Greens’ $8b plan would guarantee $325 payment

The Green Party have unveiled a sweeping new welfare policy that would guarantee a weekly income of at least $325, paid for by a wealth tax on millionaires and two new income tax brackets on high earners.

The plan would also dramatically boost and simplify family payments like Working For Families and bring disability and sickness payments into line with ACC compensation.

The $325 after-tax payment would be paid to every adult not in fulltime paid work – including students, part-time workers and the unemployed. The student allowance and Jobseekers benefit would be replaced.

It would be topped up by $110 for sole parents, and the current best start payment would be expanded from $60 per child to $100 per child, and made universal for children up to three instead of two.

This guaranteed minimum income plan would cost $7.9 billion a year – roughly half what is spent on NZ Super, but almost twice what is spent on current working age benefits.

Working For Families would be simplified with a single family support credit of $190 per week for the first child and $120 a week for subsequent children, with higher amounts of income able to be earned before these began to reduce.

Paying for all this would be a wealth tax of 1 per cent on net wealth of over $1 million and two per cent for assets over $2m. The party expects this would hit only the wealthiest 6 per cent of Kiwis.

This would take the form of an annual payment and would only apply to those who owned those assets outright – not someone who still had a mortgage on their million-dollar home, for example.

It would only apply to the worth of those assets over the threshold – so would only be 1 per cent of $100,000 if someone had net wealth of $1.1m.

As it applies on an individual not household level, it would not hit couples who jointly own more than $1m in assets but less than $2m.

Household goods worth less than $50,000 would be exempt from being counted as an asset – meaning cars and the like wouldn’t count.

Those on a fixed income with large assets, such as the retired, would be able to defer the payments until the asset was sold.

The party expects this would raise $7.9b in its first year, covering the cost of the guaranteed minimum income policy.

Alongside the wealth tax would be two new top income tax bands: 37 per cent on income over $100,000 and 42 per cent on income over $150,000. This is expected to raise $1.3b a year.

Co-leader Marama Davidson said the current social safety net trapped people in poverty.

‘‘People who are out of work, students, single parents, and those with health conditions and disabilities are often under financial stress with few options to improve their lives – especially as housing costs continue to increase,’’ Davidson said.

‘‘Our Guaranteed Minimum Income will mean when people ask for help, they get it. It will replace the dehumanising and unliveable social safety net we currently have, which we know does not allow people to live good lives.’’

The Greens would need to convince Labour of its policies in order to enact them after the election.

On current polling Labour could govern alone without the help of the Green Party, but if Labour’s polling dips any further it would need the help of the Greens to govern.

Labour party finance spokesman and current finance minister Grant Robertson said Labour was committed to reducing poverty but would have its own election policy.

‘‘Labour is committed to reducing poverty and inequality and we’ve made significant investment in our first term. We will make our own policy announcements during the course of the campaign,’’ Robertson said.

National party finance spokesman Paul Goldsmith said the policy would punish Kiwis doing well rather than celebrating them.

‘‘At a time when we need our successful small business people to invest and create more jobs, the Greens want to tax them more,’’ Goldsmith said.

Council of Trade Unions secretary Melissa Ansell-bridges backed the policy as a step towards making New Zealand fairer.

‘‘Our Guaranteed Minimum Income will mean when people ask for help, they get it.’’

Marama Davidson

Green Party co-leader