With so many kiwi families leaving for Australia and so many students doing their OE but not coming back home we have to ask what can be done to bring kiwis home in the long term.
Most parents recognise the value of local community sports and cultural groups. The value of New Zealand’s empty beaches and unspoilt bush walks is appreciated by many families. It’s true that there is more to life than the size of the pay packet. However, if we are to create an environment that remains attractive to our children’s generation then we need to ensure that New Zealand remains competitive in terms of income levels and job opportunities.
A recent study by the NZ Institute’s Dr David Skilling compared our income levels with those of Australia. New Zealand's per capita income was $40,021 per annum. Per capita incomes in Queensland ($54,317) and New South Wales ($55,805), are now significantly higher. Western Australia ($58,688), another popular destination for departing NZers is even further ahead. And the mineral boom in the Northern Territory ($78,527) has lifted the per capita to nearly double the New Zealand figure. Even Australia's poorest state, Tasmania ($49,056) now enjoys a lead over this country.
Extensive tax reform is now long overdue in New Zealand. Most New Zealand families would prefer to spend their own money rather than have the government spend it on their behalf. For parents Income Splitting would be a helpful step along the way to giving us more of a choice. In the absence of Income Splitting lower tax rates would be a step in the right direction. Labour has already announced tax cuts in the recent Budget. Commentators now await National’s tax plan (expected in September). United Future remains the only political party to commit to income splitting as well as tax cuts more generally. Tax cuts and higher productivity have been linked to higher economic growth rates. Without higher rates of economic growth our economy will not be able to provide a higher living standard for all New Zealanders. Without attractive job opportunities we will find it difficult to persuade kiwis to move back home.
Thursday, July 31, 2008
Tuesday, July 29, 2008
Early Childhood Education Funding
Playcentre www.playcentre.org.nz is a parent-run co-operative which provides early childhood education. It is indigenous to New Zealand and has provided a significant share of ECE service in NZ. However, to date Playcentre has been excluded from sharing in the funding the government makes available to teacher-led ECE providers. The reason given is that Playcentre does not charge high enough prices to parents. So therefore they cannot access the subsidies made available to other ECE service providers. Very odd given that the purpose of the subsidies is to reduce the price parents have to pay.
Playcentres have trained parents leading ECE sessions. They are NZQA qualified. So poor quality cannot be the issue. So why the discrimination? Maybe they just don't fit the funding formula that the Ministry of Education likes to work with? Maybe the parents running playcentres are not union members? In any case in a smart piece of political tactics the National party recently announced that it would bring Playcentres into the mainstream of ECE funding. The question now is whether Labour will at long last do the same?
Playcentres have trained parents leading ECE sessions. They are NZQA qualified. So poor quality cannot be the issue. So why the discrimination? Maybe they just don't fit the funding formula that the Ministry of Education likes to work with? Maybe the parents running playcentres are not union members? In any case in a smart piece of political tactics the National party recently announced that it would bring Playcentres into the mainstream of ECE funding. The question now is whether Labour will at long last do the same?
Sunday, July 20, 2008
Income Splitting Discussion Paper misses main point
It shouldn’t really have come as a surprise. The government’s Discussion Paper on Income Splitting couched the issue in terms of what single tax policy is best for families in New Zealand. Almost as if it was Income Splitting or everything else the government is doing.
The real question should have been “Would Income Splitting be a helpful option for parents?” You don’t have to abolish all other measures to introduce Income Splitting.
At the moment we have a variety of welfare payments, income support and Working for Families programmes in place. These cater for most low and middle income families where both parents work. However the group that is visibly overlooked at the moment are at home parents who choose to forego career development and wages or salary to invest in the next generation of New Zealand citizens. Not all of these families by any means are high or even middle income earners. Income Splitting would provide an option of paying tax as a couple rather than individually and thereby recognise the work of the at home parent.
In its recent submission Parents’ Choice ’08 set out some of its reasons for supporting Income Splitting:
Negative impact of overemployment on families: in recent years there has been a growing understanding about the longer term costs of overemployment. Today it is not uncommon for parents to be jointly working 90 hours or more per week. Such absence from the home takes its toll on families.
Large numbers of ordinary NZ families would benefit: Two parent families with children who would benefit from Income Splitting numbered 447,894 in the 2006 census.
Treasury papers have alluded to research which points to the negative impact on 0-3 year olds of having both parents working full time. “Nechyba, McEwan and Older-Aguilar (1999) briefly reviewed a range of studies using the US NLSY that consistently (but not without exception) relate early maternal employment to poorer behavioural and cognitive outcomes during early childhood for most children” http://www.treasury.govt.nz/publications/research-policy/wp/2003/03-26/03.htm
Treasury also mentioned that there was “…some evidence suggests the effects of parental employment on adolescents may be harmful, and may be arise from reductions in parental supervision” (Lopoo 2002, Paxson and Waldfogel 1999) http://www.treasury.govt.nz/publications/research-policy/wp/2003/03-26/03.htm
Many OECD countries provide tangible support and recognition for the work of at home parents without harming their economy. Indeed countries that usually tax couples rather than individuals (such as Ireland, Germany, and Norway) tend to be countries that also perform well in a range of social and economic performance indicators. While there may or may not be a causal link we can say that income splitting does not appear to have hurt the countries economic performance.
The real question should have been “Would Income Splitting be a helpful option for parents?” You don’t have to abolish all other measures to introduce Income Splitting.
At the moment we have a variety of welfare payments, income support and Working for Families programmes in place. These cater for most low and middle income families where both parents work. However the group that is visibly overlooked at the moment are at home parents who choose to forego career development and wages or salary to invest in the next generation of New Zealand citizens. Not all of these families by any means are high or even middle income earners. Income Splitting would provide an option of paying tax as a couple rather than individually and thereby recognise the work of the at home parent.
In its recent submission Parents’ Choice ’08 set out some of its reasons for supporting Income Splitting:
Negative impact of overemployment on families: in recent years there has been a growing understanding about the longer term costs of overemployment. Today it is not uncommon for parents to be jointly working 90 hours or more per week. Such absence from the home takes its toll on families.
Large numbers of ordinary NZ families would benefit: Two parent families with children who would benefit from Income Splitting numbered 447,894 in the 2006 census.
Treasury papers have alluded to research which points to the negative impact on 0-3 year olds of having both parents working full time. “Nechyba, McEwan and Older-Aguilar (1999) briefly reviewed a range of studies using the US NLSY that consistently (but not without exception) relate early maternal employment to poorer behavioural and cognitive outcomes during early childhood for most children” http://www.treasury.govt.nz/publications/research-policy/wp/2003/03-26/03.htm
Treasury also mentioned that there was “…some evidence suggests the effects of parental employment on adolescents may be harmful, and may be arise from reductions in parental supervision” (Lopoo 2002, Paxson and Waldfogel 1999) http://www.treasury.govt.nz/publications/research-policy/wp/2003/03-26/03.htm
Many OECD countries provide tangible support and recognition for the work of at home parents without harming their economy. Indeed countries that usually tax couples rather than individuals (such as Ireland, Germany, and Norway) tend to be countries that also perform well in a range of social and economic performance indicators. While there may or may not be a causal link we can say that income splitting does not appear to have hurt the countries economic performance.
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