On Why We Should Pay Kiwis Living Abroad

This morning, National’s deputy leader Nicola Willis managed to get top of the bulletin news coverage by pointing out that some Kiwis living abroad might receive the government’s cost of living payment. Quelle horreur. What is the problem here? Inflation is a global problem, and Kiwis living abroad may be doing it even tougher – in the UK and US, the annual inflation rate is running at over 9 per cent – so why shouldn’t they also benefit?

Not to mention there would be costs involved (and privacy intrusion) in tracking and targeting the travel movements of Kiwis – to see where they have been residing for how long, and especially during the three months covered by the scheme. (Chasing them up for refunds would be equally counter-productive.) Wouldn’t the administrative costs involved be a waste of public money that is better directed at helping those trying to cope with the cost of living crisis? And hey, isn’t the National Party supposed to be dead against nit-picking bureaucrats and their infernal red tape?

There are valid reasons to criticise the “cost of living” payments, but whether a few of the New Zealand recipients may be living abroad isn’t one of them. If anything, the payments should be more far-reaching. As this column pointed out when the payouts were first floated, IRD may lack up to date details on how to pay all of the people likely to be eligible. This now appears to be the case.

There is a wider issue raised by National’s line of criticism. It involves the alleged merits of targeting. This has cropped up again over the government’s decision to suspend the fuel excise tax. There is no disputing that the government‘s action on the fuel tax has made petrol prices more affordable at the very same time that oil prices were surging on global markets. We all gained as a result - both personally at the pump, and in dampening the inflationary effect of transport costs rippling on through the domestic economy. Again, the alleged problem here for National is the lack of targeting: some people have benefitted from the temporary waiver of the fuel excise tax who were wealthy enough to pay the real price.

Talk about nit picking, again. The criticism begs the question of how anyone at the petrol pump could tell the deserving motorist from the undeserving motorist. To repeat: we all gained from this exercise in universality, and so did the economy. As PM Jacinda Ardern reminded us on Q&A yesterday, oil prices and transport costs would have otherwise fed on unhindered and raised prices throughout the economy. It is hard to imagine how this policy could – let alone should – have been targeted only to the needy. With petrol vouchers? What would possibly go wrong with such an idea…

Targeted v universal

There’s a basic philosophical difference at work here. It comes down to the relative merits (and the drawbacks) of targeting state assistance or making help available to everyone. Even though the centre right regularly decries the evils of bureaucracy, its welfare policy actively promotes it. National prefers to fine tune the targeting of welfare payments, on the grounds that the state’s safety net should be available only for the deserving poor who can manage to jump through all the bureaucratic hoops that this entails.

In fact, it has been known for decades that the complexity of the compliance procedures means that many people do not receive the help they need, and to which they are entitled. The take-up rates of targeted benefits is commonly abysmal. National also dislikes Working for Families for - among other things- not being sufficiently targeted to those proven to need it.

There’s an obvious double standard at work here. National’s preferred solution to all socio-economic problems – tax cuts – always disproportionately assists the people who are least in need of help. It does so on a scale that dwarfs the pittances associated with the cost of living payments and WFF. Newsflash for Nicola Willis: her party leader Christopher Luxon has said he doesn’t need the $18,000 a year he stands to gain from the tax cut regime that National is currently proposing.

Finally though… Just who are those Kiwis living abroad? Young Nats aside, not every Kiwi living overseas could use the Bank of Mum and Dad to finance their tertiary education. Some of the Kiwis in question are using the higher wages they can earn elsewhere, to pay off their student debt back home. Does Willis even know how many of those offshore recipients of “cost of living payments'' that she so begrudges are still paying off student debts in New Zealand? Many of the New Zealanders resident overseas could use any assistance that helps them meet the various costs of living, wherever they are. Lets not allow National to stoke up resentment against them.

Footnote One: As for people on low incomes… As Clint Smith recently pointed out, “the cost of living payment delivers as much money to people in 3 months as National's $2 a week tax cut would deliver in 3 and a half years.”

Footnote Two: The great virtue of universal benefits is that they are more progressive. Yes, a few people do get help they may not need for their existential survival. But there’s a greater good served by ensuring the entitlements quickly reach the far greater number who genuinely need them. That’s why we don’t means test pensioners.

What’s interesting about the debate on targeting is that when it suits them, both major parties are in favour of forms of universality known to be socially regressive, such as GST. When it comes to GST, hymns are sung to the simpler, less bureaucratic, more efficient glories of a system unblemished by exemptions - even though we know full well that the lack of GST exemptions (e.g. on fruit and vegetables) is to the detriment of the people most in need.

Permafrost, defrosting

In case anyone is feeling the need to find something else to worry about, the thawing of the Earth’s permafrost should be keeping us all awake at night. Those layers of permanently frozen ground date from the Ice Age, and they can vary from between a few metres to hundreds of metres thick.

Across the Arctic, the permafrost has been thawing… And this threatens to release vast amounts of the mercury and the anthrax spores, the carbon dioxide, and the methane stored therein from eons of the frozen dead and decayed plants and animals. This bids to cancel out some of our best efforts to reduce global emissions.

The thawing of the permafrost may also (and this is the really scary part) release micro-organisms from ages gone by, bugs for which humans may now have no natural immunity. Yep, global warming could trigger the spread of any number of pre-historic diseases. Strains for which we have no known remedy. Read all about it on Vox News here, and here. And more recently here. And have a nice day.

And the good news…

Well, good news for Anthony Albanese at least. He’s just scored the highest ever approval ratings for a new Aussie Prime Minister, according to a (paywalled) poll commissioned by the Australian newspaper. Not that his problems with… Say, finding a way to avert Australia’s looming crisis in energy security are making the job any easier.

But for now though, Syreeta’s soulful classic sums up how Australians feel about the leader who had finally enabled the country to rid itself of Scott Morrison. Suitably, there’s a weird quasi-military vibe to this video flashback from 1972:

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