Labour's $1.5 billion Working for Families package has driven a net 1200 parents out of the paid workforce - achieving the opposite of its aim to "make work pay".
An evaluation by Inland Revenue and Social Development Ministry researchers has found the $60 a week in-work tax credit lured 8100 sole parents into paid work. But 9300 second-earners in two-parent families dropped out of work because higher tax credits let them stay home with the children.
But Labour social development shadow minister Annette King said yesterday the contrasting results were "two good outcomes".
"It enabled people [sole parents] on the benefit to go out and earn more and to reconnect with the workforce because it was worth their while," she said. "And if people [in couples] who were doing part-time work are now able to stay home with their families, that's a win too, because we have two groups that have different needs."
But what about the economy?
Labour maths: 2 GOOD OUTCOMES = LOST PRODUCTIVITY
Add to that the first "good outcome" has since been cancelled by the recession.
$1.5 billion is being spent to decrease productivity. Another good reason to classify WFF as welfare.
On the positive side, what this report does present is National with an opportunity to do what they should have on entering office. Scrap WFF.
Governments have never been able to 'top-up' wages without it having a negative impact on the labour market.
If National had the gumption and the long-term interests of NZ at heart they would promise to abolish this grand redistribution scheme and make the next election one about socialism versus individual effort and responsibility. Not National socialism versus Labour socialism. Many thousands of people are heartily sick of being denied a real choice.
WFF aside for a moment, productivity isn't about every single person working. You may as well promote child labour then.
ReplyDeleteIf one parent can support the family so the other can properly look after the children, we would see good outcomes in the long term.
WFF is the tax reduction every-one deserves, but wrapped in layers of bureaucracy to validate big government.
Zen Tiger, I understand "productivity isn't about every single person working".
ReplyDeleteBut when governments pay people not to work the effect must be to reduce the money available for investment in better technology, in expansion or new enterprise. Hence productivity is affected.
"WFF is the tax reduction every-one deserves, but wrapped in layers of bureaucracy to validate big government."
I support low flat tax but should parents get a better tax deal than other individuals? I stayed home and looked after our children but didn't expect other taxpayers to make it possible.
And WFF extends beyond just a 'tax reduction' for many families. Some end up paying no tax at all or receive back more they they pay in the first place.
ReplyDeleteWFF is the tax reduction every-one deserves, but wrapped in layers of bureaucracy to validate big government.
WFF is benefit socialism pure and simple.
NZ cannot afford it - or any other benefits - any more.
NZ's gross indebetness per capita relative to income is the worst in the developed world.
We need to start paying back that debt fast - not shovelling more and more money to bludgers and WFFers and all the rest.
the UK is planning on 40% spending cuts in most departments. NZ must do the same
I stayed home and looked after our children but didn't expect other taxpayers to make it possible.
Well why not? Since taxpayers - like you - pay for others people's kids going to school and hospital why the fuck shouldn't they pay you too to stay hope and keep your kids of the streets.
Oh - you mean we should stop paying for others people's kids to go to school or hospital
Wow. now there's a radical idea.
I support low flat tax but should parents get a better tax deal than other individuals?
ReplyDeleteMy point exactly Lindsay (and anon)
Sorry Zen, Misinterpreted your comment.
ReplyDeleteI was angry with the dead-weight loss of IRD costs to process WFF, the social-engineering aspects & the contrast with tax cuts being offered by National and Act at the time. Having said that, I was bemused at the possibility that WFF has been at least partly responsible for the "baby blip" in recent years. I would still prefer joint tax returns, but am interested if you also see any relation between WFF and the "baby blip"?
ReplyDelete