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Inequality won’t lead to economic prosperity

30 November 2009

Inequality won’t lead to economic prosperity

Revisiting the disastrous policies of the 80s and 90s will lead to increased inequality and environmental damage, and will not put New Zealand on the road to long-term economic prosperity, Green Party Co-Leader Russel Norman said today.

Dr Norman was responding to the release of the Government’s 2025 Taskforce report.

“The Taskforce’s policy recipe would widen the growing gaps in our own society between the rich and the poor,” said Dr Norman. “It’s a recipe for inequality, and inequality is bad for the economy.”

The 2025 Taskforce recommends flattening income taxes by reducing the top level of tax to 20%. The resulting $7-8 billion shortfall in government revenues would be addressed by cuts to Working for Families, privatising large parts of the health and education sectors, the sale of state assets, and raising the age of eligibility for New Zealand Superannuation.

“For this kind of economic analysis to be credible, it needs to also consider the costs associated with the policies of inequality. Regressive tax cuts funded by cuts to social programs will widen the gap between the rich and the poor which leads to huge social costs,” Dr Norman said.

“Almost every modern social problem — ill-health, violence, drugs, obesity, mental illness, long working hours, big prison populations — is more likely to occur in a less equal society. These problems affect us all acting as a drag on economic development.”

The Taskforce report also renewed the attack on our natural environment, advocating for the exploitation of mineral resources even if this occurs in National Parks or risks endangering native species.

“The National Government is already ahead of the Taskforce on this matter with its plans to mine in our most protected conservation land. The economic value of degrading our natural environment is another cost not recognised by the report. For example, rivers polluted by mining operations in sensitive natural environments will inevitably burden future generations with the costs of cleaning them up.”

The Taskforce also recommends further weakening the Resource Management Act — our primary democratic tool for protecting the environment from short-term exploitation. Protected green space in our towns and cities would also be opened up for development if the report’s guidelines were to be implemented.

“This report makes the unthinkable possible, even if National only follows the Taskforce’s findings in part. It’s clever politics by the National-led Government, to use keeping-up-with-the-Jones’ as an excuse to implement a radical right wing agenda,” Dr Norman said.

Link to the 2025 Taskforce Report:
http://www.2025taskforce.govt.nz/fromthetaskforce.htm

ENDS

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