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Mike Butler

Poverty, wealth, and the election

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Dirty politics from the Left during the current New Zealand general election campaign obscures policy at a time when the issue of wealth or poverty and how to get there should be critical. Party policy can give a picture of the sort of country that the various politicians imagine. A wealthy country is good for everyone. A poor country is not. I looked for what the parties said about wealth and poverty and this is what they posted.

Wealth and poverty don’t just occur without a reason. Both are outcomes of human activity. Diligent activity towards a specific goal can result in wealth. Sitting around doing nothing will get you nothing.

The incumbent National Party is clear that the country would only become wealthy by selling more stuff to other countries so focuses on a quality free trade agreement under the Trans-Pacific Partnership, investing in the primary sector, growing tourism, and following a prudent policy of “living within our means”. The Nats would start paying off debt to 20 per cent of GDP, keep generating new jobs, reduce taxes when there is room to do so, investing $22.5-million over five years to plant new forests, and recognise excellent teachers.

The only part of the National Party policy that could be linked to poverty would be a goal to reduce long-term welfare dependence.

The Labour Party does not have a clear idea of growing the pie but has many ways of taking from those who accrue wealth through diligent effort to give to those who don’t.

The Labour Party wants a new, progressive top tax rate of 36 percent on income over $150,000, a capital gains tax of 15 percent on investment property, farms, businesses, everything except the family home, wants to raise trustee income tax to 36 per cent, and remove any tax loopholes that may encourage property speculation.

Labour wants to raise the minimum wage to $16.25, ensure that all core public service workers are paid at least the “living wage” which is not defined in the policy.

Labour’s Buy New Zealand Made government procurement strategy wants to limit $200- million a year of government contracting to New Zealand suppliers, immigrants should be limited to high-skilled persons, and on the leader’s debate on Thursday I did hear Labour leader David Cunliffe both oppose and support foreign persons buying New Zealand land.

The Green Party does not appear to understand where the money comes from, although co-leader Russell Norman did suggest in 2012 successive rounds of quantitative easing, which is also known as printing money.

Green policy includes taxes and levies. They want a capital gains tax, levies on the commercial use of water, possibly new eco-taxes, and a Tobin tax on international currency movements to provide capital for poor countries to improve their social and environmental wellbeing.

Greens are big on giving free money to those sitting around doing nothing. They want to build 3000 state houses a year for the next three years, maintain income related rents of 25 percent of income for state tenants, increase benefit levels, abolish stand-down periods, treat people aged 18 and over as adults for benefit purposes, don’t require work for the dole, protect people on the DPB, end compulsory work-testing, and extend Working for Families payments to beneficiaries.

New Zealand First policies show the influences of the country’s most senior politician, Winston Peters, originally a National Party MP who served under the premier National socialist, former Prime Minister Robert Muldoon.

NZ First would support the primary sector, introduce managed float control of the exchange rate, ensure that all fish caught in New Zealand waters would be processed in New Zealand, and institute a minimum domestic log price to discourage the export of raw logs.

Peters would give manufacturing a high priority, introduce a “buy NZ” government procurement policy, ban sales of New Zealand’s strategic land and assets to foreign ownership, and link tariff removal with the policies of trading partners.

He wants comprehensive compulsory savings, he wants the New Zealand Superannuation Fund to buy shares in New Zealand infrastructure companies, and he wants to buy back SOE shares at purchase price. He would also raise the minimum wage to $17.

Colin Craig’s Conservative Party has nothing to say on the economy other than no tax on the first $20,000 of earnings. His other policies are simply tougher penalties for criminals, make referendums binding, and enact one law for all.

The Act Party wants to build wealth by focusing on economic growth albeit “sustainable”, encouraging individual responsibility, raising standards of achievement in education, maintaining sound economic management, including (but not limited to) a balanced government budget, price stability and a free and open market economy.

Act would maintain social and economic support for those unable to help themselves.

United Future embraces free trade agreements, would review legislation that burdens farmers, and similarly the tourism sector, require that all foreign charter vessels are to remain outside a 25-mile limit, require that a certain percentage of all fishing quota that is leased out by “paper” fishermen must go to New Zealanders.

The Peter Dunne party supports a broad-based low rate tax system, would introduce income sharing for couples with dependent children, opposes a capital gains tax.

On housing, United Future would require all existing dwellings sold or advertised to rent to be assessed for insulation, double glazing, heating methods, and use of solar energy and given a standardised energy efficiency rating, and would allow families to capitalise Working For Families entitlements for a year to help buy their first home.

United Future supports the 90 day probationary period for new employees, and would introduce compulsory Kiwisaver, Re-introduce savings schemes to children at school

United Future believes that work is a good, both for society and for individuals. Having a job boosts self-esteem and a sense of personal dignity, and provides a role model for children in the family. The party would encourage all young people under 25 who are not at school to either be “earning or learning”.

The Maori Party appears to have run out of ideas, has nothing specifically to build wealth and focuses on more education for Maori. This includes a four year zero fee scholarship to target the “first in whanau to engage in a bachelor level qualification” programme. Otherwise, the party says it “builds on gains” of the previous six years, which includes 3000 Maori and Pasifika trade training placements per annum, 350 cadetships for unemployed Maori, $12.45-million to establish a Maori-focused Centre of Research Excellence.

The Sharples-Turia Maori Party achieved its reason for being, namely the repeal of the Foreshore and Seabed Act 2004 and replacement by the Marine and Coastal Area Act, nudged the constitution towards including the Treaty of Waitangi, got the government to sign up to the United Nations Declaration of the Rights of Indigenous People, and, of course, shoveled a lot more welfare towards Maori through the so-called one-stop Whanau Ora programme.

Hone Harawira’s Mana Party has no clues on the economy and is big on taxing the rich to fund the idle.

Mana would replace GST with a “Hone Heke tax” on financial speculation, would exempt the first $27,000 earned, and reintroduce a more sharply progressive yet undefined tax scale, introduce a significant capital gains tax on all but the family home and Maori land, and reintroduce inheritance tax a progressive scale for inheritances valued at over $500,000, but excluding land held communally on behalf of iwi.

Mana would increase the minimum wage to $18.80 per hour and index it at 66 percent of the average wage, give workers greater bargaining power, repeal youth rates for workers aged 16-17 years. Harawira would buy or take back key state assets.

Mana would increase benefit levels, extend Working for Families to beneficiaries, implement a universal basic income where everyone aged 18 and over would receive a minimum, liveable, tax-free income after which progressive tax would kick in.

Harawira’s party would build 10,000 new state homes per year for rent (or rent-to-own) until the “crisis” is addressed, maintain income related rents at no more than 25 percent of income for state, local government, and community and iwi social housing, develop rent controls for the private sector, introduce a warrant of fitness for all rental housing, and develop a low-interest, no deposit Maori Home Ownership Scheme (with low-cost mortgage insurance) for Maori first home buyers.

For an extremely wealthy guy, Kim Dotcom (born Kim Schmitz, also known as Kimble and Kim Tim Jim Vestor) appears to have few ideas about building the economy because policy detailed on the Internet Party website only mentions increasing government investment in research and development by an additional $1-billion over the next three years and establishing university-centred innovation hubs.

Suggested amendments to the Copyright Act are not surprising for a foreign national trying to avoid extradition to the United States of copyright infringement charges, as is his desire to repeal the Government Communications Security Bureau and Related Legislation Amendment Bill, which the portly German undoubtedly links to an armed raid on Dotcom mansion on January 20, 2012.

Unfortunately, the sustained smear campaign against the National Party-led government unleashed by leftist attack dog Nicky Hager could mean that few will look at policies. Voters who do look at policy will see that options for a wealthy future appear limited.