How this Government is Keeping the Poor Down.

Through involvement in South Auckland Middle School and Middle School West Auckland over the last seven years I have developed an improved understanding of the communities – their passions and strengths – and the challenges they face.

This past week the government took an incredibly cheap shot that once again indicates that they take their voting base entirely for granted.

For many of these families the one thing they own that costs in the thousands is a car. In these parts of Auckland it is a necessity – for work, for getting their children to school and other activities, for helping wider family with grocery shopping, etc. Many of these families are already effectively victimised by circumstances that lead them to lenders who finance their cars (among other things) with interest only, or high interest loans, for high maintenance, high mileage vehicles. The families can spend years paying a loan to find they have made no progress. They will now be forced to keep these cars for longer until they get to the stage when the get told: “it would cost more to repair it than for me to give you another interest free loan – for a lot more because of the new emissions tax.”

So while our media quite rightly highlight the impact of the electric car subsidy and petrol/diesel tax on farmers they also need to see the impact on the poor. The subsidy is on EV’s which they simply cannot afford – the cheapest Tesla is $73k and the tax is on something they must have. No one has suggested alleviation for poor families for “legitimate use”.

The economic effect of a sales tax is clear … the price goes up. The economic effect of a consumer subsidy is also clear … the price goes up. I have no doubt that the $73k Tesla will relatively quickly get a lot closer to the $80k threshold. Both the seller and buyer win and it is on the taxpayer. Not smart economics in any way shape or form. Virtue signaling at its worst. Even the NY Times questions both the environmental and human rights impacts of EV’s – especially when burning coal for electricity is ramping up as it is in NZ.

How else are the poor kept poor?

  • Keeping decile 1 – 3 schools underfunded in comparison to the needs they face. John Hattie states that the key element for improving academic outcomes is the length of time students stay in school. A typical decile 10 school will have 90%+ of their students in school past 17 years of age. For decile one schools it is closer to 60% – as just one metric. If you don’t get good qualifications you are far less likely to earn a cycle breaking income. Labour also removed direct interventions such as Aspire Scholarships and Charter Schools. The PM, while acknowledging that the Charter School removal was keeping a promise to the Teacher Unions, also promised that “work was being done” on improving the Designated Character School model. No evidence of that has appeared after 5 years. Add to that a completely untargeted Free Fees tertiary policy that is one of the reasons why the last stats released from Canterbury University has one student out of 2,000 doing engineering accepted from a decile 1 school.
  • Taxes on petrol, alcohol and cigarettes, as well as GST, are regressive, as is the effect of Lotto and other forms of gambling. We have surely now reached the limit of reducing cigarette addiction through tax/price. A carton of cigarettes costs at least $350. Yes – smoking is a choice – but for long term addicts that $350 must punch a huge hole in the budget. 55% of the price of a litre of petrol is tax (plus 10% if you live in Auckland). The is a $29 per litre tax on alcohol and we keep stacking the poorer suburbs with bottle stores.
  • We won’t fund a world class child and youth mental health programme like Mike King’s even though it would cost less than 1% of the $685 million Boomer Bridge. Maori, Pasifika and low socio-economic youth are over-represented in all negative statistics – including suicide.
  • Treating the housing problem as a demand-side issue. They have failed to open-up supply, had Kainga Ora buy up land and crowd out private sector construction, and intervened in the rental market in ways that can only create greater scarcity and higher prices.
  • A 2021 budget that had almost no incentives to get into work. A good education followed by a good job is the pathway to alleviating poverty.

Jacinda Ardern cannot seriously say that she is intending to reduce child poverty (or any other form) while advocating as range of policies that include the above list. What will it take for the MP’s from lower socio-economic electorates and the Labour Maori caucus to actually take a stand for their constituents?

Alwyn Poole
Villa Education Trust

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