Government spending on “corporate welfare” in New Zealand has increased by more than $150 million. The Taxpayers’ Union has released its report on the latest Budget.

The new report said subsidies for the private sector in the latest Budget came to $1.34 billion. Spending has totaled $752 per household a year, an increase from $663 in 2014.

According to the report, the biggest spending was on KiwiRail, a state-owned rail company, which received $239 million to continue operating the network. New Zealand Finance Minister Bill English had defended the government’s spending, which he said came from the sales of state assets. However, he admitted that the operation needed to change.

“I think we imagined three or four years ago that by now, KiwiRail wouldn’t require so much ongoing investment,” English said when the Budget was released. He described the level of top up required to keep the rail company going as “unsustainable,” reports Stuff.

The finance minister had acknowledged that KiwiRail may have had taken huge steps in improving efficiency and productivity but the network still needs work. Budget documents had estimated that $99.8 million will be allotted towards the Crown Irrigation Fund, a co-investment fund for irrigation schemes.

The New Zealand government is committed to invest in irrigation. Federated Farmers president William Rolleston had requested for more funding to be given for water storage. He said it would help solve future issues between farmers and disputes with the Maori over water rights.

New Zealand’s Primary Industries Minister Nathan Guy said the lack of water storage was “wasteful.” He said there was potential for additional 420,000 hectares of land across the country to be irrigated by 2025. The minister added that the government was trying to look for ways to help pursue the opportunity.

John Williams, the executive director of the Taxpayers’ Union, said the report showed the reluctance of the government to move away from failing businesses including the subsidy of private investment. “Corporate welfare is where politicians try to pick winners and the taxpayers lose. It robs middle class taxpayers to reward the well off and politically connected,” said Williams.

Economist Jim Rose prepared the report. He said taxpayers and politicians from all sides of the political spectrum should ask whether the public gets value for money from business handouts. He believes that for every dollar of corporate welfare, there is one less for health, education or investment by the taxpayer.

(To report problems or leave feedback on this article, contact: r.su@ibtimes.com.au)

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