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Do wealthy New Zealanders really need Government Welfare?

Some of you may have seen on Facebook or in the mainstream media the campaign we ran over the last week. For those who have not, you can see it here. Gareth has just turned 65 and is now able to receive the New Zealand Superannuation. The purpose of the exercise was to show how we are spending billions on welfare for pensioners like Gareth and Winston Peters, all the while having some of the highest rates of child poverty in the developed world.

Unfortunately many missed the point of the message we were trying to deliver. “If Gareth’s so rich he shouldn’t claim it”, “Why does he have to make a song and dance, he should just give it to charity”. In the grand scheme of things, Gareth donating the money to charity will not change a thing. Without actually changing the system, we will continue to have this gross misallocation. 

Of course there will be some who donate it to charity, but it would be foolish to expect universal acts of altruism from the country’s wealthy pensioners. After all, how much wealth should one have before they consider donating it? Yes, it is easier for someone in Gareth’s position, where the money will make no material difference, but there is literally billions of dollars of welfare being funnelled to those who are supremely comfortable and will not think twice about claiming the full amount of Superannuation. This is not even a criticism of these people, they are simply doing what the system allows. It’s the taxpayer that is the mug.

The whole reason behind the campaign was to start a conversation about welfare going to the wrong group. To be clear, TOP policy will actually give more money to those pensioners who really need it ( you can read it here), the impact will be on those like Gareth and Winston Peters, taking the top half of their Super ( they will still get the Unconditional Basic Income rate) and transferring it to young families in need. This will provide the funding for the start of for our Unconditional Basic Income for all New Zealanders. No old people will starve, it just means a few will not be able to rely on the Government to fund their Mediterranean cruises and quick flocks to Fiji. We understand that for years the Super has been sold as an entitlement, but the reality is, it’s our kids that will be hit with the bill. They’re already the first generation who are predicted to be worse off than their parents, so is it reasonable to expect them to pay for Gareth’s new motorbike too?

Looking at our welfare situation objectively, means testing Super is a pragmatic way to make a tangible difference for our young kids, and families who are in need.  For a lot of us it’s hard to really understand the extent of poverty we have in New Zealand. We see examples such as beggars on the streets, more often than not these are the ones who have fallen through the cracks ( this is not to say we should ignore them), and it becomes hard for everyday Kiwis to relate. The real face of poverty are the families who face rising rents and stagnating wages, stuck with a punitive welfare system that gives them little hope of crawling out. Perhaps it’s not so obvious when parents work multiple jobs, go without so their children can eat, or a forced to live in vans because the price of rents are now so high. It’s hard to properly grasp the reality unless you really experience it.

Yes, these are dramatic example, but don’t be fooled into thinking scenarios like these are sad but just occasional. It is far more common than you think. Consider that half of all families with new-born children will experience at least a year of poverty, and for 1 in 4 that poverty will last for 4 or more years.  It’s these people that we will help, and if the cost is that Gareth doesn’t get a extra few dollars a weeks, then it’s one we are pretty happy with. Every cent raised from this means testing will be redirected toward our “Thriving families” policy, giving all families with children under three $10,000 per year as a “Young Familes” UBI. It will also fund further support for poor families, and free, full time, high-quality early childhood education.

The evidence is clear that the return on investment for society is much higher when investing in children early, so by doing this we can help nurture the most vulnerable sector of our society, all at the expense of a few less overseas holidays for our wealthy retirees.

Andrew Courtney

Andrewc@top.org.nz

 

 

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    • Valerie Marshall
      commented 2018-03-17 16:22:18 +1300
      A single person can earn up to $100.00 a week before tax before the NZ Super is abated at the rate of 70 cents in the dollar over that $100.00 – and, from you say, Alan Dawn, a couple can earn up to $100.00 before tax between them, before the NZ Super is abated at the rate of 70 cents in the dollar for any amount over $100.00 before tax.

      The more you earn, over that $100.00 per week before tax, from employment, interest, dividends, shares, etc., the more the NZ Super is reduced, at the rate of 70 cents per dollar after that first $100.00.

      Seems quite straight forward to me, and is what I have experienced on other benefits before reaching 65 years.

      The more you earn on top of your NZ Super, the less you get to keep of it. And it may even be the case that, with some benefits, the more you earn the higher the abatement, so you get to keeo even less of it.

      By simple arithmetic, if your income is sufficiently high enough and being abated at that 70 cents in the dollar rate (or higher) over the first $100.00, then there must come a point where, in fact, you should not receive any NZ Super at all, or so little of it to be virtually negligible.

      Of course, if you don’t declare all your income, that is a different story, until the Dept does an audit … (or someone dobs you in).
    • Alan Dawn
      commented 2018-03-17 16:07:18 +1300
      Valerie Marshall comments: “According to information at ”https://www.workandincome.govt.nz/eligibility/seniors/superannuation/other-income.html">https://www.workandincome.govt.nz/eligibility/seniors/superannuation/other-income.html,… “if you get “enough” income other than NZ Super, you don’t get any NZ Super at all”.
      Well Valerie should have included the full text: “If your spouse or partner is included in your payments, you can earn up to $100 (before tax) a week between you, before your New Zealand Superannuation is affected”
      So that only affects the situation if you include your spouse, but the comment was either a troll or simple misinterpretation.
      Otherwise, how would Winstone and Gareth receive anything?
    • Oliver Krollmann
      followed this page 2018-03-16 23:11:47 +1300
    • Grant W
      commented 2018-03-16 17:56:29 +1300
      Is a good idea, but it worries me that is more support for bludgers that think they are owed and have no intention of contributing and manipilating the system, i work as a sub contractor for HNZ, and frankly the absolute disgusting sate of these places is beyond belief!! HNZ has to be held accountable and tax payers of the country need to be made aware of what is going on there.. It keeps me in work, but my far out, houses provided to gang members and drug dealers at around $80/week, while hard working people can barely afford a rental. SHIT!! i pay $270/ week for a 30 sqm studio unit and have to work 50+ hours a week to get by.. The frustration is getting too much, depressed, no where to go, and work my ass off for these bludgers and see on the news everyday, ohh these poor people.example. new tenants turned up on a 5 bedroom house we have redecorated, while distracted one of them was trying to steal out of my car and the builders van!!! luckily he caught the mongrel!! why do we pay for these dead beats?
    • Michael Smythe
      commented 2018-03-16 15:51:28 +1300
      There are so many many ways to counter your argument.
      a) You can decline to receive your super, ie: you do not need to register.
      b) Means testing is a very complex, expensive process to spend our money on.
      c) People who are well off have probably paid more taxes and are, arguably, more deserving of their return on investment than those who paid less.
      d) Those with more money than they need for basics can afford comprehensive health insurance thus reducing the load on the taxpayer.
      e) Originally there was a separate tax for superannuation: ‘1/6 in the pound’ – until Muldoon absorbed it into general taxation and the consolidated fund – so it would be a breach of faith to remove what people have paid for.
      f) The Clark/Cullen government sorted it by creating the Superannuation Fund and Kiwi Saver.
    • Valerie Marshall
      commented 2018-03-16 15:28:53 +1300
      According to information at https://www.workandincome.govt.nz/eligibility/seniors/superannuation/other-income.html, “If you earn more than $100 (before tax) a week your payments are reduced by 70 cents for every dollar of income over $100 (before tax).” And if you get “enough” income other than NZ Super, you don’t get any NZ Super at all.

      How does this not make things equitable? Enquiring minds …
    • Steve Simpson
      commented 2018-03-14 00:05:41 +1300
      Apologies for the double post, I thought of a slogan for selling the idea. “Taking what you need, Giving what you can”
    • Steve Simpson
      commented 2018-03-13 23:35:55 +1300
      To gain any traction, this policy must gain moral support from the 65+ well-to-dos. A well crafted information campaign would help in this regard.

      Also, it must be remembered that the “old age pension” / superannuation has been fiddled and fussed with for well over a century. Something different is required. For my 5c, I suggest making working in paid employment mutually exclusive with receiving superannuation.
    • Jeanette Garnett
      commented 2018-03-13 12:01:53 +1300
      Looks like a proof reader would help the message, some of those typos are too distracting lol. I’d like to see more prominence given to the message that we are asking the comfortably off to take a little less (and it IS very little in terms of their weekly budgets), in order to support fairness for families, elderly poor, youth, and the disabled who have fallen too far behind over the past few decades.