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Maxim Real Issues No. 171


No. 171, 25 AUGUST 2005

To tax or not to tax - that is THE question

Funding follows the pre-schooler

Possible Parliaments Part One - More than 120 MPs

New Political Forums

Unpacking the answers

The challenge of nationhood


To tax or not to tax - that is THE question

Confused by all the figures and promises of the parties on tax and benefits? Let's go back to first principles. The social contract is simple. The citizen gives up some freedoms to gain the State's protection. He or she is protected from harm within and beyond the nation's borders, and justice is maintained. Taxation is an agreed consequence.

The vulnerable and poor are firstly the responsibility of the family and the community before being the responsibility of the State. A workable compassion requires an intimate knowledge and accountability between giver and recipient. The State's responsibility is to use taxation to maintain the social contract, which means protecting individual citizens, families and communities. In a modern democracy this also means creating the best environment for the health and education of its citizens. However, it does not follow that either or both of these need to be supplied by the State.

The difference between Labour's and National's policies on benefits and taxes highlights the critical problem the welfare State now faces in New Zealand. At issue is the creation of wealth: no wealth, no welfare State. Some policies look like an exercise in applied compassion but by transforming the Judeo-Christian commandment to love thy neighbour into a political imperative, the mutual responsibility between the individual, family and community is weakened. Charity becomes an entitlement, productivity is not encouraged and the trend is progressively to have more people dependent on State benefits. The nature of the social contract changes because the balance of power and freedom between the citizen and the State is weighted in favour of the State.

On the surface, taxation appears to be about money. But it's really about the balance of freedom, responsibility and power shared by the citizen and the State, and along with it, the creation of wealth. Reducing tax strengthens the social contract because citizens keep more of their own money to increase productivity and create wealth.

Let's remember: a society – which includes the vulnerable – moves forward when enterprise and work are rewarded; and the best way the State can do this is to exercise self-restraint and limit the tax it takes. Bureaucratic wealth redistribution is not only inefficient, it misunderstands human nature: we value what we work for more than what we are given. This election we have a choice. On the one hand, we have statist redistributive policies; on the other, the encouragement of enterprise and work. What will New Zealanders choose this election?


Funding follows the pre-schooler

Labour's decision to announce their new Early Childhood Education (ECE) policy on the same day as National released their long awaited tax policy ensured the ECE policy was overshadowed, but it deserves attention. Both Labour's and National's policies raise some compelling questions about the future State of education in New Zealand.

Labour's policy will double the ECE budget, extending the 20 hours free pre-school education to all teacher-led services from 2007, including private, for-profit centres. Originally, Labour's ECE policy applied only to community-based centres and came under fire for discriminating against private centres. Former critics are now praising Labour for their change of heart, which sees funding follow the pre-schooler to the parent's choice of centre. But, this trust in parents and the willingness to allow funding to follow the child, will still not apply to primary and secondary schools.

With virtually all political parties now committed to increasing access to early childhood education, either through subsidies or tax rebates, the years a child spends 'in school' are likely to increase. And there is a ub-text. ECE may soon be considered a right for children, much like primary education, as well as a right for parents who want to work. But if our society decides that children as young as three need formal education will we eventually see a time when ECE is made compulsory?


Possible Parliaments Part One - More than 120 MPs

The party vote is the most important in deciding the number of MPs each party gets in Parliament, because every party that crosses either of the two required thresholds (five percent of the party vote or one electorate seat), is guaranteed the same proportion of seats in Parliament as the proportion of the party vote that they win. However, if a party wins more electorate seats than it would be allocated under its share of the party vote, it still gains those seats. In order that the other parties are not disadvantaged, they still receive the same proportion of seats in the House.

This election, based on current polls, there is a good probability that the Maori party will win at least three of the Maori electorates, possibly more. If they win a lower proportion of the party vote than would have entitled them to that number of seats, then the "over-hang" seats are added to the 120 seats normally in the House.">

It is a surprise to many people that in the coming three years, there is a very good possibility that there might be more than 120 MPs in Parliament. A Parliamentary "over-hang", as it is called, is caused by the way MMP calculates how many seats a party gets in Parliament.

The party vote is the most important in deciding the number of MPs each party gets in Parliament, because every party that crosses either of the two required thresholds (five percent of the party vote or one electorate seat), is guaranteed the same proportion of seats in Parliament as the proportion of the party vote that they win. However, if a party wins more electorate seats than it would be allocated under its share of the party vote, it still gains those seats. In order that the other parties are not disadvantaged, they still receive the same proportion of seats in the House.

This election, based on current polls, there is a good probability that the Maori party will win at least three of the Maori electorates, possibly more. If they win a lower proportion of the party vote than would have entitled them to that number of seats, then the "over-hang" seats are added to the 120 seats normally in the House.


New Political Forums
Whangaparaoa Monday, 29th August
Hamilton Wednesday, 31st August
Maungaturoto Saturday, 3rd September
Dargaville Saturday, 3rd September
Palmerston North Monday, 5th September
Wellington Tuesday, 6th September
Greenlane, Auckland Tuesday, 6th September (NEW DATE)
For details of these and other upcoming political Forums, please visit:
http://www.maxim.org.nz/events


Unpacking the answers

Thank you to all who responded to our MMP quiz last week. A number of readers wrote in asking for our working for the answers, particularly to question one. To view our working on question one, visit:
www.maxim.org.nz/main_pages/media/mmpsurvey_questionone.html


The challenge of nationhood

Immigration debate always heats up around election time, but usually lacks clarity. Any policy of immigration must acknowledge the importance of citizenship. Read more in Bruce Logan's article, "Nation weakened by ideology of multiculturalism", published in the Otago Daily Times last week.

Visit:
http://www.maxim.org.nz/main_pages/news_page/M050819.php

THOUGHT FOR THE WEEK - Tiberius Caesar

It is the duty of a good shepherd to shear his sheep, not to skin them.


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