Blind to the forest for the trees

Details are boring and irrelevant when it comes to the government-run systems of benefits and tax. But those details keep thousands of people in employment. And they provide a focus for divisive politics. The two main parties are perpetually entangled in debate over details and rarely seem to take a breather step back and examine the underlying idea. Then the incongruous situations arise where one says my detail is better than your detail. But both are wrong.

This is highlighted in yesterday's blog about the unpaid parliamentary intern-ship organised by Carmel Sepuloni. Yes, it is a good thing for the young lady in question to be getting some work experience (in something other than how to run other people's lives would have been preferable), even if it was unpaid. But it clashed with the benefit rules (at least until the MP intervened). And the rules- aren't- really- rules perception of WINZ is at the heart of welfare misuse. By necessity, where government presides over people's lives, so do rules.

Today throws up another silly details scenario.

Child Poverty Action Group says the definition of ‘family scheme income’, which came into force on 1st April goes too far.

Spokesperson Susan St John says it is fair that income from trusts and ‘portfolio investment entities’ (PIEs) is now counted when calculating Working for Families, Student Allowances and the Community Services Card entitlements. “But the new definition includes regular gifts of money from other family members, for example, if an outside family member pays for something like the electricity bill.”

While gift duty is abolished for the rich, regular transfers which total over $5,000 to struggling low income families are penalised. Transfers totalling $5,001 means $1,000 loss of Working for Families tax credits.

These low income ‘working families’ are not the ones hiding money in PIEs and trusts. The government ought to be encouraging grandparents who can afford it to help their children. In the recession, without such help many more working families will resort to loan sharks and foodbanks.

CPAG also queries how such as scheme could possibly be administered fairly. “And there are other anomalies,” says St John . “For example, payments for daycare made by a working grandparent is captured by ‘family scheme income’. But if the grandparent looks after the grandchild themselves it is not counted. The overall value of the help is the same but the impact on the way IRD treat it is very different”

St John says “Under the changes one-off cash gifts are exempt, raising the prospect that families will be planning their transfers much more carefully in the future”

Unusually I agree with Susan St John's opinion that transfers of money between family members eg a grandparent paying for a grandchild's childcare costs, should not be means-tested for the purposes of WFF. But if WFF didn't exist neither would interminable wrangles over how it should be administered. The government shouldn't be interfering in people's private financial affairs full stop.

Every day the news is full of where lines are drawn, because the principle has long been ceded. Scrapping over screeds of ridiculous rules and regulations. Vast resources of wasted mental and physical energy; money and time.

Then if you have any energy left to point out the undesirability of the whole kit and kaboodle you are labelled an extremist. I give up.