Monday, August 27, 2012
Shocking Unemployment Figures revealed!
Over the last few months we have had more evidence of the growing inequities that exist in New Zealand society. We have had the release of the NBR rich list which has shown that New Zealand now has a considerable group of very rich people who, for the most part, have suffered little from the world's economic down turn. The collective wealth of this group is considerable ($52 billion for the top 100) and, with a fortune of over $50 million, Prime Minister John Key doesn't even make the top 150. Most are still seeing steady increases in their wealth over and above the 20% average increases recorded last year.
When the government decided to reward our wealthiest with tax cuts, it not only reduced the tax take by an average of $2 billion a year since, but put the tax rate for upper earners below Australia's. It is generally accepted that a large proportion of our wealthy generate their income through untaxed property investment and most of them would be investing in property to some extent. It has been estimated that around 40% of the income for our richest New Zealanders, on average, is derived through property investment. When you take into consideration the amount of income that is untaxed it becomes clear that the overall ratio of tax to income for the rich would probably be far less than the average tax payer. It was also rather shocking to hear the other day that 50% of our richest New Zealanders practically pay nothing. Although their total wealth may be in the tens of millions, few declare an annual personal income greater than $70,000. Many avoid tax through family trusts and, even though these are now taxed more than they once were, trusts are still regarded as an effective way of avoiding personal tax and protecting fortunes from losses through litigation.
At the same time as we have learned more about our most financially privileged we have a growing understanding of the extent of poverty in New Zealand. Even though Paula Bennett refuses to accept any official poverty line it has been widely accepted that a least 20% of our children live in relative poverty, where the basic necessities of life (food, healthy home and appropriate clothing) are not guaranteed.
We have seen the average family income increase but closer analysis reveals that the increasing wealth of the rich has lifted the average and the mean has actually dropped. Maori and Pacifika families have suffered the greatest drops with Maori families losing $40 a week over the last four years and Pacifika Families, $65.
We have comforted ourselves to a certain extent by the thought that our unemployment levels have not reached the excesses of other OECD countries, where around 20% unemployment is a reality for some. Our recent rise to 6.9% unemployment still seemed reasonable in comparison until Roy Morgan produced statistics that are a little different from the official Government figures, while they accept there has been some growth in employment the true extent of our unemployed has not been properly recognized. Rather than hovering around the 6% level the reality is actually 3 percentage points higher and we currently have 9.1% unemployed and a further 9.6% that are underemployed. This means that almost 20% of our workforce, or around 470,000 people, are not able to find full-time work. Of course this doesn't include those who are in full-time work but on the minimum wage (many are now included in the growing numbers of "working poor" who still need financial assistance to survive).
It seems extraordinary that this government has focused heavily on reducing expenditure on benefits and other areas of social support when the need for it has increased. The reason for the cuts in government spending is largely due to a reduced tax income and yet little has been effectively done to deal with the avoidance of tax from those who should and could pay more. In fact this National led Government is deliberately shifting our nation's wealth into the pockets of a few and has callously ignored the growing struggle for most New Zealand families and the damage being inflicted on a large number of our children. They continually use the economic crisis and the Christchurch earthquake as an excuse for their lack of income and increased borrowing and yet the top ten percent of our income earners have never had it better.