The Greens’ breathtakingly bold poverty plan

The Greens speak the truth when they say the welfare state is broken and must be fixed.

In 19th century Britain people were deported for stealing a loaf of bread. To the shame of wealthy contemporary New Zealand, we have our own versions of cruelty: the poor are ground down by a welfare state more befitting of those unenlightened times than today. 

But at last there is a bright spot. Buried in the depths of the Greens' paper Mending the Safety Net are two breathtakingly bold policies that have scarcely been discussed.

The first far-sighted and visionary policy tackles the assumption of female dependency. The policy allows sole parents to keep their sole parent support when they attempt to re-partner. She is the one to say, not WINZ, when she is in a partnership in the nature of marriage.

This policy is a sensible first step towards treating people as individuals. It does not assume that a new boyfriend will automatically take on the financial support of her and her children when they claim she is in a relationship. It removes the fear of prosecution and gives a new relationship a chance to grow into something that will actually help her and her children.

It was great to hear Green MP Metiria Turei refer to Kathryn’s story while she announced her party’s radical reforms at her party’s AGM last Sunday.

This is an appalling story of a mother prosecuted for relationship fraud when she was grieving for a son murdered by an ex-partner. Even though she had a 4-year-old child, she was imprisoned. And even though she was imprisoned, the Ministry of Social Development has hounded her for repayment of her so-called debt for the past 17 years.

The Greens know you simply can’t cure child poverty by relying on increasing the Family Tax Credit alone.

The Greens have opened up this issue for debate. The benefit system also needs to be put on an individual basis by aligning the different rates for single and married. All of this accords with the principles of simplicity and neutrality to marital status more fitting to the 21st century.

The second visionary policy is making the In-Work Tax Credit available to all low-income families. Wow! This is the bit that is missing from Labour’s Families Package.

The Greens know you simply can’t cure child poverty by relying on increasing the Family Tax Credit (FTC) alone. The FTC goes to all low-income children. Of course, the FTC has to be increased to restore its lost value for working low-income families. Both National and Labour have agreed and raised these rates, but there is a price to pay. Under National, for example, working families will lose their bigger WFF payments more quickly from a reduced total family income of only $35,000. Labour spends more by raising this to $44,700, but keeps the sharp clawback of 25 percent.  

Even so, neither National nor Labour’s increases are near enough for the worst-off families. Unfortunately, using the FTC alone to address child poverty, even with a further tightening of the clawback, would be prohibitively expensive.

It is much better to pay the IWTC, a payment for children after all, to all low-income families who currently miss out. That would be both just and very cost effective because it delivers a significant payment to only the worst-off.

The Greens also know that the In-Work Tax Credit is not a genuine work incentive and simply punishes families when they fall on hard times. It is grossly unfair to parents who have to meet rigid numbers of hours of work when the labour market is so uncertain.

The Greens will join up the IWTC with the rest of Working for Families and, by doing so, will simplify a complex system, remove discrimination, and significantly reduce child poverty in a very cost effective way. Full marks!

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