Greens on poverty
The Green party has recently released their policy program for helping the poor:
[Turei’s] party wants to extend Working For Families tax credits by $60 a week for the poorest 140,000 households, reinstate the Training Incentive Allowance for university-level courses to help beneficiaries get educated and into work, raise the minimum wage to $15 an hour and create minimum standards for rental properties to ensure they were warm and healthy.
I like the idea of helping poor families but is the best plan really to:
- raise marginal tax rates on them,
- give them cheaper bachelor’s degrees,
- increase the barriers to entering the workforce at the minimum wage; and,
- increase the cost of rental properties?
I’m sure Matt will have a more thoughtful analysis up soon but does this policy really tackle the problems that our poorest citizens and their children face? I don’t know for sure but I imagine that the cost of a university degree isn’t a binding constraint for many of them, for example.
It’s going to be fascinating to see all the parties releasing more meaty policy agendas as we approach the election!
Giving them the opportunity to get higher education, which is just unrealistic for some (especially with the current government eating away at it) really is something to help the poor. As is increasing renting property standards. We’re talking about minimum standards, making places warm and healthy – so those in need can be better able to work, provide for themselves and their families.
“As is increasing renting property standards. We’re talking about minimum standards, making places warm and healthy – so those in need can be better able to work, provide for themselves and their families.”
You can’t just say that without also admiting the cost is what rauparaha is saying – the cost is higher rents. So given this flipside, is it clear that lowering poor people’s already low discretionary income in order to ensure they have a nicer house really in their interest? I would say it is unclear.
Now, if the Green party is unwilling to face this trade-off, and instead just wants to talk about benefits people can get – then that is misleading and sort of immoral. If they are willing to face the trade-offs, and have a belief that this is appropriate policy, then I can respect that. However, in either case the trade-offs should be clear – and that is what rauparaha was doing IMO.
@Matt: Yup.
The Greens wishful thinking on minimum wages is especially galling.
As Matt said, the goals are admirable but the value of the proposed interventions is unclear. I understand that it’s difficult for politicians to talk about the trade-offs but I would really like to see more of a justification than ‘the benefits are good’.
Apolgies for ignorance, but could you expand a bit on how the proposals raise marginal tax rates for poor families? Genuine question, not an implied argument – I’m not familiar with how WFF works
I have only read the news story on the proposal so I’m guessing slightly but an increase in WFF payments means that more of a transfer has to be phased out as they start to earn more. That means their WFF payment reduces by a greater margin that at present when they earn more. Consequently, the marginal gain from the additional hours worked is smaller and their net marginal tax rate is higher.
@rauparaha
I see, thanks