Tuesday, July 11, 2017

The rich vs families with kids

That seems to be the choice we're going to get this election, with Labour announcing its new "families package":

Labour is promising to scrap National's Budget tax cut plan.

Instead it will funnell the cash into higher Working for Families payments and extra help for those with young children.

It's a package it says will deliver up to $48 a week extra to middle income families.

It would also reinstate the independent earners tax credit, which was dumped in the May Budget, but keeps in place National's big boost to the accommodation supplement.

National's tax-cuts tweaked thresholds - meaning that they only benefitted those above them. And as usual, the rich got the most. Labour reverses that, and puts the money towards helping those further the income pyramid - though not those at the very bottom or without kids. Still, its a different focus, and while its merely tinkering around the edges, a better one overall, which puts resources more where they're needed (rather than where they're not).

At the same time, it also shows the narrowness of New Zealand politics, because for all Labour tries to tart it up, this is primarily an argument over tax-cuts vs targeting as a delivery mechanism. Meanwhile, our low-wage economy is still failing to deliver to a huge number of people. I guess the real difference is going to be in what goes with this policy: Labour has already announced employment law reforms which should allow workers to better fight for pay rises, and they're also likely to run a monetary policy which pushes unemployment lower rather than higher. National, OTOH, wants a low-wage, high unemployment economy, because it means higher profits for them and their cronies. And that I guess is the real choice we're looking at.