Sincere, but not always workable
In the middle of all the dirty politicking, it is almost a relief to have a proper party policy to focus on. The Greens have announced they would, if in Government, raise the top tax rate, to collect an extra $1 billion which they would then divert to programmes aimed at reducing child poverty.
The specific details are a marginal tax rate of 40 per cent on income above $140,000, a new ‘‘children’s credit’’ giving an extra $60 to families missing out on in-work tax credits, and $220 a week to the families of newborns who are ineligible for a parental tax credit for the first 10 weeks of a baby’s life. In essence, the policy increases such assistance to the children of beneficiaries. Also, the Greens would invest $500 million a year in child health and education initiatives.
Predictably, the policy has been labelled a ‘‘Robin Hood’’ measure, targeting the rich to help the poor. The Greens say there are now more than 205,000 children living in severe poverty. The policy as announced provides a useful – although predictable – demarcation line for those undecided voters hesitating in the space between the centre-Right and centre-Left blocs. Given that Labour also has a policy of increasing the top tax rate, to 36 per cent on income above $150,000 (it is currently 33 per cent), the most credible partners in a centre-Left coalition both intend to raise income tax. If National loses this election (because, despite a narrowing gap in the weekend’s opinion polls, it is still National’s to lose), the highest income earners can expect to pay more.
Most New Zealanders wouldn’t quibble with that, if only because 97 per cent of wage and salary earners don’t earn $140,000 a year and would be unaffected. National says the policy would damage the economy and push talent overseas – although not, presumably, to Australia, where the top tax rate is 45 cents in the dollar. National is sticking to its line that the best way to reduce policy is to stimulate growth and get more people into work. It claims that it is already getting 1600 people a week off welfare.
Inequality is one of the biggest problems facing New Zealand today, and as the election campaign gets drawn further into the mire, it is almost refreshing to hear from a party with a sincere desire to help the disadvantaged. The Greens can be admired for their idealism, even as they fail to convince on the details of their policy. For while seeking to tax ‘‘the rich’’, they are also sending a signal to the large numbers of middleincome earners, many with families, that their endeavour will soon be penalised. Those battling on in low-paid jobs, meanwhile, could be forgiven for looking at the new allowances to be paid to beneficiaries with children and wonder why they bother to work as hard as they do, even as their own children go without.
In wanting to plough money back into child health and education initiatives, the Greens are on firmer ground. There are different ways to fight child poverty, and making sure disadvantaged children are healthier and educated to a level where they can make their way independently in the world is a surer way of doing it.