Alliance Policies For Children, Economy & Taxation
18 July 2002
Children: The First Call On Government Policy And Allocation Of Resources.
The Alliance’s Policies For Children, The Economy And Taxation
Alliance Leader Laila Harré today released the Alliance’s Children’s Policy at the same time as she released her party’s Tax and Economic Policies, deliberately linking the three policies together to underline that the Alliance would make sure children were the “first call on government policy and allocation of resources.”
Laila Harré said that one of the key elements of the Alliance’s Children’s Policy was a commitment to eliminate child poverty by 2010.
“This will only happen if family incomes are increased and the inequalities that exist in New Zealand are closed. The Alliance is proposing to do this through our redistributive tax policy and our commitment to full employment.
“It is vital that the Government actively works towards full employment and higher wages and these goals are at the heart of our economic policy.
“But until you reach that point you cannot tell the 3 out of 10 children who are living in families whose income is below the poverty line that they will just have to wait to have 3 square meals a day.
“That’s why the Alliance is also proposing an overall tax system that would see a greater share of New Zealand’s collective wealth being invested in the health, education and wellbeing of our children.
“New Zealand needs to develop a highly productive, skilled workforce for the future. This won’t happen if we continue to allow 3 children out of every 10 grow up without the resources they need.
“Eliminating child poverty is not just socially just – it makes economic sense,” said Ms Harré. “We will all reap the benefits of well educated, well fed and healthy children and young people. The Alliance is offering New Zealanders a programme to attain that goal – only the Alliance is showing how inequality can be tackled.”
Laila Harré said the Alliance was putting up a budget that would fund a completely free public health system, prioritise public investment in education and provide a universal payment to all families with children.
“We will raise 1% more for heath. This will mean the top 14% of income earners contributing more. Under the Alliance tax policy no-one earning $50 000 or below would pay more tax. Those under $40 000 would receive tax cuts. Someone earning $60 000 per year would pay $700 extra each year, someone earning $100 000 would pay an extra $3000 per year. All additional income tax will be tied directly to increasing health funding and all New Zealanders will have the same right to access a fully funded public health service.
“And don’t forget that these high income earners would also benefit from the Alliance’s policies of free doctors visits, free education, universal child benefit and the elimination of GST on food.
“The Alliance stands out in stark contrast to the other parties which still believe in the trickle down theory in which tax cuts for the wealthy are supposed to mean a better life for all.
“The trickle down theory didn't work all through the 80s and 90s. I fail to see how it’s going to work now. Just because you don't call it Rogernomics anymore doesn't mean it will work any better.
"Labour and National are telling us that social justice and economic equality will have to wait until the economy grows – which means no significant social investment.
"The Alliance is alone in saying that economic development will not happen without social investment. Those who believe in a redistributive tax policy, combined with social investment and universality, have no choice but to give the Alliance their party vote."
Policy summaries for Children, The Economy and Taxation follow.
The Alliance promised to introduce Paid Parental Leave and to put a plan in place to reduce youth suicide, and we delivered. As part of the government, we listened to the advice of children, young people and experts in our communities saying that issues facing our children and young people are linked. As Minister of Youth Affairs, Laila Harre developed a workable plan to meet the needs of young people: Youth Development Strategy Aotearoa (January 2002), and helped develop the Agenda for Children (June 2002), a plan to meet the needs of children in New Zealand. Children and young people talked about reducing violence as a top priority. Te Rito: The Family Violence Prevention Strategy (February 2002) has the potential to do just that.
But plans are only useful if implemented: The Alliance is committed to allocating resources to implement these plans to prioritise our children and young people. A third of our children live in poverty: The Alliance is committed to eliminating child poverty. In the next term of government, it is time to put resources behind the rhetoric: ‘children are our future’. Children are the future of the nation’s economic and social development.
The Alliance is committed to acting on the United Nations Convention on the Rights of the Child, ratified by the government in 1993. The Alliance will prioritise implementing the recommendations of the United Nations Committee on the Rights of the Child (1997). The Alliance endorses the work of the Association of Children and Young People of Aoteoroa www.acya.org.nz
The four Alliance principles on children
and young people are:
1. That children and young people in New Zealand have first call on the development of government policy and the allocation of resources.
2. That all children and young people in New Zealand have the right to maximise their potential towards attaining economic, social, intellectual, cultural and emotional competency.
3. That all children and young people in New Zealand have the right to live in a nurturing environment free from violence, abuse and discrimination.
4. That parents and caregivers in New Zealand have the right to be fully supported in their vital caregiving role.
principles have first call on related Alliance policies.
Health including mental health
Science, Research and Technology
That children and young people in New Zealand have first call on the development of government policy and the allocation of resources.
The best interests of children and young people in New Zealand will be a priority of all actions undertaken or advocated by the Alliance.
priority of the Alliance will be to advocate for the best
interests of young children under the age of seven. This is
Early childhood is the most critical period in determining the future health, education and welfare of all New Zealanders.
Too many of our youngest children live in poverty, poor housing, and deprived neighbourhoods.
Young children who experience chronic poverty are most likely to suffer most in the long-term.
The Alliance will prioritise reducing the
numbers of poor children in New Zealand. The Alliance will
A workable plan to eliminate child poverty by 2010
Immediate increased funding of Child Benefit Packages, including introducing a universal Child Benefit at the rate of $15 per child per week and increasing family support annually by the rate of inflation.
will advocate for workable government structures to ensure
that children become the centre of policy making and the
allocation of resources. This includes:
Child Impact Reporting on all legislation before parliament
Increased independence of the Commissioner for Children
Adequate data collection on children and young people, so that the nation can effectively facilitate the social and economic development of the country.
The Alliance will facilitate
children and young people in New Zealand to participate in
Young people will be encouraged to stand for public office, take leadership roles and take an active part in community affairs, to both enhance their own capabilities and to provide positive role models for young children.
Children and young people will be consulted on issues of relevance to them.
Investing in our young
children is one of the most effective ways to:
Reduce our crime rate in the long-term.
Reduce rates of physical and mental illness in the long-term.
Save money later on in areas such as health, unemployment and criminal justice.
That all children and young people in New Zealand have the right to maximise their potential towards attaining economic, social, intellectual, cultural and emotional competency.
The Alliance will increase
funding of facilities required for:
The establishment and maintenance of physical and mental well-being of children and young people,
The prevention and treatment of illness,
The rehabilitation of health.
The Alliance will increase resources for services to promote positive outcomes for all children and young people, which will be coordinated and integrated in accordance with existing plans for children and young people.
The Alliance will continue to advocate for early childhood, primary, secondary and tertiary education to be fully government funded and therefore genuinely free to all.
The Alliance will introduce free health care for all New Zealanders, with the first priority being children andyoung people.
The Alliance will honour the promise to reform special education so children with special needs (including refugees) to receive accessible and appropriate educational, health and social support services.
Quality early childhood services will be the first priority as early missed opportunities are harder to make up later in life. We will begin with 15 hours per week free childcare for all 3 and 4 year olds.
The Alliance is committed to the development of Kohanga Reo and Kura Kaupapa Maori. Every child will have the opportunity to learn the Maori language, knowledge and culture and learn through Maori language and culture.
The Alliance will fund
primary and secondary school-based services for adolescents,
to provide a range of free health education, preventive
care, support and medical services.
The Alliance is committed to ensuring that young people have access to appropriate local adolescent sexual health services.
The Alliance will increase resources for community agencies offering holistic, psycho-social approaches to recovery from trauma and mental ill- health. This includes, but is not limited to, iwi, urban Maori and Pasifika services.
The Alliance will establish therapeutic residential centres in each region to care for children and young people with serious mental health difficulties and those recovering from severe trauma.
The Alliance will continue to advocate for quality implementation of the Youth Suicide Strategy, introduced by Laila Harre.
That all children and young people in New Zealand have the right to live in a nurturing environment free from violence, abuse and discrimination.
The Alliance is committed to New Zealand becoming a safe society, and opposes all forms of violence. Violence can be physical, sexual and emotional. Violence against children is prevalent and urgent steps must be taken to monitor and reduce it. Alliance policies will show an active commitment to a non-violent future for all. Achieving a non-violent future will require intervention to change the beliefs, attitudes, and values in all areas of society.
The Alliance is committed to implementing the
recommendations of the United Nations Committee on the
Rights of the Child (1997). These include:
Section 59 of the Crimes Act (1961), makes physical punishment of children lawful and justifies it’s use. The section should be repealed and the repeal supported by well-resourced public education about non-violent parenting.
Providing adequate funding to ensure that child victims of abuse have access to quality services that can help them recover.
will advocate for quality implementation of the Ministerial
Inquiry into Child Youth and Family Services (Judge Brown,
2002). This includes:
Increased funding to The Children Young Persons and their Families Service, which is still not adequately funded to cope with the large numbers of cases (26,599 in 1999/2000) being referred to them under the Children, Young Persons and their Families Act (1989).
Supporting quality foster carers, so that children are safe from being abused again and are helped to recover from the effects of abuse.
The Alliance will advocate for
increased funding to implement and evaluate Te Rito - The
Family Violence Prevention Strategy (February, 2002). This
Community initiatives to prevent violence against children
Quality community programmes to help children and their families to recover from the effects of abuse and violence.
Evaluation of initiatives and programmes (including school-based non-violence programmes) to learn ‘what works’ and ‘what needs to be done’.
Alliance will work towards eliminating the underlying causes
of violence, such as increasing disparities between rich and
poor (see other policies) and inappropriate attitudes to
violence. The Alliance will advocate for:
A reduction in the amount of media violence.
Quality television programming for children and young people.
Changes to the portrayal of children and young people in the media.
Quality media debate on children’s issues
That parents and caregivers of children and young people in New Zealand have the right to be fully supported in their vital caregiving role.
Parents and caregivers have the primary role and responsibility in early childhood education and heath. This important role must be supported within the community. The Alliance believes that quality support is vital for parents, caregivers and families / whanau. The Alliance supports the choices of parents and caregivers of young children to stay at home, and work part-time or full-time.
The Alliance will develop
and cost a workable strategy to strengthen existing
universal and targeted community based, outcome-focused
holistic services and initiatives for children and their
families. This will be based on the principles of Sure
Start, initiated by the Treasury in Britain
www.surestart.gov.uk It will include coordinating and
Midwifery, medical and community support services which offer women quality choices, free of charge, for pregnancy, birth and post-natal care (in hospital and at home).
Plunket, Tipu Ora, iwi-based, urban-Maori, and other community agencies offering health services, information, support and specialised referrals for young children and families.
Early childhood programmes, which play an important part in the development of children in New Zealand. The Alliance goal is that quality early childhood services be accessible to every child and family through partnerships with parents, caregivers, families and the wider community.
Specialised services for refugee children and families in the main cities in New Zealand where refugees live.
The Alliance has already achieved twelve weeks paid parental leave. It will advocate to extend this to fourteen weeks and introduce a separate entitlement for fathers/partners. Employers will be encouraged to make more extensive periods of unpaid caregiver leave available to staff.
Employed parents are often in a difficult position when their children or other family members are sick. Employers will be required to provide a minimum of 10 days paid domestic leave per annum which can be used to care for sick children. Employers will also be encouraged to establish work-based crèches and establish teams in organisations to cover for workers who are caring for sick children.
The Alliance will also
The implementation of the Youth Development Strategy Aoteoroa
The development of quality pre-school, after-school and school holiday programmes.
Current economic policies focus narrowly on the interests of shareholders without recognising the rights of the other stakeholders in society. Recent monetary policy in New Zealand has been a major contributing factor to New Zealand’s woeful economic performance (one of the worst in the OECD) over the last 15 years. Unnecessary unemployment results from monetary policy that sees prolonged periods with the exchange rate raised to the point where exporters and those competing against imports cannot make profits. On top of this, wild swings in the exchange rate lead to additional risk and reduced investment for both exporters and those who may be contemplating setting up businesses to compete against imported goods. High interest rates also encourage the short-sighted misuse of resources for short-term profit. The Alliance believes that a more active and balanced approach to macroeconomic policy will make a substantial contribution to achieving these goals:
Full employment: The Alliance will use fiscal and monetary policy to increase overall demand, and hence the number of jobs in the economy. The Alliance’s trade and exchange rate policy is also designed to generate work at decent rates of pay by encouraging people to buy New Zealand made goods.
Fiscal policy: The role of fiscal policy should be to manage the overall level of demand in the economy. The Alliance believes that ensuring that demand in the economy remains high will help achieve full employment with decent well paid jobs. The Alliance proposes running operating balances which on average are neutral over the business cycle.
Monetary policy: The Reserve Bank Act will be changed to ensure that the Reserve Bank takes the aim of full employment into account when it sets monetary policy.
Exchange rate policy: The Alliance proposes to manage the exchange rate so that New Zealand exporters remain price competitive with an exchange rate that is less volatile. It will be achieved by a combination of policies, including lower real interest rates and short-term capital controls.
Competition and Regulation: The Commerce Commission will be given wider investigative powers It will be encouraged to take a proactive role in ensuring that unfair competition is stamped out.
Innovation Strategy: In addition to the Alliance’s specific regional development programme a national innovation strategy is proposed to create an environment which facilitates innovation and the development of new technologies. For example, in Research & Development, the Alliance will develop a strategic approach to R&D in consultation with industry groups. An Alliance government would increase venture capital funding which would make such support easily available.
Foreign investment: Foreign investment should only be allowed if it is in the public interest. Anyone wishing to buy more than 25% of a New Zealand company must show that it would lead to new employment opportunities and to a more sustainable use of New Zealand's resources. Furthermore any proposed investment higher then $10 million must pass the national interest test. Permission will be given for foreign ownership only if it leads towards sustainable full employment and fully respects the provisions of the Treaty of Waitangi. Only New Zealand citizens and permanent residents or companies with more than 50% New Zealand ownership should own productive land
Tariff Policy: The Alliance will maintain existing tariffs within the constraints imposed by the World Trade Organisation (WTO). This allows for generally increasing tariffs if a country has a balance of payments problem.
Taxation - Fairness and Social Spending
The Alliance Tax Policy would raise the money needed to cure the worst ills of New Zealand society, and put money back into the pockets of low and middle income earners.
The combination of income tax cuts on low incomes and the abolition of GST on food, as well as the introduction of a universal child benefit and free health care is particularly good news for low income families.
Under the Alliance, those earning under $40,000 - or 74% of taxpayers -- would pay less income tax. The reductions are modest but will be welcome for those on the lowest incomes. Someone earning $10,000 a year would have an extra $280 per year in their pocket.
The Alliance commitment to abolishing GST on food means that the average family would also save $15 per week on food.
This is a very fair tax policy. It puts money back into the pockets of the lowest income earners and it asks for a bit more only from those who can afford it.
Those earning between $40,000 and $50,000 (12% of earners) would pay exactly the same as they do now. This refers to individual incomes. A family of two earners each on $50,000 would pay no more tax.
Only the top 14% who earn over $50,000 a year would pay higher taxes. Someone earning $100,000 per year would pay $3,100 more.
The $840 million raised from the Alliance income tax structure equates to a 1% increase in taxation and is the revenue required to implement the Alliance’s free health policy announced earlier this week.
While we are asking those on higher incomes to contribute more, they will also benefit from being able to go to the doctor for free, from reduced waiting lists, an improved mental health system and from a more stable health sector overall.
The Alliance would also raise an extra $1.03 billion over and above the extra 1% for health through a variety of other taxes, the bulk of which ($500 million) would go towards a universal child benefit.
There continues to be growing inequality in New Zealand which is both socially and economically unsustainable.
The people who are being hit the hardest are our children, a third of whom are living below the poverty line. The Alliance would commit $500 million of this new revenue to improving the health and well-being of all children though a universal $15 per week child benefit for all children.”
The money for the child benefit and additional money for state housing, job creation and funding for primary and secondary education would be raised through:
Increasing taxes on casinos to the
levels found in Australia.
A carbon tax which would encourage reliance on renewable sources of energy.
Restoring the land tax abolished in 1992. This would also encourage the development of commercial property. Exemptions would be made for residential land (private homes), farmland, Crown's Conservation estate, and Maori Customary land. Small business would fall below the threshold.
Death duties on inheritances over $500 000 at 20 cents per dollar.
The Alliance policy to abolish GST on food will be fiscally neutral, as it would be replaced by a Financial Transactions Tax (FTT) at the low rate of 2 cents per $100. The FTT would be charged on withdrawals only, not deposits.
For those who just use a bank to If you spent $26,000 per year and withdrew a weekly total of $500. FTT would be 10 cents. Compare that to GST on a family's weekly food bill - 12.5% of $160 or $20 a week. Once inflation is taken into account, the saving would be closer to $15 a week.
The Alliance has already announced its free tertiary education policy, to be paid for out of the $1.2 billion of forecast government surplus.
Alliance tax compared to current tax. Incomes refer to individuals, that is, a family with two earners each making $50,000 per year would pay no extra tax.
All additional income tax raised would be spent on health.
INCOME ALLIANCE TAX CURRENT TAX DIFFERENCE
$10,000 1250 1530 (-) 280
$15,000 2350 2580 (-) 230
$20,000 3450 3630 (-) 180
$30,000 5650 5730 (-) 80
$40,000 8070 8070 NIL
$50,000 11,370 11,370 NIL
$60,000 15,370 14,670 (+) 700
$80,000 24,370 22,470 (+) 1900
$100,000 33,370 30,270 (+) 3100
$150,000 58,370 49,770 (+) 8600
REVENUE ALL SOURCES
Alliance revenue compared to current revenue. All sums in millions of $
Income tax individuals 19,888 19,048 840
Other income tax 1,077 1,077 NIL
Death duties 300 NIL 300
Land tax 400 NIL 400
Company tax 5,572 5,572 NIL
Indirect taxes 4,090 4,090 NIL
GST 8,854 10,354 [-1,500]
FTT 1,500 NIL [+1,500]
Carbon tax 200 NIL 200
Gaming duty 150 NIL 150
Fees etc 472 472 NIL
Investment income 1,316 1,337 [-21]*
Sales goods/services 705 705 NIL
Other operating income 297 297 NIL
TOTAL 44,821 42,952 1,869
*Loss of interest because of less capital in Superfund.