Benefit raise, tax cuts for poorest and hikes for wealthy in new Greens policy
Benefit sanctions will be lifted, the poorest taxed less and the richest more, while a Green Party in Government would also seek to raise all benefits by 20 per cent.
In a bold new policy launch, Greens co-leader Metiria Turei has also revealed she lied to her case workers when she was a solo mum, studying a law degree, while collecting the Domestic Purposes Benefit.
Speaking to a fervent core base of party faithful, Turei told the conference of her parents' struggle to find work and her own battle as a mum on the DPB, lying to the state about how many people were living in her house.
Her experiences have shaped the party's welfare policy, dubbed "mending the safety net", which will likely prove controversial and draw an ideological line in the sand over the presence of the welfare state.
The $1.4 billion policy would provide a suite of major changes that would effectively dismantle the Government's welfare reforms introduced in 2012, that placed obligations for beneficiaries to prove they were looking for work, not taking drugs, and showing up for appointments and courses.
The Greens policy would lift nearly all penalties and obligations for beneficiaries, raise the amount they were receiving and keep the tap running for as long as they needed.
"Our plan will lift people out of poverty, and guarantee a basic liveable income for anyone working or on a benefit," Turei said.
"We believe that poverty should never be used as a weapon, especially when children are involved.
"Our plan to mend the safety net will ensure that all families in New Zealand can afford to put food on the table, keep a roof over their head and pay their power bill."
The Greens would change the Working for Families "in-work tax credit" to a Children's Payment that goes to all families who currently qualified for it. The current qualification thresholds would not be changed.
The poorest families could receive up to $72 a week extra as a result, on top of changes to tax thresholds and the minimum wage.
Those changes would include reducing the bottom tax rate from 10.5 per cent to 9 per cent for anyone earning less than $14,000, while anyone earning more than $150,000 per year will have their tax rate hiked from 33 per cent to 40 per cent - expected to generate about $605m in revenue.
It assumed the proposed tax changes already outline by the Government in the May Budget would be reversed in a Labour-led Government.
In her speech, Turei talked about raising her daughter Piu, while on the DPB in the early 90s.
"What I have never told you before is the lie I had to tell to keep my financial life under control," she told the party.
"Because despite all the help I was getting, I could not afford to live, study and keep my baby well without keeping a secret from [Work and Income NZ]."
She and her daughter were forced to move around a lot; five different flats with various people.
"In three of those flats I had extra flatmates, who paid rent, but I didn't tell Winz. I didn't dare."
So Turei said she was announcing "the most fundamental changes to our welfare system in 30 years".
She expected the policy to lift 179,000 children out of poverty.
Former Social Development Minister Paula Bennett introduced the welfare reforms of 2012. Her story as a former beneficiary who lifted herself out of her situation is also widely known.
"As with the vast majority of people on benefits I never deliberately lied to Work and Income.
"I understand the difficulty some people encounter when they have a change of circumstances, that's why I always encouraged Work and Income to be compassionate when people may have worked an extra hour or two, or had a change of living situation."
Turei's announcement was met with rapturous applause from party faithful. However critics have been quick to seize, claiming on her admission saying she should be setting an example.
Finance Minister and National campaign director Steven Joyce said the policy was a "big backwards step".
"Particularly with the removal of obligations. The work that we've done over the last few years has reduced the numbers of people on a benefit and put more people into work.
"We're down to levels of the 80s and 90s, in terms of people who are dependent on a benefit. And that hasn't all been about the obligations it's been about the economy as well, but the obligations are an important part of that."
Her admission of lying to keep hold of more of the benefit was "disappointing".
"And a lot of people will be disappointed by that. People that are working pay their taxes, but also people that are receiving a benefit.
"We don't always agree with the rules that operate, but most people operate within those rules and those that do will be disappointed to see she's not doing that," Joyce said.
NZ First leader Winston Peters said Turei was speaking as though "she had just discovered poverty".
"Well, big deal, my family was born in a tent, and the first few family members were and know what it's like to be flooded out and evacuated to the cowshed."
Peters said if the government wasn't running a "neo-liberal experiment" with a "lousy low wage economy" then higher benefits would already be there now.
But the policy has garnered praise from the Council of Trade Unions, which said the party had set out a comprehensive strategy to improve the lives of lowest paid working people.
"There is no getting around the fact that the only way to reduce poverty is to ensure those in the most hardship have much more liveable incomes - to support themselves and their family," secretary Sam Huggard said.
THE PREDICTED OUTCOMES
- A sole parent on a benefit, with two school-aged children and no paid employment: $179.62 better off each week.
- A sole parent receiving the Student Allowance, with two children, and part time work on just above minimum wage: $176.15 more each week.
- A single person on jobseeker support: $42.20 more each week.
- A two-parent family, with one working parent on the median income, with three children: $104.52 more each week.
- Two parents, both on jobseeker support, with three children: $207.46 more per week.
- A two-parent family, both earning the median income of $48,000 with three children: $130.19 more each week.
- Two parents, one in paid work earning $70,000 a year, two children: $87.85 more a year.
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