In-work payments for those in work

The Green Party don’t appear to understand the reason that in-work tax credits go only to people in work for a very good reason although Finance Minister Bill English gave a good explanation yesterday:

. . . But the first part of the question, I think, demonstrates the difference in views about how to deal with poverty. The Government is focusing on mobility—that, in fact, a lot of families who at some times and in some periods experience low incomes actually get out of that situation. The in-work tax credit is designed to encourage people from benefits into work, and reward them for making the choice of going into work, because that is the best decision they can make to improve the incomes of their household and their children.

Holly Walker: What if a parent cannot find work? Do their children still have the same basic needs for food, shelter, warmth, and clothing that they would have if their parents were working?

Hon BILL ENGLISH: Yes, their children do have basic needs that ought to be met, and that is why the Government has throughout the last 4 years, since the beginning of the recession in 2008, protected the real value of the incomes of all our low-income households. But I would repeat for the member that those levels of income are part of the story. The other part of the story is to maintain the ability of families and individuals to move on to higher incomes. The analysis of New Zealanders’ time on low incomes shows that a relatively small number stay on low incomes for a long time, and even of those who are on low incomes only a proportion of those suffer the symptoms of persistent deprivation, which is the worst aspect of poverty. . .

. . . Holly Walker: Since children have the same basic needs regardless of the income status of their parents, will he support the Green Party bill to replace the in-work tax credit with a payment for all children who need it, and eliminate a blatant discrimination against some of our poorest children?

Hon BILL ENGLISH: No, we will not. In fact, on the issue of discrimination, this case has been to every tribunal it can go to and no one has found that the difference in payment is discriminatory. We will stick by the policy that has been in place for some time, put in place by the previous Labour Government—that is, maintaining the in-work tax credit.

What is it the left do not understand about the danger of snaring people in the welfare trap?

Some people will need a permanent benefit. But most will be in temporary need of assistance and the sooner they are helped to move from a benefit to work the better for them, their family  and society.

Keeping people on benefits when they could be working isn’t good for them and it isn’t fair on those who pay the taxes to support them.

This view isn’t the preserve of the right wing. Labour MP Trevor Mallard made this point on Facebook yesterday.

The post has now disappeared but Keeping Stock took the precaution of taking a screen shot.

In-work tax credits provide an incentive to work by ensuring people who earn a living are better off than those on benefits.

If people can get a similar income on a benefit than they can from working too many wouldn’t bother to work.

The solution to poverty is not to make life on a benefit more comfortable but to help those who could work to work.

4 Responses to In-work payments for those in work

  1. Lindsay says:

    Good post. I hope that National will vote it down at first reading and not buckle to Green pressure for a “democratic debate”. This was Labour policy at last election and people voted against it.


  2. inventory2 says:

    Well said Ele. As Lindsay notes, this was Labour Party policy at the 2011 election, and we all know what happened to Labour at the 2011 election! This Bill will have a similar fate as Peter Dunne has already said that he will vote against it for precisely the reasons you outline.


  3. Gravedodger says:

    Sadly many if not most in the Media consider such wooly woofter economic theory as Walker attempts to promulgate to be worthy of reporting.
    Someone recently described the Green Party’s economic nirvanna as a bunch of people sitting around a communal fire wearing homespun clothes, existing on what food they could catch or grow and waiting for the capitalist lorry to deliver the rest
    Russel Norman for finance minister, The pinstriped dementia patient as Treasurer and I guess that leaves Trev The Muss for Leader of the House and “My Little Pony” for PM.

    Bring back Mabel.


  4. LesterPK says:

    To my mind the $60 extra for working helps compensate for the costs of getting to/from thast work for someone moving off a benfit. Petrol or bus fares can add up to a bit and I dont begrudge that $60 to someone who need it to help earn their family an income and not just wait around till benny day.


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