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Right turns a blind eye to middle NZ

Written By: - Date published: 9:30 am, February 16th, 2010 - 62 comments
Categories: class war, gst, poverty - Tags: , ,

Having decided to do a post about politics for once, National Party pollster David Farrar attacked The Standard and No Right Turn over our pieces on the distribution of income and how low and middle income people won’t be getting promised compensation for GST increases from National:

“The Standard have made the same mistake also. You see in New Zealand, we have these things called families and households. What No Right Turn sees as a mass of poor people who will be unaffected by tax cuts, are spouses, older children, many students and even parents of those who do earn more than $23,000 a year, or even $48,000 a year.

If a family has one parent earning $60,000 a year, and one on $15,000 part-time, they both benefit from a change to the 33% tax rate. Because they are a family!!”

Hear that ladies? (implicitly, you’re the parent on the low income in this Farrar’s scenario) You don’t need a tax cut to compensate for the increased GST you’re paying with your income because your husband got a tax cut! As long as you have a wealthy husand, you’re no worse off. Whoo!

Key made similar comments on Q+A but it doesn’t stack up. Key promised that no-one would be worse off because of the hike in GST to pay for income tax cuts. That means all taxpayers need to get an offsetting income tax cut, whether they have a sugar daddy or not.

Key and Farrar want us to believe there isn’t a huge lower and middle class of people scraping by who are set to be hammered by a GST increase in a time of rising unemployment and stangnating wages. The poor, they say, aren’t really poor because they’re living with well-off people. Well, I don’t know about you, but my experience tells me that high-income people tend to live together and poor people tend to live together.

Anyway, the best bit is when Farrar concludes:

“So ignore the stupid stats and graphs about individual incomes. They are relevant to academic theory, rather than the real world. Household Family income is what affects most people”

I’ve been waiting for him to say that:

(graph is blocky because the source data is by decile. assumed uniform distribution of households within deciles and gradual trail-off in top decile)

50% of households have total incomes of less than $64,000. There are 365,000 households of two or more people getting by on a total income of less than $52,000. All these people, these one to two million people, will be worse off when National raises GST but doesn’t cut the bottom tax rate.

Whether you look at individual incomes or household incomes, the story is the same. The Right is blind to Middle New Zealand and the incomes we live on. Their only concern is tax cuts for the rich few, and we will be forced to pick up the bill.

62 comments on “Right turns a blind eye to middle NZ ”

  1. prism 1

    ” Well, I don’t know about you, but my experience tells me that high-income people tend to live together and poor people tend to live together.”

    Yes they are different strata of society. They meet in different bars at the opposite ends of town. In fact they tend not to meet much at all. Access to money or not, makes a large disconnect, can happen in families – the poor relation etc.

    The fact that to get a comfortable household income both parents have to work while they are raising children, means a lot less time spent in parenting and a lot more time in front of tv or videogames as child minder and pacifier.

    Choice and opportunity to stay home when needed, and be in the work force when one wishes would be a fine thing. Not to be forced to get ‘out’ there and then have ignorant commentators gloss over the problems of balancing the two roles parenting and paid work, by just comparing household income levels.
    They actually need to be divided into deciles with households listed by both primary income earner (male or female) with joint household earnings being a comparative listing or something.

  2. Lee Paterson 2

    The amazing thing is that Key sold himself as centrist so well when lobbying for our votes. I have a lot of (possibly misguided) young friends who honestly thought that they would be better off tax-wise under National. They expected cuts in income tax.

    Well, here is the leopard showing it’s spots. conservative government will always favour business and upper level wage earners, as it truly believes this is the best way to a strong economy. And it will always sacrifice the underclass population to do it.

    I’m a socialist, so I am personally prepared to pay MORE tax… and I’m “fortunate” enough that the current taxation plans are likely to benefit me directly.

    The downside of a more financially-polarised income base? – a bigger gap between the haves, and the have-nots…
    Result? – more crime, more discontent with government systems from the lower classes, and more actions of diminished responsibility from those ignored masses.

    The “country” may well end up on aggregate to be more wealthy… but the society will be weaker.

  3. randal 3

    right on the nail martyg. national mp’s in the house have stopped using the pie chart metaphor and now use the cake metaphor. they ate all the pies and now they want all the cake.

  4. Fisiani 4

    “Key promised that no-one would be worse off because of the hike in GST to pay for income tax cuts.”

    No he did not…… Stop inventing a myth.

    If you are in the top 10% of earners and avoiding tax you will be worse off.
    If you have taken advantage of the broken the system using Trust vehicles to write off losses and claim depreciation you will be worse off (like so many tax bludgers on the Labour side of the House).

    [lprent: Where is the link? I’m pretty sure that he didn’t add the qualifiers. I suspect that you did. ]

    • Mac1 4.1

      Fisiani, here is a link in which Key states, “The vast bulk will be better off”, lower-income New Zealanders would be “compensated” and the killer for you “on purely GST/personal tax cuts no-one is worse off on the numbers I’ve seen most recently.” The last ‘quote’ is my paraphrase in which Key covers himself by saying that it’s not been decided yet.

      The link is Visible text

      The dialogue is about half way through. You won’t mind listening to a few minutes of John Key.

      Now, please can you supply the links I have asked for? Fair’s fair.

      • Mac1 4.1.1

        Not sure the link made it. Here it is again.

        [audio src="http://podcast.radionz.co.nz/fop/fop-20100212-1830-Focus_On_Politics_for_Friday_12_February_2010-048.mp3" /]

    • Fisiani 4.2

      Where is the link to say that he said NO ONE will be worse off. There simply isn’t one. Just another straw man myth.

      • felix 4.2.1

        As has already been pointed out to you,

        8 minutes 36 seconds into the mp3 Mac1 linked to:

        John Key: “I can’t say everyone’s better off but on a purely GST/personal tax cut sort of offset, on the numbers that I’ve most recently seen, no-one’s worse off and most people are better off.”


      • felix 4.2.2

        ….aaaaaand he just repeated it in the house. Just now.

        • zugzug

          lol @ Fisiani… you just got pwned…

          [lprent: That is a BAD word around here and one I associate with someone trying to start a flamewar. I’d suggest (strongly) that you desist from saying it rather urgently before I remove the source of infection. The idea is to have a debate, and not claim victories. All sides are usually wrong to some degree or another and you can’t win bugger all – apart from getting an annoyed BOFH focusing on you. ]

  5. r0b 5

    Farrar: “You see in New Zealand, we have these things called families and households.”

    Pompous git. Thanks for handing him his ass Marty.

  6. dave 6

    There are 365,000 households of two or more people getting by on a total income of less than $52,000. All these people, these one to two million people, will be worse off when National raises GST but doesn’t cut the bottom tax rate.

    No not all these people, because you have not taken into account that National is going to raise benefits, super and student allowances and WFF to compensate. If they do compensate they are not going to be worse off directly due to an increase in GST. What I`d like to know is how childless working low income couples will not be worse off. So far Key has not told us. Even income splitting for tax purposes will not do the trick for couples who earn similar amounts, say $35k each..

  7. TightyRighty 7

    really? there are less than 1000 households on more than $149,000? I know at least 100 people on more than that, in wellington, so how can that be true?

    • gitmo 7.1

      Yep seems a bit odd to me as well when there’d be almost no salaried medical specialist, or barrister and I sure there’s other professions that could be named where the indivdual salary is well over that level.

      • Pascal's bookie 7.1.1

        less than 1000 households on more than $149,000?

        Who’s claiming that?

        • TightyRighty

          um, the graph that this whole article appears to be based upon. or did you just decide to jump on in and try and discredit my observation. looks like another discredited hockey stick graph to me now.

          • Bright Red

            Tighty can’t read a simple graph. Oh dear.

            • felix

              Not graphs – Tighty can’t read simple numbers.

              Hey Tighty, we usually read a 3 digit number to be hundreds, tens, ones – not hundreds, ones, tens.

            • TightyRighty

              my mistake. mis read it indeed. saw $149 where it reads $194. tax cuts help everyone, and consumption tax encourages saving and investment. the basic tenents of that remain the same. only socialists and idiots (socialists) think otherwise

              • Draco T Bastard

                Those basic tenets that you have so much faith in have been disproved for decades.

                Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves–and were never intended to. Harvard professor Greg Mankiw, chairman of Bush’s Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues.

                The Laffer curve is, quite simply, a joke.

                What you’ve said is just more of a the usual delusional rightward spin that we’ve come to expect from you. The only people getting a tax cut are people with incomes over $200k – everyone else will have their taxes increased to pay for them.

    • Pat 7.2

      It can’t be true. In my small advisory business I could compile a list of over 100 clients with household incomes over $149K.

    • kaplan 7.3

      Which figures are you looking at?
      The graph shows around 8000 households at $154,000 and many more above that.
      The source data shows a total of 161,000 at $150,000 +
      Comprehend graphs and stats much???

    • b 7.4

      I don’t know a single household on more than 80 000 where i live. Maybe you move in wealthy circles tightyrighty lol.

  8. indiana 8

    Just out of interest, if a group of 3 people flat together and for argument’s sake all are on $40k per annum, are they considered to be one of the 10,000 or so households earning $120k per annum?

    • Gosman 8.1

      I would think so. Why do you ask?

      I presume these people are flatting together to get some benefit from the arrangement such as lower costs versus if they flatted on their own.

      • indiana 8.1.1

        So would they be worse off or better off with a rise in GST and lower taxes? I guess I have the view that the people in an household are codependent on each other. In a flatting situation all their incomes are not pooled together and then discretionary spending money is handed out

        • felix

          Outgoings are pooled though so flatmates are dependent on each other in as far as each is helping each other to lower their cost of living.

  9. Olwyn 9

    Thanks Marty G for bringing facts to bear on things: much public dialogue suggests that anyone who counts for anything is well off, and if you claim otherwise we will relegate you to the underclass. The supermarket shelves late at night tell a different story, being for the most part depleted of budget bread, pasta and cans of tomatoes. It is so good to see the actual figures.

    • TightyRighty 9.1

      but they are not actual figures. there has been some manipulation in them if you look at it closely? or can you only count pasta and cans of tomatoes?

      • Bright Red 9.1.1

        “less than 1000 households on more than $149,000?”

        that’s not what the graph says you retard.

        Bother to check the source: the top 10% of households (that’s 160,000 households) have incomes over $150,000. Now, we can’t know how that is distributed but it’s fair to assume it’s a gradual decline, which is what marty explains he did in the post.

        The post clear has nearly 10,000 households at $150,000 and fewer each income block above that.

        • TightyRighty

          fuck off BR. we know your bludging socialist agenda. i did mis read the graph. it certainly looks like $149 at the far right of the x axis, but on closer inspection i can see i was wrong. i can still think of over 50 individuals on over $200k, and i’m sure there are plenty more i don’t know about. still fairly certain the data is wrong, even taking into account my misinterpretation.

          of course these wealthy people are all scabs, how dare they take risks, educate themselves and become wealthy while other layabouts aren’t rich. goddam i hate those rich pricks, but it’s not envy, it’s because it’s against my beliefs for some people to have more than others, and me. even if those others won’t help themselves. ah socialism, never worked, never will.

          • felix

            It doesn’t really matter what any of the stats say though does it?

            You hang out with rich people so everyone must be rich and that’s all there is to it.

            And with no way to defend your absurd position in the face of all available evidence (yep all, you haven’t provided any) you call people s0cialists instead.

            • TightyRighty

              i don’t necessarily hang out with rich people. but i do know some. what evidence? the bull shit trotted out here as reasons the electorate rejected your views? hate to say it, but i’m not alone in thinking that you’ve got it all wrong, and i’m also not alone thinking we are heading in the right direction.

              • Marty G

                mate, there’s a corner over there if you want to have a cry about it.

                Take a book about learning to read graphs over there with you.

          • Marty G

            Jesus Tighty. You wouldn’t pass the national standard would you? You can’t even read a bloody graph. It clearly shows 8,000 households are $150,000 and many thousands above. As BR notes, I assuemd a gradual rate of decline because the upper limite for the upper decile isn’t given.

            Your rant at BR is priceless but maybe you wouldn’t be so upset if you hadn’t made such a complete cowpat of yourself in the first place.

            With your maths skills, you would fit right in with Bill English.

            “it certainly looks like $149 at the far right of the x axis”

            no it doesn’t, it says $194,000. And that’s not the upper limit, obviously. The graph just stops at $200,000 because the numbers by that stage are so small and there’s no upper limit

            • TightyRighty

              i admitted i made a mistake earlier you unctuous twat. of course lets pillory those who make mistakes, like john key. or how about taito phillip field, ruth dyson etc etc? the worst thing about the left, they never see when they make mistakes, and then wonder why everyone calls them unctuous twats and corrput.

              • Marty G

                It’s just funny you know. I come on and there’s you making a half dozen highly sure of yourself comments alleging I’ve doctored the figures and it turns out you just can’t read a graph. Can’t blame a guy for enjoying himself.

                And watch the abusive terms to authors.

  10. prosaic 10

    I haven’t had time to read all the comments here but being glib by callingthe husbands of low-income women who choose to stay at home with their pre-school kids rather than earn a full-time salary “sugar daddies” is not the way to establish this particular point against Farrar, Key and the like. Your argument would have been strong without that particular comment. Maybe there are more of these “ladies” with “sugar Daddies” amongst your readership than you imagine. Don’t insult them.

  11. b 11

    Jk did say he will raise benefits & wff so if he compensates adequate amount many households will be ok. But low income people without children and students who don’t qualify for student allowance who support themselves wth part time work are screwed.

    • blinded by the right 11.1

      so not much changes then. They’ll be used to the feeling.

    • TightyRighty 11.2

      which is why WFF is discriminatory as i have argued before. that money should be used to provide tax cuts to low earners, rather than reaping it then handing it back (minus the cut that bureaucracy takes off course)

      • b 11.2.1

        I don’t agree – before wff far more children lived in poverty – it should stay. But key shouldnt pretend everyone will be compensated when its not true.

  12. Descendant Of Smith 12

    Of course it’s discriminatory. It’s meant to be. Ummm if you don’t have kids you don’t get it.

    Discriminatory is a red herring.

    What you are really saying is that help shouldn’t be provided to people with kids cause those without kids can’t get it.

    Which then leads to you shouldn’t have kids without being able to afford it.

    I’ve said it before and I’ll say it again if you don’t have kids and replenish the population you’re a selfish self serving snot. I don’t see why my kids should work for you, serve you in the shops, wipe your bum when you get old. You’ve chosen not to contribute to the population and begrudge any support that those who have get. You portray having children as a selfish act when the reverse is true.

    In the real world most people have children when they are young, before they are economically established. Given the real reduction in wages in NZ through the 80’s they need support then and I for one am happy for them to have it.

  13. prism 13

    Don’t think DoS is being sarcastic. He’s being passionate about the importance of having children to individuals and the nation. He is presenting the hard facts that parents, particularly young ones face.

    There seems to be a regular anti WFF line that comes through, partly on the basis that it doesn’t target only the very poor. Those who have studied social policy dynamics know that society is more accepting of welfare being available to those who most need it, if there is assistance available to the better off when there are stresses on their purse, and providing children’s needs is indeed costly.

    Also there is the administrative point. It is not as expensive to administer a universal scheme with perhaps income steps, than if people have to apply and be screened with interviews, paperwork etc to see if they are eligible.

    Personally I think it is nauseating to read some of the resentful comments about parents and children and resenting assistance to their parents in any way. It is like hating life, like being so sophisticated that such people have forgotten what life and being a human involves.

    • Quoth the Raven 13.1

      Do you really think the world’s population of near 7 billion needs everyone to contribute?

      Is it really your opinion that people who don’t have children are selfish? Do you think gay couples who don’t have children are just ‘selfish snots’? You should know your gracious host on this site is childfree.

      Personally I think it is nauseating to read vitriolic comments propounding heteronormative and conservative family-centric values about the importance of being a breeder.

      I myself plan to remain childfree like the selfish libertine I am.

  14. “Do you really think the world’s population of near 7 billion needs everyone to contribute?”

    you might find this interesting…or not

    “Too many of whom, and too much of what?”
    What the new population hysteria tells us about the global economic and environmental crisis, and its causes.

    • Quoth the Raven 14.1

      No, I don’t find that confused little piece interesting. My comment wasn’t on overpopulation it was on the perceived necessity for reproduction in Smith’s comment and the worldview it presents.

      As to that piece I don’t support any coercive measures to stem population growth and I support completely open borders. In fact I don’t support the stupid notion of borders or nation-states in the first place.

      If they can find a way of doing capitalism in which “we’ really does mean “all of us’ and “equality’ means just that, we will welcome it with open arms: they will have achieved socialism.

      They have it’s called the free market. You might find that interesting 🙂

      • pollywog 14.1.1

        Wigga please… ah ain’t readin all that shit 🙂

        I’s all reality and no theory and what i know is aint nuthin free bout the market. You gots to pay if you wants to play. It’s like, Polynesians aren’t socialist, capitalist, left or right. We got our own systems and ways of dealing with shit…ya feel me ? and it carries over from generation to generation! It’s that whole ‘take the boy outta the jungle but you can’t take the jungle outta the boy’ steez.

        So y’all can turn a blind eye to whats goin on in the street and in the hood but all them jobless younguns out there grindin and hustlin on the real aint nuthin to be fucked with and sooner or later they’s gonna rise up and there wont be enough jails to hold em. Sheeeit, we cain’t all be playin sports and rap singin. Sure a playa needs sum book learnin but that shit costs and we is some broke ass n*ggas.

        Here, let me break it down for ya. Idle hand make the devil’s work and all that handiwork ain’t invisible if you know whats to look for. Jesus aint gonna save us…..nahm sayin ?

        Apologies for the vernacular i’m just catching up on ‘The Wire’ but the sentiment stands

  15. prism 15

    So do nothing, let it all happen, let humanity be swept away by the power of the free market focussed on its goals of piling up material things which can include bodies of people and animals and their homes when there are extreme breakdowns in society.

    • Quoth the Raven 15.1

      prism – The free market doesn’t have goals. People have goals. We are the market you me and the market is only an aspect of society not society itself.

      The market makes a perfect totalizing enemy: it is impersonal, has no particular location and legitimates itself through a myriad of democratic practices of buying and selling. . . . The problem is that . . . the market is a democratic institution aggregating the decisions of whomever participates in it. When all is said and done, complaints about the market are nothing but complaints about the people themselves.

      Paul Piccone

      If you want to look at consumerism and mass production you should examine the state’s role in their development. Try this for starters – Mass-Production industry as a Statist construct

  16. Descendant Of Smith 16

    Quoth The Raven – keep my comments in context. I am responding to ongoing comments that assistance to families with children is unfair on those who don’t have children and the other conclusions that lead from this about only having children when and if you can afford them.

    It would be great if employers paid everyone enough – or the cost of goods were low enough that people could afford to raise a family without state assistance but sadly this is not the case.

    If the gay couple ( who could have children if they so wished – their are ways and means ) were being as critical of help being provided to these families on the basis of I don’t have kids I can’t get it then indeed I would consider them selfish snots.

    You raised the issue of the current world’s population when the context is in relation to NZ’s aging population and the children in this country. These children are our future citizens / workers / employees / employers / artists / singers and so on. Of course their are always those who rise above poverty and abuse and hardship to thrive / survive but many do not. Trying to endure they are at least well fed and provided for and educated and feel part of everyday society – the world they live in – at last lifts the prospect of them becoming good citizens later on.

    The alternative is eventually throwing them in jail.

    In the absence of a clear policy to have immigration as a means of looking after our aged population then clearly replenishing our population is the other viable option. I’m excluding such aspects as euthanasia / exporting them ( you know like Japan does with old cars ) / accepting a lower standard of living and so on. I also happen to favour looking after our own children first.

    The language used reflects quite clearly how I feel about the language used against people with families and people on benefit. Too often these labels go unchallenged e.g. bludger so throwing some labels back now and then I don’t see as a problem.

    Lastly in dealing with reality people do have children, they do have them young and it takes a society to raise them not just the parents. We either value them or we don’t. They have little choice in the matter.

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