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Working Families Lose Out Under Labour

Working Families Lose Out Under Labour
Weekly Column by Dr Muriel Newman

Working families are much worse off as a result of 32 months of a Labour Government. According to Statistics NZ, real wages fell by 0.9 per cent last year, and while they are expected to grow by 0.7 percent this year, the forecast is a drop to 0.3 per cent next year. With inflation under Labour running at 2.7 per cent up from an average of 0.8 per cent under National, rising prices are winning the race against rising wages, and workers are falling behind.

There are some 490,000 working families in New Zealand who have had no support from the Labour government. Labour's high tax, high regulation policies, have caused our growth rate to almost halve, in spite of having had the best commodity prices for more than two decades. Food price increases have hit the family budget with prices for meat, fish and poultry up 20 per cent, and fruit and vegetables up 16 per cent. On top of that there have been significant increases in the price of petrol as well as mortgage interest rate rises.

All of this has put working families under more financial pressure than they have been under for years.

But while the government turned its back on working families, it has bent over backwards to help beneficiary families. The 400,000 New Zealanders receiving welfare benefits have received over $1 billion in support from Labour. They have been protected from inflation by the automatic indexing of welfare benefits to cost of living increases rather than wages. They have been protected from rising health costs by the community services card. Those lucky enough to have the state as their landlord have been given a financial advantage - in the form of income related rents - over others who may higher levels of need but don't have a state house.

As a result of Labour's generosity, beneficiary real incomes are rising above those of families who work, with over 200 welfare families now having to pay the top rate of tax.

Rather than seeking to assist struggling working families, Labour has actively moved to keep them at a disadvantage. In fact their attitude could almost be described as one of contempt: as a result of Labour's increase of welfare benefits, some 48,000 low income working families were denied a community services card even though they earned less than some beneficiaries. Their hardship was simply not considered to be important to the government.

Ignoring the plight of working families is wrong. Working families are the backbone of a country, and when families work harder but slide backwards, they clearly need a break. Giving a break to workers was essentially the recommendation of the government's review of taxation in New Zealand. The million dollar McLeod Report warned that New Zealand's tax rates were too high, that they were inhibiting growth and disadvantaging New Zealand businesses.

Although the government ignored the McLeod report's recommendations, ACT has not. ACT has adopted the recommendations of the McLeod report and is proposing a tax cut for every worker, as a core election pledge. ACT's tax policy would over time lower the top tax rate of income tax to 28 per cent, the next rate to 18 per cent, essentially giving every worker a pay rise. That would help to ease the financial pressure working families are facing. Not only that, but because lower taxes create growth, lowering taxes would contribute to sustained wage increases and a rising standard of living.

ACT has also adopted the McLeod suggestion that company tax needs to be reduced. By lowering company tax to 28 per cent, lower than Australia's 30 per cent rate, New Zealand businesses would be given a competitive advantage. Lower taxes would also serve as an incentive for Australian businesses to relocate to New Zealand bringing with them investment and jobs.

Because of financial pressure, working families are vulnerable. Many cannot afford health insurance, so if they get sick, they languish on public hospital waiting lists getting more incapacitated as time goes by. ACT's health policy of sending anyone waiting longer than the medically accepted safe time to a private hospital at the taxpayer's expense, would significantly help those families. This system, already used by ACC, is both cost-effective, timely and compassionate.

Since first entering parliament in 1996, ACT has promised to get tough on crime and the causes of crime. It is outrageous that parents feel our streets are so unsafe that they have to drive their children to school.

A comprehensive approach is needed. Parole should be abolished and truth in sentencing introduced so offenders serve their full court imposed sentence. A zero tolerance approach to crime is needed so petty criminals do not graduate to more serious crime. Prisons need to be reformed so they are less like hotels and more like work camps. And we need to introduce comprehensive welfare reform so that fit and able men and women are gainfully employed, not paid to do nothing.

Only ACT is championing the cause of working families. ACT's values of hard work, thrift, enterprise, honesty and personal responsibility are core New Zealand family values. They are also the values of a successful nation. If the election delivers more ACT MPs into parliament on Saturday, then these values and ACT's sound common sense policies will influence more strongly the future direction ignoring their hardship of New Zealand.

Don't forget to persuade everyone else who feels as we do to vote ACT as well, including as many overseas voters as you know!)

Dr Muriel Newman, MP for ACT New Zealand, writes a weekly opinion piece on topical issues for a number of community newspapers. You are welcome to forward this column to anyone you think may be interested.

View the archive of columns at http://www.act.org.nz/action/murielnewman.html

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