29/10/2017
Owen LLewellyn
Opinion
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More Government - More Taxes - More Control… and More Poverty

With Jacinda Ardern duly sworn in as Prime Minister, what can we expect to see over the next 3 or more years? In a nutshell: more government, more taxes, and more centralised control. You won’t be surprised to hear any of that, but we can also expect more poverty. “No. Surely not,” you point out. “Jacinda has taken on a child poverty role herself, hasn’t she? We may be paying more tax and have more government control, but at least there’ll be less child poverty? Won't there?” Let’s look at two of the key planks of the coalition’s policies and see how they’ll affect poverty.

1. Increasing the minimum wage to $20.00 an hour. The net result of increasing the minimum wage is always to create unemployment at the margins, destroying private sector jobs in certain industries and hurting the poorest and least skilled members of society. Minimum wage laws increase poverty. Addressing increased unemployment and maintaining state funded monopolies will then in turn require more central control of the economy funded by higher taxation.

2. Climate change policy. The coalition has agreed to implement a zero carbon policy aimed at a net zero emissions economy by 2050. I’ll leave for another day the discussion as to whether man-made emissions are causing climate change, but the facts are that policies to reduce carbon emissions inevitably have the greatest impact on the poorest people. To achieve a net zero emissions economy will require some pretty heavyweight legislation with commensurate increases in costs. The wealthier you are, the easier it will be to absorb these costs. The poorer you are, the more difficult. Green policies hurt the poor.

Don’t forget, Jacinda’s political roots with the International Socialist Youth and the notorious comrades speech. Make no mistake, even if she sincerely believes that she’s helping poor people and children and the low paid, the main aim of her socialist political philosophy is centralised control of power and control over people’s lives.