Bribe-o-meter

August 16, 2017

The Taxpayers’ Union has updated its Bribe-O-Meter which costs party policies;

Opposition parties appear to be spending up to the rafters with sets of policies many times more expensive than the last election. New Zealand First is pushing the boundaries of fiscal free-spiritedness, so far promising $22.9 billion in new spending over the next electoral term. Labour is close behind with $18.9 billion, followed by TOP at $10.7 billion and the Green Party with $8.1 billion.
 
The incumbent governing parties have been much more controlled. Somewhat surprisingly, given the size of the party, United Future has promised the most with $4.7 billion in new spending. The National Party are still keeping the powder dry, promising just $2.5 billion of new spending over the next Parliamentary term.
 
The Maori Party are still yet to release their manifesto, so the costings to date only include IwiRail – estimated at $1.6 billion. ACT is the only party who have promised a net cut in government spending. Its manifesto would see a reduction in spending of $5.4 billion over the next three years.

KEY FINDINGS (AS OF 14 AUGUST):

  • National has promised $2.5 billion in new spending over the next parliamentary term. This equates to $1,453 per household.
  • Labour has promised $18.9 billion in new spending over the next parliamentary term. This equates to $10,952 per household.
  • The Greens has promised $8.1 billion in new spending over the next parliamentary term. This equates to $4,692 per household.
  • New Zealand First has promised $22.9 billion in new spending over the next parliamentary term. This equates to $13,291 per household.
  • ACT has promised $5.4 billion in taxpayer savings over the next parliamentary term. This equates to $3,103 in savings per household.
  • United Future has promised $4.7 billion in new spending over the next parliamentary term. This equates to $2,737 per household.
  • The Maori Party has promised $1.6 billion in new spending over the next parliamentary term. This equates to $899 per household. Although this only includes one policy (the Maori party manifesto is yet to be released).
  • The Opportunities Party has promised  $10.7 billion in new spending over the next parliamentary term. This equates to $6,199 per household. . . .

Labour wants consent to farm

August 12, 2017

Labour’s water tax policy holds a sting in its tail:

Farmers and horticulturalists face the prospect of resource consents if they want to make a shift in land use under a Labour government.

Buried in Labour’s water policy announcement was its intention to dump the National Policy Statement on Freshwater Management and replace it with a policy based on recommendations made by Environment Court judge David Sheppard in 2010.

Sheppard’s recommendation was any increase in farming intensity including more livestock, irrigation or fertiliser would no longer be permitted under the Resource Management Act unless a resource consent was obtained.

That suggestion was shelved by National when it instead opted for the policy statement on freshwater management now in play.

Federated Farmers water spokesman Chris Allen said he was surprised to learn about the resource consent provision in Labour’s policy, which had less profile than the water royalty charges mooted.

“But take that along with the water charges and they have just added another level of burden and cost on producing food in this country.

“It would seem the $18 cabbage will become more of a reality.”

He also challenged the costs the consent conditions would bring.

“This will require a significant increase in the number of people skilled to work in this area of consenting.

“Even here just in Canterbury right now we cannot get enough of those people, let alone throughout NZ.”

He said Labour’s water package taken in its entirety should have all New Zealanders concerned. . .

Water New Zealand has joined the critics of the policy:

. . . “It is only fair that some of the profits from the taking of water are returned to communities to help restore degraded water quality,” says Chief Executive John Pfahlert.

But it’s not fair that people who are already doing everything they can to protect and enhance waterways and in areas where there aren’t quality problems should pay for clean-ups elsewhere.

In principle it acknowledges the value of water and its huge contribution to our economic security and way of life.”

He says he can understand why voters would be attracted to policies that include charging big commercial users such farmers who rely on irrigation and water bottling companies. But he believes a fairer approach would be to charge everybody who uses water.

“Why target farmers and water bottlers and not industrial and domestic users in order to ensure that water is used efficiently across all sectors?”

John Pfahlert says it is important that there is a consistent approach to any policy on water and water pricing and not a knee-jerk response to opinion polls.

He says although publicly appealing, this policy raises many difficult questions.

“Currently the Government’s view is that nobody owns water. This policy takes the view that everybody owns the water.

“This shift in ownership status would raise questions of the rights of Maoridom who could legitimately claim a share of ownership under the Treaty of Waitangi.”

John Pfahlert says there are also questions around the mechanisms that would be used to impose a charge on water consent holders and irrigators.

“It would probably mean there would need to be retrospective legislation and this would raise many fish hooks for farmers and for the government.”

Massey University agribusiness expert Dr Jame Lockhart says the policy is the wrong solution to the wrong problem:

Dr Lockhart says the policy has been borne out of unsustainable growth by the dairy industry and foreign-owned bottling plants exporting water at no cost and creating little, if any, benefit to New Zealand.

“There is no doubt that some of our waterways have degraded with the intensification of land use,” he says. “This is due to many things – water extraction for irrigation, reducing flow levels, is only one. But if these are the problems that Labour is trying to solve, then the policy cabinet is full of tried and true methods to rectify them.”

He says the impact on farmers will be immense, especially those in regions where water supply is at risk, including the Heretaunga Plains, Marlborough, Nelson, Canterbury in particular and North and Central Otago.

“If this tax, and it is a tax, is at the levels being mooted, there could be as much as $500-600 billion to be paid by irrigation users, including vegetable growers, vineyards, and orchardists. Agriculture and horticulture is being asked to bear the entire burden for the nation’s water use and the degradation of its waterways.” . . .

The policy also raises questions over property rights and Treaty claims.

“Due to the abundance of water in New Zealand, we have not assigned value to it in the way we should. That means New Zealand has built an agricultural and horticultural sector around water being free, while the volumes used are regulated to some extent, all the costs to date are around access and application, such as storage, pumping and distribution.

“So, if a business has its own harvesting and storage, does it pay the same royalty as a business that takes artesian groundwater or surface water? At that point some fundamental property rights are being removed from those who have invested in their own systems.”

He says the thorny issue of who owns water in New Zealand has, until now, been something that successive governments have tried to avoid.

“Who owns water in New Zealand? Right now, Labour is saying that if they become government they do. At that point, water ownership becomes highly contestable and immediately opens the door for another round of Treaty claims.”

There are also anomalies in the policy, Dr Lockhart says, including during periods of drought.

“Labour appears to be offering some leniency during drought events so when water has the most value to the agricultural and horticultural sectors, and the environmental consequences are greatest, the tax will be either lowered or removed completely. That shows it is not an environmental issue they are trying to solve at all.

“Labour is boldly going where no government has gone before – but this is looking largely punitive as opposed to being a deliberate effort to restore the quality of our waterways.

“The policy simply has not been thought through as anything other than a vote gathering exercise. Our tax system should not be built on the principle that someone has to do worse for you to do better.”

This is echoed by the Taxpayers’ Union:

Labour’s Water Tax policy is quickly becoming the laughing stock of public policy circles with parallels being made to its infamous 2014 NZ Power policy – which, ironically, saw the very industry which escapes the Water Tax whacked with an economic gorilla.

Jordan Williams, Executive Director of the Taxpayers’ Union says, “Three week’s ago, if Andrew Little got up and announced a new water tax, but couldn’t answer how much it is, he’d have been laughed off the stage”.

“How can Labour credibly protest against industry claims that cabbages will cost $18 and grocery bills will sky-rocket when they can’t put a single number next to their policy?”

“As much as NZ Power was laughed at, at least David Cunliffe had some numbers.”

Minister for Primary Industries said the policy is like sending farmers a blank invoice.

Labour has little understanding of farming and very few MPs outside Auckland and Wellington.

Perhaps that’s why they haven’t joined the dots between the profitability of farming and those who service and supply the industry, nor between the costs of food production and the cost of food.

 


One week two taxes

August 10, 2017

It’s just over a week since Jacinda Arden took over as leader of the Labour Party and she’s already announced two new taxes.

The first was a fuel tax :

The Labour Party might have changed its leaders but where it wants to take New Zealand hasn’t changed, National Party Campaign Chair Steven Joyce says.

“By resurrecting a decade-old idea of charging Aucklanders another tax it’s now clear why they had to abandon the “fresh approach” line,” Mr Joyce says.

“Regional Fuel Tax was Labour Party policy back in 2007 and it has been rejected by voters many times since then. It’s about as tired as R&D tax credits.

“Labour would make Aucklanders pay at least another 10 cents a litre every time they fill up their tank and that’s just for starters. That would have a real impact on the cost of living for hard-working Aucklanders.

“And it would probably spread around the country. Last time around, Wellington and Canterbury were lining up for regional taxes too. There is also no national price so fuel companies could easily transfer the cost to motorists around the country.” . .

The second is a water tax.

 A Labour-led government would implement royalties for bottled water, irrigation schemes and other commercial uses, leader Jacinda Ardern told the Environmental Defence Society’s annual conference in her first major policy speech on environmental policy since becoming party leader last Tuesday.

Drinking water, stockwater for farms, and ‘non-consumptive’ uses such as hydroelectricity generation would not face the charges, which would be set following a national conference of affected industries and water users within the first 100 days of the new government, Ardern said. . .

What happens when irrigation water is also used for stock?

Why is water for stock to drink seen as a more virtuous use than water to grow grass for stock to eat?

Farmers are understandably worried:

Pledges from Labour to consult on a “proportionate and fair” royalty for irrigation water have eased the concerns of farmers – but only by a tiny margin.

They remain terrified by the potential impacts on farming families, rural communities and the entire economy.

Federated Farmers water spokesperson Chris Allen said consultation is welcome “but talking won’t allay the fears of farmers of where this could go”.

The Federation remained opposed to any royalty on irrigation water, especially when it remains unclear what purpose it would serve, other than adding another tax.

“At least Labour appears now to be proceeding with caution, recognising the considerable risks. They’ve promised that if they are part of a new government, deciding the levels of any royalty on commercial use of water will be preceded by consultation.”

Mr Allen said the 10 cents a litre figure some had bandied around would bankrupt farmers and cripple our export competitiveness and regional economies. Even one thousandth of that figure, if that’s a level Labour has in mind, would be “eye-watering” given the volume of consumptive water use.

“With any royalty, farmers and growers would have little choice but to pass on the extra cost, if they could, meaning New Zealand consumers would pay more for food, and our products would be at a disadvantage against imports.”

Farmers recognised some positives in the Labour policy announcements. They would applaud that riparian planting would qualify for carbon credits under the Emissions Trading Scheme, “but we hope this is not a hint of a policy announcement to come on including animal emissions in the ETS”.

And the idea of activating young people who are out of work to join water quality improvement projects is worthwhile.

“That will get young people out on the land and more familiar with the farming sector, and they’ll get to experience – and help with – the large amount of environmental enhancement work farmers are already doing.”

But the whole exercise of adding a new tax on water, even if the revenue is shared with regional councils for water quality work, “is counter-productive, and a money-go-round with administration costs added in.

“Farmers are working hard to live within the limits imposed by environmental standards and the desire by all New Zealanders – farmers included – to clean-up water quality hot-spots.

“Adding an extra cost in the form of a water tax drives a perverse incentive for farmers to intensify their activity, and deprives them of income that at worst puts them out of business and at best leaves them with less money to spend on environmental protection work.”

Labour has pledged to consult, and Federated Farmers would take that opportunity, Mr Allen said.

“If we can get round a table with them, we’ll be able to talk them through all the downsides of what they’re proposing in a rational way. This needs to be done without the distraction of a general election.”

Federated Farmers believes an important principle is that if there’s to be a charge for commercial use of water, it should be paid by all, with no room of discrimination.

“If you’re going to be stupid enough to bring this in, it’s got to be fair.”

DairyNZ chief executive Dr Tim Mackle said Labour’s proposal to introduce a water royalty for commercial water users would be difficult and require extensive consultation around the regions.

. . .“Within a farming business, just like any business, commercial water rates already apply. Our farmers also pay for access to irrigation, and access to water on their land through council consents. Water royalties could potentially duplicate these costs.

“Labour earlier hinted that such a levy wouldn’t result in a cost increase for farming, but without a robust conversation about how their water royalty policy will work we can’t know exactly how this would affect dairy farmers.” . .

Horticulture NZ says “Let’s not do this“:

“Extra costs on growers of fresh, healthy fruit and vegetables will make healthy food more expensive,” Horticulture New Zealand chief executive Mike Chapman says.

“This seems incongruous with policies around alleviating poverty and the benefits of healthy eating to reduce the economic burden of secondary health issues as a result of obesity.

“Horticulture New Zealand supports sound, consistent water policy to support efficient use of water and we have issued our own such policy (available here).

“But we do not support a blanket tax without due consideration of New Zealand’s water priorities as a nation. These priorities must include water for drinking, sanitation and food production.

“Today’s statement does not provide sufficient detail about Labour’s intentions, which should be made clear prior to the election. We don’t feel it is enough to say that if Labour forms the next Government, there will be a conversation about water within the first 100 days.

“There is already the Land and Water Forum which has been working on the wider issues of water allocation, rights and use for some time.

“Horticulture is a rapidly growing industry, contributing significantly to the economic wellbeing of New Zealand. Our vision is healthy food for all forever. We do not want to see the cost of fruit and vegetables grown in New Zealand, supporting local economies and providing jobs, pushed up higher than the cost of imported or processed food. We do not believe the long-term outcomes from a blanket water tax would benefit New Zealanders.”

The Taxpayers’ Union says a water tax shouldn’t pick and choose:

“Picking and choosing who pays what ‘water tax’ and changing the tax rate based on its use, is economic silliness,” says Jordan Williams, Executive Director of the Taxpayers’ Union

“In principle, a case can be mounted for charging users of water. However, Labour’s proposal seems more focused at the users, than the actual use.”

“If Labour is genuine in charging a ‘fair’ amount for water, why hasn’t it backed tradable permits for water? That’s a far more efficient, fair, and environmentally beneficial system than royalties payable by some users.”

“Jacinda Ardern comparison to royalties on oil and gas is a bit silly. Labour’s water royalty policy is akin to saying, they’ll charge oil drillers if the oil is used to make asphalt, but not if it’s used for plastics. Our point is that a water royalty should treat industries the same – rather than pick and choose.”

“The most disappointing thing about today’s announcement is that it’s really just another tax on business and entrepreneurship.

With the Treasury swimming in money, Labour should be explaining how it will lower the tax burden to get Kiwi businesses ahead – not saddling industry with even higher tax bills.”

Taxing water for bottling will be popular with voters even though a tiny amount of available water is involved and there’s a danger of it being regarded as an export tariff.

But why tax water for bottling unprocessed but not the water that is processed into beer, wine and other beverages? Or will the spring water at Speights be taxed too?

Taxing irrigators might be popular in some places until the consequences become apparent – higher costs for milk, meat, fruit and vegetables.

But popular isn’t necessarily good and the water tax is unfairly targeting a small number of businesses, most of which are in Canterbury and Otago.

Most of these will have fenced and planted waterways and already be doing everything else they can to protect and enhance water on or near their farms. It is unfair and unreasonable to take money from them to clean up other people’s messes elsewhere.

It is especially unfair for those of us who have to adhere environmental farm plans which are independently audited each year, where the only problem with nearby water is E.Coli from seagulls and where we pay the costs of water to provide environmental flows in the Waiareka Creek.

Some of the money would go to regional councils the rest would be absorbed into the consolidated fund, to be used for Treaty settlements, where there is no need for it.

The government is forecasting surpluses for years ahead, there is no need for any new taxes unless there are compensatory cuts elsewhere.

The water tax is Labour’s attempt to hide its economic profligacy under environmental camouflage.

Two new taxes in one week prove that the party has a new leader but nothing else has changed including its tax and spend policies.


Woolly thinking isn’t answer to wool woes

July 11, 2017

New Zealand First is trying to court farmers and has come up with a policy that takes us back to the 1970s:

Clearly Winston Peters has had a flashback to the 1970s when he was MP for Hunua under Rob Muldoon with this ‘Fortress New Zealand’ proclamation that under his watch no civil servant would walk synthetic again.

Earlier today, Peters issued a press release setting out NZ First’s ‘carpet policy’which favours wool and fibre over everything else.

Taxpayers’ Union, Executive Director, Jordan Williams says “While some will be scratching their heads that 76 days out from the election Winston Peters’ priority is the carpets, the issue is actually an important reminder of why taxpayers must be ever-vigilant”.

“Carpets, as well as all other government supplies, should be selected on value for money alone. This sort of crony favouritism by politicians is exactly the sort of thing which sent New Zealand bust in the early days of Peters’ career”.

“Here’s hoping Peters’ release is merely an ill-timed joke and that he hasn’t come full circle”.

It isn’t a joke. It’s a policy and one farmers don’t want.

Wool is in the doldrums but a return to the woolly thinking of the past when political interference and subsidies were the norm is not the answer, especially when the $120 million it would cost would be better spent elsewhere:

NZ First’s ‘carpet policy’ announcement this morning, to line all Government offices with woollen carpets, would cost approximately $120 million, based on the Government Property Group’s estimate of Government floor space.

Executive Director of the Taxpayers’ Union, Jordan Williams, says “While smarter carpets for government bureaucrats may be appealing to some, in comparison to what $120 million will buy you in nurses, policeman or teachers, we’re not so sure.”

“In another context, $120 million is the income tax take of over 6,000 average New Zealand households. The Taxpayers’ Union questions whether taxpayers would really get $120 million of value for bureaucrats having woollen carpet and a more comfortable walk around their office.”

“In the lead-up to the election, we would encourage all political parties to provide costings with their policy announcements. If not, the Taxpayers’ Union will be here to help.”

Notes:
• Using a standard price of a woollen carpet of $79 per square metre, and a floor space of 1,524,524 metres squared, the total cost is $120,437,396.
• If new carpets were only installed as part of usual replacements, the marginal cost of wool is $60 million to $93 million (in today’s dollars) more than usual synthetic commercial carpets.

We have only wool carpet in our home but that’s our choice and paid for with our own money.

The decision on what carpet to use in Government offices is one for the chief executive, not politicians.

It should be based on the best value for the taxpayers’ money, not political direction from an opportunist trying to court voters.

Political interference and subsidies got farming and farmers into a mess. Getting out of it through the reforms of the 1980s and 90s came at considerable financial and emotional cost.

We don’t want policy based on woolly thinking that will take us back to the bad old days when political whim rather than commercial reality drove business decisions.


Best intentions worst results

February 21, 2017

LIving Wage advocates want employers to pay a minimum of $20.20 an hour from July.

The rate, more than $4 above the adult minimum wage, is at the level needed to provide families with the necessities, they say.

How many jobs will that cost?

The current Living Wage, of $19.80 has already cost 17 jobs at Wellington City Council according to a report by Jim Rose for the Taxpayers’ Union.

The report’s key findings were:

  • Seventeen Wellington City Council employees lost their jobs after being under the skill level required for the living wage.
  • Councils hire on merit, so candidates under the skill level commensurate with the living wage will be crowded out by higher-skilled candidates.
  • There is no consensus or scientific basis for the calculation of a living wage. Any calculations are politically subjective.
  • Any living wage in New Zealand will be abated by up to 40% by decreases in government transfers and increased income tax obligations.
  • Living wages shift the burden from means-tested taxpayers to ratepayers and business owners.
  • Below-living-wage employment allows for in-work training, where employees trade off lower wages for the opportunity to learn skills that increase their future earning potential. 

Living Wage Aotearoa New Zealand nobly want to alleviate poverty and reduce unemployment with their activism for a living wage, but the evidence to date shows they are achieving the exact opposite. This report shows that a living wage will only make it harder for low wage earners to find work.

Contrary to intentions, living wage policies actually hurt the very people they seek to help. For the first time, we reveal that seventeen parking wardens lost their jobs at the Wellington City Council as a result of its living wage policy.

Living wage policies mean higher-skilled candidates apply for jobs previously occupied by lower-skilled candidates. Of course councils will hire on merit and shortlist the candidates who previously would never have applied for the lower, pre-living wage role. That’s exactly what happened when Wellington City Council brought its parking services in-house.

Minimum wage applicants do not get a shot against better-qualified candidates attracted by the higher wages. So much for the poverty alleviation and reduced unemployment.

The economic theory is clear that living wages do more harm than good, but the job losses in Wellington is the proof in the pudding. Councils should stop implementing these living wage policies which achieve so little but cost ratepayers who can ill afford it.

Living wage policies mean ratepayers pay more for less and achieve none of the intended poverty relief.

Those are very damning conclusions, but not surprising.

The Living Wage is based on what someone thinks a family of four needs to have a reasonable life.

It bears no relation to individual employee’s needs, ability or performance.

I have several reservations about Working For Families but it is a better way to help low income workers with dependent children than the living wage which takes no account of the value of their work.

The full report is here.


Bribe-O-Meter relaunched

October 31, 2016

National has a lot to gain from winning the Mt Roskill by-election and Labour is already showing it knows it has a lot to lose:

The Mt Roskill by-election campaign has hardly started and Labour has already shown how desperately worried they are about losing it, National Party Campaign Chair Steven Joyce says. 

“Labour are hitting the panic button fairly early on,” Mr Joyce says. “Promising a $1.4 billion rail link between the electorate and the city looks very desperate.” 

“This is taking pork barrel politics to a whole new level. If this is the sticker price for a Labour party by-election campaign, all the other electorates across New Zealand will be asking for their $1.4 billion. To say nothing of every other electorate in Auckland looking for multi-billions in new railway lines.  And we’ve still got more than a month to go.”

Mr Joyce noted that the Labour party is promising Auckland ratepayers will pay for part of their by-election bribe. “I’m assuming the new Mayor of Auckland is okay with Andrew Little saying the city has got a lazy $700 million lying around at the same time Mr Goff is out there saying the Council is short of money.”

Mr Joyce says Labour would be better off promoting their candidate as a possible MP for Mt Roskill. “This is Mr Wood’s third attempt to become an MP. You think they would be putting in the effort making him look electable rather than highlighting how worried they are he’ll lose.

“The Mt Roskill by-election will be about who is the best person to represent the electorate in Parliament. 

“Parmjeet Parmar is already showing the people of Mt Roskill that she is a hardworking conscientious MP who will be a strong diligent voice for Mt Roskill in Wellington. All this announcement today underlines is that Labour are worried sick that the people of Mt Roskill will choose her over their candidate.”   

These comments show National has learned from mistakes made in the Northland by-election.

 

And it’s just as well because the Taxpayers’ Union is counting the cost of any promises made:

The Taxpayers’ Union is relaunching its election Bribe-O-Meter to keep track of politicians’ pork-barrel promises in the lead up to the Mt Roskill by-election. Taxpayers’ Union Executive Director, Jordan Williams, says:

“While the by-election is for a single Parliamentary seat, the cost of pork-barrel promises impact the pockets of all New Zealand taxpayers.”

“Labour has run roughshod over Auckland Council and the NZTA’s cost-benefit planning processes. Its pledge to spend $1.4 billion on light rail risks an expensive bidding war with the Government – with the cost landing on taxpayers.”

“The Bribe-O-Meter is to provide transparency and accountability for what those promises will cost.”

The Mt Roskill Bribe-O-Meter will be hosted online at www.taxpayers.org.nz.

In a by-election voters can, as they do with their electorate vote in a general election, choose the person they think will best represent them and pay less attention to parties.

The more Labour promises to spend, the more it will be showing it lacks confidence it its candidate.

 


More than a little stupid

March 29, 2016

Mirror, Mirror on the wall, which is stupidest of all?

Strong arming banks and legislation was rightly met with indignation.

Then came 200 bucks for “free”, funded from tax paid by you and me.

And now you want the flag to change by whatever process you arrange.

If you think you’re going to pick it, you know just where you can stick it.

 

March hasn’t been a good month for Andrew Little, the Labour Party and anyone with hopes they might soon be fit to lead a government.

Little’s attempt to get onside with farmers by suggestions of strong arming banks and legislating to force them to reduce interest rates was met with the derision it deserved.

Then he came up with the proposal of a Universal Basic Income which, as the Herald points out is an idea that’s more bad than good  :

. . . The economy would suffer under punitive levels of taxation, avoidance would be rife, and the benefits would be illusory. . . 

The Taxpayers’ Union points out a UBI would require income tax rates of 50% or more:

A Universal Basic Income which avoided superannuates and beneficiaries being made worse off would require a flat rate income tax of more than 50% or drastic cuts in government services to pay for it, according to a new report released today.

The report, Money for all: the winners and losers from a Universal Basic Income, by economist Jim Rose, examines the Labour Party’s “Future of Work” proposal for a UBI and the more modest proposal by the Morgan Foundation.

A more affordable version of Labour’s scheme, such as that proposed by the Morgan Foundation of $11,000 per annum ($210 per week), would cost $11 billion dollars more than the existing welfare system, while making solo mothers $150 per week worse off. For superannuates, a UBI at this level would see their weekly income reduced by $50.

Taxpayers’ Union Executive Director, Jordan Williams, says:

“We find it startling that the Labour Party would be floating the idea of a replacement to the welfare system that would see those most vulnerable in society being far worse off. A UBI replaces helping those most in need with handouts to the middle-class and millionaires.”

“If you take Labour’s assurances that no one will be left worse off under their UBI, the amount would need to be so high that Treasury’s economic modelling suggests that a flat income tax of between 50.6% and 55.7% would be needed to pay for it.”

“Here is a political party which for years has rightly been telling New Zealanders that current superannuation entitlements are unaffordable. Now they want to effectively extend the same scheme to every New Zealander from the age of 18.”

“The Morgan Foundation proposes to pay for its more modest UBI with a tax on those holding capital. Such a tax would incentivise all those modern and innovative industries Labour want to encourage, to shift off-shore.”

Jim Rose, the author of the report, says:

“We don’t believe Labour have fully considered the consequence of a UBI on labour supply and economic incentives. People would almost certainly work fewer hours meaning that the burden of supporting the programme would be borne by a fewer number of taxable working hours, potentially requiring even further tax increases.”

“Even the Labour Party’s own paper concedes that the taxes that would be required to fund a UBI higher than $11,000 per year may be ‘unrealistically high’. The analysis in the report certainly backs that.”

Key points and conclusions:

• The Morgan proposal would cost $10 billion more than the current welfare system but leave those most in need worse off.

• For a UBI to achieve any reduction in poverty levels, or to avoid it costing those in society who most need help, much higher taxes are required. These reduce the incentives to work and economic growth.

• A UBI which allowed those currently receiving benefits and/or superannuation would need to be at least $15,000 per year (equivalent to the current average level of benefits). To pay for this, Treasury estimate that a flat income tax of between 45% and 56% would need to be introduced (assuming other taxes stayed equal).

• Child poverty is not reduced by a UBI less than $15,000 per year because single parents receive no more income support than before.

• A UBI would likely push the New Zealand economy into recession off the back of the reduced labour supply from the windfall increase in incomes alone.

One of the National-led government’s successes is a reduction in number of people in long term benefit dependency with all the financial and social costs that go with it.

A UBI would reverse the good done by that and encourage more people into welfare dependency.

Not content with these two bad ideas, this morning Little has come up with another:

In the wake of the flag referendum, the opposition leader said he voted against the alternative as it “doesn’t reflect anything about New Zealand at all”.

“I’m pleased to say we haven’t adopted it,” he said. 

Mr Little said the country should revisit the issue “sooner rather than later”, suggesting a flag that “genuinely represents who we are, the diversity that is New Zealand”. 

Doesn’t reflect anything about New Zealand at all? Anyone’s views on the merits of the alternative flag are a matter of opinion but there is no arguing that the Southern Cross reflects New Zealand’s place in the world and that the fern is recognised as a symbol of New Zealand here and abroad.

It was used long before sports teams adopted it and they did so for that reason.

That aside, there is a mood for change but Little can’t lead it.

He voted for the legislation which set the process, campaigned for Labour with a policy to change the flag then, after the election put political expediency before his principles by criticising the process, the timing and the cost.

The time to criticise the process was before voting for it.

If the timing was wrong last week, it can’t be right this week.

And if the cost of the process we’ve just gone through was too high, another process “sooner rather than later” is even higher.

The party partisan part of me is amused by the way Little stumbles from one demonstration that he’s more than a little stupid to another.

The rest of me is concerned that the leader of the second biggest party in government keeps showing he’s ill-fitted to lead the Opposition let alone a government.

 

 


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