NEW REPORT SHOWS CORPORATE WELFARE CONTINUES TO SOAR IN BUDGET 2016
2 JULY 2016
FOR IMMEDIATE RELEASE
Corporate welfare amounts to more than $800 per New Zealand household, according to a calculation by the Taxpayers’ Union contained in a report released today. The report, entitled Welfare Bums, is available here.
The report updates the previous Taxpayers’ Union reports, Any new kids at the trough?, which scrutinised Budget 2015, and Monopoly Money, published soon after the 2014 Budget.
The key findings in the report are:
- Corporate welfare will cost taxpayers $1.36 billion this year, up from $1.2 billion in the 2015/16 financial year
- The Government will spend the equivalent of $803 per household on corporate welfare, compared to $723 per household spent in 2014/15
- Handouts to the private sector in Science and Innovation have grown to $250 million, co-funding “commercialisations” and start-ups.
- The primary sector and communications are the other main corporate welfare growth areas, with over $375 million being handed out to private providers installing ultra-fast broadband and irrigation.
- Taxpayers continue to throw money at KiwiRail, which since 2008, has been given $3.5 billion worth of subsidies, and has cost the taxpayer a staggering $14.4 billion in asset write downs.
- Solid Energy makes matters worse, being handed an investment write-off of $60 million.
“Corporate welfare is where politicians try to pick winners and the taxpayers lose,” says Jordan Williams, Executive Director of the Taxpayers’ Union. “It robs middle class taxpayers to reward the well off and politically connected while also hurting the private entrepreneurs creating jobs in industries which don't qualify for government handouts.”
“Steven Joyce has turned the Government science spend into the modern day equivalent of ‘Think Big’. As an example, he has shifted money that used to go to Universities and Crown research institutes to an American-owned rocket company, which has sucked $25 million of government funding, whilst competing with Silicon Valley billionaires.”
The report is authored by economist Jim Rose. Mr Rose says, “Taxpayers and politicians from all sides of the political spectrum should ask whether the public gets value for money from these business handouts.”
"For every dollar spent on corporate welfare, there is one less dollar for education, health, or investment by the taxpayer who earned it."
Corporate welfare is defined as government expenditure used to subsidise businesses or specific industries. Hard copies of the report are available on request.
NOTES TO EDITORS:
021 762 542
The New Zealand Taxpayers’ Union is an independent and membership-driven activist group, dedicated to being the voice for Kiwi taxpayers in the corridors of power.
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/resources