What comes next Labour? Time for transformational change- PLEASE Lets just do it this time.

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The major announcements from Prime Minister Chris Hipkins’ big policy refocus  were  to clear away the election losers and signal a new interest in the little, forgotten people.

“They make impossible trade-offs between food and medical care, dry homes and clothing for their children, these families need our support now more than ever,” said Hipkins. 

Unfortunately , so far, it is only the ‘deserving’ little people that count by having paid work. They can have an increase in the minimum wage of $1.50 an hour which looks like an overdue adjustment for inflation.

But even these working poor will be sadly disappointed.  Lets take a typical family with a couple of kids and one and half full-time earners.  At 60 hours a week, they have an extra $90 gross a week. This is an annual increased income of $4,680. 

They are both on a tax rate of 17.5%, and so pay $819 income tax. But that is not all. As a consequence of that extra gross income they also lose 27% or $1264 of their Working for Families. Because of this extra income they may also have to repay an extra $562 in Student loans and may receive $1170 less Accommodation Supplement.  With ACC and Kiwisaver deductions they are left with around $655 or an increase in net weekly income of just $13 dollars.  That won’t dent their cost of living problems or cover their chidlren’s ‘bread and milk’.

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In effect the extra income they can expect from 1 April could be taxed as much as 86%.

In the meantime, prices continue to rise. If the main earner tries to get ahead by doing extra hours of work they would cross into the 30% tax bracket and give them zero for their extra income. 

So far it is lose/ lose for Labour.  Families will not be helped despite Hipkins’ intent and business is also unhappy. Child poverty among the working poor will continue to increase and their parents will become even more stressed. 

There must be an immediate and meaningful adjustment to thresholds for tax and social assistance payments and their abatement rates or it is just meaningless talk. 

Worse still, with the floods and recession many of these families who Hipkins cares about may lose their paid work. After just 2 weeks their Working for families will be cut by $72.50 a week or more for larger families. The failure to deal with this breach of human rights is an injustice that cannot be tolerated.  

Social Insurance had become a huge albatross around  Labour’s neck and it is so good it was dumped before it unhinged the election year debates. The money spent so wastefully on this seriously inadequate policy however is now spilled milk but the issue it was supposed to address does not go away. Now  is the time to immediately  individualise social welfare benefits.  



37 COMMENTS

  1. Don’t expect transformational change, nothing to frightening the horses, only shelved policies & vote winning bribes.

    • People like you are absolute cancer. Doing the cheap options on heath, education and infrastructure really worked out well.

      • What? I run the Labour Party now? I set their policy direction? I write their policies? I guess that explains the extra money in my account. I must remember to be careful what I say in future.

        • Just keep being honest to yourself & don’t let any negative comments get you down. I think you have described the likely result while I also think that we need to do a lot better with health, education & infrastructure but there is an election to win first & voters are a funny bunch & don’t all see the logic of long-term planning.

          • The mistake was the Nation giving them a second term concidering they achieved so little in the first term. Unfortunately the opposition at the time was week and did not represent a real choice . There is a strong more focused double act this time and z Labour know they are mincemeat unless they can do in six months what the should have been doing in the last 5 +1/2 years

            • What’s the strong focus, as many people and media have said National have no policies?
              How can they have a strong focus?

          • @ Sam. Governments don’t make mistakes, they have mistakes forced upon them. roger douglas should be in prison for treason and sabotage.
            Roger douglas was Labour’s minister of finance for two terms leading up to the crime wave he set forth that’s kindly referred to now as ‘neo-liberalism.
            Neo-liberalism was, indeed still is, a form of mafia but without the class and infinitely more transgenerationally dangerous and damaging. I’m proud of the fact that I saw neoliberalism coming back in 1984 and I well understood the on-going damage unbridled and abusive greed would reek upon us, and I was not wrong.
            That, was thirty nine years ago. I was playing a few cords on my guitar with an old friend who was studying for a degree in psychology at Canterbury. I was ranting on about the nose dive Labour seemed to be in and was bewildered at how others didn’t seem to see what was happening. My friend said ” Ah, you’re talking about ‘neo-liberalism’. AKA Thatcherism AKA Reaganomics. I remember the fabric on the sofa I was sitting on, I remember my friends art and books on his shelves, I remember the sudden realisation that what we were about to experience was the total destruction of our precious, comfortable lives for the private wealth creation of psychiatrically unwell individuals who’s only frissons could be experienced at knowing they had power over others and they pain they would cause.
            douglas did that to us. He disempowered the only bulwark we had against the tyranny he was about to unleash upon us so he walked out of labour and deregulated the trade unions. Teeth? Pulled. Fangs? clipped. Job? Done.
            It’s taken 39 years to build nine multi billionaires, to create vast net profits for what were our four soley AO/NZ trading banks, now foreign owned, and have created an underclass of homeless people, hungry kids and terminally indebted working poor not to mention a world leading health system that’s now in crisis, an education system that’s now in despair and an agrarian primary industry sector that’s by loathed by design to make its pillaging more socially acceptable. Labour’s the victim of a parasite that became imbedded under its skin and I must say, I have a certain sickening respect for the criminal genius behind the crime. Or is it a criminal [genius]? When trust is exploited? When one uses secret, privileged, inside information and when economic power is deployed against innocent and defenceless AOtearoa / New Zealand people who could never have seen roger douglas, a two term Labour finance minister coming.
            That’s why I keep requesting a public, Royal Commission of Inquiry up and into our politics, our politicians and our economy spanning at least the last 80 years because rogers version of neoliberalism was merely a means to hand our publicly accrued wealth into the hands of privateers champing at the bit to get their hands on our wealth.

            • Far too over-dramatic, countryboy. Cock-ups explain things better than conspiracies. Remember how we all intended to piss on Roge’s grave? Now, at most, we’ll put a post-it note on the tombstone saying that. He’s two things, not a serious person and thought he was doing right.

              And you over-dramatise, much like the blog-holder. It’s not necessary. The facts are drama enough for us realists.

  2. You are an incisive person Susan, and a total public intellectual with the ability to convey relevant detail.

    My thing is how do we (as in the Aotearoa NZ working class) get cut through? Neo liberalism, and post modernist philosophy has demonstrably debilitated collective thought and action.

  3. Next comes NACT in government forever on the back of record non-citizen voter numbers, that no other country on the planet is insane or suicidal enough to entertain.

  4. I would argue we need to start rebuilding labour movement education, and use that to try and generate campaigns around the big issues.

    To expand on Susan’s idea of the Universal Basic Income: I wonder if one option would be a U.B.I. combined with a compulsory savings scheme.

    Working people have a very low amount of assets today, and too much debt. Primarily, we have to ensure that real wages are high enough, by ensuring we rebuild the Award System, universal trade union representation, and the provision of high-wage, high value-added jobs.

    We could add to this a compulsory savings scheme (similar to the C.P.F. in Singapore), which would receive deposits from both the U.B.I. and employers. It could address low savings rates, low household assets, and also the insufficient investment in the domestic economy.

    This should not replace the old-age pension, disability pension, or Full Employment Policy. Perhaps it could be mandated that withdrawals can only be made when one begins receiving any type of pension?

  5. Nothing will come. Chippie was on the side of J.A every step of the way. If he approved then no change will come, if he did not approve but did not speak out cause he did not want to lose his job or right hand position, then he can not really change anything as it would show him for the fraud he would be. So either way, Labour is fucked. They had their chance to do good, full majority, a leader that was for a while a person who could do no wrong, and here you are, for the umpteen time asking the same question, when will labour do the right thing?
    Labour will never / can’t do the right thing as ideologically they are opposed to the right thing. Labour atm can’t define what worker are or for that matter would dare to ‘define’ women. They would like to pretend that class and categories don’t exist and ‘identity’ is a decent and non discriminative differentiator. That type of thinking will leave most behind. And therein lies their problem, they left behind their core voters, and now have no where to go and no where to hide.

  6. If only they knew. If only, we as a society knew what we were doing and demanded change.

    But we choose not to know that we are destroying our fellow people. Causing terrible suffering and making life all but impossible while we moan about those social effects that impact our own comfort, generally temporarily, just being around ‘those people’ in public places.

    And sometimes in major ways with the inevitable upswing in serious crime.

    But always within the relentless mythology of benefits exceeding wages and the lazy living on the pigs back. Yada yada yada.

    I’ve tried many times to intrude on the myths including the inevitable ‘proof’ stories about someone that someone knows. There is always an absolute refusal to go to the winz website and show how the story could possibly be true.

    We are wilfully blind to our deliberate cruelty. Divide and rule suits the political class as they and their own prosper from a divided society in which the wealthy and comfortable can hate on the poor from the comfort of the backs of the poor. Breaking them.

    Thank you for your work, Susan

    • what+now. Well said. Divide and rule, the neolib dialectic, has deepened the chasm between the haves and have nots, with Labour and National equally culpable. Both must go.

    • they aren’t blind they just enjoy the cruelty and take pleasure at others dire positions….they won’t listen because it makes them all tingly in the trouser dept,

  7. The problem seems to be that Susan, an idealist, is the only one presenting cogent tax arithmetic and a social vision.
    I taught English in New Zealand schools for forty years. The effects of poverty on some students were devastating, many of whom were victims of poor nutrition, drugs and conflictual homes, leading to their ironic vocation of switching off and disrupting classes. All teachers could do was keep them in ‘holding pens’ (A K Grant’s term).
    My colleagues and I could not believe the vitriol levelled against well meaning teachers, who were never trained to deal with the effects of real material and cultural poverty. Many of these students had never been read to. A book was a threat. Understandably, the mental health of teachers deteriorated. It was a matter of survival, not demonstrably improving literacy rates for the students, as, inevitably, assessment scores showed. Education for them was ritual humiliation.
    Change would have a chance if Susan’s vision had effect, but it would need to be complemented by a massive investment in education, i.e. admitting the bitter realities for many teachers and students in our classrooms. New Zealand is very unlikely to have a combination of Susan’s mindset and education investment to get social amelioration. We are a Nietzschean society.

    • Roger, Sober words well said. You know what I know, that the Labour government really has no inkling of the effect of poverty and deprivation upon children, or if they do know – which I doubt – and fail to act, then they are as big a ratbags as ever walked the corridors of power.

      Incredibly, it is Education Deot wallahs who now replace the Commissioner for Vulnerable Children, providing an even uglier landscape for children who need and deserve better than this. I salute your teaching years; your experience should be heard, and heeded.

  8. The idea of a minimum wage is that it is a step onto the ladder whereby someone can attain higher levels of remuneration. The idea isn’t to be in a minimum wage for the rest of your life. It is meant to allow people with little or no skill into the workforce (and arbitrarily raising it only closes more doors for these people).

    Moreover, to use the example given, should minimum wage earners really have two children? Sure, they can procreate if they want to, but as a consequence, they will be making their and their children’s life very difficult. The attitude seems to be “let people do what they want, but when the results aren’t great, something is wrong with the system.” No, prudence and personal responsibility (or lack of them) go a long way.

    Similarly, we often see sod stories of, for instance, a solo mother with 4 or 5 children complaining that she is struggling – being unmarried with 5 children whose father(s) is nowhere to be found is the cause of her problem, not benefit levels or minimum wage levels.

    • @Antoine:
      Most of the high wage jobs were deliberately sent abroad to sweatshops, after the tarriffs were dismantled.

      The minimum wage in each Award was previously set by the Arbitration Court to the Basic Wage level: defined as enough for a family of five to live ‘in frugal comfort’. No longer.

      As it stands, only 56% of the working age population has regular employment (full time permanent). Once students, homemakers and the disabled are excluded, this leaves about 39% of the workforce either unemployed or scraping by on odd jobs!

      The economy is too weak to provide high wage jobs, or even a sufficient number of poorly paid ones.

      The neoliberals would abolish the minimum wage if they knew it wouldn’t result in mass riots. Even if that happened, their theory is totally unconcerned by the huge reserve army of labour that would exist whenever production falls from its peak – even at 5¢ per hour, this will end up being 0¢ if there is no work on the production line that day.

    • While I can understand that people with some sort of privilege see the logic in restricting breeding rights & even I will agree that some single-parent families are a bit of a self-inflicted mess the idea that any form of state control should be imposed is a step too far along the way to a totalitarian society for me.
      The cause is that people have a range of abilities so they are not all able to succeed the same, the original answer was for us to recognise that we came from a loving creator God & our possessions were a gift to be used for the benefit of all, as we all know the churches did a very bad job of achieving that ideal & we live in an overwhelmingly secular society now so it is up to the state to ensure that all get looked after. The scripture has a chapter regarding blessings & curses (note the blessings came first) with the modern equivalent being rights & responsibilities. Too many people want to take from society & not enough give back for us to have the sort of peaceful future we want.

      • Aw bless… Antoine Forbes-Hamilton and Pope Punctilious II. It’s strangely heart warming to see two idiots bumping into each other like two dumb ducklings on a small shallow pond.

  9. Oh please! Even if Labour knew what transformational change looked like, they are far too incompetent to implement it.
    Whats more, they are far too concerned with being racist, sexist and ageist to bother with silly ideas like whether they are turning NZ into a 3rd world country.
    Indeed no, they must make sure that maori are given special rights and that nobody mis-genders a pigeon.

    • If this Labour Government, that after 5 plus years hasn’t achieved anything, then transformational change will be a miracle.
      If anything their incompetence has grown over their term in office.

  10. If Labour is to deal with this, it will one through the Budget, not as an isolated policy statement. Labour will be fully aware of the issue. After all, both left and right commentators have pointed the issue out in the last few days. Treasury will be also well across this, it being pretty obvious that the minimum wage, as a 40 hour per week income, is getting very close to the tax thresholds.

    All the political parties will have to have policy to deal with it. But the two major ones will wait to the budget and its repercussions to announce their positions.

  11. Good post Reactionary Bratwurst. I am one one of the multi decade supporters that Labour has lost. Sad really as my maternal grand parents had a portrait of Savage on the wall, my mother fund raised for Kirk, I attended Lange functions and was once a staunch supporter. Ardern had lots of political capital but totally blew it! Working class and small business no longer owe any loyalty to the Labour party! I won’t vote for them in 2023. I don’t support Luxton but he couldn’t be worse than current Labour!

  12. “I don’t support Luxton but he couldn’t be worse than current Labour!”

    Really?

    Then you are most definitely part of the problem, not the solution.

    • Given this Labour Government will go down as the worst in New Zealand’s history,then Trevor you are correct.

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