Reducing Income Inequality-Some Ideas

Hopefully this page will become a site for ideas from as many people as possible. If you have something to add or a comment to make on ideas below please go to the bottom of the page and type in what you wish to say. I reserve the right to edit what is said as we are only interested in constructive comments either positive or negative.

Please contribute.

 

A   SOME GENERAL POLICY

1. There is no argument that income should arise through work where possible. So long term there must be plenty of well-paid jobs for all those who need work, and a well-trained work force (however you define work).

2.  In the short term

  • “rescue packages” should be put in place for all children who do not have a good start in life or are not achieving at school, Such packages should ensure that the children can achieve from school and training and so eventually get and hold well-paying jobs.
  • similar “rescue packages” should be put in place for all adults who are not holding good well-paid jobs, probably because of poor home life and/or an unsuccessful schooling and training, so that they are able to get and hold well-paying jobs.
  • sufficient well-paid jobs should be available for those who need them

3.   In the longer term

  • all people where possible should achieve in education and training opportunities so they can hold and contribute to well-paid jobs. How do we do this?

–Ensure that all children have a great start in life. They need  good mothers (pre and post natal), and homes that are warm loving, secure, well resourced, appropriately stimulating, and in stable communities

–Ensure that all state provided schooling is free and accessible, and that extras are available to everyone, and easily accessible.

–Ensure that all schools are good, well resourced and responsive to the needs of their students ie teachers well  trained, well paid and respected. Where students are failing, treat the teachers as professionals and ask them to provide the              solutions

  • Introduce a progressive tax structure ie the larger the income, the higher the tax rate on the top dollars.
  • Introduce a  tax system that is fair ie impacts on all income regardless of the source whether it be salaries, bonuses, capital gains, or anything else that makes money. This should be a fundamental basis for taxation. Variations to this could occur where a Government wants to stimulate areas of the economy that will benefit everybody
  • Introduce upper and lower limits on wages and salary packages. 

4.  Leadership from all who have a voice, particularly Government. The  people who live in this country should know that they are part of a society from which they all benefit regardless of their personal philosophies and as such have            rights and responsibilities. Further they should know that they are all dependent to a greater or lesser extent  on  that society for a reasonable life and as a consequence must contribute to it.

“No Man is an Island.”

B SOME FURTHER THOUGHTS

Obviously to provide enough jobs for all who need them on an ongoing basis the economy needs to perform better. Here are some ideas that might help>

We need a public policy that encourages the private sector to invest and build businesses that provide training and jobs at fair rates of pay, that help minimise pay gaps, and have good employment relations and fair bargaining processes.

Reset the Reserve Bank objectives to take account of the exchange rate and the social consequences of their actions. The current level of the Kiwi dollar encourages importers and consumers ahead of production, manufacturing, tourism and exporting. But no tariff protection providing that any that lose jobs as a consequence have access to replacement positions at fair rates of pay.

Cut red tape. You will know that we have become a country of bureaucrats. Sure we need regulations to control business and enterprise to ensure that it is all safe, enviromentally sound and in the interests of all, but currently the costs of reporting and monitoring in too many areas far outway any benefits. Officialdom now requires compliance to be proved in multiple ways when simpler systems would suffice.  Maybe we need to do this because of our particular circumstances but it is a fact that there are now half the number of public servants that there were 25 years ago (86000 down to 45 ooo) and that most international comparisons show NZ to be among the easiest and least “bureaucratic” countries to do business with–see www.investmentnz.govt.nz?WhyInvest/15290.aspx

Somehow get New Zealanders to take on uncomfortable jobs providing they are well paid and adequately protected ie secure etc. But there seems to be examples eg a dairy worker can start at a pretty decent wage ($30k pa plus board for a trainee with no experience rising to $120k for a manager) but the dairy industry would struggle without the Phillipinos, Brazillians and others who migrate here. There is an argument that says if there are jobs available at liveable rates of pay, secure and reasonable there should be no unemployment benefits paids.

Low company tax rates to encourage investment and consequently more jobs. Ireland before the bankers screwed it up was a good example of what a company tax rate of 12.5% does for a country. Despite a low tax rate, businesses in Ireland contributed hugely more tax to the Government coffers than NZ despite the fact we are of a similar size. Our company tax rates are currently heading in the right direction. After all, the only way a company owner can take wealth from a business is via dividends and wages, both of which are caught by personal tax rates.

Capital gains tax to ensure returns from any investment are equally taxed whether they be by income or capital gain. This will start to encourage more investment that is income generating and less with an eye on future tax free gains.

More GST but exempt foodstuffs. This would encourage investment and saving over consumption. The argument against it is that GST is not progressive. But rich people can only enjoy their wealth by spending it. Any attempt to avoid GST by crafty investing would be caught by capital gains tax. The cost to beneficiaries and low income earners could be fixed by adjusting benefits and personal tax rates.

The above comments on tax can be revenue neutral or result in more or less tax – take your pick. What we are talking about is redistributing tax so that it encourages the economy.

 

 

C> SOME CHANGES TO THE TAX SYSTEM

The ROBIN HOOD TAX click here

D. Another useful concept is that of the “Living Wage/Family Wage”. These concepts have been developed over the last 120years and are based on the isea of ” a minimum hourly income necessary for a worker to meet basic needs for an extended period of time or a lifetime/sufficient income to raise a family”—search the internet for further information on these concepts

E.  Vulnerable Children are most at risk of gaining the educational and social skills required to get good jobs at “Living Wages” and so “close the Gap”. The Govt has put out a paper on how to improve the lot of vulnerable children and is asking for feed-back. Please respond. Click here for access to this paper and ways of responding

Click here for some Articles on Reducing the Income gap from the Green Party

And some further material from the Greens

 An Article on how the improve educational outcomes

Organised by  Income Equality Aotearoa New Zealand Inc

More equal societies work better for everyone