Really good two minute explainer from the Greens on how the Wealth Tax, that would pay for a Guaranteed Minimum Income, would actually work.
The gist:
That’s straight forwards and sensible. There are some issues to be ironed out, but this is the only thing I am seeing from parties in parliament that attempts to resolve poverty in New Zealand rather than tinkering around the edges while holding the causes in place. The Greens have made addressing income inequality one of their top three priorities*.
There’s still this idea that New Zealand is full of millionaires off the back of the property boom, who are income poor and will be hard hit by the wealth tax. The Greens say their policy would affect 6% of New Zealanders. Here’s where they got the data from,
The model for the net wealth tax is based on a combination of data from Stats NZ’s Household Economic Survey and the Reserve Bank’s Household balance sheet. Stats NZ’s data allows for a breakdown of assets, liabilities,and net wealth by various demographic indicators, however it tends to under-report the total value of net wealth in Aotearoa. The Reserve Bank’s data is an aggregate, so does not allow a breakdown but gives a more accurate overall figure of net wealth.
Shaw pointed out earlier this week that the assets of the wealthiest New Zealanders have been increasing, whereas wage earners are worse off. I found this from Stats NZ,
The net worth of the richest 20 percent of New Zealand households has risen $394,000 since 2015, to reach a median of $1.75 million, Stats NZ said today.
Over the same period, from the year ended June 2015 to the June 2018 year, the net worth of the bottom 40 percent has not increased.
And this,
For most households, the amount of property debt for each dollar of property asset held remained stable or reduced over the three years to June 2018. However, for households in the lowest 20 percent of the net worth distribution, the debt per dollar of asset, specifically for the home they live in, increased from $1.10 of debt to $1.75.
“While the amount of debt a household holds is important, for wealth, it’s the size of the debt in relation to the size of the assets that determines a household’s net worth. Households with the lowest net worth now have more debt per dollar of asset in the house they live in than three years ago,” Mr Attewell said.
*For people wanting an environmental Green Party, the other two priorities are climate action and halting the biodiversity crisis, and these can be seen in a range of policies including Farming for the Future, Thriving Oceans, and the Clean Energy Plan.
As always, poverty is seen as a barrier to climate action, and the environmental care is integrated into economic as well as social policy. The full policy platform: Our Green Vision for Aotearoa.
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