Has the Maori Party poverty elimination policy been costed???
My goodness. This (I notice it is not co-issued by Tariana Turia AND Pita Sharples which is usually the case) puts the Maori Party to the left of the Greens.
The Maori Party says:
* Provide a universal benefit for parents raising children. If families are already well off, recoup the benefit from tax on higher incomes. (Universal benefits reach the neediest families most effectively.)
* Set a baseline for poverty at 60% of the average wage, and a deadline of 2020 to eliminate child poverty.
* Exempt the first $25,000 of income from tax.
* Raise the minimum wage to $15 per hour.
* Remove GST from food. (The government says this would make the tax system too complex, but that argument hasn't stopped them granting all sorts of exemptions from the Emissions Trading Scheme.)
* Investigate other sources of revenue - capital gains tax, bank transaction tax.
I will attempt some VERY crude costings and please feel free to put me right if I err.
1/ A universal benefit for parents. Which parent? How much? In 2006 there were 515,000 families with dependent children. A modest universal benefit of $20 per week would cost $536 million. But why should a parent with one child receive the same as a parent with 5? The old family benefit (scrapped in the early 90s) used to be paid per child. In which case it would cost over $1 billion.
2/ Set a baseline for poverty at 60 percent of the average wage. The average income from wages or salary was $893 a week in June 2007. So at 60 percent every family head (employed or otherwise) would receive $536 a week. That's around double the current benefit rate. With roughly 114,000 parents on a benefit, instead of $1.5 billion the welfare bill would be $3 billion (and that doesn't include family support and accommodation supplement.)
3/ Exempt the first $25,000 from income tax. That would cost (very roughly) about $11 billion.
4/ Raise the minimum wage to $15. (Cost to business about $1.2 billion)
5/ Remove gst from food. $2.4 billion (DPF figures)
That's $15.9 billion. To be raised from incomes and income over $25,000. That's about 1 million workers paying an extra $15,900 a head in tax.....
...or whatever effort and wealth-creation tax the Maori Party prefers.
When they have driven all the workers away they won't have to worry about divvying up the pie any more. There won't be one.
Having talked this through with my own 'economic adviser' he wonders whether this isn't a cultural policy designed to return NZ to the economic approach that prevailed before colonisation.