The Government considered and ultimately decided against a $100 payment for every Aucklander ahead of Christmas last year.
Briefings obtained under the Official Information Act show the Inland Revenue Department warned they would struggle to roll out a helicopter money-style stimulus package to every New Zealander and that anything more targeted than that simply wouldn’t be feasible.
“Designing, implementing and administering this payment would require a significant reprioritisation of Inland Revenue’s work programme. Our experience is that it would be very challenging to design and stand up an untargeted one-off payment before the end of the year,” officials wrote in a briefing on November 3.
“We need further confirmation and details on the parameters to design the payment, and to assess whether it is feasible, cost effective, and establish a timeline if Inland Revenue is asked to deliver the payment.”
A week later, ministers had evidently narrowed the proposal to a $100 payment for all Aucklanders.
“The level of operational support required to accurately deliver a $100 payment to Aucklanders prior to Christmas would be significant and beyond Inland Revenue’s current capacity,” a November 10 briefing noted.
At the time the payment was considered, Auckland was nearing three months in Level 4 or Level 3 lockdown, with no true end in sight.
“The idea of a $100 payment was suggested when ministers were looking at a range of possible options for support, including suggestions from sector groups and lobby groups – including Auckland specific groups (where restrictions lasted longer),” Revenue Minister David Parker said.
The tax department was already funnelling Covid-related support out the door in the form of the Resurgence Support Payment. A Christmas bonus to all Aucklanders would require officials to split their focus.
“Given the Government’s and public expectations around these [Regional Support Payment] measures, we consider there would be significant reputational fallout if progressing the one-off payment resulted in Inland Revenue failing to meet these expectations,” IRD said.
Officials said applications might have to be checked manually to ensure those who had recently moved out of Auckland weren’t trying to defraud the system. Then there were the logistics of actually making the payments – IRD doesn’t have any bank details for more than a third of Aucklanders. Updating the bank account information for just 5 percent of the population would have taken an additional 6000 hours of staff time.
Parker said no further advice came from Inland Revenue after the stark November 10 briefing.
“Ministers focused on support for businesses and the CBD, which was why in the end they went with other measures including vouchers,” Parker said, providing a link to a Government press release about the free distribution of 100,000 $100 vouchers in Auckland over last summer.
National Party finance spokesperson Nicola Willis called the proposal “another case of more policy on the fly”.
It was “a reactive, panicked response to what would have been very real concerns in Auckland in particular as their lockdown went on. Aucklanders had a really challenging time during that lockdown. What they were looking for was a government that was organised and would ensure this wouldn’t happen again.
“For the Government at the same time to be thinking, well, how can we distract everyone by putting $100 in their pocket, seems to me to be the wrong focus at that time. I think it is emblematic of a government that has become very focused on symptoms and not on causes.”
Willis added that she suspected the tax department will face similar difficulties in distributing this year’s $350 cost of living payment for anyone who makes below $70,000.