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notices and features - Date published:
11:29 am, September 14th, 2011 - 64 comments
Categories: benefits, tax, wages -
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Because of benefit abatement rates, the current system makes it perfectly rational for people who rely on benefits not to supplement them with paid work. You wouldn’t attempt paid work if it left you worse off – why should you? With respect to unpaid work, New Zealand has one of the highest rates of unpaid work in the world – hardly indicative of a nation of shirkers.and
It is also important that there are paid jobs for people to do. We address this issue with the tax proposal. By leaving large gaps in the tax base, current policies have encouraged huge amounts of money to be invested in housing – but what paid work does this create? – the initial build, then cleaning, gardening, someone to fix the odd faulty tap. This excessive focus on housing has been at the expense of investment in real wealth creation.
Gareth and Susan nailed it with good old fashioned straight forward thinking. So to highlight what they’re talking about a bit more, here’s some info re National’s “incentives” so far:
Unemployment beneficiary
Scott is 25 and receives the Unemployment Benefit. He lives in a shared flat, pays $100 a week rent and receives $36 in Accommodation Supplement. Under Budget 2010 changes, he gets a $3.92 a week increase in his benefit and pays an extra $2.89 in GST. Overall, he is $1.03 a week, or $53.56 a year, better off.
Scott weekly income | Before | After |
Net Benefit |
$194.12
|
$198.04
|
Accommodation Supplement |
$36.00
|
$36.00
|
Disposable income |
$230.12
|
$234.04
|
Change in disposable income due to indexation |
$3.92
|
|
Extra GST |
$2.89
|
|
Change in net income |
+$1.03
|
|
Annual change in net income |
+$53.56
|
Doesn’t seem like much incentive to stay on the dole. But is there an incentive for Scott to start working? According to this Ministry of Social Development web page, the abatement rate is 70 cents in every dollar earned over $80 a week, for people on Unemployment Benefit. They also pay tax on that and the Accommodation Supplement is automatically deducted.
So let’s say Scott is working part time and earning $104.00 for 8 hours per week at minimum wage. Scott’s tax on secondary income is 12.54% meaning an additional $678.16 is deducted per year. He loses his Accommodation Supplement straight away – $1944 per year. That works out to be a reduction in his income of $50.43 per week. Then an additional reduction of $16.8 on the $24 he earns above the threshold gives Scott $36.77 in the hand per week. He is effectively working for $4.60 per hour.
Not much incentive then to start working eh! And without a CGT, there’s not going to be much incentive for people to invest in job creation either.
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A UBI is actually a better incentive for work than getting the UB cancelled. As basics are already covered by the UBI people could technically work for nothing (Unlikely to happen though). It does have another side effect – it would be unlikely that bad managers would be able to keep the employees which would be an incentive for our bad managers, of which we seem to be over endowed, to become good managers – or, at perhaps, to get fired.
A UBI actually gives us a “free” labour market which is, of course, the reason why National doesn’t like it. They want people forced to be dependent upon the capitalists so that the capitalists can exploit them.
I’ve had a look at the page you have referenced and other policy and think you’ve missed something – apart from the benefit rates increasing.
Accommodation Supplement doesn’t abate any more for those on benefit (it did in the 80’s when I was an advocate but this changed some years ago I believe).
The Accommodation Supplement stays until the benefit cut-out point is reached – in this case $368-00 per week.
http://www.workandincome.govt.nz/manuals-and-procedures/deskfile/main_benefits_cut-out_points/unemploment_benefit_cut-out_points.htm
I’ll let you re-do the maths though. Unfortunately you do overstate the position if not the principle.
I would argue that the better incentive would be to increase the Unemployment Benefit rate so the person didn’t have to struggle to pay the bills quite so much and could concentrate on finding work and be a bit more healthier and less depressed and be able to go to the doctor and so on. But then I’ve posted my disgust about Labour not putting the $20-00 per week back on benefits many times.
There are benefits to working other than financial as well. I think playing around the perimeters with abatement rates ignores the real issue is that rates in themselves have gradually become more miserly.
I like this line from the content of the original post. I was listening to The Font Lawn this morning. I reckon they could make a great song out of it.
Good post, though this line:
And without a CGT, there’s not going to be much incentive for people to invest in job creation either
is a total overstatement. A principled, broad-based CGT (which excludes Labour’s version, which Gareth Morgan also criticises) should help to remove ROI distortions (and more importantly bubbles) that can favour less productive capital. But it is plainly incorrect to say that without a CGT (noting that NZ already has one) there’s “not much incentive” to create jobs.
Many people in the US are actually calling for a reduction or even removal of CGT in order to promote job creation.
Job creation isn’t the issue. Our productivity is far beyond what we need to sustain a comfortable living standard for everyone with “work” only taking up a few hours per week. The problem is distribution and use of the communities resources which the capitalists are doing their best secure in their own hands forcing everyone else to work even harder – hence the desire of National to sell our assets.
QSF that sort of thinking is dumb considering you’ve been supporting a comprehensive CGT.Your attitude is closely aligned to National party policy your policy is undermining Govt is mining .They are inter changeable as National is Undermining.
Huh? Yes I do support (in principle) a comprehensive CGT. Nothing I said is contrary to that, I just point out that it is not a nearly-must-have policy for creating jobs.
prism, thats a bit like matthew hootons assertion that Aucklanders will never use the train system again because of a crowd at the football. are we being governed by simpletons?
anyway back to the tax how much do some of these people want and why do they think that they are so specail that they dont have to pay taxes like everyone else.
Hey dont talk to me man…I’m a musician.
so you believe it is fair to charge someone a secondary tax rate of 70 cents in the dollar. 70 c randl!
Remember that is taken as tax due in the week that the income is declared. No other group in NZ has this stipulation outside of those who choose to pay witholding tax, but even this can be deferred to an annual payment.
What this means is a person who for your arguments sake is a musician, has a good week and gets a gig.
The door take is sorted and the musician declares the income dutifully to WINZ. The first $100 is taxed according to normal income tax for those on a low income (sorry Jackal the $80 limit was changed in 2010 i think) Then the remaining money is taxed at the extorted rate of 70 cents in the dollar. This might be the only extra work this person secures all year but unlike every other citizen who pays tax off their Annual Income, beneficiaries are taxed on income earned that week.
EG the musician earned $900 the week of the gig, declared it and has to pay approximately $580 in tax.
Not every beneficiary who works part time does so in a supermarket or video store. I know it troubles some but the world is not just made up of office workers and baristas. there are aspects to the society we all share in and contribute to that need addressing. The tax system is by far the most important and the sooner the archaic values associated to secondary tax in this country are destroyed the more people will find real work and real opportunity
you do know that musicians are taxed on schedular payments at 20c in the dollar, right?
My comment was based on my own experiences when declaring occassional commissions/sales during a period i was on a sickness benefit. I used the musician doing a gig as an example only because of the quip made by randal.
If there are schedular payments(?), i suspect you refer to a contactual payment from record sales or some such. There is an arrangement with authors, stock holders and others who receive a semi-regular contractual or dividend payment. For reasons i never had adequately explained to me, these are completely different scenarios to the rare occassional income that some beneficiaries currently experience and this was the circumstance i was commenting on.
For decades, Winz used to take all extra earnings above abatement as an average drawn from the period of that year’s income. In 2006/7 they altered this to the system described above. If they have altered that again i am not aware of it and would appreciate any information pertaining the current practise. I know several people receiving benefits and they have not made me aware of any changes. I apologise if my information is incorrect, but i believe it to be accurate.
The secondary tax figure though, is definitely accurate and above the abatement of $100, all extra income is taxed at 70c in the dollar. That is a patently ridiculous figure in this economic climate. It has been for at least the last decade. If a 70% secondary tax that predominantly punishes low wage earners was ever a sensible idea, that time has passed on.
I would not call unskilled people a commodity, a more accurate description would be to call them a burden on society.
Invariably they are lazy, they have been aware from day one that they need skills to survive yet they choose to take no notice and rely on their fellow tax payer to give them a free ride.
If they are dumb enough (and they are) to ignore a lifetime of advice and a lifetime of warnings then tough luck, all we can really hope for is that they do not breed.
Actually, it’s entirely possible that they didn’t know that and the education wasn’t available to them due to the psychopathic way our society is run.
What a heinous creature that bigbruv is.
Full of contempt for his compatriots, his lack of solidarity means he won’t get far when the numbers turn against him. Spending all day making ignorant remarks on the interwebs won’t get you any friends mate.
Tool.
Full of contempt for bludgers and parasites….Yes.
Full of contempt for liberals who insist that the cure is to keep tossing more of my money at them…Yes.
Full of contempt for the left who really do not care about the plight of the ‘poor’ just as long as they keep voting for them.
No bruv, what you’re full of is pure bullshit.
Here, have a bit of education.
Brilliant link. While your watching it BB have a think about how a having no purpose in life (and trying to create one in severely restricted opportunities) might create the social problems you’re so scathing about.
Awesome, I just wish the references were in the description as it makes so much sense from a psychology standpoint when looking at reactions to different levels of reward.
You really are a complete and utter douchebag.
In your delusional little dream, people like me who suffer from long term depression or others who have mental and/or physical disabilities that make life difficult would be out on the streets or dead from preventable illness or suicide. Bringing a rather heavy mental toll on their families and friends, but hey, we’re utterly worthless right? And if you say otherwise, you’re an even bigger lying, hypocritical piece of shit.
Furthermore, it’s not you’re fucking money, it’s the price you pay to belong to society and maintain the social, economic and legal infrastructure that makes society and your ability to earn an income possible. And helps to keep major illness outbreaks and other negative outcomes that existed before welfare systems came into place from getting the way and creating major scale social instabilities.
As for the left not giving a shit about the poor, only a delusional idiot such as yourself could say that, as it’s the left that historically aims to make sure that the educational opportunities are there and that the social welfare networks work to help you when the shit hits fan. Where as the right these days actively erodes these in the ironic belief that only “hard work” matters despite the tendency towards them having received quite a bit of positive benefits from these systems either directly, or indirectly via the benefits their employees have received.
Of course, one feels these simple things may be a littl’ too complex for you, and that like a Stalinist confronted by reality, you’ll probably start frothing or retreat to the sewer to whine about those damn lefties. Instead of providing any form of intelligent, critical response, because lets face it, you’ve shown time and time again that you couldn’t even argue your way out of a thin paper bag, let alone manage year 11 science or english exams, with their relative low hanging fruit in terms of critical thinking…
NickS
Those claiming they suffer from long term depression are almost always telling lies. What they suffer from is chronic laziness and a lack of determination to succeed in life. I would wager that most of you claim to have long term depression because you cannot be bothered getting off your arse. You find it easier to take hand outs from people like me than you do to take care of yourself.
Try taking a huge dose of HTFU.
I wonder how many ‘long term depression’ sufferers they have in countries with no social welfare systems?
http://scholar.google.co.nz/scholar?q=long+term+depression&hl=en&as_sdt=0&as_vis=1&oi=scholart
The science says otherwise.
Please try again.
Also, a massive fuck you. I’ve had more suicidal episodes than I can count, including a minor one this fucking Monday, insomnia that’s turned me into a zombie for two years, partial anhedonia that made life utterly bland, constant brainfog that made thinking a chore instead a joy, and low stamina even though I bike everywhere that remains despite the happy pills which limits my ability to work fulltime. On top of making my dermatillomania the worst it’s almost even been.
And even though I’ve been crudely modding my neurochemistry with citalopram successfully, like many others I’m stuck with varying motivation levels and thinking patterns + crap stamina in time frames that are measured in years and months till it goes. That’s lead to me having to drop out of tertiary education again.
All with the possibility I’m stuck with this utterly frustrating disability for life.
So show some fucking scientific evidence for your bullshit, or piss off back to the sewer where your bullshit is welcome.
Having a hard time dealing with one who gives as good as he gets are you NickS?
Do not expect me to have sympathy for you when you are the one who kicked off the abuse, funnily enough your “depression” seems to abate for just long enough for you to bang out one of the normal tedious left wing rants.
I repeat, try taking a big dose of HTFU and get on with things, from what you say in your last comment it seems that it might be the only thing you have not tried.
Awww, how adorable, instead of providing any evidence to back up your claims you instead try and dodge with tone trolling and moral high ground tactics.
And anger is ever the great motivator for cutting through depression when dealing with the wilfully moronic such as yourself.
So again, science please to back up your claim the long term (aka chronic depression) isn’t real, or shut the fuck up.
Wow Nick, you seem to have made a remarkable recovery, back to telling blatant lies just like a true left winger.
Now Moron, tell me where I said that “chronic depression” is not real?
What I said Nick is that almost always those claiming to suffer from it are telling lies, from what I have read here tonight you may well be one of them, for somebody who claims to be so debilitated by chronic depression you show a remarkable ability to stick at things when it is something you want to do.
Those claiming they suffer from long term depression are almost always telling lies.
Close-a-fucking-nough.
Yeah, “looking for work” in a manner that ensures you do not get a job.
No doubt you are well coached and well used to playing the system, as you have intimated here tonight you intend to be on the bludge for the rest of your life.
Right, got to go Nick, unlike some I do not have all day and all night to spend in a circle jerk with my fellow socialists, some of us have to go out and earn a living so people like you get your benefit every week.
BTW…you can thank me anytime you like, because of people like me you get to sit at home all day.
http://www.sjs.co.nz/en/Jobs/Search-Results/?regionId=e6121ff2-84ed-43d9-8899-4d7c0e208c38&resultsFrom=0&searchQuery=
http://www.trademe.co.nz/Browse/CategoryAttributeSearchResults.aspx?keyval=2026888&from=fav&sort_order=
+what ever WINZ throws my way
Bookmarked, refreshed and analysed for what I can do on the basis of time availability, hours on offer, stamina and skills; brush hand- non trade qual, furniture moving, biology research, minor comp fixes, general labouring – part time only. No licence or motorbike, fine with biking anywhere, not brilliant work history per depression, but do have one recent reference possible from UC’s head librarian.
I’d take the picking/packing one, but I need to hit IRD tomorrow for income confirmation so I don’t end up with a depressive episode from having no money, like the last time I tried to survive solely off SJS until I caved in and made myself a somewhat happier person. So presently looking for some weekend, one off stuff.
Also, this one was fun, it took more than two weeks and both lower windows had rotted out down the bottom requiring a far bit of bog. Ended up working 1-10pm+ due to sleep issues. Came out almost okay, but depression issues fucked it up and somethings were left undone with one semi-annoyed client and one unhappy Nick…
Furthermore, I like the courses I had to drop out, and was motivated to do them, but depression symptoms lead to a situation where I wasn’t capable of meeting attendance levels and so onto an utterly fun episode of minor suicidal ideation.
Which I wouldn’t recommend even to a complete douchebag such as yourself, though I model that if you developed depression, on the basis of your behaviours, you’d run a significant risk of becoming another sorry statistic.
Not me Nick, I don’t hide behind depression and I will never ask others for a hand out because I cannot be bothered getting off my backside or because I am feeling a bit down.
It does seem that you have the ‘victim’ mentality well and truly sorted though, it might make things a lot easier if you just stopped pretending that you ever intend to go back to work.
“Victim mentality”
lolololololololol
My oh how he dodges, painting reality as excuses and delusion.
And as I’ve already mentioned, I’m looking for work you illiterate twit.
That should be “chronic depression” /d’oh:
http://scholar.google.co.nz/scholar?hl=en&as_sdt=0,5&as_vis=1&q=chronic+depression
And you know what? I’ve been looking for work, but unfortunately it seems mentioning you can only work fulltime doesn’t go down so well with the temping agencies, nor does a work history that’s been clusterfucked by depression symptoms, especially when there’s plenty of unemployed, mentally healthy people about.
Not that’s ever stopped me trying.
As for “HTFU”, ironically that’s cited as one of the major cultural factors in NZ’s high male youth suicide rate, and from prior experience doesn’t work, it just results in me punching someone who may not deserve it.
Congratulations in surviving depression. Good on you.
I can tell you. It does get better!
Remember. “What doesn’t kill you makes you stronger”. And a wiser more compassionate human being.
Very few they kill themselves you knob!
BB. You are getting extremely tedious.
What do you actually do?
Something real useful like shuffling paper!
Judging by your comments, you are too thick skinned, and thick, to hold down a real job.
Further evidence that RWNJ’s are generally less intelligent.
bigbruv you’re full of it all right.
Your blood must be turning to vinegar enough to sour the milk of human kindness.
So you are happy to keep hanging over tax payer dollars to those who have no desire to work?
I am more than happy to help those in genuine need or those who really want to better themselves, what I am dead against is giving ever increasing amounts to those who contribute nothing to our society and those who think it is my job to work so they can sit at home all day doing drugs and drinking booze.
Simply way to fix that problem though, term limits for benefits and remove the vote from all beneficiaries apart from pensioners.
If you rally want compassion from the public then stop wasting so much of their money.
Hey big bruv, society can carry the 0.5% of true slackers in this country with a couple of hundred dollar a week subsidy.
Now, let’s move on and sort out a decent minimum wage and poor standard of management in our economy so that people have good incentives and opportunities to work.
BTW the biggest bludgers in NZ are rich asset owners who have professionally structured their affairs to hide their income.
Viper
It is a damn site more than 0.5%, remember all the bludgers Labour shifted onto the sickness and invalids benefit as well. And why the hell should I pay them anything at all?
More than happy to help out the GENUINE unemployed (those with skills and those who have worked hard) but I just don’t care about the parasites or long term DPB slappers.
As for the biggest bludgers, clearly the biggest of the lot are the unions and the Labour party, BTW, has UNITE paid it’s tax yet?
It’s a damn sight more the number of dairy farmers that are paying little or no tax and having a comfortable lifestyle, but that is fair isn’t it, because they get to employ people to do the dirty jobs.
Ian
See, unlike you left wing morons we on the right can and do openly disagree with our own parties.
I happen to agree with Labour when they say they want to go after the farmers, those bastards do not pay their fair share of tax.
If you make it fair (low, broad and one flat rate) then everybody has a stake and everybody is contributing.
What we must stop doing is rewarding laziness and those who refuse to work.
More desire for dictatorship coming from the RWNJs.
Anyone who has no say in the formation of the laws of the country are no longer bound by those laws.
Think about it.
I totally agree with stopping support to bludgers and those who take the benefits from society without paying for them.
Starting with these ones.
http://kjt-kt.blogspot.com/2011/03/kia-ora-yeah-we-should-be-doing.html
“Politicians who accept an income from the people of NZ, while they sell them, and the country out, to their sponsors from private corporates”.
Whats this “my money” you refer to?
“If they are dumb enough …. to ignore a lifetime of advice and a lifetime of warnings then tough luck, ”
wow, pause to reflect big bruv – when things go south , you may be eating those words
Little Pesk I obviously get out an about more than you.Most unemployed people i know want to work and get ahead .
And BB I would call you a waste of Oxygen. And I would hope that you don’t breed and pollute the gene pool.
Sigh!
Another one who cannot construct a reasoned debate.
For a reasoned Big Bro debate. See above. LOL
I think there’s far more benefit to be had in overhauling the WfF package.
There’s something fundamentally wrong when we grant WfFTC immediately the minute that certain immigrants step foot in New Zealand.
I’d like to see WfF only be distributed to those who have been working for at least the previous 12 months. In this way, people who are on the benefit aren’t incentivised to bring more children into the poverty cycle as they currently are. It’s one of those long term thought processes where only people who have been working get WfF and then aren’t so likely to continue to bring children into a poverty cycle.
Not to mention the outright rorting that takes place where proof of no income for the previous three years (often gained by entering NZ on a Seasonal Work Permit then leaving the country) and having your name down as a father on the birth certificate, viola, maximum entitlement gained by the mother.
Hey Jasper, love how you focus on rorts by the poor and by poor new immigrants, when the biggest money rorts in this country are perpetrated by the rich.
There’s something fundamentally wrong when we grant New Zealand citizenship to rich people who won’t even be living here.
“There’s something fundamentally wrong when we grant WfFTC immediately the minute that certain immigrants step foot in New Zealand”
except, we don’t.
“In addition one of these two residency requirements must be met:
• you’re a New Zealand resident and have been in New Zealand continuously for at least 12 months at any time
• the child or children you’re claiming for are both resident and present in New Zealand”.
-From the ir691 working for families tax sheet on http://www.ird.govt.nz
Not correct
An Australian citizen is entitled to receive WfF immediately they arrive in New Zealand and start working – but only some portions of it.
Remember, WfF is made of about 10 different things including, but not limited to;
– Family Tax Credit
– Parental Tax Credit
– Child Tax Credit
– In Work Tax Credit
– Minimum Income Tax Credit
@Viper
The rich seeking their residency are usually doing it for tax breaks. Personally we shouldn’t even be granting residency status to any person unless they’re born here – so going back to pre 2006 era, except this time making it so that having a child in NZ does not automatically qualify non resident parents for residency.
What a decent and compassionate human being you are bruv. No doubt you are happy and content in your existence as well….
Very happy thanks, well most of the time that is.
I always get a bit grumpy when I see how much of my money the government takes off me and wastes on bludgers and parasites.
I could almost agree with our high rates of taxation if so much of what they government steals from me was not wasted, were all of it put to good use then I might be a little happier about being robbed every two weeks.
I could say how much I hate my taxes being spent on things I don’t like, possibly the arts, some conservation work, sending the SAS to Afghanistan; but to use your terminology, I just ‘Man Up’ – I take it on the chin and move on. It frustrates the hell out of me some of the things taxes are spent on, but your dream world of ‘bludgers all over the place’ – is just that.
Tell you what, you go to Kaingaroa Village, Minginui, Opotiki, Turangi, etc. You see what the work opportunities are, you see the standard (or should that be sub-standard) of the housing, you see the resources that the people have there, and then you tell me they are making a ‘lifestyle choice’.
Frankly you could not walk in those peoples shoes for a week. Some of us are luckier than others; you need to realise that SOCIETY has an obligation to assist others in need; without that belief you may as well become a cannibal.
As I have said before, I really can’t wait till you need the assistance of a.n.other – your time will come!
Ian
It is so much easier for you brain dead socialists to pigeon hole those of us on the right, in your little world everybody on the right comes from a wealthy family and had lived a life of privilege.
Well Ian, that is not me, no life of privilege here, just one of long hard work and many hours spent grafting for what I have (and it will be far less than you imagine it to be)
What I find laughable is your pathetic attempt to make me feel sorry for those who live in dumps like Kaingaroa Village, Minginui, Opotiki, Turangi, you tell me there are no work opportunities there and expect me to be saddened by that as well.
Those people can do what I have done three times in my life Ian and that is up sticks and move, they do not have to stay there, they can do what plenty of other people have done and get off their huge backsides and go where the work is.
Those people are not in need Ian, they choose to stay where they are, if they want to stay there they can, just don’t expect me to pay for their lifestyle choice.
Bullshit; your party is allegedly creating 170K new jobs – where are those?
Is there housing to support all those places if they move elsewhere? No.
Are there actually jobs for everyone? No.
In case you hadn’t noticed there are no new jobs; what there is though is a steady stream of departees heading for Aussie or further afield; what we have is similar to the UK – employers offering a pittance and having to recruit from overseas to do menial jobs in the wop wops for a couple of months.
It would be really astute for someone who has a family to move from one of those places I mentioned to say Marlborough for 3 months so they can pick grapes for $12 and hour – consider how much it would cost to move, consider the lack of support mechanisms (e.g family members/friends who assist with after school care).
As I have said before, it must be great to be the all-conquering, independet superman that is Big Bruv – I seriously am resisting cursing you to die a slow painful death, but in reality, something like that MAY (and I say may because you are beyond the point of no return) allow you to develop empathy and compassion instead of vile greed and excessive self worth.
Simplistic Redneck Abuse by an naive self centered Narcissist. Big Bully
Having problems dealing with the truth are you mik e?
Great the references were in the description makes so much sense from a psychology standpoint when looking at reactions to different levels of reward.
The self-loathing is strong in this one.
A secret beneficiary I sense.
you can argue this one until the next uptick and then somehow magically when the economy booms again all this talk will be shelved as the nation rushes into another orgy of gew gaws and stuff and overseas travel and interst rates go up and mortgage rates go down and it all gets crazy and then back to this again. its called the business cycle. Unfortunately there is no such thing as an aticylcical measure as the bills always have to be payed sooner or later.
so grin and bear it.
in the meantime soak the rich just because they need their overweening pride dented every now and again.
up against the wall motherfucker!
Or, as a society of rational adults we accept the failings of generations past and restructure the economies of the planet so shelter, food, community, become the principal motivators.