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Media release from the Taxpayers' Union

MEDIA RELEASE

GOOD INTENTIONS ARE NOT GOOD POLICY

11 JULY 2014
FOR IMMEDIATE RELEASE

Reacting to Science and Innovation Minister Steven Joyce’s comments that the Taxpayers’ Union has a ‘fundamental misunderstanding’ relating to accusations of corporate welfare, Taxpayers’ Union Executive Director, Jordan Williams, says:

“Mr Joyce claims that the Taxpayers’ Union has a 'fundamental misunderstanding’ but fails say what it is. Instead of rebutting our criticisms of the policy, Mr Joyce has just reiterated what the ‘intentions’ are. Unfortunately even the worst policies have the best of intentions.”

“The Taxpayers’ Union isn't questioning the intention of the Callaghan Innovation grants, our objection relates to the outcome, where taxpayers bear the risks and private businesses get the reward."

“Justifying the 3:1 funding ratio, where taxpayers take on 75% of the risk, Mr Joyce is effectively saying that 75% is better than 100%. He appears to ignore that under his policy 0% of the profit is returned to the Crown."

“We hoped to be proven wrong on our fear that the grants are interest free. Instead the Minister confirms the worst, with 40% of the grants expected to be written off and the rest not even adjusted for inflation.”

In February the world's third largest software maker, SAP, which last year posted a profit of €1.80 billion, received a similar growth grant'.

“The SAP example shows that this isn’t some business IVF program," says Williams.

"We call on Mr Joyce to please explain what our ‘fundamental misunderstanding’ is. Where is the evidence that the return taxpayers get from the successful start-ups compensate for the money lost on the half that fail? In addition, who is ensuring that the decisions made by politicians on what businesses to back are better than what would have happened had the money stayed in taxpayers' pockets?"

ENDS


ENQUIRIES:

Jordan Williams
021 762 542

NOTES TO EDITORS:

The New Zealand Taxpayers’ Union is a non-partisan activist group, dedicated to being the voice for Kiwi taxpayers in the corridors of power. It’s here to fight government waste and make sure New Zealanders get value for money from their tax dollar.

The Taxpayers’ Union operates a 24 hour media line for comment on taxpayer issues. Representatives are available on (04) 282 0302.

High resolution images and logos are available on request or online at http://www.taxpayers.org.nz/pages/resources