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That Guy

Posted by on August 8th, 2013

The Minister of Primary Industries, Hon Nathan Guy, is floundering.

He has had a shocker of a time on why his ministry didn’t pick up earlier on Fonterra’s whey protein botulism scare.  Now Stephen Joyce has been flown in to clean up the mess.

But I reckon his worst errors of judgement have been in Fisheries, and there is a striking pattern emerging.

He botched the Otago/Southland commercial paua take extension: poor consultation, backing commercial at the expense of everyday Kiwis, polarising the community; then kicked for touch.

It was the same story with the North Island East Coast crayfish quota, where commercial interests were again protected and public interests overridden.

Now he wants to slash the recreational snapper bag limit from nine a day to three, while once again giving gold plated protection to big commercial interests.  In doing so he has made a series of blunders:

  • MPI research shows the snapper stock is growing and Guy himself crowed about that here.
  • He said he would consult on options to reduce the commercial take as well as recreational limits, but failed to do so;
  • MPI’s consultation has been flawed: an impenetrable consultation document and no ministry-organised public meetings –so Legasea (the advocacy arm of one of the main sport fishing groups) has taken a lead in doing that for them;
  • Seeking to lock in “proportionality” so that commercial interests get most of the upside on future catch increases – more on this later.
  • Ignoring the opportunities to reduce wasteful by-catch and improve the sustainability of fishing methods (despite allocating $26 million to “precision harvesting” for a consortium of big fishing companies)

All in all this has caused outrage among the wider Kiwi fishing community.  What is proposed is nothing but privatisation of public fishing rights to suit commercial quota holders.

Labour is campaigning hard to bring some fairness to this issue.  You can see statements by our leader here and here and from me here. We are out around the country over the next weeks and stand squarely for defending the public’s right to catch snapper to feed their families.

Nyet! Kiwi crew need to learn Russian for jobs

Posted by on July 18th, 2013

Kiwi fishing crew are now having to learn Russian to get work in the fisheries sector, showing that more and more Kiwis are being shut out of jobs, says Labour’s Fisheries spokesperson David Cunliffe.

“A Kiwi company is now advertising for crew who speak Russian and can read mechanical instructions in that language. This is madness. It is completely wrong that a Kiwi fisherman should need to learn Russian to fish in Kiwi waters.

“How many Kiwis know Russian to the level of reading mechanical instructions? I’m willing to say very few, especially those in the fishing industry.

“Next they will have to read War and Peace to man the nets. Or Alexander Pushkin’s ‘The Tale of the Fisherman and the Fish’.

“It’s hard to see how your average Kiwi can get a job as crew when the Russian language is a must-have to get in the door. Perhaps the captains should learn English, or Māori.

“The Russian language test will be of particular concern to iwi, who want as many rangatahi as possible to learn skills in the fishing industry.

“Fisheries Minister Nathan Guy needs to explain how this job criterion has come into being and whether he supports it.

“Labour backs moves to bring all foreign charter vessels within New Zealand law – including English language requirements. As this advertisement shows, change cannot come soon enough to boost jobs for young New Zealanders,” said David Cunliffe.

Recreational fishers shouldn’t carry the snapper can

Posted by on July 16th, 2013

Nathan Guy is putting the interests of commercial snapper fishers ahead of recreational fishermen in another example of National cosying up to their corporate mate.
The Government has only released three options for snapper bag and size limits for recreational fishermen in its latest round of consultation and all of them are significantly less than the current allowance.
Nathan Guy expects recreational fishermen to carry the can but there is very little proposed change to the commercial quota.
This has outraged recreational fishermen. Getting a feed of snapper for the family is a tradition that Kiwis hold dear.
The Snapper 1 fishery, covering the north east coast of the North Island and the Hauraki Gulf, is the most popular and important recreational fishery nationwide.
Labour wants an even better fishery to be there for future generations. We support rebuilding the stock. But it is untenable for recreational limits to be reduced while the commercial catch is virtually the same.
Current snapper stocks in the Hauraki Gulf and Eastern Northland are well below target. They are 24% of natural biomass, below the agreed target of 40%. The Bay of Plenty fishery is at only 6% of original levels.
Labour wants a sustainable snapper fishery that supports recreational fishing and a strong, sustainable commercial sector. Getting there means everyone must play their part.

On Marlins and Long fins

Posted by on June 13th, 2013

Striped Marlin

The Ministry of Primary Industries’ recent review of the management of striped marlin has reached a stalemate.  Commercial fishers wanted to change the rules and land striped marlin caught in NZ waters.  Currently only marlin by-catch caught outside NZ waters can be landed.  Recreational fishers oppose the current by-catch rule and rejected the proposed extension with vigour.   

The Ministry decided that the current management policy provides the “best balance”.  The Minister has obviously found marlin a fish too big for him to land and kicked for touch.  No surprises there.

Long fin Eels (Tuna)

The Government has taken some initial steps in response to the Parliamentary Commissioner of Environment’s (PCE) recent recommendations about longfin eels. 

There are grave concerns about the long term survival of the eels and the Commissioner’s report was scathing about the management policies up to now.  News that DOC and an independent Review Panel will undertaking work to find appropriate ways to protect longfin eels and other migratory fish is a useful interim step.

I consider that work the PCE has done to be very important.  What matters now, given the complexity of the science and the range of interests involved, is to ensure that the Review Panel is fully independent and well-qualified – including appropriate international expertise.  I would expect that the PCE should be consulted about that.

Let’s hope the work to be done is genuine and results-orientated rather than a time-wasting excuse for slippery inaction while the longfin eel faces potential extinction.  We will watch the outcome closely.

Filed under: Fisheries

Death and Taxes

Posted by on June 7th, 2013

Nothing, they say, is as certain as death and taxes.

It seems the saying is true.

Yesterday the Finance and Expenditure Select Committee reported back the Taxation (Livestock Valuation, Assets Expenditure and Remedial Matters) Bill to the House.

The usual impenetrable tome of complex technical detail that only corporate lobbyists, tax accountants and hard-working Labour MPs bother to read.

This one was remarkable for what was NOT in it – the odious car park tax had been stripped out under pressure from us, unions and business groups.

Death and taxes may be certain, but there is no point having an annoying tax that costs more to administer and comply with than it actually raises.

The second certainty is that the IRD Call Centre is fast becoming a joke.  

A friend just told me they had been on hold to it for an hour and twenty minutes this morning.  I have had several experiences of close to an hour on hold.  It’s enough to drive you spare!

It is fundamentally wrong that our tax system imposes stiff penalties for late payment and tax payers bear the full risks and cost of any errors when they are effectively denied access to their own tax information and advice because IRD cannot run a decent call centre.

If funding is the issue, it’s a false economy.   The lost productivity must be staggering.

If its management incompetence, it needs a big tune up.

The third certainty this week is that the Minister of Revenue is under huge pressure. 

Indeed, he may not be long in the portfolio.


Filed under: Budget 2013, IRD, Tax

We wouldn’t have unqualified doctors in hospitals – why allow unqualified teachers in charter schools?

Posted by on June 4th, 2013

The charter schools Bill is likely to be enacted this week.  It is a disgrace that the Government has agreed to establish sschools who may hire unqualified teachers in their classrooms.  See my speech during committee stages last week –

Filed under: education

State sector unions win on reform bill

Posted by on May 31st, 2013

Most of the time, it’s hard for Labour and unions to make progress for workers when we don’t have the numbers in the House.  Occasionally, as in the Mondayisation Bill, we get a win.  Sometimes we can help to avoid a disaster.

That’s what has happened with the State Sector and Public Finance Reform Bill (SSPFRB), soon to get its second reading in the House.

This Bill, as introduced by National, would have scrapped redundancy provisions for public sector workers, overridden bargaining rights and allowed state powers to be contracted out without proper protections and accountability.

Fortunately, the PSA, the CTU and many individual civil servants testified powerfully agonists the Bill.

That allowed the Labour members of the committee to insist on further consultations between officials and unions.

We were then able to use our potential vote for the Bill as leverage to negotiate major concessions from the government.

As a result the Bill has been heavily amended.  State sector employee rights are now better protected than they would have been.

Redundancy provisions have been improved so that the state sector employees retain their entitlements unless accepting a position that is ‘no less favourable’ than their existing package.

Transition arrangements have been fixed so that collective agreements and individual agreements are sunsetted equally, three years after the Bill takes effect.

Government workforce policy statements have been revised to ensure that all existing legal and bargaining rights have been protected.

Conflict of interest protections; enhanced governance for delegated powers; and strengthened accountability requirements in public sector financial reporting have all been achieved through the negotiations.

There still are concerns over some aspects of the Bill, but the vigorous work of public sector unions and successful negotiations in the select committee have resulted in a much better outcome that we were originally facing.

National’s Rubber Budget

Posted by on May 30th, 2013

The truth is National’s surplus is not ‘wafer thin’.  It comes from massaging a bunch of rubber numbers. Had they been completely upfront with New Zealanders they would have either admitted they would not reach surplus or had to hike up petrol taxes or ACC levies even more.   

It’s a “bogus surplus” and here is why.

Over $1 billion more than is needed is being collected from ACC levies and an extra $900 million is being taken from people’s pockets through petrol taxes.

Forecast revenue flows show a one-off net $600 million surge above trend in 2014/15, driven by an unexplained jump in corporate tax and employee compensation, and a magic $400 million tax loss offset that occurs in that year only.

National has forgotten to cost their tax credits to small business or include them in the estimates.

There is a strange and abnormal use of contingencies in Education ($196 million). That means National’s surplus relies on major spending lines that are not properly appropriated. The question this raises in my mind is – is this featherbedding for next year’s surplus?

But wait, it gets worse.

At the previous forecasts the Government said they would spend $1.2 billion in 2014/15. This time around $200 million spending has suddenly shifted out of that year (the year they need surplus) and shunted into the other years or disappeared. This way they only have to spend $1 billion in 2014/15. That makes it a lot easier for them to reach surplus.

If that $200 million of total new spending had not shifted out of 2014/15 at the last minute all the contortions I’ve discussed would not have got them over the line.  

It’s almost like they are taking the New Zealand public for fools.

Refusing to lower excessive ACC levies, kicking out forecast expenditure, an artificial spike in predicted revenue flows, and a huge use of unfunded contingencies and unbudgeted spending shows National’s surplus relies on flaky accounting, not prudent management.

By contrast, Labour ran nine consecutive fiscal surpluses in nine years of government.  Labour has a proud record of prudent fiscal management.

But even if the National-Act Government had reached fiscal surplus, their record on broader economic management has been woeful.

The current account deficit continues to widen; international debt continues to rise; unemployment is too high; wage growth is too low; the gap between rich and poor continues to widen.  They lack vision, strategy and a heart for everyday Kiwis.

National is fiddling with the figures to balance their rubber books. And they are doing it at the expense of New Zealanders books. Their fiscal surplus is bogus, it’s a rubber budget, and they know it.

Gutting fisheries

Posted by on May 20th, 2013

The Blackjack Budget has been a huge disappointment for ordinary families.

It’s also an assault on the fisheries industry and the communities who rely on growing high value sustainable fisheries for their jobs, including iwi and Māori.

In almost every category National has wiped its hands of fisheries. It’s like climate change – the Government’s backwards ideologies mean they can’t face the scientific facts, so they just block their ears and abolish the scientific programmes.

Let’s look at what National has cut in fisheries, and why:

  1. Operational Advice on Sustainability and Management Controls in Fisheries. This means Primary Industries Minister Nathan Guy won’t receive the best scientific advice when he’s revising fishing quotas,
  2. Fisheries Policy Advice. This cut reduces officials’ ability to build partnerships with fishing interests, and limits the Minister from having to face the consequences of his cuts at the coalface,
  3. Aquaculture. There’s a huge cut here, and it means the high-value aquaculture industries have been disregarded by the Government,
  4. Adverse Climatic Events. This is so Nathan Guy can ignore the acidification of our oceans,
  5. Sustainable Farming Fund. Basically, National just doesn’t care about the environment.

The list goes on and on and on.

Yet again the Blackjack Budget has shown the gaping chasm between Labour and the governing parties.

Labour stands for a clean, green, clever and prosperous future. National and their luddite mates stand for a future that is dumb, dirty, desperate – and gutted.

David Cunliffe is Labour’s Fisheries Spokesperson.

Here we go again West Auckland

Posted by on May 19th, 2013

In my time in Parliament I have always been given such humbling support by the people of New Lynn and West Auckland, and every day I do my best to live up to their hopes and expectations.

Nothing – absolutely nothing – tested the trust which West Auckland people have placed in me more than the aerial spraying programme in the early 2000s to eliminate the painted apple moth outbreak. It had to be done. The economic destruction of doing nothing would have hurt all my constituents in the end.

But what was necessary was also hugely disruptive for the community in my electorate. And ever since I have worked to improve New Zealand’s biosecurity protections so my constitutents might never have to live through that again.

Unfortunately in 2008 the National Party became the Government. National think they know the price of everything – but they certainly know the value of nothing. And under John Key we have seen cut after cut after cut in our biosecurity protections.

Last year, yet again, West Aucklanders bore the brunt of a biosecurity breach. My constituents were going about their lawful business at the Avondale markets when biosecurity officers turned up apparently in hazmat suits to confiscate their fresh fruit. It was the feared Queensland Fruit Fly – and it got through the border after National cut biosecurity and customs.

So it’s almost beyond comprehension that John Key, Bill English and National have made another $6.2 million of cuts to biosecurity risk management in the Blackjack Budget.

They’ve also cut biosecurity policy advice. If Nathan Guy just doesn’t want to hear about coming threats then he simply shouldn’t be the Minister in charge.

These latest cuts to biosecurity are an attack on the community in my New Lynn electorate. And next year, when Labour returns to power, this irresponsible approach will not stand.

$1.5 billion – for what?

Posted by on May 18th, 2013

Earlier this month Cabinet gave Revenue Minister Peter Dunne and the IRD $1 billion of your money to buy a new computer – and another $500 million just in case the Minister burned through your first billion too quickly.

The announcement was astonishingly vague.

Almost immediately we in the Labour Party located an independent review of the computer plan. In a document released to me under the Official Information Act we learned how KPMG reported:

We do not believe the timeline presented… is achievable. A programme of this complexity, where scoping and articulation of long-list options, a robust options assessment (critical for Treasury support) and the programme’s design (i.e. ordering of tranches and projects) have not yet occurred.

Now that John Key and Bill English have bought down their Blackjack Budget we can see KPMG were too diplomatic.

Here’s how the official Budget Economic and Fiscal Update (BEFU) 2013 (p64) defines the project:

Revenue – Transformation and Technology Renewal (Changed)

The Government is exploring options that will fundamentally change the way IRD manages its processes and data. Any changes could have material costs to implement (with capital and operating implications) and/or impact tax revenue collections. The Government is currently considering a programme business case and is yet to finalise the scope of the programme.


The National Government have committed $1.5 billion of your dollars to a project which hasn’t been fully considered and which isn’t even properly scoped. For $1.5 billion you could have two thousand experienced nurses providing essential care in our hospitals for 12 whole years!

Ordinary people in New Zealand are doing it hard. Ordinary people are worried about the lack of jobs, and how to put food on the table for their kids.

Too many ordinary people can’t dream of having a new computer in 2013. But Peter Dunne gets $1.5 billion for his, and he doesn’t even know which one he wants.

Or maybe the Minister with the casting vote in the shabby casino deal will blow the lot on ‘scope defining’ exercises. Either way it’s ordinary families who will foot the bill under National.

David Cunliffe is Labour’s Revenue Spokesperson.

What’s half a billion between the Government’s friends?

Posted by on May 8th, 2013

Half a billion dollars. $500 million dollars. It’s an almost unimaginable amount of money to an ordinary person.

Half a billion is almost a third of Police’s annual budget. It’s more than DOC’s entire funding.

It’s a year’s wages for 4,150 experienced nurses and 4,150 experienced secondary school teachers as well.

It’s $113 for every man, woman and child in New Zealand.

And it’s the amount National promised Peter Dunne last week for potential overruns in his “upgrade” of IRD’s computer system.

Yes, you read that correctly. I’m not talking about the known project costs – National has committed $1 billion for those.

The extra half a billion is just in case Mr Dunne blows through the first billion without getting the job done. It’s a shadowy “slush fund” equal to half the basic worked-out cost of the project.

And let’s be frank – the Revenue Minister’s reputation for basic maths hasn’t been strong of late. This year Dunne’s had to back down on reckless new taxes on car parks and iPads and laptops and cellphones, because Labour proved he hadn’t done his sums.

But what do the experts think? Well accountants KPMG reviewed Mr Dunne’s project at the end of last year and there appear to be real issues with the way it has been set up.

Here’s what KPMG said:

“We do not believe the timeline presented… is achievable. A programme of this complexity, where scoping and articulation of long-list options, a robust options assessment (critical for Treasury support) and the programme’s design (i.e. ordering of tranches and projects) have not yet occurred.”

Now Labour does agree the IRD’s FIRST mainframe is not fit for the internet age. IRD started as a revenue collecting department, but now it has responsibilities in KiwiSaver, child support and student loans.

But surely a project of this magnitude needs to be planned better than “give or take half a billion”? Especially after this Government’s total botch-up with Novopay.

It all beggars belief really, just as National and Peter Dunne will beggar New Zealand until they’re given the boot at the next election.

Saving New Zealand’s own eel

Posted by on April 23rd, 2013

We’re a passionate people about our natural environment. From the kiwi to the kauri, from the black robin to Maui’s dolphin, our shared sense of responsibility to protect (and when necessary save) our native flora and fauna unites New Zealanders from all walks of life.

The longfin eel (known in Te Reo Māori as tuna) is this country’s only native eel. It’s an amazing species.

Longfin eel only reproduce once in their lifetimes. When the females reach about 80 years of age their instinct drives them from their homes in freshwater streams and rivers out into the sea, and onto a journey of thousands of kilometres to the Tonga Trench where they breed and pass away. Their spawn are carried by ocean currents all the way back to New Zealand, where they make their way up the rivers and that very slow reproductive cycle begins again.

Tuna are taonga to many Hapu and iwi, and at times in history they have been a crucial food protein source for Māori.

Indeed eel is a reasonably popular food in West European markets, particularly in Belgium and the Benelux countries. New Zealand fishers have long exported to Europe and recently there’s been some tentative steps towards selling into Asia.

The available science shows longfins are in decline. They are particularly susceptible to water pollution and sedimentation, and their slow breeding cycle has been disrupted by overfishing and damming of rivers.

Perhaps the starkest evidence is the size of the commercial fishery. At 82 tons it has dropped a whopping 96% since the 1960s.

Yet, for all which we do know, our longfins remain mysterious creatures – and we as a country don’t have adequate science to know just what is required to turn around their path to extinction.

That’s a gross failing on the part of Primary Industries Minister Nathan Guy, who is supposed to be responsible for fisheries science, as well as Conservation Minister Nick Smith who is responsible for the DOC estate where much of the population lives.

In the face of hands-off inaction from the Government, Parliamentary Commissioner for the Environment, Dr Jan Wright, launched her own investigation into the status of longfin eels. Last week Commissioner Wright released her comprehensive report, and it’s a true landmark.

The Commissioner calls for better science, which is a no-brainer – but also for a total moratorium on the commercial fishery.

Now a moratorium is a bold step which would hit fishing communities and some iwi in the pocket. However if the eels go extinct the outcome is the same – only we’d all be the losers.

Conservationists and fishing industries around the world have long looked to New Zealand as an example of a country where the people care for the environment, and as a an early leader in science-based quota management. If the choice is extinction or saving our native eel, then I expect New Zealanders will want their Government to take responsibility and rescue our natural heritage.

So the Government’s deafening silence in the face of Commissioner Wright’s report has been truly disturbing. Ministers haven’t even issued press releases, and the only acknowledgement of the report has come from officials.

I asked Nathan Guy “Is he concerned that the longfin eel (tuna) might go extinct; if so, why, if not, why not?” and here’s what he said:

I will not be able provide the Member with a response within the timeframe available and will endeavour to provide this response at the earliest opportunity.

I received that non-answer three weeks ago but haven’t heard a peep from the Minister since.

The Parliamentary Commissioner for the Environment couldn’t have been clearer that the time for action is now. If we don’t commit to saving our native eel then it will go extinct – and extinction is forever.

Could it be that the National Government are so hands-off and hostile to the environment that they just don’t care?

Op-ed: We all must pay tax – including multinationals

Posted by on April 12th, 2013

This op-ed was originally published in the New Zealand Herald.

On May 14 Australia’s Budget will introduce new requirements providing more transparency of tax arrangements by giant multinationals like Apple and Google. It’s a fair bet that just two days later, our Government’s Budget won’t.

Australia has chosen to front-foot an important global economic challenge while, once again, our Government sits on the sidelines.

The new Australian regulations will ensure companies with annual revenue above A$100 million ($122.5 million) will have their tax details published by the Government in a bid to ensure that all pay, and are seen to pay, their fair share.

The issue is sharpest for online sales, where it is possible to allocate costs and shift profits and tax liabilities across borders to low tax jurisdictions.

“As a matter of principle, taxpayers, whether they’re companies or individuals, should pay their proper rate of tax.” Most fair-minded Kiwis would agree with that statement by Australian Prime Minister Julia Gillard.

On April 2 the Herald’s editorial railed that “point-scoring outbursts will not solve [this] tax conundrum”.

I couldn’t agree more. Reasoned and considered debate on this complex issue is required. But that must not be an excuse for inaction. This is not a populist issue – it is an issue for a 21st century tax system and one that multiple jurisdictions and international bodies are grappling with, including the OECD and the Group of 20 industrialised nations.

Enduring solutions will require both a global response and a clear sense of what we expect of our tax system in New Zealand. But global co-operation is no excuse for local indifference, impotence or resignation.

Recent months have shown that we have a Revenue Minister who is more interested in tinkering around the edges.

Peter Dunne wants to tax New Zealanders’ use of iPads and iPhones but shies away from taxing Apple itself.

The Herald asked this writer if it seemed fair that in New Zealand Apple paid only $2.5 million in tax on $571 million in turnover. Of course tax is paid on profit, not revenue – and Apple NZ apparently made only $5.5 million in profit and paid 31 per cent tax on that. Fair enough?

Oddly, Apple shares have climbed 73 per cent from US$404.30 to $700.09 ($471,00 to 815.85) over the tax year to September 2012. Its global profits climbed from US$25.922 billion to $41.733 billion, or from 23.94 per cent to 26.66 per cent of sales revenue during that time. So why was its New Zealand arm so apparently unprofitable at less than 1 per cent of sales revenue, relative to Apple’s global operations?

New Zealand Inc’s inability to answer that question is exactly why the Australian Government will soon move to require transparency of tax arrangements for large firms. I would hope that as good corporate citizens New Zealand-based multinationals would welcome similar transparency here.

Let me put on record that Labour is not proposing new taxes in this area – we are researching and consulting on a widely recognised challenge: how to protect the tax base, improve transparency and reduce legal avoidance of existing tax obligations by global companies operating within New Zealand.

Globalisation is a fact, not a philosophy. The issue for all New Zealanders is how we deal with it.

Do we lay ourselves blindly open to the chill winds of international markets and simply take the tax affairs of multinationals on trust? Do we say it’s all too hard and bury our little heads in the Antipodean sand like the current Revenue Minister? Or do we learn to play a high-value global game like winners – including insisting that global businesses operating in New Zealand transparently pay a fair and equitable share of tax?

The answer matters because if multinationals avoid paying the taxes that are due, Kiwi mums and dads will be forced to pay more for their early childhood education, school “donations” and higher fees for taking their kids to the doctor. Or we will be told the services we need are no longer available because we, as a country, can’t afford them any more.

We are increasingly paying a high price for growing inequality. We have a right-wing Government moving to “targeted” social funding because even it is not blind to the inexcusable, ghastly truth that 270,000 Kiwi children live in poverty.

But that, once again, will be at the expense of working and middle New Zealanders facing more intrusive, penny pinching local taxes – from car parks to phones to Christchurch rebuild accommodation. These are the result of the Government balancing their books at the expense of yours – while waving the proverbial wet bus ticket at multinational tax avoidance.

Our tax system must be fair to all – and that includes multinationals paying their fair share. Because in the end somebody has to pay.

David Cunliffe is Labour’s Revenue Spokesperson.

Holding on (and on and on and on…)

Posted by on April 10th, 2013

After four long years it’s obvious the National-United Future Government has no plan to turn around New Zealand’s economic decline or fix the unfair tax system.

The common theme of the Government’s legislative programme is it’s all tiny, tinkering, distracting little changes which ignore the big issues.

This year MPs have had interminable debates about petty new taxes on car parks and iPads and cellphones and laptops – with the sole result being that Revenue Minister and United Future leader Peter Dunne has had to back down on all of them, after Labour demonstrated how the minister hadn’t done his sums.

So if Mr Dunne isn’t doing his job of crafting workable tax laws, then surely he must be very busy overseeing his IRD department? Um, no, he’s not.

I reckon Kiwis who’ve tried to phone the taxman this week will be absolutely pulling their hair out.

A few weeks ago Peter Dunne assured me the IRD was adequately staffed to deal with the poorly-communicated 1 April tax changes. Well the Revenue Minister’s credibility today is as shot as the economy.

Try phoning IRD for yourself. It won’t take long, because they’re not even bothering to put people in a call queue – they just play a message saying they’re too busy and then they hang up on you.

(Now, if you really do want to torture yourself like that, please make sure you’re sufficiently wealthy and of a generation inclined to have a landline rental, because the IRD won’t accept 0800 calls from cellphones. With wait times stretching on and on, many people would need more call credit to phone the cellphone-acceptable number than they’d owe in tax).

If, however, you’re not a glutton for frustration you could try writing a letter to the IRD… but you might never get a reply.

Because now the Peter Dunne has admitted his department have no performance indicators for responding to postal transactions. Not one! None!

They might chuck your letter in the bin unopened for all the Revenue Minister cares.

Last year Dunne slashed IRD staff by 7% and this year he’s fluffed around in his cushy ministerial limo creating endless tiny, tinkering new taxes which he didn’t even bother to cost, all while the 1 April changes were looming.

And now the chickens have come home to roost.

But, as usual with this Government, it’s ordinary Kiwis who will pay the price in time and worry (and cellphone credit) for ministers’ incompetence – and they’ll pay an even bigger price if they mix up their tax obligations, no matter how many times they’ve tried to phone the IRD and no matter how many letters they’ve written.

Filed under: Revenue, Tax

Tax pain time

Posted by on March 26th, 2013

Next week thousands upon thousands of New Zealanders will wake up to a cut in their take-home pay because of policy decisions by the National/United Future government.

From 1 April 2013 the minimum KiwiSaver contribution is increasing from 2% to 3%, while the Student Loan compulsory repayment jumps a whopping 20% to 12 cents in every dollar earned over the repayment threshold.

Now Labour stands for a gradual move to universal, employment-based KiwiSaver contributions over time, because that will grow the economy and secure savers in retirement.

But with unemployment today at record levels, and with so many families only just getting by, it’s crucial that changes which hit people in the pocket are well-signalled and well-understood before they take effect.

Complex communications around tax changes need to be relevant. Some Kiwis watch the 6pm news; others will see billboards on the daily commute; and web-savvy students might expect important information to be pushed to them through social media.

Ultimately the obligation for quality communications falls squarely to Revenue Minister and United Future leader Peter Dunne.

But over and over again I’ve heard that many Kiwis have no idea how next week they’ll have less cash-in-hand to feed the kids and pay the mortgage.

That’s not good enough from Mr Dunne. That’s not good enough from the National/United Future Government.

Now too many Kiwi taxpayers find a phone call to the IRD an exercise in frustration.

But you can bet there’ll be lots of calls on pay day next week.

Too often people who phone the IRD contact line get put in a long, long queue (last time I tried I waited 45 minutes).

Even worse, callers are sometimes flatly told by a machine “We’re too busy – call back later” then disconnected. This is just not good enough. It is the taxpayer who is liable if issues are not resolved. Any Government has a duty to facilitate good compliance.

Therefore it’s a bit of a worry that IRD had its staffing slashed by 6% last year.

Who is going to answer all the calls?

And with the external communications so lacklustre, how can we be confident that Peter Dunne has ensured IRD’s own staff know what’s going on?

Fortunately (for the first time in quite a long while) Mr Dunne has pinned his colours to the mast.

I asked Dunne Parliamentary Written Question 1401 (2013), and here’s what the Revenue Minister has assured the public:

Portfolio: Revenue
Minister: Hon Peter Dunne
Question: Is he confident that the Inland Revenue Department is adequately staffed to manage any requests from businesses related to the change in minimum KiwiSaver contributions?

Answer Text: Yes.

Next week we shall see whether Peter Dunne’s word is more credible than his department’s communications.

United Future’s awful week

Posted by on March 19th, 2013

Poor Peter Dunne. He’s having one heck of an awful week.

The sad thing is the United Future leader used to be quite diligent back when his party had a confidence and supply agreement with the 2005-2008 Labour-Progressive Government.

But Labour were diligent to Mr Dunne too. We respected United Future and we were careful to consult with their leadership on revenue matters and keep lines of communication open.

Perhaps, though, in the four years since as John Key’s Revenue Minister, Peter Dunne might have become too comfortable in his cushy leather-seated limo.

Mr Dunne has royally stuffed up with his attempt to ram through uncosted and unfair new taxes on car parks and iPads and cell phones and laptops, and goodness knows what else which hasn’t come to public light yet.

The mobile phone tax is a 1980s idea completely out of touch with New Zealand families in the twenty first century. What about the benefits of flexible work, especially for working mums? What about New Zealand-led companies working across multiple time zones (or the generation of Kiwi parents who have to phone Australia to talk to their kids)? How about encouraging the bright young Kiwis who’ve stayed here to be web warriors and build a high-value knowledge economy!

But let’s set aside for a moment the merits of the new taxes.

(Although, for the record, the car park tax made zero financial sense, would not have grown jobs or the economy or reduced crime, and had nothing whatsoever to do with a plan for better public transport.)

The really shocking back-story to this tax debacle has been the total contempt which Prime Minister John Key has shown for Peter Dunne and the United Future Party.

Twice in two days Mr Key has publicly put the kibosh Mr Dunne’s new taxes by speaking directly to journalists. Each time Mr Dunne has carried on, seemingly oblivious to how he’d just been thrown under the bus by National’s leader.

Today, in the seeming back down on the iPad and cell phone tax, John Key announced “there is virtually no chance of it going ahead” only minutes before he walked into Question Time.

That left Mr Dunne to struggle on under questioning, seemingly oblivious to how his IRD officials were wasting time and taxpayer money finalising another new tax which was already dead as a dodo.

Now Peter Dunne might have grown tired and reckless as Revenue Minister – and I will continue to highlight how on behalf of New Zealanders.

But, ironically, the reality is John Key relies on Peter Dunne to prop up his fraying Government.

That’s precisely why there is a formal confidence and supply agreement between the National and United Future parties.

Crucially the agreement demands confidentiality and collective responsibility. Well, United Future members can see there’s been none of that from the Prime Minister this week.

So, with the new taxes ‘dodo’, United Future’s membership need to ask why they’re being used to prop up the National Government. Because it’s clear that National have nothing but contempt for them and their leader.

The no credibility car park tax

Posted by on March 15th, 2013


FBT Action Group bumber sticker

New Zealand desperately needs a fairer tax system.

Labour stands for a capital gains tax because wage earners carry the can for wealthy property investors who too often pay almost no tax at all.

We support progressive tax rates because it’s wrong for the poorest in our society to subsidise big tax cuts for the richest.

Opposition to the National/United Future Government’s new car park tax unites unions and business because its administration will cost more than the tax will collect. That’s just crazy.

And those administration costs will disproportionally hit the poor, because it’s vulnerable female cleaners working at night for minimum wage who’ll lose their safe parking (not the bigwigs).

Labour stands firmly for better public transport in Auckland. But the car park tax simply isn’t intended to deliver that.

Any theoretical revenues from the new tax are earmarked to be chucked down the deficit hole.

That’s because the National/United Future Government have staked their entire economic credibility on two measures: reducing taxes and returning the Crown’s books to surplus.

Well they’ve completely failed on the tax reduction front. John Key and Peter Dunne have introduced more new taxes than any Government since Rob Muldoon. As well as the car park tax we’ve had the paperboy and papergirl tax, the increase in GST, higher prescription charges for the elderly, pickpocketed tertiary students, and cuts to services all over the show. Last week they even announced a rapacious tax on Christchurch rebuild workers’ accommodation!

With regards to returning the books to surplus, well we’ve had 4 years of John Key’s deficits. And the only thing New Zealand has to show for forced austerity are these new taxes which make zero financial sense.

So the National and United Future parties aren’t just scraping the bottom of their own credibility barrel – they’ve dug right through and they’re on their way to Greece.

It’s time for this Government to come clean and acknowledge their trickle-down dogmas don’t work in the real world.

It’s time for a plan to make New Zealand’s tax system fairer so we can see sustainable growth in jobs and the wider economy.

And a very simple start would be dropping this costly and absurd new car park tax.

Motivated by the pressure from their traditional backers and funders, I won’t be surprised if National concede on the car park tax pretty soon. If so, expect to see Tory ministers abrogate collective responsibility as they desperately try to shift blame onto United Future and Peter Dunne for this debacle.

Tell us it’s Dunne and dusted now Peter

Posted by on March 13th, 2013

United Future leader and Revenue Minister Peter Dunne’s belated recognition that he holds a casting vote in John Key and Steven Joyce’s shonkey SkyCity convention centre deal is welcome.

The question remains, however, whether Dunne will use his veto to stop the sale of our country’s laws to a casino.

Because he most certainly should.

By Dunne’s own admission the National Government “did play very fast and loose at times” during the rotten tender.

The Deputy Auditor-General was more clear – the deal was “unfair” and managed so the “SkyCity proposal was always going to be the most attractive”.

Last week Dunne (finally) appeared to lay down a challenge to the National Government which he otherwise supports:

There is a time-bomb warning to the government here. Support for the cut through approach will wither if it is seen to be a standard proxy for bending the rules or doing special deals to achieve the desired outcome. While the government is not immediately vulnerable on this issue, the clock has started ticking.

And it is worth remembering the adage, the ends do not justify the means.

Well National has responded to Dunne’s challenge.

I asked Steven Joyce written Parliamentary question [1307 (2013)]:

Does he regret any of his actions as Minister for Economic Development related to the Government’s decision to negotiate with SkyCity Entertainment Group Ltd for an international convention centre; if he does, which actions?

And Joyce has (finally) responded with one word:


This is just about the only time I can recall the Economic Development Minister giving a straight answer to any question. But what an answer it is.

With one word Joyce has confirmed he’s learned nothing from the Deputy Auditor-General’s scathing criticism. He’s thumbed his nose at fair and proper process, at accountability to the people of this country, and at their hard-earned (but fast fading) reputation for having the lowest level of Government corruption in the world. Joyce has effectively confirmed that so long as he’s a Minister he’ll trade New Zealand’s laws if he sniffs a special deal for the big end of town.

So there you have it Peter Dunne. National do think the ends justify the means. The time-bomb has exploded.

And you – and only you – can put a stop to this madness.

The question the whole country wants to know is whether you will. So do it today Mr Dunne.

Resolve is building to save our trees

Posted by on March 1st, 2013


Titirangi Ratepayers and Residents Association public meeting, 21 February 2013.

Resolve is really building in West Auckland to stop National’s chainsaw massacre in the Waitakere Ranges.

Te Atatū Labour MP Phil Twyford, Labour’s Environment spokesperson Maryan Street, Councillors, Local Board representatives and ratepayers groups are all backing the community’s determination to save our trees – which together we surely will.

Following my earlier post I’ve had a few requests for copies of the speech I gave at the recent local meeting to save our trees. So I’ve popped it on my website here.

David Cunliffe’s speech to the Titirangi Ratepayers and Residents Association – Saving our trees (again) – 21 February 2013

Here’s wishing Red Alert readers the chance to enjoy some of New Zealand’s great outdoors with family and friends this weekend.