The leftward and other blatherings of Span (now with Snaps!)

Monday, May 21, 2007

Blah Blah Budget

Well I didn't really write anything about the Budget. To be honest I found it all a bit blah.

Again with the not doing anything to reverse the 1991 benefit cuts, again with the not really doing anything except tinkering with funding in education and health. Four percent for school operation grants was a slap in the face, although it's been trumpeted by some as one of the significant parts of Michael Cullen's presentation - they seem ignorant of the fact that costs are running at higher than 4%, and support staff wages are so pitiful that even adding the full 4% on to their existing pay rates isn't going to give them the increases they deserve. I know I know, it's Better Than National, but it's not exactly vision stuff.

Maybe Kiwisaver is a bit of a Grand Scheme, but I have a sneaking suspicion it's just going to get wound up or fully privatised by a future National Government - particularly if they come in next year when it hasn't been aroundlong enough for people to feel attached to it. We do need to do something about our savings culture, but I'm not sure that a scheme that can be so easily converted to privatising superannuation is such a smart idea.

I heard John Tamihere talking on the radio the other day about the similar Super scheme that the 1972-1975 Labour Govt brought in - it was only in a short time before Muldoon was elected and scrapped it, giving people a one-off refund of their balance in the next tax year or something. I have no idea if that's true, and I'm too lazy to do any research (isn't that what readers are for? ;-) ) but given the way the polls are trending and the rhetoric from the Right about Kiwisaver, it seems like history may repeat itself.

I'm quite gloomy about the polls. I know it's not too late, and part of me would like to see Labour get a good kicking. But given that the boot would be on the end of John Key's leg, well that makes me not so keen.


(Pic Via)


jo said...

before we do anything about our savings culture, we need to do something about our low wages culture. Rant rant, price of housing etc etc...

ex-expat said...

One question that I wish someone would ask is what's going to happen to the superfund now we are introducing kiwisaver.

Span said...

Jo, I completely agree - we must get wages up. It frustrates me no end that people go on and on about the Australian comparison on tax but fail to recognise the extra super payroll tax Australian companies pay and the much higher average wage in Australia. Sadly with the introduction of WorkChoices there I think we will probably see a closing of the pay gap because their wages will come down, when what we want (need!) is for our wages to go up.

I heard an interesting stat yesterday - a third of NZ's current accounts balance (ie the money we send overseas, just in case I am using the wrong term) is bank profits. $3B a year. Mind-boggling, particularly given how poorly renumerated many bank workers are :-(

Span said...

ex-expat, I think the idea is for the Cullen Fund to continue, as that will be state provision of Super, whereas Kiwisaver is effectively private provision (albeit through a Govt scheme). But the point is that with Kiwisaver it could be easy for a future Govt to say "well you're all saving privately anyway, so we don't really need state provision anymore" and I think that would be very dangerous indeed.

che tibby said...

hasn't labour increased the minimum wage two years in a row? and will increase it again to $12.50?

surely that's putting money directly into the pockets of the working poor?

and, house prices are high because kiwi's don't save, they put everything into houses.

and span, surely the best thing for beneficiaries is to find work? even *part-time* work at the minimum wage returns much higher money than the unemployment or domestic purposes benefit?

Span said...

Yep I'm stoked about the increases in the minimum wage. But the Govt hasn't always walked the talk there in terms of increasing Govt funding to many of the services it funds by enough to increase the wages of those workers eg support staff in schools and caregivers in rest homes. I heard a horror story the other day about ACC funding a teacher aide for a secondary school student but the money they were giving the school fell short of not only the pay rate set in the collective agreement but also the minimum wage. There was simply no way the school could deliver the hours ACC had funded a teacher aide for on the money they provided.

House prices are high for a variety of reasons and I agree one is that we are investing too much in housing, particularly beyond the family home. Those who buy second, third, etc homes to rent out are effectively knocking first home buyers out of the market. Kiwisaver will have made a positive difference if it changes that culture, but Jo is right - people need to have the extra income at the end of the week to save in the first place.

Not all beneficiaries can find work. Some because they can't work, others because there aren't jobs out there, a few because they don't want to. We seem to have decided that an unemployment rate of 3% is somehow "full employment" - it's not. I don't see why we can't seek to increase wages and increase benefits too.

Pablo said...

it was only in a short time before Muldoon was elected and scrapped it

Yes, I believe that happened. There is nothing stopping a future govt scrapping Kiwisaver either, I just hope the electorate is so committed to it that it wouldn't be politically possible. I would imagine that potential coalition partners for the Nats (Winston & Dunne) would make it hard to repeal the scheme though.

A more likely scenario (IMHO) is that the Tories will make the scheme compulsory and increase the income/asset testing threshold for National Super, effectively eliminating National Super for those with enough cash in their Kiwisaver investments.

Anonymous said...

Is the minimum wage a living wage, though? Will it cover accomodation, food, transport, power and phone at a bare minimum? Possibly, in some cases, if circumstances permit. What about childcare, dr's visits, which might also be considered bare minimums?

Leaving aside that 30hrs, or slightly more maybe, counts as full-time, unless a min. wage worker puts in around 70hrs a week, they will not be able to do much more than the basics even then. And do they have a life to speak of, aside from working, eating and sleeping?

If you believe that bene's of almost all sorts are better off in minimum wage jobs, you've bought into an illusion, seriously. It costs more to work, in terms of transport at least. Food and other health maintaining costs are a big factor too.

Even when healthcare and childcare seem well subsidised, they're far from fully subsidised and the co-pay's will often be beyond what might be called the disposable portion of many incomes at minimum and somewhat above.

So, ct, if you consider yourself left wing, or even left leaning, you clearly have lots to learn about the real lived lives of the poor in this country (working and otherwise), particulalry as it has been lived during the last decade or two. Labour led intervention has been too little too late. Even WFF has only taken some people from hopelessly desparate struggle street, to desparate struggle street, or if slightly more fortunate, plain ol' struggle street.

Even if it were true that everyone gets to move on from desparate struggle, does it not seem somewhat draconian to enforce a period of 'suffering' in the belief that that will make us all stronger and more grateful, or something. It seems rather like the belief that a bit of a beating from time to time hurts no child.

che tibby said...

anon, i think you've made a big assumption there. i was brought up by a solo woman, and have lived much of my life on minimum wage or worse.

and what did that lead me to? i swore never to have to eat mystery-meat stew or weetbix for dinner ever again.

my defence of the minimum wage was that it has *been raised* for the past two years. and sure, it's still damn tough to live on, but people can do it. i've worked those 70 hour weeks in dirty, unhealthy jobs, but did so with an eye to working my way out of them.

i should add that i don't believe in social assistance. belief is for idiots. i know that social assistance is both necessary and good.

but, what social assistance is meant to be is an assurance that no-one in my country will ever experience the kind of routine poverty we see overseas.

i think what many people don't realise is that poor and poverty are normal. there has never, ever been a time in history when there haven't been poor.

the difference is that, in this country, those poor have people like you and i making sure there's no-one keeping them in poverty. anyone who works hard enough can work there way out. and if they can't, then let's find out how and why they're held back.

Craig Ranapia said...

Well, on Nine To Noon's politics segment yesterday, Lila Harre -- who can hardly be dismissed as any kind of born-again fiscal neo-con -- made a rather interesting point: Hasn't Michael Cullen effectively privatised superannuation (and, I'd add, nationalised the risk if these schemes fail to perform) without anyone on the left raising an eyebrow?

I never thought I'd say this, but I think she's got a point. While the politics is brain-meltingly brilliant, I just don't know if it's really very good public policy or will there's much less to it than the heroic sales pitch we're seeing would suggest.

Make Tea Not War said...

One thing I find problematic about the kiwi saver, as a feminist, is that it attaches to employment thus entrenching the the same old rights as citizens flow from status as paid worker. Anyone out of paid work due to doing child care or elder care gets nothing and will be that much closer to the poverty line when they reach retirement age.

Obviously if someone doesn't have an employer there won't be employer contributions but, it seems to me, if the state valued carework they could contribute something during those years someone is doing the important unpaid work that keeps the world turning.

I was also interested to hear the other day that in Germany the state reduces student loan debt by a set amount for every year someone is out of the paid work force due to care responsibilities.

Make Tea Not War said...

PS Che Tibby- I had lots of crap low paid jobs & long hours in my (many!) years as a student. It was hard at times but my choice and easy to live cheap with no dependents and flatting etc. I would hate to have to raise a child or children on that level of income though.