Latest news with #RegulationsMinistry
RNZ News
2 days ago
- Business
- RNZ News
Regulations ministry clarifies cost estimate for Regulatory Standards Bill
David Seymour introduced the Regulatory Standards Bill to make rules and regulations more transparent. Photo: RNZ An estimated annual cost to government of $50-60m from the Regulatory Standards Bill is outdated, an official statement shows, but a change that revised that cost down is expected to be at least partly reversed. This week, RNZ revealed MBIE officials feared the Regulations Ministry's estimate of $50-60m a year was on the low end. That estimate was included in a draft version of the ministry's regulatory impact statement (RIS) sent out for agency consultation. The final version released in May put the expected cost at closer to $18m a year. In a statement on Friday, which included a timeline, the Regulations Ministry said the higher figure was based on an earlier version of the bill that would have required a full review of all existing laws - both primary (statutes) and secondary (regulations) - within 10 years. That proposal was later scrapped. The timeline As it stands, the bill would require all new legislation to be assessed against the "good regulation" principles - with some exceptions. It also requires ministries to regularly review the existing primary legislation they are responsible for, but does not set a specific timeframe. Existing regulations are currently exempt from review. The lack of a specific timeframe reduces the pressure on agencies to complete these reviews so quickly and excluding existing secondary legislation also significantly reduces the workload, which explains the cost reduction to about $18m. However, the current RIS also notes the minister is expected to make some secondary legislation subject to the RSB in future. "Existing secondary legislation is initially not in scope by default, with the expectation that some classes of secondary legislation will be brought in (via a Notice) at a later date." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Scoop
3 days ago
- Business
- Scoop
On The Costs Of Regulating Cost, And Burkina Faso As A Role Model
Article – Gordon Campbell Funny how blow-out gets so readily applied to cost escalation in the provision of public services (hospital rebuilds, the Cook Strait ferries) but when politicians get the figures wrong for their pet projects, its just a matter of opinion. Funny how 'blow-out' gets so readily applied to cost escalation in the provision of public services (hospital rebuilds, the Cook Strait ferries) but when politicians get the figures wrong for their pet projects, its just a matter of opinion. Case in point : the original cost estimates for the Regulatory Standards Bill came to $18 million a year – but this week, MBIE calculations released under the Official Information Act indicate that the annual cost could be $50-60 million, or roughly three times the original figure. Sounds like a cost blow-out to me. The sort of incompetence the Bill was created to prevent. MBIE has also calculated that between 95 and 285 full time equivalent staff would be needed to carry out the legislative vetting work envisaged. And already we know that staff at Seymour's Regulations Ministry get paid considerably more than other public servants, on average. In response, Seymour has queried the figures, and suggested that AI would help to reduce those costs. (Hmm. What could possibly go wrong if we asked Chat GTP to rewrite the Resource Management Act in the style of Ayn Rand?) At best, AI might conceivably cut the time spent on several basic administrative tasks, but that would hardly bridge the gap between $18 million and $50-60 million. As the Greens regulation spokesperson Francisco Hernandez told RNZ, one UK study showed that AI would reduce public service labour costs by only about 5%. With the Bill, Hernandez says, money is being diverted from frontline public services into'one person's ideological vanity project': 'But the level of nuanced work of interpreting secondary legislation and how it applies to a principles framework…its not the sort of thing that could easily be automated.' Nor will the Regulatory Standards Bill do much to restore business confidence, which MBIE expects will be negatively affected by the introduction of an extensive vetting process and related compliance worries that are unlikely to survive a change of government. Offal in, offal out This week, the news has been almost as bad about another ACT Party fiasco – the school lunches programme. In recent weeks, a venerable political gambit has been used to repair the programme as a success. First, government enacts a terrible idea, and lots of people complain. No matter how many of them complain – or how loudly – the government totallky ignores them and, over time, people just give up. The government then declares the decline in the number of complaints to be a sign of success! That's exactly what has happened with school lunches. People have been forced to accept a shoddier product as the new norm. This week though, Business Desk revealed just how shoddy that product has become. Reportedly, an offal mince blend is now being used in school lunches instead of pure beef mince, in order to cut costs. The School Lunch Collective has started using a cheaper offal mince blend, a move that has raised compliance questions. The supplier, headed by the Compass Group, quietly updated its website to disclose the use of 'beef trim/heart' only after BusinessDesk and regulators made inquiries late last week. Business Desk understands the value blend, which is 50% beef trim and 50% beef heart, is about 25% cheaper than pure beef mince. Feeding offal to children to make a buck….Truly, anyone who voted for the ACT Party at the last election should now be hanging their head in shame. Out of Africa Unless a natural disaster, coup or rugby team is involved, Africa rarely makes it onto our news bulletins. Even back when it was called Upper Volta, Burkina Faso barely rated a mention. Yet weirdly, Burkina Faso's young leader Ibrahim Traore recently became a point of contention between the leaders of two of our major political parties. Traore was praised by Te Pāti Māori leader Rawiri Waititi, and damned by ACT Party leader David Seymour with equal fervour. As is usually the case with any country not in the Anglophile sphere of interest, local media coverage didn't go much beyond the initial 'he said/he said' exchange. That's a pity, given that in the non-Anglo media, Traore is arguably the most popular political figure on the African continent right now. To Waititi, Traore is a 'hero' – the view that Seymour has described as 'insane.' Insane? This seemed rich coming from someone who – as recently as 2023 – was still expressing his admiration for Margaret Thatcher. Why does Waititi rate Traore so highly? After seizing power in a coup in 2022, Traore's regime cut ties with France, its former colonial ruler, and set up a state-owned mining company. He also required foreign mining firms to (a) give the citizens of Burkina Faso a 15% stake in their local operations and (b) transfer skills to the local people. To further ensure that Burkina Faso receives a fairer share of the benefits from its mineral wealth, Traore is also said to be building a gold refinery and establishing national gold reserves for the first time in the nation's history. The leaders of Mali and Niger are doing much the same. As the UK Financial Times has reported: Their more interventionist stance….stems from a desire to assert national sovereignty after decades under the thumb of western miners and subject to contracts the new rulers view as tilted in favour of the companies. They have been rewriting mining laws, demanding higher tax payments and larger ownership stakes in the industry, but have also resorted to restricting operations, issuing arrest warrants and detaining employees. The effects of France's grim colonial record of exploitation and oppression are still evident. Just before Traore's coup, the literacy rate for those aged 15+ was below 35%, which is almost half the average level of literacy found across the Sahel, the region located between the Sahara desert and the savannahs of Central Africa. Burkina Faso and two other Sahel countries (Mali, Niger) have cut ties with Western colonial powers and forged defence links with Russia, and its Wagner Group of mercenaries. Unfortunately though…right across the Sahel region, the banking system remains in France's colonial grip. How come this is still possible? As the US Foreign Policy magazine recently conceded in an article otherwise hostile to Traore: …[There] is a growing frustration with France's continued economic role in Africa, a result of the enduring Central and West African franc currency systems that continue to exist in twelve former French colonies in the region. This currency regime, which during de-colonization aimed to provide a smooth landing for African economies by pegging their currencies to the stability of the French franc, has endured through the transition to the euro until today. Yet, perhaps the most humiliating aspect of this system is that 50 percent of each member state's foreign assets are held in Paris, plus an additional 20 percent for 'sight liabilities.' All up, one can readily see why Traore's fightback against Western economic dominance and minerals extraction has struck a sympathetic chord with Waititi. Despite the authoritarian nature of the Burkina Faso regime, some of its brutal suppression of dissent has been a survival tactic in the face of the advances by jihadi military forces. For that reason alone, Traore's survival is in the West's self-interest. The jihadis appear to be winning, across much of the Sahel region. To combat them, the Sahel governments that have kicked out France and the United States have not only turned to the Wagner Group for military assistance, but have offered mining rights to Moscow in compensation. Russian assistance has also boosted Traore's sophisticated social media presence. As a result, deepfake AI videos of Beyonce, Justin Bieber and R Kelly have appeared online in which they appear to wish God's blessing on Ibrahim Traore for a long life, and for many more years of enlightened rule. In reality, Traore's rule barely extends beyond the country's two main cities, with jihadi militia controlling much of the countryside. Elections have to be deferred, Traore claims, until these Salafi fundamentalist forces are defeated – otherwise, people would be killed by the rebels for daring to cast a ballot. Given the extent of the jihadi threat, Burkina Faso is now rated by some as being the world's number one centre of Salafi terrorism. Footnote: Unfortunately, politics readily lends itself to this lionising vs demonising process, focussed on individual heroes and villains. The Congolese politician Laurent Kabila once called this process 'dancing in the glory of the monster.' Meaning : it's not about the man, it should be about the system. We need to better understand why the political system rewards the sort of leaders we get. Anthem for a nation The Ivory Coast has always had a strong influence on the music of Burkina Faso. Born in Ivory Coast, the artist now known as Floby has been a fixture on the Burkinabe music scene for over 15 years. From last year, here's a single in which he celebrates his country, and its people:
Scoop
3 days ago
- Business
- Scoop
On The Costs Of Regulating Cost, And Burkina Faso As A Role Model
Funny how 'blow-out' gets so readily applied to cost escalation in the provision of public services (hospital rebuilds, the Cook Strait ferries) but when politicians get the figures wrong for their pet projects, its just a matter of opinion. Case in point : the original cost estimates for the Regulatory Standards Bill came to $18 million a year – but this week, MBIE calculations released under the Official Information Act indicate that the annual cost could be $50-60 million, or roughly three times the original figure. Sounds like a cost blow-out to me. The sort of incompetence the Bill was created to prevent. MBIE has also calculated that between 95 and 285 full time equivalent staff would be needed to carry out the legislative vetting work envisaged. And already we know that staff at Seymour's Regulations Ministry get paid considerably more than other public servants, on average. In response, Seymour has queried the figures, and suggested that AI would help to reduce those costs. (Hmm. What could possibly go wrong if we asked Chat GTP to rewrite the Resource Management Act in the style of Ayn Rand?) At best, AI might conceivably cut the time spent on several basic administrative tasks, but that would hardly bridge the gap between $18 million and $50-60 million. As the Greens regulation spokesperson Francisco Hernandez told RNZ, one UK study showed that AI would reduce public service labour costs by only about 5%. With the Bill, Hernandez says, money is being diverted from frontline public services into'one person's ideological vanity project': 'But the level of nuanced work of interpreting secondary legislation and how it applies to a principles not the sort of thing that could easily be automated.' Nor will the Regulatory Standards Bill do much to restore business confidence, which MBIE expects will be negatively affected by the introduction of an extensive vetting process and related compliance worries that are unlikely to survive a change of government. Offal in, offal out This week, the news has been almost as bad about another ACT Party fiasco – the school lunches programme. In recent weeks, a venerable political gambit has been used to repair the programme as a success. First, government enacts a terrible idea, and lots of people complain. No matter how many of them complain – or how loudly - the government totallky ignores them and, over time, people just give up. The government then declares the decline in the number of complaints to be a sign of success! That's exactly what has happened with school lunches. People have been forced to accept a shoddier product as the new norm. This week though, Business Desk revealed just how shoddy that product has become. Reportedly, an offal mince blend is now being used in school lunches instead of pure beef mince, in order to cut costs. The School Lunch Collective has started using a cheaper offal mince blend, a move that has raised compliance questions. The supplier, headed by the Compass Group, quietly updated its website to disclose the use of 'beef trim/heart' only after BusinessDesk and regulators made inquiries late last week. Business Desk understands the value blend, which is 50% beef trim and 50% beef heart, is about 25% cheaper than pure beef mince. Feeding offal to children to make a anyone who voted for the ACT Party at the last election should now be hanging their head in shame. Out of Africa Unless a natural disaster, coup or rugby team is involved, Africa rarely makes it onto our news bulletins. Even back when it was called Upper Volta, Burkina Faso barely rated a mention. Yet weirdly, Burkina Faso's young leader Ibrahim Traore recently became a point of contention between the leaders of two of our major political parties. Traore was praised by Te Pāti Māori leader Rawiri Waititi, and damned by ACT Party leader David Seymour with equal fervour. As is usually the case with any country not in the Anglophile sphere of interest, local media coverage didn't go much beyond the initial 'he said/he said' exchange. That's a pity, given that in the non-Anglo media, Traore is arguably the most popular political figure on the African continent right now. To Waititi, Traore is a 'hero' - the view that Seymour has described as 'insane.' Insane? This seemed rich coming from someone who – as recently as 2023 – was still expressing his admiration for Margaret Thatcher. Why does Waititi rate Traore so highly? After seizing power in a coup in 2022, Traore's regime cut ties with France, its former colonial ruler, and set up a state-owned mining company. He also required foreign mining firms to (a) give the citizens of Burkina Faso a 15% stake in their local operations and (b) transfer skills to the local people. To further ensure that Burkina Faso receives a fairer share of the benefits from its mineral wealth, Traore is also said to be building a gold refinery and establishing national gold reserves for the first time in the nation's history. The leaders of Mali and Niger are doing much the same. As the UK Financial Times has reported: Their more interventionist from a desire to assert national sovereignty after decades under the thumb of western miners and subject to contracts the new rulers view as tilted in favour of the companies. They have been rewriting mining laws, demanding higher tax payments and larger ownership stakes in the industry, but have also resorted to restricting operations, issuing arrest warrants and detaining employees. The effects of France's grim colonial record of exploitation and oppression are still evident. Just before Traore's coup, the literacy rate for those aged 15+ was below 35%, which is almost half the average level of literacy found across the Sahel, the region located between the Sahara desert and the savannahs of Central Africa. Burkina Faso and two other Sahel countries (Mali, Niger) have cut ties with Western colonial powers and forged defence links with Russia, and its Wagner Group of mercenaries. Unfortunately across the Sahel region, the banking system remains in France's colonial grip. How come this is still possible? As the US Foreign Policy magazine recently conceded in an article otherwise hostile to Traore: ...[There] is a growing frustration with France's continued economic role in Africa, a result of the enduring Central and West African franc currency systems that continue to exist in twelve former French colonies in the region. This currency regime, which during de-colonization aimed to provide a smooth landing for African economies by pegging their currencies to the stability of the French franc, has endured through the transition to the euro until today. Yet, perhaps the most humiliating aspect of this system is that 50 percent of each member state's foreign assets are held in Paris, plus an additional 20 percent for 'sight liabilities.' All up, one can readily see why Traore's fightback against Western economic dominance and minerals extraction has struck a sympathetic chord with Waititi. Despite the authoritarian nature of the Burkina Faso regime, some of its brutal suppression of dissent has been a survival tactic in the face of the advances by jihadi military forces. For that reason alone, Traore's survival is in the West's self-interest. The jihadis appear to be winning, across much of the Sahel region. To combat them, the Sahel governments that have kicked out France and the United States have not only turned to the Wagner Group for military assistance, but have offered mining rights to Moscow in compensation. Russian assistance has also boosted Traore's sophisticated social media presence. As a result, deepfake AI videos of Beyonce, Justin Bieber and R Kelly have appeared online in which they appear to wish God's blessing on Ibrahim Traore for a long life, and for many more years of enlightened rule. In reality, Traore's rule barely extends beyond the country's two main cities, with jihadi militia controlling much of the countryside. Elections have to be deferred, Traore claims, until these Salafi fundamentalist forces are defeated - otherwise, people would be killed by the rebels for daring to cast a ballot. Given the extent of the jihadi threat, Burkina Faso is now rated by some as being the world's number one centre of Salafi terrorism. Footnote: Unfortunately, politics readily lends itself to this lionising vs demonising process, focussed on individual heroes and villains. The Congolese politician Laurent Kabila once called this process 'dancing in the glory of the monster.' Meaning : it's not about the man, it should be about the system. We need to better understand why the political system rewards the sort of leaders we get. Anthem for a nation The Ivory Coast has always had a strong influence on the music of Burkina Faso. Born in Ivory Coast, the artist now known as Floby has been a fixture on the Burkinabe music scene for over 15 years. From last year, here's a single in which he celebrates his country, and its people:
Scoop
08-07-2025
- Business
- Scoop
On Using The Tax System To Boost Funding For The Arts
Despite the myriad concerns being expressed about the Regulatory Standards Bill including misgivings by his own Regulations Ministry and scorn from constitutional law expert Sir Geoffrey Palmer David Seymour has professed to find no merit in … Despite the myriad concerns being expressed about the Regulatory Standards Bill – including misgivings by his own Regulations Ministry and scorn from constitutional law expert Sir Geoffrey Palmer – David Seymour has professed to find no merit in any of the objections. Sure, he'll add in a reference to the Treaty if people can make what he considers to be a sound argument for why he should do so – but in the same breath, Seymour made it clear that he had no intention of actually honouring any Treaty responsibility to Māori. Truly, there are none so blind as those who will not see. Show Art The Money Often, a false division gets made between art and commerce, and that helps to explain why art tends to be treated as a social luxury: an optional extra, and not one of life's essentials. Everywhere you look, the arts are coming under pressure from rising costs, changing patterns of arts consumption, and declining support from donors and philanthropic foundations. What's to be done about it? Well…last weekend, the NSW state government announced plans to hold an 'arts tax summit' at the Sydney Opera House in September. The gathering will explore ways to radically reform the tax system with the aim of shoring up support for the arts in Australia. The ideas being floated include: giving wealthy patrons added tax incentives to donate to the arts, offering tax relief to the owners of vacant commercial premises if they rent them cheaply (or for free) to artists, and allowing artists to claim a wider range of production-related expenses on their tax returns. Reportedly, this NSW arts summit will be attended by NSW Treasurer Daniel Mookhey, and about 150 donors, venue operators, art investors and tax experts. [Just how many artists will be invited is unclear.] 'The sector is telling us,' Mookhey told the Sydney Morning Herald, ' that tax policy settings are a significant impediment to artists' business viability, international competitiveness and income stability.' Arguably, artists deserve better. At last count, the arts and culture sector contributed an estimated $A123.3 billion annually to the Australian economy. In the year to March 2024, New Zealand's arts and creative sector contributed $NZ17.3 billion to our economy, or 4.2 % of GDP. In other words, the arts and cultural sector more than pays its way. According to Infometrics research in 2023, the arts/culture sector grew by 5.3% that year, compared to only 2.9% growth for the rest of the economy. Some 117,0000 people were employed in the arts/culture sector in 2023. Only 11,000 of them identified as Māori, well below the ratio of Māori within the general population. So, even on strictly economic terms, the arts sector is punching above its weight. As the Infometrics survey pointed out : Productivity (measured as GDP per FTE) in the Arts and Creative sector grew by 1.7% to $155,539. Over the past five years (2018-2023), productivity has grown by 3% per annum on average, where the total economy has remained relatively flat (0.2%). Point being: arts funding deserves to be treated as an investment, not as a handout. One of those tax incentives being seriously considered in Australia i.e enabling vacant commercial premises to be made available to artists at little or no rent, deserves to be investigated here in order (a) to give creative people a place in which to create and (b) to help to revitalise the depressed commercial areas in our towns and cities. Reportedly, its worked elsewhere. Footnote: Other countries are treating arts funding as an investment in social wellbeing and economic growth. Last year, Ireland extended its Basic Income For The Arts funding programme into 2026, and put $35 million euros more into it: Launched in 2022, the pilot scheme is examining the impact of a basic income on artists and creative arts workers over a three-year period. Payments of €325 per week [that's $NZ634! ]are being made to 2,000 eligible artists and creative arts workers, who have been selected at random. Here's the rationale : ' I believe that Ireland holds a unique position in the world, where our culture, Ár dTeanga and our artists are the beating heart of our society,' Minister Paschal Donohoe commented. 'There are record numbers visiting our national cultural institutions. Irish writers are some of the best in the world – giving us pause to reflect on the world around us, to make sense of it or, indeed, to escape it entirely for a moment.' Not surprisingly, artists in Ireland like the scheme a lot, and say it improves the quality of their work. Footnote Two : On that score, it is worth noting that in New Zealand, Budget 2025 kept the level of our Large Budget Film Production Grant at only 20%. This rebate is available to international film productions in return for the increased spending, jobs and skills expertise that these major film projects inject into the New Zealand economy. Problem being, our current rate is no longer competitive. In Australia, it is 30%. In Ireland, the headline equivalent rate is 32%. As in NZ, there is no overt cap to Ireland's film production incentive, which is based on whatever is the lowest figure: 32 % of qualifying expenditure, 80% of the film's total production costs or 180 million euros. As for government support to Ireland's own film industry, there was an 8% increase last year to the incentives for local feature film productions that utilise Irish creative talent. The coalition government has provided no similar, additional stimulus to our own local film industry. The Art Budget blues Given New Zealand's current ideological fixation on cost cutting for its own sake, Creative NZ's retention of funding of $16.6 million in Budget 2025 counts as a relief, even though inflation will erode some of the funding's net value. Direct government funding provides about 25% of Creative NZ's revenue, with the other 75% coming from Lotteries Board money, which has inched up to $52.78 annually for the next four years, from $49.5 million in 2023/24. The current lotteries plus government funding comes to an annual total of $69 million, well down from the $87 million the arts received during the last year of the pandemic recovery period. In a familiar gambit, 're-prioritisation' has also seen funds shifted from one scheme and added to another to create an illusion of extra government support. At Creative NZ for example, funds for the umbrella Toi Uru Kahimakea programme (formerly praised to the skies by Creative NZ for expanding the range and reach of the arts in New Zealand and for being one of the organisation's 'most significant annual investments') will now be poured into the general funds available to arts organisations. Similarly, the Ministry For Culture and Heritage will see much of the funding for the National Fale Malae Project ( an intended showcase for Pasifika art and culture) being 're-prioritised' for other purposes. The recent funding cuts and job losses at the Ministry (which will sharply reduce the country's awareness of its own history)have been met with horrified public opposition. To no avail, so far. As for the community funding for arts -related community assets such as libraries, community organisations and events…Finance Minister Nicola Willis once again raised (on RNZ yesterday) the spectre of National imposing a cap on the annual rates increases that local councils are allowed to propose. This pandering to property owners resentful of anything being spent on community facilities and events they don't personally use, is deeply alarming. An arbitrary rates cap poses an obvious threat to council spending on the likes of libraries, community arts events, and public transport.(Yesterday, Willis spoke about the need to reduce council spending 'on fanciful projects.') By driving down rates revenue, a rates cap policed by central government would force communities to make ugly choices about which public facilities councils can continue to support. In the process, the rates cap would also undermine the international credit rating of councils, and increase the costs of their borrowing for essential infrastructure. Instead of an imposed rates cap, Local Government NZ President ( and Selwyn mayor) Sam Broughton wants local and central government to collaborate on solutions: 'From the international analysis it is clear that a rates cap will have unintended consequences on communities; it will restrict the ability of councils to invest in infrastructure and risks their financial instability, and we need to avoid this…..Australian examples show that a rates cap will have the opposite effect to what the Government wants to achieve.' Footnote: BTW, and in the interests of informed collaboration, there is nothing 'fanciful ' about local council or central government spending on the arts. Artists pay taxes and help lift the nation's GDP, as well as enhancing the public's sense of wellbeing and cultural identity. If artists could afford to live downtown e.g. if tax system changes did enable unused commercial properties to be occupied at peppercorn rentals – this could revitalise the inner city, boost retail spending, provide part time labour for cafes and restaurants, and enhance the value of adjacent downtown properties through the added foot traffic (and tourism) being generated. Footnote: In 2019 Victoria University academic Jonathan Barrett analysed how a capital gains tax could make more people feel inclined to invest in art. Don't Rely On The Market Some people, including a few artists, find the very notion of state funding of the arts to be a hard concept to embrace. For one thing, there's a certain lack of romance involved. An artist starving in a garret is a more heroic image (at least, until the gum rot sets in) than an artist pulling a government cheque from the mailbox en route to the potting shed. Charges of elitism over arts funding (why this art form over that one, why them, not me) tend to clang up hard against the sense that this stuff is really important, contributes to our national identity etc etc. All of which is worthy of debate, provided it doesn't lead to policy paralysis, One way to justify spending on the arts is to demand a commercial return, as one would with any other commodity. That argument is self defeating. Why? For one thing, society benefits from what economists call the 'spillover' benefits of arts creation and consumption, just as it does in other non-quantifiable areas. Inevitably, the 'spillover' returns to society from spending on art, public healthcare, state schooling, science and the military are notoriously difficult to quantify, and establish a market value. Defence spending for instance is as costly as its benefits are nebulous. Yet for some reason, successive governments have been willing to write the NZDF – and them only – a blank cheque. Why not science? Why not the arts? There is also a so-called 'option value' argument for arts funding, whereby whilst you or I may not choose to patronise an art gallery or a ballet, many of us would still like to see such things supported, and kept as a viable option for others, or for our grandchildren. To illustrate this notion of option value, economists routinely offer the jokey old anecdote about the King of Naples, who once told the composer Antonio Scarlatti that he felt fine about supporting the Naples Opera, just so long as he was never actually invited to attend the confounded thing. Another key economic driver for regular boosts in arts funding was a point made decades ago by the economist William Baumol – namely, that arts activity is simply not conducive to the technological advances and the productivity gains that have been obtainable elsewhere in the economy. This syndrome – routinely called 'cost disease' or 'Baumol's disease' – applies equally to the funding for public health and education as much as it does to the arts. All such sectors entail services – creating art, educating kids, caring for sick people – that are next to impossible to automate and to mechanise. 'This means that as wages go up in these handicraft services,' Baumol said, 'there is no productivity offset to rising costs.' (Lorde, Taikla Waititi, Shane Cotton etc do not come off a production line.). At this point, the free marketers would probably say – well, why not leave it the market? If people want art, then let them pay for it. Yes, Baumol wrote, but what quality would the prevailing market settle for? Wouldn't such a market be inclined to downsize by cutting out rehearsals and other production costs, and concentrate on the likes of sure-fire Broadway hit musicals, rather than on Shakespeare or on untried new talent? In other words, the centre-right formula of holding the funding at current levels – and looking to the market and/or the community for extra money – is unlikely to result in (a) quality (b) diversity and (c) anything other than the recycling of the known and the safe. All of which would quickly erode the option value and the cultural capital of our art, both here and overseas. It would be self-defeating, in that it would diminish/destroy the value of the product. Besides…at the very worst, an added investment by the state in art and culture is certain to deliver better social and economic returns than gifting landlords with a $3 billion handout. Footnote : Australia is a wealthier country than New Zealand. Yet its artists hardly have it easy. According to the SMH article linked to above, the average annual income of professional artists in Australia is $A54,500, earned via insecure projects and commissions. A writer's average annual income is just $A18,000, and the median annual income for musicians is $A15,000. Plainly, starving in a garret for your art isn't a lifestyle ' choice' that died out at the end of the 19th century. Needing The Love There's no particular reason for linking to this, beyond it being an all-time favourite video. Oh baby lady girl. Art is its own reward :
Scoop
08-07-2025
- Business
- Scoop
On Using The Tax System To Boost Funding For The Arts
Despite the myriad concerns being expressed about the Regulatory Standards Bill – including misgivings by his own Regulations Ministry and scorn from constitutional law expert Sir Geoffrey Palmer – David Seymour has professed to find no merit in any of the objections. Sure, he'll add in a reference to the Treaty if people can make what he considers to be a sound argument for why he should do so – but in the same breath, Seymour made it clear that he had no intention of actually honouring any Treaty responsibility to Māori. Truly, there are none so blind as those who will not see. Show Art The Money Often, a false division gets made between art and commerce, and that helps to explain why art tends to be treated as a social luxury: an optional extra, and not one of life's essentials. Everywhere you look, the arts are coming under pressure from rising costs, changing patterns of arts consumption, and declining support from donors and philanthropic foundations. What's to be done about it? weekend, the NSW state government announced plans to hold an 'arts tax summit' at the Sydney Opera House in September. The gathering will explore ways to radically reform the tax system with the aim of shoring up support for the arts in Australia. The ideas being floated include: giving wealthy patrons added tax incentives to donate to the arts, offering tax relief to the owners of vacant commercial premises if they rent them cheaply (or for free) to artists, and allowing artists to claim a wider range of production-related expenses on their tax returns. Reportedly, this NSW arts summit will be attended by NSW Treasurer Daniel Mookhey, and about 150 donors, venue operators, art investors and tax experts. [Just how many artists will be invited is unclear.] 'The sector is telling us,' Mookhey told the Sydney Morning Herald, ' that tax policy settings are a significant impediment to artists' business viability, international competitiveness and income stability.' Arguably, artists deserve better. At last count, the arts and culture sector contributed an estimated $A123.3 billion annually to the Australian economy. In the year to March 2024, New Zealand's arts and creative sector contributed $NZ17.3 billion to our economy, or 4.2 % of GDP. In other words, the arts and cultural sector more than pays its way. According to Infometrics research in 2023, the arts/culture sector grew by 5.3% that year, compared to only 2.9% growth for the rest of the economy. Some 117,0000 people were employed in the arts/culture sector in 2023. Only 11,000 of them identified as Māori, well below the ratio of Māori within the general population. So, even on strictly economic terms, the arts sector is punching above its weight. As the Infometrics survey pointed out : Productivity (measured as GDP per FTE) in the Arts and Creative sector grew by 1.7% to $155,539. Over the past five years (2018-2023), productivity has grown by 3% per annum on average, where the total economy has remained relatively flat (0.2%). Point being: arts funding deserves to be treated as an investment, not as a handout. One of those tax incentives being seriously considered in Australia i.e enabling vacant commercial premises to be made available to artists at little or no rent, deserves to be investigated here in order (a) to give creative people a place in which to create and (b) to help to revitalise the depressed commercial areas in our towns and cities. Reportedly, its worked elsewhere. Footnote: Other countries are treating arts funding as an investment in social wellbeing and economic growth. Last year, Ireland extended its Basic Income For The Arts funding programme into 2026, and put $35 million euros more into it: Launched in 2022, the pilot scheme is examining the impact of a basic income on artists and creative arts workers over a three-year period. Payments of €325 per week [that's $NZ634! ]are being made to 2,000 eligible artists and creative arts workers, who have been selected at random. Here's the rationale : " I believe that Ireland holds a unique position in the world, where our culture, Ár dTeanga and our artists are the beating heart of our society," Minister Paschal Donohoe commented. "There are record numbers visiting our national cultural institutions. Irish writers are some of the best in the world – giving us pause to reflect on the world around us, to make sense of it or, indeed, to escape it entirely for a moment." Not surprisingly, artists in Ireland like the scheme a lot, and say it improves the quality of their work. Footnote Two : On that score, it is worth noting that in New Zealand, Budget 2025 kept the level of our Large Budget Film Production Grant at only 20%. This rebate is available to international film productions in return for the increased spending, jobs and skills expertise that these major film projects inject into the New Zealand economy. Problem being, our current rate is no longer competitive. In Australia, it is 30%. In Ireland, the headline equivalent rate is 32%. As in NZ, there is no overt cap to Ireland's film production incentive, which is based on whatever is the lowest figure: 32 % of qualifying expenditure, 80% of the film's total production costs or 180 million euros. As for government support to Ireland's own film industry, there was an 8% increase last year to the incentives for local feature film productions that utilise Irish creative talent. The coalition government has provided no similar, additional stimulus to our own local film industry. The Art Budget blues Given New Zealand's current ideological fixation on cost cutting for its own sake, Creative NZ's retention of funding of $16.6 million in Budget 2025 counts as a relief, even though inflation will erode some of the funding's net value. Direct government funding provides about 25% of Creative NZ's revenue, with the other 75% coming from Lotteries Board money, which has inched up to $52.78 annually for the next four years, from $49.5 million in 2023/24. The current lotteries plus government funding comes to an annual total of $69 million, well down from the $87 million the arts received during the last year of the pandemic recovery period. In a familiar gambit, 're-prioritisation' has also seen funds shifted from one scheme and added to another to create an illusion of extra government support. At Creative NZ for example, funds for the umbrella Toi Uru Kahimakea programme (formerly praised to the skies by Creative NZ for expanding the range and reach of the arts in New Zealand and for being one of the organisation's 'most significant annual investments') will now be poured into the general funds available to arts organisations. Similarly, the Ministry For Culture and Heritage will see much of the funding for the National Fale Malae Project ( an intended showcase for Pasifika art and culture) being 're-prioritised' for other purposes. The recent funding cuts and job losses at the Ministry (which will sharply reduce the country's awareness of its own history)have been met with horrified public opposition. To no avail, so far. As for the community funding for arts -related community assets such as libraries, community organisations and Minister Nicola Willis once again raised (on RNZ yesterday) the spectre of National imposing a cap on the annual rates increases that local councils are allowed to propose. This pandering to property owners resentful of anything being spent on community facilities and events they don't personally use, is deeply alarming. An arbitrary rates cap poses an obvious threat to council spending on the likes of libraries, community arts events, and public transport.(Yesterday, Willis spoke about the need to reduce council spending 'on fanciful projects.') By driving down rates revenue, a rates cap policed by central government would force communities to make ugly choices about which public facilities councils can continue to support. In the process, the rates cap would also undermine the international credit rating of councils, and increase the costs of their borrowing for essential infrastructure. Instead of an imposed rates cap, Local Government NZ President ( and Selwyn mayor) Sam Broughton wants local and central government to collaborate on solutions: 'From the international analysis it is clear that a rates cap will have unintended consequences on communities; it will restrict the ability of councils to invest in infrastructure and risks their financial instability, and we need to avoid examples show that a rates cap will have the opposite effect to what the Government wants to achieve.' Footnote: BTW, and in the interests of informed collaboration, there is nothing 'fanciful ' about local council or central government spending on the arts. Artists pay taxes and help lift the nation's GDP, as well as enhancing the public's sense of wellbeing and cultural identity. If artists could afford to live downtown e.g. if tax system changes did enable unused commercial properties to be occupied at peppercorn rentals – this could revitalise the inner city, boost retail spending, provide part time labour for cafes and restaurants, and enhance the value of adjacent downtown properties through the added foot traffic (and tourism) being generated. Footnote: In 2019 Victoria University academic Jonathan Barrett analysed how a capital gains tax could make more people feel inclined to invest in art. Don't Rely On The Market Some people, including a few artists, find the very notion of state funding of the arts to be a hard concept to embrace. For one thing, there's a certain lack of romance involved. An artist starving in a garret is a more heroic image (at least, until the gum rot sets in) than an artist pulling a government cheque from the mailbox en route to the potting shed. Charges of elitism over arts funding (why this art form over that one, why them, not me) tend to clang up hard against the sense that this stuff is really important, contributes to our national identity etc etc. All of which is worthy of debate, provided it doesn't lead to policy paralysis, One way to justify spending on the arts is to demand a commercial return, as one would with any other commodity. That argument is self defeating. Why? For one thing, society benefits from what economists call the 'spillover' benefits of arts creation and consumption, just as it does in other non-quantifiable areas. Inevitably, the 'spillover' returns to society from spending on art, public healthcare, state schooling, science and the military are notoriously difficult to quantify, and establish a market value. Defence spending for instance is as costly as its benefits are nebulous. Yet for some reason, successive governments have been willing to write the NZDF – and them only – a blank cheque. Why not science? Why not the arts? There is also a so-called 'option value' argument for arts funding, whereby whilst you or I may not choose to patronise an art gallery or a ballet, many of us would still like to see such things supported, and kept as a viable option for others, or for our grandchildren. To illustrate this notion of option value, economists routinely offer the jokey old anecdote about the King of Naples, who once told the composer Antonio Scarlatti that he felt fine about supporting the Naples Opera, just so long as he was never actually invited to attend the confounded thing. Another key economic driver for regular boosts in arts funding was a point made decades ago by the economist William Baumol – namely, that arts activity is simply not conducive to the technological advances and the productivity gains that have been obtainable elsewhere in the economy. This syndrome – routinely called 'cost disease' or 'Baumol's disease' - applies equally to the funding for public health and education as much as it does to the arts. All such sectors entail services – creating art, educating kids, caring for sick people – that are next to impossible to automate and to mechanise. 'This means that as wages go up in these handicraft services,' Baumol said, 'there is no productivity offset to rising costs.' (Lorde, Taikla Waititi, Shane Cotton etc do not come off a production line.). At this point, the free marketers would probably say – well, why not leave it the market? If people want art, then let them pay for it. Yes, Baumol wrote, but what quality would the prevailing market settle for? Wouldn't such a market be inclined to downsize by cutting out rehearsals and other production costs, and concentrate on the likes of sure-fire Broadway hit musicals, rather than on Shakespeare or on untried new talent? In other words, the centre-right formula of holding the funding at current levels – and looking to the market and/or the community for extra money – is unlikely to result in (a) quality (b) diversity and (c) anything other than the recycling of the known and the safe. All of which would quickly erode the option value and the cultural capital of our art, both here and overseas. It would be self-defeating, in that it would diminish/destroy the value of the product. the very worst, an added investment by the state in art and culture is certain to deliver better social and economic returns than gifting landlords with a $3 billion handout. Footnote : Australia is a wealthier country than New Zealand. Yet its artists hardly have it easy. According to the SMH article linked to above, the average annual income of professional artists in Australia is $A54,500, earned via insecure projects and commissions. A writer's average annual income is just $A18,000, and the median annual income for musicians is $A15,000. Plainly, starving in a garret for your art isn't a lifestyle ' choice' that died out at the end of the 19th century. Needing The Love There's no particular reason for linking to this, beyond it being an all-time favourite video. Oh baby lady girl. Art is its own reward :
