at a beach. But these so-called blowouts pale in comparison to the multiple billions the policies championed by the TPU and their ilk cost the country as a whole. The least the media could do is tell the other side of the story: the outsize effect that these groups have on the formulation of public policy, and the catastrophic cost of those efforts to all New Zealanders.

1. The report makes the case that the Government’s debt is both unsustainable and like a household’s, a nonsense which is still repeated ad nauseam by political and financial reporters. Verity Johnson’s excellent op-ed makes short work of this absurd claim. ↩︎