Why I don’t want a tax cut
I desperately need some extra cash, but I’d rather have better public services, writes Elle Sun-Min Park.
Arecent poll showed the overwhelming majority of Kiwis want a tax cut in the Budget. But I don’t, even though I’m what you might call working poor, and could use some extra cash in my pocket.
From what I see, tax cuts usually equate to the reduction or privatisation of public services, cutting funding in health, education, housing and transport.
New Zealand’s tax rates sit in the lower range for the 38 OECD member countries. And lowering tax may have real negative impacts on our lives, especially for lowerand middle-class working people.
Scandinavian countries often rank higher in happiness and quality-of-life surveys. Their tax rates are among the world’s highest at 50-60%. As a consequence, their education, health, social welfare, and public services are free and/or accessible for all – regardless of income. Imagine if we had the same. That might be too much to ask from this Budget. But a tax cut will take us further away from the services we desperately need.
My first year of postgraduate studies coincided with the National government cutting the student allowance for postgraduate students. I had to get more student debt to fund part of my living costs, as well as working either part-time or fulltime on top of my studies. I relied heavily on salt-loaded instant noodles, close to $1 a packet.
The annual minimum wage rise under National was about 25-40 cents an hour. Any emergency costs, such as a doctor’s visit, dentist, textbooks, laptop, a car warrant, moving flat, meant I had to go deeper into debt while I was endlessly working hard. The casual nature of student jobs meant I did not have any holidays for a few years.
I accumulated a large student loan and personal loan through my 20s, while often working in two or three jobs to make ends meet. I couldn’t be accused of not working hard enough – I worked in more than 40 jobs to survive in Auckland.
In the past year, my dental bill has grown to a few thousand dollars, which required more debt. It is sad to think that being able to use debt to cover my medical bills puts me in a privileged position, compared to those who don’t have that option.
My previous neighbour, who relied on government support, lost several front teeth to infections. I imagine it is difficult to get a job with poor teeth, which can further lock you into the poverty cycle.
Going to the GP is a luxury. I once left getting medical attention for ear infections to the point that I suffered ongoing symptoms for a couple of years.
All the above happened when I was working without any government support and without any dependent family members. My friends with four children and one income have been struggling when the school year starts with the costs of stationery, uniforms and shoes. With the rising costs of living and rent, and tighter grocery and petrol bills, there’s nothing left in the budget for anything else.
My friend who is a single mother is tempted to move to Australia so she can provide more than the bare minimum for her child, thanks to cheaper rents and higher wages. She works fulltime, but earns nowhere near enough for two of them. She is worried about taking time off work to jump into the long queue at Work and Income to ask for support for her child. New Zealand has become almost uninhabitable for her.
There is an urgent need for the Government to mitigate the rising cost of living for everyone. Better funding of essential services for all, such as healthcare, education and public transport, would benefit the working poor, who now extend to the squeezed middle.
As soon as the public transport fare was reduced by half recently, it instantly gave me more incentive to catch the bus. Before, it cost an adult about $54 aweek to commute by bus in Auckland (based on $5.40 a trip, twice a day for five days aweek).
Reducing it to $27 aweek made an immediate difference, potentially saving $1404 a year per person, along with all the other benefits of getting people out of cars, reducing congestion and emissions.
Also, a robust plan supported by the Budget to increase our safe housing stocks would prevent health issues caused by bad housing, and save the working poor from greedy landlords competing to put up rent and house prices.
Elle Sun-Min Park lives in Auckland and works as an organiser for the First Union.