Don’t prop up students or rich corporates
There are no happy endings. There will be no return to normal from this coronavirus crisis. But it seems there will be plenty of handouts. We can make pretend, and wish a miraculous tourism recovery by opening the border to Australia, but don’t pin any hopes on that. We can encourage each other to ‘‘buy local’’, until the neon yellow hue of McDonald’s hits the pavement.
With our fingers crossed that coronavirus has truly been brought under control, our attention turns to an only mildly less terrifying conundrum. Well, what the hell do we do now?
The economic strategy so far has been to maintain some sort of hope and for the Government to throw cash around.
Although the wage subsidy scheme isn’t technically a universal basic income, it isn’t far off. Already, more than $10 billion has been paid and many more applications are flooding in. The equivalent of about 1.5 million full-time workers are currently beneficiaries of the payments.
Coupled with New Zealand’s actual universal basic income, the pension, that means an estimated 2.2 million are getting untargeted payouts each week.
Those untargeted payments have many Kiwis in much greater need pleading, ‘‘What about us?’’
Student unions are calling for a ‘‘Universal Education Income’’. When you can get paid just for being old, or being employed by companies that know how to work the books, why not?
Likewise, tourism companies want a special long-lasting wage subsidy. The Tourism Industry Association says more than 6000 jobs will go when the 12-week wage subsidy ends.
No doubt many in tourism will be looking at the other companies currently claiming the wage subsidy, and thinking: ‘‘Why not?’’ If McDonald’s and Restaurant Brands can claim just under $30m while raking in so much cash that they’re literally running out of food, then why shouldn’t businesses that actually need help receive it?
Obviously, not everyone will be happy with the Government. The initial goal of the wage subsidy was to ensure small and medium businesses could keep people employed. But look now at those who’ve gained the most, and they’re big corporates that aren’t doing too poorly.
Former Labour finance minister Sir Roger Douglas says the scheme is ‘‘unfairly advantaging big business and the professional elite’’. He wants Grant Robertson to cut off the big fish. Singling out beneficiaries such as The Warehouse and big law firms like Bell Gully, he asks: ‘‘Why, when the good times suddenly come to an end, have they gone cap in hand to the Government?’’
A good question. But a better question is, what does Robertson think New Zealand receives by subsiding the business of SkyCity Casino? It received more than $21m.
Robertson needs to start saying no. My classmates won’t like me for this . . . But say ‘‘no’’ to the students wanting to be paid to study. The fact is, students are no worse off than anyone else. In fact, they’re probably better off.
There are, of course, exceptions. Some students are now the sole income earners for their entire families. They need support.
However, student unions calling for universal benefits are opportunists no better than the accountants at KFC and SkyCity. Shame on them.
The Government, also, cannot prop up businesses waiting for customers who may never return. There’s no point keeping the tourism industry on life support if it has no hope of revival.
The public service needs to be honest with business owners: Does any of their forecasting show signs of life for tourism? When will Australians be able to travel here, and will it matter anyway? I fear the prognosis is not cheery.
Let’s face the facts and look for what other jobs those in the tourism industry could do. They may need to retrain. Rather than shovelling money from taxpayers to tourism businesses, that money could be better spent helping out the employees.
Once this 12-week wage subsidy is up, the Government should look to target spending where it matters most. It will be important not just to ‘‘grow GDP’’, but also to control inequality.
Get back to basics. Agriculture remains an important export, which will become even more important in smaller towns which used to rely on tourism.
Focus on education. New Zealand needs a skilled workforce. Get rid of ‘‘fees free’’ for firstyear students and invest that money in programmes that can retrain people looking to pick up employable skills.
And invest in innovative Kiwi business. Big companies which should have been able to fend for themselves are ripping off taxpayers. Put a stop to that, and use that money to invest in the big ideas coming from the minds of New Zealand’s entrepreneurs.
Already, small businesses have shown they’re able to come up with creative solutions quickly. They’re our best hope for building a new economy.
Student unions calling for universal benefits are opportunists no better than the accountants at KFC and Sky City.