ACT: "Minimum Wage Hikes And Handouts -Sounds Like Labour"

Todd Muller made a speech today. Seymour responds:

Minimum Wage Hikes And Handouts -Sounds Like Labour

Friday, 29 May 2020, 2:49 pm

Press Release: ACT New Zealand

“It sounds like Labour, is what I’m already hearing about National’s promise to raise the minimum wage regularly while handing out money to businesses,” according to ACT Leader David Seymour

“ACT won’t sign up to supporting a Labour Government, or vote for Labour Party policies in any Government.

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I would add that as Labour made the historical move of linking benefit rates to average wages, National is also promising regular benefit increases.

No matter what you think about the policy, it's proof that under Todd Muller, National is even more deserving of the label 'Labour-lite'.

Trying to please everyone results in pleasing no-one.

Forget the forecasts - free up the restrictions

One: Unemployment could rise to 18 per cent, house prices could halve, and the viability of the banks could be "called into question" if the coronavirus prompted a further period of economic lockdowns, the Reserve Bank has warned.

Two: Unemployment is likely to peak at only 8.1 per cent and not until March 2022, according to a relatively upbeat forecast by the New Zealand Institute of Economic Research.

The first is more than double the second. I'm in the middle. But apart from Treasury trying to guess the size of the expenditure it's pretty futile. Trying to make people feel 'upbeat' isn't going to save their job.

We need action and activity immediately.

The Prime Minister is now clearly the one with the foot on the brake. ACT and Winston First are both calling for a move to level one. National appears neutral. Useless as usual.

Sue Bradford says Labour betrays its traditions

If Sue Bradford writes something I generally read it. Because Sue has political conviction. She shunned Kim Dotcom's money and has stayed true to her roots. I respect that she engages with opponents in a  thoughtful and non-combative manner. That was my experience anyway.

Here she addresses the rift created by the Jobseeker Premium benefit introduced from June 8:

For over three decades, we've had governments who politically and through the administration of a flawed, punitive welfare system have blamed unemployed people and beneficiaries for their situation, rather than treating "them" as "us".

Yesterday, Labour brought this two-class system into stark focus once again, as it did when it introduced the discriminatory "In Work" payment as part of Working for Families back in the mid-2000s.

During his Budget speech on 14 May, Grant Robertson evoked the "great traditions of the First Labour Government who rebuilt New Zealand after the Great Depression".

I reckon the employed and unemployed workers and their families who brought the first Labour government to power in 1935 would be scandalised by Robertson's evocation of that era at a time when his government is entrenching a brutal divide between the worthy and unworthy poor.

No. I doubt they would. A 'brutal divide between the worthy and unworthy poor' was a stark feature of early Social Security. Unmarried mothers couldn't access a benefit. Criminals couldn't. And sorry to go on about it but anyone who was considered the author of their own misfortune certainly would not have been able to drawn on the pooled social security funds paid into a specific account and recorded individually in a passbook weekly.

What the "employed and unemployed workers" of 1935 would be scandalised by is being forced to support other people's children whose father's pay nothing. They would be outraged that someone who has committed a crime can come out of a prison and get immediate recourse to welfare - repeatedly! They would be angry that  entire isolated rural communities could turn their local economies on welfare.

What I think Sue overlooks is the strong socially conservative streak that existed in Labour (and in most people) back at the outset of social security. The left today is rather revisionist in recalling the sentiments of their forebears.

Questions about the Income Relief Payment

Perhaps Freudian, the word ‘relief’ hasn’t been used in relation to state assistance since the Great Depression when it described the government’s relief work schemes eg the building of the Homer Tunnel on the Milford Road.

But questions …

1/ How are the other 300,000 beneficiaries not on the Jobseeker Premium going to feel about being paid a basic rate of up to 50% less than the favoured? Probably like those green grocers and butchers who were shut down in favour of dairies and supermarkets during lock down four. Justifiably angry and unhappy.

2/ Grant Robertson says the IRP is about ‘cushioning’ and economic stimulus but if you’ve just been made redundant and know the benefit you are receiving will be halved in 12 weeks, would you be out spending? Apart from on the basics like mortgage or rent, food and utilities?

3/ Given the two large English-speaking countries without wage subsidies - Canada and the US – have  unemployment  rates of 13-14 %, why will NZ be any different? Ours will be in double digits when the IRP policy ends - when the chance of finding other work is lowest. If still in power, will a left-wing government introduce massive ‘benefit cuts’ - knocking the Jobseeker Premium recipients back to Jobseeker Regular rates? (BTW Treasury estimates are for Jobseeker numbers  to reach 297,000 in 2021)

4/ How long can the economy be kept artificially afloat? That’s the question for National. Will they have the kahuna’s to tell the country – during the election campaign - that we cannot keep borrowing? Or will they be forced into a Faustian bidding war for votes?

5/ Does the public understand that when Roberston talks about creating a unemployment insurance scheme similar to other countries  that it will, if it is anything like the US scheme, be paid for via employer and employee premiums?

(BTW when I searched the budget expense tables for the wage subsidy I found one item described as  "The 2020 forecast of non-departmental expenses includes costs in relation to the Government's response to COVID-19" projected as $9.122 billion. That's already well surpassed.)

What will National do?

The new Income Relief Payment for people who have lost their jobs due to the  Covid response is available from June 8 for 12 weeks. That takes Labour up till 2 weeks before the election.

So how will this play out in the election campaign? Because the question hangs in the air and demands an answer.

Will Labour extend The Jobseeker Premium (pays around 75% more than The Jobseeker Regular) beyond September 7?

Which forces National to answer the same question.

However it plays out, Labour has put National in a politically fraught position.

Labour are being either very smart or very foolish and I can't decide which it is. But I don't think like socialists.

These wage subsidies and high rate income relief payments cannot go on and on. National may just have to come out and say so.

And if the public can't accept or understand that, then would you want to govern them anyway?

I get more worried by the day.

Update: The PR says, "The payment will be available for 12 weeks from 8 June for anyone who has lost their job due to the impact of COVID-19 since March 1." I understood that in terms of the wage subsidy framing ie it would be available over that 12 week period. In fact the availability is from the time of the claim for up to 12 weeks for any job lost between March 1 and October 30 so could extend into 2021. The question I asked isn't substantively affected.