The Bougainville President, John Momis, says he has been assured by Papua New Guinea’s Prime Minister, Peter O’Neill, that the absence of a vital grant from the 2019 Budget was an “administrative error”.
Both leaders met last week in Port Moresby
PNG’s budget, announced last week, makes no mention of the Restoration and Development Grant which is constitutionally guaranteed under the Bougainville Peace Agreement.
Momis said Bougainville relied on this grant for essential projects and a failure by the national government to pay it would reflect badly on both Port Moresby and Bougainville.
The budget did feature a cut to recurrent funding for the Autonomous Bougainville Government.
Next year, 2019, will be a critical year with a referendum on Bougainville’s long term political future scheduled to take place in June, Momis said.
The PNG and Bougainville governments must ensure that together they provide the funding and support needed to allow the vote to take place and for the important work of peace building to continue, he said.
O’Neill has promised to rectify the issues.
This article is republished under the Pacific Media Centre’s content partnership with Radio New Zealand.
Is KiwiBuild “a dog”? Labour’s parliamentary opponents were always going to hone in on the problems and contradictions of the scheme, but what’s interesting and telling is the criticism of the scheme is now also coming from the political left, with a building consensus that KiwiBuild is not up to the scale of the task required by the current housing crisis.
Yesterday, leftwing political commentator Chris Trotter published his weekly Otago Daily Times column criticising the scheme, and explaining why it’s become “a dog”. He argues that “tragically… the Coalition Government is selling the poor a pup” – see: KiwiBuild should be targeting the poor.
Trotter’s main criticism of the scheme is that it does little or nothing to deal with the housing crisis, and is targeted to give assistance to the wrong people: “Nowhere are Labour’s ambitions for KiwiBuild matched by the resources needed to fulfil them. Worst of all, the people most in need of 100,000 extra dwellings – beneficiaries and the working poor – are not the scheme’s targets. KiwiBuild is a perverse mixture of corporate and middle-class welfare, offering a handsome subsidy to builders and a generous hand-up to young professionals.”
He explains that the concept for Kiwibuild was dreamed up under the leadership of David Shearer, as a way of out-manoeuvring leadership rival David Cunliffe. There was never any “necessary detailed development work on how it would be implemented, by whom, and at what cost”, because it was always just a political tool rather than a serious attempt to improve society.
He also criticises the scheme for morphing into something that, rather than creating extra housing, just repurposes housing already being built by private developers who have got into financial trouble: “Twyford is willing to buy Labour’s promised houses straight off the property developers’ plans. At a stroke, bad financial bets are transformed into sure things. Phil’s happy. The developers are happy. The banks are happy. And the winners of KiwiBuild ballots are over the moon. About the only people who aren’t happy are those who believe that publicly funded social interventions on the scale of KiwiBuild should be directed first to those most in need.”
Even the pro-Government blogsite, The Standard, is publishing criticisms of the scheme – see: KiwiBuild doesn’t fly. According to this critique, the Government is effectively privatising “state housing land”, to be used by private developers and the KiwiBuild scheme, meaning that most of the land will be for privately-owned houses. It says John Tamihere is correct in his call that development on state housing land in Mangere is akin to “social engineering”.
It’s “probably time to call the Government’s flagship KiwiBuild programme for what it is – state sponsored gentrification of state housing suburbs” according to Salvation Army economist Alan Johnson. He explains that many of the KiwiBuild projects are actually being built on state housing land, which is meant for social housing – see: Call it KiwiBuild but it is still gentrification.
At the moment in Auckland, state houses are being demolished in three different locations (Mangere, Mt Roskill and Northcote), and being replaced mostly privately-owned houses.
Johnson says: “Added all up the three big urban re-development projects in state house suburbs being promoted by Government seem likely to involve the demolition of 6050 state houses and the construction of up to 20,000 new dwellings. Of these around 6500 will be state or social housing units.” Clearly the Government isn’t prioritising state housing at the moment, and is even selling off much of the necessary state housing land.
Similarly, the “massive $1.5 billion regeneration project for Porirua” announced this week, involves selling off state housing land for private houses. The Government’s announcement that there will be over 2000 houses on the market has overshadowed the fact that there will only be 150 more state houses than before.
This has other leftwing critics alarmed. Blogger Martyn Bradbury concludes: “Kiwibuild is like the Labour party – it’s for the children of the white middle classes. That’s fine and dandy, but let’s dump the illusion that this is helping the poor and until the new Government do something meaningful on state houses (building 1000 state houses per year isn’t meaningful), they should be savaged ruthlessly and relentlessly for this” – see: Surprise, surprise – Kiwibuild is for the children of the white middle classes.
Perhaps the political left shouldn’t be surprised that KiwiBuild isn’t aimed at the poorest in our society. After all, the modern Labour Party is more focused on winning middle-class voters. As Martin van Beynen explains today, Kiwibuild’s targeting of more well-off New Zealanders is actually by design: “There was another important benefit for Labour in the Papakura welcome. It has made it look like more of a middle-class party” – see: Housing crisis – Method in Labour’s KiwiBuild madness.
He explains the electoral calculation behind Labour’s policy making: “The poor and the strugglers will always vote Labour or for some one man-cult like NZ First. So that vote is sort of guaranteed and spending some money on social housing is preaching to the choir… It is the middle that decides who governs. The house welcome showed that Labour is not only a party for strugglers. It showed it was awake to the aspirations of young, middle-class achievers who were battling to afford a home in unaffordable Auckland.”
Of course, the Government has replied to its leftwing critics, pointing out that such disappointment with Kiwibuild is misplaced, as it was never intended to be a scheme for the poor or homeless. And they point to Housing New Zealand and state housing as other parts of the equation working to fix the housing crisis.
The problem is, Kiwibuild was sold by Labour during the election as their response to the housing crisis. Yes, there might have been some fine print to suggest otherwise, but that was the impression that Labour deliberately used to win a lot of votes. As yesterday’s New Zealand Herald editorial stated, “Twyford must carry much of the blame for that false impression which dates from last year’s election campaign when he put housing affordability and homelessness into the same breathless ‘crisis’.” – see: KiwiBuild houses never for the poor.
Similarly, Labour has sought to associate the introduction of Kiwibuild with the imagery and symbolism of the first Labour Government’s massive state housing builds, even appropriating Michael Joseph Savage for the task. As Jane Clifton says in her Listener column this week, “KiwiBuild was rhetorically styled as Savage’s second coming”.
Leftwing critics are pointing to the lack of state housing being planned by this government and have started to protest against the Kiwibuild programme, or at least signal their concerns. For example, Auckland Action Against Poverty held a protest last weekend against the street party launch of the first Kiwibuild properties sold in Papakura – see Scott Palmer’s KiwiBuild ‘not aimed at low-income families’ – Phil Twyford.
Protest coordinator, Ricardo Menendez, is quoted saying that KiwiBuild will “further exacerbate the housing crisis”, and that “With a price-tag of half a million dollars, KiwiBuild homes are a future speculator’s dream.” Similarly, on Twitter he’s suggested: “KiwiBuild maybe should be renamed KiwiSpeculator, as it’s just an entryway for high income earners into the housing market to then become property speculators.”
Another community group, Monte Cecilia, which is a social housing provider, has been highly critical of the way the Government is organising state housing and KiwiBuild. The housing trust’s chief executive Bernie Smith gave the annual Bruce Jesson lecture at the University of Auckland last month, in which he condemned the government for taking “short cuts” to tackle New Zealand’s housing crisis, arguing, “We need to stop pulling rabbits out of hats and looking for quick fixes” – see Teuila Fuatai’s KiwiBuild: a ‘community trainwreck’.
Bryce Edwards’ Political Roundup: Labour’s changing approach to Maori inequality
That Maori face severe disadvantage in New Zealand is a given. The debate really lies in how to deal with this inequality and deprivation. Right now, a significant political shift seems to be occurring, in which the once-dominant ideas of targeted programmes and separate Maori political vehicles are being replaced by a more universal approach.
The latest sign came in last week’s Government Budget, which was conspicuously lacking in funding for “Maori development”. According to John Tamihere, writing in the Herald yesterday, the Whanau Ora programme “received zero funding in Budget 2018” and “for the first time in decades, Budget 2018 actually took money away from Māori. Te Puni Kokiri loses $3 million of baseline funding over the next four years” – see: Where’s the money for Māori, Jacinda?
Tamihere looks at targeted vs universal funding and concludes that, while both approaches “have merit”, there is a need to “actually target Māori problems, with Māori solutions”. In fact, he makes the case that mainstream funding ends up being race-based: “This targeted racist-style of funding has to stop. It’s called mainstream or white stream funding because more funding is thrown at the Māori problem by non-Māori to fix Māori.”
Tamihere highlights two very different models for dealing with Maori deprivation and disadvantage. These are important public policy concepts which have informed how New Zealand government and politics have operated in recent decades.
The universal approach is based on political strategies in which Maori are largely treated the same as other ethnicities, and problems are dealt with on the basis of need, in the first instance, rather than culture, race, etc. In this broad strategy, social services and targeted programmes are directed to those in poverty or with particular illnesses, housing needs, or whatever.
The theory is that, by virtue of addressing those most in need, this will also benefit Maori because Maori are disproportionately represented amongst New Zealand’s most disadvantaged populations. In an electoral sense, under this more “mainstream” approach, Maori vote for or join political parties on the basis of policy, rather than on the basis of ethnicity, and perhaps even go on the general roll.
The Maori-specific approach is based on political strategies which accept Maori issues require a unique answer due to the complex and distinct situation of Maori. This approach also places a greater emphasis on cultural practices and sovereignty issues. This means that the provision of public services should be tailored for Maori, and ideally designed and delivered by Maori. A major driver of this approach lies in the failure of mainstream solutions to alleviate Maori inequality. Under this Maori-specific approach, Maori vote for and join parties that are explicitly set up for Maori interests and aspirations.
Of course, the reality is much more complex than this simple dichotomy, and combinations of both approaches are used by governments. Nonetheless, the “universal vs Maori-specific” dualism does give a sense of some of the complexities of Maori and ethnic politics in New Zealand over recent decades.
Very broadly, New Zealand government and politics has traditionally employed a more universal approach. But this began to change quite significantly in the 1980s, when frustration grew with the plight of Maori and demands for new strategies grew. Universalism became discredited for some, and governments and others moved more towards Maori-specific public policy. I examine this shift in a column this week on the Newsroom website – see: Labour’s move away from Maori-specific policies.
Labour’s shift away from “race-based” politics
In an earlier Political Roundup in February, I covered the Labour Party’s signalled shift away from “culturalist” or “race-based” politics in dealing with Maori inequality – see: The real political controversy of Waitangi 2018. This looked at Jacinda Ardern’s declaration at Waitangi that the new government would take a universalistic approach: “We are specifically targeting things like poverty. An actual by-product of that is it will positively impact Maori.”
At the centre of much of the change in Maori politics is new Labour MP and Minister, Willie Jackson, who is playing a key role in changing Labour’s approach. He’s written a very informative post at the Daily Blog, in which he defends the Budget, and explains the changes going on – see: The Budget and Māori.
Jackson starts off explaining that Labour believes in both universalism and a Maori-specific approach: “people must be clear that Governments run dual strategies for Māori. The first one is a universal strategy and the second one is a targeted strategy. Anybody who thinks that a Government should just have a targeted strategy funding Māori programmes and kaupapa only, is deluded, and more than likely a member of the Māori Party!”
He then explains that Maori-specific public policy approaches tend to be based around a traditional and cultural world in which most Maori don’t actually live: “Although some of us practice things Māori every day and our whole world is about te ao Māori, we are sadly in the minority. Most Māori kids don’t speak Māori, don’t go to Māori schools, most Māori families don’t engage with the marae and most of our people are not on the Māori roll. That’s the reality, and that’s what we have to deal with in politics. So with that being the case we have to have policies that deal with that reality”.
Jackson also argues that Labour won all seven Maori seats on the basis of appeals to universalism and traditional economic or class-based politics, and saw it as a priority to deal with ameliorating material poverty and deprivation before focusing on cultural or sovereignty issues. This is in line with comments Jackson made following last year’s election: “This waffle about foreshore and seabed is exactly that. I think most of our people don’t care – that’s why they voted against the Maori Party. They care about housing, health and education” – see John-Michael Swannix’s Most Māori don’t care about foreshore and seabed – Jackson.
For an in-depth examination of how Willie Jackson, along with Shane Jones and Nanaia Mahuta are changing iwi-government relations, see Graham Cameron’s excellent article from March, Labour to Iwi Chairs Forum: ‘Iwi leaders need to catch up with the new world’. He argues that the traditional iwi leaders are out of favour in the new Maori political landscape, and future influential Maori leaders will be those who can show that they can help transform the lives of the poor.
Not everyone agrees with this new approach, of course. The Maori Party have provided the best challenges to it. Marama Fox questions whether the new approach is appropriate, saying “Universality does not work, has not worked. It will have some benefits, but it would be greatly increased if it was targeted in the right direction” – see Jenna Lynch’s Labour could face backlash from Māori voters.
With more than 99 percent of votes counted in the poll, Timor-Leste’s opposition Alliance of Change for Progress (AMP) was leading at the weekend with 49.59 percent of the total votes and is set to break the country’s political deadlock.
The coalition squeaked across the line with an absolute majority, preliminary election results showed yesterday, after a fractious campaign marred by violence and mud-slinging, reports SBS-AFP News.
It was the second general election in less than a year for the half-island nation of 1.2 million that is struggling to boost its oil-dependent economy, after a months-long political impasse saw Parliament dissolved in January.
With 97 percent of votes from Saturday’s election counted, the three-party Parliamentary Majority Alliance (AMP) – led by independence hero Xanana Gusmao – had about 48 percent of the votes.
The result means the alliance – which includes the National Congress for Timorese Reconstruction (CNRT) led by Gusmao, the People’s Liberation Party (PLP) and the youth-based Khunto – has secured an overall majority of 34 seats in the 65-member legislature.
The provisional line-up in Timor-Leste’s Parliament with the AMP Coalition (blue) and Fretilin (black) commanding most of the seats in the new Parliament.
The former Portuguese colony won independence in 2002 after a brutal, 24-year occupation by neighbouring Indonesia followed by 2 1/2 years of UN stewardship.
Fretilin, which narrowly won last July’s poll, had about 36 percent, leaving it with 23 seats.
No reports of unrest Despite a fractious campaign and fears of violence on election day, there were no reports of unrest.
Clashes broke out the previous weekend between Fretilin and opposition supporters, with more than a dozen people injured.
Parliament was dissolved and new elections called in January amid tensions between former Prime Minister Mari Alkatiri’s minority government and the opposition centred around Gusmao’s CNRT.
Dr Alkatiri’s Fretilin party-led government collapsed after its bid to introduce a policy programme and new budget were thwarted by a hostile opposition.
“This outcome should produce a return to political stability in Timor-Leste and may allow Xanana Gusmao time to again consider looking to a replacement leader from the next generation after a suitable amount of time has elapsed,” said Professor Damien Kingsbury, coordinator of the Australia Timor-Leste Election Observer Mission.
“In terms of economic policy, it will be business as usual, which raises questions about the longer term viability for Timor-Leste,” Dr Kingsbury added.
Big challenges ahead The incoming government will face big challenges, especially as the clock is ticking fast on its disappearing oil and gas reserves.
Oil and gas pay for the bulk of government spending but oil revenues are in steep decline and the country has few other productive economic sectors.
About 60 percent of Timor Leste’s population is under 25, according to the World Bank, while some 40 percent of its people live in poverty.
Providing jobs for young people and reining in public spending – especially on large infrastructure projects – will be key tasks for the new government, commentators say.
Headline: Bryce Edwards’ Political Roundup: Something is rotten in the state of NZ’s healthcare
Bryce Edwards’ Political Roundup: Something is rotten in the state of NZ’s healthcare
Something is rotten in the state of New Zealand’s hospitals – literally. And the source of that rot lies in the state of governance in health and politics. How else to explain recent revelations about the state of Middlemore Hospital buildings in South Auckland? It appears that politicians and heath managers have irresponsibly run down infrastructure in a way that calls into serious question levels of funding under previous governments, and puts immense pressure on the new government over what they are prepared to do about it.
A case study in rotten politics
South Auckland’s Middlemore Hospital has recently become the emblem of what is wrong with New Zealand’s healthcare system. The decrepit and decaying state of many of its buildings have come under the spotlight over the past week or so thanks to the excellent investigatory work of RNZ’s Phil Pennington, who has put together about a dozen reports on the scandal. His original story – Hospital buildings full of rot and mould – started the ball rolling, with details of how bad the situation at Middlemore is, and how the hospital’s management has known of the crisis for many years.
Pennington’s latest story details power supply problems, and reports on how the person in charge of the Middlemore buildings claims the health board knew it was all an accident “waiting to happen” – see: Major power failure revealed at Middlemore Hospital clinic. Former building manager Greg Simpson is reported believing that maintenance budgets were vastly underfunded: “Instead of an international best-practice of 2 percent to 3 percent of asset value as a maintenance budget, he was getting less than half the $15m a year Middlemore needed”.
It is now very unclear how much it will cost to fix the buildings, but increasingly many of those involved are talking about the need to demolish and build new ones. One estimate puts this cost at least $1.6 billion.
How has this happened?
The Middlemore buildings are symptomatic of a rottenness in the way health is run in New Zealand. Middlemore is no anomaly, according to Gordon Campbell, who says there’s been an overall underfunding of health since 2010 – see: On Middlemore Hospital as a symptom of neglect. Campbell says the decay and neglect at “Middlemore Hospital serve as a perfect symbol of the dilapidation that’s been fostered by pressure to meet the political goals of budgetary constraint.”
His main point is about the previous National Government’s insistence on creating surpluses at almost any cost: “All of it done so that John Key and Bill English could brag about being capable managers, who kept expenditure under control – as if balancing the books was an end in itself. Meanwhile at Middlemore, the necessary investments in maintenance were being deferred – as they have been in DHBs all around the country, in order to prop up the illusion of competence by a government always far more interested in delivering another round of tax cuts, if it possibly could. It didn’t want to hear bad news. Its managers in public health heard that, and obeyed orders.”
DHBs and various other health sector figures are now talking more openly about the pressure hospitals have been under to make cuts and follow the efficiency agenda of the last government. This is strongly conveyed in the must-read RNZ report, DHBs under ‘relentless pressure to make surplus’. According to this, “The health system is facing a funding shortfall so bad that three DHBs are likely to need at least $4.3 billion in capital expenditure alone. Canterbury DHB’s hospital is being rebuilt but after that it will still be short of beds, Counties-Manukau has rotting buildings, and Auckland is short of beds.”
The DHBs appear to have been under more political pressure than in the past, according to one long-time DHB chair, Peter Glensor, who is quoted in the RNZ item, saying: “What happened over the last government’s term was that the instructions from central government became more and more explicit, more and more pointed… If you are appointed you are appointed at the minister’s grace and favour … if you don’t like it and you can’t do it then you need to move on… You have to make it all sound as though ‘we’re becoming more efficient constantly, and all of these changes are for the good of the community’.”
The article suggests that DHBs have made cuts to areas such as capital expenditure in order to achieve targets set by their political bosses, and they are unable to speak out, or to be accountable to the public.
According to David Galler, an intensive care specialist at Middlemore, the whole situation should make us reflect not only on how we run hospitals but also our wider society – see: The toxic mould and rot of Middlemore is the legacy of a crisis in values. He points to the ideology of light-handed regulation and low government spending as the main problem, with crises arising from “a concentration on short-term costs instead of valuing a longer term investment.”
Labour’s challenge and dilemma
Many commentators argue that the neglect of the health system over recent decades is now simply “coming home to roost”. Previous governments – both National and Labour – have increased health expenditure, but nowhere near enough to keep up with needs in the health system.
It is quite understandable for the new Labour-led government to point the finger at the previous administration (and perhaps even also at the Clark Labour government). But the big question is now whether the new government is willing to properly fund health. And in order to inject the billions of dollars now needed, taxes might need to increase, or further borrowing made. Yet Labour and the Greens insist on their Budget Responsibility Rules of essentially maintaining National’s fiscal policies.
Labour has a dilemma, according to Armstrong, because they’re going to have trouble affording that funding: “During the election campaign, Ardern and Grant Robertson were at pains to point out they wouldn’t touch the corporate tax rate or John Key’s 2008 tax cuts for the wealthy. This reticence to change the wealth distribution might have helped them get elected but now they either have to find the money elsewhere or disappoint underpaid nurses, many of whom would have voted for them. So that’s the unenviable health dilemma that this Government faces over the next three years.”
Papua New Guinea’s opposition has declared it will fight a good fight to expose and oppose what it describes the 2018 state money plan as a “fake budget”, reports the PNG Post-Courier.
However, the rival daily newspaper, The National, quotes Prime Minister Peter O’Neill as decribing the K14.7 billion (NZ$6.6 billion) Budget as Papua New Guinea’s “best in 16 years”.
The opposition’s Shadow Minister for Treasury and Finance Ian Ling-Stuckey presented the “alternative government” 2018 Budget response titled “Fake Revenues, Fake Loans and a Fake Budget”, the Post-Courier reported.
He said the 2018 Budget was filled with misguided spending priorities, failed plans for financing and yet another huge deficit that would burden “our children” with too much expensive debt.
“Put simply, when I look at the budget, I think of PNG as being similar to a very large and diverse company-PNG Government Limited,” Ling-Stuckey said.
“Is PNG Government Ltd broke? Our people are feeling the pain through a lack of jobs, a lack of incomes, a lack of foreign exchange and a lack of important government services.”
Ling Stuckey said that since 2011 debt had grown from K8 billion (NZ$3.6 billion) to more than K24 billion (NZ$10.8 billion) in just five years.
‘Fake revenue’ “The 2018 Budget has, at this early stage, some K2 billion in ‘fake revenue’. This is not the ‘building block’ that the Minister for Treasury promised. So where is this K2 billion in fake revenue?”
He said to assume that revenues were going to increase as much as 20 percent from K10.6 billion to K12.7 billion in 2017 was wrong.
He said the opposition supported the increase in health expenditure of K285 million but relative to the 2015 Budget, health had been cut by 16 percent in real terms.
“It’s no wonder our health services are declining. It is good that more funds are being provided for medical supplies. However, the underlying issue is a lack of transparent competitive tendering in the medical supply contract,” he said.
Ling Stuckey said the biggest winners in this budget were interest costs, administration, health and APEC.
“Are some of these really the right priorities at this time of severe economic pain and failing government services?
‘Bad signal’ However, The National’s Clifford Faiparik reported that Prime Minister O’Neill criticised the opposition budget response, calling on Ling-Stuckey to withdraw his “fake budget” remark.
“This is very disappointing as it will give a bad signal to our international investors. I’m calling on the Shadow Treasury Ian Ling- Stuckey to withdraw his statement,” he said.
“This is by far one of the best budgets that I have ever seen since I have been in this Parliament for 16 years now. That includes the budget that I have presented as well.”
O’Neill had served as a treasurer in the Sir Michael Somare-led government.
“I say this because this budget is now putting us on a course to make sure that this country’s economic base and growth will be such that it can be self-sustainable,” he said.
“So it is quite disappointing that some of the terminologies that he [Ling-Stuckey] used are unbecoming of leaders of this honourable House. We have to be careful of how we portray the image of our country, our parliament and ourselves.
“Sometimes for short political convenience and point-scoring we say things and do things that are not really in the best interest of our country. We have to be constructive.”
The Post-Courier and The National are Papua New Guinea’s only two daily newspapers.
Headline: Keith Rankin’s Chart of the Month: Budget 2017: New Zealand’s ‘Universal’ Basic Income up to $195 per week
Keith Rankin’s Chart of the Month – Budget 2017: New Zealand’s ‘Universal’ Basic Income up to $195 per week.
The big unnoticed story of last Thursday’s Budget is the increase in New Zealand’s quasi Universal Basic Income (UBI), from just under $175 per week ($9,080 per year) to precisely $195 (annual $10,140).
It’s actually particularly pertinent that Stephen Joyce acknowledged, by including these ‘tax cuts’ in his ‘family assistance package’, that ‘raising the tax thresholds’ represents in fact a form of benefit increase. I call the unconditional benefit that is embodied within our tax scale, the Public Equity Benefit (PEB).
(I claim naming rights because nobody else has bothered to name this unconditional benefit that is implicit within traditional graduated tax scales. Also, the name ‘Public Equity Benefit’, which embodies the visionary concept of public equity, offers much more for the future than the prosaic alternative name ‘personal tax credit’. Language matters.)
From the chart, we can clearly see that the PEB is not a true UBI. Persons grossing less than $70,000 per year do not get the full amount. However, we can say that most people grossing less than $70,000 do receive some conditional cash benefits which, when added to their unconditional PEB, take their total weekly benefits to $175 (or more).
In a fiscal sense, the cost of topping up so that all adults’ unconditional and conditional benefits total at least $175 per week is minimal. (An interesting case, however, affects my teenage son. He receives a ‘student loan living allowance’ which represents the same amount of cash as a student allowance. In the future, he will be required to ‘pay back’ his quasi student allowance, by means of a tax surcharge. The logic of universal unconditional benefits requires that ‘student loan living allowances’ should be no more subject to being ‘paid back’ than the unconditional Public Equity Benefits which all salary/wage earners receive.)
An important feature of the 2017 Budget is that, in line with the announced increase in the unconditional PEB to (upto) $195 per week, there have been significant increases in income-tested cash benefits – Family Tax Credits and Accommodation Supplements – to many of those people who have been short-changed by present anomalies in these benefits.
The 2017 Budget represents a significant step towards the inevitable acceptance of a genuinely universal ‘basic income’. Once this conceptual milestone has been achieved, we will then be able to understand that inequality and poverty are largely a consequence of the present tax rate (33%) and the present ‘universal’ basic income ($175 per week) both being too low.
Raising the weekly ‘universal’ basic income to $195 is a handy first step towards reducing inequality without resorting to increased ‘redistribution’ (and all the tragic bureaucracy that targeted redistribution entails).