Friday 28 October 2011

In the year 2033

Who would have thought this Labour Party would have the courage to open the can of worms that is the debate about Government Super’s sustainability—and to open it with a flourish.

What they’ve done is to look at the financial chaos around the world and realise that a large portion of it comes from government’s borrowing unsustainably to fund election bribes welfare. And they’ve made a tough call.

Government Super in its present form is unsustainable, they say. And they’re right. Yes it is.

The simplest way to remedy that is to raise the age at which Government Super is payable, they say. And they’re right. Yes it is.

So, therefore, they say we must immediately got on with raising the age incrementally … so that by 2033 the qualifying age will be 67.  Did they really say 2033?

2033?


Surely, Phil, you have to be kidding.

Yes, yes, I know you’re simply opening the debate, and for that I doff my hat to you.  But to kick the can down the road to 2033 is, frankly, to acknowledge the problem and then do nothing about it. (And no, implementing compulsory “saving” and raising payroll taxes to pay for this and other promises is not a solution, but two new problems.)

Mind you, acknowledging this problem is still one step further than Smile and Wave has done. He’s now hamstrung by his ridiculous promise never to touch Government Super as long as he’s PM. If this announcement makes him wriggle while others around him grasp the necessary nettles, then all the better for that.

And if the necessary nettles are grasped, and this National Party wants to put blue water between itself and Phil Goff on Super (rather than the red water that separates them now Goff is outflanking them on the right) they could easily announce a much more robust plan to raise the age in more appropriate increments to erase the problem in much better time.

Or they could even do something along these lines.

PS: In more “are they finally getting it” news, it turns out that Hone’s Mana Party is prepared to grasp a few nettles themselves.

Correctly diagnosing the present tax system as being bad for the poor, since every dollar the poor earn and spend is taxed like hell, Mana wants to get rid of all income tax on the first $30,000 of income, and to get rid of the Government Slavery Tax (GST) altogether.

All good stuff—or at least it would be if they planned equal cuts in spending to balance this out. But still, it’s a healthy start.

PPS:  And in even more “finally getting it” news, it looks like even the National Party are able to admit when they are wrong: they’ve announced this morning that exploding youth unemployment has (finally) changed their mind on the Youth Minimum Wage. Bravo!

Yes, three years and several thousand youngsters on the scrapheap too late. But still: “Bravo.”

Except, except ... as Eric Crampton points out the large print of this policy announcement giveth while the small print taketh away. What National pledge to do is not to take away the Youth Minimum Wage but instead to "expand eligibility for the New Entrant's Wage (now called the Starting-Out Wage)":


The starting-out wage will be set at 80 per cent of the adult minimum wage and three groups of people will be eligible:
  • 16- and 17-year-olds in their first six months of work with a new employer.
  • 18- and 19-year-olds entering the workforce after more than six months on a designated benefit.
  • 16- to 19-year-old workers training in a recognised industry course involving at least 40 credits a year.
What's the sum total of the changes then?
  • 16 and 17 year olds get an additional three months' eligibility for the training wage. Maybe this is enough to make employers deem the transactions costs worthwhile, maybe not;
  • 18 & 19 year olds have access to the starting out wage - this is new;
  • Youths in training only have to be doing 40 instead of 60 credits per year.
In short, there's not much there. 

Cartoon by Richard McGrail
Not.  Much.  There.

Shorthand not just for this policy announcement, but what's between a politician's ears.

Except this time, there's even less than meets the eyes.

Sometimes a party will be accused of hypocrisy when it simply says the populist and wrong thing while quietly getting on and doing the right thing. Given the electoral environment, in which doing the right thing is rarely the populist thing, behaviour like this is understandable, and almost forgiveable.

What is neither is to say the right thing, and to take all the flak for it, while not even intending to actually do what you say you'll do.

This isn't hypocrisy.  It's just flat-out political flatulence.

5 comments:

twr said...
This comment has been removed by the author.
twr said...

I really can't see why you're giving the Mana party kudos for "reducing tax". This isn't what they're doing at all. They're increasing it, particularly for people who have paid plenty already. Giving some of the proceeds to the needy will never justify an increase in burglary.

Eric Crampton said...

The best part of National's policy change is a technical change on how eligibility for the new entrant's wage is determined: based on time with current employer rather than total time in employment. That could substantially increase uptake. But, it's still a relatively minor tweak.

gregster said...

Sometimes a party will be accused of hypocrisy when it simply says the populist and wrong thing while quietly getting on and doing the right thing. Given the electoral environment, in which doing the right thing is rarely the populist thing, behaviour like this is understandable, and almost forgiveable.

What is neither is to say the right thing, and to take all the flak for it, while not even intending to actually do what you say you'll do.


Well put.

Anonymous said...

Both parties are insulting our intelligence with low quality gimmicks designed to dog whistle voters and achieve nothing positive in reality.

What is it with these wankers? Cant they just do the right thing and get on with it?