Mind the gap - Green New Deal initiatives to combat growing inequality in New Zealand
The Green New Deal is what a Green Government would do right now to combat the biggest economic, environmental, and social problems facing Aotearoa New Zealand.
Last year, the Green Party released two packages of ‘shovel-ready' initiatives the Government could take to stimulate the economy and look after the environment at the same time.
This is the third instalment of our Green New Deal. It contains solutions the Government can implement right now to combat growing inequality in New Zealand.
We have chosen to focus on inequality and its effects on children because income inequality has been shown to be the single most important cause of a wide range of social and economic problems.
We have chosen to focus on children because they are the future of our planet and society. All children are entitled to live in a safe, sustainable society that protects their rights to warm housing, safe affordable food, quality public education and healthcare within a loving, supportive whānau.
Inequality hurts every child and every family, not only the people at the ‘bottom', and we know that New Zealand is one of the most unequal countries in the developed world.
We are concerned at the path John Key's Government is taking us down: away from a clean, smart economy, and a caring society, towards environmental destruction, an unsustainable economy, and widespread social inequality.
By contrast, the Greens have a vision for a smart economy and a better society. We've got lots of ideas about how to get there, and we want to share them with you and hear what you think.
What's in this package?
This package contains eight simple solutions in four areas to take us towards greater equality and to reduce the gap between rich and poor in Aotearoa New Zealand. These are not intended as a comprehensive solution to the problem of growing inequality, but as eight simple, practical initiatives that can be implemented immediately.
Fair tax
Solution 1: A tax-free $10,000
Solution 2: A comprehensive capital gains tax (except on family homes)
Addressing energy poverty
Solution 3: Progressive electricity prices
Income support
Solution 4: In-Work Tax Credits for all low income families with dependent kids
Solution 5: Reinstate a discretionary Special Benefit
Housing
Solution 6: 6,000 new state houses in the next three years
Solution 7: Investment in community housing
Solution 8: Secure long-term rental tenure
Making changes to the tax system is one of the most important and direct policy options available to the Government if the goal is to promote equality. The changes proposed here use the tax system to narrow the gap between rich and poor and would have an immediate effect. In the long-term, they would work well in conjunction with wider structural changes to the tax system, as set out in the Green Party's economic policy. Taken in combination, these solutions will be cost-neutral.
John Key's Government is principally interested in tax reform that will lower top personal tax rates to 30 percent and raise GST to 15 percent to pay for it. This is a double blow for inequality. Internationally speaking, New Zealand already has some of the lowest top personal tax rates in the world. A move to make them even lower is a radically regressive step towards a more unequal society.
Fair tax
Solution 1: A tax-free $10,000
Soultion 2: A comprehensive capital gains tax (except on family homes)
Warm, healthy homes are hard to come by in New Zealand. The phenomenon of "energy poverty" – when households have to spend more than 10 percent of their income to keep warm – is a growing problem.
Since the first estimates in 2001, energy poverty in New Zealand has increased by 44 percent. It is now estimated that 1 in 4 New Zealand households (410,000) spend more than 10 percent of their income on household energy, and don't have access to affordable warmth.
Access to affordable warmth is a major inequality issue. People on low incomes often end up spending disproportionately more of their income on warmth than those on higher incomes. The rising number of people in this position has been driven by huge increases in the real cost of electricity relative to the meagre increases in real income. The international literature suggests that energy poverty is a major symptom of inequality. Research here in New Zealand correlates well with that literature.
However, affordable warmth is also a prime example of a problem which doesn't just hurt low income families, but everyone: it's also estimated that three-quarters of all New Zealand homes do not meet the World Health Organisation's recommendations for a healthy indoor temperature. Too many of us live in cold, damp houses, and we all pay the cost in higher health spending. We all stand to benefit if the situation is improved.
Addressing energy poverty
Solution 3: Progressive electricity prices
Benefit levels have not risen in real terms since 1991. For many of our most vulnerable families, making ends meet on inadequate levels of welfare support is a daily struggle. Very often it is the children of these families who suffer the most. Despite introducing some measures which had a positive impact on inequality, the previous Labour Government made some decisions that have had detrimental effects, such as the decisions (outlined below) not to extend In-Work Tax Credits to beneficiaries, and to discontinue the Special Benefit. These decisions would be easy to reverse (the Green Party has Bills drafted already) and doing so would have a major positive impact on inequality, and help many thousands of low-income families to better meet their basic needs.
Income support
Solution 4: In-Work Tax Credits for all low income families with dependent kids
Solution 5: Reinstate a discretionary Special Benefit
Safe, secure, sustainable housing is fundamental to the health and wellbeing of individuals, families and communities. Everyone living in New Zealand should have access to housing that is suitable for their needs.
Housing is a basic necessity but a lot of vulnerable New Zealanders are either homeless or do not have access to adequate housing. This has flow-on effects on their ability to participate fully in their communities, curtails people's educational opportunities, and ultimately can negatively impact on the job market.
There is a vast disparity in the standard of housing available to wealthy and low income New Zealanders. This is both a symptom of increasing inequality, and also a key driver of many other social and health problems. There is a vicious cycle where poor housing caused by increasing inequality actually leads to an accelerated widening of the gap between rich and poor.
Housing
Solution 6: 6,000 new state houses in the next three years
Solution 7: Investment in community housing
Solution 8: Secure long-term rental tenure
Attachments
