The Taxpayers’ Union is calling on the Government to release the Treasury and Inland Revenue advice and costing documents related to the business interest-free loan scheme announced yesterday.
The Union's Executive Director, Jordan Williams, said, “Without a doubt, the Government’s business loan scheme leaves taxpayers exposed to enormous financial risk, but estimates of how much are hard to pin down.”
“Our initial back-of-the-envelope estimate was somewhere between $15 and 20 billion - depending on uptake, and based on $50,000 per loan, the mid-point of the $100,000 maximum. But on further reflection, we think the cost is likely to be far less - around $6 billion.”
“But that is still an enormous cost – many times larger than the Government’s ‘fees free’ scheme or even the usual total new spending in annual budget rounds.”
“Unlike the wage subsidy, which at least had to be paid down to the workers who need it, this protects the capitalists and the bankers, which can use this interest free money to move risky borrowing off their books."
"New Zealand prides itself on being a country that sticks up for and looks after the little guy. In the Government’s haste, they’ve come up with a scheme that benefits capitalists and bankers, with regular taxpayers footing the bill. The perverse incentives are enormous.”
“We understand that the Government is moving at lightning speed on these policy announcements. But that makes it more, not less important, for there to be public scrutiny.”