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Archive for 5 February 2018

Handouts to the Racing Industry? So no more homeless then?!

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Deputy PM, Racing Minister, and de facto godfather, Winston Peters  announced on Sunday (28 January) that the New Zealand racing industry was due for tax-cuts for horse breeders and a taxpayer-funded all-weather horse racing track;

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He’s promising the racing industry a multi-million dollar track that can be used even when its pouring with rain. Mr Peters says it is expected to cost around $10 million to construct.

It comes as several races throughout the country had to be abandoned.

The Minister says both taxpayers and the industry will be helping to pay for the new track.

Mr Peters is also promising tax relief for owners who are breeding horses for racing. He says the current legislation, which he delivered last time he was Racing Minister, isn’t working like it should.

This, at a time when homelessness in this country has been steadily rising since the 2006 Census;

The number of homeless people in New Zealand rose between the last two Census counts, a new study says.

The University of Otago study, which is based on Census data, said one in 100 were homeless in 2013, compared with one in 120 in 2006 and one in 130 in 2001.

The study used the Government’s official definition of homeless, which is people living in severely crowded houses, in motels, boarding houses, on the street or in cars.

Between 2006 and 2013, the rise in homeless people outstripped population growth.  New Zealand’s population grew by 4.8 per cent over this period, while the number of homeless grew by 25 per cent.

As Prime Minister Ardern said on TV3’s The Nation on 21 October last year;

“When you have a market economy, it all comes down to whether or not you acknowledge where the market has failed and where intervention is required. Has it failed our people in recent times? Yes. How can you claim you’ve been successful when you have growth roughly 3 percent, but you’ve got the worst homelessness in the developed world?”

For Winston Peters to be offering tax-breaks and taxpayer funded covered racetracks, at a time of critical need for boosting funding for housing, hospitals, mental healthcare, and other services is a return to the corporate cronyism we’ve experienced for the last nine years under National.

National’s corporate cronyism has included;

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There is probably more. National’s nine years in office has been less free-market and more corporate welfare than Muldoonism at it’s height. They’ve simply been more adept at hiding it.

In 2013, when it came to throwing taxpayers’ dollars at The Hobbit, Winston Peters was scathing at National’s corporate welfare  largesse;

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Peters even demanded that Warner Bros repay taxpayer’s money;

“Now the first movie has grossed more than $1 billion, Warner Brothers should repay the $67 million subsidy the movie moguls sucked from Kiwi taxpayers.”

After all the criticisms from Labour and NZ First at National’s corporate welfarism, the Coalition government has succumbed to the same folly of throwing money – our money! – at multi-million dollar businesses.

For an industry sector that turns over $1.6 billion, it beggars belief that they have their corporate hands out for taxpayer largesse and tax breaks. What other industry will be receiving tax breaks? Tourism? Wine and beer producers? Why not our nascent computer-gaming industry? Or Rocketlabs?

Key must be laughing his head off at this fiasco. After all the ‘stick’ given to Key and his National government for their corporate welfare, the Labour-led coalition have engaged in the same practice – only three months into their first term.

Was there no one with sufficient political nouse in Labour or NZ First’s Parliamentary offices to express reservations over this daft plan? That giving tax-dollars and tax-breaks to a “sport” enjoyed by predominantly affluent New Zealanders is not a particularly good idea? Especially when Labour and NZ First (and the Greens) made so much of New Zealand’s housing crisis during last year’s election campaign?

In effect, Peters has just handed the National Opposition a bloody big stick with which to whack the Coalition over their  heads. English and his minions will be gleefully strategising over how they can best use this corporate welfare to attack the Coalition.

National’s strategists have already started by launching this attack-website carrying negative messages;

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Side-note: Interestingly, the website is done in Labour Party colours – not National’s own blue livery. The National Party is not even directly mentioned anywhere on the main page. (Though the “Privacy Policy” link will take you to the National Party website. The authorisation statement is by “G. Hamilton”, National’s General Manager – though few people would know that.)

The racing industry has complained that a covered race-track is essential to allow all-weather events to be held. If so, let the racing industry pay for it. The “Sport of Kings” should not be paid from the taxes of hard-working New Zealanders who expect essential services in health, education, conservation, housing, mental health, policing, etc from their hard-earned tax-dollars. Not enhancing horse-racing facilities.

For perhaps the first (and hopefully the only) time, I find myself nodding in agreement with far-right blogger and former Libertarian/ACT candidate, Lindsay Mitchell, when she wrote her own critique of Peters’ plans;

Today [28 January] Racing Minister Winston Peters apparently promised an all weather track at the cost of $10 million (double it for starters) and either promised or called for tax breaks because the industry (breeding in particular) brings in so much money.

If tax breaks can make one industry stronger, then they can make any industry stronger.

Government picking winners is a recipe for corruption and injustice. We cannot expect New Zealanders who have not a skerrick of interest in the racing industry to disproportionately pay taxes to advance it.

Tax breaks are not subsidies if they are applied universally. Reduce tax period.

You are a guardian of public money Winston. Not a private investor.

On the upside, I am looking forward to our Prime anti-poverty crusader getting it in the neck today over her government’s support for “rich pricks”.

I, for one, will not be defending this policy from criticism from the Right. Because with thousands of New Zealanders homeless and struggling in poverty, it is indefensible. Absolutely, utterly, indefensible.

If the Coalition government wants to assist the racing industry, and they are incapable of raising their own funds, then a suitable compromise is  available. The State could easily borrow on behalf of the racing industry and on-lend to the appropriate racing club. Governments with good credit ratings can generally borrow at lower interest rates than from the commercial banking sector.

But it would have to be paid back.

The responsibility of this Coalition government is simple: Putting roofs over homeless families.

Not roofs over race tracks.

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References

NZ Herald:   Jacinda Ardern arrives at Ratana Pa in first visit by Labour PM since Clark

TVNZ:   Winston Peters announces a multi-million dollar all weather horse racing track is on the way

NZ Herald:  Homelessness rising in New Zealand

Mediaworks:  Homelessness proves capitalism is a ‘blatant failure’ – Jacinda Ardern

Fairfax media: Government denies MediaWorks loan

NZ Herald:  Filling the Cup – cost $500m and climbing

Radio NZ:  Farmers’ ETS exemption progresses

Fairfax media:  Federated Farmers say moving to ETS will cost primary industry $83m

Radio NZ:  Saudi sheep deal – MFAT didn’t provide legal advice on lawsuit risk

Interest.co.nz: Key says Government won’t add to NZ$30 million of support given to Rio Tinto to keep Tiwai Pt open

Fairfax media: $191m in public grants paid to Hollywood for Hobbit trilogy

Fairfax media:  Government called on to stand by existing irrigation contracts

Radio NZ:  Government defends Hobbit subsidies

Fairfax media:  Peters – Hobbit subsidy should be handed back

Otago Daily Times:  Peters signals intention to make ‘positive changes’

National Party: Let’s Undo This

Fairfax media:  Winston Peters back at helm of racing as a return to the old days is heralded

Youtube: Bad Taste

Other Blogs

Lindsay Mitchell:  Winston picking winners

Previous related blogposts

National Party Corporate welfare vs real welfare

National ditches environmental policies

ETS – National continues to fart around

“National Party Corporate welfare vs real welfare”

Corporate Welfare under National

The Corporate Welfare of Tiwai Point – An exercise in National’s “prudent fiscal management”?

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This blogpost was first published on The Daily Blog on 31 January 2018.

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