Provincial Growth Fund: $120,000 a job
Each job being created through the Government’s Provincial Growth Fund comes with an eye-watering price tag of more than $120,000, says ACT Leader David Seymour.
According to the New Zealand Herald, Shane Jones has spent $400 million from his slush fund for a return of just 3300 jobs.
“Returning one year’s allocation of the PGF – $1 billion – to the private sector would be an effective corporate tax cut of 3 per cent. If given the opportunity, firms would create thousands of additional jobs with the same amount of money.
“Too often, schemes like the PGF ignore the simplest truth in economics: a dollar can only be spent once, and every dollar spent by the PGF is a dollar taken from business.
“The question is not ‘what has been done with this money?’ but ‘has the Government spent the dollar better than the people who earned it could have?’ At $120,000 per job, the answer is surely ‘no’.
“Firms have the incentive to create profitable and sustainable employment, because if they don’t, they go bust.
“Politicians have an incentive to set up short-term, make-work schemes that are designed to last beyond the next election. They might win, but taxpayers lose out.
“Alternatively, the Government could put a person through a university degree for $120,000 and set them up for life.
“But this neglects the real purpose of the PGF and other corporate welfare: to generate photo opportunities and votes. Simply allowing firms to keep their own money and create jobs themselves doesn’t cut the political mustard.
“Politicians must be seen to be handing over novelty-sized cheques and creating jobs themselves. What is unseen are the jobs the private sector never creates because they aren’t given the opportunity.”