Friday, July 23, 2004

New Improved Effective Tax calculator

There is now a new improved "effective tax rate calculator" see sidebar link to activate.  This performs all calculations for Income, Benefit (DPB or unemployment), Family Support (including Child Tax Credit), Accommodation Supplement and Student Loan repayment.  All figures are calculated for the fiscal years 2005, 2006, 2007 and 2008 and are compared withwhat they woud be with a zero income.  The final (take-home) income is calculated as Income+Benefit-Tax+Family Support+Accommodation Supplement-Student Loan Repayment, the net value of work is calculated as the difference between Income+Benefit-Tax+Family Support+Accommodation Supplement using the actual Income or setting Income to zero.  The effective tax rate is calculated by scaling the value of work against actual income.

I've also created a link to a pdf document which uses this sort of analysis to highlight the inequities in NZ's present system and to suggest improvements.  I also e-mailed this document to all the parties in parliament at the time (Maori Party weren't and I couldn't find an EMail address and have received replies from Labour and NZ First.

Thursday, July 15, 2004

Are you paying too much.

As you may have already gathered I'm interested in the issues of income tax versus benefits. The new link to the right points to a calculator which combines information on an individual family's tax liabilities and entitlements to various benefits. The output displays income tax liability, "main benefit" (DPB, Unemployment, etc), and family assistance entitlements for the current year and for the next three years according to the latest budget. These figures are then compared with what they would be if you had no earnings to calulate the net value (to you) of your earnings and your "effective tax rate".
Feedback welcomed.

Tuesday, July 13, 2004


The latest ONCB poll has already drawn posts from Just Left, David Farrar. The figures shown here are compared to the 2002 general election (in parentheses)

NZ First5%(10)

The poll certainly leaves the next election wide open but we need to consider three separate things that are going on.
(1) Midterm shrinkage of minor parties. The smaller parties have consistently polled poorly in midterm but increased their support in the election campaign when they get more exposure. The combined vote for parties other than Labour or National was 38% (33% for the parties in parliament at present) at the general election compared to 18% in the latest poll. They may well get most of this back at the next election.
(2) An overall left-right swing. The combined Labour-Green-Progressive-Alliance-Maori
vote has gone down from 51% at the general election to 47%. The combined National-Act vote has gone up from 28% to 46%. This corresponds to about a 10% swing.
(3) National has drawn voters from ACT, NZ First and United. Although it's difficult to differentiate this from the combined effects of 1 and 2.
If the two major "blocs" come up about even but support for the minor parties (in particular NZF and UF) returns to about 2002 levels then the ability of the major parties to compromise will become critical.

We live in interesting times.

Monday, July 12, 2004

Bowling for Columbine and Welfare Reform

I watched "Bowling for Columbine" last night with memories of National's proposed welfare policies still fresh in my mind. This lent a particular piquancy to the story of the Michigan six-year-old who took a gun to school and killed another child. His mother had been thrown off welfare and forced to work two minimum-wage jobs in another city as part of Michigan state's welfare reforms.
Now I'm not so naive as to believe everything Mike Moore alleges about the Bush administration, the GOP or neoconservatives in general, but the basic facts outlined above are a matter of record. The statements that Lockheed Martin are being paid to administer the welfare reforms and that at least one of the mother's employers was receiving a tax break for participating are also (to the best of my knowledge)uncontested.
It is also hard to deny that the Bush administration and much of the American right is tainted by more than mere greed -
(1) There may be innocent explanations to some of the Cheney/Halliburton stories nut surely there is at least a stronger prime facia case for a special prosecutor than Whitewater.
(2) There seems little doubt that George Bush was guilty of at least insider trading in the early 1990's but escaped the consequences because of his father's position. The amounts involved were much larger than in Whitewater.
The readiness of the American ruling classes to chase a fast buck, of the mainstream American media to lionise the rich and hold the powerful beyond suspicion and of the American public to equate wealth and power with fitness to be given more wealth and power makes it all too easy to see how reforms like the privatisation of health, prisons, education and welfare become policy (cherchez l'argent mes amis) over there. It would be a tragedy if "cultural colonisation" led to countries like New Zealand, where we demand (and, I believe with few exceptions, get) higher ethical standards from our politicians, adopting the same flawed policies.
In New Zealand a solo mother with a six year old child would get an annual net income of $14,716 (excluding accommodation allowance). She can earn up to $80 a week without any loss of benefit for a total annual income of $18,001. If, however she get's a full-time job earning (say) $20,000 per year (about $12 per hour, many full-time jobs pay less) her final take home pay will be $21,662. Even if the state (or someone else) pays the full cost of childcare, transport, etc the extra $3660 is not an adequate reward for working full time. If we want to encourage solo parents with young children to go out to work then letting them hang on to a bigger share of their earnings is likely to be far more effective than coercive measures.

Friday, July 09, 2004

More on the parole debate

Don Brash's Orewa II speech has generated a public debate which has shed more heat than light om the issues. If we really believe that it's always a good thing to make sentences tougher, then we could save a lot of time by setting a minimum penalty of life without parole for all crimes. If we take a more balanced view then a more thoughtful analysis is in order.

If (at present) a prisoner is sentenced to 12 years imprisonment then
(1) their normal civil rights will be suspended/restricted for that period;
(2) they will spend at least 4 years (1/3) in prison.

The actual severity of the sentence will also depend on
(3) the type of prison the prisoner is sent to
(4) the actual time served before parole
(5) the restrictiveness or intrusiveness of the parole conditions.

which are all outside the control of the sentencing judge. At one level, Don Brash's entire arguent can be seen as one of semantics. Do we call the above sentence 12 years or "4 years followed by a supervision period of 8 years"? On the other hand we might legitimately ask -
(1) Is the balance of power between the sentencing judge and the parole board (and hence between punishment and rehabilitation) about right?
(2) Is a fixed ratio of minimum time before parole to maximum sentence appropriate regardless of whether the latter is 20 years or 6 months ?
(3) Are parole boards too close to the Corrections Department (eg Are prisoner's released earlier than appropriate because prisons are overcrowded? Is the evidence of prison staff to parole hearings used as a lever to help control prisoners?).

I would welcome an informed debate on these questions but I don't see too many signs of it yet/

Three problems, three policies, three questions

Could some of the Brashophiles, National insiders or other right-wing cheerleaders out there please enlighten me on the following -

(1) Would you wager a fish dinner (well, make that a chocolate fish) that Orewa III will NOT be about immigration (or refugees)?

(2) Can you remember any particularly pithy quotes leading National politicians may have had to say about Winston Peter's "Three problems, three policies" campaign?