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Gov could help poor, benefit economy

Recent data shows that child poverty and poverty in general is as bad as ever despite the Government promises to correct this terrible position for our country
But there is a solution that would benefit us all says Peter Malcolm spokesperson for “Closing the Gap”. With economic confidence apparently at a low level, there have been calls to boost infrastructure spending to take advantage of what is likely to be under-utilized capacity in the building and civil engineering sectors.

This makes sense as New Zealand is struggling to keep up with the provision of quality assets particularly in the areas of health, education and transport.

But the timing is also right to advance equality, and help the poor, by boosting the incomes of the poorest sector in our population. It is well established that increasing the incomes of the lower paid and beneficiaries means money flows directly into goods and services that stimulate economic activity.

The three most important ways of achieving this are to increase benefits—please Government, implement all the findings of the WEAG (and if Winston won’t, tell him to ….), increase further the minimum wage, and also lift the starting threshold on tax in order to ensure a tax free allowance on the first part of an individual's taxable income.

Politically, such a move will be more easily accepted by New Zealanders if it is part of a package that includes infrastructure spending. Spending on infrastructure is a stimulus for business and those they employ in mostly well paid jobs. Lifting the levels of income among the less well off can be seen as spreading the stimulus more evenly.

With current very low interest rates, and the government's decision to increase borrowing when appropriate, there should be no need to raise taxes if more of the infrastructure spending is funded by borrowing.

To tie increasing the income of the poor, to to a stimulus to the economy would be a really smart move and acceptable to us all.

© Scoop Media

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