18 May 2010

John Key defends inequality

John Key’s patronising comment that Kiwis shouldn’t be jealous if the rich get big tax cuts in Thursday’s Budget show his Government’s real attitude towards inequality, the Green Party said today.

“John Key is trying to defend the widening gulf between rich and poor in New Zealand as an economic strategy,” Green Party Co-leader Metiria Turei said.

“His Government is about to introduce tax cuts that will widen the gap. They will give hundreds of dollars per week to people on the highest incomes, and only 84 cents a week to people on the lowest.

“There is no evidence to support his claim that Kiwis should suck it up because the rich are crucial to the economy,” Mrs Turei said.

Research released last week by economist Peter Conway shows that tax is not a significant factor in economic prosperity, and that there is no strong evidence that lower taxes assist the economy.

“On the other hand, there is a wealth of evidence that inequality hurts everyone, rich and poor,” Mrs Turei said.

“The more unequal a society is, the higher its rates of just about every social, economic, and health problem, across all income brackets.

“New Zealand is one of the most unequal countries in the developed world, and the problem is getting worse under John Key’s Government.

“John Key should be tackling inequality head-on, and telling the rich not to be jealous because they will be better off in a more equal society too,” Mrs Turei said.

Yesterday, the Green Party launched a pre-Budget strategy to combat growing inequality entitled Mind the Gap. It contains eight solutions that could be implemented immediately to reduce the gap between rich and poor, including a proposal that the first $10,000 of everyone’s income should be tax-free.

“A tax-free $10,000 would deliver a tax cut to everyone, and reduce inequality at the same time by helping those on the lowest incomes the most,” Mrs Turei said.

“Instead of a measly 84 cents a week, people on the lowest incomes would be between $15 and $20 better off.

“Inequality is becoming one of the defining political issues of our time. The Greens would make it the highest priority, and we urge John Key’s Government to do the same,” Mrs Turei said.

References:

The Green Party’s Mind the Gap strategy to reduce inequality: www.greens.org.nz/mindthegap
Economist Peter Conway's preview paper on tax in the Budget: http://www.fabians.org.nz/images/stories/RES-PC-WGTNmay2010.pdf

Evidence that inequality hurts whole societies: www.equalitytrust.org.uk

ENDS

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