Tuesday, September 23, 2008

Lucia New Zealanders are getting poorer!

This is my second post with the same name of "New Zealanders are getting poorer!" and I now stand vindicated by the assertions of my first post on this subject. I asserted a little while back that if the gap has closed between the rich and the poor in NZ, then this is not a good result as trumpeted by a bureaucratic arm of the NZ Government. No, instead this closing of the gaps most likely means that all New Zealanders are getting poorer.

I was correct. We are getting poorer. Especially in relation to the rest of the world. All this redistribution is just resulting in less incentives for those who can earn more to do so.

Most people in NZ are poor. I would define poverty as needing money from the government because your own income is insufficient for your needs. Given the number of "middle-class" welfare recipients, it seems there are very few people who don't rely on the government.

Our aim ought to be self-sufficiency, not redistributionism.

Related Links: Kiwis getting poorer ~ No Minister
New Zealanders are getting poorer! ~ NZ Conservative

11 comment(s):

MathewK said...

Went to get my tax returns done today, boy was it an exercise in frustration. Because i have more than one job and i save my money rather than spend it, i end up paying even more tax. It's so damn frustrating, knowing that some bludger somewhere is going to enjoy the fruits of my labour.

Keep taking from folks who work hard to earn more and more and eventually they'll stop.

nyokodo said...

The only way out of poverty is to create wealth. The only way to create wealth is to be an entrepreneur. The only way to enable and encourage entrepreneurship is to take away barriers of market entry and growth, i.e. regulation, tax etc. Free up labour markets by liberalising employment contracts while freeing the people by removing income tax and striping unions of their monopolies. There is much work to be done, all this and more!

Psycho Milt said...
This comment has been removed by the author.
Psycho Milt said...

I would define poverty as needing money from the government because your own income is insufficient for your needs. Given the number of "middle-class" welfare recipients, it seems there are very few people who don't rely on the government.

Given that Working For Families (your "middle class welfare,") is a targeted tax credit, by your logic John Key is planning to reduce all of us to poverty with his tax cuts.

Free up labour markets by liberalising employment contracts while freeing the people by removing income tax and striping unions of their monopolies.

Er - just like Germany and Japan did to get where they are today? And what monopolies exactly do you delude yourself that unions hold? Did you fall asleep in the 1970s and only just wake up, or what?

Lucia Maria said...

PM, "targeted" tax cuts are just a euphemism for welfare. If you don't take the money in the first place, then you don't need to give it back. WFF impoverishes people by taking too much money in the first place and then seeks to right that imbalance.

Subtle, I know, but I'm sure you can rise to the occasion.

nyokodo said...

And what monopolies exactly do you delude yourself that unions hold?
Monopolies on representing an industry. The same kind of "old boys club" rank corruption exists in union monopolies as it tends to in market monopolies. The people should have the freedom to choose which union will represent them, or start one if no existing one does. (FYI, I am in a union).

Anonymous said...

Good post. The problem with WFF is that you can get a pay-rise and actually end up with less money in the hand, as your WFF payments decrease. This removes the incentive to achieve.

Having said that, many families have now become reliant on WFF so it would not be appropriate now to cut the scheme. We need to fix this over time so we eventually end up with a lower, flatter tax system that encourages achievement, but doesn't harm families who have become reliant on WFF along the way.

I fully agree with not worrying about the gap between rich and poor. Rather, we need to be concerned about the actual living conditions of the poor. If you think about poverty in relative terms however rich the country gets there will still be some people considered poor (however high their standard of living), and however poor the country gets there will still only be a few people considered truly poor (however poor the standard of living of everyone else is).

Frankly, the richer the rich get the better for the poor. If a rich person can afford a yacht, they then provide employment for poorer people to build the yacht, maintain it, run it, operate the docks... A rich person's money doesn't disappear when it is spent, it goes to other people who are generally poorer. And that is a good thing.

Mr Dennis

ZenTiger said...

I think we need to define poor as being different from poverty. Real poverty is not having food on the table (actually, not even having the table).

Labour's policies are creating degrees of "poor" and it isn't good for the individuals concerned and it isn't good for the nation's spirit.

Middle class should not be defined by earning more than 60K. The top tax rate set at 60K speaks volumes on Labour's rhetoric that "rich pricks" is all just posturing and the politics of envy suggest anyone on 60K should consider themselves wealthy is an insult to those who would have reasonable aspirations to improve their lot in life and feel they deserve it, and feel they can raise a family without crawling to the government for assistance.

I believe WFF could and should be abolished. National have bought into Labour's crap that "too many people rely on it to end it". To end WFF, you just need to come up with something better.

nyokodo said...

the richer the rich get the better for the poor.
Yes wealth certainly isn't "zero-sum" as many mistakenly believe, however this principle is regrettably not always true in our current system. The reason for this is that our monetary and banking system cause an increasing shift of wealth to the special interests close to Government or the Banks. The incomes, savings and assets of those not in that cushy position go down in value and the poor suffer the most. An issue no political party in this country opposes or even acknowledges.

nyokodo said...

BTW the shift I refer to above is via monetary inflation.

a lower, flatter tax system that encourages achievement

That would be good as a short term mitigation. Much better is to abolish the income tax altogether, at the same time as bringing government down to do only it's legitimate functions leaving the people free to provide their own welfare and education etc. Then the freedom to invest would go through the stratosphere and wealth and the effectiveness of welfare would increase exponentially.

ZenTiger said...

Universal, your last comment is something we can agree upon!

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