Written By:
Bill - Date published:
9:57 am, March 20th, 2020 - 71 comments
Categories: class war, cost of living, Economy, Politics, poverty, welfare -
Tags: Covid19, Gabbard, GOP, ubi
With coronavirus numbers in Italy going through the roof and some US unions expecting up to 90% of their members to lose their jobs, while JP Morgan’s forecasting a 14% retraction in the US economy in the next quarter…
Unlike the GFC of 2008, NZ will not skirt the worst of the effects this time around.
So, on the basis that what’s happening overseas will also likely happen here, it’s time for the government to get real. If airlines and others couldn’t perform some basic household budgeting (as governments are apparently expected to do) and put aside some of their profits for a rainy day, then fuck them – they fall.
It’s real people who need assistance, not abstract business models.
So give everyone a thousand dollars right now and tax the money back off the rich at a later date if ‘universal’ is a sticking point.
Right now, I and thousands of others cannot afford even the basic measures required to ride a potential period of isolation. Right now, I and thousands of others can only hope to service debt, and unless meaningful sums of money are made available to us, we will only continue to spend all of our money on debt repayments of one sort or another.
Even the Republicans in the US understand that people need money in their pockets.
Now sure, I’m sure the GOP have some hooks sitting just under the surface wrapping of their package, but still…
Isn’t it an odd world when the ask is for the government to follow the example of the Republican Party in the US and avoid the downright horrible examples of disregard and disconnect being put on display by the Democratic Party?
The current rise of populism challenges the way we think about people’s relationship to the economy.We seem to be entering an era of populism, in which leadership in a democracy is based on preferences of the population which do not seem entirely rational nor serving their longer interests. ...
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lol calm down. there's no community spread. we are nothing like those other countries yet.
I was thinking the last thing we need is more pressure on supermarkets.
You mean more pressure from poor people who live week to week anyway and cannot prepare for illness if they need to? Never mind the fact that those 'poor' people now can't even access cheap bread, milk, flour or yeast because people who can afford it, resort to panic buying and continue to wipe the shelves of basics. This just leaves poor people in the position of having to spend money they don't have on more expensive options to feed themselves this week, never mind not having food when they either can't leave their homes or are too sick to cook.
Also the splurge on hand sanitizer has a certain twist when those who can afford to buy it in bulk, leave the shelves empty so that those who can't access it have no choice but to go unprotected and spread whatever virus' they may carry on to others, possibly even to those who greedily brought it all out in the first place – I can't help think about karma at this proposition.
No one needs to go unprotected there is plenty of soap available and it is more effective than hand sanitizer.
Even the soap is being wiped off the shelves – with shops introducing limits per customer – then there's the price gouging on sought after items – panadol, garlic just two examples off the top of my head, You know who can't afford it? Poor people.
Tho…at some point surely we will have, and will need to have community spread…unless you envisage the whole of NZ shutting down like this each and every year for the duration of the Bat flu season.
Where's my grand?
I need such a large amount to buy myself another 12 pack of Corona ale to inoculate myself against such an ailment.
Why are you using a different user name and e-mail address? Please explain.
@ infused – Pretty sure people in Italy were saying exactly the same thing two weeks ago and look at them now, don't think they're lol now 🙂
An emergency UBI/Super type payment to all adults and children citizens and residents, would not necessarily address the longer term issues with such a payment–but that would not be the bloody point of it–if we do not act promptly many will not be around for the “longer term” at all.
NZ pundit Hickey is a UBI supporter in the crisis it seems, me too as long as WINZ/MSD are keep well away from it!
https://www.rnz.co.nz/national/programmes/afternoons/audio/2018739215/financial-impact-of-covid19-around-the-world
Yeah a UBI would best response but doesn't need to be Superannuation level. With Unemployment for a single being boosted to just over &250 pw we just need to universalise that to all workers not waiting for them to lose jobs & go on unemployment.
Direct GST towards it, take off GST on basic goods & in exchange ramp it up on luxury goods to compensate. Bring in CGT, FTT, Carbon/Pollution Tax, slightly increase higher income & corporate/company (large/medium enterprises) tax while slightly lowering small business tax. Make first $24, 000 income tax free.
An emergency UBI might not be able to be undone though (which is a good thing in my view as it's needed not just as disaster relief/disaster proofing but as a means to soften the coming automation/A.I./roboticisation which no doubt will speed up due to coronavirus) If it's in place for 3 months, six months people will see it's value to their bottom-line & will vote in their personal interest for the party that says they'll keep it.
$250 a week is more sustainable. Add in a Universal Child Benefit (UBI for Kids) of $75 (0-10) $125 (10-18) & gradually reduce base Super down to $250 while keeping/modifying means-tested Accommodation Supplement.
https://www.stuff.co.nz/national/health/coronavirus/120387232/coronavirus-the-importance-of-shopping-local-in-the-midst-of-a-pandemic
well i guess they can sell their assets, they can beg family and friends, they can ask for a loan at the eve of a financial crisis that is going to be GFC 2008 on steroids and meth. And then, when they have all exhausted all means, have impoverished themselves, have loaded themselves up with debt, they can declare bankruptcy and go on the dole.
Oh, i must be whinging again. ………
Small businesses should be getting immediate and comprehensive relief – freeze lease payments etc.
And if enough money is given to people like me that we can move beyond simply servicing debt or paying bills, then I'd like to think enough cash flow would enter smaller businesses that they might stay afloat.
I sure as hell don't want the small local ones around me to tank.
that was the one thing that i was hoping for and speaking with the businesses on my fringe we all did, either a government and interest free loan to get us over 12 weeks (that is how long at a min a shut down will last looking at China, South Korea etc), or a rent/lease/mortgage freeze, or at least some sort of legislation that does not allow any evictions, debt collections during this crisis.
Instead we got told to go to the bank and take out a loan.
Best bit was that shortly after the presser was over my bank emailed me and offered me a business continuancy loan at a 1% discount.
And i am in a good position to many. No loans to speak of, fairly small lease, and oh, btw, i have not paid myself since January.
The government might have just found out about the Virus three weeks ago, but let me assure you here in Tourist Land we have not hired the staff we would have, we have let go of staff since january, and we have not have the income since then.
I have pity for some of the young ones that threw themselves into 'self employment' cause they are shit outta luck and they have a government that does not give a flying fuck about them.
whining again.
https://thespinoff.co.nz/money/18-03-2020/freelancers-and-sole-traders-how-to-apply-for-the-covid-19-wage-subsidy/
we are to first load us up with debt before we can apply for anything.
but hey, i guess if small businesses don't have a years worth of saving then we can just die cause we must not be viable.
Air New Zealand however needs to be regularly bailed out every three to four years as they are too big to fail, and also it seems that some of our Ministerial critters are fond of flying.
Maybe a scheme where the landlord and tenant agree to 50% rent to the end of the current lease (3 to 6 to 12 month periods depending on how long this lasts). The government provides loan finance for the 50% of rent paid and is paid back later.
hahahahahahahahahahahahahahahahahahah
sorry but
ahahahahahahahahahahahahahahahahahahah
We are working this through with both our property managers right now; we've contacted all our tenants letting them know that if they've lost income due to this event, they must contact the manager and let us know. Things are moving so fast we're not sure what our final policy will be, but evictions are not an option.
Landlords are reasonable people who want to retain good tenants and understand that now is the worst possible time to have mass evictions.
Oh, for heaven's sake, don't tell your tenants that. Otherwise they will ALL be claiming to be hard up!! (sarc)
We're not fools, the managers will require evidence of their changed circumstances.
i was going to evict my tenant so i could reovate the house but i will delay that action since they havent any where to go there will there will be no increses no debt allows options
Good. Any sensible landlord knows that it's better to retain existing reliable tenants in place if at all possible.
The key thing for any tenants reading this is to advise your landlord of any changed circumstances as soon as possible.
The first priority is going to be those Kiwis in Oz who lose jobs and if stuck without income come back here (we do not have any spare housing and especially not for those on a benefit)
So either Oz steps up, or we pay them the dole in Oz (and Oz gives them their AS).
But yes – in general people need some cash in the bank to ride this out at any time to feel secure (and even those working and paying rent struggle to put any aside). I might restrict it to those paying AS or on fixed supported incomes, those on mortgages have a bank credit card facility.
Yes I commented on this yesterday. Even if only 10% of kiwis in oz lose their jobs, that's at least 50,000 people with no access to any social support at all. The SCV444 is a temporary visa that is not the same as residency, and certainly not citizenship.
At the same time the official line at the moment is that all NZ's living overseas (temporary or otherwise) should consider returning. Well that's potentially a million people, although in reality the actual numbers will be lower than this, we have no idea exactly how much lower. 5%, 10% … 50%? We just don't know.
I've been wondering if the under 25"s – those without permanent work or SA or loan living costs should get UI to supplement their casual, part-time and gig job incomes. Also a good trial of the idea in their case.
Here is a more detailed story on this question from The Guardian:
In other words, yes you can travel, but no there will be no planes, and get fucked.
Calm down! We are in NZ.
No way should we be paying people who are wealthy enough to live on their own. In any case this virus will be over quickly, like a bad dream.
Then onto the next crisis…
Universality stops the us vs them division ie we work & they bludge off our tax dollars paid. If every citizen is seen as an equal stakeholder/shareholder in society the envy towards rich & rich denigrating the poor lessens. Giving a UBI to rich reminds them they're part of the society too …plus with adjusted taxation at higher income levels & reform of taxation in general (ie bringing in CGT, FTT, Pollution Tax etc) & GST that's higher on luxury goods …high-tier items …they pay more into system than they receive in UBI. UBI is just a little return back to them to thank them for their spending, investment & citizenship.
i hope your right
A lump sum cash payment right now to low income and beneficiaries is essential.
UK govt also considering a UBI but preferring to use existing welfare systems.
https://www.birminghammail.co.uk/news/midlands-news/coronavirus-universal-basic-income-uk-17948185
I'm in two minds about UBI vs using existing welfare, but the biggest issue for NZ is that WINZ are not probably going to cope very well, logistically or culturally, with handing out non-taxed, non-abated cash payments via welfare.
I'm trying to remember how far Labour looked at a 'UBI' in their Future of Work project. i.e. have the numbers already been crunched.
For those concerned about rich people getting a weekly sum, they pay it back in tax.
There's an explanation here (haven't read this in a while, but it covers the basics)
https://thestandard.org.nz/universal-income-revisited/
Other key point is that whatever happens, welfare has to be bolted on. If people keep calling for the abolition of WINZ, it will muddy the waters.
The government could instruct IRD to send checks, after all they already do that and know how to.
Winz has no way of coping, because the government so far refuses to see and acknowledge the wave of unemployed people that is gonna hit them hard.
It will be bad once the kids aren't allowed to go to school anymore, day care closes and women will have to go home to look after the children. How long do you think before they have exhausted sick leave, holiday pay, etc, and how long before the small / medium sized busnesses that hire them will close shop.
OH, am i whining again?
"Winz has no way of coping, because the government so far refuses to see and acknowledge the wave of unemployed people that is gonna hit them hard."
I'd bet this weeks benefit that they know what is coming and are preparing for it (I had to deal with WINZ this week, they know that the system is about to be very stressed). What you see as ignorance I see as the govt rolling out different parts of the plan in a fast changing scenario. They will be watching what is happening internationally both with the spread of covid, and with impact on economics, and making plans in the NZ context. I expect more announcements over time.
I don't think they will get it right every time (eg they should have given a lump sum to benes and low income people so they could get supplies). I haven't looked at the business side. I'm sorry it's going to hit you hard, and I think it's good you keep raising issues, but I probably disagree with your basic assessment of the govt's competency.
according to the Spin Off, there are 375.000 self employed, sole traders, small businesses in NZ. So please keep your 'I am sorry' to yourself, because at this stage this borders on insult after injury.
there are 375.000 people who look at utter devastation and the government does not give a shit.
Useless does not even cut it.
Since Jan 22 there were cases of sick people in the US – who did nothing, China sealed people in apartment buildings, Singapore closed shop etc et c etc and you can feel free to disagree with me as much as you like, but they are either incompetend, or malicious. Because people like me have left posts on this side in regards to it, inclusive an article some weeks ago about Singapores Parliament/President all takeing pay cuts of a full month wage to show solidarity.
But keep in mind that 375.000 people and their staff and their families were thrown under the bus by St. Jacinda and her posse of empty but expensive suits, and that we will remember this come election day. And it wont matter if its a Labour "Candidate, a Green Candidate or a NZ first Candidate who will beg for money, time, and votes.
Funny thing about all of this is, that i will be one of the very few to potentially survive this economically.
and lastly Weka, these people will not isolate, they will go to work. Because they have to.
It seems to me that every financial crisis or pandemic in history has had the same outcome: the poorer and middle classes lose income, have to sell off at a time when few have the money to buy up, so the prices of what is being sold crash, and the rich élite are suddenly able to buy up lots of assets dead cheap.
Afterwards, the poor are still poor, but the rich are even richer. So the poor are encouraged to be enterprising and create wealth – only for the cycle to be repeated.
I think it was always so…
The govt has already boosted all benefits (except NS) and doubled the winter heating payment. It is around a $2.2 billion injection into the economy. Most if not all of it will be spent. So that is some help to both the recipients and to the wider economy.
The government knows that pretty soon they will be paying the UB to hundreds of thousands more people within a month. That is going to substantially push up govt spending, right at a time when tax payments are crashing.
In a comment a few days ago I said this is going to cost the government $40 billion, basically $20 billion extra spending and $20 billion to cover the drop in revenue. That will double the size of the NZ govt debt to around 40% of GDP. The current package is getting close.
Because NZ has a high level of private debt, the government borrowing can’t easily go to 100% of GDP as in some countries. I reckon up to about 60% before borrowing becomes problematic. That would another $40 billion. So a fair bit of manoeuvre room yet. But it is not limitless. So therefore the government won’t be sending $1,000 lump sum to every beneficiary. They are already sort of doing so by increasing the weekly payment ($25 x 50 weeks).
The next priority for government will be looking at employees in middle to larger businesses. Also also ramping up their own infrastructure and maintenance budgets on schools, hospitals, National Parks, etc. Needs to be done soon if it is going to work.
Yeah, they are moving through the easy ones on the pareto curve. Start with ones where there are existing channels for feeding out a stimulus, then move on to the ones that take longer or require channel making.
The infrastructure and maintenance (as you’ll be aware) takes time to get moving. You can announce it early but that isn’t useful for anything apart from PR. It is usually better with any of those to actually know what you’re going to be able to actually do in the near term. Otherwise it will wind up in projects that start employing mid-2021 at the earliest or meaningless make-work (thinks back to some of the employment schemes of Muldoon and shudders).
In the latter case, I’d prefer to just hand out money – it is more productive than some of the useless ‘training’ or feather bedding that I’ve seen. If you don’t waste peoples time with ideological posturing and punishment for being a beneficiary but give them resources, it is often surprising how they can use that time productively.
There are lots of small scale jobs within the state sector that could be done almost immediately. For instance a lot of state houses need a repaint. A lot of them are pretty scruffy.
And the point of repainting, when with global warming a complete retrofit is required for them to remain habitable?
But sure. Send out the "scruff brigades"… 🙄
If you don’t waste peoples time with ideological posturing and punishment for being a beneficiary but give them resources, it is often surprising how they can use that time productively.
Which was always one of my big three contentions in support of a UBI.
Air New Zealand has been bailed out three times, once under Clark, once under Key and now under Ardern. We seem to have mone yfor that. But i guess when you have taxpayer funded travel its important for you and your ilk to have a access to flights. Right?
You and all you retired Government critters could forgo your perks.
You and your rich mates could offer to pay taxes, after all you spend many good years avoiding them.
The Ministers and the Prime minister could like the government in Singapore take a pay cut for a month or two of wages, which would not hurt any of hte useless suits. After all we are all in this together, amirite?
The government could print money.
The goverment could enact emergency legislation to make sure that people that have to default on payments don't get evicted or have the debt collectors run after them (luckily these guys will work form home….lookit a growth sector)
The government could do many things, and is doing nothing, and you are sill of no use to anyone.
Anyone would think that if Air New Zealand was "let go" that the planes and everything else would all just vanish in a puff of whatever 🙂
Can't be having air travel propelled by fossil anyway. The bastards should have pursued the hydrogen route back in the late 80s when prototypes were already developed, instead of chasing short term profit.
UB payments don't begin to even approach a damned thing in terms of "meaningful". And neither does trotting out the same old liberal canards of trickle down and belt tightening.
The extra $25 and doubling of winter pay is the opposite of belt tightening. It is extra money. It was the right thing to do, but to say it is belt tightening is an unusual definition of that term.
The $25 is an insult. When does it kick in and what abatement is lumped along with it? The winter allowance doesn't kick in until May and frees up nothing at all in terms of disposable cash.
In total, the some tens of dollars per week (when they arrive) are just a very slight easing of the squeeze this country's succession of liberal governments have applied to the poor.
Not really a slight easing of squezze as this boost basically gets singles ub benefit back to what it was (real terms) before Ruthenasia Black Budget cut of $14 So now where only $14 dollars or so off in real terms back then. Of course more is needed as prices/rents have increased ahead of that but on track to lift people up. UBI of $250 per week logical next step.
As Hickey notes, the money does not need to be debt financed.
This is a load of hooie Wayne. You have tried to imply some kind of hard limits on possible New Zealand government spending and no such limits exist. This misdirection is very harmful for how people discuss and understand economic policy.
Its just like all the policies which have been discussed before the pandemic and largely held out as infeasible, but when the pandemic arrives suddenly they are on the table. The virus didn't improve the countries economic capacity, its just the ideological constraints no longer are worth quibbling over to most.
I'd have thought IRD was in the best position to disperse money – not WINZ. That, and being universal, it's not a case of payments in lieu of anything else (Welfare entitlements are separate to any such payment and continue). As you say, tax can be used as a retrospective means test measure.
Easy enough to pass emergency legislation so that those on entitlements don't get hit with stupid WINZ abatement rules. Surely.
Snap. That was always my expectation too, after all everyone is universally engaged with the tax system already, while most people are not with the welfare system.
but the biggest issue for NZ is that WINZ are not probably going to cope very well, logistically or culturally, with handing out non-taxed, non-abated cash payments via welfare.
Good point. I always liked the idea of it being treated as a form of 'negative tax'. The idea is that everyone has a single IRD linked bank account that their UBI is paid into by IRD not WINZ. After all everyone has an IRD number, but only a minority have dealings with WINZ.
In the bigger picture a UBI is inseperable from tax reform anyway and to my mind it makes sense to treat it as a tax function that IRD is responsible for.
You may argue that IRD doesn't have a much better culture than WINZ either, but of the choice of the two institutions I'd prefer IRD because it’s a better functional alignment.
Agree UBI is long overdue.
And negative tax through IRD, is the logical way to do it.
WINZ, like Hoskings, is so immersed in the right wing culture of bloody minded cruelty to those out of work, that it is probably beyound their cultural competence.
The neo-liberal & 'deserving poor' myth needs to knocked on head. UBI will mean a thinned down MSD as no longer need for huge bureaucracy of oversight, continual interviews/meetings, paperwork, applications, investigations, fraud cases etc etc. Many those staff other than min needed to administer UBI can be retasked to bring back Dept of Labour side of things (in modern parlance the bare bones 'Workbrokers' being a skeleton within WINZ compared to the fleshy obeseness of 'Caseworkers' having outsourced job finding/jobmatching to for-profit parasite employment agencies).
What is there to be in two minds about? Universal, Unconditional Citizen-Right Income is superior to Means tested "you have the right to food money …as long as you don't mind a little humiliation, investigation…" To paraphrase the Clash LOL.
I wrote a whole post on it recently.
https://thestandard.org.nz/ubi-what-is-it-good-for/
Basically, there are very large number of people who cannot work and will need more money than a UBI provides. Those people are disabled, young mums, people caring full time for family members. We need welfare bolted on to any UBI.
I agree WINZ could be streamlined, but we need to be very careful not to think of a UBI as a substitute for welfare. We still need a top up system. Many of the reasons are in that post.
Given all that, that there are no good working models, and the problem of Labour creating a replacement, we might be better off with reforming welfare (at least first).
on a side note…Gabbard..I mean who cares about what she says this week..she is after all quite 'flexible' and in her opinions and outrage..
Well there is this from Sept 2018 where Gabbard discussed a UBI with Joe Rogan. Only a 5min segment.
Yeah, but heres Tulsi losing her supporters as we speak. Just read the comments…
I support her supporters. What was she thinking.
And exactly what does this diversion have to do with a UBI?
Personally I always knew she didn't have a chance, but that is not really the point. If you want better politics you need better people.
As for endorsing Biden, it's now obviously too late for Sanders. The world is not a fairy tale that always has happy endings.
Maintaining a pool of underpaid and desperate workers motivated by an even more impoverished underclass of beneficiaries is a key component of our current economic system. Corporate investors must be relishing the opportunities for cheap labor in the near future. No current government will contemplate emancipating the soon to be unemployed pool of wage slaves with a UBI.
they certainly relish at the idea of worker loosing their houses becuase they can't service the mortgage (and that will be bad once one income is lost), or they can't service the payments to their businessess (quite a few assets to be bought a penny the tool) and the banks are wetting themselves at the amount of loans they are getting to hand out with a 1% discounts.
this coming shitshow will put the great depression to shame.
Vulture Capitalism, and please don't ask the government to fix it or regulate it, no you must blame capitalism for this.
as a country we allowed private debt to get out of hand
Couldn't agree more – except it is good to see recognition that when poor people are given extra cash (no matter how miserly the offerings) they actually spend it where it counts and ultimately prop up profiteers in another way – those who like to extract the blood of the workers and underclass know they need us more than we need them (like a parasite needs a host). Now there's a thought…
yes I can see small business and sole traders needing some extra help – in particular those who are compromised healthwise or in areas where other employment prospects are not available.
As to air nz – looks like the big guns are still drawing the big salaries – .
Would be good to see the part state owned power companies being told to cut the big salaries too – it may be a token gesture – although pushing the power prices down – would be very helpful to domestic consumers many of whom will be heating the work from home office on behalf of their employer this winter.
lprent
Something credible….
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10511832
Don't see much pain being inflicted on the top end of town yet. Stuff mentioned this morning that Air NZ pays about $1.2 billion a year in staff costs. Okay there will be some highly skilled pilots, engineers, IT etc in the mix – sort of expert technocrats that businesses actually need but 2008 people are paid over $150K according to the 2019 report. so around 17% of the staff are taking home ( very conservtively ) well over a quarter of the payroll. Time to cut some top end wages??
Well one assumes if 30% of staff are redundant then the ceo is 30% overpaid.
The CEO has already taken a voluntary $250k pay cut
Probably nearer 15% than 30%… How condescendingly generous!!
And the 2019 annual financial report showed 1 person in the highest salary band (presumably the CEO ) and this doesn't include any share options, bonuses yet to be paid etc. Don't forget the executives who aren't far behind.
Drumroll………. the band is $4.36-$4.37 million . so 5.75%.
At least he has to actually deal with a crisis- it won't be any better over at the telco's or the power companies who continue to gouge lower incomes. which has to be financed out of benefits and paid back by the general taxpayer.
Well chorus and some of the power co's have partial state ownership.
Resources
Payroll tax is a big part of what pays for social security in the US Bill, so the underhand shit here it to cut payroll tax to fund the 1K UBI.
So the long term goal is to starve social security of money.