Monday, August 19, 2013

Welfare versus tax debt

Victoria University last week published research which compared tax debt to welfare debt and concluded that,

“The more punitive approach to managing the debts of welfare recipients appears to reflect the underlying view of those on welfare as less deserving, while taxpayers—even those who do not pay their taxes—are viewed as providing a greater contribution to society and therefore worthy of preferential treatment.”

To compare the two things is silly.

People owe money to the Ministry primarily as a result of overpayments or payments of recoverable assistance loans. (OIA correspondence 2008)
Last time I asked the question, just over half of all beneficiaries were in debt to the Ministry so it's fairly common.

If I get a loan from the bank I expect they will want it back. If the bank makes an error in my favour I expect when they pick it up they will want to recover the money. Perhaps a better comparison to welfare debt would have been debt to another public enterprise - Kiwibank. Would Associate Professor Marriot describe efficient management of that debt as 'punitive'?

Tax debt is the result of unpaid taxes as determined by the IRD. It is not primarily the result of borrowing or the IRD having given you too big a refund and asking for it back. 
Additionally the size of it can be substantially inflated by interest and penalties, which isn't going to happen with welfare debt.

It might be argued that as welfare debt or recoverable assistance does not incur interest it's the beneficiary who is receiving preferential treatment.


Mark Hubbard said...

And regarding the tax, who's money was it? And by what moral mandate does a government take it by force?

Anonymous said...

Mark hits it on the head.


Anonymous said...

Of course the bludger has it best.

As far as I'm concerned, ever damn cent of welfare should be a debt, not just the cash but schools, hospitals, roads, super, the whole fucking lot, and any salaries paid to govt employees and contractors

all of it is debt, all of it should be recoverable, all of it should be charged at the deposit rate plus say 15% surcharge - and that debt should carry on to estates and descendants and siblings or family members.

No-one who owes even one cent of that debt should have the franchise or indeed any other "civil rights" whatsoever.

and yes - better to go to the pawnbroker or loan shark than borrow on those terms!