8 November 2018
KiwiBuild had the potential to be a good policy. One that helped people in need. Most of us are quite capable of, and therefore should, be responsible for our own housing. But for a minority of kiwis in vulnerable positions, decent housing is unaffordable and hard to find. These are the people the government should be seeking to assist.
If an example is needed of how misplaced a policy initiative can be, the KiwiBuild discussion at my recent family dinner was it. My adult children, all university graduates and in good jobs, are eligible to enter the KiwiBuild ballot. Are they impoverished and unable to make good decisions for themselves? No. They’ve all been able to afford overseas trips and live relatively comfortable lives. None own a house but all are of the view that renting makes economic sense for them currently. They have choices and exercise these to fit their lifestyles. They are – though they wouldn’t appreciate the label – middle class and are not actually in need of help from the government.
This dinner table discussion took me back to 2006 when I was a back bench MP earning $118,000 a year. If I had been the sole earner in our family then, with 5 children I would have been eligible for a $20 Working for Families payment. I asked then Minister of Social Development and Employment David Benson-Pope if he really thought someone earning a Member of Parliament’s salary should be eligible for a welfare payment. Like this current government, that Labour government also thought middle-class welfare was OK.
It is my children and those of the same economic standing the Labour-led government is helping into KiwiBuild homes, not the vulnerable. The middle class benefit from Working for Families. The middle class benefit from interest free student loans, 20 hours free early childhood education, free children’s GP visits and more. Michael Joseph Savage did not set up the welfare state for the benefit of the middle class.
The Prime Minister gave clear insight into her government’s view of their role in people’s lives last weekend in an interview on Three’s The Nation. When questioned about KiwiBuild she said “So for us it’s about providing housing for every price point, every income level and every need”. The cynic in me thinks this approach is about buying votes from a block that probably has free market tendencies, just as Helen Clark bought the 2005 election with her interest free student loan policy. Sadly, self-interest too often trumps the greater good.
Middle class welfare is harmful to society for many reasons. Market economies thrive when the incentives are in the right place because they drive the right behaviours. People should take responsibility for themselves when they can and the government can step in to help those who can’t. This is the way a caring society works too – those who ‘have’ helping those who ‘have not’. Middle class welfare disenfranchises people in a sneaky, ugly way, leaving the vulnerable in ever more perilous situations. It builds unnecessary dependency. This may succeed in attracting votes for the next election but is harmful to a resilient society. Policies for all New Zealanders over recent times such as 20 hours free pre-school education and free GP visits for all under 13s should be targeted at those in need. Blanket policy initiatives providing for all, including the wealthy, merely acts to undermine the poor by denying them more assistance.
The churn caused by taxing people with one hand then giving back in cash and in-kind benefits is material and means precious taxpayer funding that should have gone to those in need is lost to the system. The solution is to let people keep more of what they earn. The fairest tax regimes involve property taxes combined with consumption taxes – not taxing your employment earnings.
In political lolly scramble terms Jacinda Ardern’s government believe it is ethical to hand out sweets laced with dependency to one and all. The vulnerable however are still the last to get the sweetie sugar rush but what they need is a solid square meal. Her focus should be on the hungry, not the peckish.
Our children are capable of making their own life decisions. The government should leave them alone. No bribes, special favours or dependency laced promises. When we all focus on the vulnerable our communities will be compassionate, strong and resilient. The job of the government is to make sure we have a growing economy- a rising tide that lifts all boats. Middle class welfare has no place in this picture.