Predict the outcomes of these policies

[Flak]

1. I'm in general for this proposal. It will be some incentive for some to pursue an education. If the economy can support the fruits of their education, great. They get to stay home and make a decent living while paying 0% interest. If they leave, *shrug* they pay the normal 7% interest anyway. This may have a small effect on the 'Brain Drain'.

2. I oppose this for a couple of reasons:

a) As someone has already mentioned, there's no way the amount of welfare is going to cover the costs of having a child. Only stupid people would think that it might. That means (forgive my illogic) that only stupid people will be encouraged enough by this policy to breed. Thus breeding more stupid people. This in effect undermines the first proposal of low interest student loans (I'm on an illogical roll!), because the resulting stupid people won't be smart enough to go to college anyway.

b) As a taxpayer, I'm not particulary interested in helping pay for other peoples kids, except in the desperate situations where such help is perfectly valid. If I have a child of my own, then I'll take that responsibility. Why should I also have to pay for someone else to raise their kids? Especially if I'm not one of those 'fortunate' enough to qualify for a government handout. I repeat, if it's a desperate situation, the last net before starvation and homelessness, I have no problem paying taxes to support a system to provide just such a security net. But to pay for people just to have kids and further to pay for them to raise these kids that aren't even mine? I've got enough responsibilities of my own.

c) I wonder if this won't have some sort of negative impact on the NZ economy. I mean you're basically artificially raising the poverty level by giving welfare even to people who are working. This could devalue the currency at the lowest level and also drive up inflation. That's extremely speculative ofcourse, but the whole idea, if it caused an explosion of such 'working welfare' families, could result in some risky economics.

 

[Aphex_Twin]

Lowering taxes can be politically hard to sell though

What?.....

 

[The Last Conformist]

If one specifically wanted to help poorer families, one could give parents a higher income level before income tax kicks in than non-parents.

 

[ainwood]

Not testing income is an idea I support. Income limits creates marginal effects: ppl close to the income limits might abstain from raising their income because the raise is neutralised by the loss of the welfare payments (which is why I like the ideas of citizens pay and flat tax). Testing income also requires more bureaucracy and creates cheating possibilities.

Well, testing of incomes in this case is certainly required - even for people earning well above the average-wage; in some cases those in the top income bracket will have their income tested to claim the benefit.

 

[Hakim]

What?.....

It is here at least. Lowering taxes benefits rich ppl more than poor.

 

[King Alexander]

Policy 1:
Interest on student loans dropped from 7% to 0%, for anyone who, on graduating, remains in the country (the interest kicks-in again if they leave).

I find it a good motive to keep new -and well educated ganerations- on the country.

Policy 2:
Substantial welfare payments to families (and solo parents) who are working and have children. The more children you have, the more you get. Even people earning well-above the average wage qualify for these hand-outs. People with no children get nothing.

I only wish the EU had a similar program, and stop complaining about birth rates.
Either this Policy2, OR, simply, NO TAXES EVER AGAIN FOR ANYTHING for people with 3 kids(or above, AND, of course, extra-benefits(money) for those families that only earn a minimum salary(you can't expect from people who barely earn what they need to live to have a motive for not paying taxes, when, they already don't pay enough taxes due to poor income!).

 

[The Last Conformist]

It is here at least. Lowering taxes benefits rich ppl more than poor.

It's a very interesting version of social democrat solidarity; they encourage people to oppose lower taxes for themselves because it would benefit someone else even more.

 

[Hakim]

Well, testing of incomes in this case is certainly required - even for people earning well above the average-wage; in some cases those in the top income bracket will have their income tested to claim the benefit.

If the benefit will be given to top incomers, why test it ?

 

[Yom]

How can it be abused?
And why should only the poor enjoy public services? The rich are paying taxes too, so they have just as much right to public services as the poor!

If the money isn't used to raise the child, then that's abuse.

 

[farting bob]

Policy 1:
Interest on student loans dropped from 7% to 0%, for anyone who, on graduating, remains in the country (the interest kicks-in again if they leave).

A very good scheme IMO, And will really help out students graduating from uni. Not much impact outside of students though.

Policy 2:
Substantial welfare payments to families (and solo parents) who are working and have children. The more children you have, the more you get. Even people earning well-above the average wage qualify for these hand-outs. People with no children get nothing.

Kind fo like what we have now, but more of it. Anyway, we dont need to encourage big families, and money should not be used as an incentive.
Policy 1 would be beneficial, policy 2 although popular isnt totally needed (the current system works fine).

 

[frekk]

Policy (1) I think is a good policy - making education easier is always a good thing. Making it pay to stay is also a good thing.

Policy (2) has some flaws. Chiefly, it's basically a handout to employers who are not paying a living wage and further encourages shifting the responsibility for the welfare of working people away from their employers and towards the state. As well, its a sneaky way of subsidizing employers under the guise of social program spending.

 

[ainwood]

If the benefit will be given to top incomers, why test it ?

Not top - above average. Average wage in NZ is 42,000 (or thereabouts). A family on 100,000 (ie both parents earning above the average) gets no money for one or two children, but gets money if they have more (and it varies with the age of the children). So, these people will be required to prove that they have the children and also their incomes. Get a pay-rise? well, your benefit will be cut.

The scary part (in my opinion) is that the marginal tax rate for getting a pay increase is very high - you still pay the high tax threshold rate, plus you lose a portion of your benefit. Way to incentivise people to improve their lot!

 

[Mountain-God]

Not top - above average. Average wage in NZ is 42,000 (or thereabouts). A family on 100,000 (ie both parents earning above the average) gets no money for one or two children, but gets money if they have more (and it varies with the age of the children). So, these people will be required to prove that they have the children and also their incomes. Get a pay-rise? well, your benefit will be cut.

The scary part (in my opinion) is that the marginal tax rate for getting a pay increase is very high - you still pay the high tax threshold rate, plus you lose a portion of your benefit. Way to incentivise people to improve their lot!

It was my understanding - as of 5 years ago - that the average wage in NZ is approximately NZ$28,000.

Approximately 5% New Zealanders earn over 60,000.

For a family earning over 60,000, I don't see the problem with them losing this 'family benefit' as they are well capable in that circumstance, of paying.

To the zero interest rate:
While there is a compulsory requirement to pay back - as a percentage of income - the issue of the money not being paid back might seem lesser. There is also the point that while graduates are retained and will tend to higher incomes, increased tax revenue offsets...

 

[Mountain-God]

The current system:
1. Students pay zero percent interest whilst studying full time.
2. After that they begin to pay interest regardless of income.
3. Only after income exceeds aprproximately 14,000 must they begin paying back.
4. Paid back annually minimum as a percentage of gross income.
5. Also, a person is not eligable for study-loan longer than 4 years at a single instance.
6. Not sure, but I think after 25 a person pays more for study - as study 'right' expires...

I didn't mind this system, except that the interest rate was not set by the market, and, at times, exceeded market interest rates.

I think I would have proposed a market guided rate, but one kept several percent below.

Who this new system really helps is doctors and dentists with loans in the region of 100,000 - and this may be where the current government intends it's impact...

 

[Marla_Singer]

Policy 2:
Substantial welfare payments to families (and solo parents) who are working and have children. The more children you have, the more you get. Even people earning well-above the average wage qualify for these hand-outs. People with no children get nothing.

This already exists in France... and I would imagine a politician would need a lot of courage to even dare insinuating it should get dropped. I personally believe this is a good system as it's encourage people to get the number of kids they want to. And that's severely needed in Europe.

The fact such a policy exists in France is most likely related with the fact France is one of the European countries having the highest birth rates.

 

[King Alexander]

This already exists in France... and I would imagine a politician would need a lot of courage to even dare insinuating it should get dropped. I personally believe this is a good system as it's encourage people to get the number of kids they want to. And that's severely needed in Europe.

The fact such a policy exists in France is most likely related with the fact France is one of the European countries having the highest birth rates.

Marla, as you know, the world's economy(or at least, the EU's economy) isn't at it's best since a few years now, so, the people's income has "shrink". That money -which also are given here- aren't enough to support the majority of the parents/couples themselves(bills, loans, etc...), and aren't enough even to cover a good portion of a child's monthly expenses.

The EU needs to take more drastical measures, if we don't want to extinct, and it has to make it a top priority strategy.

 

[ainwood]

It was my understanding - as of 5 years ago - that the average wage in NZ is approximately NZ$28,000.

Approximately 5% New Zealanders earn over 60,000.

This was why when Helen said "we're going to make people earning over 60,000 pay more", people thought it was good, until more and more people met the threshold.

There is a good article about it on stuff - it has all sorts of data about taxes. Can't find it now - I bookmarked it at work, so I'll post it on monday. But there is now something like 11% of people earning $60,000+, and I believe the official 'average wage' is 42,000.

 

[Nobody]

Policy 1:Interest on student loans dropped from 7% to 0%, for anyone who, on graduating, remains in the country (the interest kicks-in again if they leave).

When people are just starting off in life, trying to get a carrer and starting a familiy, buying a house. The last thing they need in a huge intrest incuring loan. Educated people will end up paying alot more tax than people who don't go to university so why should they be punished by having a second House to pay for. (which some are like).

By cutting the intrest for people who stay in New Zealand, it will mean the educated people won't need to run away to australia and britain to avoid there debts. They will stay here paying tax to the New Zealand goverment.

Somebody said that people will get student loans and just keep the money as its a intrest free loan. This is impossible, you can only get 1 lumpsum payment of 1000 dollars per year.

Even better would free education.

Policy 2:
Substantial welfare payments to families (and solo parents) who are working and have children. The more children you have, the more you get. Even people earning well-above the average wage qualify for these hand-outs. People with no children get nothing.

This will encourage people to go out and get a job, and still get help for the kids. Im not sure why the High income needs this, and single people could say its unfair for their tax dollars to pay for other peoples kids. Also i think it is benefital for a child to have a parent at home with atleast until they are ready for school. Some will says that it will just encourage people who can't afford kids to keep having them, but current system does this anyway with the DPB.

Edit: Good job paying it off in 3 years . Also when i signed the contract it said the loaner was "Queen Elizabeth 2" does this mean if we become a republic, my debt is wiped?

 

[Mountain-God]

...does this mean if we become a republic, my debt is wiped?

Depends on the exact wording, but it's entirely possible...

 

[Mountain-God]

AINWOOD

Regarding your sig, I wonder at the reference to election bribes - I've also wondered at NZFirst and National crying the same thing - but isn't that just par for the course? Every party has it's election 'bribes'...