Brian Easton is impressed by how effective the Taxpayers' Union has been. He looks at their recipe of how to run a successful pressure group

This is a re-post of an article originally published on pundit.co.nz. It is here with permission.

In 2013 a group of idealists, led by Jordan Williams and David Farrar, established the Taxpayers’ Union. To celebrate its first decade as surely New Zealand’s most successful political pressure group NZTU published The Mission: The Taxpayers Union at 10, ten short interviews (by David Cohen) of people associated with the group with a foreword by Bill English.

The NZTU describes its mission as:

seek[ing] lower taxes and value for money from every tax dollar.
            We promote sensible restraint of government expenditure by:
            - Scrutinising government spending;
            - Publicising government waste;
            - Arguing for an end to corporate and union welfare; and
            - Promoting an efficient tax system.

It has had numerous successful campaigns. National cabinet minister Hekia Parata, knocked back a proposal from her officials saying, ‘I can’t approve this spending – what if the Taxpayers’ Union found out?’ Certainly the NZTU has identified many expenditure programs of both National and Labour Government which seemed wasteful (or worse).

Its reach has been even greater. There are alumni of the NZTU throughout the current government including New Zealand First cabinet minister Casey Costello, who was a chairperson and board member. (She was also a joint founder of Hobson’s Choice.) The son of the NZTU’s first chairperson is Chris Bishop, a senior cabinet minister. The prime minister’s office includes an economic adviser who previously worked for the NZTU. The list can go on. (It has interns, typically university students, who go into political activities elsewhere.)

By New Zealand standards it is a big pressure-group organisation. Williams described the NZTU as having ‘18 on the union’s payroll’. It must be an expensive operation. You will recall that during the month-or-so 2020 Covid lockdown the NZTU accepted a $60,000-plus wage subsidy from the government because donations had fallen off. It explained that ‘we have stated on the record that we would never accept taxpayer funding’. They reversed their position, because they believed ‘the welfare of our employees to be a more pressing immediate concern than ideological purity’. Good that staff wellbeing was more important than ideological purity – the approach of pragmatic social democracy. (The grant was repaid so it became in effect an interest-free loan, which the NZTU does not approve of either.)

It says the major source of its funding is from members’ donations, claiming 200,000 members which may be more than the membership of all the political parties together. (National last had 200,000 members in 1980; the trade union movement has about 400,000 members.) The annual subscription is $25 but it receives larger donations. (The book mentions a $15,000 one.) The NZTU claims corporate donations are tiny but is a bit fuzzy about contra-deals where business interests provide free services – such as the expenses of going to an overseas conference where NZTU and the business interests align.

Economics has an elaborate theory of taxation which seems to have passed it by. For instance, its position to reduce tobacco excise is crude. (Why is it not more vigorous over alcohol excise?) There is an economic case based on a particular ethical framework that it is too high – you may not agree with it – but there is no hint the NZTU is aware of the case. Admittedly, its simple message has more impact in the public arena. As a general rule its public relations have been impressive.

In contrast, the (neoliberal) New Zealand Initiative has much more economic firepower (although you may not agree with how it is applied). There is not much in the book about the two organisations’ relationship, except a mention of NZI as a corporate-funded equivalent. In contrast, the NZTU is open about having formed the Free Speech Union which has an office next door.

Where does it sit on the political spectrum? Clearly it is on the right and there are hints of an alignment with National, although it feels free to criticise National Governments – Bill English winces when he relates some of the complaints when he was a minister.

My initial response on reading the book was that it was presenting itself on the pragmatic political centre-right. However, on the four-member board there is Ruth Richardson, John Boscawen a former ACT deputy leader, and Chris Milne, a former ACT Party Parliamentary Chief of Staff. The NZTU does not appear to produce reports – it campaigns. But the podcasts in its ‘taxpayer talk’ are dominated by neoliberals. I leave you to judge to what extent the pressure group is a front for ACT and its ideology.

Whatever, it is a very successful pressure group and its message dominates public policy. The recent Labour Government was unwilling to challenge it by introducing new taxes, even if they were popular in the party. On the other hand that government appears to have presided over much wasteful expenditure, not least indicated by most government departments having found it relatively easy to make major spending cuts. Seeking out that waste has been a key element in giving the NZTU so much public authority.

The NZTU’s low-taxation logic leads to advocating a minimalist welfare state, thereby rejecting the welfare state conceived by the First Labour Government. Not surprisingly, it objected strongly to Labour’s proposed unemployment insurance scheme, development of which was withdrawn because of public pressure.

In contrast, the equivalent pressure groups on the left are hardly effective. In terms of the public debate, it’s a no contest. The Helen Clark Foundation seems uninterested in economic policy. (Perhaps there should also be a Michael Cullen Foundation.) There is a Fabian Society which provides lectures but has no paid secretariat. As far as I know, neither has codified their rather woolly objectives into a program as concrete as the NZTU’s. (There is a bit of economic firepower at the NZCTU.)

The level of taxation determines the balance between the public and private sectors. The NZTU favours a smaller public one and a larger private one. That is a policy choice. I’m not sure that it is the majority of the public’s choice. The NZTU may have won policy minds but has it won the public’s hearts?

This column eschews instant commentary. The next one will discuss the 2024 budget.

*Brian Easton, an independent scholar, is an economist, social statistician, public policy analyst and historian. He was the Listener economic columnist from 1978 to 2014. This is a re-post of an article originally published on pundit.co.nz. It is here with permission.