PM Ardern's "Creepy" Economic Strategy for Election 2023
Labour's economic strategy for 2023 is being revealed. Yesterday PM Ardern suggested the Government is looking at income support measures, but these might come through the tax credit system - like Working For Families,
“We recognise the need to support people. We recognise the need for our low- and middle-income earners and that is what we are doing, but as it stands for future policy that’s obviously down the track,” Ardern said.
So what's going on? Well, I invited Sir Roger Douglas, the former Finance Minister, to speak to a class of students at the University earlier this term, and he gave the best explanation that I have heard - and not one you will read in the mainstream media.
It goes like this: low & middle earners have had their average tax rates pushed up by bracket creep. Rates for high earners have barely changed. Although the PM & Finance Minister argue the Nats want tax policies that favor the rich - the truth is that Labour is the party that has run a tax system which is punishing low & middle earners due to rising inflation.
Now here's the PM's cunning plan: having received more from low & middle earners in taxes, she wants to pay back (some of it) to (some of them) in the form of working-for-families credits, or welfare. Of course, if you don't have children, you don't fall under "working-for-families", so you probably wont get anything.
Why is this a cunning plan? Since the PM is making more Kiwis dependent on her for welfare payments - and the more dependent they are the more likely they are to vote for her. What a "creepy" policy. It's awhile since Sir Roger was Finance Minister, but he hasn't lost his clarity when it comes to analyzing how a policy is actually "working".