Budget 2015 Increases The Cost of Corporate Welfare

Corporate welfare will cost the average New Zealand household more than $750 this year according to a new report published by the Taxpayers’ Union. The report, entitledAny new kids at the trough? collates all of the corporate welfare in Budget 2015.

The report updates the previous Taxpayers’ Union previous, Monopoly Money: the cost of corporate welfare since 2008 and shows:

• Corporate welfare will cost taxpayers $1.344 billion this year, up from $1.178 billion in Budget 2014

• The amounts are the equivalent to $752 (Budget 2015) and $663 (Budget 2014) per household

• The largest item of corporate welfare is still KiwiRail which has cost taxpayers $13.2 billion (including write downs) since 2008 with still no sign of the ‘turn around’ National promised soon after it was elected to office.

• ‘Economic development’ is the second largest category of corporate welfare, including a $115 million appropriation for NZTE 'international business growth services’ which saw the controversial ‘Agri-hub’ given to a Saudi farmer.

• The fastest growing area of corporate welfare is the ramping up of taxpayer funded grants to agriculture businesses wanting to install irrigation.

“Corporate welfare is where politicians try to pick winners and the taxpayers lose,” saysJordan Williams, Executive Director of the Taxpayers’ Union. “It robs middle class taxpayers to reward the well off and politically connected.”

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."

The report includes a forward by Matthew Elliott, Chief Executive of the London-based business group, Business for Britain. Mr Elliott has been in New Zealand as a guest of the Taxpayers’ Union and says, “Many of the business subsidies and corporate handouts this report exposes are more suited to an EU-style picking business winners regime than a modern open economy. What these reports demonstrate is that lower taxes – not additional government spending – are the best driver of economic growth and prosperity.”

The report is available for download on the Taxpayers’ Union website here. The earlier report, Monopoly Money: the cost of corporate welfare since 2008, is available to download here. Hard copies are available on request.

ENDS

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