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Who says we can’t afford it!

11 Aug

By Mike Treen, Unite National Director

One of the constant refrains we get from the right wing is that we can’t afford the social benefits that go to working people.

The right wingers also claim that “we are all equal” and should be treated equally to avoid any privileges arising like Maori and others are alleged to get.

If we were really all equal then all our income would be taxed at source at the same marginal rate as for other income we get.

Workers pay tax before they get paid and have to argue with the tax man afterwards if they want some back.

The super-rich (including multinationals, banks and local monopolies) treat tax as some kind of theft from their birth right that must be avoided at all costs. The penalties for avoidance are near zero. In really big cases like when the the big overseas-owned banks were caught avoiding billions of dollars in taxes no one went to jail and they got to pay back less than they avoided.

Companies like Apple, Google and Microsoft can structure their affairs to pay next to nothing in tax even though they have a massive presence in the economy and are reaping monopoly super profits from their business model.

The super rich in NZ should be paying at least 33% on all income above $70,000. That should include their income from company dividends and property speculation.

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Why support a Universal Basic Income

19 Apr

My Mike Treen
National Director, Unite Union

(Reprinted from The Daily Blog)

The Mana movement’s support of the idea of a universal basic income is a welcome development. It could become one of the litmus issues that define the party and prove extremely popular.

If Mana are in a position to do so, they should demand that the concept be explored in a commission on tax and welfare to be established by the incoming Labour/Green government. The Green Party is also a supporter in principle for the idea.
The mechanics of a UBI are actually quite simple.

We would abolish WINZ and the giant bureaucracy it administers.

We would eliminate working for families and most welfare benefits.

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Bryan Gould: Key’s march toward inequality

30 Jul

By Bryan Gould
Reprinted from the New Zealand Herald

Moves that effectively remove the right to collective bargaining reinforce the Government’s assault on the wages of working Kiwis.


In his first term as Prime Minister, John Key made a determined effort to be all things to all men – and women. In his second term, however, he hasn’t bothered; he has clearly calculated he can still win an election while overtly tipping the balance of advantage further in favour of the better off and against those struggling.

The evidence for this can be seen, for example, in the alacrity and openness with which he meets the demands of big business; but nowhere is it more apparent than in the burdens he is increasingly ready to place on working people.

The ranks of the poor in New Zealand have been increased in recent years by the unemployed and their families. The Key Government’s indifference to their plight has been one of the least appealing aspects of its skewed order of priorities. But what has attracted less attention, perhaps, is the pressure now being put on families that depend on the earnings of those in work.

We have come a long way since the heady days of John Key’s commitment to close the wages (and living standards) gap with Australia. Far from trying to lift wages, the Government is engaged in an undeclared campaign to depress real wages still further.

And that is from a starting point where low wages were already the central element in the widening income gap in New Zealand. We suffered the fastest widening of inequality of any country in the last two decades of last century, and remain dishonourably in the top group.

The top 10 per cent of income earners enjoy today an income nine times greater than the income of the bottom 10 per cent, up from five times in the 1980s.

As Treasury research shows, New Zealand households in the lower half of the income range had no increase in real incomes between 1988 and 2010; all the increase in national income over that period went, in other words, to those who were already better off. Although labour productivity in the private sector rose by 48 per cent over a similar period (1989 to 2011), the average hourly wage rose in real terms by only 14 per cent.

The price we have paid for this intensification of inequality is not just financial. As workers’ rights at work have weakened, our shameful record on health and safety at work has worsened. In industries like forestry, where employees work long hours in a virtually deregulated workplace and labour costs as a proportion of total costs have fallen sharply, the rate of industrial accidents remains unacceptably high.

It is against this background that the Government has intensified its assault on the ability of ordinary people to protect their living standards and safety at work. That assault has taken the form of a whole range of measures, such as maintaining the minimum wage at a level that is inadequate to halt the increase in family and child poverty and introducing a young workers’ wage even lower than the minimum wage. Low-paid workers in industries such as aged care are still expected to accept minimal wage increases that mean a further fall in their living standards. The unemployed are forced by benefit cuts and tighter rules about eligibility to try their luck in a labour market where there are few new jobs so that they are forced to try to undercut those in jobs that are already low-paid.

These factors are not accidental. They seem part of a deliberate strategy to remove the floor under wages and force them lower as a means of restimulating the economy. It is an amazingly convenient coincidence, is it not, that our slow recovery from the recession apparently depends on sacrifices made by the poor while we can afford more goodies for the rich.

The Government is still at it. International research shows the most important factor in determining the rate of wage growth is workers’ ability to use collective bargaining to negotiate wage rates. This is not surprising; individual workers have little bargaining power in the face of powerful employers and in a labour market weakened by high unemployment. It is only by joining each other they have any hope of protecting their wage levels and working conditions.

It is easy for those whose economic fortunes do not depend on collective bargaining to underestimate its importance, not only to trade union members but also to a properly functioning economy. The right to organise in a trade union is recognised as fundamental in international conventions and the Universal Declaration of Human Rights and is an essential element in ensuring that a market economy operates fairly and in everyone’s interest.

But our Government is pressing ahead with so-called “reforms” that, in effect, remove the right to collective bargaining and allow employers to refuse to engage with their workers other than on an individual basis. Sadly, this is just one more step in the campaign to reinforce the disadvantage suffered by ordinary people when faced with the overwhelming power of their employers in an unregulated marketplace.

It turns back the clock to a society disfigured by division and inequality and an economy that fails to fire because it serves an increasingly narrow interest.

(Bryan Gould is a former UK Labour MP and former vice-chancellor of Waikato University)

Union News to 10/10/12

10 Oct



Demolition derby: National’s approach to solving unemployment by Sue Bradford

Teens hit back over proposed youth wage

Youth wage seen as sending ‘a poor message’–a-poor-message-

Call for same minimum wage for all workers

Dave Feickert: Dark day as coal mines shuttered

Foot chopped off in accident at Port of Tauranga

Indian workers keen to unite

New Port union deal ‘inferior’ says MU

Ports demo Teal Park Oct 5

Govt’s ‘starting out’ wage rubbished

Lower wages no solution

So-called ‘free market’ thrives on the enslavement of others

Helen Kelly on the Health and Safety Taskforce

Union joins international campaign for decent work

Govt needs to send clear message about migrant work abuse

Key’s Film Jobs Being Filled by Migrants

Maritime Union laughs off rival in Auckland port dispute

The Union Report with Syd Keepa & Laila Harre: Issue 1: How significant a step between Maoridom and the Union movement was the Tauranga hui last month? Issue 2: Solid Energy jobs on the line – what should Government do to protect them? Issue 3: How does publishing National Standards on line help parents make decisions?

NZ probe into child labour claims

Korean fishing firm gags crew with ‘peace’ contract

Tiwai workers want Govt intervention

Crew who fled fishing boat seek $917,000


Bryce Edwards: Political round-up: The politicisation of poverty

Solutions sought to poverty

Protester’s plea to minister

Hunger striker fights for kids

Harawira praises hunger striker

Sam Kuha facebook page

Over 57,000 benefits sanctioned

Nation-wide protests oppose welfare reforms

Matt McCarten: No need to starve yourself, just give poor some more

Child Poverty Special report: Searching for a way out

Six of the best ideas for change

Jonathan Boston: Three myths about child poverty

National Day of Action against Welfare Reforms – Mana Party

Battle against beneficiary bashing

The latest issue of the New Zealand Council of Christian Social Services’ newsletter Kete Kupu is now online. Kete Kupu includes information and commentary on a wide range of social service issues and provides updates and commentary on social service policy and practice. Some of the higlights of this September 2012 issue include: Help the Children’s Commissioner do well for our kids; Liability or Citizen? Welfare Reform; Income Inequality Reaches News Heights; Taking Action on Reducing Inequality; Poor Quality Housing is making our children & older people sick; Watch Out For Burnout; Quality of Care in Rest Homes

Govt signals it will feed hungry kids

Homeless problem demands attention

Business eye on poverty report

1400 Kiwis try poverty for a week


EPMU call urgent meeting to tackle job crisis

Kim Hill interviews journalist Max Rashbrooke on his upcoming book about the increasing divide between rich and poor in New Zealand – listen to: Max Rashbrooke – social inequality and boarding houses.

Income survey shows stagnant incomes for most New Zealand families

Jane Kelsey: Hollywood lays down its own law

CTU: New ideas to manage the exchange rate welcomed

TPPWatch Action Bulletin #18 – 29 September 2012

Aus banks making more money from Kiwis – Greens

So-called ‘free market’ thrives on the enslavement of others

The case for Financial Transaction Taxes in NZ: A FACT SHEET

Question 15: Why do big business and the government want to cut welfare spending?

1 Oct

Big business wants to cut the costs of welfare for two reasons. Firstly, benefits above the barest minimum are seen as a barrier to lowering wages. The costs of welfare are also seen as a barrier to the government’s programme of cutting taxes on business and the rich. Cutting social welfare and cutting taxes for the rich usually go hand in hand.

Protests against benefit cuts in 2012 that echo those of the early 1990s

In 1991 the then Minister of Social Welfare Jenny Shipley blamed “high” benefits for making it difficult to lower wages. Explaining her support for benefit cuts she claimed: “Benefit payments have been high enough compared to wages that for many people there has been little financial encouragement to take on paid work and employers have been unable to attract workers at rates that would maintain the viability of their business.” Commenting on what basis the benefit levels were decided she said: “Quite frankly, the research I rely on is the marketplace. If the marketplace cannot pay, there is no such thing as an arbitrary, isolated, adequacy level.”

The current government is also testing the water to impose time limits on benefits by forcing people to reapply after one year. Business Roundtable chairman Douglas Myers told the HR Nicholls Society in Melbourne in 1992: “The absence of any time-limit on the dole (following which people might be obliged to undertake training or qualify for restricted assistance) reduces the pressure on wages to adjust to competitive pressures.”

By targeting the most vulnerable the government hopes to get support for large scale cuts to basic welfare for everyone. They can then use those cuts to finance tax cuts for business and the rich. And they are happy to lie to achieve that goal. John Key claimed in February 2010 that the government would save $10 million over their lifetime if 100 sole parent beneficiaries were moved off benefits and into work. In March 2010 he upped the ante and claimed that getting 5 percent of DPB recipients (around 2150 sole parents) with a child over six off the benefit would save $200 million. This calculation assumed the full cost of DPB over another 6.5 years on the DPB. This number doesn’t actually match time usually spent on the DPB. What he also “forgot” is that nearly exactly the same amount would be spent or lost on Working For Families, In work Tax benefits, child care subsidies, payments from the other parent (which goes to the State) and the like if (as can be assumed) they work 20 or more hours a week. Working for Families alone would cost $170 million over the 6.5 years. That’s the way our benefit/wage/tax system is set up. The biggest disincentive to working is the 100% marginal tax rates for income earned by beneficiaries over $80 a week. The proposed increase in this level to $100 (for those on the DPB and invalids benefits only) will do very little remove the real disincentives that exist to working more hours while transitioning off a benefit. This $20 increase is the first increase in the limit in two decades!

People on unemployment and sickness benefits will still only be able to earn $80 a week before their benefits are reduced by 70 cents for every dollar they earn. Promising to allow beneficiaries to earn up to $100 a week before their benefit is affected was one of the only good parts of National’s pre-election policy and they have reneged on it. National’s 2008 Benefits Policy Backgrounder notes: “After paying tax on their extra income, and losing part of their benefit, beneficiaries can be in a position where they are losing up to 92 cents of every additional dollar they earn. This is a disincentive for people to work even a few hours a week.” The law change introduced by National will force sickness and unemployment beneficiaries to do exactly that.

As the economist Susan St John commented when releasing these calculations: “Reminiscent of the welfare attacks of the early 1990s, there is a disturbing lack of empathy for the hardship endured by the people who cannot work or who can only work part-time while on a benefit. Many are sole parents already carrying a huge load of caregiving work, others suffer ill-health that makes them unsuited to full-time or even any work. Then there are the alarming numbers of young people who are now pounding at the doors of tertiary institutes as the job market fails to absorb their growing numbers.”

The intrusive and punitive work test regime will set up a costly new layer of bureaucracy to police those forced onto benefits by an economic system that has failed to create enough jobs. Solo mothers on the domestic purposes benefit will be expected to work a minimum 15 hours a week if their child is over the six. For some reason Widows are exempt from this requirement even if they have no dependent children – probably reflecting the governments elitist concept of deserving and undeserving poor. If you husband drops dead you are “deserving” and won’t be work tested. If you are abandoned by a violent husband, or get pregnant outside of a good middle class family – you are “undeserving”. Sickness beneficiaries will also be assessed for part-time work and required to seek work if deemed able to work at least 15 hours a week. The package also offers case managers a new range of penalties, including cutting payments by 50 percent and suspension of payments in full. The requirement that sickness beneficiaries must present medical certificates at four, eight, thirteen and 52 weeks to verify their condition will impose considerable extra costs on everyone now on a sickness benefit, mindful that a full examination with blood tests can easily cost nearly $100 a time.

(Part of a series of extracts from “Exposing Right Wing Lies” by Mike Treen, Unite National Director)

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