Saturday, 19 April 2008

Labour's core consituency

The NBR has an article on John Key's statement of not selling any state owned assets during in his first term and say it is good politics but not good economics (with which I agree).

However, what I wanted to highlight is what appears to be Labour's core constituency (i.e. the person Helen Clark states is the reason why average New Zealand still loves labour). This person said:

“I currently have an interest free student loan. Last year, my partner and I purchased our first home using the Welcome Home loan scheme. [Our two daughters] attend pre-school with the support of the childcare subsidy, as I am currently studying a Bachelor’s degree in nursing. We receive a weekly support from Working for Families…We have also just signed up for KiwiSaver…”
They do appear to have accessed all parts of Labour's extended social welfare package (being interest free student loans, housing NZ subsidised home loans, childcare subsidy, working for families and Kiwisaver mark II). But would the average New Zealander actually benefit from all this. To do so you would need to:
  • for interest free student loan, have studied in New Zealand, have a student loan and be living in New Zealand;
  • for the Welcome Home Loan, be earning less than $85,000 as a household (i.e. if both of a couple are working can earn only $42,500 on average), this is above the average household income at June 2007 (of $67,973);
  • for the Welcome Home Loan, be buying a house less than $280,000 (this appears to be far below the average north island house price at November 2007);
  • for the childcare subsidy, have children under 5 attending childcare for more than 3 hours per week and be earning a low or middle income (and assuming this person is getting the largest childcare subsidy, which means they are earning the least, this means only $31.59 per child (assuming no disability) per week);
  • for working for families (assuming they are on the average household income at June 2007), they get $72 dollars per week;
  • for Kiwisaver, they get $1,000 kickstart and (assuming it all is going to one of the partners, given the other is studying and presumably earning nothing) and the government contributions.

This person seems to meet a very specific set of circumstances. If I was still in New Zealand, I would only have met the interest free student loans and the Kiwisaver contributions (assuming I had joined Kiwisaver). Yes Labour's policies have benefited people on low incomes with children, but is this really the average person?

And if this is an average person, can they afford to put $2,718 of their after tax $50,193.53 towards Kiwisaver?

This person does however seem to be Labour's core constituency. Labour's policies are clearly not aimed at me (not benefiting me or even keeping me on a good level - my tax was high, I was not getting any working for families just paying high taxes) hence one reason why I have moved to Australia. I think that this person Labour is talking about is not the average New Zealander and that Labour is completely missing the point. The electorate has moved on, roll on October / November.

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