Redistributing wealth a bold plan

MATHEW GROCOTT - DEPUTY CHIEF OF STAFF
Last updated 12:00 18/08/2014

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In the lead-up to its campaign launch event yesterday the Green Party was reported as being frustrated with a lack of media coverage.

The media had instead been focused on racist speeches, racist jokes, effigy burnings and expletive-laden videos.

As a party that likes to keep itself above such underhanded shenanigans, the Greens have been waiting in the wings.

Well, yesterday the party had its moment in the spotlight with a campaign launch that included a shake-up of the New Zealand tax system.

Under their plan, the Greens would hike the top tax rate to 40 per cent for those on an income over $140,000 and use the extra revenue to tackle child poverty.

The Family Tax Credit and the In-work Tax Credit would be scrapped and replaced with a Children's Credit, worth an extra $60 a week. It would be extended to those who currently miss out on the In-work credit, which is available only to parents who work more than 20 hours a week.

The Greens say this will benefit an extra 130,000 to 150,000 people, to the tune of $3000 a year.

Whether their plans see the light of day in a coalition with Labour remains to be seen. It's hard to see Labour backing a 40 per cent tax rate, even for only a few people. Universal payments for newborns are somewhere where Labour and the Greens agree, however.

The bulk of those set to be hit by the new tax bracket will be against the move, but then they're not likely to have voted Green anyway.

Indeed National's Steven Joyce hit out at the plan yesterday afternoon, saying the tax hike would penalise school principals, doctors, and many small business owners and stall economic recovery.

He said it was one of a list of new taxes the Left wanted to introduce, including a carbon tax, a capital gains tax and taxes on water use.

A traditional claim of the Right is that Labour and parties of the Left is are all about taxing and spending. The Right, however, supports lower taxes so people can determine what happens with their money.

What the Greens have said is that this approach and trickle-down economics are creating greater inequality in our society.

Their tax plan is a move to counter that by taking more from the 3 per cent with the most and redistributing it to those with the least.

It's a bold plan that has grabbed the headlines and no doubt it would help tackle child poverty.

Whether it ever becomes reality is another thing.

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- Manawatu Standard

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