Greens welfare initiative is sensible – Key barking mad?

Gareth MorganTax and WelfareLeave a Comment

Green Party co-leader Metiria Turei last week introduced a Bill in Parliament that extends the child welfare payment currently paid to low income working parents to other low income non-working parents. It is unlikely the Bill will be passed.

The Bill proposes something short of a universal child payment because it doesn’t replace the current targeted welfare system, just broadens the eligibility for one targeted payment called the ‘in-work tax credit’. However the Greens seem clearly in support of a universal payment for kids, calling their Bill ‘Income Tax (universalization of In-work Tax Credit) Amendment Bill’. Moving towards universal, not targeted, welfare payments is something we supported in the Big Kahuna and the Greens are to be commended for going in this direction.

The experts say universal payments for kids are the right way to go. Professor Peter Saunders, the chair of the Foundation for International Studies on Social Security, spoke in Auckland recently and said that global research established that a universal child payment is one of three key factors to reduce child poverty. Parental employment and decent wages are the other two.

Could John Key’s response to Turei’s proposed legislation be more superficial?

“She argues that we have people that are well off, then she wants to give the same millionaires yet more money to raise their kids – she is barking mad,” Mr Key said.

Quite apart from the fact that he seems to misunderstand the Bill, does he not realise that we already hand over something like $18,000 a year net as a welfare payment to many millionaires, they just happen to be over 65 (that payment is called NZ Superannuation)? He has no problem doing it for that age group, but does doing it for kids. His criticism is flaky, his stance hypocritical.

Of course what’s really bugging Mr Key is that a universal child payment means more tax has to be collected. And the only sensible way to do that is to shut down the gaping tax loopholes that are a cancer in our tax system. And guess who that would hurt? Yes, the millionaires Mr Key represents. He isn’t really objecting to giving money to millionaires, he’s objecting to taking it from them. This is where his ability to objectively assess the role of tax and benefits flounders, he cannot accept that a tax regime that sees the biggest suckers paying tax are PAYE earners as somehow wrong. Far rather that, it seems to this bond trader, than taxing those who generate the most income in the true sense of that word, those in control of the most wealth.

He hadn’t a leg to stand on, he’s an apologist for tax loopholes for the rich. Pity there are so many mugs amongst the voting public who can’t see that.

Greens welfare initiative is sensible – Key barking mad? was last modified: December 15th, 2015 by Gareth Morgan
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Gareth Morgan

Gareth Morgan

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Gareth Morgan is a New Zealand economist and commentator on public policy who in previous lives has been in business as an economic consultant, funds manager, and professional company director. He is also a motorcycle adventurer and philanthropist. Gareth and his wife Joanne have a charitable foundation, the Morgan Foundation, which has three main stands of philanthropic endeavour – public interest research, conservation and social investment.