A system failure

Jun. 11th, 2016 09:30 pm
marsden_online: (write)
I communicate with the pollsters by e-survey, especially since auto-dialers put me offering my phone completely. One particular company often starts with the question "What do you see as the biggest issue facing NZ today.", or something similar. This week it was beefed up a bit and led to an extended series of thoughts which I posted on FB (as being the most convenient format at the time) but am repeating here as a less ephemeral record.

The question:
What are the main social problems in New Zealand that the Government and community as a whole need to address?
My initial answer:
Inequity and poverty:
With our GDP per capita there should be no excuse for not being able to provide everyone with the basics of a warm, dry, private space to call their own and sufficient to eat; as a matter of right with no need to jump through any hoops to prove they are entitled to it.
Address this issue and a great number of other issues which stem from or are exacerbated by it will also recede.

Half an hour or so later I also wrote the following (edited a bit for clarity):
---
Ongoing thought about why our current social welfare system doesn't work very well wrt eg housing and food.

It consists of (reluctantly) giving people money and then leaving them to be able to procure the required services from "the market". But they're not dealing with /one/ market they are dealing with /many/ markets - accommodation, food, electricity ... - /each of which/
- has the goal of acquiring as much of that money as possible /without concern/ for the balance of the customers' needs
- and prices accordingly.

The result of course is that there is not and probably will never be "enough" money - see also for example how private rent increases have tracked the accommodation supplement.

The supply industries also benefit in their pricing strategy from individuals being given the money to spend rather than the services being purchased in bulk by a central authority with the clout to negotiate and keep the prices down.

For this reason I'm not opposed to government purchasing services from private providers; I /am/ opposed to the private providers being selected on the basis of lowest cost or metrics such as how fast they can get people off their books (churn). The correct metric has to be based on standard of care.

That would unfortunately require the government to care about the well-being of it's /entire/ constituency, not just those who voted for the "ruling" party or contributed to its coffers. :/
---

Back to now and a couple of other thoughts

Dealing with poverty is not a problem which can be solved by a single approach.
- Giving people money (or some form of equivalent discretionary resource) directly so they can target their own needs in their own situation is one part of the solution and has been shown to work well for getting people back on their feet. But as a sole or primary approach it risks capture as described above; where funds meant to help people into a position to better their lives end up straight in the (mostly metaphorical these days) pockets of "service" providers.
- /But/ poverty is relative and targeting the affordability of common - even "basic" goods and services is another piece of the puzzle. Not in an ad-hoc manner (eg taxes on/off fresh/processed foods - this has been a regulatory nightmare wherever it has been tried, save it for genuine luxury goods) but in a whole-of-market approach like Pharmac.
Bulk demand can shift the costs down but this is not something those already struggling with their living situation are in a position to organise. In a democratic/capitalist welfare society this should be a function of government.

One government department I think could make more of an impact here (if they were permitted) is Housing New Zealand; right now they are limited by having to use their own housing stock (which they have been forced to run down and sell down over the past decade); but if they were also able to function as a not-for-profit property management company effectively handling maintenance and property standards for those who for example
- have an investment property "retirement plan" but find the details of renting it out more effort than it is worth
- have a social conscience
- will accept a low-end-of-the-market-rent-range return

they might well be able to
- apply downward pressure on rental prices
- fill up some of those homes we hear about sitting empty
- reduce their waiting lists
- provide security for a lot of people who currently have found they can't ever trust they will still have a place to live after the next review
- upgrade some of NZ's abysmal housing stock
- and potentially be in a position to acquire some of those properties to replenish their own stocks when the bubble bursts

Yes the deal would have to be structured so as to appeal to the property owners opening it up to the criticism of being a government handout to that class; but I am reasonably certain it could be made to work for no more than is currently being handed to them indirectly via the accommodation supplement and putting beneficiaries up in motels for a week while simultaneously lumbering them with a paper debt which will, realistically, never be recovered.
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The importance of giving

May. 29th, 2016 07:04 pm
marsden_online: (Blueknight)
Giving is a major part of my life. Probably the greater part of it is invisible; charities I regularly support, flybys on givealittle and so forth but to be honest I find these less satisfying than what I can do directly for those around me. Making someone's life immediately better even if only for a short time kicks off one of the few emotional highs remaining to me. You can argue about whether than makes it altruistic giving or not elsewhere, I don't care. What is important to me is that there is less stress in a persons' life at frankly, little substantial cost to me.
- pad your groceries? People who have full stomachs are happier, healthier and think better.
- top up your bus card? Represents pocket change to me, to you might represent the freedom to leave the house and get to where you want/need to be when you want/need to be.
- covered an unexpected shortfall? Luck comes in good and bad, I have plenty of the former so please let me share it with you.

Life does not treat everyone equally, but it is within our power as people to redress the balance. Especially those of us to whom it has been more than fair; and I think compassion demands that we do so. Some people prefer to argue from a position of self interest - make sure other have (just) enough and they won't be motivated to try and take what you have to redress the balance. That's better than building fortresses ("gated communities") and hiring guards to keep the mob from the door I suppose.

I can understand how a person who has had to struggle, work and fight their whole life to get above the line and stay there might not be able to let go of that mindset, no matter how much success they achieve it may be that in their own mind they will always be poor and one unexpected bill away from disaster. But I also know that there are many who do not fall into that trap and having made their way to a comfortable position do a great deal to try and help others do the same. That makes much more sense to me - having been there how would not want to get other people out of the situation once you have means?

I am not one of of these; the metaphorical spoon in my mouth may not have been silver but it is less through my own efforts that I am where I am today than the gifts afforded from from my parents' hard labours. And so I can understand how, up to a certain age, a person can be raised simply not cognizant of the harsh realities of life for many. In the modern world my sympathy for that mindset runs out a year or two after they have reached university and should have had the opportunity to start taking a critical look at the world around them.

As always grateful that again, life has been more than fair to me and my sympathy for the struggles of others is born of intellect and a sense of fairness than hard personal experience.

So we come back to the position where I have- more than enough and so I endeavour to share my good fortune. I give this less than I would like; for two reasons
- Rationally I do need to keep putting some aside for my own future. How much is arguable, but I am not at the position where I can absolutely soak a large expense (such as the one about to be incurred for drain replacement) just yet, and I have no certainty that NZ's welfare state will be in a condition to look after me in my old age.
- it occupies not just the physical resources but also time and energy.

On this latter we have as a society theoretically harnessed the specialisation of labour to handle this. We pay takes to a central organisation (government) and one of the things they are supposed to do with them is make sure that if life treats us poorly we are looked after to a not-uncomfortable standard. In the meantime our money is (supposed to be) used to look after those who life is currently treating poorly. This should free us from the greater part of a need to worry about the circumstances of our families, friends, acquaintances / strangers.

Our current government is rejecting that part of it's duties (granted it is not the first to do so). Instead of going directly - in cash or in kind - to people who need food and shelter significant amounts of "our" money are shown to be being spent propping up companies that by National's own market ethos should probably be allowed to fail / take their business elsewhere, or paid in bribes to already wealthy individuals in countries where corruption is blatant, or siphoned off as indirect subsidies to private accommodation providers and old-boys-network businesspeople who are already "above the line".

One result of this is that I - multiplied by who-knows-how-many-others - have to spend more of my time and energy personally directing resource to the people I can see in need, and relying on the voids which are charities to be doing the right thing just to help regular people when they should be able to focus on those who positions are truly dire. And in some ways that /waste/ pisses me off just as much as seeing people around me living in poverty and the mis-appropriation of public money.

I am one person of good but still moderate means. I cannot do enough to even scrape the surface. I can feed a few people but I cannot house them. Organisations which have been set up explicitly to address the issues and channel the contributions of people like myself are barely scraping the surface. Central government is actively and deliberately following policies guaranteed to make the situation worse while benefiting those who already have more than enough.

My local council is one of the largest providers of social housing in the country (an operation which is currently being strong-armed to privatisation by central government). I occasionally encounter people who state vehemently how they are against their rates being used for such a purpose. I have no time for this attitude. Homelessness and poverty have both local and regional aspects and I absolutely expect our elected representatives at all levels to work together at the task of redirecting a sufficient portion of our taxes to those in need (rates being pretty much the closest we have in NZ to a formal tax on land even if they are not particularly responsive to capital gains).

Taking care of those who do not have the means to take care of themselves I consider the first duty of a supposedly democratic government. All else follows from or supports that. In doing so, for those of a more right-wing bent, people are freed to be more productive and contribute their best to society and the future rather than burning our all - and in the case of those who turn to crime, others all as well - just to survive.

[deep calming breaths]

The point I was getting around to is actually about the visibility of giving. This morning I posted quickly in my FB and Tumblr

When we talk about “give and take” why is the implication always that the giving and the taking are between the same two entities?

If I am in a position to give freely what someone needs why is it expected that I am expecting something in return? If you are in want of something why should it have to come from someone that already owes you or that you are then expected to owe?

Much better that we all give what we can when we see a need, and try to make out own desires visible without guilt or suspicion for others seeking to fulfil them - or be it necessarily with the the acceptance that there may not be anyone who feels they are in a position to do so.

I know a lot of people above and below the line, and plenty of those have moved from one side to the other and sometimes multiple times over the years. I am fairly public about much of the personal giving I do, not because I desire the plaudits (although they are nice) but in an endeavour to set an example to others above the line who may meander across my trail. To make giving freely visible and accepted, because I alone cannot make a lasting difference.

~~~
Related reading: that came through my Facebook feed while I was typing this up: How we got Here
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Submission on Making Tax Simpler, an NZ government green paper

Apr. 6th, 2015 01:10 pm
marsden_online: (write)
Last week the Government released "The first in a series of government discussion documents looking
towards a better tax administration system for New Zealanders".
NZ Herald article
The Government is floating the idea of businesses paying their tax on a pay-as-you-go (PAYE) basis, like individual taxpayers, in the biggest proposed shake-up of one of the building blocks of the income tax system since its introduction in 1957.

Revenue Minister Todd McClay announced the proposal to introduce a form of "business PAYE" among a raft of other possible reforms contained in a green paper seeking public submissions by May 29 ahead of a rolling maul of public consultation documents he plans to publish over the next three years to modernise and simplify the tax system, while improving the rate and accuracy of tax collection.

( snip )

I've made comments in a few other places too (all pending moderation).
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Submission on ECan's Long Term plan consultation document

Apr. 5th, 2015 04:23 pm
marsden_online: (write)
Environment Canterbury is currently seeking submissions on their Long Term Plan for 2015 - 2025. Locals may have found a print version in their mailbox over the past week or two. You can download the document and make submissions online at the Ecan Website

This is my first time being motivated enough to make such a submission. It may be a little wordy but I felt it important to convey a little of my personal perspective and background rather than a relatively context-less set of bullet points (which I couldn't have arrive at without writing all this out anyway).

( long )
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Thoughts on: comprehensive transactional tax and the individual

Jun. 11th, 2014 08:11 pm
marsden_online: (write)
Back in my post on a Universal Base Income I briefly mentioned transactional tax. The more I think about it the more I like the idea of replacing large chunks of our current tax system with a comprehensive transactional tax or set of taxes.

Many of our current taxes can already be framed as transactional taxes with little effort. Our consumption tax GST is effectively a tax on certain transactions. So is income tax especially as it is currently implemented with PAYE. A transactional tax would also capture those capital gains (although would be considered hard on those taking capital losses).

Transactional taxes are usually considered to be a flat (to regressive) tax, but there's no reason one couldn't be implemented progressively based on the value of the transaction. Some people would doubtless find it worthwhile to "game" this - regardless of where the bands were set but they would also still be paying the lower tier (times n) regardless. It is likely that the bands could be set to minimise this.

Collecting transactional taxes in our electronic economy should prove little more difficult (technically) than accounting for that pesky withholding tax (also a transactional tax as it is deducted when interest is paid). Financial institutions will doubtless balk at being put in the position of tax collector but they are the ones who have the transaction records (and they also have the computing power) and the ability to deduct the taxes in the same way as they would deduct an account fee.

(With modern computing I'd expect the tax-accrued to an account to be able to be displayed with every balance request.)

Who pays the tax is another important question to answer: the person sending the money or the person receiving it. I toyed with the idea of halving the rate and having it apply equally to ingoing and outgoing transactions but viewed one the scale of income tax and the ease of PAYE it became obvious that this was not feasible. Having the recipient responsible for paying the tax in that case is a recipe for those with poor financial planning skills to end up with terrible outstanding tax bills and would be a step backwards. Additionally having to somehow tag every transaction into or out of an account as tax-paid / tax-incurring would be additional unwanted complications for every account holder. So it seems to me that such a tax must be implemented as the transaction is *outgoing*.

Some allowance would need to be made for the cash economy - I think this is simply handled by applying the tax to "cash" deposits (it would already apply to withdrawals) and not worrying too much about the intervening time except for transfers above a certain level which should be required to be declared.

Even a comprehensive transactional tax will need exceptions or claim-backs as with GST to prevent it all being loaded on to the consumer. And every-so-often waiving accrued amounts not worth collecting seems reasonable. Although given that a comprehensive transactional tax rate would be much lower than GST (we are hopefully talking fractions of a cent on the dollar) and overall everyone should have more to spend the accruing increases may not make sufficient difference to be worth it in many cases.

Why so low? We are, if you're a cynic, double dipping or taking many nibbles of the cherry.
- get paid? Taxed (paid by your employer).
- withdraw or deposit cash? Taxed (accrued to the account and deducted monthly / at a certain value by the bank - unless they are offering some sort of sweetener whereby they are paying t.tax on the account for you).
- purchase something with cash? Taxed (accrued to the merchant's account when they deposit the money).
- purchase something with EFTPOS, Credit Card or paying a bill by internet banking? Taxed (accrued to your account).
- paying off the credit card or otherwise moving funds between your accounts? Taxed (accrued to the originating account).
- sending money to a friend? Sorry, taxed to you.

I don't see an implementation of this sort of tax being sufficient to bankroll the country, not immediately anyway and Robin Hood tax effects notwithstanding, particularly if we're funding a progressive social welfare system. We would still need a (lower) income tax and we would still certainly want health-related excise taxes - tobacco, alcohol, carbon .... but it could simplify a few things and even if the effect on an individual were fiscally neutral I think the lower income and (preferably abolished) GST would be welcomed.
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